[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Proposed Rules]
[Pages 61596-62648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14828]



[[Page 61595]]

Vol. 89

Wednesday,

No. 147

July 31, 2024

Part II

Book 2 of 2 Books

Pages 61595-62652





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 401, 405, et al.



Medicare and Medicaid Programs; CY 2025 Payment Policies Under the 
Physician Fee Schedule and Other Changes to Part B Payment and Coverage 
Policies; Medicare Shared Savings Program Requirements; Medicare 
Prescription Drug Inflation Rebate Program; and Medicare Overpayments; 
Proposed Rule

  Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 401, 405, 410, 411, 414, 423, 424, 425, 427, 428, and 
491

[CMS-1807-P]
RIN 0938-AV33


Medicare and Medicaid Programs; CY 2025 Payment Policies Under 
the Physician Fee Schedule and Other Changes to Part B Payment and 
Coverage Policies; Medicare Shared Savings Program Requirements; 
Medicare Prescription Drug Inflation Rebate Program; and Medicare 
Overpayments

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

ACTION: Proposed rule.

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SUMMARY: This major proposed rule addresses: changes to the physician 
fee schedule (PFS); other changes to Medicare Part B payment policies 
to ensure that payment systems are updated to reflect changes in 
medical practice, relative value of services, and changes in the 
statute; codification of, and proposing policies for, the Medicare 
Prescription Drug Inflation Rebate Program under the Inflation 
Reduction Act of 2022; updates to the Medicare Diabetes Prevention 
Program expanded model; payment for dental services inextricably linked 
to specific covered medical services; updates to drugs and biological 
products paid under Part B including immunosuppressive drugs and 
clotting factors; Medicare Shared Savings Program requirements; updates 
to the Quality Payment Program; Medicare coverage of opioid use 
disorder services furnished by opioid treatment programs; updates to 
policies for Rural Health Clinics and Federally Qualified Health 
Centers; electronic prescribing for controlled substances for a covered 
Part D drug under a prescription drug plan or a Medicare Advantage 
Prescription Drug (MA-PD) plan under the Substance Use-Disorder 
Prevention that Promotes Opioid Recovery and Treatment for Patients and 
Communities Act (SUPPORT Act); update to the Ambulance Fee Schedule 
regulations; codification of the Inflation Reduction Act and 
Consolidated Appropriations Act, 2023 provisions; updates to Clinical 
Laboratory Fee Schedule regulations; updates to the diabetes payment 
structure and PHE flexibilities; expansion of colorectal cancer 
screening and Hepatitis B vaccine coverage and payment; establishing 
payment for drugs covered as additional preventive services; Medicare 
Parts A and B Overpayment Provisions of the Affordable Care Act.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on September 9, 
2024.

ADDRESSES: In commenting, please refer to file code CMS-1807-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY:
    Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-1807-P, P.O. Box 8016, Baltimore, MD 
21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY:
    Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-1807-P, Mail Stop C4-26-05, 7500 
Security Boulevard, Baltimore, MD 21244-1850.

FOR FURTHER INFORMATION CONTACT: 
    [email protected], for any issues not 
identified below. Please indicate the specific issue in the subject 
line of the email.
    Michael Soracoe, (410) 786-6312, Morgan Kitzmiller, (410) 786-1623, 
or [email protected], for issues related to 
practice expense, work RVUs, conversion factor, and PFS specialty-
specific impacts.
    Kris Corwin, (410) 786-8864, or 
[email protected], for issues related to 
strategies for updates to practice expense data collection and 
methodology.
    Hannah Ahn, (814) 769-0143, or 
[email protected], for issues related to 
potentially misvalued services under the PFS.
    Kris Corwin, (410) 786-8864, Patrick Sartini, (410) 786-9252, 
Mikayla Murphy, (667) 414-0093, or 
[email protected], for issues related to direct 
supervision using two-way audio/video communication technology, 
telehealth, and other services involving communications technology.
    Tamika Brock, (312) 886-7904, or 
[email protected], for issues related to 
teaching physician billing for services involving residents in teaching 
settings.
    Sarah Leipnik, (410) 786-3933, Mikayla Murphy, (667) 414-0093, 
Regina Walker-Wren, (410) 786-9160, or 
[email protected], for issues related to payment 
for caregiver training services and addressing health-related social 
needs (community health integration, principal illness navigation, and 
social determinants of health risk assessment).
    Erick Carrera, (410) 786-8949, or 
[email protected], for issues related to office/
outpatient evaluation and management visit inherent complexity add-one.
    Sarah Irie, (410) 786-1348, Emily Parris (667) 414-0418, or 
[email protected], for issues related to payment 
for advanced primary care management service.
    Sarah Leipnik, (410) 786-3933, or 
[email protected], for issues related to global 
surgery payment accuracy.
    Pamela West, (410) 786-2302, for issues related to supervision of 
outpatient therapy services in private practices, certification of 
therapy plans of care, and KX modifier threshold.
    Lindsey Baldwin, (410) 786-1694, Regina Walker-Wren, (410) 786-
9160, Erick Carrera, (410) 786-8949, Mikayla Murphy, (667) 414-0093, or 
[email protected], for issues related to 
advancing access to behavioral health services.
    Laura Ashbaugh, (410) 786-1113, and Erick Carrera, (410) 786-8949, 
Zehra Hussain, (214) 767-4463, or 
[email protected], for issues related to dental 
services inextricably linked to specific covered medical services.
    Zehra Hussain, (214) 767-4463, or 
[email protected], for issues related to payment 
of skin substitutes.
    Laura Kennedy, (410) 786-3377, Adam Brooks, (202) 205-0671, Rachel 
Radzyner, (410) 786-8215, Rebecca Ray, (667) 414-0879, and Jae Ryu, 
(667) 414-0765 for issues related to Drugs and Biological Products Paid 
Under Medicare Part B.
    [email protected], for issues related to 
complex drug administration.

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    Glenn McGuirk, (410) 786-5723, or [email protected] for 
issues related to Clinical Laboratory Fee Schedule.
    Lisa Parker, (410) 786-4949, or [email protected], for issues 
related to FQHC payments.
    Heidi Oumarou, (410) 786-7942, for issues related to the FQHC 
market basket.
    Michele Franklin, (410) 786-9226, or [email protected], for issues 
related to RHC payments.
    Kianna Banks (410) 786-3498 and Cara Meyer (667) 290-9856, for 
issues related to RHCs and FQHCs and Conditions for Certification or 
Coverage.
    Colleen Barbero (667) 290-8794, for issues related to Medicare 
Diabetes Prevention Program.
    Ariana Pitcher, (667) 290-8840, or [email protected], for 
issues related to Medicare coverage of opioid use disorder treatment 
services furnished by opioid treatment programs.
    Sabrina Ahmed, (410) 786-7499, or [email protected], 
for issues related to the Medicare Shared Savings Program (Shared 
Savings Program) Quality performance standard and quality reporting 
requirements.
    Janae James, (410) 786-0801, or [email protected], 
for issues related to Shared Savings Program beneficiary assignment and 
benchmarking methodology.
    Richard (Chase) Kendall, (410) 786-1000, or 
[email protected], for issues related to reopening ACO 
payment determinations, and mitigating the impact of significant, 
anomalous, and highly suspect billing activity on Shared Savings 
Program financial calculations.
    Lucy Bertocci, (410) 786-3776, or [email protected], 
for issues related to Shared Savings Program prepaid shared savings, 
advance investment payments, beneficiary notice and eligibility 
requirements.
    Rachel Radzyner, (410) 786-8215, for issues related to payment for 
preventative services, including preventive vaccine administration and 
drugs covered as additional preventive services.
    Elisabeth Daniel, (667) 290-8793, for issues related to the 
Medicare Prescription Drug Inflation Rebate Program.
    Genevieve Kehoe, [email protected], or 1-844-711-
2664 (Option 4) for issues related to the Request for Information: 
Building upon the MIPS Value Pathways (MVPs) Framework to Improve 
Ambulatory Specialty Care.
    Kimberly Long, (410) 786-5702, for issues related to expanding 
colorectal cancer screening.
    Rachel Katonak, (410) 786-8564, for issues related to expanding 
Hepatitis B vaccine coverage.
    Mei Zhang, (410) 786-7837, for issues related to requirement for 
electronic prescribing for controlled substances for a covered Part D 
drug under a prescription drug plan or an MA-PD plan (section 2003 of 
the SUPPORT Act).
    Katie Parker, (410) 786-0537, for issues related to Parts A and B 
overpayment provisions of the Affordable Care Act.
    Amy Gruber, (410) 786-1542, for issues related to low titer O+ 
whole blood transfusion therapy during ground ambulance transport.
    Renee O'Neill, (410) 786-8821, or Sophia Sugumar, (410) 786-1648, 
for inquiries related to Merit-based Incentive Payment System (MIPS) 
track of the Quality Payment Program.
    Danielle Drayer, (516) 965-6630, for inquiries related to 
Alternative Payment Models (APMs).

SUPPLEMENTARY INFORMATION: 
    Addenda Available Only Through the Internet on the CMS website: The 
PFS Addenda along with other supporting documents and tables referenced 
in this proposed rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.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 
2025 PFS proposed rule, refer to item CMS-1807-P. Readers with 
questions related to accessing any of the Addenda or other supporting 
documents referenced in this proposed rule and posted on the CMS 
website identified above should contact 
[email protected].
    CPT (Current Procedural Terminology) Copyright Notice: Throughout 
this proposed rule, we use CPT codes and descriptions to refer to a 
variety of services. We note that CPT codes and descriptions are 
copyright 2020 American Medical Association. All Rights Reserved. CPT 
is a registered trademark of the American Medical Association (AMA). 
Applicable Federal Acquisition Regulations (FAR) and Defense Federal 
Acquisition Regulations (DFAR) apply.

I. Executive Summary

A. Purpose

    This major annual rule proposes to revise payment policies under 
the Medicare PFS and makes other policy changes, including proposals to 
implement certain provisions of the Further Continuing Appropriations 
and Other Extensions Act of 2024 (Pub. L. 118-22, November 16, 2023), 
Consolidated Appropriations Act, 2023 (Pub. L. 117-328, September 29, 
2022), Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, August 
16, 2022), Consolidated Appropriations Act, 2022 (Pub. L. 117-103, 
March 15, 2022), Consolidated Appropriations Act, 2021 (CAA, 2021) 
(Pub. L. 116-260, December 27, 2020), Bipartisan Budget Act of 2018 
(BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the Substance 
Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for 
Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October 
24, 2018), related to Medicare Part B payment. In addition, this major 
proposed rule includes proposals regarding other Medicare payment 
policies described in sections III. and IV.
    This rulemaking also proposes to codify policies previously 
established in guidance for the Medicare Prescription Drug Inflation 
Rebate Program at new parts 427 and 428, including clarifications to 
certain existing policies, consistent with sections 1847A(i) and 1860D-
14B of the Act. This rulemaking also proposes new policies for the 
Medicare Prescription Drug Inflation Rebate Program, including removal 
of units of drugs subject to discarded drug refunds from the Part B 
rebate amounts, exclusion of units for which a manufacturer provides a 
discount under the 340B Program from the Part D inflation rebate amount 
starting on January 1, 2026, the process for reconciliation of a Part B 
or Part D rebate amount to incorporate certain revised information, and 
procedures for imposing civil money penalties on manufacturers that do 
not pay Part B or Part D inflation rebate amounts within a specified 
period of time.
    This rulemaking proposes to update the Rural Health Clinic (RHC) 
and Federally Qualified Health Clinic (FQHC) Conditions for 
Certification and Conditions for Coverage (CfCs), respectively, by 
clarifying the requirements and intent of the program regarding the 
provision of services. We also aim to ensure RHCs are provided 
flexibility in the services they offer, including specialty and 
laboratory services.

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    This rulemaking also proposes to further advance Medicare's overall 
value-based care strategy of growth, alignment, and equity through the 
Medicare Shared Savings Program (Shared Savings Program) and the 
Quality Payment Program. The structure of the programs enables us to 
develop a set of tools for measuring and encouraging improvements in 
care, which may support a shift to clinician payment over time into 
Advanced Alternative Payment Models (APMs) and accountable care 
arrangements which reduce care fragmentation and unnecessary costs for 
patients and the health system.
    This rulemaking also proposes changes to Medicare regulations 
regarding requirements for reporting and returning Parts A and B 
overpayments.

B. Summary of the Major Provisions

    Please note, some sections of this proposed rule contain a request 
for information (RFI). In accordance with the implementing regulations 
of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR 
1320.3(h)(4), these general solicitations are exempt from the PRA. 
Facts or opinions submitted in response to general solicitations of 
comments from the public, published in the Federal Register or other 
publications, regardless of the form or format thereof, provided that 
no person is required to supply specific information pertaining to the 
commenter, other than that necessary for self-identification, as a 
condition of the agency's full consideration, are not generally 
considered information collections and therefore not subject to the 
PRA. Respondents are encouraged to provide complete but concise 
responses. These RFIs are issued solely for information and planning 
purposes; they do not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. These RFIs do not 
commit the U.S. Government to contract for any supplies or services or 
make a grant award. Further, CMS is not seeking proposals through these 
RFIs and will not accept unsolicited proposals. Responders are advised 
that the U.S. Government will not pay for any information or 
administrative costs incurred in response to these RFIs; all costs 
associated with responding to these RFIs will be solely at the 
interested party's expense. Not responding to these RFIs does not 
preclude participation in any future procurement, if conducted. It is 
the responsibility of the potential responders to monitor these RFI 
announcements for additional information pertaining to these requests. 
Please note that CMS will not respond to questions about the policy 
issues raised in these RFIs. CMS may or may not choose to contact 
individual responders. Such communications would only serve to further 
clarify written responses. Contractor support personnel may be used to 
review RFI responses. Responses to this notice are not offers and 
cannot be accepted by the U.S. Government to form a binding contract or 
issue a grant. Information obtained as a result of these RFIs may be 
used by the U.S. Government for program planning on a non-attribution 
basis. Respondents should not include any information that might be 
considered proprietary or confidential. These RFIs should not be 
construed as a commitment or authorization to incur cost for which 
reimbursement would be required or sought. All submissions become U.S. 
Government property and will not be returned. CMS may publicly post the 
comments received, or a summary thereof.
    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. In addition, the statute requires that each 
year we establish, by regulation, the payment amounts for physicians' 
services paid under the PFS, including geographic adjustments to 
reflect the variations in the costs of furnishing services in different 
geographic areas.
    In this major proposed rule, we are proposing to establish RVUs for 
CY 2025 for the PFS to ensure that our payment systems are updated to 
reflect changes in medical practice and the relative value of services, 
as well as changes in the statute. This proposed rule also includes 
discussions and provisions regarding several other Medicare Part B 
payment policies, Medicare and Medicaid provider and supplier 
enrollment policies, and other policies regarding programs administered 
by CMS.
    Specifically, this proposed rule addresses:

 Background (section II.A.)
 Determination of PE RVUs (section II.B.)
 Potentially Misvalued Services Under the PFS (section II.C.)
 Payment for Medicare Telehealth Services Under Section 1834(m) 
of the Act (section II.D.)
 Valuation of Specific Codes (section II.E.)
 Evaluation and Management (E/M) Visits (section II.F.)
 Enhanced Care Management (section II.G.)
 Supervision of Outpatient Therapy Services in Private 
Practices, Certification of Therapy Plans of Care with a Physician or 
NPP Order, and KX Modifier Thresholds (section II.H.)
 Advancing Access to Behavioral Health Services (section II.I.)
 Proposals on Medicare Parts A and B Payment for Dental 
Services Inextricably Linked to Specific Covered Services (section 
II.J.)
 Payment for Skin Substitutes (section II.K.)
 Drugs and Biological Products Paid Under Medicare Part B 
(section III.A.)
 Rural Health Clinics (RHCs) and Federally Qualified Health 
Centers (FQHCs) (section III.B.)
 Rural Health Clinic (RHC) and Federally Qualified Health 
Center (FQHC) Conditions for Certification and Conditions for Coverage 
(CfCs) (section III.C.)
 Clinical Laboratory Fee Schedule: Revised Data Reporting 
Period and Phase-in of Payment Reductions (section III.D.)
 Medicare Diabetes Prevention Program (MDPP) (section III.E.)
 Modifications Related to Medicare Coverage for Opioid Use 
Disorder (OUD) Treatment Services Furnished by Opioid Treatment 
Programs (OTPs) (section III.F.)
 Medicare Shared Savings Program (section III.G.)
 Medicare Part B Payment for Preventive Services (Sec. Sec.  
410.10, 410.57, 410.64, 410.152) (section III.H.)
 Medicare Prescription Drug Inflation Rebate Program (section 
III.I.)
 Request for Information: Building upon the MIPS Value Pathways 
(MVPs) Framework to Improve Ambulatory Specialty Care (section III.J.)
 Expand Colorectal Cancer Screening (section III.K.)
 Requirements for Electronic Prescribing for Controlled 
Substances for a Covered Part D Drug under a Prescription Drug Plan or 
an MA-PD Plan (section III.L.)
 Expand Hepatitis B Vaccine Coverage (section III.M.)
 Low Titer O+ Whole Blood Transfusion Therapy During Ground 
Ambulance Transport (section III.N.)
 Medicare Parts A and B Overpayment Provisions of the 
Affordable Care Act (section III.O.)
 Updates to the Quality Payment Program (section IV.)

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 Collection of Information Requirements (section V.)
 Response to Comments (section VI.)
 Regulatory Impact Analysis (section VII.)

C. Summary of Costs and Benefits

    We have determined that this proposed rule is economically 
significant. We estimate the CY 2025 PFS conversion factor to be 
32.3562 which reflects a 0.05 percent positive budget neutrality 
adjustment required under section 1848(c)(2)(B)(ii)(II) of the Act, the 
0.00 percent update adjustment factor specified under section 
1848(d)(19) of the Act, and the removal of the temporary 2.93 percent 
payment increase for services furnished from March 9, 2024, through 
December 31, 2024, as provided in the CAA, 2024. For a detailed 
discussion of the economic impacts, see section VII., Regulatory Impact 
Analysis, of this proposed rule.

II. Provisions of the Proposed Rule for the PFS

A. Background

    In accordance with section 1848 of the Social Security Act (the 
Act), CMS has paid for physicians' services under the Medicare 
physician fee schedule (PFS) since January 1, 1992. The PFS relies on 
national relative values that are established for work, practice 
expense (PE), and malpractice (MP), which are adjusted for geographic 
cost variations. These values are multiplied by a conversion factor 
(CF) to convert the relative value units (RVUs) into payment rates. The 
concepts and methodology underlying the PFS were enacted as part of the 
Omnibus Budget Reconciliation Act of 1989 (OBRA '89) (Pub. L. 101-239, 
December 19, 1989), and the Omnibus Budget Reconciliation Act of 1990 
(OBRA '90) (Pub. L. 101-508, November 5, 1990). The final rule 
published in the November 25, 1991 Federal Register (56 FR 59502) set 
forth the first fee schedule used for Medicare payment for physicians' 
services.
    We note that throughout this proposed rule, unless otherwise noted, 
the term ``practitioner'' is used to describe both physicians and 
nonphysician practitioners (NPPs) who are permitted to bill Medicare 
under the PFS for the services they furnish to Medicare beneficiaries.

B. Determination of PE 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 (MP) 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 Physician Fee Schedule (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 American Medical Association (AMA) Relative Value Scale Update 
Committee (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 RVUs 
under the PFS and proposed changes to the PE methodology in the CY 2007 
PFS proposed rule (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 to 
develop the indirect portion of the PE RVUs. Prior to CY 2010, we 
primarily used the PE/HR by specialty obtained from the AMA's 
Socioeconomic Monitoring System (SMS). The AMA administered a new 
survey in CY 2007 and CY 2008, the Physician Practice Information 
Survey (PPIS). The PPIS is a multispecialty, nationally representative, 
PE survey of 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 or how the PE/HR data are used. 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 are not

[[Page 61600]]

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 titled ``CY 2025 PFS proposed rule PE/HR'' on the 
CMS website under downloads for the CY 2025 PFS proposed rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For CY 2025, we have incorporated the available utilization data 
for two new specialties, Marriage and Family Therapist (MFT) and Mental 
Health Counselor (MHC), which we recognized effective January 1, 2024, 
in accordance with section 4121 of the CAA, 2023. We are proposing to 
use proxy PE/HR values for these new specialties, as there are no PPIS 
data for these specialties, by crosswalking the PE/HR as follows from 
specialties that furnish similar services in the Medicare claims data:

 Marriage and Family Therapist (MFT) from Licensed Clinical 
Social Workers; and
 Mental Health Counselor (MHC) from Licensed Clinical Social 
Workers

    These updates are reflected in the ``CY 2025 PFS proposed rule PE/
HR'' file available on the CMS website under the supporting data files 
for the CY 2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, medical supplies, and medical equipment) typically involved with 
furnishing each of the services. The costs of these resources are 
calculated from the refined direct PE inputs in our PE database. For 
example, if one service has a direct cost sum of $400 from our PE 
database and another service has a direct cost sum of $200, the direct 
portion of the PE RVUs of the first service would be twice as much as 
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
    We allocate the indirect costs at the code level based on 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. 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.
     Then, we incorporate the specialty specific indirect PE/HR 
data into the calculation. In our example, if, based on the survey 
data, the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a facility setting, where Medicare makes a separate payment 
to the facility for its costs in furnishing a service, we establish two 
PE RVUs: facility and nonfacility. The methodology for calculating PE 
RVUs is the same for both the facility and nonfacility RVUs but is 
applied independently to yield two separate PE RVUs. In calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service. For this reason, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components 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 healthcare providers, 
or they may be furnished together as a global service. When services 
have separately billable PC and TC components, the payment for the 
global service equals the sum of the payment for the TC and PC. To 
achieve this, we use a weighted average of the ratio of indirect to 
direct costs across all the specialties that furnish the global 
service, TCs, and PCs; that is, we apply the same weighted average 
indirect percentage factor to allocate indirect expenses to the global 
service, PCs, and TCs for a service. (The direct PE RVUs for the TC and 
PC sum to the global.)
(5) PE RVU Methodology
    For a more detailed description of the PE RVU methodology, we 
direct readers to the CY 2010 PFS final rule with comment period (74 FR 
61745 through 61746). We also direct readers to the file titled 
``Calculation of PE RVUs under Methodology for Selected Codes'' which 
is available on our website under downloads for the CY 2025 PFS 
proposed rule at https://www.cms.gov/

[[Page 61601]]

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 proposed 
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 projected 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 an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs as long as the same CF is used in Step 4 
and Step 5. Different CFs 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 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 three most recent years of 
available Medicare claims data to determine the specialty mix assigned 
to each code. 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. We 
finalized a policy in the CY 2018 PFS final rule (82 FR 52982 through 
59283) 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 a specialty mix based on the 
specialties of the practitioners reporting the services in the claims 
data, we use the expected specialty that we identify on a list 
developed based on medical review and input from expert interested 
parties. We display this list of expected specialty assignments as part 
of the annual set of data files we make available as part of notice and 
comment rulemaking and consider recommendations from the RUC and other 
interested parties on changes to this list annually. Services for which 
the specialty is automatically assigned based on previously finalized 
policies under our established methodology (for example, ``always 
therapy'' services) are unaffected by the list of expected specialty 
assignments. We also finalized in the CY 2018 PFS final rule (82 FR 
52982 through 52983) a policy to apply these service-level overrides 
for both PE and MP, rather than one or the other category.
    Step 8: Calculate the service level allocators for the indirect PEs 
based on the percentages calculated in Step 7. The indirect PEs are 
allocated based on the three components: the direct PE RVUs; the 
clinical labor PE RVUs; and the work RVUs.
    For most services the indirect allocator is: indirect PE percentage 
* (direct PE RVUs/direct percentage) + work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
PE allocator is: indirect percentage (direct PE RVUs/direct percentage) 
+ clinical labor PE RVUs + work RVUs.
     If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
indirect PE percentage (direct PE RVUs/direct percentage) + clinical 
labor PE RVUs.
    (Note: For global services, the indirect PE allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs 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 
titled ``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.

[[Page 61602]]

    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 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 BN. 
(See ``Specialties excluded from ratesetting calculation'' later in 
this proposed 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).
(e) Setup File Information
     Specialties excluded from ratesetting calculation: To 
calculate the PE and MP RVUs, we exclude certain specialties, such as 
NPPs paid at a percentage of the PFS and low volume specialties, from 
the calculation. These specialties are included to calculate the BN 
adjustment. They are displayed in Table 1.
BILLING CODE P

[[Page 61603]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.000

BILLING CODE C
     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 
creating the file consistent with the 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

[[Page 61604]]

manner in which the modifiers are applied.
[GRAPHIC] [TIFF OMITTED] TP31JY24.001

    We also adjust 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.
    Beginning in CY 2022, section 1834(v)(1) of the Act required that 
we apply a 15 percent payment reduction for outpatient occupational 
therapy services and outpatient physical therapy services that are 
provided, in whole or in part, by a physical therapist assistant (PTA) 
or occupational therapy assistant (OTA). Section 1834(v)(2)(A) of the 
Act required CMS to establish modifiers to identify these services, 
which we did in the CY 2019 PFS final rule (83 FR 59654 through 59661), 
creating the CQ and CO payment modifiers for services provided in whole 
or in part by PTAs and OTAs, respectively. These payment modifiers are 
required to be used on claims for services with dates of service 
beginning January 1, 2020, as specified in the CY 2020 PFS final rule 
(84 FR 62702 through 62708). We applied the 15 percent payment 
reduction to therapy services provided by PTAs (using the CQ modifier) 
or OTAs (using the CO modifier), as required by statute. Under sections 
1834(k) and 1848 of the Act, payment is made for outpatient therapy 
services at 80 percent of the lesser of the actual charge or applicable 
fee schedule amount (the allowed charge). The remaining 20 percent is 
the beneficiary copayment. For therapy services to which the new 
discount applies, payment will be made at 85 percent of the 80 percent 
of allowed charges. Therefore, the volume discount factor for therapy 
services to which the CQ and CO modifiers apply is: (0.20 + (0.80* 
0.85), which equals 88 percent.
    We note that for CY 2025, we are proposing mandatory use of the 54 
and 55 modifiers when practitioners furnishing global surgery 
procedures share in patient care and intend only to furnish 
preoperative/intraoperative or postoperative portions of the total 
global procedure. If finalized, this proposal will likely increase the 
number of claims subject to the adjustment described in the discussion 
above. We discuss this proposal in section II.G. of this proposed rule.
    For anesthesia services, we do not apply adjustments to volume 
since we use the average allowed charge when simulating RVUs; 
therefore, the RVUs as calculated already reflect the payments as 
adjusted by modifiers, and no volume adjustments are necessary. 
However, a time adjustment of 33 percent is made only for medical 
direction of two to four cases since that is the only situation where a 
single practitioner is involved with multiple beneficiaries 
concurrently, so that counting each service without regard to the 
overlap with other services would overstate the amount of time spent by 
the practitioner furnishing these services.
     Work RVUs: The setup file contains the work RVUs from this 
proposed rule.
(6) Equipment Cost per Minute

The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1 (1/((1 + 
interest rate)[supcaret] life of equipment)))) + maintenance)

Where:

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

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic

[[Page 61605]]

imaging equipment, for which we use a 90 percent assumption as required 
by section 1848(b)(4)(C) of the Act.
    Useful Life: In the CY 2005 PFS final rule we stated that we 
updated the useful life for equipment items primarily based on the 
AHA's ``Estimated Useful Lives of Depreciable Hospital Assets'' 
guidelines (69 FR 66246). The most recent edition of these guidelines 
was published in 2018. This reference material provides an estimated 
useful life for hundreds of different types of equipment, the vast 
majority of which fall in the range of 5 to 10 years, and none of which 
are lower than two years in duration. We believe that the updated 
editions of this reference material remain the most accurate source for 
estimating the useful life of depreciable medical equipment.
    In the CY 2021 PFS final rule, we finalized a proposal to treat 
equipment life durations of less than 1 year as having a duration of 1 
year for the purpose of our equipment price per minute formula. In the 
rare cases where items are replaced every few months, we noted that we 
believe it is more accurate to treat these items as disposable supplies 
with a fractional supply quantity as opposed to equipment items with 
very short equipment life durations. For a more detailed discussion of 
the methodology associated with very short equipment life durations, we 
refer readers to the CY 2021 PFS final rule (85 FR 84482 through 
84483).
     Maintenance: We finalized the 5 percent factor for annual 
maintenance in the CY 1998 PFS final rule with comment period (62 FR 
33164). As we previously stated in the CY 2016 PFS final rule with 
comment period (80 FR 70897), 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 noted that we believe it likely overstates the 
maintenance costs for other equipment. When we solicited comments 
regarding data sources containing equipment maintenance rates, 
commenters could not identify an auditable, robust data source that CMS 
could use on a wide scale. We noted that we did not believe 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 a different maintenance factor, we did not 
propose a variable maintenance factor for equipment cost per minute 
pricing as we did not believe that we have sufficient information at 
present. We noted that we would 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). The Interest rates are listed in Table 3.
[GRAPHIC] [TIFF OMITTED] TP31JY24.002

    We are not proposing any changes to the equipment interest rates 
for CY 2025.
3. Adjusting RVUs To Match the PE Share of the Medicare Economic Index 
(MEI)
    In the past, we have stated that we believe that the MEI is the 
best measure available of the relative weights of the three components 
in payments under the PFS--work, practice expense (PE), and malpractice 
(MP). Accordingly, we believe that to ensure that the PFS payments 
reflect the relative resources in each of these PFS components as 
required by section 1848(c)(3) of the Act, the RVUs used in developing 
rates should reflect the same weights in each component as the cost 
share weights in the Medicare Economic Index (MEI). In the past, we 
have proposed (and subsequently finalized) to accomplish this by 
holding the work RVUs constant and adjusting the PE RVUs, MP RVUs, and 
CF to produce the appropriate balance in RVUs among the three PFS 
components and payment rates for individual services, that is, that the 
total RVUs on the PFS are proportioned to approximately 51 percent work 
RVUs, 45 percent PE RVUs, and 4 percent MP RVUs. As the MEI cost shares 
are updated, we would typically propose to modify steps 3 and 10 to 
adjust the aggregate pools of PE costs (direct PE in step 3 and 
indirect PE in step 10) in proportion to the change in the PE share in 
the rebased and revised MEI cost share weights, and to recalibrate the 
relativity adjustment that we apply in step 18 as described in the CY 
2023 PFS final rule (87 FR 69414 and 69415) and CY 2014 PFS final rule 
(78 FR 74236 and 74237). The most recent recalibration was done for the 
CY 2014 RVUs.
    In the CY 2014 PFS proposed rule (78 FR 43287 through 43288) and 
final rule (78 FR 74236 through 74237), we detailed the steps necessary 
to accomplish this result (see steps 3, 10, and 18). The CY 2014 
proposed and final adjustments were consistent with our longstanding 
practice to make adjustments to match the RVUs for the PFS components 
with the MEI cost share weights for the components, including the 
adjustments described in the CY 1999 PFS final rule (63 FR 58829), CY 
2004 PFS final rule (68 FR 63246 and 63247), and CY 2011 PFS final rule 
(75 FR 73275).
    In the CY 2023 PFS final rule (87 FR 69688 through 69711), we 
finalized to rebase and revise the MEI to reflect more current market 
conditions faced by physicians in furnishing physicians' services 
(referred to as the ``2017-based MEI''). We also finalized a delay of 
the adjustments to the PE pools in steps 3

[[Page 61606]]

and 10 and the recalibration of the relativity adjustment in step 18 
until the public had an opportunity to comment on the rebased and 
revised MEI (87 FR 69414 through 69416). Because we finalized 
significant methodological and data source changes to the MEI in the CY 
2023 PFS final rule and significant time has elapsed since the last 
rebasing and revision of the MEI in CY 2014, we believed that delaying 
the implementation of the finalized CY 2023 rebased and revised MEI was 
consistent with our efforts to balance payment stability and 
predictability with incorporating new data through more routine 
updates. We refer readers to the discussion of our comment solicitation 
in the CY 2023 PFS final rule (87 FR 69429 through 69432), where we 
reviewed our ongoing efforts to update data inputs for PE to aid 
stability, transparency, efficiency, and data adequacy. We also 
solicited comment in the CY 2023 PFS proposed rule on when and how to 
best incorporate the CY 2023 rebased and revised MEI into PFS 
ratesetting, and whether it would be appropriate to consider a 
transition to full implementation for potential future rulemaking. We 
presented the impacts of implementing the rebased and revised MEI in 
PFS ratesetting through a 4-year transition and through full immediate 
implementation, that is, with no transition period in the CY 2023 PFS 
proposed rule. We also solicited comment on other implementation 
strategies for potential future rulemaking in the CY 2023 PFS proposed 
rule. In the CY 2023 PFS final rule, we discussed that many commenters 
supported our proposed delayed implementation, and many commenters 
expressed concerns with the redistributive impacts of the 
implementation of the rebased and revised MEI in PFS ratesetting. Many 
commenters also noted the AMA's intent to collect practice cost data 
from physician practices, which could be used to derive cost share 
weights for the MEI and RVU shares.
    In light of the AMA's current data collection efforts and because 
the methodological and data source changes to the MEI finalized in the 
CY 2023 PFS final rule would have significant impacts on PFS payments, 
similar to our discussion of this topic in the CY 2024 PFS rulemaking 
cycle (88 FR 78829 through 78831), we continue to believe that delaying 
the implementation of the finalized 2017-based MEI cost share weights 
for the RVUs is consistent with our efforts to balance payment 
stability and predictability with incorporating new data through more 
routine updates. For these reasons, we did not propose to incorporate 
the 2017-based MEI in PFS ratesetting for CY 2024. As we noted in the 
CY 2024 PFS final rule, many commenters on the CY 2024 PFS proposed 
rule supported our continued delayed implementation of the 2017-based 
MEI in PFS ratesetting (88 FR 78830). Most of these commenters urged us 
to pause consideration of other sources for the MEI until the AMA's 
efforts to collect practice cost data from physician practices have 
concluded, although a few commenters recommended that we implement the 
MEI for PFS ratesetting as soon as possible. We agree with the 
commenters that it would be prudent, and avoid potential duplication of 
effort, to wait to consider other data sources for the MEI while the 
AMA's data collection activities are ongoing. As we discussed in the CY 
2024 PFS final rule, we continue to monitor the data available related 
to physician services' input expenses, but we are not proposing to 
update the data underlying the MEI cost weights at this time. Given our 
previously described policy goal to balance PFS payment stability and 
predictability with incorporating new data through more routine updates 
to the MEI, we are not proposing to incorporate the 2017-based MEI in 
PFS ratesetting for CY 2025. We invite comments on this approach as 
well as any information on the timing of the AMA's practice cost data 
collection efforts and other sources of data we could consider for 
updating the MEI.
4. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are included in the CY 2025 direct PE input public use files, which are 
available on the CMS website under downloads for the CY 2025 PFS 
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
a. Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule with comment period (79 
FR 67640 through 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 post service periods for each code. In addition to 
increasing the transparency of the information used to set PE RVUs, 
this level of detail 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 detailed 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 physician preservice time 
packages. We believe that setting and maintaining such standards would 
provide greater consistency among codes that share the same clinical 
labor tasks and could improve the relativity of values among codes. For 
example, as medical practice and technologies change over time, 
standards could be updated simultaneously for all codes with the 
applicable clinical labor tasks instead of waiting for individual codes 
to be reviewed.
    In the CY 2016 PFS final rule with comment period (80 FR 70901), we 
solicited comments on the appropriate standard minutes for the clinical 
labor tasks associated with services that use digital technology. After 
consideration of comments received, we finalized standard times for 
clinical labor tasks associated with digital imaging at 2 minutes for 
``Availability of prior images confirmed'', 2 minutes for ``Patient 
clinical information and questionnaire reviewed by technologist, order 
from physician confirmed and exam protocoled by radiologist'', 2 
minutes for ``Review examination with interpreting MD'', and 1 minute 
for ``Exam documents scanned into PACS'' and ``Exam completed in RIS 
system to generate billing process and to populate images into 
Radiologist work queue.'' In the CY 2017 PFS final rule (81 FR 80184 
through 80186), we finalized a policy to establish a range of 
appropriate standard minutes for the clinical labor activity, 
``Technologist QCs images in PACS, checking for all images, reformats, 
and dose page.'' These standard minutes will be applied to new and 
revised codes that make use of this clinical labor activity when they 
are reviewed by us for valuation. We finalized a policy to establish 2 
minutes as the standard for the simple case, 3 minutes as the standard 
for the intermediate

[[Page 61607]]

case, 4 minutes as the standard for the complex case, and 5 minutes as 
the standard for the highly complex case. These values were based upon 
a review of the existing minutes assigned for this clinical labor 
activity; we determined that 2 minutes is the duration for most 
services and a small number of codes with more complex forms of digital 
imaging have higher values. We also finalized standard times for a 
series of clinical labor tasks associated with pathology services in 
the CY 2016 PFS final rule with comment period (80 FR 70902). We do not 
believe these activities would be dependent on number of blocks or 
batch size, and we believe that the finalized standard values 
accurately reflect the typical time it takes to perform these clinical 
labor tasks.
    In reviewing the RUC-recommended direct PE inputs for CY 2019, we 
noticed that the 3 minutes of clinical labor time traditionally 
assigned to the ``Prepare room, equipment and supplies'' (CA013) 
clinical labor activity were split into 2 minutes for the ``Prepare 
room, equipment and supplies'' activity and 1 minute for the ``Confirm 
order, protocol exam'' (CA014) activity. We proposed to maintain the 3 
minutes of clinical labor time for the ``Prepare room, equipment and 
supplies'' activity and remove the clinical labor time for the 
``Confirm order, protocol exam'' activity wherever we observed this 
pattern in the RUC-recommended direct PE inputs. Commenters explained 
in response that when the new version of the PE worksheet introduced 
the activity codes for clinical labor, there was a need to translate 
old clinical labor tasks into the new activity codes, and that a prior 
clinical labor task was split into two of the new clinical labor 
activity codes: CA007 (Review patient clinical extant information and 
questionnaire) in the preservice period, and CA014 (Confirm order, 
protocol exam) in the service period. Commenters stated that the same 
clinical labor from the old PE worksheet was now divided into the CA007 
and CA014 activity codes, with a standard of 1 minute for each 
activity. We agreed with commenters that we would finalize the RUC-
recommended 2 minutes of clinical labor time for the CA007 activity 
code and 1 minute for the CA014 activity code in situations where this 
was the case. However, when reviewing the clinical labor for the 
reviewed codes affected by this issue, we found that several of the 
codes did not include this old clinical labor task, and we also noted 
that several of the reviewed codes that contained the CA014 clinical 
labor activity code did not contain any clinical labor for the CA007 
activity. In these situations, we believe that the three total minutes 
of clinical staff time would be more accurately described by the CA013 
``Prepare room, equipment and supplies'' activity code, and we 
finalized these clinical labor refinements. We direct readers to the 
discussion in the CY 2019 PFS final rule (83 FR 59463 through 59464) 
for additional details.
    Following the publication of the CY 2020 PFS proposed rule, one 
commenter expressed concern with the published list of common 
refinements to equipment time. The commenter stated that these 
refinements were the formulaic result of applying refinements to the 
clinical labor time and did not constitute separate refinements; the 
commenter requested that CMS no longer include these refinements in the 
table published each year. In the CY 2020 PFS final rule, we agreed 
with the commenter that these equipment time refinements did not 
reflect errors in the equipment recommendations or policy discrepancies 
with the RUC's equipment time recommendations. However, we believed it 
was important to publish the specific equipment times that we were 
proposing (or finalizing in the case of the final rule) when they 
differed from the recommended values due to the effect these changes 
can have on the direct costs associated with equipment time. Therefore, 
we finalized the separation of the equipment time refinements 
associated with changes in clinical labor into a separate table of 
refinements. We direct readers to the discussion in the CY 2020 PFS 
final rule (84 FR 62584) for additional details.
    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 the RUC's development and our review of code values 
for individual codes. Beginning with its recommendations for CY 2019, 
the RUC mandated the use of a new PE worksheet for its 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 
helps us simplify and standardize the hundreds of clinical labor tasks 
currently listed in our direct PE database. As in previous calendar 
years, to facilitate rulemaking for CY 2025, we are continuing to 
display 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 crosswalked to the new listing of clinical labor activity 
codes. These lists are available on the CMS website under downloads for 
the CY 2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
b. 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. Beginning in 
CY 2019 and continuing through CY 2022, we conducted a market-based 
supply and equipment pricing update using information developed by our 
contractor, StrategyGen, which updated pricing recommendations for 
approximately 1300 supplies and 750 equipment items currently used as 
direct PE inputs. Given the potentially significant changes in payment 
that would occur, in the CY 2019 PFS final rule, we finalized a policy 
to phase in our use of the new direct PE input pricing over a 4-year 
period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 
percent (CY 2021), and 100/0 percent (CY 2022) split between new and 
old pricing. We believed that implementing the proposed updated prices 
with a 4-year phase-in would improve payment accuracy while maintaining 
stability and allowing interested parties to address potential concerns 
about changes in payment for particular items. This 4-year transition 
period to update supply and equipment pricing concluded in CY 2022; for 
a more detailed discussion, we refer readers to the CY 2019 PFS final 
rule with comment period (83 FR 59473 through 59480).
    For CY 2025, we are proposing to update the price of 17 supplies 
and one equipment item in response to the public submission of invoices 
following the publication of the CY 2024 PFS final rule. The 18 supply 
and equipment items with proposed updated prices are listed in the 
valuation of specific codes section of the preamble under Table 16, CY 
2025 Invoices Received for Existing Direct PE Inputs.
    An interested party submitted 30 invoices to update pricing for the 
human amniotic membrane allograft

[[Page 61608]]

mounted on a non-absorbable self-retaining ring (SD248) supply. We 
previously updated the price of this supply in the CY 2024 final rule 
(88 FR 78901) based on averaging together the price of the Prokera 
Slim, Prokera Classic, and Prokera Plus devices. The interested party 
submitted new invoices for all three of these devices which averaged to 
a new price of $1149.00 which we are proposing for the SD248 supply. We 
are soliciting additional comments from interested parties regarding 
the price of the SD248 supply as well as any information as far as 
whether one of these three devices (the Prokera Slim, Prokera Classic, 
and Prokera Plus) would be more typical than the other two for use as a 
supply in CPT code 65778.
    In the case of the indocyanine green (25ml uou) (SL083) supply, we 
noticed that there was a clear bimodal distribution of prices on the 
eight submitted invoices, clustered around $91.00 and $141.67, 
respectively, with no pricing in between $100 and $140. We are 
proposing the updated total average price of $125.11 based on the eight 
submitted invoices for the SL083 supply, however, we are soliciting 
comments on why there was such divergence in the pricing on the 
submitted invoices, as well as whether these may represent pricing for 
two different supplies.
    Regarding the Reaction buffer 10X (Ventana 950-300) (SL478) supply, 
we are proposing to update the price from $0.037 to $0.045, which is 
less than the $0.075 contained on the invoice submitted by interested 
parties. We were able to find this product readily available for 
purchase online at a quantity of 10 liters for $453 or a price of 
$0.045. We do not believe that it would be typical for providers to pay 
a higher price based on smaller unit quantities; therefore, we are 
proposing to update the price of the SL478 supply but only to $0.045, 
which is the price to purchase this supply online, as stated above.
    Interested parties also alerted CMS to a technical correction for 
pricing the Atomizer tips (disposable) (SL464) supply. We previously 
finalized a price of $2.66 for the SL464 supply, which was included in 
the table of Invoices Received for Existing Direct PE Inputs in the CY 
2018 final rule (82 FR 53162). However, due to a technical error, the 
updated pricing for the SL464 supply was never implemented. We are 
proposing to make this correction for CY 2025; the corrected price of 
$2.66 for the SL464 supply is included in Table 16.
    We are not proposing to update the price of another ten supplies, 
which were the subject of public submission of invoices. Our reasons 
for not proposing updates to these prices are detailed below, and we 
are seeking additional information from interested parties for 
assistance in pricing these supplies:
     Liposorber supplies: Tubing set (SC083), Plasma LDL 
adsorption column (SD186), and Plasma separator (SD188): We received 
invoices for these three Liposorber supplies from an interested party. 
However, it was unclear from the invoice submissions what the unit 
quantity size is for each product. We require additional information 
regarding the unit size of each supply included on these invoices to 
establish updated pricing, and therefore, we are not proposing updates 
to the prices for these supplies. We are seeking additional comments 
regarding the pricing of these supplies and whether the pricing has 
increased so dramatically, as it seems unlikely that prices have 
tripled in the five years since we most recently updated the pricing 
for these supplies.
     Congo Red kits (SA110): We received three invoices from 
interested parties requesting an increase in the price of the SA110 
supply from $6.80 to $18.78. However, we were able to find Congo Red 
staining kits readily available online at a price of 100 for $410 or 
$4.10 per kit. The unit size of these kits was also unclear, which made 
price comparisons with the submitted invoices difficult. Based on the 
three invoices and the online price of 100 for $410 or $4.10 per kit, 
we do not believe there is enough pricing data to support an increase 
in the price of the SA110 supply from $6.80 to $18.78, and we are not 
proposing an increase in the price of this supply.
     Gauze, non-sterile 4in x 4in (SG051): We received one 
invoice from interested parties requesting an increase in the price of 
the SG051 supply from $0.03 to $0.04. However, the submitted invoice 
price appeared to be for surgical gauze, not non-sterile gauze. We were 
able to find the 4x4 non-sterile gauze readily available online at less 
than the invoice price. Based on this information, we do not believe 
there is enough pricing data to support an increase in the price of the 
SG051 supply from $0.03 to $0.04, and we are not proposing an increase 
in the price of this supply.
     Permanent marking pen (SL477): We received one invoice 
from interested parties requesting an increase in the price of the 
SL477 supply from $2.81 to $4.62. However, we found black marking pens, 
such as Sharpies, widely available at unit prices around $2.00 when 
purchased in larger quantities. Based on this information, we do not 
believe there is enough pricing data to support an increase in the 
price of the SL477 supply from $2.81 to $4.62, and we are not proposing 
an increase in the price of this supply.
     Hematoxylin II (Ventana 790-2208) (SL483): We received 
four invoices from interested parties requesting an increase in the 
price of the SL483 supply from $0.780 to $2.722. However, we were able 
to find hematoxylin II stains readily available online at cheaper 
prices, such as $52.00 for 500 ml ($0.104 per ml). Based on this 
information, we do not believe there is enough pricing data to support 
an increase in the price of the SL483 supply from $0.780 to $2.722, and 
we are not proposing an increase in the price of this supply.
     Bluing reagent (Ventana 760-2037) (SL484): We received 
three invoices from interested parties requesting an increase in the 
price of the SL484 supply from $4.247 to $6.130. While researching the 
pricing of the SL484 supply, we were unable to determine the unit 
quantity size on invoices, which made it difficult to evaluate if the 
requested price accurately reflected market pricing. As best we could 
tell, the requested price increase to $6.130 was more expensive than 
comparable online bluing reagents available for purchase. Based on this 
information, we do not believe there is enough pricing data to support 
an increase in the price of the SL484 supply from $4.247 to $6.130, and 
we are not proposing an increase in the price of this supply.
     EZ Prep (10X) (Ventana 950-102) (SL481) and 250 Test Prep 
Kit # 78 (Ventana 786-3034) (SL486): In each of these cases, we 
received invoices from interested parties requesting substantial 
increases in the price of the associated supplies, from $0.034 to 
$0.509 for the SL481 supply and from $0.309 to $2.134 for the SL486 
supply. We do not believe that it is reasonable to expect that the 
typical market prices for these supplies have increased by 1400 percent 
and 600 percent, respectively, in the 5 years since we most recently 
updated the pricing for these supplies. The limited pricing information 
we could find online for each product also failed to support these 
drastic increases in pricing. Based on this information, we do not 
believe there is enough pricing data to support the requested increases 
for the SL481 and SL486 supplies, and we are not proposing increases to 
the prices for these supplies.
(1) Invoice Submission
    We remind readers that we routinely accept public submissions of 
invoices as part of our process for developing payment rates for new, 
revised, and

[[Page 61609]]

potentially misvalued codes. Often, these invoices are submitted in 
conjunction with the RUC-recommended values for the codes. To be 
included in a given year's proposed rule, we generally need to receive 
invoices by the same February 10th deadline we noted for consideration 
of RUC recommendations. However, we will consider invoices submitted as 
public comments during the comment period following the publication of 
the PFS proposed rule and would consider any invoices received after 
February 10th or outside of the public comment process as part of our 
established annual process for requests to update supply and equipment 
prices. Interested parties are encouraged to submit invoices with their 
public comments or, if outside the notice and comment rulemaking 
process, via email at [email protected].
    In recent years, we have noticed a growing number of invoice 
submissions for use in updating supply and equipment pricing. Although 
we continue to believe in the importance of using the most recent and 
accurate invoice data to reflect current market pricing, we do have 
some concerns that the increased use of these submissions may distort 
relativity across the fee schedule. Relying on voluntary invoice 
submissions to update pricing for a small subset of the total number of 
supply and equipment items in our database, while leaving the 
overwhelming majority of prices untouched, could be distorting pricing 
in favor of the most recent submissions. We believe that it may be more 
efficient, and more accurate, to update supply and equipment pricing in 
a more comprehensive fashion similar to the pricing update that took 
place from CY 2019 to CY 2022. For example, future updates to supply 
and equipment pricing could take place in tandem with updates to 
clinical labor pricing after the current clinical labor update 
concludes in CY 2025. We welcome public comments on this general topic 
of more comprehensive updates to supply and equipment pricing, and we 
may consider comments we receive to inform future rulemaking.
(2) Supply Pack Pricing Update
    Interested parties previously notified CMS that they identified 
numerous discrepancies between the aggregated cost of some supply packs 
and the individual item components contained within. The interested 
parties indicated that CMS should rectify these mathematical errors as 
soon as possible to ensure that the sum correctly matches the totals 
from the individual items, and they recommended that we resolve these 
pricing discrepancies in the supply packs during CY 2024 rulemaking. 
The AMA RUC convened a workgroup on this subject and submitted 
recommendations to update pricing for a series of supply packs along 
with the RUC's comment letter for the CY 2024 rule cycle.
    We appreciated the additional information and RUC workgroup 
recommendations regarding discrepancies in the aggregated cost of some 
supply packs. However, due to the projected significant cost revisions 
in the pricing of supply packs and because we did not propose to 
address supply pack pricing in the CY 2024 proposed rule, we stated 
that this issue would be better addressed in future rulemaking. For 
example, the cleaning and disinfecting endoscope pack (SA042) is 
included as a supply input in more than 300 HCPCS codes, which could 
have a sizable impact on the overall valuation of these services, and 
which was not incorporated into the proposed RVUs published for the CY 
2024 proposed rule. We stated that interested parties would be better 
served if we comprehensively addressed this topic during future 
rulemaking in which commenters could provide feedback in response to 
proposed pricing updates (88 FR 78833 through 78834).
    For CY 2025, we are proposing to implement the supply pack pricing 
update and associated revisions as recommended by the RUC's workgroup. 
We are proposing to update the pricing of the ``pack, cleaning and 
disinfecting, endoscope'' (SA042) supply from $19.43 to $31.29, to 
update the pricing of the ``pack, drapes, cystoscopy'' (SA045) supply 
from $17.33 to $14.99, to update the pricing of the ``pack, ocular 
photodynamic therapy'' (SA049) supply from $16.35 to $26.35, to update 
the pricing of the ``pack, urology cystoscopy visit'' (SA058) supply 
from $113.70 to $37.63, and to update the pricing of the ``pack, 
ophthalmology visit (w-dilation)'' (SA082) supply from $3.91 to $2.33. 
As recommended by the RUC workgroup, we are also proposing to delete 
the ``pack, drapes, laparotomy (chest-abdomen)'' (SA046) supply 
entirely. The proposed updated prices for these supply packs are listed 
in the valuation of specific codes section of the preamble under Table 
16, CY 2025 Invoices Received for Existing Direct PE Inputs.
    In accordance with the RUC workgroup's recommendations, we are also 
proposing to create eight new supply codes, including components 
contained within previously existing supply packs. Aside from the SB056 
supply, which is a replacement in several HCPCS codes for the deleted 
SA046 supply pack, all of these new supplies are not included as 
standalone direct PE inputs in any current HCPCS codes, as they are, 
again, components contained within previously existing supply packs. We 
are proposing to add:
     The kit, ocular photodynamic therapy (PDT) (SA137) supply 
at a price of $26.00 as a component of the SA049 supply pack;
     The Abdominal Drape Laparotomy Drape Sterile (100 in x 72 
in x 124 in) (SB056) supply at a price of $8.049 as a replacement for 
the SA046 supply pack;
     The drape, surgical, legging (SB057) supply at a price of 
$3.284 as a component of the SA045 supply pack;
     The drape, surgical, split, impervious, absorbent (SB058) 
supply at a price of $8.424 as a component of the SA045 supply pack;
     The post-mydriatic spectacles (SB059) supply at a price of 
$0.328 as a component of the SA082 supply pack;
     The y-adapter cap (SD367) supply at a price of $0.352 as a 
component of the SA049 supply pack;
     The ortho-phthalaldehyde 0.55% (e.g., Cidex OPA) (SM030) 
supply at a price of $0.554 as a component of the SA042 supply pack; 
and
     The ortho-phthalaldehyde test strips (SM031) supply at a 
price of $1.556 as a component of the SA042 supply pack.
    The proposed new supply pack component items are listed in the 
valuation of specific codes section of the preamble under Table 17, CY 
2025 New Invoices.
    We are also proposing the following additional supply substitutions 
based on the recommendations of the RUC workgroup. We are proposing to 
remove the deleted SA046 supply pack and replace it with the drape, 
sterile, fenestrated 16in x 29in (SB011) supply for CPT codes 19020, 
19101, 19110, 19112, 20101, and 20102. We are proposing to remove the 
deleted SA046 supply pack and replace it with two supplies--the drape, 
sterile, three-quarter sheet (SB014) and the drape, towel, sterile 18in 
x 26in (SB019)--for CPT codes 19000 and 60300. We are proposing to 
remove the deleted SA046 supply pack and replace it with two supplies--
the drape, towel, sterile 18in x 26in (SB019) and the newly created 
Abdominal Drape Laparotomy Drape Sterile (100 in x 72 in x 124 in) 
(SB056) supply--for CPT codes 22510, 22511, 22513, and 22514. We are 
proposing to remove the deleted SA046 supply pack without replacing it 
with anything for CPT code 22526; the RUC workgroup

[[Page 61610]]

did not make a recommendation on what to do with CPT code 27278, which 
also previously contained the SA046 supply pack. Therefore, we are also 
proposing not to replace the SA046 supply pack with any supplies for 
this code. The RUC workgroup also recommended removing the SA046 supply 
pack from CPT code 64595 with no replacement; however, this code was 
recently reviewed at the April 2022 RUC meeting and it no longer 
includes the SA046 supply.
    The RUC workgroup also reviewed the issue of skin adhesives and 
identified several generic alternatives to using the skin adhesive 
(Dermabond) (SG007) supply. The workgroup stated that there are 
multiple skin adhesive products, at different price points, available 
that work similarly to Dermabond and requested that generic 
alternatives be used overall in place of brand names in the CMS direct 
PE database. The workgroup made a series of suggestions for CMS to 
create new medical supply item codes to encompass the generic 
formulations of cyanoacrylate skin adhesive in multidose form and 
single use sterile application.
    We appreciate the recommendations from the RUC workgroup and concur 
that generic alternatives be used in place of brand names, where 
appropriate, in the CMS direct PE database. However, we have no pricing 
information or submitted invoices for the four generic formulations of 
cyanoacrylate skin adhesive requested by the RUC workgroup (2-Octyl-
cyanoacrylate, n-Butyl-2-cyanoacrylate, Combined n-Butyl and 2-
Octylcyanoacrylate, and Ethyl-2-cyanoacrylate). Since these four 
potential new supplies have no pricing information and are not 
currently included as direct PE inputs for any HCPCS codes, we have not 
added them to our direct PE database for the CY 2025 proposed rule due 
to lack of available information.
c. Clinical Labor Pricing Update
    Section 220(a) of the PAMA provides that the Secretary may collect 
or obtain information from any eligible professional or any other 
source on the resources directly or indirectly related to furnishing 
services for which payment is made under the PFS and that such 
information may be used in the determination of relative values for 
services under the PFS. Such information may include the time involved 
in furnishing services; the amounts, types, and prices of PE inputs; 
overhead and accounting information for practices of physicians and 
other suppliers, and any other elements that would improve the 
valuation of services under the PFS.
    Beginning in CY 2019, we updated the supply and equipment prices 
used for PE as part of a market-based pricing transition; CY 2022 was 
the final year of this 4-year transition. We initiated a market 
research contract with StrategyGen to conduct an in-depth and robust 
market research study to update the supply and equipment pricing for CY 
2019, and we finalized a policy in CY 2019 to phase in the new pricing 
over a period of 4 years. However, we did not propose to update the 
clinical labor pricing, and the pricing for clinical labor has remained 
unchanged during this pricing transition. Clinical labor rates were 
last updated for CY 2002 using Bureau of Labor Statistics (BLS) data 
and other supplementary sources where BLS data were not available; we 
refer readers to the full discussion in the CY 2002 PFS final rule for 
additional details (66 FR 55257 through 55262).
    Interested parties raised concerns that the long delay since 
clinical labor pricing was last updated created a significant disparity 
between CMS' clinical wage data and the market average for clinical 
labor. In recent years, several interested parties suggested that 
certain wage rates were inadequate because they did not reflect current 
labor rate information. Some interested parties also stated that 
updating the supply and equipment pricing without updating the clinical 
labor pricing could create distortions in the allocation of direct PE. 
They argued that since the pool of aggregated direct PE inputs is 
budget neutral, if these rates are not routinely updated, clinical 
labor may become undervalued over time relative to equipment and 
supplies, especially since the supply and equipment prices are in the 
process of being updated. There was considerable interest among 
interested parties in updating the clinical labor rates, and when we 
solicited comment on this topic in past rules, such as in the CY 2019 
PFS final rule (83 FR 59480), interested parties supported the idea.
    Therefore, we proposed to update the clinical labor pricing for CY 
2022, in conjunction with the final year of the supply and equipment 
pricing update (86 FR 39118 through 39123). We believed updating the 
clinical labor pricing was important to maintain relativity with the 
recent supply and equipment pricing updates. We proposed to use the 
methodology outlined in the CY 2002 PFS final rule (66 FR 55257), which 
draws primarily from BLS wage data, to calculate updated clinical labor 
pricing. As we stated in the CY 2002 PFS final rule, the BLS' 
reputation for publishing valid estimates that are nationally 
representative led to the choice to use the BLS data as the main 
source. We believe that the BLS wage data continues to be the most 
accurate source to use as a basis for clinical labor pricing and this 
data will appropriately reflect changes in clinical labor resource 
inputs for setting PE RVUs under the PFS. We used the most current BLS 
survey data (2019) as the main source of wage data for our CY 2022 
clinical labor proposal.
    We recognized that the BLS survey of wage data does not cover all 
the staff types contained in our direct PE database. Therefore, we 
crosswalked or extrapolated the wages for several staff types using 
supplementary data sources for verification whenever possible. In 
situations where the price wages of clinical labor types were not 
referenced in the BLS data, we used the national salary data from the 
Salary Expert, an online project of the Economic Research Institute 
that surveys national and local salary ranges and averages for 
thousands of job titles using mainly government sources. (A detailed 
explanation of the methodology used by Salary Expert to estimate 
specific job salaries can be found at www.salaryexpert.com.) We 
previously used Salary Expert information as the primary backup source 
of wage data during the last update of clinical labor pricing in CY 
2002. If we did not have direct BLS wage data available for a clinical 
labor type, we used the wage data from Salary Expert as a reference for 
pricing, then crosswalked these clinical labor types to a proxy BLS 
labor category rate that most closely matched the reference wage data, 
similar to the crosswalks used in our PE/HR allocation. For example, 
there is no direct BLS wage data for the Mammography Technologist 
(L043) clinical labor type; we used the wage data from Salary Expert as 
a reference and identified the BLS wage data for Respiratory Therapists 
as the best proxy category. We calculated rates for the ``blend'' 
clinical labor categories by combining the rates for each labor type in 
the blend and then dividing by the total number of labor types in the 
blend.
    As in the CY 2002 clinical labor pricing update, the proposed cost 
per minute for each clinical staff type was derived by dividing the 
average hourly wage rate by 60 to arrive at the per minute cost. In 
cases where an hourly wage rate was not available for a clinical staff 
type, the proposed cost per minute for the clinical staff type was 
derived by

[[Page 61611]]

dividing the annual salary (converted to 2021 dollars using the 
Medicare Economic Index) by 2080 (the number of hours in a typical work 
year) to arrive at the hourly wage rate and then again by 60 to arrive 
at the per minute cost. We ultimately finalized the use of median BLS 
wage data instead of mean BLS wage data in response to comments in the 
CY 2022 PFS final rule. To account for the employers' cost of providing 
fringe benefits, such as sick leave, we finalized a benefits multiplier 
of 1.296 based on a BLS release from June 17, 2021 (USDL-21-1094). As 
an example of this process, for the Physical Therapy Aide (L023A) 
clinical labor type, the BLS data reflected a median hourly wage rate 
of $12.98, which we multiplied by the 1.296 benefits modifier and then 
divided by 60 minutes to arrive at the finalized per-minute rate of 
$0.28.
    After considering the comments on our CY 2022 proposals, we agreed 
with commenters that the use of a multi-year transition would help 
smooth out the changes in payment resulting from the clinical labor 
pricing update, avoiding potentially disruptive changes in payment for 
affected interested parties, and promoting payment stability from year-
to-year. We believed it would be appropriate to use a 4-year 
transition, as we have for several other broad-based updates or 
methodological changes. While we recognized that using a 4-year 
transition to implement the update means that we will continue to rely 
in part on outdated data for clinical labor pricing until the change is 
fully completed in CY 2025, we agreed with the commenters that these 
significant updates to PE valuation should be implemented in the same 
way, and for the same reasons, as for other major updates to pricing 
such as the recent supply and equipment update. Therefore, we finalized 
the clinical labor pricing update implementation over four years to 
transition from current prices to the final updated prices in CY 2025. 
We finalized the implementation of this pricing transition over 4 
years, such that one-quarter of the difference between the current 
price and the fully phased-in price is implemented for CY 2022, one-
third of the difference between the CY 2022 price and the final price 
is implemented for CY 2023, and one-half of the difference between the 
CY 2023 price and the final price is implemented for CY 2024, with the 
new direct PE prices fully implemented for CY 2025. (86 FR 65025) An 
example of the transition from the current to the fully-implemented new 
pricing that we finalized in the CY 2022 PFS final rule is provided in 
Table 4.
[GRAPHIC] [TIFF OMITTED] TP31JY24.003


(1) CY 2023 Clinical Labor Pricing Updates

    For CY 2023, we received information from one interested party 
regarding the pricing of the Histotechnologist (L037B) clinical labor 
type. The interested party provided data from the 2019 Wage Survey of 
Medical Laboratories which supported an increase in the per-minute rate 
from the $0.55 finalized in the CY 2022 PFS final rule to $0.64. This 
rate of $0.64 for the L037B clinical labor type is a close match to the 
online salary data that we had for the Histotechnologist and matches 
the $0.64 rate that we initially proposed for L037B in the CY 2022 PFS 
proposed rule. Based on the wage data provided by the commenter, we 
proposed this $0.64 rate for the L037B clinical labor type for CY 2023; 
we also proposed a slight increase in the pricing for the Lab Tech/
Histotechnologist (L035A) clinical labor type from $0.55 to $0.60 as it 
is a blend of the wage rate for the Lab Technician (L033A) and 
Histotechnologist clinical labor types. We also proposed the same 
increase to $0.60 for the Angio Technician (L041A) clinical labor type, 
as we previously established a policy in the CY 2022 PFS final rule 
that the pricing for the L041A clinical labor type would match the rate 
for the L035A clinical labor type (86 FR 65032).
    Based on comments received on the CY 2023 proposed rule, we 
finalized a change in the descriptive text of the L041A clinical labor 
type from ``Angio Technician'' to ``Vascular Interventional 
Technologist''. We also finalized an update in the pricing of three 
clinical labor types: from $0.60 to $0.84 for the Vascular 
Interventional Technologist (L041A), from $0.63 to $0.79 for the 
Mammography Technologist (L043A), and from $0.76 to $0.78 for the CT 
Technologist (L046A) based on submitted wage data from the 2022 
Radiologic Technologist Wage and Salary Survey (87 FR 69422 through 
69425).

(2) CY 2024 Clinical Labor Pricing Updates

    We did not receive new wage data or other additional information 
for use in clinical labor pricing from interested parties prior to the 
publication of the CY 2024 PFS proposed rule. Therefore, our proposed 
clinical labor pricing for CY 2024 was based on the clinical labor 
pricing that we finalized in the CY 2023 PFS final rule, incremented an 
additional step for Year 3 of the update. Based on comments received on 
the CY 2024 proposed rule, we finalized an update in the clinical labor 
pricing of the cytotechnologist (L045A) clinical labor type from $0.76 
to $0.85 based on submitted data from the 2021 American Society of 
Clinical Pathologists (ASCP) Wage Survey of Medical Laboratories (88 FR 
78838).

(3) CY 2025 Clinical Labor Pricing Update Proposals

    We did not receive new wage data or other additional information 
for use in clinical labor pricing from interested parties prior to the 
publication of the CY 2025 PFS proposed rule. Therefore, our proposed 
clinical labor pricing for CY 2025 in Table 5 is based on the clinical 
labor pricing that we finalized in the CY 2024 PFS final rule, 
incremented an additional step for the final Year 4 of the update:
BILLING CODE P

[[Page 61612]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.004


[[Page 61613]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.005

BILLING CODE C
    As was the case for the market-based supply and equipment pricing 
update, the clinical labor rates will remain open for public comment 
during the 60-day comment period for this CY 2025 PFS proposed rule. We 
expect to set the updated clinical labor rates for CY 2025 in the final 
rule. We updated the pricing of some clinical labor types in the CY 
2022, CY 2023, and CY 2024 PFS final rules in response to information 
provided by commenters. For the full discussion of the clinical labor 
pricing update, we direct readers to the CY 2022 PFS final rule (86 FR 
65020 through 65037).
5. Development of Strategies for Updates to Practice Expense Data 
Collection and Methodology
a. Background
    The AMA PPIS was first introduced in 2007 as a means to collect 
comprehensive and reliable data on the direct and indirect PEs incurred 
by physicians (72 FR 66222). In considering the use of PPIS data, the 
goal was to improve the accuracy and consistency of PE RVUs used in the 
PFS. The data collection process included a stratified random sample of 
physicians across various specialties, and the survey was administered 
between August 2007 and March 2008. Data points from that period of 
time are integrated into PFS calculations today. In the CY 2009 PFS 
proposed rule (73 FR 38507 through 3850), we discussed the indirect PE 
methodology that used data from the AMA's survey that predated the 
PPIS. In CY 2010 PFS rulemaking, we announced our intent to incorporate 
the AMA PPIS data into the PFS ratesetting process, which would first 
affect the PE RVU. In the CY 2010 PFS proposed rule, we outlined a 4-
year transition period, during which we would phase in the AMA PPIS 
data, replacing the existing PE data sources (74 FR 33554). We also 
explained that our proposals intended to update survey data only (74 FR 
33530 through 33531). In our CY 2010 final rule, we finalized our 
proposal, with minor adjustments based on public comments (74 FR 61749 
through 61750). We responded to the comments we received about the 
transition to using the PPIS to inform indirect PE allocations (74 FR 
61750). In the responses, we acknowledged concerns about potential gaps 
in the data, which could impact the allocation of indirect PE for 
certain physician specialties and suppliers, which are issues that 
remain important today. The CY 2010 PFS final rule explains that 
section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106-
113, November 29, 1999) (BBRA) directed 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. BBRA required us to 
establish criteria for accepting supplemental survey data. Since the 
supplemental surveys were specific to individual specialties and not 
part of a comprehensive multispecialty survey, we had required that 
certain precision levels be met in order to ensure that the 
supplemental data was sufficiently valid, and acceptable for use in the 
development of the PE RVUs. At the time, our rationale included the 
assumption that because the PPIS is a contemporaneous, consistently 
collected, and comprehensive multispecialty survey, we do not believe 
similar precision requirements are necessary, and we did not propose to 
establish them for the use of the PPIS data (74 FR 61742). We noted 
potential gaps in the data, which could impact the allocation of 
indirect PE for certain physician and suppliers. The CY 2010 final rule 
adopted the proposal, with minor adjustments based on public comments, 
and explained that these minor adjustments were in part due to non-
response bias that results when the characteristics of survey 
respondents differ in meaningful ways, such as in the mix of practices 
sizes, from the general population (74 FR 61749 through 61750).
    Throughout the 4-year transition period, from CY 2010 to CY 2013, 
we gradually incorporated the AMA PPIS data into the PFS rates, 
replacing the previous data sources. The process involved addressing 
concerns and making adjustments as necessary, such as refining the PFS 
ratesetting methodology in consideration of interested party feedback. 
For background on the refinements that we considered after the 
transition began, we refer readers to discussions in the CY 2011 
through 2014 final rules (75 FR 73178 through 73179; 76 FR 73033 
through 73034; 77 FR 98892; 78 FR 74272 through 74276).
    In the CY 2011 PFS proposed rule, we requested comments on the 
methodology for calculating indirect PE RVUs, explicitly seeking input 
on using survey data, allocation methods, and potential improvements 
(75 FR 40050). In our CY 2011 PFS final rule, we addressed comments 
regarding the methodology for indirect PE calculations, focusing on 
using survey data, allocation methods, and potential improvements (75 
FR 73178 through 73179). We recognized some limitations of the current 
PFS ratesetting methodology but maintained that the approach was the 
most appropriate at the time. In the CY 2012 PFS final rule, we 
responded to comments related to indirect PE methodology, including 
concerns about allocating indirect PE to specific services and using 
the AMA PPIS data for certain specialties (76 FR 73033 through 73034). 
We indicated that CMS would continue to review and refine the 
methodology and work with interested parties to address their concerns. 
In the CY PFS 2014 final rule, we responded to comments about fully 
implementing the AMA PPIS data. By 2014, the AMA PPIS data had been 
fully integrated into the PFS, serving as the primary source for 
determining indirect PE inputs (78 FR 74235). We continued to review 
data and the PE methodology annually, considering interested party 
feedback and evaluating the need for updates or refinements to ensure 
the accuracy and relevance of PE RVUs (79 FR 67548). In the years 
following the full implementation of the AMA PPIS data, we further 
engaged with interested parties, thought leaders and subject matter 
experts to improve our PE inputs' accuracy and reliability. For further 
background, we refer readers to our discussions in final rules for CY 
2016 through 2022 (80 FR 70892; 81 FR 80175; 82 FR 52980 through 52981; 
83 FR 59455 through 59456; 84 FR 62572; 85 FR 84476 through 84478; 86 
FR 62572).
    In our CY 2023 PFS final rule, we issued an RFI to solicit public 
comment

[[Page 61614]]

on strategies to update PE data collection and methodology (87 FR 69429 
through 69432). We solicited comments on current and evolving trends in 
health care business arrangements, the use of technology, or similar 
topics that might affect or factor into PE calculations. We reminded 
readers that we have worked with interested parties and CMS contractors 
for years to study the landscape and identify possible strategies to 
reshape the PE portion of physician payments. The fundamental issues 
are clear but thought leaders and subject matter experts have advocated 
for more than one tenable approach to updating our PE methodology.
    As described in previous rulemaking, we have continued interest in 
developing a roadmap for updates to our PE methodology that account for 
changes in the health care landscape. Of various considerations 
necessary to form a roadmap for updates, we reiterate that allocations 
of indirect PE continue to present a wide range of challenges and 
opportunities. As discussed in multiple cycles of previous rulemaking, 
our PE methodology relies on AMA PPIS data, which may represent the 
best aggregated available source of information at this time. However, 
we acknowledge the limitations and challenges interested parties have 
raised about using the current data for indirect PE allocations, which 
we have also examined in related ongoing research. We noted in our CY 
2023 and CY 2024 rules that there are several competing concerns that 
CMS must take into account when considering updated data sources, which 
also should support and enable ongoing refinements to our PE 
methodology.
b. Preparation for Incorporating Refreshed Data and Request for 
Information on Timing To Effectuate Routine Updates
    In the CY 2024 PFS proposed rule, we continued to encourage 
interested parties to provide feedback and suggestions to CMS that give 
an evidentiary basis to shape optimal PE data collection and 
methodological adjustments over time. Considering our ratesetting 
methodology and prior experiences implementing new data, we issued a 
follow-up from the CY 2023 comment solicitation for general 
information. We solicited comments from interested parties on 
strategies to incorporate information that could address known 
challenges we experienced in implementing the initial AMA PPIS data. 
Our current methodology relies on the AMA PPIS data, legislatively 
mandated supplemental data sources (for, example, we use supplemental 
survey data collected in 2003, as required by section 1848(c)(2)(H)(i) 
of the Act to set rates for oncology and hematology specialties), and 
in some cases crosswalks to allocate indirect PE as necessary for 
certain specialties and provider types. We also sought to understand 
whether, upon completion of the updated PPIS data collection effort by 
the AMA, contingencies or alternatives may be necessary and available 
to address the lack of data availability or response rates for a given 
specialty, set of specialties, or specific service suppliers who are 
paid under the PFS.
    In response to last year's RFI, most commenters stated that CMS 
should defer significant changes until the AMA PPIS results become 
available. For further background, refer to 88 FR 78841 to 78843. In 
responding to our RFI, the AMA RUC provided a set of responses, which 
many other commenters repeated in their separate, individual comments. 
In summary, the AMA RUC letter submission from CY 2024 suggested that 
CMS should not consider further changes until PPIS data collection and 
analysis is complete. Overall, the AMA comments generally do not 
support any change to the methodology and stated that CMS should wait 
to consider any further changes until PPIS updates become available. 
Further, we noted that through its contractor, Mathematica, the AMA 
secured an endorsement for the PPIS updates from each State society, 
national medical specialty society, and others prior to fielding the 
survey (88 FR 78843). Refer to the AMA's summary of the PPIS, available 
at https://www.ama-assn.org/system/files/physician-practice-information-survey-summary.pdf. The AMA expects analysis, reporting, 
and documentation to complete by the end of CY 2024, and the AMA would 
share data with CMS when results become available.
    We believe the AMA's approach may possibly mitigate nonresponse 
bias, which created challenges using previous PPIS data. However, we 
remain uncertain about whether endorsements prior to fielding the 
survey may inject other types of bias in the validity and reliability 
of the information collected. We believe it remains important to 
reflect on the challenges with our current methodology, and to continue 
to consider alternatives that improve the stability and accuracy of our 
overall PE methodology. We reiterate our discussion summarizing the 
responses to previous years' RFIs in each of the CY 2023 and CY 2024 
final rules (refer to 87 FR 69429 through 69432 and 88 FR 78841 to 
78843). We have started new work under contract with the RAND 
Corporation to analyze and develop alternative methods for measuring PE 
and related inputs for implementation of updates to payment under the 
PFS. We continue to study possible alternatives, and would include 
analysis of updated PPIS data, as part of our ongoing work. In the 
meantime, we request general information from the public on ways that 
CMS may continue work to improve the stability and predictability of 
any future updates. Specifically, we request feedback from interested 
parties regarding scheduled, recurring updates to PE inputs for supply 
and equipment costs.
    We believe that establishing a cycle of timing to update supply and 
equipment cost inputs every 4 years may be one means of advancing 
shared goals of stability and predictability. CMS would collect 
available data, including, but not limited to, submissions and 
independent third-party data sources, and propose a phase-in period 
over the following 4 years. The phase-in approach maps to our 
experience with previous updates. Additionally, we believe that more 
frequent updates may have the unintended consequence of 
disproportionate effects of various supplies and equipment that have 
newly updated costs.
    Further, we seek feedback on possible mechanisms to establish a 
balance whereby our methodology would account for inflation and 
deflation in supply and equipment costs. We remain uncertain how 
economies of scale (meaning a general principle that cost per unit of 
production decreases as the scale of production increases) should or 
should not factor into future adjustments to our methodology. There 
remains a diversity of perspectives among interested parties about such 
effects. We seek information about specific mechanisms that may be 
appropriate, and in particular, approaches that would leverage 
verifiable and independent, third-party data that is not managed or 
controlled by active market participants.

C. Potentially Misvalued Services Under the PFS

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 relative 
value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of 
the Act requires the Secretary to periodically identify potentially 
misvalued services using

[[Page 61615]]

certain criteria and to review and make appropriate adjustments to the 
relative values for those services. Section 1848(c)(2)(L) of 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.E. of this proposed rule, under 
Valuation of Specific Codes, each year we develop appropriate 
adjustments to the RVUs taking into account recommendations provided by 
the American Medical Association (AMA) Resource-Based Relative Value 
Scale (RBRVS) Update Committee (RUC), MedPAC, and other interested 
parties. 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 statute. We may also consider analyses 
of work time, work RVUs, or direct PE inputs using other data sources, 
such as the Veterans Health Administration (VHA), National Surgical 
Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons 
(STS), and the Merit-based Incentive Payment System (MIPS) data. 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 interested parties such as from the general medical-related 
community and the public. 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 (https://www.medpac.gov/document/report-to-the-congress-2006-medicare-payment-policy/), 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 costs decline. 
This can happen when the costs of equipment and supplies fall, or when 
equipment is used more frequently than is estimated in the PE 
methodology, reducing its cost per use. Likewise, services can become 
undervalued when physician work increases, or PE costs rise.
    As MedPAC noted in its March 2009 Report to Congress (https://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 PE.
     Codes that describe new technologies or services within an 
appropriate time-period (such as 3 years) after the relative values are 
initially established for such codes.
     Codes which are multiple codes that are frequently billed 
in conjunction with furnishing a single service.
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment.
     Codes that have not been subject to review since 
implementation of the fee schedule.
     Codes that account for the majority of spending under the 
PFS.
     Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time.
     Codes for which there may be a change in the typical site 
of service since the code was last valued.
     Codes for which there is a significant difference in 
payment for the same service between different sites of service.
     Codes for which there may be anomalies in relative values 
within a family of codes.
     Codes for services where there may be efficiencies when a 
service is furnished at the same time as other services.
     Codes with high intraservice work per unit of time.
     Codes with high PE RVUs.
     Codes with high cost supplies.
     Codes as determined appropriate by the Secretary.
    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of any RVU with the periodic review described 
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of 
the Act specifies that the Secretary may make appropriate coding 
revisions (including using current processes for consideration of 
coding changes), which may involve consolidating individual services 
into bundled codes for payment under the PFS.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes as specified in section 
1848(c)(2)(K)(ii) of the Act, and we intend 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

[[Page 61616]]

misvalued codes established in the CY 2012 PFS final rule with comment 
period (76 FR 73026, 73058 through 73059), other individuals and groups 
submit nominations for review of potentially misvalued codes as well. 
Individuals and groups may submit codes for review under the 
potentially misvalued codes initiative to CMS in one of two ways. 
Nominations may be submitted to CMS via email or through postal mail. 
Email submissions should be sent to the CMS emailbox at 
[email protected], with the phrase ``Potentially 
Misvalued Codes'' and the referencing CPT code number(s) and/or the CPT 
descriptor(s) in the subject line. Physical letters for nominations 
should be sent via the U.S. Postal Service to the Centers for Medicare 
& Medicaid Services, Mail Stop: C4-01-26, 7500 Security Blvd., 
Baltimore, Maryland 21244. Envelopes containing the nomination letters 
must be labeled ``Attention: Division of Practitioner Services, 
Potentially Misvalued Codes.'' Nominations for consideration in our 
next annual rule cycle should be received by our February 10th 
deadline. Since CY 2009, as a part of the annual potentially misvalued 
code review and Five-Year Review process, we have reviewed over 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 same CY 2012 PFS final rule with comment period, we 
finalized our policy to consolidate the review of physician work and PE 
at the same time and established a process for the annual public 
nomination of potentially misvalued services.
    In the CY 2013 PFS final rule with comment period (77 FR 68892, 
68896 through 68897), 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'' \1\). 
In the CY 2019 PFS proposed rule (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 of Work RVUs 
proposed rule (76 FR 32410, 32419), 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). We continue each year to consider and 
finalize a list of potentially misvalued codes that have or will be 
reviewed and revised as appropriate in future rulemaking.
---------------------------------------------------------------------------

    \1\ The research team and panels of experts at the Harvard 
School of Public Health developed the original work RVUs for most 
CPT codes, in a cooperative agreement with the Department of Health 
and Human Services (HHS). Experts from both inside and outside the 
Federal Government obtained input from numerous physician specialty 
groups. This input was incorporated into the initial PFS, which was 
implemented on January 1, 1992.
---------------------------------------------------------------------------

3. CY 2025 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. In the CY 2015 PFS final rule with comment period (79 FR 67548, 
67606 through 67608), we modified this process whereby the public and 
interested parties may nominate potentially misvalued codes for review 
by submitting the code with supporting documentation by February 10th 
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 demonstrate 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, VA, NSQIP, the STS National Database, 
and the MIPS data).
     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 for each nominated code whether we 
agree with its inclusion as a potentially misvalued code. The public 
has the opportunity to comment on these and all other proposed 
potentially misvalued codes. In each year's final rule, we finalize our 
list of potentially misvalued codes.
a. Public Nominations
    In each proposed rule, we seek nominations from the public and from 
interested parties of codes that they believe we should consider as 
potentially misvalued. We receive public nominations for potentially 
misvalued codes by February 10th and we display these nominations on 
our public website, where we include the submitter's name, their 
associated organization, and the submitted studies for full 
transparency. We sometimes receive submissions for specific, PE-related 
inputs for codes, and discuss these PE-related submissions, as 
necessary under the Determination of PE RVUs section of the rule. We 
summarize below this year's submissions under the potentially misvalued 
code initiative. For CY 2025, we received 5 nominations concerning 
various codes. The nominations are as follows:
(1) CPT Codes 22210, 22212, 22214, 22216
    An interested party nominated CPT codes 22210 (Osteotomy of spine, 
posterior or posterolateral approach, 1 vertebral segment; cervical) 
(090 day global code), 22212 (Osteotomy of spine, posterior or 
posterolateral approach, 1 vertebral segment; thoracic) (090 day global 
code), 22214 (Osteotomy of spine, posterior or posterolateral approach, 
1 vertebral segment; lumbar) (090 day global code), and 22216 
(Osteotomy of

[[Page 61617]]

spine, posterior or posterolateral approach, 1 vertebral segment; each 
additional vertebral segment (List separately in addition to primary 
procedure) (add-on ZZZ) as potentially misvalued for six reasons: (1) 
incorrect global period; (2) incorrect inpatient days; (3) incorrect 
intraservice work description; (4) overvalued intraservice times; (5) 
changed surgical practice; and (6) incorrect use of posterior osteotomy 
codes. The posterior osteotomy codes were last valued by the RUC in 
1995. Currently, CPT code 22210 has a work RVU of 25.38, CPT code 22212 
has a work RVU of 20.99, CPT code 22214 has a work RVU of 21.02, and 
CPT code 22216 has a work RVU of 6.03. CPT codes 22210, 22212, and 
22214 have 7 inpatient days each, while CPT code 22216 has 0 inpatient 
days, and it is an add-on code.
    First, the nominator stated that these posterior osteotomies are 
always performed as an optional addition to a spinal fusion and should 
be valued as add-on services and not as 90-day global services. We note 
that no references are provided to support the statement that the 
service is always performed as an optional addition to a spinal fusion. 
Second, the nominator explained that the average hospital stay for 
scoliosis fusion with osteotomy is 4 to 5 days according to the current 
literature,2 3 4 in contrast with the currently included 7 
inpatient days. We note that the majority of the medical literature 
submitted by the nominator presented outcome information on adolescent 
patients, which may be different from the Medicare population. 
Furthermore, the nominator stated that the intraservice work 
description for CPT code 22216 describes removal of the pedicle, which 
is not a typical part of a Ponte/Schwab II osteotomy. Among the 
posterior osteotomy codes, only CPT code 22216 had vignettes and we do 
not have information to decide whether the code descriptor is correct. 
We believe this issue would benefit from further review by the medical 
community and welcome comments and considerations, including from the 
AMA CPT.
---------------------------------------------------------------------------

    \2\ Halanski, Matthew Aaron, and Jeffrey A Cassidy. ``Do 
multilevel Ponte osteotomies in thoracic idiopathic scoliosis 
surgery improve curve correction and restore thoracic kyphosis?'' 
Journal of spinal disorders & techniques vol. 26,5 (2013): 252-5. 
doi:10.1097/BSD.0b013e318241e3cf.
    \3\ Floccari, Lorena V et al. ``Ponte osteotomies in a matched 
series of large AIS curves increase surgical risk without improving 
outcomes.'' Spine deformity vol. 9,5 (2021): 1411-1418. doi:10.1007/
s43390-021-00339-x.
    \4\ Buckland, Aaron J et al. ``Ponte Osteotomies Increase the 
Risk of Neuromonitoring Alerts in Adolescent Idiopathic Scoliosis 
Correction Surgery.'' Spine vol. 44,3 (2019): E175-E180. 
doi:10.1097/BRS.0000000000002784.
---------------------------------------------------------------------------

    The nominator also asserted that intraservice times were too high, 
particularly for these osteotomy services furnished with scoliosis 
fusion procedures. The nominator explained that a typical scoliosis 
fusion would be billed with an intraservice time of up to 840 minutes 
for pediatric scoliosis fusion and 915 minutes for adult cases. 
However, referencing current literature, they observed that a typical 
scoliosis fusion in a child requires approximately 278 minutes (243-296 
minutes),5 6 7 which contrasts significantly with the 
durations indicated for the current codes. The nominator provided no 
studies to support a typical scoliosis fusion time in adults. Drawing 
from the literature, the nominators assert that intraservice times are 
overvalued for these services and propose that these times should be 
adjusted to align more closely with average and/or typical surgery 
times.
---------------------------------------------------------------------------

    \5\ Samdani, Amer F et al. ``Do Ponte Osteotomies Enhance 
Correction in Adolescent Idiopathic Scoliosis? An Analysis of 191 
Lenke 1A and 1B Curves.'' Spine deformity vol. 3,5 (2015): 483-488. 
doi:10.1016/j.jspd.2015.03.002.
    \6\ Pizones, Javier et al. ``Ponte osteotomies to treat major 
thoracic adolescent idiopathic scoliosis curves allow more effective 
corrective maneuvers.'' European spine journal: official publication 
of the European Spine Society, the European Spinal Deformity 
Society, and the European Section of the Cervical Spine Research 
Society vol. 24,7 (2015): 1540-6. doi:10.1007/s00586-014-3749-1.
    \7\ Feng, Jing et al. ``Clinical and radiological outcomes of 
the multilevel Ponte osteotomy with posterior selective segmental 
pedicle screw constructs to treat adolescent thoracic idiopathic 
scoliosis.'' Journal of orthopaedic surgery and research vol. 13,1 
305. 29 Nov. 2018, doi:10.1186/s13018-018-1001-0.
---------------------------------------------------------------------------

    The nominator further asserted that this code family is potentially 
misvalued because surgical practice for these procedures has evolved 
since 1995. Approximately 30 years ago, osteotomies were infrequently 
performed and usually reserved for addressing completely ankylosed or 
fused spinal segments.\8\ However, according to the nominator, 
contemporary surgical techniques often involve posterior osteotomies to 
release multiple stiff vertebral segments, thereby enhancing coronal 
correction and reducing thoracic hypokyphosis. In addition to changes 
in surgical techniques over time, there are notable shifts in the 
trends regarding the utilization of osteotomies. For instance, between 
2007 and 2015, the use of posterior osteotomies in scoliosis cases 
nearly doubled, increasing from 17 percent to 35 percent.\9\ 
Additionally, 73 percent of patients undergoing scoliosis surgery 
received posterior osteotomies.\4\ This information supports the 
nominator's assertion that there have been notable changes in the 
surgical practice for these codes over time.
---------------------------------------------------------------------------

    \8\ Ponte, Alberto et al. ``The True Ponte Osteotomy: By the One 
Who Developed It.'' Spine deformity vol. 6,1 (2018): 2-11. 
doi:10.1016/j.jspd.2017.06.006.
    \9\ Shaheen, Mohammed et al. ``Complication risks and costs 
associated with Ponte osteotomies in surgical treatment of 
adolescent idiopathic scoliosis: insights from a national 
database.'' Spine deformity vol. 10,6 (2022): 1339-1348. 
doi:10.1007/s43390-022-00534-4.
---------------------------------------------------------------------------

    Lastly, the nominator highlighted incorrect usage of posterior 
osteotomy codes. They noted instances where facet/soft tissue releases, 
such as Schwab type I osteotomies, are inaccurately reported with these 
codes. According to the nominator, isolated partial facetectomy and 
soft tissue release are already included in spinal fusion procedures 
and should not be separately billed with an osteotomy code. 
Additionally, CMS in reviewing data for these services identified 
potential bundling of services within this code family. For instance, 
CPT code 22210 is frequently billed alongside CPT code 22600 
(Arthrodesis, posterior or posterolateral technique, single interspace; 
cervical below C2 segment) (090-day global code), approximately 83 
percent of the time. This indicates a common billing pattern, 
suggesting potential for coding revisions, including the consideration 
of consolidating individual services into bundled codes. Overall, based 
on the six reasons provided by the nominator, along with the fact that 
these codes were last valued almost 30 years ago, and given the 
identified billing practices, we concur that CPT codes 22210, 22212, 
22214, and 22216 are potentially misvalued. The nominator suggested two 
options to address this concern: (1) developing add-on codes to 
differentiate between the number of vertebral segments involved in the 
osteotomy procedure and whether it occurs in the cervical, thoracic, or 
lumbar regions; and (2) removing the current posterior osteotomy codes 
and incorporating osteotomies into new deformity fusion codes, both 
with and without osteotomy. We are proposing to consider this code 
family as potentially misvalued and we appreciate the detailed 
information submitted by the nominator with sufficient supporting 
evidence. We believe that this code family would benefit from a 
comprehensive review by the RUC, and we welcome comments on a broader 
understanding of these codes. Additionally, we seek input on current 
standard billing practices. For example, information on whether the 
standard of

[[Page 61618]]

practice has evolved over time, and if so, how it has evolved, could 
aid in identifying potential coding issues related to this matter.
(2) CPT Code 27279
    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) (090 day global code) has been re-nominated as 
potentially misvalued based on the absence of separate direct PE inputs 
for this 090 day global code in the nonfacility setting. Currently, CPT 
code 27279 is only priced under the PFS in the facility setting, but 
the nominator is requesting that we establish separate direct PE inputs 
for this service to value the service when performed in the 
nonfacility/office setting (for example, in an office-based lab). The 
nominator stated that establishing payment for direct PE inputs in the 
nonfacility/office setting would increase access to this service for 
Medicare patients.
    We did not nominate CPT code 27279 as potentially misvalued in the 
CY 2024 PFS final rule, mainly due to a lack of consensus on whether 
these services may be safely and effectively furnished in the 
nonfacility/office setting. In this year's submission, the nominator 
provided three post-market surveillance publications and two 
independent reviews of minimally invasive sacroiliac (SI) joint fusion 
procedures to support their assertion that this 90-day surgical service 
could be safely and effectively furnished in the nonfacility/office 
setting. Based on the studies, the nominator stated that the current 
medical literature provides evidence supporting the conclusion that 
percutaneous or minimally invasive SI joint arthrodesis (CPT code 
27279) carries a complication rate that is acceptably low, comparable 
to other spinal procedures commonly performed in the office-based lab 
(OBL). For instance, the risk of major complications during lateral 
trans iliac (LTI) SI joint fusion (CPT code 27279) is lower than the 
risks associated with other OBL procedures. These include the risk of 
iliac perforation during angioplasty, the risk of death, myocardial 
infarction (MI), and stroke during diagnostic cardiac catheterization. 
The nominator did not reference literature regarding the rates of major 
complications for other OBL procedures in their submission.
    Based on the information submitted we recognize the possibility 
that CPT code 27279 may be potentially misvalued, given the nominator's 
assertion that its complication rate is acceptably low based on the 
five studies they submitted. The results of the studies may suggest 
that CPT code 27279 can be safely performed in the office-based lab 
setting, as asserted by the nominator, with a relatively low 
complication rate. However, upon reviewing the submitted information, 
we also note that these studies collectively report heterogeneous 
safety outcomes. The large variabilities in safety outcomes reported in 
the studies, coupled with several unreported outcomes, may indicate 
that we have little knowledge about the effect of the service on safety 
outcomes, prompting the need for further investigation. Therefore, we 
are not proposing to consider this code as potentially misvalued, and 
we are instead seeking comments and additional studies from the broader 
medical community regarding whether this code should be priced under 
the PFS for the non-facility/office setting.
(3) CPT code 95800
    An interested party re-nominated CPT code 95800 (Sleep study, 
unattended, simultaneous recording; heart rate, oxygen saturation, 
respiratory analysis (e.g., by airflow or peripheral arterial tone), 
and sleep time) to update practice expenses that were last reviewed in 
2017. This code was nominated as potentially misvalued in the CY 2024 
PFS proposed rule (88 FR 52283). For the CY 2024 final rule, we stated 
that we were unable to properly assess whether CPT code 95800 is 
potentially misvalued based on the evidence submitted with the original 
nominations and subsequent comments that CMS received (88 FR 78849-
78850). This year, an interested party re-nominated CPT code 59800 
noting two significant changes: (1) in the technologies available to 
perform home sleep apnea testing (HSAT) services; and (2) in clinical 
practice that leads to the typical procedure reported with the CPT code 
95800. According to the nominator, the current practice utilizes 
disposable HSAT technology, such as the WatchPat One device, more often 
than the reusable equipment currently included in the procedure's 
direct practice expense (PE) inputs.
    To account for these changes, the nominator requested the deletion 
of three direct PE input codes: (1) equipment code EQ335 (WatchPAT 200 
Unit with strap, cables, charger, booklet, and patient video); (2) 
equipment code EQ336 (Oximetry and Airflow Device); and (3) supply code 
SD263 (WatchPAT pneumo-opt sleep probes), which are WatchPAT probes 
used with the reusable WatchPAT unit. Instead, the nominator requested 
the addition of a supply code SD362 (the WatchPAT ONE device), a 
disposable HSAT technology, as a replacement. According to our PE 
supply list, the combined price of the items that the nominator 
requested to delete (EQ335, EQ336, and SD263) is $4.71 + $4.55 + $73.32 
= $82.58, which is $15.62 less than the price of the item that the 
nominator requested to add (SD362), priced at $98.20. The price of 
$98.20 is mentioned in the nomination letter without an accompanying 
specific invoice. Last year, the nominator submitted invoices, showing 
a price of $99.00 each (a case of 12 totaling $1,188.00) for the 
WatchPat One Device (SD362) (see Table 6).

[[Page 61619]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.006

    The nominator asserted that testing trends have shifted away from 
traditional airflow-based tests, with a noticeable rise in peripheral 
arterial tone (PAT)-based (non-airflow) tests. The traditional airflow-
based tests use the reusable supplies and equipment, whereas the PAT-
based non-airflow tests use the disposable HSAT device. While 
describing these changes in trends, the nominator did not provide us 
with their internal data, thus we are unable to verify its validity. 
The nominator also stated that disposable HSAT devices were used for 
nearly 50 percent of CPT code 95800 services in 2023 and attributed the 
increased use of disposable devices to the COVID-19 public health 
emergency (PHE). Furthermore, the nominator projected that over 50 
percent of CPT code 95800 services will be furnished using disposable 
devices in 2024 and 2025. Explaining the patterns and predictions, the 
nominator concluded that the pandemic significantly altered the 
delivery of HSAT services, with many sleep physicians transitioning to 
single-use, disposable sleep tests as an alternative to the reusable 
testing equipment that is shipped from patient-to-patient after post-
use cleaning. The nominator believes that, going forward, the typical 
procedure described by CPT code 95800 in CY 2024 and beyond will be 
furnished using disposable HSAT devices rather than reusable equipment.
    Since the COVID-19 PHE ended in 2023, we are still unclear as to 
whether the typical procedure reported with CPT code 95800 involves the 
use of a reusable or disposable HSAT device. Given that we only have 
access to the nominator's summary of their internal data to observe 
changes in usage trends, which may not be generalizable, we propose to 
maintain the current direct PE supply and equipment inputs for CPT code 
95800. While we are not currently proposing to review CPT code 95800 as 
potentially misvalued for CY 2025, we seek public comments on this 
nomination. In particular, we seek comments on whether the typical 
procedure described by CPT code 95800 now involves the use of a 
disposable HSAT device rather than reusable equipment.
(4) CPT codes 10021, 10004, 10005, 10006
    An interested party nominated the CPT code 10021 (Fine needle 
aspiration biopsy, without imaging guidance; first lesion), CPT code 
10004 (Fine needle aspiration biopsy, without imaging guidance; each 
additional lesion), CPT code 10005 (Fine needle aspiration biopsy, 
including ultrasound guidance; first lesion) and CPT code 10006 (Fine 
needle aspiration biopsy, including ultrasound guidance; each 
additional lesion) as potentially misvalued. We note that this code 
family has been nominated several times in recent years. We discussed 
our review of these codes and our rationale for finalizing the current 
values extensively in the CY 2019 PFS final rule (83 FR 59517), and CY 
2021 PFS final rule (85 FR 84602). Furthermore, this code family was 
nominated as potentially misvalued and discussed in the CY 2020 PFS 
final rule (84 FR 62625). For more information we encourage the 
interested parties to go to our previous PFS final rules.
    The nominator specifically requested that we revisit our work RVU 
decisions for these codes, stating that the underpinnings of the 
reduction in work RVUs from the RUC-recommended values were flawed. The 
nominator suggested that CMS should adopt the RUC-recommended work 
RVUs. For CPT code 10021, the RUC recommended a work RVU of 1.20, but 
we adopted a lower value of 1.03. Similarly, for CPT code 10005, the 
RUC recommended a work RVU of 1.63, but we adopted 1.46. The nominator 
disagreed with these reductions from the RUC-recommended values by CMS, 
raising particular concerns about our choice for the RVU crosswalk for 
CPT code 36440 (Push blood transfusion, patient 2 years or younger). 
According to the nominator, the CPT code we chose is not comparable to 
fine needle aspiration in any respect other than service time. The 
nominator raised several points, including that CPT code 36440 is 
rarely utilized and is almost never billed to Medicare because it 
pertains to a pediatric procedure conducted on neonates, while CPT code 
10021 is never performed on neonates. They further asserted that the 
training and experience levels required to properly perform these 
procedures differ significantly; neonatal transfusions can be conducted 
by less experienced personnel, while performing a thyroid fine needle 
aspiration demands more experience. Specifically, they argued that 
there is a notable difference in the work intensity between the two 
procedures. The thyroid is closely positioned to vital structures such 
as the carotid artery, jugular vein, lymphatic vessels, nerves, 
trachea, and esophagus. When sampling thyroid nodules, they are often 
in proximity to the carotid artery, jugular vein, or both. According to 
the nominator, even a slight deviation of 1-2 millimeters during the 
sampling procedure can result in accidental puncture of these critical 
blood vessels or other nearby structures. Factors such as respiratory 
movements, patient swallowing, or anxiety may cause the thyroid to 
move, further increasing the

[[Page 61620]]

risk during the procedure. In contrast, neonatal phlebotomy does not 
require such measures. Also, the CPT code 36440 is designated as 
facility-only, meaning it does not include any clinical staff pre-
service time and has no associated practice expense inputs. According 
to the nominator, fine needle aspiration is a very complex and high-
risk procedure that may require significant physician work and a higher 
level of clinical expertise to furnish the service, which is very 
different from CPT code 36440. We appreciated the survey (N=74) results 
that the nominator submitted to support their statements. The 
nominator-conducted survey, and their survey questions aimed to gather 
information on the practitioners' experiences, opinions, and practices 
related to fine needle aspiration procedures. However, no other 
references such as peer reviewed medical literature or other nationally 
representative survey data were provided to reinforce their argument.
    The nominator further stated that thyroid fine needle aspiration 
should exclusively be performed as an outpatient procedure and does not 
require hospitalization. The nominator emphasized that the reduction in 
payment for the code family due to the reduction in work RVUs from the 
RUC-recommended values has led endocrinologists in office-based 
practices, those who are not affiliated with facilities, to discontinue 
furnishing this service. According to the nominator, as a consequence 
of this payment decrease, patients are now being referred to hospital-
based radiology practices, despite the fact that thyroid fine needle 
aspiration should ideally be conducted exclusively in nonfacility 
outpatient settings. The nominator asserted that radiologists in 
hospital settings are often unfamiliar with the patient's medical 
history and risk factors for suspected thyroid cancer. The nominator 
further noted that radiologists' training in thyroid cancer primarily 
emphasizes imaging and procedures, rather than considering the 
patient's overall health perspective. This result may further lead to 
an increase in medically unnecessary procedures. Additionally, the 
nominator believes that the payment reduction for this code family has 
the potential to diminish the specialist workforce trained to perform 
these procedures, thereby presenting future challenges in patient care 
and access to specialized services.
    Overall, we appreciate the comprehensive information and level of 
detail provided by the nominator. The nominator disagreed with the 
choice of crosswalk CPT code 36440 made by CMS, emphasizing the 
differences in provider training, procedure risk, and patient 
population. They noted the rarity of Medicare billing for this code. 
Additionally, they emphasized the importance of outpatient thyroid fine 
needle aspiration being performed by endocrinologists. The shift to 
facility settings, prompted by reduced work RVUs, could raise Medicare 
costs. This, along with a potential decline in specialist workforce, 
may hinder patient access. However, in discussing this group of codes, 
we must note that these codes have been recently reviewed multiple 
times through the annual PFS rulemaking process. We would like to 
clarify once again that we disagree with the nominator that this code 
family is potentially misvalued. We acknowledge the possibility that 
there could be significant changes in the practice of delivering 
services described by these codes that were not fully reflected in the 
current work RVU. In such cases, it would be appropriate to refer the 
codes to the RUC to conduct a new survey to capture these changes 
accurately. However, we note that these codes underwent thorough RUC 
survey and review processes during the October 2017 and January 2018 
RUC meetings. Based on these considerations, we disagree with the 
assertion that this code family is potentially misvalued. Nevertheless, 
we welcome comments on whether these codes should be re-reviewed in 
light of the arguments made by the nominator.
(5) Tympanostomy codes
    CMS routinely interacts with interested parties, and in our most 
recent review, we have observed several new devices that could be 
beneficial for populations but are not currently included in our coding 
system. While there are variations in the described devices, they 
commonly share the following descriptions. This device uses an 
innovative surgical technology that combines the separate functions of 
creating a myringotomy (incision in the eardrum), and positioning and 
placing a ventilation tube across the tympanic membrane. The new device 
is intended to deliver a tympanostomy tube (also referred to as a 
ventilation tube) through the tympanic membrane of the patient and is 
indicated to be used in office settings for pediatric patients 6 months 
and older. This device allows the tympanostomy service to be furnished 
to patients without general anesthesia and the service could therefore 
be performed in the office setting.
    Regarding the delivery of this service using innovative surgical 
technology, CMS recognizes that CPT code 69433 (Tympanostomy (requiring 
insertion of ventilating tube), local or topical anesthesia) (010-day 
global code) may serve as a sufficient base code, adequately describing 
the majority of the surgeon's work and facility resources. However, a 
practitioner may incur additional resources, due to the higher expected 
intraservice work driven by both time and intensity factors, especially 
when furnishing a service to a child, and the cost of the device when 
using these devices as part of the performed procedure. While the 
existing CPT code 69433 is not age-specific, both the vignette and the 
RVU associated with this procedure are established for adult patients 
who can respond to surgeon direction, and do not have risk of movement 
during the procedure. We believe that potentially establishing 
additional coding and payment for tympanostomy services may enable the 
provision of these services utilizing new technologies to a broader 
patient population who may benefit from innovative surgical technology. 
To improve the accuracy of the payment for these services, we are 
soliciting comments on several alternatives that we are considering for 
adoption in the CY 2025 PFS final rule or future rulemaking. First, we 
are seeking comment on whether to establish a new G code that accounts 
for the work and practice expense for a procedure involving the 
positioning and placement of a ventilation tube across the tympanic 
membrane using an innovative surgical technology that combines the 
separate functions of creating a myringotomy (incision in the eardrum). 
We could assign contractor pricing to this potential G code for 
generalizable innovative tympanostomy tube delivery devices and/or 
systems falling under emerging technology and services categories. 
Alternatively, we are seeking comment on whether we should establish an 
add-on payment for the service using inputs from CPT code 69433 as a 
crosswalk reference, plus direct costs from invoices for the surgical 
devices referenced above. We are seeking comments regarding these 
potential approaches, particularly on whether there is additional 
information we should consider if we were to establish additional 
coding and payment for these services.

D. Payment for Medicare Telehealth Services Under Section 1834(m) of 
the Act

    As discussed in prior rulemaking, several conditions must be met 
for Medicare to make payment for telehealth services under the PFS. See

[[Page 61621]]

further details and full discussion of the scope of Medicare telehealth 
services in the CY 2018 PFS final rule (82 FR 53006), the CY 2021 PFS 
final rule (85 FR 84502) and the CY 2024 PFS final rule (88 FR 78861 
through 78866) and in 42 CFR 410.78 and 414.65. For a discussion of 
Telemedicine Evaluation and Management (E/M) Services, we refer readers 
to section II.E.4.18 of this proposed rule.
1. Payment for Medicare Telehealth Services Under Section 1834(m) of 
the Act
a. Changes to the Medicare Telehealth Services List
    In the CY 2003 PFS final rule with comment period (67 FR 79988), we 
established a regulatory process for adding services to or deleting 
services from the Medicare Telehealth Services List in accordance with 
section 1834(m)(4)(F)(ii) of the Act. This process provides the public 
with an ongoing opportunity to submit requests for adding services, 
which are then reviewed by us and assigned to categories established 
through notice and comment rulemaking. Under the process we established 
beginning in CY 2003, we evaluated whether a service meets the 
following criteria:
     Category 1: Services similar to professional 
consultations, office visits, and office psychiatry services currently 
on the Medicare Telehealth Services List. In reviewing these requests, 
we looked 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 was present 
with the beneficiary in the originating site. We also looked 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 those on the 
current Medicare Telehealth Services List. Our review of these requests 
included assessing whether the service was accurately described by the 
corresponding code when furnished via telehealth and whether using a 
telecommunications system to furnish the service produces demonstrated 
clinical benefit to the patient. Submitted evidence should have 
included both a description of relevant clinical studies that 
demonstrated 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 did not include minor or incidental 
benefits. Some examples of other clinical benefits that we considered 
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 signs or 
symptoms.
     Reduced recovery time.
    In the CY 2021 PFS final rule (85 FR 84507), we created a third 
category of criteria for adding services to the Medicare Telehealth 
Services List on a temporary basis following the end of the PHE for the 
COVID-19 pandemic. This new category described services that were added 
to the Medicare Telehealth Services List during the PHE, for which 
there was likely to be clinical benefit when furnished via telehealth, 
but there was not yet sufficient evidence available to consider the 
services for permanent addition under the Category 1 or Category 2 
criteria. Services added on a temporary, Category 3 basis ultimately 
needed to meet the criteria under Category 1 or 2 in order to be 
permanently added to the Medicare Telehealth Services List. To add 
specific services on a Category 3 basis, we would conduct a clinical 
assessment to identify those services for which we could foresee a 
reasonable potential likelihood of clinical benefit when furnished via 
telehealth.
    In the CY 2024 PFS final rule (88 FR 78861 through 78866), we 
consolidated these three categories and implemented a revised 5-step 
process for making additions, deletions, and changes to the Medicare 
Telehealth Services List (5-step process), beginning for the CY 2025 
Medicare Telehealth Services List. Rather than categorizing a service 
as ``Category 1'' or ``Category 2,'' each service is now assigned a 
``permanent'' or ``provisional'' status. As described further below, a 
service is assigned a ``provisional'' status if there is not enough 
evidence to demonstrate that the service is of clinical benefit, but 
there is enough evidence to suggest that further study may demonstrate 
such benefit. The 5-step process review criteria are set forth in the 
CY 2024 PFS final rule (88 FR 78861 through 78866), listed at https://www.cms.gov/medicare/coverage/telehealth/criteria-request, and 
summarized below. Consistent with the deadline for our receipt of code 
valuation recommendations from the American Medical Association's 
Relative Value Scale Update Committee (AMA RUC) and other interested 
parties (83 FR 59491) and with the process set forth in prior calendar 
years, for CY 2025, requests to add services to the Medicare Telehealth 
Services List must have been submitted to and received by CMS by 
February 10, 2024. Each request to add a service to the Medicare 
Telehealth Services List must have included any supporting 
documentation the requester wishes us to consider as we review the 
request. Because we use the annual PFS rulemaking process to make 
changes to the Medicare Telehealth Services List, requesters are 
advised that any information submitted as part of a request is subject 
to public disclosure for this purpose. For more information on 
submitting a request to add services to the Medicare Telehealth 
Services List, including where to send these requests, and to view the 
current Medicare Telehealth Service List, see our website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
    Step 1. Determine whether the service is separately payable under 
the PFS.
    When considering whether to add, remove, or change the status of a 
service on the Medicare Telehealth Services List, we first determine 
whether the service, as described by the individual HCPCS code, is 
separately payable under the PFS because, as further discussed in CY 
2024 PFS final rule (88 FR 78861 through 78866), Medicare telehealth 
services are limited to those services for which separate Medicare 
payments can be made under the PFS. Before gathering evidence and 
preparing to submit a request to add a service to the Medicare 
Telehealth Services List, the submitter should therefore first check 
the payment status for a given service and ensure that the service (as 
identified by a HCPCS code), is a covered and separately payable 
service under the PFS (as identified by payment status indicators A, C, 
T, or R on our public use files).
    Step 2. Determine whether the service is subject to the provisions 
of section 1834(m) of the Act.

[[Page 61622]]

    If we determine at Step 1 that a service is separately payable 
under the PFS, we apply Step 2 under which we determine whether the 
service at issue is subject to the provisions of section 1834(m) of the 
Act. Section 1834(m) of the Act provides for payment to a physician (or 
other practitioner) for a service furnished via an interactive 
telecommunications system, notwithstanding that the furnishing 
practitioner and patient are not in the same location, at the same 
amount that would have been paid if the service was furnished without 
the telecommunications system. We have historically interpreted this to 
mean that only services that are ordinarily furnished with the 
furnishing practitioner and patient in the same location can be 
classified as a ``telehealth service'' for which payment can be made 
under section 1834(m) of the Act. Given that there may be a range of 
services delivered using certain telecommunications technology that, 
though they are separately payable under the PFS, do not fall within 
the definition of telehealth service set forth in section 1834(m) of 
the Act, the aim of Step 2 is therefore to determine whether the 
service at issue is, in whole or in part, inherently a face-to-face 
service. Such services generally include services that do not require 
the presence of, or involve interaction with, the patient (for example, 
remote interpretation of diagnostic imaging tests, and certain care 
management services). Other examples include virtual check-ins, e-
visits, and remote patient monitoring services which involve the use of 
telecommunications technology to facilitate interactions between the 
patient and practitioner, but do not serve as a substitute for an in-
person encounter, for example, to assess whether an in-person or 
telehealth visit is needed or to transmit health information to the 
practitioner.
    In determining whether a service is subject to the provisions of 
section 1834(m) of the Act, we therefore review during this Step 2 
whether one or more of the elements of the service, as described by the 
particular HCPCS code at issue, ordinarily involve direct, face-to-face 
interaction between the patient and practitioner such that the use of 
an interactive telecommunications system to deliver the service would 
be a substitute for an in-person visit.
    Step 3. Review the elements of the service as described by the 
HCPCS code and determine whether each of them is capable of being 
furnished using an interactive telecommunications system as defined in 
Sec.  410.78(a)(3).
    Step 3 is corollary to Step 2, and is used to determine whether one 
or more elements of a service are capable of being delivered via an 
interactive telecommunication system as defined in Sec.  410.78(a)(3). 
In Step 3, we consider whether one or more face-to-face component(s) of 
the service, if furnished via audio-video communications technology, 
would be equivalent to the service being furnished in-person, and we 
seek information from requesters to demonstrate evidence of substantial 
clinical improvement in different beneficiary populations that may 
benefit from the requested service when furnished via telehealth, 
including, for example, in rural populations. The services are not 
equivalent when the clinical actions, or patient interaction, would not 
be of similar content as an in-person visit, or could not be completed.
    Step 4. Consider whether the service elements of the requested 
service map to the service elements of a service on the list that has a 
permanent status described in previous final rulemaking.
    The purpose of Step 4 is to simplify and reduce the administrative 
burden of submission and review. For Step 4, we review whether the 
service elements of a code that we are considering for addition to, or 
removal from, the Medicare Telehealth Services List map to the service 
elements of a service that is already on the list and is assigned 
permanent status. Any code that satisfies this criterion would require 
no further analysis. If the service elements of a code maps to the 
service elements of a code that is already included on the Medicare 
Telehealth Services List and is assigned permanent basis, we will add 
the code to the Medicare Telehealth Services List and assign it 
permanent status. While we have not previously found that the service 
elements of a code we are considering for addition to the list map to 
the elements of a service that was previously added to the list and 
assigned permanent basis, we believe that it is appropriate to apply 
this step 4 analysis to compare the candidate service with any 
permanent code that is on the list on a permanent basis. When Step 4 is 
met, further evidence review is not necessary. We continue to Step 5 if 
Step 4 is not met.
    Step 5. Consider whether there is evidence of clinical benefit 
analogous to the clinical benefit of the in-person service when the 
patient, who is located at a telehealth originating site, receives a 
service furnished by a physician or practitioner located at a distant 
site using an interactive telecommunications system.
    Similar to Steps 3, 4, and 5 above, the purpose of the proposed 
step 5 is to simplify and reduce the administrative burden. Under Step 
5, we review the evidence provided with a submission to determine the 
clinical benefit of a service. We then compare the clinical benefit of 
that service, when provided via telehealth, to the clinical benefit of 
the service if it were to be furnished in person. If there is enough 
evidence to suggest that further study may demonstrate that the 
service, when provided via telehealth, is of clinical benefit, CMS will 
assign the code a ``provisional'' status on the Medicare Telehealth 
Services List. Where the clinical benefit of a service, when provided 
via telehealth, is clearly analogous to the clinical benefit of the 
service when provided in person, CMS will assign the code ``permanent'' 
status on the Medicare Telehealth Services List, even if the code's 
service elements do not map to the service elements of a service that 
already has permanent status. We reminded readers that our evidentiary 
standard of demonstrated clinical benefit does not include minor or 
incidental benefits (81 FR 80194). We review the evidence submitted by 
interested parties, and other evidence that CMS has on hand. The 
evidence should indicate that the service can be safely delivered using 
two-way interactive audio-video communications technology. Clinical 
practice guidelines, peer-reviewed literature, and similar materials, 
should illustrate specifically how the methods and findings within the 
material establish a foundation of support that each element of the 
defined, individual service described by the existing face-to-face 
service code has been studied in the typical setting of care, typical 
population of beneficiaries, and typical clinical scenarios that 
practitioners would encounter when furnishing the service using only 
interactive, two-way audio-video communications technology to complete 
the visit or encounter with Medicare beneficiaries. General evidence 
may also answer the question of whether a certain beneficiary 
population requiring care for a specific illness or injury may benefit 
from receiving a service via telehealth versus receiving no service at 
all, but must establish that the service is a substitute for an 
equivalent in-person service. Evidence should demonstrate how all 
elements described by the individual service code can be met when two-
way, interactive audio-video communications technology is used as a 
complete substitute for any face-to-face interaction required between 
the patient and practitioner that are described in the individual code 
descriptor. We further remind readers that submissions

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reflecting practitioner services furnished to Medicare beneficiaries 
are helpful in our considerations.
b. Requests To Add Services to the Medicare Telehealth Services List 
for CY 2025
    We received several requests to permanently add various services to 
the Medicare Telehealth Services List, effective for CY 2025. The 
requested services are listed in Table 7.
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    Many services were added to the Medicare Telehealth Services List 
on a temporary basis as discussed in the March 31st COVID-19 interim 
final rule with comment period (IFC) (85 FR 19235 through 19237) for 
the PHE for Covid-19, and we subsequently retained these services on a 
provisional basis. All of the received submissions were requests for 
addition on a permanent basis. We believe that, rather than selectively 
adjudicating only those services for which we received requests for 
potential permanent status, it would be appropriate to complete a 
comprehensive analysis of all provisional codes currently on the 
Medicare Telehealth Services List before determining which codes should 
be made permanent. We are therefore not making determinations to 
recategorize provisional codes as permanent until such time as CMS can 
complete a comprehensive analysis of all such provisional codes which 
we expect to address in future rulemaking.
    The following is a discussion of the requests received for addition 
of services to the Medicare Telehealth Services List:
(1) Continuous Glucose Monitoring
    We received a request to add CPT code 95251 (Ambulatory continuous 
glucose monitoring of interstitial tissue fluid via a subcutaneous 
sensor for a minimum of 72 hours; analysis, interpretation and report) 
to the Medicare Telehealth Services List and assign it permanent 
status. This code is not on the Medicare Telehealth Services List, nor 
had it been previously added and removed. The requester stated that the 
ability of the practitioner to interpret continuous glucose monitoring 
data and communicate changes in the diabetes care plan to our patients 
is enhanced by the availability of video visits, and the code should 
therefore be added to the Medicare Telehealth Services List. This 
service does not meet the criteria described by Step 2 of the 5-step 
process: determination of whether the service is subject to the 
provisions of section 1834(m) of the Act. Section 1834(m) of the Act 
limits the definition of Medicare telehealth services to those services 
that would ordinarily be furnished with the furnishing practitioner and 
patient in the same location (88 78863). In other words, as stated 
above, for a service to be considered a Medicare telehealth service 
subject to and payable under section 1834(m) of the Act, the service 
must be so analogous to in-person care such that the telehealth 
service, as defined in Sec.  410.78, is essentially a substitute for a 
face-to-face encounter. We do not consider this service a Medicare 
telehealth service because it is not an inherently face-to-face 
service; the patient does not need to be present for the service to be 
furnished in its entirety. CPT code 95251 describes sensor placement 
and monitoring over a 72-hour period. We do not consider CPT code 95251 
a telehealth service under section 1834(m) of the Act or our regulation 
at Sec.  410.78. Therefore, we are not proposing to add this service to 
the Medicare Telehealth Services List.
(2) Cardiovascular and Pulmonary Rehabilitation
    We received requests to permanently add cardiovascular 
rehabilitation services (CPT codes 93797 and 93798) and pulmonary 
rehabilitation services (CPT codes 94625 and 94626) to the Medicare 
Telehealth Services List. These services are currently on the Medicare 
Telehealth List and are assigned provisional status. We had originally 
added CPT codes 93797 and 93798 and HCPCS codes G0422 and G0423 on a 
temporary basis in the CY 2022 PFS final rule (FR 86 65054 through 
65055). A requester cited studies that they say demonstrate that the 
availability of these services via telehealth enhances access and 
patient equity. Another requester cited evidence of improved outcomes 
for patients that had access to these services via telehealth. As 
explained previously, we are not proposing to revise the status of 
codes from provisional to permanent in this proposed rule because we 
intend to conduct a comprehensive review. While considering these 
issues for future rulemaking, we are not proposing to assign CPT codes 
93797 and 93798 or CPT codes 94625 and 94626 permanent status on the 
Medicare Telehealth Services List and would instead maintain the 
services on the Medicare Telehealth Services List on a provisional 
basis for CY 2025.
(3) Health and Well Being-Coaching
    We received a request to add Health and Well-Being Coaching (CPT 
codes 0591T-0593T) to the Medicare Telehealth Services List with 
permanent status. These services are currently on the Medicare 
Telehealth Services List and are assigned a provisional status. We 
originally added these codes on a provisional basis in the CY 2024 PFS 
final rule (FR 88 78859 and 78860). One requester stated that health 
and well-being coaching, including content education, delivered in a 
telehealth modality is an evidence-based, cost-

[[Page 61626]]

effective, sustainable, and common sense approach to facilitating 
lifestyle/behavioral intervention and treating the Medicare population 
with or at heightened risk for chronic diseases. As explained 
previously, we are not proposing to revise the status of codes from 
provisional to permanent in this proposed rule because we intend to 
conduct a comprehensive review. Therefore, we are not proposing to 
assign them to the Medicare Telehealth Services List with permanent 
status.
(4) Psychological Testing and Developmental Testing
    We received a request to add Psychological Testing and 
Developmental Testing (CPT codes 96112, 96113, 96130, 96136, and 96137) 
to the Medicare Telehealth Services List on a permanent basis. These 
services are currently on the Medicare Telehealth Services List and are 
assigned provisional status. In the March 31, 2020 interim final rule 
with comment period (IFC-1) (85 FR 19239), we originally added CPT 
codes 96130, 96136, and 96137 to the Medicare Telehealth Services List 
for the duration of the PHE for COVID-19, and in the CY 2021 PFS final 
rule (85 FR 85003), we stated we were retaining them on the list on a 
category 3 basis. In the CY 2023 PFS final rule (87 FR 69460), we added 
CPT codes 96112 and 96113 on a temporary basis.
    As explained previously, we are not proposing to revise the status 
of codes from provisional to permanent in this proposed rule because we 
intend to conduct a comprehensive review. Therefore, we are not 
proposing to either remove these services from or to assign them 
permanent status on the Medicare Telehealth Services List.
(5) Therapy/Audiology/Speech Language Pathology
    We received multiple requests to add the Therapy services described 
by CPT codes 97110, 97112, 97116, 97161 through 97164, 97530 and 97535, 
97165 through 97168, and Audiology and Speech Language Pathology 
services CPT codes 92507, 92508, 92521 through 92524, 92526, 92607 
through 92610, 96105 92626, 92627, 96125, 97129, 97130, 92607 through 
92609 92550 through 92557, 92563, 92565 92567, 92568, 92570, 92587, 
92588, 92601 through 92604, 92625 through 92627, and 92651 and 92652 to 
the Medicare Telehealth Services List on a permanent basis stating that 
continuing Telehealth flexibilities for these services could lead to 
reduced health care expenditures, increased patient access, and 
improved management of chronic disease and quality of life. These 
services are currently available on the Medicare Telehealth Services 
List and are assigned provisional status, and we refer readers to 
section II.D.1. for further discussion of these services. In the CY 
2023 PFS final rule (87 FR 69451), we originally added CPT codes 90901, 
97150, 97530, 97537, 97542, 97763, and 98960-98962 to the Medicare 
Telehealth Services List on a Category 3 basis. As explained 
previously, we are not proposing to revise the status of codes from 
provisional to permanent in this proposed rule because we intend to 
conduct a comprehensive review. Therefore, we are not proposing to 
assign them permanent status on the Medicare Telehealth Services List.
(6) Care Management
    We received a request to permanently add General Behavioral Health 
Integration (CPT code 99484) and Principal Care Management (CPT codes 
99424-99427) to the Medicare Telehealth Services List. These services 
are not on the Medicare Telehealth Services List, nor have they been 
previously added and removed. These services do not meet the criteria 
described by Step 2 of the 5-step process: determination of whether the 
service is subject to the provisions of section 1834(m) of the Act. As 
stated above, the scope of section 1834(m) of the Act is limited to 
services that would ordinarily be furnished with the furnishing 
practitioner and patient in the same location (88 78863), and for a 
service to be considered a telehealth service subject to and payable 
under section 1834(m) of the Act, the service must be so analogous to 
in-person care such that the telehealth service, as defined in Sec.  
410.78, is essentially a substitute for a face-to-face encounter. We do 
not consider these services to be Medicare telehealth services because 
they are not inherently face-to-face services, and the patient need not 
be present for the services to be furnished in its entirety. Therefore, 
we do not consider CPT codes 99484 and 99424-99427 to be telehealth 
services under section 1834(m) of the Act or our regulation at Sec.  
410.78. Therefore, we are not proposing to add this service to the 
Medicare Telehealth Services List.
(7) Posterior Tibial Nerve Stimulation for Voiding Dysfunction
    We received a request to permanently add Posterior tibial 
neurostimulation (CPT code 64566) to the Medicare Telehealth Services 
List. This code is not on the Medicare Telehealth Services List, nor 
had it been previously added and removed. This service does not meet 
the criteria for addition described by Step 3 of the 5-step process, 
namely the review the elements of the service as described by the HCPCS 
code and determine whether each of them is capable of being furnished 
using an interactive telecommunications system as defined in Sec.  
410.78(a)(3). The requestor describes the services underlying CPT code 
64566 as the continual or recurring treatments over a period of time 
consisting of the remote monitoring of device utilization and bladder 
diary for the generation of reports for review by the care provider. 
Based on our review, this description does not align with the elements 
of the service as described by CPT code 64566. CPT code 64566 describes 
a single treatment provided by a clinician who has direct contact with 
the patient and inserts an electrode into the skin overlying the 
posterior tibial nerve. Upon conclusion of the treatment, the clinician 
removes the electrode and examines and dresses the puncture wound. 
Providing these services would require in-person interaction. We are 
therefore not proposing to add the service to the Medicare Telehealth 
Services List because we do not believe the service elements can be met 
in full using two-way audio-video telecommunications technology.
(8) Radiation Treatment Management
    We received requests to permanently add Radiation Treatment 
Management (CPT code 77427) to the Medicare Telehealth Services List. 
The code is currently on the Medicare Telehealth List with provisional 
status. In the March 31, 2020 IFC (85 FR 9240), we originally added CPT 
code 77427 on the Medicare Telehealth Services List for the duration of 
the PHE for Covid-19. A requester stated that data collected during the 
PHE demonstrates that the telehealth option is as safe as the in-person 
equivalent. We also received a request that we remove this code from 
the Medicare Telehealth Services List, citing the importance of in-
person physical examination to ensure quality of care and stating that 
a telehealth modality presents patient safety concerns such as those 
related to the ability of the practitioner to address side effects of 
radiation therapy. Given the safety concerns raised by members of the 
practitioner community, we believe this service may not be safely and 
effectively furnished, and therefore believe that such concerns merit 
removing this item from the telehealth list. We are therefore proposing 
to remove this code from the Medicare Telehealth Services List, and we 
are

[[Page 61627]]

soliciting comment on these quality of care concerns.
(9) Home International Normalized Ratio (INR) Monitoring
    We received a request to permanently add Home INR Monitoring (HCPCS 
code G0248) to the Medicare Telehealth Services List. This service is 
not on the Medicare Telehealth Services List, nor had it been 
previously added and removed. We are proposing to add HCPS code G0248 
to the Medicare Telehealth Services List with provision status because 
our clinical analyses of these services indicate that they can be 
furnished in full using two-way, audio and video technology, and 
information provided by requesters indicates that there may be clinical 
benefit; however, there is not yet sufficient evidence available to 
consider the services for permanent status. This service as described 
by the HCPCS code describes face-to-face demonstration of use and care 
of the INR monitor, obtaining at least one blood sample, provision of 
instructions for reporting home INR test results, and documentation of 
patient's ability to perform testing and report results, and we believe 
each of these service elements the elements is capable of being 
furnished using an interactive telecommunications system. Adding this 
service on a provisional basis will allow additional time for the 
development of evidence of clinical benefit when this service is 
furnished via telehealth for CMS to consider when evaluating this 
service for potential permanent addition to the Medicare Telehealth 
Services List.
(10) Caregiver Training
    We received a request to permanently add Caregiver Training 
services, as described by HCPCS codes 97550 (Caregiver training in 
strategies and techniques to facilitate the patient's functional 
performance in the home or community (eg, activities of daily living 
[ADLs], instrumental ADLs [iADLs], transfers, mobility, communication, 
swallowing, feeding, problem solving, safety practices) (without the 
patient present), face to face; initial 30 minutes) and CPT code 97551 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (eg, 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)) to the Medicare Telehealth Services List. These codes 
do not currently appear on the Medicare Telehealth Services List nor 
had they previously been added or removed. We are proposing to add 
these services to the Medicare Telehealth List with provisional status 
for CY 2025, in addition to the other currently payable caregiver 
training service codes (CPT codes 97550, 97551, 97552, 96202, 96203). 
These codes are new services that were added to the PFS beginning in 
2024. Given the limited utilization of those codes added for 2024, 
there are not peer-reviewed studies supporting these codes' ability to 
be furnished remotely. Adding these services on a provisional basis 
will allow additional time for the development of evidence of clinical 
benefit when these services are furnished via telehealth for CMS to 
consider when evaluating these services for potential permanent 
addition to the Medicare Telehealth Services List. Contingent upon 
finalizing the service code descriptions that we propose in section 
II.E. of this proposed rule, we also propose that HCPCS code GCTD1-3 
and GCTB1-2 be added to the Medicare Telehealth Services list for CY 
2025 on a provisional basis. We believe that these codes are similar to 
other services already available on the Medicare Telehealth Services 
List, including education and training for patient self-management (CPT 
codes 98960-98962), self-care/home management training (CPT codes 
97535), and caregiver-focused health risk assessment (CPT code 96161). 
Further, it appears that all elements of these services may be 
furnished when using two-way interactive communications technology. 
Adding these services on a provisional basis will allow additional time 
for the development of evidence of clinical benefit when this service 
is furnished via telehealth for CMS to consider when evaluating these 
services for potential permanent addition to the Medicare Telehealth 
Services List.
c. Other Services Proposed for Addition to the Medicare Telehealth 
Services List
(1) Preexposure Prophylaxis (PrEP) of Human Immunodeficiency Virus 
(HIV)
    As discussed in Section II.E. of this proposed rule, we are 
proposing national rates for HCPCS codes G0011 (Individual counseling 
for pre-exposure prophylaxis (PrEP) by physician or QHP to prevent 
human immunodeficiency virus (HIV), includes: HIV risk assessment 
(initial or continued assessment of risk), HIV risk reduction and 
medication adherence, 15-30 minutes) and G0013 (Individual counseling 
for pre-exposure prophylaxis (PrEP) by clinical staff to prevent human 
immunodeficiency virus (HIV), includes: HIV risk assessment (initial or 
continued assessment of risk), HIV risk reduction and medication 
adherence) pending the future finalization of the NCD for Pre-Exposure 
Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection. We 
believe these services are similar to services currently on the 
Medicare Telehealth Services list, specifically HCPCS codes G0445 (High 
intensity behavioral counseling to prevent sexually transmitted 
infection; face-to-face, individual, includes: education, skills 
training and guidance on how to change sexual behavior; performed semi-
annually, 30 minutes) and 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) as these codes are the codes from which HCPCS codes 
G0011 and G0013 were unbundled, respectively. As similarity to services 
currently on the Medicare telehealth list is one of our criteria for 
permanent addition, we are proposing to add HCPCS codes G0011 and G0013 
to the Medicare Telehealth Services List with a permanent status.
    The services that we are proposing to add to the Medicare 
Telehealth Services List are listed in Table 8.
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BILLING CODE C
d. Frequency Limitations on Medicare Telehealth Subsequent Care 
Services in Inpatient and Nursing Facility Settings, and Critical Care 
Consultations
    When adding some services to the Medicare Telehealth Services List 
in the past, we have included certain frequency restrictions on how 
often practitioners may furnish the service via Medicare telehealth. 
These include a limitation of one subsequent hospital care service 
furnished through telehealth every 3 days, added in the CY 2011 PFS 
final rule (75 FR 73317 through 73318), one subsequent nursing facility 
visit furnished through telehealth every 14 days, added in the CY 2011 
PFS final rule (75 FR73318), and one critical care consultation service 
furnished through telehealth per day, added in the CY 2017 final rule 
(81 FR 80198). In establishing these limits, we cited concerns 
regarding the potential acuity and complexity of these patients.
    We temporarily removed these frequency restrictions during the PHE 
for COVID-19. In the March 31, 2020 COVID-19 interim final rule with 
comment period (IFC) (85 FR 19241), we stated that we did not believe 
the frequency limitations for certain subsequent inpatient visits, 
subsequent NF visits, and critical care consultations furnished via 
Medicare telehealth were appropriate or necessary for the duration of 
the PHE because this would have been a patient population who would 
have otherwise not had access to clinically appropriate in-person 
treatment. Although the frequency limitations resumed effect on May 12, 
2023 (upon expiration of the PHE), through enforcement discretion 
during the remainder of CY 2023 and notice-and-comment rulemaking for 
CY 2024, Medicare telehealth frequency limitations have been suspended 
for CY 2024 (88 FR 78876 through 78878) for the following codes 
relating to Subsequent Inpatient Visits, Subsequent Nursing Facility 
Visits, and Critical Care Consultation Services:
1. Subsequent Inpatient Visit CPT Codes
     99231 (Subsequent hospital inpatient or observation care, 
per day, for the evaluation and management of a patient, which requires 
a medically appropriate history and/or examination and straightforward 
or low level of medical decision making. when using total time on the 
date of the encounter for code selection, 25 minutes must be met or 
exceeded.);
     99232 (Subsequent hospital inpatient or observation care, 
per day, for the evaluation and management of a patient, which requires 
a medically appropriate history and/or examination and moderate level 
of medical decision making. when using total time on the date of the 
encounter for code selection, 35 minutes must be met or exceeded.); and
     99233 (Subsequent hospital inpatient or observation care, 
per day, for the evaluation and management of a patient, which requires 
a medically appropriate history and/or examination and high level of 
medical decision making. when using total time on the date of the 
encounter for code selection, 50 minutes must be met or exceeded.)
2. Subsequent Nursing Facility Visit CPT Codes
     99307 (Subsequent nursing facility care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and straightforward medical 
decision making. when using total time on the date of the encounter for 
code selection, 10 minutes must be met or exceeded.);
     99308 (Subsequent nursing facility care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and low level of medical 
decision making. when using total time on the date of the encounter for 
code selection, 15 minutes must be met or exceeded.);
     99309 (Subsequent nursing facility care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and moderate level of medical 
decision making. when using total time on the date of the encounter for 
code selection, 30 minutes must be met or exceeded.); and
     99310 (Subsequent nursing facility care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and high level of medical 
decision making. when using total time on the date of the encounter for 
code selection, 45 minutes must be met or exceeded.)
3. Critical Care Consultation Services: HCPCS Codes
     G0508 (Telehealth consultation, critical care, initial, 
physicians typically spend 60 minutes communicating with the patient 
and providers via telehealth.); and
     G0509 (Telehealth consultation, critical care, subsequent, 
physicians typically spend 50 minutes communicating with the patient 
and providers via telehealth.)
    We are proposing to remove the frequency limitations for these 
codes for CY 2025.
    In the CY 2024 PFS final rule (88 FR 78877), we solicited comments 
from interested parties on how practitioners have been ensuring that 
Medicare beneficiaries receive subsequent inpatient and nursing 
facility visits, as well as critical care consultation services since 
the expiration of the PHE. As discussed in that final rule, many 
commenters supported permanently removing these frequency limitations, 
stating that they are arbitrary and re-imposing the limitations would 
result in decreased access to care; that practitioners should be 
allowed to use

[[Page 61632]]

their clinical judgment to determine the type of visit, how many 
visits, and the type of treatment that is the best fit for the patient 
so long as the standard of care is met; and that lifting these 
limitations during the PHE has been instructive and demonstrates the 
value of continuing such flexibilities. Many commenters urged us to 
permanently remove them. That said, some commenters did not support 
removing these frequency limitations citing patient acuity and safety, 
some commenters cited the importance of in-person care for patients in 
acute care settings. Some commenters stated that telehealth patient 
assessments and evaluations are never the same as in-person, hands on 
visits and should not be considered a viable replacement with no 
limitations for in-person care. We are continuing to consider what 
changes we should be making to how telehealth services are reimbursed 
under Medicare in light of the way practice patterns may have changed 
following the PHE for COVID-19. Taking into account the information 
received from commenters in the CY 2024 PFS final rule, we believe it 
is reasonable to continue to pause certain pre-pandemic restrictions, 
such as the frequency limitations for the abovementioned codes for CY 
2025. Removing such restrictions for CY 2025 will allow us to gather an 
additional year of data to determine how practice patterns are evolving 
and what changes, if any, to frequency limitations should be made. We 
do not believe pausing such frequency limitations for another year 
presents a level of safety risk requiring us to immediately reinstate 
the limitations. Our analysis of claims data indicates that the volume 
of services that would be affected by implementing these limitations is 
relatively low; in other words, these services are not being furnished 
via telehealth with such frequency that frequency limits are being met 
or exceeded very often or for many beneficiaries (claims data from 
2020--2023 suggest that less than five percent received one or more of 
these services as a telehealth service). Therefore, while claims data 
does not suggest that lifting these limitations during the PHE has led 
to an increase in utilization, we continue to be interested in 
information from interested parties on our concerns regarding the 
potential acuity and complexity of these patients and how such acuity 
and complexity should complexity should influence our implementation of 
frequency limitations.
e. Audio-Only Communication Technology To Meet the Definition of 
``Telecommunications System''
    Through our regulation at Sec.  410.78(a)(3), we define 
``interactive telecommunications system'' 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. Through emergency 
regulations and waiver authority under section 1135(b)(8) of the Act, 
in response to the PHE for COVID-19, we allowed the use of audio-only 
communications technology to furnish services described by the codes 
for audio-only telephone evaluation and management services and 
behavioral health counseling and educational services. Section 4113 of 
the CAA, 2023, extended the availability of telehealth services that 
can be furnished using audio-only technology and provided for the 
extension of other PHE-related flexibilities including removal of the 
geographic and location limitations under section 1834(m) of the Act 
through December 31, 2024.
    In the CY 2022 PFS final rule (86 FR 65060), in part to recognize 
the changes made by section 123 of the CAA, 2021 that removed the 
geographic restrictions for Medicare telehealth services for the 
diagnosis, evaluation, or treatment of a mental health disorder and the 
addition of the patient's home as a permissible originating site for 
these services, we revisited our regulatory definition of ``interactive 
telecommunications system'' beyond the circumstances of the PHE. 
Specifically, we finalized a policy to allow for audio-only services 
under certain circumstances and revised the regulation at Sec.  
410.78(a)(3) to permit the use of audio-only equipment for telehealth 
services furnished to established patients in their homes for purposes 
of diagnosis, evaluation, or treatment of a mental health disorder 
(including substance use disorders) if the distant site physician or 
practitioner is technically capable of using an interactive 
telecommunications system as defined previously, but the patient is not 
capable of, or does not consent to, the use of video technology. We 
also established this policy in part because mental health services are 
different from most other services on the Medicare telehealth services 
list in that many of the services primarily involve verbal conversation 
where visualization between the patient and furnishing physician or 
practitioner may be less critical to the provision of the service.
    However, with the successive statutory extensions of the telehealth 
flexibilities implemented in response to the PHE for COVID-19, most 
recently by the CAA, 2023, and our adoption of other extensions where 
we have had authority to do so, we have come to believe that it would 
be appropriate to allow interactive audio-only telecommunications 
technology when any telehealth service is furnished to a beneficiary in 
their home (when the patient's home is a permissible originating site) 
and when the distant site physician or practitioner is technically 
capable of using an interactive telecommunications system as defined 
previously, but the patient is not capable of, or does not consent to, 
the use of video technology. While practitioners should always use 
their clinical judgment as to whether the use of interactive audio-only 
technology is sufficient to furnish a Medicare telehealth service, we 
recognize that there is variable broadband access in patients' homes, 
and that even when technologically feasible, patients simply may not 
always wish to engage with their practitioner in their home using 
interactive audio and video. Under current statute, with the expiration 
of the PHE-related telehealth flexibilities on December 31, 2024, the 
patient's home is a permissible originating site only for services for 
the diagnosis, evaluation, or treatment of a mental health or substance 
use disorder, and for the monthly ESRD-related clinical assessments 
described in section 1881(b)(3)(B) of the Act.
    We are proposing to revise the regulation at Sec.  410.78(a)(3) to 
state that an interactive telecommunications system may also include 
two-way, real-time audio-only communication technology for any 
telehealth service furnished to a beneficiary in their home if the 
distant site physician or practitioner is technically capable of using 
an interactive telecommunications system as defined as multimedia 
communications equipment that includes, at a minimum, audio and video 
equipment permitting two-way, real-time interactive communication, but 
the patient is not capable of, or does not consent to, the use of video 
technology. Additionally, a modifier designated by CMS must be appended 
to the claim for services described in this paragraph to verify that 
these conditions have been met. These are CPT modifier ``93'' and, for 
RHCs and FQHCs, Medicare modifier ``FQ'' (Medicare telehealth service 
was furnished using audio-only communication technology).

[[Page 61633]]

Practitioners have the option to use the ``FQ'' or the ``93'' modifiers 
or both where appropriate and true, since they are identical in 
meaning.
f. Distant Site Requirements
    In the CY 2024 PFS final rule (88 FR 78873 through 78874) we 
discussed that many commenters expressed concerns regarding the 
expiring flexibility for telehealth practitioners to bill from their 
currently enrolled location instead of their home address when 
providing telehealth services from their home. CMS issued an FAQ, 
available at https://www.cms.gov/files/document/physicians-and-other-clinicians-cms-flexibilities-fight-covid-19.pdf, which extended the 
flexibility for telehealth practitioners to bill from their currently 
enrolled location instead of their home address when providing 
telehealth services from their home through December 31, 2023. 
Interested parties suggested that the expiration of this flexibility 
poses a potential and imminent threat to the safety and privacy of 
health professionals who work from home and furnish telehealth 
services. Commenters cited recent examples of workplace violence in 
health care facilities, where direct harm to nurses and other medical 
staff occurred. In addition to safety and privacy concerns, interested 
parties explained that a significant number of practitioners would need 
to change their billing practices or add their home address to the 
Medicare enrollment file, coordinating with the appropriate Medicare 
Administrative Contractor in their jurisdiction, and this would present 
administrative burden. To address these concerns, commenters requested 
that CMS take steps to protect telehealth practitioners by adjusting 
enrollment requirements so that individual practitioners do not have to 
list their home addresses on enrollment forms.
    In response, CMS finalized, through CY 2024, that we would continue 
to permit a distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home.
    We have continued to hear from interested parties who have stressed 
the importance of continuing this flexibility for the safety and 
privacy of health care professionals. Given the shift in practice 
patterns toward models of care that include the practitioner's home as 
the distant site, we believe it would be appropriate to continue this 
flexibility as CMS considers various proposals that may better protect 
the safety and privacy of practitioners. We are therefore proposing 
that through CY 2025 we will continue to permit the distant site 
practitioner to use their currently enrolled practice location instead 
of their home address when providing telehealth services from their 
home.
2. Other Non-Face-to-Face Services Involving Communications Technology 
Under the PFS
a. Direct Supervision Via Use of Two-Way Audio/Video Communications 
Technology
    Under Medicare Part B, certain types of services, including 
diagnostic tests described under Sec.  410.32 and services incident to 
a physician's (or other practitioner's) professional service described 
under Sec.  410.26 (incident-to services), are required to be furnished 
under specific minimum levels of supervision by a physician or other 
practitioner. We define three levels of supervision in our regulation 
at Sec.  410.32(b)(3): General Supervision, Direct Supervision, and 
Personal Supervision. Notwithstanding the temporary measures 
implemented in response to the PHE for COVID-19, direct supervision 
requires the physician (or other supervising practitioner) to be 
present in the office suite and immediately available to furnish 
assistance and direction throughout the performance of the service. It 
does not mean that the physician (or other supervising practitioner) 
must be present in the room when the service is performed. Again, 
notwithstanding the temporary measures implemented in response to the 
PHE for COVID-19, we have established this ``immediate availability'' 
requirement to mean in-person, physical, not virtual, availability 
(please see the April 6, 2020 IFC (85 FR 19245) and the CY 2022 PFS 
final rule (86 FR 65062)).
    Direct supervision is required for various types of services, 
including most incident-to services under Sec.  410.26, many diagnostic 
tests under Sec.  410.32, pulmonary rehabilitation services under Sec.  
410.47, cardiac rehabilitation and intensive cardiac rehabilitation 
services under Sec.  410.49, and certain hospital outpatient services 
as provided under Sec.  410.27(a)(1)(iv). In the March 31, 2020 COVID-
19 IFC, we amended the definition of ``direct supervision'' for the 
duration of the PHE for COVID-19 (85 FR 19245 through 19246) at Sec.  
410.32(b)(3)(ii) to state that the necessary presence of the physician 
(or other practitioner) for direct supervision includes virtual 
presence through audio/video real-time communications technology. 
Instead of requiring the supervising physician's (or other 
practitioner's) physical presence, the amendment permitted a 
supervising physician (or other practitioner) to be considered 
``immediately available'' through virtual presence using two-way, real-
time audio/visual technology for diagnostic tests, incident-to 
services, pulmonary rehabilitation services, and cardiac and intensive 
cardiac rehabilitation services. We made similar amendments at Sec.  
[thinsp]410.27(a)(1)(iv) to specify that direct supervision for certain 
hospital outpatient services may include virtual presence through 
audio/video real-time communications. The CY 2021 PFS final rule (85 FR 
84538 through 84540) and the CY 2024 PFS final rule (88 FR 78878) 
subsequently extended these policies through December 31, 2024. As 
stated in the CY 2024 PFS final rule, we extended this definition of 
direct supervision through December 31, 2024, in order to align the 
timeframe of the policy with other PHE-related telehealth policies that 
were extended most recently under the provisions of the CAA, 2023.
    We note that in the CY 2021 PFS final rule (85 FR 84539) we 
clarified that, to the extent our policy allows direct supervision 
through virtual presence using audio/video real-time communications 
technology, the requirement could be met by the supervising physician 
(or other practitioner) being immediately available to engage via 
audio/video technology (excluding audio-only), and would not require 
real-time presence or observation of the service via interactive audio 
and video technology throughout the performance of the service. We 
noted that this was the case during the PHE and would continue to be 
the case following the PHE. While flexibility to provide direct 
supervision through audio/video real-time communications technology was 
adopted to be responsive to critical needs during the PHE for COVID-19 
to ensure beneficiary access to care, reduce exposure risk and to 
increase the capacity of practitioners and physicians to respond to 
COVID-19, we expressed concern that direct supervision through virtual 
presence may not be sufficient to support PFS payment on a permanent 
basis, beyond the PHE for COVID-19, due to issues of patient safety. 
For instance, in complex, high-risk, surgical, interventional, or 
endoscopic procedures, or anesthesia procedures, a patient's clinical 
status can quickly change; in-person supervision would be necessary for 
such services to allow for rapid on-site decision-making in the event 
of an

[[Page 61634]]

adverse clinical situation. In addition to soliciting comment in the CY 
2021 PFS proposed rule on whether there should be any additional 
``guardrails'' or limitations to ensure patient safety/clinical 
appropriateness, beyond typical clinical standards, as well as 
restrictions to prevent fraud or inappropriate use, we solicited 
comment in the CY 2024 PFS proposed rule on whether we should consider 
extending the definition of direct supervision to permit virtual 
presence beyond December 31, 2024. Specifically, we stated that we were 
interested in input from interested parties on potential patient safety 
or quality concerns when direct supervision occurs virtually; for 
instance, if direct supervision of certain types of services with 
virtual presence of the supervising practitioner is more or less likely 
to present patient safety concerns, or if this flexibility would be 
more appropriate for certain types of services, or when certain types 
of auxiliary personnel are performing the supervised service. We were 
also interested in potential program integrity concerns that interested 
parties may have regarding this policy, such as overutilization or 
fraud and abuse.
(1) Proposal To Extend Definition of ``Direct Supervision'' To Include 
Audio-Video Communications Technology Through 2025
    As discussed in the CY 2024 PFS final rule (88 FR 78878), in the 
absence of evidence that patient safety is compromised by virtual 
direct supervision, we are concerned about an abrupt transition to our 
pre-PHE policy that defines direct supervision to require the physical 
presence of the supervising practitioner. We noted that an immediate 
reversion to the pre-PHE definition of direct supervision would 
prohibit virtual direct supervision, which may present a barrier to 
access to many services, such as incident-to services, and that 
physicians and/or other supervising practitioners, in certain 
instances, would need time to reorganize their practice patterns 
established during the PHE to reimplement the pre-PHE approach to 
direct supervision without the use of audio/video technology. We 
acknowledge the utilization of this flexibility and recognize that many 
practitioners have stressed the importance of maintaining it, however 
we seek additional information regarding potential patient safety and 
quality of care concerns. This flexibility has been available and 
widely utilized since the beginning of the PHE, and we recognize that 
may enhance patient access. However, given the importance of certain 
services being furnished under direct supervision in ensuring quality 
of care and patient safety, and in particular the ability of the 
supervising practitioner to intervene if complications arise, we 
believe an incremental approach is warranted, particularly in instances 
where unexpected or adverse events may arise for procedures which may 
be riskier or more intense. In light of these potential safety and 
quality of care implications, and exercising an abundance of caution, 
we are extending this flexibility for all services on a temporary basis 
only. We are therefore proposing to continue to define direct 
supervision to permit the presence and ``immediate availability'' of 
the supervising practitioner through real-time audio and visual 
interactive telecommunications through December 31, 2025.
(2) Proposal To Permanently Define ``Direct Supervision'' To Include 
Audio-Video Communications Technology for a Subset of Services
    In the CY 2024 PFS proposed rule, we solicited comment on extending 
or permanently establishing the virtual presence flexibility for 
certain services valued under the PFS given that these services 
typically are performed in their entirety by auxiliary personnel as 
defined at Sec.  410.26(a)(1). We stated such services would include 
incident-to services wholly furnished by auxiliary personnel, Level I 
office or other outpatient E/M visits for established patients. We also 
mentioned Level I Emergency Department (ED) visits in this list, but 
have since concluded that ED services would not be wholly furnished by 
auxiliary personnel and, for that reason, have excluded them from the 
discussion in this proposed rule. Based on our review, these specific 
services present less of a patient safety concern than services for 
which there may be a need for immediate intervention of the supervising 
practitioner; as noted in the CY 2024 PFS proposed rule, allowing 
virtual presence for direct supervision of these services could balance 
patient safety concerns with the interest of supporting access and 
preserving workforce capacity for medical professionals while 
considering potential quality and program integrity concerns. After 
reviewing the various comments in response to this solicitation, 
additional feedback provided by interested parties, and conducting our 
own independent review, we believe these services are low risk by their 
nature, do not often demand in-person supervision, are typically 
furnished entirely by the supervised personnel, and allowing virtual 
presence for direct supervision of these services would balance patient 
safety concerns with the interest of supporting access and preserving 
workforce capacity.
    We are proposing to adopt a definition of direct supervision that 
allows ``immediate availability'' of the supervising practitioner using 
audio/video real-time communications technology (excluding audio-only), 
but only for the following subset of incident-to services described 
under Sec.  410.26: (1) services furnished incident to a physician or 
other practitioner's service when provided by auxiliary personnel 
employed by the billing practitioner and working under their direct 
supervision, and for which the underlying HCPCS code has been assigned 
a PC/TC indicator of `5'; \10\ and (2) services described by 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). As 
provided in the code descriptor for CPT code 99211, an office or other 
outpatient visit for the evaluation and management of an established 
patient may not require the presence of a physician or other 
practitioner and may be furnished incident to a physicians' service by 
a nonphysician employee of the physician under direct supervision. The 
service described by CPT code 99211 and the services that are 
identified with a PC/TC indicator of `5' as listed in the PFS Relative 
Value Files are services that are nearly always performed in entirety 
by auxiliary personnel. The vignette for CPT code 99211 describes the 
provision of supervision and guidance to the clinical staff as 
necessary. The code descriptor for this service specifies an E/M 
service that may not require the presence of a physician or other 
professional; and the current valuation, which is relatively low 
compared to other office and outpatient E/M services, suggests that 
this service would primarily be provided by auxiliary personnel.
---------------------------------------------------------------------------

    \10\ For a full list of all PFS payment status indicators and 
descriptions, see the Medicare Claims Processing Manual (IOM Pub. 
100-04, chapter 23, sections 30.2.2). For a full list of all PFS 
payment status indicators and descriptions, see the Medicare Claims 
Processing Manual (IOM Pub. 100-04, chapter 23, sections 30.2.2 and 
50.6). Specific indicators by service are listed in the PFS Relative 
Value files at https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files).
---------------------------------------------------------------------------

    We are proposing an incremental approach whereby we will adopt 
without any time limitation the definition of direct supervision

[[Page 61635]]

permitting virtual presence for services that are inherently lower 
risk: that is, services that do not ordinarily require the presence of 
the billing practitioner, do not require direction by the supervising 
practitioner to the same degree as other services furnished under 
direct supervision, and are not services typically performed directly 
by the supervising practitioner.
    For all other services required to be furnished under the direct 
supervision of the supervising physician or other practitioner, we are 
proposing, as described above, to continue to define ``immediate 
availability'' to include real-time audio and visual interactive 
telecommunications technology only through December 31, 2025.
    We are proposing to revise the regulations at Sec.  
410.32(b)(3)(ii) to state that through December 31, 2025, the presence 
of the physician (or other practitioner) would include virtual presence 
through audio/video real-time communications technology (excluding 
audio-only).
    We are proposing to revise the regulation at Sec.  410.26(a)(2) to 
state that for the following services furnished after December 31, 
2025, the presence of the physician (or other practitioner) required 
for direct supervision shall continue to include virtual presence 
through audio/video real-time communications technology (excluding 
audio-only): services furnished incident to a physician's service when 
they are provided by auxiliary personnel employed by the physician and 
working under his or her direct supervision and for which the 
underlying HCPCS code has been assigned a PC/TC indicator of `5'; and 
office and other outpatient visits for the evaluation and management of 
an established patient that may not require the presence of a physician 
or other qualified health care professional.
(3) Teaching Physician Billing for Services Involving Residents With 
Virtual Presence
    In the CY 2021 PFS final rule (85 FR 84577 through 84584), we 
established a policy that, after the end of the PHE for COVID-19, 
teaching physicians may meet the requirements to be present for the key 
or critical portions of services when furnished involving residents 
through audio/video real-time communications technology (virtual 
presence), but only for services furnished in residency training sites 
located outside of an Office of Management and Budget (OMB)-defined 
metropolitan statistical area (MSA). We made this location distinction 
consistent with our longstanding interest in increasing beneficiary 
access to Medicare-covered services in rural areas. We noted the 
ability to expand training opportunities for residents in rural 
settings. For all other locations, we expressed concerns that 
continuing to permit teaching physicians to bill for services furnished 
involving residents when they are virtually present, outside the 
conditions of the PHE for COVID-19, may not allow the teaching 
physician to have personal oversight and involvement over the 
management of the portion of the case for which the payment is sought, 
under section 1842(b)(7)(A)(i)(I) of the Act. In addition, we stated 
concerns about patient populations that may require a teaching 
physician's experience and skill to recognize specialized needs or 
testing and whether it is possible for the teaching physician to meet 
these clinical needs while having a virtual presence for the key 
portion of the service. We refer readers to the CY 2021 PFS final rule 
(85 FR 84577 through 84584) for a more detailed description of our 
specific concerns. At the end of the PHE for COVID-19, and as finalized 
in the CY 2021 PFS final rule, we intended for the teaching physician 
to have a physical presence during the key portion of the service 
personally provided by residents in order to be paid for the service 
under the PFS, in locations that were within a MSA. This policy applied 
to all services, regardless of whether the patient was co-located with 
the resident or only present virtually (for example, the service was 
furnished as a 3-way telehealth visit, with the teaching physician, 
resident, and patient in different locations). However, interested 
parties expressed concerns regarding the requirement that the teaching 
physician be physically present with the resident when a service is 
furnished virtually (as a Medicare telehealth service) within an MSA. 
Some interested parties stated that during the PHE for COVID-19, when 
residents provided telehealth services, and the teaching physician was 
virtually present, the same safe and high-quality oversight was 
provided as when the teaching physician and resident were physically 
co-located. In addition, these interested parties stated that during 
telehealth visits, the teaching physician was virtually present during 
the key and critical portions of the telehealth service, available 
immediately in real-time, and had access to the electronic health 
record. After review of the public comments, we finalized a policy that 
allowed the teaching physician to have a virtual presence in all 
teaching settings, only in clinical instances when the service was 
furnished virtually (for example, a 3-way telehealth visit, with all 
parties in separate locations). This permitted teaching physicians to 
have a virtual presence during the key portion of the Medicare 
telehealth service for which payment was sought, through audio/video 
real-time communications technology, in all residency training 
locations through December 31, 2024.
    As stated in the CY 2024 PFS final rule (88 FR 78880), we are 
concerned that an abrupt transition to our pre-PHE policy may present a 
barrier to access to many services. We also understand that teaching 
physicians have gained clinical experience providing services involving 
residents with virtual presence during the PHE for COVID-19 and could 
help us to identify circumstances where the teaching physician can 
routinely provide sufficient personal and identifiable services to the 
patient through their virtual presence during the key portion of the 
Medicare telehealth service. We sought comment and information to help 
us consider other clinical treatment situations where it may be 
appropriate to continue to permit the virtual presence of the teaching 
physician, while continuing to support patient safety, meeting the 
clinical needs for all patients, and ensuring burden reduction without 
creating risks to patient care or increasing opportunities for fraud. 
As summarized in the CY 2024 PFS final rule (88 FR 78881 through 
78882), commenters encouraged us to establish this policy permanently 
and include in-person services to promote access to care, stated that 
teaching physicians should be allowed to determine when their virtual 
presence would be clinically appropriate, based on their assessment of 
the patient's needs and the competency level of the resident. While we 
continue to consider clinical scenarios where it may be appropriate to 
permit the virtual presence of the teaching physician, we are proposing 
to continue our current policy to allow teaching physicians to have a 
virtual presence for purposes of billing for services furnished 
involving residents in all teaching settings, but only when the service 
is furnished virtually (for example, a 3-way telehealth visit, with the 
patient, resident, and teaching physician in separate locations). This 
would permit teaching physicians to have a virtual presence during the 
key portion of the Medicare telehealth service for which payment is 
sought in any residency training location through December 31, 2025. 
The teaching physician's virtual presence would continue to require 
real-time observation (not mere availability) and

[[Page 61636]]

excludes audio-only technology. The documentation in the medical record 
must continue to demonstrate whether the teaching physician was 
physically present or present through audio/video real-time 
communications technology at the time of the Medicare telehealth 
service, which includes documenting the specific portion of the service 
for which the teaching physician was present through audio/video real-
time communications technology.
(a) Request for Information for Teaching Physician Services Furnished 
Under the Primary Care Exception
    The so-called primary care exception set forth at Sec.  415.174 
permits the teaching physician to bill for certain lower and mid-level 
complexity physicians' services furnished by residents in certain types 
of residency training settings even when the teaching physician is not 
present with the resident during the services as long as certain 
conditions are met, including that the services are furnished by 
residents with more than 6 months of training in the approved residency 
program; and that the teaching physician directs the care of no more 
than four residents at a time, remains immediately available and has no 
other responsibilities while directing the care, assumes management 
responsibility for beneficiaries seen by the residents, ensures that 
the services furnished are appropriate, and reviews certain elements of 
the services with each resident during or immediately after each visit. 
For a more detailed description of the list of services currently 
allowed under the primary care exception policy, we refer readers to 
the CY 2021 PFS final rule (85 FR 84585 through 84590).
    We have received feedback from interested parties requesting that 
we permanently expand the list of services that can be furnished under 
the primary care exception to include all levels of E/M services and 
additional preventive services. These interested parties have stated 
that the fact that high-value primary care and preventive services are 
not included in the scope of the primary care exception discourages 
their integration in residency training in these primary care settings, 
which has a negative impact on physician training, patient access, and 
longer-term outcomes. Additionally, these interested parties have 
suggested that including all levels of E/M services under the primary 
care exception could support primary care workforce development and 
improve patient continuity of care without compromising patient safety; 
furthermore, including additional preventive services within the 
primary care exception would increase the utilization of high-value 
services.
    We believe the primary care exception was intended to broaden 
opportunities for teaching physicians to involve residents in 
furnishing services under circumstances that preserve the direction of 
the care by the teaching physician and promote safe, high-quality 
patient care. As such, we are requesting information to help us 
consider whether and how best to expand the array of services included 
under the primary care exception in future rulemaking. We are 
interested in hearing more about the types of services that could be 
allowed under the primary care exception, specifically preventive 
services, and whether the currently required six months of training in 
an approved program is sufficient for residents to furnish these types 
of services without the presence of a teaching physician. We are 
seeking comment to help us consider whether adding certain preventive 
services or higher level E/M services to the primary care exception 
would hinder the teaching physician from maintaining sufficient 
personal involvement in the care to warrant PFS payment for the 
services being furnished by up to four residents at any given time. 
Similarly, we are requesting information on whether the inclusion in 
the primary care exception of specific higher-level or preventive 
services would impede the teaching physician's ability to remain 
immediately available for up to four residents at any given time, while 
directing and managing the care furnished by these residents.
3. 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, 
and specifies that, 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 proposed MEI increase for CY 2025 is 3.6 percent and is based 
on the expected historical percentage increase of the 2017-based MEI. 
For the final rule, we propose to update the MEI increase for CY 2025 
based on historical data through the second quarter of 2024. Therefore, 
for CY 2025, the proposed payment amount for HCPCS code Q3014 
(Telehealth originating site facility fee) is $31.04. Table 9 shows the 
Medicare telehealth originating site facility fee and the corresponding 
MEI percentage increase for each applicable time period.
BILLING CODE P

[[Page 61637]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.013

BILLING CODE C
4. Payment for Outpatient Therapy Services, Diabetes Self-Management 
Training, and Medical Nutrition Therapy When Furnished by Institutional 
Staff to Beneficiaries in Their Homes Through Communication Technology
    For information related to outpatient physical therapy, 
occupational therapy, speech-language pathology, diabetes self-
management training (DSMT) and medical nutritional therapy (MNT) 
services furnished by institutional staff in hospitals and other 
institutional settings to beneficiaries in their homes through 
communication technology, please refer to section X.A. in the CY 2025 
Hospital Outpatient Prospective Payment System (OPPS) proposed rule (FR 
Doc. 2024-15087), on public inspection July 10, 2024, and publishing in 
the Federal Register of July 22, 2024.

E. 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, and revised MP RVUs in CY 2010, CY 2015, and CY 2020. 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 identified a number of potentially misvalued 
codes each year using various identification screens, as outlined in 
section II.C. of this proposed rule, Potentially Misvalued Services 
under the PFS. 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 with comment period for a year. Then, 
during the 60-day period following the publication of the final rule 
with comment period, 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 (79 FR 67547), 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 (81 FR 46162), 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

[[Page 61638]]

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 
(81 FR 80170), we reviewed the comments received during the 60-day 
public comment period following release of the CY 2016 PFS final rule 
with comment period (80 FR 70886), 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.
    As part of our obligation to establish RVUs for the PFS, we 
thoroughly review and consider available information including 
recommendations and supporting information from the RUC, the Health 
Care Professionals Advisory Committee (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. 
Where we concur that the RUC's recommendations, or recommendations from 
other commenters, are reasonable and appropriate and are consistent 
with the time and intensity paradigm of physician work, we proposed 
those values as recommended. Additionally, we continually engage with 
interested parties, including the RUC, with regard to our approach for 
accurately valuing codes, and as we prioritize our obligation to value 
new, revised, and potentially misvalued codes. We continue to welcome 
feedback from all interested parties regarding valuation of services 
for consideration through our rulemaking process.
2. Methodology for Establishing Work RVUs
    For each code identified in this section, we conduct a review that 
includes 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 generally include, but have not been limited to, a review of 
information provided by the RUC, the 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 also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. In the CY 2011 PFS final rule with comment period (75 
FR 73328 through 73329), we discussed a variety of methodologies and 
approaches used to develop work RVUs, including survey data, building 
blocks, crosswalks to key reference or similar codes, and magnitude 
estimation (see the CY 2011 PFS final rule with comment period (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.
    Components that we use in the building block approach may include 
preservice, intraservice, or postservice time and post-procedure 
visits. When referring to a bundled CPT code, the building block 
components could include the CPT codes that make up the bundled code 
and the inputs associated with those codes. We use the building block 
methodology to construct, or deconstruct, the work RVU for a CPT code 
based on component pieces of the code. 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 frequently utilize an incremental methodology in 
which we value a code based upon its incremental difference between 
another code and another family of codes. Section 1848(c)(1)(A) of the 
Act specifically defines the work component as the resources that 
reflect time and intensity in furnishing the service. Also, the 
published literature on valuing work has recognized the key role of 
time in overall work. For particular codes, we refine the work RVUs in 
direct proportion to the changes in the best information regarding the 
time resources involved in furnishing particular services, either 
considering the total time or the intraservice time.
    Several years ago, to aid in the development of preservice time 
recommendations for new and revised CPT codes, the RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently, there are 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 E/M service, we believe that there is overlap between the two 
services in some of the activities furnished during the preservice 
evaluation and postservice time. Our longstanding adjustments have 
reflected a broad assumption that at least one-third of the work time 
in both the preservice evaluation and postservice period is duplicative 
of work furnished during the E/M visit.
    Accordingly, in cases where we believe that the RUC has not 
adequately accounted for the overlapping activities in the recommended 
work RVU and/or times, we adjust the work RVU and/or times to account 
for the overlap. The work RVU for a service is the product of the time 
involved in furnishing the service multiplied by the intensity of the 
work. Preservice evaluation time and postservice time both have a long-
established intensity of work per unit of time (IWPUT) of 0.0224, which 
means that 1 minute of preservice evaluation or postservice time 
equates to 0.0224 of a work RVU.
    Therefore, in many cases when we remove 2 minutes of preservice 
time and 2 minutes of postservice time from a procedure to account for 
the overlap with the same day E/M service, we also remove a work RVU of 
0.09 (4 minutes x 0.0224 IWPUT) if we do not believe the overlap in 
time 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.
    The following paragraphs discuss our approach to reviewing RUC 
recommendations and developing

[[Page 61639]]

proposed values for specific codes. When they exist, we also include a 
summary of interested party reactions to our approach. We noted that 
many commenters and interested parties have expressed concerns over the 
years with our ongoing adjustment of work RVUs based on changes in the 
best information we 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 used to make 
the adjustments is derived from their survey process. We note that we 
are obligated under the statute 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 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 started by looking at the change 
in the time in the context of the RUC-recommended work RVU. When the 
recommended work RVUs do not appear to account for significant changes 
in time, we 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 sometimes use the relationship 
between the old time values and the new time values for particular 
services to identify alternative work RVUs based on changes in time 
components.
    In so doing, rather than ignoring the RUC-recommended value, we 
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 were not otherwise reflected in the 
RUC-recommended value. If we believe that such changes in time are 
already accounted for in the RUC's recommendation, then we do not make 
such adjustments. Likewise, we do not arbitrarily apply time ratios to 
current work RVUs to calculate proposed work RVUs. We use the ratios to 
identify potential work RVUs and consider these work RVUs as potential 
options relative to the values developed through other options.
    We do not imply that the decrease in time as reflected in survey 
values should always equate to a one-to-one or linear decrease in newly 
valued work RVUs. Instead, we believe that, since the two components of 
work are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, significant decreases in time should be reflected in 
decreases to work RVUs. If the RUC's recommendation has appeared to 
disregard or dismiss the changes in time, without a persuasive 
explanation of why such a change should not be accounted for in the 
overall work of the service, then we 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 interested parties, including the RUC, have expressed 
general objections to our use of these methodologies and suggested that 
our actions in adjusting the recommended work RVUs are inappropriate; 
other interested parties have also expressed general 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 (81 FR 46162), 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 described earlier in this section, 
crosswalks to key reference or similar codes are one of the many 
methodological approaches we have employed to identify potential values 
that reconcile the RUC-recommend work RVUs with the recommended time 
values when the RUC-recommended work RVUs did not appear to account for 
significant changes in time.
    In response to comments, in the CY 2019 PFS final rule (83 FR 
59515), we clarified that terms ``reference services'', ``key reference 
services'', and ``crosswalks'' as described by the commenters are part 
of the RUC's process for code valuation. These are not terms that we 
created, and we do not agree that we necessarily must employ them in 
the identical fashion for the purposes of discussing our valuation of 
individual services that come up for review. However, in the interest 
of minimizing confusion and providing clear language to facilitate 
feedback from interested parties, we stated that we would seek to limit 
the use of the term, ``crosswalk,'' to those cases where we are making 
a comparison to a CPT code with the identical work RVU. (83 FR 59515) 
We note that we also occasionally make use of a ``bracket'' for code 
valuation. A ``bracket'' refers to when a work RVU falls between the 
values of two CPT codes, one at a higher work RVU and one at a lower 
work RVU.
    We look forward to continuing to engage with interested parties and 
commenters, including the RUC, as we prioritize our obligation to value 
new, revised, and potentially misvalued codes; and we will continue to 
welcome feedback from all interested parties regarding valuation of 
services for consideration through our rulemaking process. We refer 
readers to the detailed discussion in this section of the valuation 
considered for specific codes. Table 13 contains a list of codes and 
descriptors for which we are proposing work RVUs for CY 2025; this 
includes all codes for which we received RUC recommendations by 
February 10, 2024. The proposed work RVUs, work time and other payment 
information for all CY 2025 payable codes are available on the CMS 
website under downloads for the CY 2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html).
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

[[Page 61640]]

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 the RUC-recommended direct PE inputs 
includes many refinements that are common across codes, as well as 
refinements that are specific to particular services. Table 14 details 
our refinements of the RUC's direct PE recommendations at the code-
specific level. In section II.B. of this proposed rule, Determination 
of Practice Expense Relative Value Units (PE RVUs), we address certain 
refinements that will be common across codes. Refinements to particular 
codes are addressed in the portions of that 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 $0.35 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. In this proposed rule, we also note that many of the 
refinements listed in Table 14 result in changes under the $0.35 
threshold and would be unlikely to result in a change to the RVUs.
    We note that the direct PE inputs for CY 2025 are displayed in the 
CY 2025 direct PE input files, available on the CMS website under the 
downloads for the CY 2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs displayed there have been 
used in developing the CY 2025 PE RVUs as displayed in Addendum B (see 
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).
b. Common Refinements
(1) Changes in Work Time
    Some direct PE inputs are directly affected by revisions in work 
time. Specifically, changes in the intraservice portions of the work 
time and changes in the number or level of postoperative visits 
associated with the global periods result in corresponding changes to 
direct PE inputs. The direct PE input recommendations generally 
correspond to the work time values associated with services. We believe 
that inadvertent discrepancies between work time values and direct PE 
inputs should be refined or adjusted in the establishment of proposed 
direct PE inputs to resolve the discrepancies.
(2) Equipment Time
    Prior to CY 2010, the RUC did not generally provide CMS with 
recommendations regarding equipment time inputs. In CY 2010, in the 
interest of ensuring the greatest possible degree of accuracy in 
allocating equipment minutes, we requested that the RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the RUC with general guidelines regarding appropriate 
equipment time inputs. We 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 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 
postoperative visits included in the global period for a service, the 
equipment time will 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 noted that we believe these same assumptions will 
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 will be available if the 
room is not being occupied by a particular patient. For additional 
information, we referred 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 is 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 proposed rule, 
Determination of Practice Expense Relative Value Units (PE RVUs), 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's

[[Page 61641]]

recommendations include items that are not clinical labor, disposable 
supplies, or medical equipment or that cannot be allocated to 
individual services or patients. We 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. However, some recommendations include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the RUC has historically recommended 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 2025 we received invoices for several new supply and 
equipment items. Tables 17 and 18 detail the invoices received for new 
and existing items in the direct PE database. As discussed in section 
II.B. of this proposed rule, Determination of Practice Expense Relative 
Value Units, we encourage interested parties 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 interested parties to submit invoices or other information to 
improve the accuracy of pricing for these items in the direct PE 
database by February 10th of the following year for consideration in 
future rulemaking, similar to our process for consideration of RUC 
recommendations.
    We remind interested parties 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 17 and 18 also include the number of 
invoices received and the number of nonfacility allowed services for 
procedures that use these equipment items. We provide the nonfacility 
allowed services so that interested parties 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 interested 
parties 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 interested parties 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 include 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 
final PE RVU for particular services, it facilitates our ability to 
incorporate a price once we obtain information and are able to do so.
(6) Service Period Clinical Labor Time in the Facility Setting
    Generally speaking, our direct PE inputs do 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 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 list of services for the upcoming calendar year 
that are subject to the MPPR on diagnostic cardiovascular services, 
diagnostic imaging services, diagnostic ophthalmology services, and 
therapy services; and the list of procedures that meet the definition 
of imaging under section 1848(b)(4)(B) of the Act, and therefore, are 
subject to the OPPS cap; are displayed in the public use files for the 
PFS proposed and final rules for each year. The public use files for CY 
2025 are available on the CMS website under downloads for the CY 2025 
PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. 
For more information regarding the history of the MPPR policy, we refer 
readers to the CY 2014 PFS final rule with comment period (78 FR 74261 
through 74263).
    Effective January 1, 2007, section 5102(b)(1) of the Deficit 
Reduction Act of 2005 (Pub. L. 109-171) (DRA) amended section 
1848(b)(4) of the Act to require that, for imaging services, if--(i) 
The TC (including the TC portion of a global fee) of the service 
established for a year under the fee schedule without application of 
the geographic adjustment factor, exceeds (ii) The Medicare OPD fee 
schedule amount established under the prospective payment system (PPS) 
for HOPD services under section 1833(t)(3)(D) of the Act for such 
service for such year, determined without regard to geographic 
adjustment under section 1833(t)(2)(D), the Secretary shall substitute 
the amount described in clause (ii), adjusted by the geographic 
adjustment factor under the PFS, for the fee schedule amount for such 
TC for such year. As required by section 1848(b)(4)(A) of the Act, for 
imaging services furnished on or after January 1, 2007, we cap the TC 
of the PFS payment amount for the year (prior to geographic adjustment) 
by the Outpatient Prospective Payment System (OPPS) payment amount for 
the service (prior to geographic adjustment). We then apply the PFS 
geographic adjustment to the capped payment amount. Section 
1848(b)(4)(B) of the Act defines imaging services as ``imaging and 
computer-assisted imaging services, including X-ray, ultrasound 
(including echocardiography), nuclear medicine (including PET), 
magnetic resonance imaging (MRI), computed tomography (CT), and 
fluoroscopy, but excluding diagnostic and screening mammography.'' For 
more information regarding the history of the cap on the TC of the PFS 
payment amount under the DRA (the ``OPPS cap''), we refer readers to 
the CY 2007 PFS final rule with comment period (71 FR 69659 through 
69662).
    For CY 2025, we identified new and revised codes to determine which 
services meet the definition of ``imaging services'' as defined at 
section 1848(b)(4)(B) of the Act for purposes of this cap. Beginning 
for CY 2025, we are proposing to include the following services on the 
list of codes to which the OPPS cap applies: CPT codes 0868T (High-
resolution gastric electrophysiology mapping with simultaneous patient-
symptom profiling, with interpretation and

[[Page 61642]]

report), 0876T (Duplex scan of hemodialysis fistula, computer-aided, 
limited (volume flow, diameter, and depth, including only body of 
fistula)), 74263 (Computed tomographic (ct) colonography, screening, 
including image postprocessing), 9X059 (Computerized ophthalmic 
diagnostic imaging (eg, optical coherence tomography [OCT]), posterior 
segment, with interpretation and report, unilateral or bilateral; 
retina including OCT angiography), 93X94 (Vasoreactivity study 
performed with transcranial Doppler study of intracranial arteries, 
complete (List separately in addition to code for primary procedure)), 
93X95 (Emboli detection without intravenous microbubble injection 
performed with transcranial Doppler study of intracranial arteries, 
complete (List separately in addition to code for primary procedure)), 
and 93X96 (Venous-arterial shunt detection with intravenous microbubble 
injection performed with transcranial Doppler study of intracranial 
arteries, complete (List separately in addition to code for primary 
procedure)). We believe that these codes meet the definition of imaging 
services under section 1848(b)(4)(B) of the Act, and thus, should be 
subject to the OPPS cap.
    In the CY 2024 PFS final rule (88 FR 78894), we noted that in 
response to the CY 2024 PFS proposed rule, commenters requested that 
CMS remove CPT code 92229 (Imaging of retina for detection or 
monitoring of disease; point-of-care autonomous analysis and report, 
unilateral or bilateral) from the OPPS cap list because it does not 
include an associated PC or physician interpretation and it is 
primarily utilized in the physician office setting. We are soliciting 
comment on the appropriateness of applying the OPPS cap to services 
such as this for which the interpretation component is not captured by 
work RVUs, and the service is not split into technical and professional 
components. We are more broadly evaluating how services involving 
assistive technologies are most accurately valued. We note that the 
OPPS rate for this service is currently higher than what would be paid 
in a physician office setting, and therefore the OPPS cap does not 
currently apply to CPT code 92229 as of 2024.
4. Valuation of Specific Codes for CY 2025
(1) Skin Cell Suspension Autograft (CPT codes 15XX1, 15XX2, 15XX3, 
15XX4, 15XX5, 15XX6, 15XX7, and 15XX8)
    In September 2023, the CPT Editorial Panel approved the creation of 
eight new CPT codes to describe skin cell suspension autograft (SCSA) 
procedures. The code set includes a 000-day global base code (CPT code 
15XX1 (Harvest of skin for skin cell suspension autograft; first 25 sq 
cm or less)) and an add-on code (CPT code 15XX2 (Harvest of skin for 
skin cell suspension autograft; each additional 25 sq cm or part 
thereof (List separately in addition to code for primary procedure))) 
describing the harvesting component of the procedure, an XXX global 
base code (CPT code 15XX3 (Preparation of skin cell suspension 
autograft, requiring enzymatic processing, manual mechanical 
disaggregation of skin cells, and filtration; first 25 sq cm or less of 
harvested skin) and an add-on code (CPT code 15XX4 (Preparation of skin 
cell suspension autograft, requiring enzymatic processing, manual 
mechanical disaggregation of skin cells, and filtration; each 
additional 25 sq cm of harvested skin or part thereof (List separately 
in addition to code for primary procedure))) describing the preparation 
component of the procedure, and two 090-day global base codes and two 
add-on codes for the application component to distinguish between body 
areas: trunk, arms, and legs with CPT codes 15XX5 (Application of skin 
cell suspension autograft to wound and donor sites, including 
application of primary dressing, trunk, arms, legs; first 480 sq cm or 
less) and 15XX6 (Application of skin cell suspension autograft to wound 
and donor sites, including application of primary dressing, trunk, 
arms, legs; each additional 480 sq cm or part thereof (List separately 
in addition to code for primary procedure)); and face, scalp, eyelids, 
mouth, neck, ears, orbits, genitalia, hands, feet, or multiple digits 
with CPT codes 15XX7 (Application of skin cell suspension autograft to 
wound and donor sites, including application of primary dressing, face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits; first 480 sq cm or less) and 15XX8 (Application of 
skin cell suspension autograft to wound and donor sites, including 
application of primary dressing, face, scalp, eyelids, mouth, neck, 
ears, orbits, genitalia, hands, feet, and/or multiple digits; each 
additional 480 sq cm or part thereof (List separately in addition to 
code for primary procedure)).
    We disagree with the RUC-recommended work RVUs of 3.00, 2.00, 2.51, 
2.00, 10.97, 2.50, 12.50, and 3.00 for CPT codes 15XX1 through 15XX8, 
respectively, and are proposing contractor-pricing for these CPT codes 
due to concerns with the coding structure of the code family and the 
total physician time that results when these codes are billed multiple 
times on the same date of service for the typical patient.
    We note that our concerns with these CPT codes are expansive. 
Firstly, we note that these CPT codes represent a segmentation of a 
single service that is performed sequentially on the same date of 
service. We are seeking comment on whether the segmentation of the 
harvest, preparation, and application is necessary when these are 
sequential service parts of one episode of care, and could be 
simplified by having just two codes that encompass all three service 
parts (harvest, preparation, and application), to differentiate the two 
different application areas. We also are soliciting comment on the base 
and add-on codes' incremental square centimeters, considering that the 
typical size treatment area described in the vignettes could result in 
the add-on codes being billed multiple times, particularly for the base 
application CPT code 15XX5 and add-on CPT code 15XX6. Based on the 
meeting notes from the September 2023 CPT Editorial Panel meeting, the 
specialty society initially structured their coding request to 
``bundle'' the service components into fewer codes, but it is unclear 
to us why these codes were further segmented. We believe that the very 
large range of intraservice times from the 33 burn surgeons may have 
been exacerbated by the harvest, preparation, and application 
components of the service being segmented in this manner. Most notably, 
CPT code 15XX1, which describes the first 25 sq cm of harvest, base 
code, had an intraservice survey time range of 5 to 480 minutes, and 
CPT code 15XX7, which describes the first 480 sq cm of application to 
the face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, 
feet, and/or multiple digits, had an intraservice survey time range of 
10 to 360 minutes.
    We note that the survey median intraservice times for CPT codes 
15XX1 through 15XX8 contradict numerous publicly available sources that 
describe much lower times for this service or specific service parts. 
Most notably, the manufacturer of the RECELL Autologous Cell Harvesting 
Device (RECELL[supreg] System) used in this service, indicates

[[Page 61643]]

that a suspension of Spray-On SkinTM Cells using a small 
sample of the patient's own skin for the treatment of thermal burn 
wounds and full-thickness skin defects is ``prepared and applied at the 
point of care in as little as 30 minutes.'' \11\ Additionally, Temple 
University Hospital published a news article on December 20, 2019, just 
11 months after the U.S. Food and Drug Administration (FDA) approval of 
the RECELL[supreg] System for the treatment of acute thermal second and 
third-degree burns in adult patients in January 2019, stating that the 
entire process of skin sample collection, enzyme solution preparation, 
and suspension spraying/application ``can take as little as 30 
minutes'' and ``treat a wound up to 80 times the size of the donor skin 
sample.'' \12\ Additionally, an article published in Europe PubMed 
Central states that the procedure takes approximately 30 minutes and is 
performed by a burn surgeon trained in how to use RECELL[supreg] 
System, and does not require specialized laboratory staff.\13\ 
Additionally, a 2007 study aimed at comparing the results from the 
RECELL[supreg] System and the classic skin grafting for epidermal 
replacement in deep partial thickness burns showed a total procedure 
time of 594 minutes for the RECELL[supreg] System 
group.\14\
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    \11\ https://avitamedical.com/.
    \12\ Temple Burn Center Using Spray-On SkinTM Cells Technology 
to Offer Patients a New, Less Invasive Option for the Treatment of 
Severe Burns. (2019, December 20). https://medicine.temple.edu/news/temple-burn-center-using-spray-skin-cells-technology-offer-patients-new-less-invasive-option.
    \13\ Cooper-Jones B, Visintini S. A Noncultured Autologous Skin 
Cell Spray Graft for the Treatment of Burns. In: CADTH Issues in 
Emerging Health Technologies. Canadian Agency for Drugs and 
Technologies in Health, Ottawa (ON); 2016. PMID: 30855772.
    \14\ G. Gravante, M.C. Di Fede, A. Araco, M. Grimaldi, B. De 
Angelis, A. Arpino, V. Cervelli, A. Montone, A randomized trial 
comparing ReCell[supreg] system of epidermal cells delivery versus 
classic skin grafts for the treatment of deep partial thickness 
burns, Burns, Volume 33, Issue 8, 2007, Pages 966-972, ISSN 0305-
4179, https://doi.org/10.1016/j.burns.2007.04.011.
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    More granularly, the FDA's Instructions for Use of the 
RECELL[supreg] Autologous Cell Harvesting Device state that ``if a skin 
sample is harvested and processed according to these instructions, it 
should require between 15 and 30 minutes of contact with the 
Enzyme''.\15\ Additionally, the National Institute for Health and Care 
Excellence (NICE) produced guidance on using the RECELL[supreg] System 
based on the consideration of evidence submitted and the views of 
expert advisers, and stated that the harvested skin is added to the 
proprietary enzyme solution in a processing unit and heated for 15 to 
30 minutes to disaggregate the cells. The skin is then removed and 
scraped with a scalpel to develop a plume of cells. These cells are 
added to a buffer solution, aspirated and filtered to create a cell 
suspension that contains keratinocytes, melanocytes, fibroblasts and 
Langerhans cells.\16\ This correlates to the preparation component of 
the service described by CPT codes 15XX3 and 15XX4, for which the RUC 
recommended the survey median time of 33 and 28 minutes, respectively.
---------------------------------------------------------------------------

    \15\ https://www.fda.gov/media/169630/download.
    \16\ National Institute for Health and Care Excellence. The 
ReCell Spray-On Skin system for treating skin loss, scarring and 
depigmentation after burn injury. Medical technologies guidance 
[MTG21] [internet]. 2014. [Accessed 16 Nov 2017]. https://www.nice.org.uk/guidance/mtg21/documents/the-recell-sprayon-skin-system-for-treating-skin-loss-scarring-and-depigmentation-after-burn-injury-medical-technology-consultation-document.
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    We believe that the publicly available sources that make 
representations about the total service and preparation times 
contradict the RUC-recommended median times based on the survey of 33 
burn surgeons. Moreover, when we considered how the add-on CPT codes 
15XX2, 15XX4, 15XX6, and 15XX8 would be billed based on the typical 
patient described in the vignettes, we believe the survey times are 
inflated compared to the publicly available sources, likely due to how 
the survey respondents considered the service given the segmentation of 
the code set. For example, the vignette for CPT code 15XX5 describing 
the application to the trunk, arms, and legs says ``A 35-year-old male 
sustained partial-thickness thermal burns on his trunk and arms 
measuring 3,600 sq cm. A skin cell suspension autograft is applied to 
480 sq cm of the wound bed.'' Of the 33 burn surgeons surveyed, 96 
percent found this vignette to be typical. Given the typical sq cm 
application area of 3,600 sq cm and the expansion ratio of harvested 
and prepared skin to treatment skin for application of 1:80, the 
typical episode of care would constitute 1 unit of both CPT codes 15XX1 
and 15XX2 for harvesting, 1 unit of both CPT codes 15XX3 and 15XX4 for 
preparation, 1 unit of CPT code 15XX5 for the first 480 sq cm of 
application, and 7 units of CPT code 15XX6 for the remaining 3,120 sq 
cm of application area. When the RUC-recommended intraservice and total 
times (not including the post-operative visit time for CPT code 15XX5) 
for all the units billed on the same date of service as sequential 
service parts are summed, the intraservice time totals to 399 minutes 
and total time (not including the post-operative visit time included in 
the global period for CPT code 15XX5) totals to 529 minutes. The 
intraservice time total alone is nearly 6 and 2/3 hours.
    We note the RUC recommended that CPT codes 15XX1 through 15XX8 be 
placed on the New Technology list to be re-reviewed by the RUC for both 
work and PE for the September 2026 or January 2027 RUC meeting when 
2025 Medicare utilization data is available, and at that time, the RUC 
would consider if other specialties were performing the service and if 
the service was performed in the non-facility setting. We look forward 
to re-reviewing these CPT codes when recommendations are re-submitted 
with more robust and inclusive survey data. In the meantime, we 
encourage the reconsideration of the family's coding structure by the 
CPT Editorial Panel given the challenging aspects of this service, 
including the fact that the current coding structure represents a 
severely segmented single episode of care with troublesome billing 
patterns for the typical patient, particularly for the add-on CPT code 
15XX6 describing the additional 480 sq cm increments of application on 
the trunk, arms, and legs. This code is particularly concerning because 
the coding structure of the family requires 7 units of add-on CPT code 
15XX6 to be billed for the typical patient. Similarly, the typical 
patient described in the vignettes for this family of codes would 
require 3 units of add-on CPT code 15XX8 due to the coding structure.
    We are also seeking feedback on the recommended global period for 
CPT code 15XX3. The RUC recommended an XXX global period, which 
indicates that the global concept does not apply, but we believe a 000-
day global period, indicating an endoscopic or minor procedure with 
related preoperative and postoperative relative values on the day of 
the procedure only in the fee schedule payment amount, may be more 
appropriate given the nature of the service (which is intertwined with 
the other codes in the series) and that the entire service cannot be 
completed without 15XX3. This would allow the entire service to run 
within a surgical global period.
    We note that we believe contractor-pricing is appropriate for CPT 
codes 15XX1 through 15XX8 until reconsideration of the coding structure 
and re-survey is complete, given the concerning aspects of the CPT 
codes. We note that this service is currently billed for using 
contractor-priced CPT code 17999 (Unlisted procedure, skin, mucous 
membrane and subcutaneous

[[Page 61644]]

tissue) and the eight new codes are expected to be a very low 
utilization.
(2) Hand, Wrist, & Forearm Repair & Recon (CPT Codes 25310, 25447, 
2X005, and 26480)
    In September 2022, the RUC referred CPT codes 26480 and 25447 to 
the CPT Editorial Panel for a code bundling solution. In May 2023, the 
CPT Editorial Panel approved a new bundled code (CPT code 2X005) to 
report intercarpal or carpometacarpal joint suspension arthroplasty, 
including transfer or transplant of tendon, with interposition when 
performed while CPT code 25447 was revised to clarify that the code 
only included interposition of a tendon and not suspension. This family 
of codes was surveyed for the September 2023 RUC meeting.
    We disagree with the RUC-recommended work RVU of 9.50 for CPT code 
25310 (Tendon transplantation or transfer, flexor or extensor, forearm 
and/or wrist, single; each tendon) and we are instead proposing a work 
RVU of 9.00 based on the survey 25th percentile result. In reviewing 
CPT code 25310, we noted that the recommended intraservice time was 
unchanged at 60 minutes in the new survey; however, the RUC-recommended 
work RVU is increasing from the current 8.08 to 9.50. Although we do 
not imply that changes in work time as reflected in survey values must 
equate to a one-to-one or linear change in the valuation of work RVUs, 
we believe that since the two components of work are time and 
intensity, increases in the recommended work RVU should typically be 
reflected in increases in the surveyed work time. We recognize that the 
total time for CPT code 25310 is increasing from 235 minutes to 263 
minutes (an increase of 12 percent) due to changes in the code's post-
operative office visits which will now take place at a higher level. 
However, this again does not match the increase in the recommended work 
RVU, which is increasing from 8.08 to 9.50 (approximately 18 percent). 
We believe that it would be more accurate to propose the survey 25th 
percentile work RVU of 9.00 for CPT code 25310 which matches this 
increase in the total work time. We also note that the intensity of CPT 
code 25310 is decreasing, not increasing, as recommended by the RUC 
which further suggests that a work RVU of 9.50 would not be appropriate 
for this code given the surveyed work times.
    We disagree with the RUC-recommended work RVU of 11.14 for CPT code 
25447 (Arthroplasty, intercarpal or carpometacarpal joints; 
interposition (eg, tendon)) and we are instead proposing a work RVU of 
10.50 based on the survey 25th percentile result. In reviewing CPT code 
25447, we noted that the recommended intraservice time was decreasing 
from 100 minutes to 75 minutes in the new survey; however, the RUC 
recommended maintaining the current work RVU of 11.14. Although we do 
not imply that changes in work time as reflected in survey values must 
equate to a one-to-one or linear change in the valuation of work RVUs, 
we believe that since the two components of work are time and 
intensity, decreases in the surveyed work time should typically be 
reflected in decreases to the work RVU. We recognize that the total 
time for CPT code 25447 is slightly increasing from 278 minutes to 281 
minutes (an increase of about 1 percent) due to changes in the code's 
post-operative office visits which will now take place at a higher 
level. However, we believe that the sizable decrease in surveyed 
intraservice work time (a reduction of approximately 33 percent) better 
supports proposing the survey 25th percentile work RVU of 10.50 instead 
of maintaining the current work RVU of 11.14. We also disagree with the 
RUC that the intensity of CPT code 25447 is unchanged due to increases 
in the post-operative work; we believe that the sizable decrease in 
surveyed intraservice work time indicates a modest decrease in 
intensity. We note again that the intensity of CPT code 25310 is 
decreasing, not increasing, as recommended by the RUC which suggests 
that a similar pattern is likely taking place with clinically similar 
procedures elsewhere in the same code family.
    We disagree with the RUC-recommended work RVU of 13.90 for CPT code 
2X005 (Arthroplasty, intercarpal or carpometacarpal joints; suspension, 
including transfer or transplant of tendon, with interposition, when 
performed) and we are instead proposing a work RVU of 11.85 based on 
the survey 25th percentile result. We note that the RUC typically 
values new codes such as CPT code 2X005 using this survey 25th 
percentile work RVU as opposed to the survey median work RVU that it 
recommended. The RUC's recommendations stated that CPT code 2X005 
should be valued higher than CPT code 25447 due to having higher 
intensity, a relationship which is preserved at our proposed work RVUs 
of 11.85 and 10.50 respectively. The RUC also stated in its 
recommendations that CPT code 2X005 should be valued higher than 
reference CPT code 29828 (Arthroscopy, shoulder, surgical; biceps 
tenodesis) because it has more intraservice time and total work time. 
However, the RUC also stated elsewhere in its recommendations that the 
arthroscopy described by CPT code 29828 is more intense than the 
arthroplasty procedures described by this family of codes, which we 
believe supports CPT code 29828 having a higher work RVU despite its 
lower work times. Based on this information, we believe that proposing 
the survey 25th percentile work RVU of 11.85 is the most accurate 
valuation for CPT code 2X005.
    We disagree with the RUC-recommended work RVU of 9.50 for CPT code 
26480 (Transfer or transplant of tendon, carpometacarpal area or dorsum 
of hand; without free graft, each tendon) and we are instead proposing 
a work RVU of 9.00 based on the survey 25th percentile result. In 
reviewing CPT code 26480, we noted that the recommended intraservice 
time was unchanged at 60 minutes in the new survey; however, the RUC-
recommended work RVU is increasing from the current 6.90 to 9.50. 
Although we do not imply that changes in work time as reflected in 
survey values must equate to a one-to-one or linear change in the 
valuation of work RVUs, we believe that since the two components of 
work are time and intensity, increases in the recommended work RVU 
should typically be reflected in increases in the surveyed work time. 
We recognize that the total time for CPT code 26480 is increasing from 
227 minutes to 263 minutes (an increase of 16 percent) due to changes 
in the code's post-operative office visits which will now take place at 
a higher level. However, this again does not match the increase in the 
recommended work RVU, which is increasing from 6.90 to 9.50 
(approximately 38 percent). We believe that it would be more accurate 
to propose the survey 25th percentile work RVU of 9.00 for CPT code 
26480 which more closely matches this increase in the total work time. 
We also note that CPT codes 25310 and 26480 were surveyed as having 
identical work times and identical survey 25th percentile and survey 
median work RVUs. We concur with the RUC that these two codes should be 
valued at the same work RVU, however we continue to believe that the 
survey 25th percentile work RVU of 9.00 is a more accurate choice in 
both cases. We are proposing the RUC-recommended direct PE inputs for 
all four codes in the family without refinement.

[[Page 61645]]

(3) CAR-T Therapy Services (CPT Codes 3X018, 3X019, 3X020, and 3X021)
    In September 2023, the CPT Editorial Panel deleted four category 
III codes (0537T-0540T) and approved the addition of four new codes 
(3X018-3X021) that describe only steps of the complex CAR-T Therapy 
process performed and supervised by physicians. The RUC recommended 
four different work RVUs for codes 3X018, 3X019, 3X020, and 3X021 and 
only recommended direct PE values for code 3X021.
    For CPT code 3X018 (Chimeric antigen receptor T-cell (CAR-T) 
therapy; harvesting of blood-derived T lymphocytes for development of 
genetically modified autologous CAR-T cells, per day) the RUC 
recommended a work RVU of 1.94. For CPT code 3X019 (Chimeric antigen 
receptor T-cell (CAR-T) therapy; preparation of blood-derived T 
lymphocytes for transportation (eg, cryopreservation, storage)) the RUC 
recommended a work RVU of 0.79. For CPT code 3X021 (Chimeric antigen 
receptor T-cell (CAR-T) therapy; CAR-T cell administration, autologous) 
the RUC recommended a work RVU of 3.00. For CPT code 3X020 (Chimeric 
antigen receptor T-cell (CAR-T) therapy; receipt and preparation of 
CAR-T cells for administration) the RUC recommended a work RVU of 0.80 
and for CPT code 3X020, we are proposing the RUC-recommended work RVU 
of 0.80. We are proposing the RUC-recommended work RVUs for CPT codes 
3X018, 3X019, and 3X021 respectively.
    As mentioned previously, the RUC recommended direct PE values for 
only one code, CPT code 3X021, and the RUC recommended that the non-
facility PE RVU for CPT codes 3X018-3X020 should be contractor-priced. 
However, contractor pricing can only be applied at the whole code 
level, not to a single component of the valuation. Therefore, for CPT 
codes 3X018-3X020 we are treating these codes as having no recommended 
direct PE values and are seeking comment on direct PE values for these 
codes. We are proposing the RUC-recommended direct PE inputs for CPT 
code 3X021.
(4) Therapeutic Apheresis and Photopheresis (CPT Codes 36514, 36516, 
and 36522)
    In the CY 2024 PFS final rule, we finalized CPT codes 36514 
(Therapeutic apheresis; for plasma pheresis), 36516 (Therapeutic 
apheresis; with extracorporeal immunoadsorption, selective adsorption 
or selective filtration and plasma reinfusion), and 36522 
(Photopheresis, extracorporeal) as potentially misvalued, as we 
believed there may have been a possible disparity with the clinical 
labor type (88 FR 78848). As a result, the PE clinical labor type was 
reviewed for these three codes at the January 2024 RUC meeting, with no 
work review. The PE Subcommittee and the RUC agreed that clinical staff 
code L042A (RN/LPN) did not appropriately represent the work of an 
Apheresis Nurse Specialist. There is not a clinical staff code for an 
Apheresis Nurse Specialist; however, the RUC agreed with the specialty 
societies' recommendation that the training and experience of an 
oncology nurse (clinical staff code L056A, RN/OCN) would more 
accurately reflect the work of an apheresis nurse for these CPT codes. 
The RUC submitted new PE recommendations for these three codes based on 
the use of the L056A clinical labor type.
    We are proposing the RUC-recommended direct PE inputs for CPT codes 
36514, 36516, and 36522 without refinement. The RUC did not make 
recommendations and we are not proposing any changes to the work RVU 
for CPT codes 36514, 36516, and 36522.
(5) Intra-Abdominal Tumor Excision or Destruction (CPT Codes 4X015, 
4X016, 4X017, 4X018, and 4X019)
    In May 2023, the CPT Editorial Panel created five new codes to 
describe the sum of the maximum length of intra-abdominal (that is, 
peritoneal, mesenteric, retroperitoneal), primary or secondary tumor(s) 
or cyst(s) excised or destroyed: CPT code 4X015 (Excision or 
destruction, open, intra-abdominal (i.e., peritoneal, mesenteric, 
retroperitoneal), primary or secondary tumor(s) or cyst(s), sum of the 
maximum length of tumor(s) or cyst(s); 5 cm or less), CPT code 4X016 
(Excision or destruction, open, intra-abdominal (i.e., peritoneal, 
mesenteric, retroperitoneal), primary or secondary tumor(s) or cyst(s), 
sum of the maximum length of tumor(s) or cyst(s); 5.1 to 10 cm), CPT 
code 4X017 (Excision or destruction, open, intra-abdominal (i.e., 
peritoneal, mesenteric, retroperitoneal), primary or secondary tumor(s) 
or cyst(s), sum of the maximum length of tumor(s) or cyst(s); 10.1 to 
20 cm), CPT code 4X018 (Excision or destruction, open, intra-abdominal 
(i.e., peritoneal, mesenteric, retroperitoneal), primary or secondary 
tumor(s) or cyst(s), sum of the maximum length of tumor(s) or cyst(s); 
20.1 to 30 cm), and CPT code 4X019 (Excision or destruction, open, 
intra-abdominal (i.e., peritoneal, mesenteric, retroperitoneal), 
primary or secondary tumor(s) or cyst(s), sum of the maximum length of 
tumor(s) or cyst(s); greater than 30 cm). These new CPT codes will 
replace existing CPT codes 49203 (Excision or destruction, open, intra-
abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor 5 cm diameter or less), 49204 (Excision or destruction, open, 
intra-abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor 5.1-10.0 cm diameter), and 49205 (Excision or destruction, open, 
intra-abdominal tumors, cysts or endometriomas, 1 or more peritoneal, 
mesenteric, or retroperitoneal primary or secondary tumors; largest 
tumor greater than 10.0 cm diameter) that described tumor excision or 
destruction based on the size of the single largest tumor, cyst, or 
endometrioma removed, no matter the number of tumors. For CY 2025, the 
RUC recommended a work RVU of 22.00 for CPT code 4X015, a work RVU of 
28.65 for CPT code 4X016, a work RVU of 34.00 for CPT code 4X017, a 
work RVU of 45.00 for CPT code 4X018, and a work RVU of 55.00 for CPT 
code 4X019.
    We are proposing the RUC-recommended work RVUs of 22.00 for CPT 
code 4X015, 28.65 for CPT code 4X016, and 34.00 for CPT code 4X017.
    We disagree with the RUC-recommended work RVU of 45.00 for CPT code 
4X018 and we are proposing a work RVU of 40.00 based on the survey 25th 
percentile. Compared to the predecessor CPT code 49205, the intra-
service time ratio for CPT code 4X018 suggests a work RVU of 41.51 and 
the total time ratio suggests a work RVU of 38.02. These changes in 
surveyed work time as compared with predecessor CPT code 49205 suggest 
that the recommended work RVU of 45.00 is inappropriately high. We also 
note that the RUC recommended the survey 25th percentile work RVU for 
CPT codes 4X015, 4X016, and 4X017. Therefore, we believe that proposing 
a work RVU of 40.00 for CPT code 4X018 keeps the valuation consistent 
with the other CPT codes in this family. Our proposed work RVU of 40.00 
for CPT code 4X018 is supported by the following reference CPT codes 
with similar intra-service time (310 minutes) and similar total time 
(814 minutes): reference CPT code 69970 (Removal of tumor, temporal 
bone) with a work RVU of 32.41 with 330 minutes intra-service time and 
793 minutes of total time, and reference CPT code 33864 (Ascending 
aorta graft, with cardiopulmonary bypass with valve suspension, with 
coronary reconstruction and valve-sparing aortic root remodeling (e.g., 
David Procedure,

[[Page 61646]]

Yacoub Procedure)) with a work RVU of 60.80 with 300 minutes of intra-
service time and 838 minutes of total time. We believe the proposed 
work RVU of 40.00 is a more appropriate value overall than 45.00 when 
compared to the range of codes with similar intra-service time and 
similar total time.
    We disagree with the RUC-recommended work RVU of 55.00 for CPT code 
4X019 and we are proposing a work RVU of 50.00 based on the survey 25th 
percentile. Compared to the predecessor CPT code 49205, the intra-
service time ratio for CPT code 4X019 suggests a work RVU of 48.21 and 
the total time ratio suggests a work RVU of 48.86. These changes in 
surveyed work time as compared with predecessor CPT code 49205 suggest 
that the recommended work RVU of 55.00 is inappropriately high. We also 
note again that the RUC recommended the survey 25th percentile work RVU 
for CPT codes 4X015, 4X016, and 4X017. Therefore, we believe that 
proposing a work RVU of 50.00 for CPT code 4X019 keeps the valuation 
consistent with the other CPT codes in this family. Our proposed work 
RVU of 50.00 for CPT code 4X019 is supported by the following reference 
CPT codes with similar intra-service time (360 minutes) and similar 
total time (1,046 minutes): reference CPT code 61598 (Transpetrosal 
approach to posterior cranial fossa, clivus or foramen magnum, 
including ligation of superior petrosal sinus and/or sigmoid sinus) 
with a work RVU of 36.53 with 377.7 minutes intra-service time and 
1,048.1 minutes of total time, and reference CPT code 47140 (Donor 
hepatectomy (including cold preservation), from living donor; left 
lateral segment only (segments II and III)) with a work RVU of 59.40 
with 355 minutes of intra-service time and 1,073 minutes of total time. 
We believe the proposed RVU of 50.00 is a more appropriate value 
overall than 55.00 when compared to the range of codes with similar 
intra-service time and similar total time.
    We also note that the RUC's recommendations for the first three 
codes in the family (CPT codes 4X015-4X017) maintained the same amount 
of intensity as their respective predecessor codes, and in fact 
slightly decreased in intensity in the case of CPT codes 4X015 and 
4X016. However, the RUC recommended a notable increase in intensity for 
CPT codes 4X018 and 4X019 over predecessor code 49205 due to its 
selection of the survey median work RVU in both cases. We do not 
believe that this increase in intensity for CPT codes 4X018 and 4X019 
is warranted due to their clinical similarities to the previous coding 
in the family, especially given that CPT code 49205 had the lowest 
intensity in the family. We believe that this intensity argument 
further supports our choice to propose the survey 25th percentile work 
RVU for these two codes, matching the RUC recommendations for CPT code 
4X015-4X017.
    We are proposing the RUC-recommended direct PE inputs for CPT codes 
4X015, 4X016, 4X017, 4X018, and 4X019 without refinement.
(6) Bladder Neck and Prostate Procedures (CPT Codes 5XX05 and 5XX06)
    In September 2023, the CPT Editorial Panel created two Category I 
CPT codes to describe the insertion or removal of a temporary device to 
remodel the bladder neck and prostate using pressure to create necrosis 
and relieve lower urinary tract symptoms (LUTS) secondary to benign 
prostate hyperplasia (BPH). These two new 000-day global Category I 
codes were surveyed and reviewed for the January 2024 RUC meeting.
    At the January 2024 RUC meeting, the specialty society indicated 
that CPT code 5XX05's survey 25th percentile work RVU of 3.91 was too 
high for this procedure compared to other services in the physician fee 
schedule with similar intra-service time. The specialty society 
recommended, and the RUC agreed that the recommended work RVU for CPT 
code 5XX05 should be crosswalked to CPT code 52284 (Cystourethroscopy, 
with mechanical urethral dilation and urethral therapeutic drug 
delivery by drug-coated balloon catheter for urethral stricture or 
stenosis, male, including fluoroscopy, when performed). Because these 
procedures are similar in intensity and both require precise placement 
of an intraurethral device, we concur with the RUC and we are proposing 
the RUC recommended work RVU of 3.10 for CPT code 5XX05.
    At the January 2024 RUC meeting, the specialty society indicated 
that CPT code 5XX06's survey 25th percentile work RVU of 2.00 was too 
high for this procedure compared to other services in the physician fee 
schedule with similar intra-service time. The specialty society 
recommended, and the RUC agreed, that CPT code 5XX06 should have a 
direct work RVU crosswalk to CPT code 27096 (Injection procedure for 
sacroiliac joint, anesthetic/steroid, with image guidance (fluoroscopy 
or CT) including arthrography when performed). We are proposing the RUC 
recommended work RVU of 1.48 for CPT code 5XX06.
    We are also proposing the RUC-recommended direct PE inputs for CPT 
codes 5XX05 and 5XX06 without refinement. However, we note possible 
duplications in two of the supply items within CPT code 5XX05. 
Specifically, supply item SB027 (gown, staff, impervious) is already 
included in supply item SA042 (pack, cleaning and disinfecting, 
endoscope), and supply item SB024 (gloves, sterile) is included in 
supply items SA058 (pack, urology cystoscopy visit). We are seeking 
comments on whether a total of three SB027 impervious staff gowns and 
two SB024 pairs of sterile gloves would be typical and necessary when 
providing this procedure.
(7) MRI-Monitored Transurethral Ultrasound Ablation of Prostate (CPT 
Codes 5X006, 5X007, and 5X008)
    At the April 2023 CPT Editorial Panel meeting, three new CPT codes 
were approved for MRI-monitored transurethral ultrasound ablation 
(TULSA). These codes were surveyed for the September 2023 RUC meeting 
and recommendations submitted to CMS for inclusion in the CY 2025 PFS 
proposed rule.
    For CY 2025, we are proposing the RUC-recommended work RVUs for all 
three CPT codes. However, we note that interested parties may have 
concerns regarding the experience of the survey respondents and the 
intra-service times provided in the survey data. We welcome commenters 
to provide additional data that we could consider in the valuation of 
the work and direct PE inputs for these CPT codes. We are proposing a 
work RVU of 4.05 for CPT code 5X006 (Insertion of transurethral 
ablation transducers for delivery of thermal ultrasound for prostate 
tissue ablation, including suprapubic tube placement during the same 
session and placement of an endorectal cooling device, when performed), 
a work RVU of 9.80 for CPT code 5X007 (Ablation of prostate tissue, 
transurethral, using thermal ultrasound, including magnetic resonance 
imaging guidance for, and monitoring of, tissue ablation), and a work 
RVU of 11.50 for CPT code 5X008 (Ablation of prostate tissue, 
transurethral, using thermal ultrasound, including magnetic resonance 
imaging guidance for, and monitoring of, tissue ablation; with 
insertion of transurethral ultrasound transducers for delivery of the 
thermal ultrasound, including suprapubic tube placement and placement 
of an endorectal cooling device, when performed). We are also proposing 
the RUC-recommended direct PE inputs for CPT codes 5X006, 5X007, and 
5X008 without refinement.

[[Page 61647]]

(8) Insertion of Cervical Dilator (CPT Code 59200)
    In the CY 2024 PFS final rule, we finalized CPT Code 59200 
(Insertion of cervical dilator (e.g., laminaria, prostaglandin) 
(separate procedure)) as potentially misvalued. The code is to be used 
to report the total duration of time spent on a patient history and 
physical, reviewing lab resulting, discussing risk and benefits of the 
procedure, obtaining consent, performing the procedure, and assessing 
the patient post-procedure. The RUC reviewed the work RVU and PE inputs 
for CPT code 59200 at their January 2024 meeting. We are proposing the 
RUC-recommended work RVU of 1.20 for CPT code 59200. We are also 
proposing the RUC-recommended direct PE inputs for CPT code 59200 
without refinements.
(9) Guided High Intensity Focused Ultrasound (CPT Code 6XX00)
    In September 2023, the CPT Editorial Panel created a new Category I 
code to describe magnetic resonance image guided high intensity focused 
ultrasound intracranial ablation for treatment of a severe central 
tremor that is recalcitrant to other medical treatments. This service 
is typically performed by a neurosurgeon without the involvement of a 
separate radiologist. This new code replaces the existing Category III 
code 0398T.
    We are not proposing the RUC-recommended work RVU of 18.95 for CPT 
code 6XX00 and are instead proposing a work RVU of 16.60 based on a 
crosswalk to CPT code 61626 (Transcatheter permanent occlusion or 
embolization (e.g., for tumor destruction, to achieve hemostasis, to 
occlude a vascular malformation), percutaneous, any method; non-central 
nervous system, head or neck (extracranial, brachiocephalic branch)), 
which describes a similar tumor destruction service that has similar 
time and intensity values to this service, and we support this value by 
referencing CPT code 33889 (Open subclavian to carotid artery 
transposition performed in conjunction with endovascular repair of 
descending thoracic aorta, by neck incision, unilateral) and 33894 
(Endovascular stent repair of coarctation of the ascending, transverse, 
or descending thoracic or abdominal aorta, involving stent placement; 
across major side branches). We do not believe that this service is 
significantly more intense than the key reference codes, CPT codes 
61736 (Laser interstitial thermal therapy (LITT) of lesion, 
intracranial, including burr hole(s), with magnetic resonance imaging 
guidance, when performed; single trajectory for 1 simple lesion) and 
61737 (Laser interstitial thermal therapy (LITT) of lesion, 
intracranial, including burr hole(s), with magnetic resonance imaging 
guidance, when performed; multiple trajectories for multiple or complex 
lesion(s)), as the RUC-recommended work value implies. Our proposed 
work RVU of 16.60 for CPT code 6XX00 largely matches the intensity of 
CPT code 61736 which we believe is a more accurate valuation for this 
service, as opposed to the RUC recommendation which would have 
significantly more intensity.
    We are proposing the RUC-recommended direct PE inputs for CPT code 
6XX00 without refinement.
(10) Percutaneous Radiofrequency Ablation of Thyroid (CPT Codes 6XX01 
and 6XX02)
    In January 2024, the RUC surveyed codes 6XX01 (Ablation of 1 or 
more thyroid nodule(s), one lobe or the isthmus, percutaneous, 
including imaging guidance, radiofrequency) and its respective add-on 
code 6XX02 (Ablation of 1 or more thyroid nodule(s), additional lobe, 
percutaneous, with imaging guidance, radiofrequency (List separately in 
addition to code for primary service) and recommended both work RVUs 
and PE values for this code family.
    For CPT code 6XX01, the RUC recommended a work RVU of 5.75 and we 
are proposing the RUC-recommended work RVU of 5.75.
    For add-on code CPT 6XX02, the RUC recommended a work RVU of 4.25 
and we are proposing the RUC-recommended work RVU for this code. We are 
also proposing the RUC-recommended direct PE values for both codes 
6XX01 and 6XX02.
(11) Fascial Plane Blocks (CPT Codes 6XX07, 6XX08, 6XX09, 6XX10, 6XX11, 
6XX12, 64486, 64487, 64488, and 64489)
    In September 2023, the CPT Editorial Panel created six new Category 
I CPT codes, CPT code 6XX07 (Thoracic fascial plane block, unilateral; 
by injection(s), including imaging guidance, when performed), 6XX08 
(Thoracic fascial plane block, unilateral; by continuous infusion(s), 
including imaging guidance, when performed), 6XX09 (Thoracic fascial 
plane block, bilateral; by injection(s), including imaging guidance, 
when performed), 6XX10 (Thoracic fascial plane block, bilateral; by 
continuous infusion(s), including imaging guidance, when performed), 
6XX11 (Lower extremity fascial plane block, unilateral; by 
injection(s), including imaging guidance, when performed), and 6XX12 
(Lower extremity fascial plane block, unilateral; by continuous 
infusion(s), including imaging guidance, when performed) to report 
thoracic or lower extremity fascial plane blocks, typically used for 
post-operative pain management. Four existing CPT codes describing 
transversus abdominis plane (TAP) blocks, 64486 (Transversus abdominis 
plane (TAP) block (abdominal plane block, rectus sheath block) 
unilateral; by injection(s) (includes imaging guidance, when 
performed)), 64487 (Transversus abdominis plane (TAP) block (abdominal 
plane block, rectus sheath block) unilateral; by continuous infusion(s) 
(includes imaging guidance, when performed)), 64488 (Transversus 
abdominis plane (TAP) block (abdominal plane block, rectus sheath 
block) bilateral; by injections (includes imaging guidance, when 
performed)) 64489 (Transversus abdominis plane (TAP) block (abdominal 
plane block, rectus sheath block) bilateral; by continuous infusions 
(includes imaging guidance, when performed)), were included as part of 
this code family for RUC review in January 2024.
    We are proposing the RUC-recommended work RVU for all ten codes in 
this family. We are proposing a work RVU of 1.50 for CPT code 6XX07, 
1.74 for CPT code 6XX08, 1.67 for CPT code 6XX09, 1.83 for CPT code 
6XX10, 1.34 for CPT code 6XX11, 1.67 for CPT code 6XX12, 1.20 for CPT 
code 64486, 1.39 for CPT code 64487, 1.40 for CPT code 64488, and 1.75 
for CPT code 64489.
    We are also proposing the RUC recommended direct PE inputs for CPT 
codes 6XX08, 6XX09, 6XX10, 6XX12, 64487, 64488, and 64489. We disagree 
with one of the RUC recommended direct PE inputs for CPT codes 6XX07, 
6XX11, and 64486. The RUC stated they believe that there is a rounding 
error in the CA019 clinical labor time, ``Assist physician or other 
qualified healthcare professional--directly related to physician work 
time (67%)'', for these three codes. We disagree with the RUC that 
there are rounding errors in these codes and we are proposing to 
maintain the current 7 minutes of CA019 clinical labor time for CPT 
codes 6XX07, 6XX11, and 64486. We note that this matches the pattern of 
CA019 clinical labor time for the rest of the codes in the family, 
which remained the same or slightly decreased in each case. This 
refinement to the CA019 clinical labor time also means that we are 
proposing a decrease of 0.5 minutes to the equipment time for the 
stretcher (EF018) and 3-channel ECG

[[Page 61648]]

(EQ011) which decreases from 25.5 to 25 minutes for these three codes. 
We are proposing all of the other RUC-recommended direct PE inputs for 
CPT codes 6XX07, 6XX11, and 64486 without refinement.
(12) Skin Adhesives (CPT Codes 64590 and 64595 and HCPCS Codes G0168, 
G0516, G0517, and G0518)
    In April 2022, the RUC approved the use of SG007 (adhesive, skin 
(Dermabond)) for CPT code 64590 (insertion or replacement of 
peripheral, sacral, or gastric neurostimulator pulse generator or 
receiver, requiring pocket creation and connection between electrode 
array and pulse generator or receiver) and 64595 (revision or removal 
of peripheral, sacral, or gastric neurostimulator pulse generator or 
receiver, with detachable connection to electrode array). In April 
2023, the PE Subcommittee reviewed the following six codes on the 
Medicare Physician Fee Schedule 64590, 64595, G0168, G0516, G0517, 
G0518 that utilize Dermabond (supply code S6007) in order to identify 
justification for its use versus the generic version and present its 
findings to the RUC for approval. The RUC reviewed all six codes for PE 
only and did not submit work recommendations.
    For CPT codes 64590 and 64595 and HCPCS code G0168 (Wound closure 
utilizing tissue adhesive(s) only), the RUC recommends that CMS remove 
the supply input SG007 adhesive, skin (Dermabond) and add one unit of 
SH076 adhesive, cyanoacrylate (2ml uou). We are proposing the RUC-
recommended direct PE inputs for CPT codes 64590 and 64595 and HCPCS 
code G0168. Similarly, for HCPCS codes G0516 (Insertion of non-
biodegradable drug delivery implants, 4 or more (services for subdermal 
rod implant), G0517 (Removal of non-biodegradable drug delivery 
implants, 4 or more (services for subdermal implants), and G0518 
(Removal with reinsertion, non-biodegradable drug delivery implants, 4 
or more (services for subdermal implants), the RUC recommends that CMS 
remove the supply input SG007 adhesive, skin (Dermabond) and add one 
unit of SH076 adhesive, cyanoacrylate (2ml uou). We are proposing the 
RUC-recommended direct PE inputs for HCPCS codes G0516-G0518.
(13) Iris Procedures (CPT Codes 66680, 66682, and 6X004)
    In April 2023, the CPT Editorial Panel deleted three related 
Category III CPT codes, CPT code 0616T (Insertion of iris prosthesis, 
including suture fixation and repair or removal of iris, when 
performed; without removal of crystalline lens or intraocular lens, 
without insertion of intraocular lens), CPT code 0617T (with removal of 
crystalline lens and insertion of intraocular lens), and CPT code 0618T 
(with secondary intraocular lens placement or intraocular lens 
exchange). At the same time, CPT created a new Category I code 6X004 
(Implantation of iris prosthesis, including suture fixation and repair 
or removal of iris, when performed) which describes insertion of an 
artificial iris into an eye with a partial or complete iris defect due 
to a congenital defect or surgical or non-surgical trauma. The new 
Category I CPT code 6X004 replaced the three Category III codes to 
simplify reporting. Concurrent with these updates, the RUC surveyed the 
two other 90-day global iris repair codes, CPT code 66680 (Repair of 
iris, ciliary body (as for iridodialysis)) and CPT code 66682 (Suture 
of iris, ciliary body (separate procedure) with retrieval of suture 
through small incision (e.g., McCannel suture)).
    We disagree with the RUC-recommended work RVU of 10.25 for CPT code 
66680. We are proposing a work RVU of 7.97 for CPT code 66680 based on 
a crosswalk to CPT code 67904 (Repair of blepharoptosis; (tarso) 
levator resection or advancement, external approach). When we reviewed 
CPT code 66680, we found that the RUC recommended work RVU does not 
maintain relativity with other 90-day global period codes with the same 
intraservice time of 45 minutes and similar total time around 182 
minutes. The total time ratio between the current time of 159 minutes 
and the recommended time established by the RUC survey of 182 minutes 
equals 1.145 percent. This ratio, 1.145 percent, when applied to the 
current work RVU of 6.39 would suggest a work RVU of 7.31 which is far 
below the RUC's recommended work RVU of 10.25. Based on this total time 
ratio, we believe a more appropriate work valuation for CPT code 66680 
is 7.97 based on a crosswalk to CPT code 67904.
    We disagree with the RUC-recommended work RVU of 10.87 for CPT code 
66682. We are proposing a work RVU of 8.74 based on the total time 
ratio between the current time of 169.5 minutes and the recommended 
time established by the RUC survey of 202 minutes. This ratio equals 
1.192 percent, and 1.192 percent of the current work RVU of 7.33 
suggests a work RVU of 8.74 for CPT code 66682. When we reviewed CPT 
code 66682, we found that the recommended work RVU was higher than 
nearly all of the other 90-day global codes with similar time values. 
The RUC's recommended work RVU does not maintain relativity with other 
90-day global period codes with the same intraservice time value of 45 
minutes and similar total time of 202. We found that work RVU 
crosswalks to CPT codes of similar intraservice and total time were too 
low, such as CPT code 45171 with a work RVU of 8.13. A more appropriate 
work RVU for CPT code 66682 is 8.74 based on the total time ratio.
    The RUC recommended a work RVU of 12.80 for CPT 6X004, the RUC 
survey 25th percentile result, with an intraservice time of 60 minutes 
and a total time of 224 minutes. We disagree with the RUC-recommended 
work RVU of 12.80 for CPT code 6X004. Although we disagree with the 
RUC-recommended work RVU, we concur that the relative difference in 
work between CPT codes 66682 and 6X004 is equivalent to the recommended 
interval of 1.93 RVUs. Therefore, we are proposing a work RVU of 10.67 
for CPT code 6X004, based on the recommended interval of 1.93 
additional RVUs above our proposed work RVU of 8.74 for CPT code 66682. 
This proposed work RVU of 10.67 falls between the work RVU values of 
existing codes with similar intraservice and total time values. For 
example, CPT code 65850 (60 minutes of intraservice time and 233 
minutes of total time) has a work RVU of 11.39 and CPT code 24164 with 
the same intraservice time and 228 minutes of total time has a work RVU 
of 10.00. We believe that the work valuation of these CPT codes, which 
bracket our proposed work RVU of 10.67, provide additional support for 
our proposed valuation.
    We also disagree with the RUC's recommended work RVUs for the codes 
in this family because they suggest that there has been a tremendous 
increase in intensity as compared to how these services have 
historically been valued. CPT code 66680 is more than doubling in 
intensity at the RUC's recommended work RVU of 10.25, which we do not 
believe to be the case given that the code descriptor remains unchanged 
and the surveyed intraservice work time is unchanged at 45 minutes. 
This same pattern holds true for CPT code 66682, which would be 
increasing in intensity by more than 50% at the RUC's recommended work 
RVU of 10.87, and which similarly has no change in its code descriptor 
and a modest increase in its surveyed work time. We concur that the 
intensity of these services has likely gone up over time, which is why 
we are proposing modest intensity increases for both codes, however we 
continue to disagree that the very

[[Page 61649]]

substantial intensity increases recommended by the RUC would be 
accurate for this code family. We believe that our proposed work RVUs 
are more in line with how these services have historically been valued 
and better maintain relativity with the rest of the fee schedule.
    We are proposing the direct PE inputs as recommended by the RUC for 
all three codes in the family without refinement.
(14) Magnetic Resonance Examination Safety Procedures (CPT Codes 7XX00, 
7XX01, 7XX02, 7XX03, 7XX04, and 7XX05)
    In September 2023, the CPT Editorial Panel created a new code 
family to describe magnetic resonance (MR) examination safety 
procedures and capture the physician work involving patients with 
implanted medical devices that require access to MR diagnostic 
procedures: CPT code 7XX00 (MR safety implant and/or foreign body 
assessment by trained clinical staff, including identification and 
verification of implant components from appropriate sources (e.g., 
surgical reports, imaging reports, medical device databases, device 
vendors, review of prior imaging), analyzing current MR conditional 
status of individual components and systems, and consulting published 
professional guidance with written report; initial 15 minutes), CPT 
code 7XX01 (MR safety implant and/or foreign body assessment by trained 
clinical staff, including identification and verification of implant 
components from appropriate sources (e.g., surgical reports, imaging 
reports, medical device databases, device vendors, review of prior 
imaging), analyzing current MR conditional status of individual 
components and systems, and consulting published professional guidance 
with written report; each additional 30 minutes (List separately in 
addition to code for primary procedure)), CPT code 7XX02 (MR safety 
determination by a physician or other qualified health care 
professional responsible for the safety of the MR procedure, including 
review of implant MR conditions for indicated MR exam, analysis of risk 
versus clinical benefit of performing MR exam, and determination of MR 
equipment, accessory equipment, and expertise required to perform 
examination with written report), CPT code 7XX03 (MR safety medical 
physics examination customization, planning and performance monitoring 
by medical physicist or MR safety expert, with review and analysis by 
physician or qualified health care professional to prioritize and 
select views and imaging sequences, to tailor MR acquisition specific 
to restrictive requirements or artifacts associated with MR conditional 
implants or to mitigate risk of non-conditional implants or foreign 
bodies with written report), CPT code 7XX04 (MR safety implant 
electronics preparation under supervision of physician or other 
qualified health care professional, including MR-specific programming 
of pulse generator and/or transmitter to verify device integrity, 
protection of device internal circuitry from MR electromagnetic fields, 
and protection of patient from risks of unintended stimulation or 
heating while in the MR room with written report), and CPT code 7XX05 
(MR safety implant positioning and/or immobilization under supervision 
of physician or qualified health care professional, including 
application of physical protections to secure implanted medical device 
from MR-induced translational or vibrational forces, magnetically 
induced functional changes, and/or prevention of radiofrequency burns 
from inadvertent tissue contact while in the MR room with written 
report). For CY 2025, new CPT codes 7XX00 and 7XX01 are PE only 
services that represent the preparatory research and review completed 
by clinical staff (that is, MRI technologist and/or a medical 
physicist) that will be utilized by the physician or qualified health 
professional for the other four services (CPT codes 7XX02, 7XX03, 
7XX04, and 7XX05) in this code family.
    We are proposing the RUC-recommended work RVU of 0.60 for CPT code 
7XX02, the work RVU of 0.76 for CPT code 7XX03, the work RVU of 0.75 
for CPT code 7XX04, and the work RVU of 0.60 for CPT code 7XX05.
    We are proposing the following refinements to the direct PE inputs. 
For CPT codes 7XX00, 7XX01, 7XX02, 7XX04, and 7XX05, we are proposing 
to refine the clinical labor for the CA034 activity (Document procedure 
(nonPACS) (e.g., mandated reporting, registry logs, EEG file, etc.)) 
performed by the MRI Technologist from 2 minutes to 1 minute. We note 
that the clinical labor for the CA032 activity (Scan exam documents 
into PACS. Complete exam in RIS system to populate images into work 
queue.) included in the direct PE inputs for reference CPT code 70543 
(Magnetic resonance (e.g., proton) imaging, orbit, face, and/or neck; 
without contrast material(s), followed by contrast material(s) and 
further sequences) is a similar clinical labor activity and has 1 
minute of time. We also note that the Medical Physicist has 1 minute of 
recommended clinical labor time for the CA034 activity for CPT code 
7XX03. Therefore, we believe that the MRI Technologist should have the 
same time (1 minute) for the CA034 activity for the remaining codes in 
the family to maintain consistency across these services.
    For CPT code 7XX01, we are proposing to refine the clinical labor 
for the CA021 activity (Perform procedure/service--NOT directly related 
to physician work time) from 27 minutes to 14 minutes. We believe this 
clinical labor time should be double the 7 minutes assigned to the 
CA021 activity for CPT code 7XX00. The description for CPT code 7XX00 
is for the ``initial 15 minutes'' and CPT code 7XX01 is for ``each 
additional 30 minutes,'' that is, double the time of CPT code 7XX00. We 
believe that the clinical labor associated with the CA021 activity 
should match this pattern in which CPT code 7XX01 contains double the 
time of CPT code 7XX00. This proposed refinement to the CA021 clinical 
labor also results in a proposed decrease to the equipment time for the 
Technologist PACS workstation (ED050) from 45 minutes to 32 minutes.
    For CPT code 7XX03, the RUC recommended 13 minutes of equipment 
time for the Professional PACS Workstation (ED053) listed as a Facility 
PE input. We believe this was an unintended technical error and we are 
proposing to remove this time from the direct PE inputs for CPT code 
7XX03.
    For CPT codes 7XX04 and 7XX05, we proposing to refine the clinical 
labor time for the CA024 activity (Clean room/equipment by clinical 
staff) from 2 minutes to 1 minute. According to the PE recommendations, 
only the new equipment code EQ412 (Vitals monitoring system (MR 
Conditional)) is being cleaned and not the entire room. We believe that 
1 minute of clinical labor time would be typical for cleaning the EQ412 
equipment. Our proposed clinical labor refinement also results in a 
proposed decrease to the equipment time for EL008 (room, MR) and EQ412 
by 1 minute for these two codes.
    For CPT code 7XX05, we are proposing to remove supply item SL082 
(impression material, dental putty (per bite block)). We believe this 
was an error since the PE recommendations did not list SL082 as one of 
the included supplies for CPT code 7XX05 and it does not appear as a 
supply input for any of the other codes in the family.
(15) Screening Virtual Colonoscopy (CPT Code 74263)
    As discussed in section III.K. of this proposed rule, we are 
proposing to exercise our authority at section

[[Page 61650]]

1861(pp)(1)(D) of the Act to update and expand coverage for colorectal 
cancer screening and adding coverage for the computed tomography 
colonography procedure. Accordingly, we are assigning an active payment 
status for CPT code 74263 (Computed tomographic (ct) colonography, 
screening, including image postprocessing). We note that, as proposed 
above, the OPPS cap would apply to this code, and payment for the TC of 
this service would be capped at the OPPS payment rate.
(16) Ultrasound Elastography (CPT Codes 76981, 76982, and 76983)
    This code family was flagged for re-review at the April 2023 RUC 
meeting by the new technology/new services screen. Due to increased 
utilization of CPT code 76981 (Ultrasound, elastography; parenchyma 
(e.g., organ)), the entire code family was resurveyed for the September 
2023 RUC meeting. We are proposing the RUC-recommended work RVUs of 
0.59, 0.59, and 0.47 for CPT codes 76981, 76982 (Ultrasound, 
elastography; first target lesion), and 76983 (Ultrasound, 
elastography; each additional target lesion (List separately in 
addition to code for primary procedure)), respectively. We are 
proposing the RUC-recommended direct PE inputs for CPT codes 76981, 
76982, and 76983 without refinement.
(17) CT Guidance Needle Placement (CPT Code 77012)
    CPT code 77012 (Computed tomography guidance for needle placement 
(e.g., biopsy, aspiration, injection, localization device), 
radiological supervision and interpretation) was reviewed at the 
September 2023 RUC meeting to account for deferred updates to the 
vignette to reflect the typical patient until updated utilization data 
was available to reflect coding changes that occurred in 2019. We are 
proposing the RUC-recommended work RVU of 1.50 for CPT code 77012.
    We are proposing to refine the equipment time for the CT room 
(EL007) to maintain the current time of 9 minutes. CPT code 77012 is a 
radiological supervision and interpretation (RS&I) procedure and there 
has been a longstanding convention in the direct PE inputs, shared by 
38 other codes, to assign an equipment time of 9 minutes for the 
equipment room in these procedures. We made the same refinement in the 
CY 2019 PFS final rule (83 FR 59553 through 59554) and continue to 
believe that it would not serve the interests of relativity to increase 
the equipment time for the CT room in CPT code 77012 without also 
addressing the equipment room time for the other radiological 
supervision and interpretation procedures. In response to the CY 2019 
proposal, several commenters stated that they agreed with CMS that 
other RS&I codes use the 9 minutes for room time as a precedent, but 
that it is specific to angiographic rooms. We agreed with the 
commenters that at least some portion of the procedure is performed in 
the CT room, but we continue to believe that it would not serve the 
interests of relativity to increase the equipment time for the CT room 
in CPT code 77012 without also addressing the equipment room time for 
the other radiological supervision and interpretation procedures in a 
more comprehensive fashion. We also disagreed with the commenters that 
this policy is specific to angiography rooms, as CPT codes 75989 
(Radiological guidance (i.e., fluoroscopy, ultrasound, or computed 
tomography), for percutaneous drainage (e.g., abscess, specimen 
collection), with placement of catheter, radiological supervision and 
interpretation) and 77012 both employ CT rooms and currently utilize 
the standardized 9 minutes of equipment time, and CPT code 76080 
(Radiologic examination, abscess, fistula or sinus tract study, 
radiological supervision and interpretation) employs a radiographic-
fluoroscopic room with the 9 minute standard equipment time. We 
continue to believe that 9 minutes for EL007 is appropriate for this 
RS&I code, therefore, we are proposing to maintain the current 
equipment room time of 9 minutes for EL007 until this group of 
procedures can be subject to a more comprehensive review. We are 
proposing all other RUC-recommended direct PE inputs for CPT code 
77012.
(18) Telemedicine Evaluation and Management (E/M) Services (CPT Codes 
9X075, 9X076, 9X077, 9X078, 9X079, 9X080, 9X081, 9X082, 9X083, 9X084, 
9X085, 9X086, 9X087, 9X088, 9X089, 9X090, and 9X091)
    In February 2023, the CPT Editorial Panel added a new Evaluation 
and Management (E/M) subsection to the draft CPT codebook for 
Telemedicine Services. The Panel added 17 codes for reporting 
telemedicine E/M services: CPT code 9X075 (Synchronous audio-video 
visit for the evaluation and management of a new patient, which 
requires a medically appropriate history and/or examination and 
straightforward medical decision making. When using total time on the 
date of the encounter for code selection, 15 minutes must be met or 
exceeded.); CPT code 9X076 (Synchronous audio-video visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination and low medical decision making. 
When using total time on the date of the encounter for code selection, 
30 minutes must be met or exceeded.); CPT code 9X077 (Synchronous 
audio-video visit for the evaluation and management of a new patient, 
which requires a medically appropriate history and/or examination and 
moderate medical decision making. When using total time on the date of 
the encounter for code selection, 45 minutes must be met or exceeded.); 
CPT code 9X078 (Synchronous audio-video visit for the evaluation and 
management of a new patient, which requires a medically appropriate 
history and/or examination and high medical decision making. When using 
total time on the date of the encounter for code selection, 60 minutes 
must be met or exceeded. (For services 75 minutes or longer, use 
prolonged services code 99417)); CPT code 9X079 (Synchronous audio-
video visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and straightforward medical decision making. When using 
total time on the date of the encounter for code selection, 10 minutes 
must be met or exceeded.); CPT code 9X080 (Synchronous audio-video 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination and 
low medical decision making. When using total time on the date of the 
encounter for code selection, 20 minutes must be met or exceeded.); CPT 
code 9X081 (Synchronous audio-video visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and moderate medical decision 
making. When using total time on the date of the encounter for code 
selection, 30 minutes must be met or exceeded.); CPT code 9X082 
(Synchronous audio-video visit for the evaluation and management of an 
established patient, which requires a medically appropriate history 
and/or examination and high medical decision making. When using total 
time on the date of the encounter for code selection, 40 minutes must 
be met or exceeded.); CPT code 9X083 (Synchronous audio-only visit for 
the evaluation and management of a new patient, which requires a 
medically appropriate history and/or examination, straightforward 
medical decision making, and more

[[Page 61651]]

than 10 minutes of medical discussion. When using total time on the 
date of the encounter for code selection, 15 minutes must be met or 
exceeded.)); CPT code 9X084 (Synchronous audio-only visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination, low medical decision making, 
and more than 10 minutes of medical discussion. When using total time 
on the date of the encounter for code selection, 30 minutes must be met 
or exceeded.)); CPT code 9X085 (Synchronous audio-only visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination, moderate medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 45 minutes 
must be met or exceeded.); CPT code 9X086 (Synchronous audio-only visit 
for the evaluation and management of a new patient, which requires a 
medically appropriate history and/or examination, high medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 60 minutes 
must be met or exceeded. (For services 75 minutes or longer, use 
prolonged services code 99417)); CPT code 9X087 (Synchronous audio-only 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination, 
straightforward medical decision making, and more than 10 minutes of 
medical discussion. When using total time on the date of the encounter 
for code selection, 10 minutes must be exceeded.)); CPT code 9X088 
(Synchronous audio-only visit for the evaluation and management of an 
established patient, which requires a medically appropriate history 
and/or examination, low medical decision making, and more than 10 
minutes of medical discussion. When using total time on the date of the 
encounter for code selection, 20 minutes must be met or exceeded.)); 
CPT code 9X089 (Synchronous audio-only visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination, moderate medical decision 
making, and more than 10 minutes of medical discussion. When using 
total time on the date of the encounter for code selection, 30 minutes 
must be met or exceeded.)) CPT code 9X090 (Synchronous audio-only visit 
for the evaluation and management of an established patient, which 
requires a medically appropriate history and/or examination, high 
medical decision making, and more than 10 minutes of medical 
discussion. When using total time on the date of the encounter for code 
selection, 40 minutes must be met or exceeded. (For services 55 minutes 
or longer, use prolonged services code 99417)); CPT code 9X091 (Brief 
communication technology-based service (e.g., virtual check-in) by a 
physician or other qualified health care professional who can report 
evaluation and management services, provided to an established patient, 
not originating from a related evaluation and management service 
provided within the previous 7 days nor leading to an evaluation and 
management service or procedure within the next 24 hours or soonest 
available appointment, 5-10 minutes of medical discussion)).
    In April 2023, the AMA-RUC noted that the survey instrument they 
used to develop valuation recommendations for the telemedicine E/M 
codes did not include the time (when time is used for code selection) 
in the new telemedicine E/M services descriptors, or the E/M services 
displayed on the reference service list. The AMA-RUC made interim 
valuation recommendations and conducted a new survey for September 
2023, which included the minimum required times in the code 
descriptors, and those minimum times were the same as appear in 
existing O/O E/M services code descriptors (CPT codes 99202-99205, 
99212-99215); the new survey in September 2023 included code 
descriptors and times approved by the CPT Editorial Panel in May 2023. 
Also, additional specialties who perform E/M services participated in 
the second round of this survey. For CY 2025, the RUC recommended the 
following work RVUs: a work RVU of 0.93 for CPT code 9X075, a work RVU 
of 1.6 for CPT code 9X076, a work RVU of 2.6 for CPT code 9X077, a work 
RVU of 3.50 for CPT code 9X078, a work RVU of 0.70 for CPT code 9X079, 
a work RVU of 1.30 for CPT code 9X080, a work RVU of 1.92 for CPT code 
9X081, a work RVU of 2.60 for CPT code 9X082, a work RVU of 0.90 for 
CPT code 9X083, a work RVU of 1.60 for CPT code 9X084, a work RVU of 
2.42 for CPT code 9X085, a work RVU of 3.20 for CPT code 9X086, a work 
RVU of 0.65. for CPT code 9X087, a work RVU of 1.20 for CPT code 9X088.
    In April 2023, the AMA-RUC Practice Expense Subcommittee approved 
the direct practice expense inputs as recommended by the specialty 
societies without modification, and CMS received these inputs as 
recommendations from the RUC. The specialty societies detailed their 
methodology for making some changes to specific clinical activity codes 
to adapt those clinical activity codes for telemedicine. The AMA edited 
both CA009 and CA013. The AMA revision to CA009 deletes, ``greet 
patient, provide gowning''; the AMA revision to CA013 deletes, 
``Prepare room, equipment and supplies''. CA009 now reads, ``Ensure 
appropriate medical records are available'' and CA013 now reads, 
``Prepare patient for the visit (i.e., check audio and/or visual''. The 
RUC, using the Practice Expense subcommittee recommendations, also 
recommended to CMS that a camera and microphone ``should be considered 
typical in the computer contained in the indirect overhead expense.'' 
This determination is consistent with CMS' longstanding position that 
items that are not specifically attributable to the individual services 
should not be included for valuation of specific codes.
    The AMA-RUC recommended the direct practice expense inputs as 
submitted by the AMA-member specialty societies, and as affirmed by the 
AMA-RUC Practice Expense Subcommittee. All supply and equipment costs 
were zeroed out from the reference services, and as a result, the new 
telemedicine E/M codes did not include any supply or equipment costs in 
the recommended direct practice expense inputs that the AMA submitted 
to CMS. The direct PE inputs removed from the reference services to 
create the new telemedicine E/M codes are: CA010 (obtain vital signs), 
CA024 (clean room/equipment by clinical staff), SA047 (pack, EM visit), 
SM022 sanitizing cloth-wipe (surface, instruments, equipment), EQ189 
(otoscope-ophthalmoscope [wall unit]), EF048 (Portable stand-on scale), 
and EF023 (table, exam).
    Sixteen of the telemedicine E/M codes describe use of either audio-
video or audio-only telecommunications technology to furnish the 
individual service. The CPT Editorial Panel finalized eight codes for 
synchronous audio-video services (CPT codes 9X075 to 9X082), and eight 
codes for synchronous audio-only services (CPT codes 9X083 to 9X0890), 
and one code for an asynchronous service (CPT code 9X091). The audio-
video and audio-only code family subsets have parallel codes for new 
patients and established patients. Like other E/M codes, these codes 
may be reported based on the level of medical decision making (MDM) or 
total time on the date of the encounter. For each set of four codes, 
there is a code that may be reported for a straightforward, low, 
moderate and high level of MDM.

[[Page 61652]]

    The CPT Editorial Panel also established new CPT code 9X091 
describing a brief virtual check-in encounter that is intended to 
evaluate the need for a more extensive visit (that is, a visit 
described by one of the office/outpatient E/M codes). The code 
descriptor for CPT code 9X091 mirrors existing HCPCS code G2012 (Brief 
communication technology-based service, e.g., virtual check-in, by a 
physician or other qualified health care professional who can report 
evaluation and management services, provided to an established patient, 
not originating from a related e/m service provided within the previous 
7 days nor leading to an e/m service or procedure within the next 24 
hours or soonest available appointment; 5-10 minutes of medical 
discussion) and, per the CPT Editorial Panel materials, is intended to 
replace that code. As described in CPT Editorial Panel final edits, CPT 
code 9X091 does not require the use of audio or video technology and is 
expected to be patient-initiated. Furnishing the complete service 
described by CPT code 9X091 must involve 5-10 minutes of medical 
discussion (and the code descriptor does not include MDM as means of 
code selection). CPT code 9X091 should not be reported if it originates 
from a related E/M service furnished within the previous 7 days, or, if 
the clinical interaction leads to another E/M or procedure within the 
next 24 hours or the soonest available appointment. The final CPT 
Editorial Panel draft language explains that if the virtual check-in 
described by CPT 9X091 leads to an E/M visit in the next 24 hours, and 
if that E/M is reported based on time, then the time from the virtual 
check-in may be added to the time of the resulting E/M visit to 
determine the total time on the date of encounter for the resulting E/
M. The RUC recommended a work RVU of 0.30 for 9X091.
    The CPT Editorial Panel also deleted three codes (99441-99443) for 
reporting telephone E/M services. We note that CPT codes 99441, 99442, 
and 99443, each are assigned provisional status on the Medicare 
telehealth services list, and would return to bundled status when the 
telehealth flexibilities expire on December 31, 2024. For further 
background, we refer readers to our discussions in previous rulemaking, 
where CMS explains the rationale for this policy (88 FR 78871-78878).
    CMS has a long-standing interpretation of section 1834(m) of the 
Act as specifying the circumstances under which Medicare makes payment 
for services that would otherwise be furnished in person but are 
instead furnished via telecommunications technology. Specifically, 
section 1834(m)(2)(A) of the Act expressly requires payment to the 
distant site physician or practitioner of an amount equal to the amount 
that such physician or practitioner would have been paid had such 
service been furnished without the use of a telecommunications system. 
This means that we must pay an equal amount for a service furnished 
using a ``telecommunications system'' as for a service furnished in 
person (without the use of a telecommunications system). In the CY 2019 
PFS final rule, we stated that ``[w]e have come to believe that section 
1834(m) of the Act does not apply to all kinds of physicians' services 
whereby a medical professional interacts with a patient via remote 
communication technology. Instead, we believe that section 1834(m) of 
the Act applies to a discrete set of physicians' services that 
ordinarily involve, and are defined, coded, and paid for as if they 
were furnished during an in-person encounter between a patient and a 
health care professional'' (83 FR 59483). Under this interpretation, 
services that are coded and valued based on the understanding that they 
are not ordinarily furnished in person, such as remote monitoring 
services and communication technology-based services, are not 
considered Medicare telehealth services under section 1834(m) of the 
Act and thus not subject to the geographic, site of service, and 
practitioner restrictions included therein.
    Information provided to CMS from the RUC indicates that CPT codes 
9X075-9X090 describe services that would otherwise be furnished in 
person, and as such the services described by these codes are subject 
to section 1834(m) of the Act. In the summary of the coding changes, 
the AMA states that these services are ``patterned after the in-person 
office visit codes.'' The draft CPT prefatory language states that 
``[t]elemedicine services are used in lieu of an in-person service when 
medically appropriate to address the care of the patient and when the 
patient and/or family/caregiver agree to this format of care.'' The 
draft CPT prefatory language likewise states that when a telemedicine 
E/M is billed on the same day as another E/M service ``the elements and 
time of these services are summed and reported in aggregate, ensuring 
that any overlapping time is only counted once,'' which indicates that 
the work of the telemedicine E/M service is identical to the work 
associated with an in-person, non-telehealth E/M. The code descriptors 
and requirements for billing the codes generally mirror the existing 
office/outpatient E/M codes with the exception of the technological 
modality used to furnish the service. The audio-video telemedicine E/M 
codes have nearly identical recommended work RVUs to parallel office/
outpatient E/M codes. In general, the audio-only telemedicine E/M codes 
have lower recommended work RVUs than parallel office/outpatient E/M 
codes. The RUC stated that this is because, when surveyed, specialty 
societies indicated that ``the audio-video and in-person office visits 
require more physician work than the audio-only office visits.''
    Table 10 describes the similarities between 16 of 17 telemedicine 
E/M codes and the parallel office/outpatient E/M codes. The table shows 
that except for the element of ``modality'' (that is, audio-video or 
audio-only), the service elements of the new telemedicine E/M code 
family are no different than the O/O E/M codes (for each enumerated row 
1 through 16 the columns display the analogous elements). When 
comparing code descriptors, as described at the start of this section, 
the only difference (as represented in Table 10 when comparing the 
elements of E/M services represented by columns C, D, E, and F) is that 
these new telemedicine E/M code descriptors lead with the phrase 
``synchronous audio-video'' or ``synchronous audio only'' before 
describing the visit in full exactly as the existing office/outpatient 
E/M visit codes describe a visit in the long descriptor of the 
analogous service.
BILLING CODE P

[[Page 61653]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.014

BILLING CODE C
    There are services already describing audio-video and audio-only 
telemedicine E/M codes on the Medicare telehealth services list--the 
office/outpatient E/M code set--that can be furnished via synchronous 
two-way, audio/video communication technology generally and via audio-
only communication technology under certain circumstances to furnish 
Medicare telehealth services in the patient's home for the purpose of 
diagnosis and treatment of a mental health disorder or SUD. 
Additionally, as stated above, section 1834(m)(2)(A) of the Act 
requires us to pay an equal amount for a service furnished using a 
``telecommunications system'' as for a service furnished in person 
(without the use of a telecommunications system). Were we to accept the 
AMA's recommendations and add the telemedicine E/M codes to the 
Medicare telehealth services list, we would need to establish RVUs for 
the telemedicine E/M codes to equal the corresponding non-telehealth 
services to satisfy the requirements for payment under section 
1834(m)(2)(A) of the Act.
    We do not believe that there is a programmatic need to recognize 
the audio/video and audio-only telemedicine E/M codes for payment under 
Medicare. We are proposing to assign CPT codes 9X075-9X090 a Procedure 
Status indicator of ``I'', meaning that there is a more specific code 
that should be used for purposes of Medicare, which in this case would 
be the existing office/outpatient E/M codes currently on the Medicare 
telehealth services list when billed with the appropriate POS code to 
identify the location of the beneficiary and, when applicable, the 
appropriate modifier to identify the service as being furnished via 
audio-only communication technology.
    Section 4113 of the Consolidated Appropriations Act (CAA), 2023 
extended the availability of Medicare telehealth services to 
beneficiaries regardless of geographic location or site of service by 
temporarily removing such statutory restrictions under section 1834(m) 
of the Act until the end of 2024. Under the current statute, the 
geographic location and site of service restrictions on Medicare 
telehealth services will once again take effect for services furnished 
beginning January 1, 2025. Although there are some important 
exceptions, including for behavioral health services and ESRD-related 
clinical assessments, most

[[Page 61654]]

Medicare telehealth services will once again, in general, be available 
only to beneficiaries in rural areas and only when the patient is 
located in certain types of medical settings. As previously discussed, 
the introduction of new CPT coding to describe telemedicine E/M 
services does not change our authority to pay for visits furnished 
through interactive communications technology in accordance with 
section 1834(m) of the Act. We recognize that there are significant 
concerns about maintaining access to care through the use of Medicare 
telehealth services with the expiration of the statutory flexibilities 
that were successively extended by legislation following the PHE for 
COVID-19. We understand that millions of Medicare beneficiaries have 
utilized interactive communications technology for visits with 
practitioners for a broad range of health care needs for almost 5 
years. We are seeking comment from interested parties on our 
understanding of the applicability of section 1834(m) of the Act to the 
new telemedicine E/M codes, and how we might potentially mitigate 
negative impact from the expiring telehealth flexibilities, preserve 
some access, and assess the magnitude of potential reductions in access 
and utilization. On the latter point, we note that we have developed 
proposed PFS payment rates for CY 2025, including the statutory budget 
neutrality adjustment, based on the presumption that changes in 
telehealth utilization will not affect overall service utilization. We 
also note that historically we have not considered changes in the 
Medicare telehealth policies to result in significant impact on 
utilization such that a budget neutrality adjustment would be 
warranted. However, we are unsure of the continuing validity of that 
premise under the current circumstances where patients have grown 
accustomed over several years to broad access to services via 
telehealth. We are seeking comment on what impact, if any, the 
expiration of the current flexibilities would be expected to have on 
overall service utilization for CY 2025. We refer readers to section 
IV.B. of this proposed rule for our discussion of budget neutrality 
adjustments.
    Given the similarity between CPT code 9X091 and HCPCS code G2012, 
we are proposing to accept the RUC-recommended values for CPT code 
9X091, and we are proposing to delete HCPCS code G2012. For CPT code 
9X091, we propose to accept the RUC- recommended work RVU of 0.30, and 
are proposing the RUC-recommended direct PE inputs. We note that our 
proposal does maintain the same direct PE inputs, which the RUC 
recommendations leave unchanged from the current G2012 in total amount, 
and allocate the same 3 minutes of time to the same level of staff 
(Clinical Staff code L037D, RN/LPN/MTA). We believe that the coding and 
payment recommendations for CPT code 9X091, submitted to CMS by the AMA 
RUC, accurately reflect the resources associated with this service and 
believe that maintaining separate coding for purposes of Medicare 
payment could create confusion. We note that, similar to our current 
policy for payment of HCPCS code G2012, CPT code 9X091 would be 
considered a communication technology-based service that is not subject 
to the requirements in section 1834(m) of the Act applicable to 
Medicare telehealth services.
(19) Genetic Counseling Services (CPT Code 9X100)
    In September 2023, the CPT Editorial Panel deleted CPT code 96040 
(Medical genetics and genetic counseling services, each 30 minutes 
face-to-face with patient/family) and created CPT code 9X100 (Medical 
genetics and genetic counseling services, each 30 minutes of total time 
provided by the genetic counselor on the date of the encounter) for 
medical genetics and genetic counseling services to be provided by the 
genetic counselor. Prior to its deletion, CPT code 96040 would only be 
reported by genetic counselors for genetic counseling services, though 
genetic counselors are not among the practitioners who can bill 
Medicare directly for their professional services. As we stated in the 
CY 2012 PFS final rule (76 FR 73096 through 73097), physicians and NPPs 
who may independently bill Medicare for their services and who are 
counseling individuals would generally report office or other 
outpatient E/M CPT codes for office visits that involve significant 
counseling, including genetic counseling; therefore CPT code 96040 was 
considered bundled into O/O E/M visits.
    For CPT code 9X100, we are proposing the RUC-recommended direct PE 
inputs. We note that the code descriptor now specifies that the service 
is provided by a genetic counselor, therefore we considered assigning 
Procedure Status ``X'' to CPT code 9X100. Because the PE RVUs would not 
display for the code with that assignment and that may impact access to 
the service with other payors, we are instead proposing bundled status 
(Procedure Status ``B'') for CPT code 9X100 to maintain the status of 
predecessor CPT code 96040, and we are seeking feedback from interested 
parties regarding the appropriate procedure status for this code. CPT 
guidelines for CPT code 9X100 state that a physician or other qualified 
healthcare professional (QHP) who may report evaluation and management 
services would not be able to report CPT code 9X100. Instead, these 
physicians and QHPs would use the appropriate evaluation and management 
code.
(20) COVID Immunization Administration (CPT Code 90480)
    On August 14, 2023, new CPT codes were created to consolidate over 
50 previously implemented codes and streamline the reporting of 
immunizations for the novel coronavirus (SARS-CoV-2, also known as 
COVID-19). The CPT Editorial Panel approved the addition of a single 
administration code (CPT code 90480) for administration of new and 
existing COVID-19 vaccine products. The RUC reviewed the specialty 
societies' recommendations for this code at the September 2023 RUC 
meeting.
    We are proposing the RUC-recommended work RVU of 0.25 for CPT code 
90480 (Immunization administration by intramuscular injection of severe 
acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (coronavirus 
disease [COVID-19]) vaccine, single dose). We are also proposing the 
RUC-recommended direct PE inputs for CPT code 90480 without refinement.
(21) Optical Coherence Tomography (CPT Codes 92132, 92133, 92134, and 
9X059)
    At the February 2023 CPT Editorial Panel meeting, CPT code 9X059 
(Computerized ophthalmic diagnostic imaging (eg, optical coherence 
tomography [OCT]), posterior segment, with interpretation and report, 
unilateral or bilateral; retina including OCT angiography) was created 
in response to new technology that allows imaging of the retina using 
optical coherence tomography (OCT) with and without non-dye OCT 
angiography (OCT-A). This code family also includes CPT code 92132 
(Computerized ophthalmic diagnostic imaging (eg, optical coherence 
tomography [OCT]), anterior segment, with interpretation and report, 
unilateral or bilateral), CPT code 92133 (Computerized ophthalmic 
diagnostic imaging (eg, optical coherence tomography [OCT]), posterior 
segment, with interpretation and report, unilateral or bilateral; optic 
nerve), and CPT code 92134 (Computerized

[[Page 61655]]

ophthalmic diagnostic imaging (eg, optical coherence tomography [OCT]), 
posterior segment, with interpretation and report, unilateral or 
bilateral; retina). These codes were reviewed at the April 2023 RUC 
meeting. The RUC determined the survey results were inaccurate due to 
underestimation of time, so the entire code family was re-surveyed and 
reviewed at the September 2023 RUC meeting.
    We are proposing the RUC-recommended work RVUs for all codes within 
the Optical Coherence Tomography code family. We are proposing a work 
RVU of 0.29 for CPT code 92132, a work RVU of 0.31 for CPT code 92133, 
a work RVU of 0.32 for CPT code 92134, and a work RVU of 0.64 for CPT 
code 9X059. We are also proposing the RUC-recommended direct PE inputs 
for all four codes in the family.
(22) Transcranial Doppler Studies (CPT Codes 93886, 93888, 93892, 
93893, 93X94, 93X95, 93X96, and 93890)
    The RUC's Relativity Assessment Workgroup (RAW) requested action 
plans in September 2022 to determine if specific code bundling 
solutions should occur for CPT codes 93890/93886, 93890/93892, 93892/
93886, and 93892/93890. The RAW referred this issue to the CPT 
Editorial Panel which created three new add-on codes to report when 
additional studies are performed on the same date of services as a 
complete transcranial Doppler study. The RUC reviewed these three new 
add-on codes, as well as CPT codes 93886, 93888, 93892 and 93893 for 
the September 2023 RUC meeting.
    We are proposing the RUC-recommended work RVU for all seven codes 
in the Transcranial Doppler Studies code family. We are proposing a 
work RVU of 0.90 for CPT code 93886 (Transcranial Doppler study of the 
intracranial arteries; complete study), a work RVU of 0.73 for CPT code 
93888 (Transcranial Doppler study of the intracranial arteries; limited 
study), a work RVU of 1.15 for CPT code 93892 (Transcranial Doppler 
study of the intracranial arteries; emboli detection without 
intravenous microbubble injection), a work RVU of 1.15 for CPT code 
93893 (Transcranial Doppler study of the intracranial arteries; venous-
arterial shunt detection with intravenous microbubble injection), a 
work RVU of 0.81 for CPT code 93X94 (Vasoreactivity study performed 
with transcranial Doppler study of intracranial arteries, complete), a 
work RVU of 0.73 for CPT code 93X95 (Emboli detection without 
intravenous microbubble injection performed with transcranial Doppler 
study of intracranial arteries, complete), and a work RVU of 0.85 for 
CPT code 93X96 (Venous-arterial shunt detection with intravenous 
microbubble injection performed with transcranial Doppler study of 
intracranial arteries, complete). We are also proposing the direct PE 
inputs as recommended by the RUC for all seven codes in this family.
    We note that the billing instructions for this code family specify 
that the three new add-on codes should be used in conjunction with CPT 
code 93886, and that CPT code 93888 should not be used in conjunction 
with CPT codes 93886, 93892, 93893, 93X94, 93X95, and 93X96. However, 
we believe that it would be beneficial for the CPT Editorial Panel to 
state more explicitly that CPT code 93X95 should not be used in 
conjunction with CPT code 93892 and that CPT code 93X96 should not be 
used in conjunction with CPT code 93893. The work performed in the add-
on codes would be duplicative of the base codes in these situations and 
result in unnecessary overbilling of services.
(23) RSV Monoclonal Antibody Administration (CPT Codes 96380 and 96381)
    At the September 2023 CPT meeting, the CPT Editorial Panel created 
two codes to report passive administration of respiratory syncytial 
virus, monoclonal antibody, seasonal dose, with and without counseling. 
CPT codes 96380 and 96381 were reviewed the following week at the 
September 2023 RUC meeting and the RUC submitted recommendations to 
CMS.
    We are proposing the RUC-recommended work RVU of 0.24 for CPT code 
96380 (Administration of respiratory syncytial virus, monoclonal 
antibody, seasonal dose by intramuscular injection, with counseling by 
physician or other qualified health care professional) and the RUC-
recommended work RVU of 0.17 for CPT code 96381 (Administration of 
respiratory syncytial virus, monoclonal antibody, seasonal dose by 
intramuscular injection). We understand that these are interim work 
recommendations from the RUC, and that the RUC intends to conduct a 
more complete review at a future RUC meeting which we would then 
consider in future rulemaking. We are also proposing the direct PE 
inputs as recommended by the RUC for both codes.
(24) Hyperthermic Intraperitoneal Chemotherapy (CPT Codes 96547 and 
96548)
    In September 2022, the CPT Editorial Panel created two time-based 
add-on Category I codes, CPT code 96547 (Intraoperative hyperthermic 
intraperitoneal chemotherapy (HIPEC) procedure, including separate 
incision(s) and closure, when performed; first 60 minutes (List 
separately in addition to code for primary procedure)) and CPT code 
96548 (Intraoperative hyperthermic intraperitoneal chemotherapy (HIPEC) 
procedure, including separate incision(s) and closure, when performed; 
each additional 30 minutes (List separately in addition to code for 
primary procedure)), to report HIPEC procedures for 2024. At the 
January 2023 RUC meeting, the RUC reached the conclusion that the 
survey data was flawed due to a lack of work definition and guidelines, 
and the RUC recommended contractor pricing for CPT codes 96547 and 
96548 for CY 2024 with further clarification from the CPT editorial 
panel. CMS proposed and finalized contractor pricing for CPT codes 
96547 and 96548 for 2024. At the May 2023 CPT Editorial Panel meeting, 
new guidelines and descriptions of work activities were approved and 
the codes were resurveyed for the September 2023 RUC meeting with 
recommendations for national pricing.
    We are proposing the RUC-recommended work RVU of 6.53 for CPT code 
96547 and the RUC-recommended work RVU of 3.00 for CPT code 96548. The 
RUC did not recommend, and we are not proposing, any direct PE inputs 
for the Hyperthermic Intraperitoneal Chemotherapy codes (CPT codes 
96547 and 96548).
(25) Laser Treatment--Skin (CPT Codes 96920, 96921, and 96922)
    In April 2022, the RUC referred CPT codes 96920 (Excimer laser 
treatment for psoriasis; total area less than 250 sq cm), 96921 
(Excimer laser treatment for psoriasis; 250 sq cm to 500 sq cm), and 
96922 (Excimer laser treatment for psoriasis; over 500 sq cm) to the 
CPT Editorial Panel to capture expanded indications beyond what was 
currently noted in the codes' descriptions to include laser treatment 
for other inflammatory skin disorders such as vitiligo, atopic 
dermatitis, and alopecia areata, which could result in changed 
physician work based on the expanded indications. The coding change 
application was subsequently withdrawn from the September 2023 CPT 
Editorial meeting when it was determined that existing literature was 
insufficient and did not support expanded indications at that time. 
Therefore, these CPT codes were re-surveyed and reviewed at the April

[[Page 61656]]

2023 RUC meeting without any revisions to their code descriptors.
    We disagree with the RUC-recommended work RVUs for CPT codes 96920, 
96921, and 96922 of 1.00, 1.07, and 1.32, respectively. The RUC noted 
that there have been multiple reviews of these CPT codes, and the 
valuation of the codes is currently based on the original valuation 
over two decades ago in 2002 where the physician time values were lower 
than the current times. A subsequent review in 2012 adopted new survey 
times while maintaining the work RVUs from 2002 for CPT codes 96920 and 
96922. The RUC noted that, for both CPT code 96920 and 96922 with the 
largest treatment area, the total times have not changed since first 
implemented more than 20 years ago. While we understand that the 
physician times have fluctuated over the course of several years and 
several reviews, yet the work RVUs have remained mostly constant as 
shown in Table 11, this was not addressed in the 2012 recommendations, 
and we believe that our operating assumption regarding the validity of 
the existing values as a point of comparison is critical to the 
integrity of the relative value system as currently constructed. The 
work times currently associated with codes play a very important role 
in PFS ratesetting, both as points of comparison in establishing work 
RVUs and in the allocation of indirect PE RVUs by specialty. If we were 
to operate under the assumption that previously recommended work times 
had been routinely over or underestimated, this would undermine the 
relativity of the work RVUs on the PFS in general, in light of the fact 
that codes are often valued based on comparisons to other codes with 
similar work times. We also believe that, since the two components of 
work are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, significant decreases in time should be reflected in 
decreases to work RVUs.
[GRAPHIC] [TIFF OMITTED] TP31JY24.015

    For CPT code 96920, we are proposing a work RVU of 0.83 based on a 
crosswalk to CPT code 11104 (Punch biopsy of skin (including simple 
closure, when performed); single lesion), which has the same 10 minutes 
of intraservice time and 23 minutes of total time as CPT code 96920. We 
note that of the 15 other 000-day global codes with a total time of 20 
to 25 minutes, only four codes fall above the RUC-recommended work RVU 
of 1.00. While we understand that commenters will dispute the validity 
of the current time values, we note that the 2002 intraservice time was 
17 minutes, which yields an intraservice time ratio between the 2002 
intraservice time and the recommended intraservice time of 10 minutes 
of 0.68 work RVUs ((10 minutes/17 minutes) * 1.15). We note our 
proposed work RVU of 0.83 maintains the intensity associated with the 
2002 review of CPT code 96920, which we believe to be more appropriate 
than the significant increase in intensity that results from the RUC-
recommended work RVU of 1.00 which nearly doubles the current intensity 
of the code. We have no evidence to indicate that the intensity of CPT 
code 96920 is increasing to this degree given how the surveyed work 
time is substantially decreasing.
    For CPT code 96921, we are proposing a work RVU of 0.90 based on a 
total time ratio to CPT code 96920 ((25/23) * 0.83) and a crosswalk to 
CPT code 11301 (Shaving of epidermal or dermal lesion, single lesion, 
trunk, arms or legs; lesion diameter 0.6 to 1.0 cm), which has 3 
additional minutes of intraservice time and 1 additional minute of 
total time compared to CPT code 96921. We also note that our proposed 
work RVU of 0.90 for CPT code 96921 maintains the RUC-recommended 
incremental difference between CPT codes 96920 and 96921 of 0.07 work 
RVUs. Like CPT code 96920, we understand that commenters will dispute 
the validity of the current time values, but we note that the 2002 
intraservice time was 20 minutes, which yields an intraservice time 
ratio between the 2002 intraservice time and the recommended 
intraservice time of 12 minutes of 0.70 work RVUs ((12 minutes/20 
minutes) * 1.17). Like CPT code 96920, we note that proposed work RVU 
of 0.90 for CPT code 96921 maintains the intensity associated with the 
2002 review of CPT code 96921, which we believe is more appropriate 
than the intensity increase that results from the RUC-recommended work 
RVU of 1.07 which again nearly doubles the current intensity of the 
code.
    For CPT code 96922, we are proposing a work RVU of 1.15 based on 
the RUC-recommended incremental difference between CPT codes 96921 and 
96922 of 0.25 work RVUs. Like CPT code 96920 and 96921, we understand 
that commenters will dispute the validity of the current time values, 
but we note that the 2002 intraservice time was 30 minutes, which 
yields an intraservice time ratio between the 2002 intraservice time 
and the recommended intraservice time of 18 minutes of 1.26 work RVUs 
((18 minutes/30 minutes) * 2.10). We note that the RUC recommended CPT 
code 96922 as having the lowest intensity of the three codes in this 
family and that our proposed work RVU of 1.15 maintains in relationship 
to the other codes.
    For the direct PE inputs, we are proposing to refine the clinical 
staff

[[Page 61657]]

time for the CA024 activity ``Clean room/equipment by clinical staff'' 
to the standard of 3 minutes for CPT codes 96920, 96921, and 96922. We 
note that 3 minutes is the current CA024 time for these three CPT 
codes. A rationale for extending clinical staff beyond the standard 3 
minutes for the CA024 activity was absent from the PE Summary of 
Recommendations, therefore we believe the current and standard 3 
minutes is more appropriate than the RUC-recommended 5 minutes. We are 
also proposing equipment times of 36, 38, and 44 minutes for the power 
table (EF031) and exam light (EQ168) equipment for CPT codes 96920, 
96921, and 96922, respectively, to account for the proposed refinement 
for CA024 to the standard 3 minutes.
    We also disagree with the RUC-recommended creation of new supply 
items for the excimer laser and are proposing to re-include the 
equipment time for the excimer laser (EQ161) using the current 
methodology where its cost is accounted for in the equipment of these 
CPT codes' direct PE. The RUC submitted recommendations to change this 
equipment item to new supply items to account for the per-use cost to 
rent the equipment, stating that the business model has changed from 
the standard equipment ownership that CMS recognizes using standardized 
equipment formulas to a per-use rental or subscription model. While we 
understand that there may have been a change in business model, we do 
not believe a rental, subscription, or per-use fee of an equipment item 
that is still available to be purchased and is already accounted for 
with our equipment methodology is appropriate, especially given its 
implications for direct PE costs for these CPT codes. Therefore, we are 
proposing reincorporating equipment times of 36, 38, and 44 minutes for 
the EQ161 equipment for CPT codes 96920, 96921, and 96922, 
respectively, based on the refined service period clinical labor times. 
We are proposing to remove the three pay-per-use excimer lasers listed 
as supplies and recommended by the RUC for these three codes.
    We have repeatedly stated in past rulemaking that rental and 
licensing fees are typically considered forms of indirect PE under our 
methodology. In the CY 2020 PFS final rule, we omitted the inclusion of 
several invoices for the monthly rental price of a PET infusion cart 
(ER109), and only accounted for the four purchase invoices for the 
equipment. We noted as well for future reference that although we 
appreciated the submission of the rental invoices, we were unable to 
use invoices for a monthly rental fee to determine the typical purchase 
price for equipment. We believe that invoices for a monthly rental fee 
would not be representative of the purchase price for equipment, in the 
same fashion that the rental fee for a car differs from its purchase 
price (84 FR 62771). Similarly, while we appreciate the submission of 
per-use, rental, and partnership invoices for the excimer laser, we 
believe that the excimer laser is appropriately and adequately 
accounted for in the equipment formula, and note that EQ161 has a very 
high cost per minute of $0.5895/minute. Compared to the nearly 700 
other equipment items in our database, only 55 equipment items have 
higher costs per minute (based on our standardized formula which 
accounts for years of useful life, utilization rate, purchase price, 
and minutes per year of use, discussed in detail in section II.B. of 
this proposed rule, Determination of PE RVUs) and only 53 equipment 
items have higher purchase prices than the excimer laser at $151,200. 
We do not believe that CPT codes 96920 through 96922 should be valued 
based on a significantly more expensive pay-per-use rental version of 
the excimer laser when the same treatment is cheaper and available as a 
purchasable form of equipment.
    Therefore, we are seeking comment on the difference in direct PE 
costs between the purchase and per-use rental of the laser. We note 
that using the equipment cost per minute formula, discussed in detail 
of section II.B. of this proposed rule, Determination of PE RVUs, 
yields direct PE costs of about $21.22, $22.40, and $25.94 for CPT 
codes 96920, 96921, 96922, respectively. Alternatively, the new supply 
items for the per-use fee of the laser yielded direct PE costs of $80, 
$83, and $100 for CPT codes 96920, 96921, 96922, respectively. These 
direct PE disparities represent a 277 percent, 270.5 percent, and 285.5 
percent increase for CPT codes 96920, 96921, 96922, respectively. Given 
this, we are interested in feedback from interested parties on the 
payment disparity between this equipment as a per-use or rental versus 
how we currently account for the purchase of equipment using the 
standard equipment formula, as we understand that both manufacturers 
and physicians may be inclined to shift to a per-use or rental business 
models to limit overhead for purchase and maintenance of expensive 
equipment.
(26) Physical Medicine and Rehabilitation (CPT Codes 97012, 97014, 
97016, 97018, 97022, 97032, 97033, 97034, 97035, 97110, 97112, 97113, 
97116, 97140, 97530, 97533, 97535, 97537, and 97542 and HCPCS Code 
G0283)
    The RUC's Health Care Professionals Advisory Committee (HCPAC) 
previously reviewed 19 physical medicine and rehabilitation codes in 
February 2017. In the CY 2024 PFS proposed rule, CMS received public 
nominations on these same 19 therapy codes as potentially misvalued (88 
FR 78851-78852). An interested party asserted that the direct PE 
clinical labor minutes reflected inappropriate multiple procedure 
payment reductions (MPPR), which were duplicative of the CMS MPPR 
policy implemented in CMS' claims processing systems. CMS reviewed the 
clinical labor time entries for these 19 therapy codes and concluded 
that a payment reduction should not have been applied in some instances 
to the 19 nominated therapy codes' clinical labor time entries since 
the payment valuation reduction would be duplicative of the MPPR 
applied during claims processing. CMS indicated that the valuation of 
these services would benefit from additional review through the RUC's 
HCPAC valuation process; they were therefore reviewed by the HCPAC for 
PE only, with no work review, at the January 2024 RUC meeting for 
inclusion in the CY 2025 PFS proposed rule.
    The HCPAC's direct PE recommendations were based on the typical 
number of services reported per session, which was 3.5 units according 
to CMS data, to ensure that there was no duplication in the standard 
inputs for preservice and postservice time. To account for the MPPR, 
the HCPAC determined that 3.5 codes are billed per session, with the 
first paid at 100% and the second and subsequent units paid at half and 
so forth for PE (for example, 1.00 + 0.5 + 0.5 + 0.25 = 2.25). This 
resulted in the HCPAC recommending that many of the standard clinical 
labor times be divided by 2.25 to account for the MPPR, such as taking 
the standard 3 minutes for greeting and gowning the patient and 
dividing it by 2.25 to arrive at the recommended time of 1.33 minutes 
(1.33 + 0.67 + 0.67 + 0.34 = 3 minutes). In most cases, the HCPAC 
recommended using the standard equipment time formula aside from a few 
exceptions such as the use of the whirlpool in CPT code 97022 which 
would require additional time for the cleaning of the equipment.

[[Page 61658]]

    Following the January 2024 RUC meeting, representatives from the 
American Physical Therapy Association (APTA) and the American 
Occupational Therapy Association (AOTA) met with CMS to express concern 
with the HCPAC's recommended direct PE inputs for this family of codes. 
Representatives from these trade associations stated that the HCPAC had 
inappropriately recommended too few equipment minutes for these 
procedures. These interested parties requested utilizing an alternate 
equipment time formula for the 19 reviewed therapy codes based on 
adding together the intraservice work time together with the clinical 
labor for the preservice and postservice portion of the service period. 
For 17 of the 19 reviewed therapy codes, this alternate equipment time 
formula would result in an increase over the HCPAC's equipment time 
recommendations. Table 12 lists the direct PE costs of each HCPCS code 
under their current pricing, under the HCPAC recommendations, and the 
alternate APTA and AOTA recommendations:
[GRAPHIC] [TIFF OMITTED] TP31JY24.016

    After consideration of these recommendations, we are proposing the 
direct PE inputs as recommended by the HCPAC for all 19 codes in the 
Physical Medicine and Rehabilitation code family. We believe that the 
HCPAC's equipment time recommendations better maintain relativity with 
the rest of the fee schedule through primarily using standard equipment 
time formulas, along with limited exceptions for additional equipment 
time in cases where more time for equipment cleaning or patient 
positioning would be typical. We also believe that the alternate 
equipment time formula recommended by APTA and AOTA leads to 
inconsistent equipment times for many of these procedures, such as 
recommending 23.98 equipment minutes for CPT code 97110 which is a 
timed code billed in 15-minute increments. Although we agree that some 
additional equipment time beyond the timed 15 minutes would be typical 
for setup and cleaning, 9 additional minutes for each billing of CPT 
code 97110 would not appear to reflect typical equipment usage.
    Given the complexity of determining appropriate direct PE inputs 
across multiple billings of these therapy codes, and the need to factor 
in the MPPR, we believe that this code family may benefit from 
additional review, specifically review focused on the subject of 
appropriate equipment minutes. The HCPAC review of these codes was 
primarily focused on the clinical labor portion of the PE inputs and 
the equipment times did not receive the same degree of scrutiny as the 
clinical labor. We believe that the HCPAC's recommended direct PE 
inputs are the most accurate values based on the current information 
that we have available, however this is a topic that may warrant 
additional review to ensure that this family of codes is properly 
valued.
(27) Acupuncture--Electroacupuncture (CPT Codes 97810, 97811, 97813, 
and 97814)
    In September 2022, the RUC's Relativity Assessment Workgroup 
identified the acupuncture codes with 2020 Medicare utilization over 
10,000 where the service was surveyed by one specialty but is now 
performed by a different specialty. CPT codes 97810-97814 were selected 
and surveyed for the April 2023 RUC meeting.
    For CY 2025, we are proposing the RUC-recommended work RVUs for all 
four CPT codes. We are proposing a work RVU of 0.61 for CPT code 97810 
(Acupuncture, 1 or more needles; without electrical stimulation, 
initial 15 minutes of personal one-on-one contact with the patient), a 
work RVU of 0.46 for CPT code 97811 (Acupuncture, 1 or more needles; 
without electrical stimulation, each additional 15 minutes of personal 
one-on-one contact with the patient, with re-insertion of needle(s) 
(List separately in addition to code for

[[Page 61659]]

primary procedure)), a work RVU of 0.74 for CPT Code 97813 
(Acupuncture, 1 or more needles; with electrical stimulation, initial 
15 minutes of personal one-on-one contact with the patient), and a work 
RVU of 0.47 for CPT code 97814 (Acupuncture, 1 or more needles; with 
electrical stimulation, each additional 15 minutes of personal one-on-
one contact with the patient, with re-insertion of needle(s) (List 
separately in addition to code for primary procedure)). We are also 
proposing the RUC-recommended direct PE inputs for CPT codes 97810, 
97811, 97813 and 97814 without refinement.
(28) Annual Alcohol Screening (HCPCS Codes G0442 and G0443)
    In April 2022, the Relativity Assessment Workgroup identified 
services with Medicare utilization of 10,000 or more that have 
increased by at least 100 percent from 2015 through 2020, including 
HCPCS codes G0442 (Annual alcohol misuse screening, 5 to 15 minutes) 
and G0443 (Brief face-to-face behavioral counseling for alcohol misuse, 
15 minutes). In September 2022, the RUC recommended that these services 
be surveyed for April 2023 after CMS published the revised code 
descriptor for HCPCS code G0442 in the CY 2023 PFS final rule (87 FR 
69523).
    We are proposing the RUC-recommended work RVU of 0.18 for HCPCS 
code G0442 (Annual alcohol misuse screening, 5 to 15 minutes). We are 
also proposing the RUC-recommended work RVU of 0.60 for HCPCS code 
G0443 (Brief face-to-face behavioral counseling for alcohol misuse, 15 
minutes).
    The RUC recommended an increase in the work RVU for HCPCS code 
G0443 from 0.45 to 0.60 which we believe is warranted based on time and 
intensity of the service in preventing alcohol misuse. In valuing this 
code, the time and work valuation is for separate and distinct services 
from same-day E/M services since HCPCS codes G0442 and G0443 are 
typically billed with an annual wellness visit (AWV) or office visit. 
We believe that the codes in the adjacent Behavioral Counseling & 
Therapy family, which includes HCPCS codes G0445 (High intensity 
behavioral counseling to prevent sexually transmitted infection; face-
to-face, individual, includes: education, skills training and guidance 
on how to change sexual behavior; performed semi-annually, 30 minutes), 
G0446 (Annual, face-to-face intensive behavioral therapy for 
cardiovascular disease, individual, 15 minutes), and G0447 (Face-to-
face behavioral counseling for obesity, 15 minutes), may be undervalued 
as their respective intensities may be lower than what is warranted for 
these services. We believe that the intensity for these G-codes may be 
more in line with the intensity of HCPCS code G0443 which we noted had 
an increase in intensity as recommended by the RUC. As such, we believe 
that the Behavioral Counseling & Therapy codes may benefit from 
additional review in the future to recognize the intensity of these 
services.
    We are proposing to maintain the current 15 minutes of clinical 
labor time for the CA021 ``Perform procedure/service--NOT directly 
related to physician work time'' activity for HCPCS code G0442. This 
clinical labor activity is specifically noted as not corresponding to 
the surveyed work time of 5 minutes, and we do not believe that it 
would be typical for the clinical staff to administer the 
questionnaire, clarify questions as needed, and record the answers in 
the patient's electronic medical record in the RUC-recommended 5 
minutes. We believe that the current 15 minutes of clinical labor time 
would be more typical to ensure the accuracy of this screening 
procedure. We are also proposing to maintain 15 minutes of 
corresponding equipment time for the EF023 exam table as a result of 
our proposed clinical labor time refinement. We are proposing the RUC-
recommended direct PE inputs for HCPCS code G0443 without refinement.
    We thank the RUC for their review of this code family and for 
highlighting an important consideration specifically for services that 
fall under the Medicare preventive services benefit. We are now 
considering how best to implement and maintain payment for preventive 
services and may develop new payment policies in future rulemaking to 
address this issue more comprehensively to ensure consistent access to 
these services. We considered the recommended PE inputs for this code 
family, as well as for the Annual Depression Screening (HCPCS code 
G0444) and Behavioral Counseling & Therapy services (HCPCS codes G0445, 
G0446, and G0447) within this context, as noted below.
(29) Annual Depression Screening (HCPCS Code G0444)
    In 2012, HCPCS code G0444 (Annual depression screening, 5 to 15 
minutes) was added to the PFS (77 FR 68955 and 68956) to report annual 
depression screening for adults in primary care settings that have 
staff-assisted depression care supports in place to assure accurate 
diagnosis, treatment and follow up. In April 2022, the Relativity 
Assessment Workgroup identified this service with Medicare utilization 
of 10,000 or more that have increased by at least 100 percent from 2015 
through 2020. In September 2022, the RUC recommended that this service 
be surveyed for April 2023 after CMS published the revised code 
descriptor in the CY 2023 PFS final rule (87 FR 69523).
    We are proposing the RUC-recommended work RVU of 0.18 for HCPCS 
code G0444.
    We are proposing to maintain the current 15 minutes of clinical 
labor time for the CA021 ``Perform procedure/service--NOT directly 
related to physician work time'' activity for HCPCS code G0444. This 
clinical labor activity is specifically noted as not corresponding to 
the surveyed work time of 5 minutes, and we do not believe that it 
would be typical for the clinical staff to administer the 
questionnaire, clarify questions as needed, and record the answers in 
the patient's electronic medical record in the RUC-recommended 5 
minutes. We believe that the current 15 minutes of clinical labor time 
would be more typical to ensure the accuracy of this screening 
procedure. We are also proposing to maintain 15 minutes of 
corresponding equipment time for the EF023 exam table as a result of 
our proposed clinical labor time refinement.
(30) Behavioral Counseling & Therapy (HCPCS Codes G0445, G0446, and 
G0447)
    CMS created HCPCS codes G0445 (High intensity behavioral counseling 
to prevent sexually transmitted infection; face-to-face, individual, 
includes education, skills training and guidance on how to change 
sexual behavior; performed semi-annually, 30 minutes), G0446 (Annual, 
face-to-face intensive behavioral therapy for cardiovascular disease, 
individual, 15 minutes), and G0447 (Face-to-face behavioral counseling 
for obesity, 15 minutes) effective with the 2012 Medicare PFS (77 FR 
68892). HCPCS codes G0445-G0447 were identified to be reviewed at the 
April 2023 RUC meeting because they were services with Medicare 
utilization of 10,000 or more that had increased by at least 100% from 
2015 through 2020.
    The specialty societies surveyed HCPCS codes G0445-G0447 for the 
April 2023 RUC meeting but did not obtain the required number of survey 
responses. After the resurvey, which occurred after the April 2023 RUC 
meeting, the specialty societies were again unable to achieve the 
required minimum number of survey responses

[[Page 61660]]

for any of the codes in this family for the September 2023 RUC meeting. 
The RUC reviewed HCPCS codes G0445-G0447 at the September 2023 RUC 
meeting. Given the insufficient number of survey responses and 
considering that these are CMS-created time-based codes, the RUC 
determined it would be most appropriate to maintain the current work 
values and flagged these codes for review in 3 years. We are proposing 
the RUC-recommended work RVU of 0.45 for each of these three HCPCS 
codes, G0445-G0447.
    We are not proposing the RUC-recommended direct PE inputs for these 
codes because of the insufficient number of survey responses, and 
further, we do not agree with some of the RUC's refinements to the 
direct PE inputs for this service. We are not proposing the RUC-
recommended direct PE inputs for G0445, G0446, and G0447, which include 
the SK062 patient education booklet being eliminated in favor of the 
SK057 paper, laser printing (each sheet) in the amount of 10 sheets and 
the equipment minutes being modified to equal the sum of clinical staff 
time plus the physician/QHP time as reflected by the survey median. We 
do not agree that these changes are substantiated given the 
insufficient number of survey responses and we are proposing to 
maintain the current values for each of these direct PE inputs.
    We are proposing the RUC recommended refinements to clinical staff 
time for HCPCS code G0445. We are proposing to move two minutes from 
CA021 Perform procedure/service--NOT directly related to physician work 
time to CA035 Review home care instructions, coordinate visits/
prescriptions. We agree with the RUC that this more accurately reflects 
the clinical work involved in arranging follow-up and/or referrals with 
clinical and community resources and providing educational materials. 
Currently, for HCPCS code G0445, PE includes a whip mixer (EP086) and 
biohazard hood (EP016) among the equipment assigned to the code. We are 
also proposing the RUC recommendations to eliminate both of these 
pieces of equipment from the PE for HCPCS code G0445.
    We note that the Behavioral Counseling & Therapy code family (HCPCS 
codes G0445-G0447) should be reviewed in the future by the RUC and we 
anticipate the recommendations that will come from the review for this 
family.
(31) Autologous Platelet Rich Plasma (HCPCS Code G0465)
    HCPCS code G0465 (Autologous platelet rich plasma (prp) or other 
blood-derived product for diabetic chronic wounds/ulcers, using an fda-
cleared device for this indication, (includes as applicable 
administration, dressings, phlebotomy, centrifugation or mixing, and 
all other preparatory procedures, per treatment)) was created for CY 
2022 (retroactively dated back to the effective date of the policy, 
April 13, 2021) and assigned contractor pricing (NCD 270.3, CR 12403).
    Following the publication of the CY 2023 PFS proposed rule, we 
received two comments on the pricing of HCPCS code G0465, and the 3C 
patch system supply which is topically applied for the management of 
exuding cutaneous wounds, such as leg ulcers, pressure ulcers, and 
diabetic ulcers and mechanically or surgically debrided wounds (87 FR 
69420). One commenter submitted invoices associated with the pricing of 
the 3C patch system (SD343) supply for which we established a price of 
$625.00 in the CY 2021 PFS final rule (85 FR 84498). The commenter 
requested that CMS update its supply database based on invoices 
submitted for SD343 to reflect an updated price of $750.00 per unit. 
The commenter also requested national pricing for HCPCS code G0465, 
expressing concern that insufficient payment disproportionately impacts 
vulnerable populations. The commenter requested a payment rate of 
$1,408.90 for HCPCS G0465 in the office setting, stating that this rate 
would appropriately account for the purchase of the 3C patch, as well 
as the other related costs and supply inputs required for point of care 
creation and administration.
    In response, we stated in the CY 2023 PFS final rule that we did 
not have enough information to establish national pricing at this time 
for HCPCS code G0465 (87 FR 69420). We stated that we would consider 
the commenters' feedback for future rulemaking while maintaining 
contractor pricing for CY 2023, which would allow for more flexibility 
for contractors to establish appropriate pricing using available 
information. We appreciated the invoice submission with additional 
pricing information for the SD343 supply and we updated our supply 
database for supply code SD343 at a price of $678.57 based on an 
average of the submitted invoices.
    Since the publication of the CY 2023 PFS final rule, interested 
parties have continued to request national pricing for HCPCS code G0465 
due to their perception of inconsistent and insufficient payment for 
this service by the MACs. CMS has asked the interested parties to 
engage with the MACs to establish adequate payment for HCPCS code 
G0465. The interested parties have continued to state that most MACs 
have not established consistent payment rates and the rates are 
heterogeneous; some are significantly below the cost of performing this 
service, leading to an unpredictable process and inadequate rates, 
creating barriers to access this service.
    Due to these concerns, we are therefore proposing to establish 
national pricing for HCPCS code G0465 for CY 2025. We are proposing to 
value HCPCS code G0465 using a crosswalk to CPT code 15271 (Application 
of skin substitute graft to trunk, arms, legs, total wound surface area 
up to 100 sq cm; first 25 sq cm or less wound surface area), drawing 
from a selection of relevant studies.17 18 19 20 We are 
proposing a work RVU of 1.50 for HCPCS code G0465 based on the 
crosswalk to CPT code 15271 because wound surface area sizes in current 
literature appear to be less than 100 sq cm for patients with diabetes 
and/or chronic ulcers. We are also proposing to use the direct PE 
inputs included with CPT code 15271 for valuing HCPCS code G0465, with 
the additional inclusion of the 3C patch system (SD343) supply that we 
priced in CY 2023. We note that the payment includes debridement, which 
may involve a wound reaching the bone. Therefore, debridement may not 
be billed separately. In addition, we are currently seeking comments on 
other available crosswalks from the broader medical community. For 
example, CPT code 15277 (Application of skin substitute graft to face, 
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits, total wound surface area greater than or equal to 
100 sq cm; first 100 sq cm wound surface area, or 1% of body area of 
infants and children) with a work RVU of 4.00 and CPT code 15273 
(Application of skin substitute graft to

[[Page 61661]]

trunk, arms, legs, total wound surface area greater than or equal to 
100 sq cm; first 100 sq cm wound surface area, or 1% of body area of 
infants and children) with a work RVU of 3.50 could also be viable 
crosswalk options. We are soliciting comments regarding our selection 
of CPT code 15271 as a crosswalk code, as well as general comments and 
available studies regarding the appropriate valuation of HCPCS code 
G0465.
---------------------------------------------------------------------------

    \17\ Gethin, G et al. ``The profile of patients with venous leg 
ulcers: A systematic review and global perspective.'' Journal of 
tissue viability vol. 30,1 (2021): 78-88. doi:10.1016/
j.jtv.2020.08.003.
    \18\ Sheehan, Peter et al. ``Percent change in wound area of 
diabetic foot ulcers over a 4-week period is a robust predictor of 
complete healing in a 12-week prospective trial.'' Plastic and 
reconstructive surgery vol. 117,7 Suppl (2006): 239S-244S. 
doi:10.1097/01.prs.0000222891.74489.33.
    \19\ Oyibo, S O et al. ``The effects of ulcer size and site, 
patient's age, sex and type and duration of diabetes on the outcome 
of diabetic foot ulcers.'' Diabetic medicine: a journal of the 
British Diabetic Association vol. 18,2 (2001): 133-8. doi:10.1046/
j.1464-5491.2001.00422.x.
    \20\ Patry, J[eacute]r[ocirc]me et al. ``Outcomes and prognosis 
of diabetic foot ulcers treated by an interdisciplinary team in 
Canada.'' International wound journal vol. 18,2 (2021): 134-146. 
doi:10.1111/iwj.13505.
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(32) Temporary Female Intraurethral Valve-Pump (CPT Codes 0596T and 
0597T)
    In the CY 2024 PFS proposed rule, an interested party nominated two 
Category III CPT codes, CPT codes 0596T (Initial insertion of temporary 
valve-pump in female urethra) and 0597T (Replacement of temporary 
valve-pump in female urethra), as potentially misvalued. The nominator 
expressed concern about variability in MAC pricing for the contractor-
priced service. Additionally, the nominator highlighted that the 
payment amounts determined by MACs were inadequately low and did not 
account for the time and effort required to furnish the services. In 
their submission, the nominator discussed their anticipated inputs for 
both codes. For CPT code 0596T, the nominator stated that a physician 
typically spends 60 minutes inserting the Vesiflo inFlow System. The 
nominator stated that CPT code 0596T included various supplies, 
equipment, and clinical labor time totaling $1,902.76, with the inflow 
supply items making up about 99 percent of the total cost of supplies. 
For CPT code 0597T, the nominator stated that a physician spends 25 
minutes replacing the Vesiflo inFlow System and PE items were similar, 
with supplies, equipment and clinical labor time costing $505.30, with 
the inflow supply items making up about 98 percent of the total cost of 
supplies. We direct interested parties to the CY 2024 PFS final rule 
(88 FR 78850) for more detailed submission information regarding CPT 
codes 0596T and 0597T. After reviewing, we concluded that these codes 
were not potentially misvalued because they are Category III codes 
describing relatively new and low-volume services. Category III codes 
are contractor priced under the PFS, meaning that each MAC can 
establish pricing for the code within its jurisdiction, resulting in 
variability in payments.
    This year, the nominator newly informed CMS that their analysis of 
national payment rates showed that in most CMS jurisdictions, not only 
are these codes misvalued, but in most cases, they are not valued at 
all, with fee schedule amounts in most CMS jurisdictions at or near 
zero dollars. The nominator further emphasized that three physician 
experts, all employed in major university medical centers, have 
highlighted the challenges posed by the combination of high supply 
costs and inadequate fee schedule payments, which have hindered their 
ability to provide services covered by these codes over several years. 
According to the nominator, these selected physicians also expressed 
frustration with the reluctance of MACs to address or discuss this 
issue. Moreover, the nominator highlighted high access barriers as a 
significant concern. These barriers primarily affect Medicare's most 
vulnerable beneficiaries, particularly women experiencing permanent 
urinary retention (PUR), although we note that no quantifiable evidence 
was provided to support these statements. We acknowledge and appreciate 
the nominator's efforts in reaching out to experts in the field and 
patients who rely on these services to elucidate their significant 
needs.
    Since these two Category III CPT codes were not identified as 
potentially misvalued and were consequently priced by contractors, each 
MAC can set pricing for the code within its jurisdiction. This could 
result in inevitable variability in MAC pricings until they receive a 
higher number of claims, as stated by the nominator. Through our 
engagement with MACs, we found that claims for the two Category III CPT 
codes are reviewed on a case-by-case basis for medical necessity. If 
the claim is payable, the price will be determined at that time by the 
MAC. Additionally, these codes were a topic of discussion within the 
MAC pricing workgroup, and we observed that there was not a significant 
difference among the MACs in terms of allowances based on the proposed 
pricing methodologies. However, there is variance in how MACs load 
pricing for Category III codes. For instance, some MACs publish the 
price for the service before they receive any claims, while others set 
the price only after they receive claims that help determine the 
appropriate pricing. If a MAC does not load a price for a code before 
receiving any claims, the service can still be paid, but the allowance 
has not been published.
    We continue to hear concerns about these payment inconsistencies 
for CPT codes 0596T and 0597T. As a result, we are recommending that 
the MACs establish more consistency in pricing, enabling the 
appropriate inclusion of the Vesiflo system in the code's PE valuation. 
Therefore, for CY 2025, we encourage interested parties to provide more 
accurate and appropriate cost data, along with additional information 
regarding work RVU, work time, indicators, and utilization estimates 
for the MACs. This should complement the information provided by the 
nominator in the CY 2024 final rule (88 FR 78850) and will facilitate 
the process. To aid in this process, we are adding three new supplies 
to our direct PE database based on invoices submitted by interested 
parties: the inFlow Measuring Device at a price of $140 (SD370), the 
inFlow Valve-Pump Device at a price of $495 (SD371), and the inFlow 
Activator Kit at a price of $1,250 (SD372). Although we are not 
proposing national pricing for these two Category III codes, we do note 
for the benefit of the MACs that CPT code 0596T would typically include 
one of each of these supplies, whereas CPT code 0597T would typically 
include only one of the supplies (SD371).
    We encourage the MACs to continue to engage with interested parties 
by providing information on how they price these services. We welcome 
additional comments from the broader medical community regarding the 
usage of this service, particularly concerning its safety and 
effectiveness, as well as potential factors contributing to its low 
utilization.
(33) PE-Only Replacement Code for Heart Failure System
    Interested parties have expressed concern about the lack of coding 
and a billing mechanism when practitioners incur costs replacing 
identified components of the CardioMEMSTM Heart Failure 
System used in the physician service described by CPT code 33289 
(Transcatheter implantation of wireless pulmonary artery pressure 
sensor for long-term hemodynamic monitoring, including deployment and 
calibration of the sensor, right heart catheterization, selective 
pulmonary catheterization, radiological supervision and interpretation, 
and pulmonary artery angiography, when performed).
    The CardioMEMSTM Heart Failure System furnished during 
this service allows practitioners treating heart failure patients to 
wirelessly monitor and measure pulmonary artery pressure and heart rate 
in patients with heart failure and transmit the information to the 
physician to inform the treatment plan for the patient. The system 
includes two critical components: first, a miniaturized, wireless 
monitor, which is implanted into a patient's pulmonary artery, and 
second, a smart pillow (the CardioMEMSTM Patient Electronics 
System), which captures and transmits

[[Page 61662]]

readings via safe radio frequency from the patient's implanted 
CardioMEMSTM Heart Failure System. Overall, the 
CardioMEMSTM Heart Failure System enables patients to 
transmit critical heart failure status information to clinicians 
regularly, potentially eliminating the need for frequent clinic or 
hospital visits.
    Interested parties have highlighted the critical importance of the 
device for heart failure patients who require close monitoring of 
weight and blood pressure to prevent fluid buildup around the heart, 
and have requested that CMS establish coding to describe when 
practitioners incur costs during clinical scenarios when crucial 
components of the system require replacement. Given that these 
components are crucial for system functionality and there is no 
existing coding framework to address their replacement, we believe that 
establishing appropriate coding and payment mechanisms can facilitate 
the provision of these services more effectively in the office and 
hospital settings. Given provided information, we propose assigning 
contractor pricing to this PE-only code for CY 2025. We are proposing a 
new code, HCPCS code GMEM1 (Provision of replacement patient 
electronics system (for example, system pillow) for home pulmonary 
artery pressure monitoring including provision of materials for use in 
the home and reporting of test results to physician or qualified health 
care professional). We are seeking feedback from interested parties on 
our contractor pricing approach with the aim of establishing national 
pricing through future rulemaking that can be billed under the OPPS and 
PFS specifying an ongoing care visit for the CardioMEMSTM 
Heart Failure System along with the provision of the replacement part. 
We are specifically looking for information from the broader medical 
community regarding direct costs from invoices for the replacement 
component referenced above, utilization estimates, and potential 
indicators. Additionally, we solicit comments on additional direct PE 
inputs that we should consider.
(34) Portable X-Ray (HCPCS Codes R0070-R0075)
    Several Portable X-Ray (PXR) suppliers and trade organizations 
continue to express longstanding concerns with how payment is 
established for transportation related to these services (HCPCS codes 
R0070-R0075). CMS has worked with interested parties over the past 
several years to understand the costs of these services while taking 
into consideration the MACs perspective on pricing of these costs. 
Through recent ongoing discussions with interested parties, we learned 
that interested parties are concerned with the recognition of costs 
incurred from PXR services and are wanting more consistency in the 
pricing of these services, including the application of an inflation 
factor.
    We acknowledge the interested parties' concerns and clarify that 
interested parties may best engage with the MACs through appropriate 
reporting of cost data in the MAC requested format. This information 
provided by interested parties can help MACs establish payment rates 
that are more reflective of costs incurred. MACs are then able to 
consider this cost information and apply an inflation factor to update 
changes in costs year over year.
    However, CMS recognizes that we should maintain consistency in 
pricing these services that are more indicative of changes in costs 
that occur yearly. While still preserving MAC discretion, CMS 
highlights the usage of an ambulance inflation factor (AIF) that is 
typically used to adjust ambulance services, which include 
transportation costs. The AIF is updated annually, and we believe MACs 
may consider using the AIF to price PXR services when establishing 
payment rates that are more consistent and reflective of costs 
incurred.
    Additionally, interested parties highlighted inconsistency with 
language found in our manual and program memoranda policies related to 
transportation costs. Therefore, to remain consistent and transparent 
in the pricing of PXR services, we are proposing to revise language in 
our Medicare Claims Processing manual (Chapter 13, 90.3 and Chapter 23, 
30.5) to reflect any updates to our guidance for these services.
(35) Non-Chemotherapy Administration
    CMS received inquiries from several external parties with concerns 
that MACs have developed local coverage determinations (LCDs) and local 
coverage articles (LCAs) that down code or restrict payment for complex 
and non-chemotherapeutic drug administration for CPT code series 96401-
96549, when used for the administration of several biologic and 
infusion drugs, including drugs furnished to treat, for example, 
rheumatology related conditions.
    CMS requested information in the CY 2024 PFS proposed rule (88 FR 
52837) seeking public feedback regarding the concerns of down coding or 
denials for the administration of non-chemotherapeutic infusion drugs. 
We received comments that asked for additional clarification from CMS 
regarding the payment guidelines for the complex non-chemotherapeutic 
administration code series and updates to the IOM. Commenters urged CMS 
to provide additional guidance clarifying the conditions under which 
these complex infusion drugs should be payable.
    In response to the comments received, and in response to continuing 
inquiries on downcoding and or restrictions on payment for non-
chemotherapy complex infusion services, we are proposing an updated 
policy based largely on the IOM Medicare Claims Processing Manual, 
Chapter 12, section 30.5, to include language currently consistent with 
CPT code definitions for the complex non-chemotherapy infusion code 
series stating that the administration of infusion for particular kinds 
of drugs and biologics can be considered complex and may be 
appropriately reported using the chemotherapy administration CPT codes 
96401-96549. We note that CPT guidance describes requirements for these 
non-chemotherapy complex drugs or biologic agents to include the need 
for staff with advanced practice training and competency, such as, a 
physician or other qualified health care professional to monitor the 
patient during these infusions due to the incidence of severe adverse 
reactions. There are also special considerations for preparation, 
dosage, or disposal for these infusion drugs. These services do involve 
serious patient risk which requires frequent consults with a physician 
or other qualified healthcare professional. Based on these facts and 
comments, we are proposing to update our subregulatory guidance 
accordingly.
    This will also provide complex clinical characteristics for the 
MACs to consider as criteria when determining payment of claims for 
these services. The current IOM language does not include the unique 
characteristics of the administration of these drugs that could provide 
additional context to the MACs when they are determining appropriate 
payment. Updating the IOM with the increased detail of these codes 
would be responsive to the concerns and requests of external parties 
and will ensure the IOM is consistent with published guidance.
    Therefore, we are soliciting and welcome comments on our proposal 
to revise the IOM to better reflect how complex non-chemotherapeutic 
drug administration infusion services are furnished and billed.

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(36) Hospital Inpatient or Observation (I/O) Evaluation and Management 
(E/M) Add-On for Infectious Diseases (HCPCS Code GIDXX)
    Interested parties have continued to engage with CMS and provide 
recommendations to recognize the increased work associated with 
diagnosis, management, and treatment of infectious diseases that may 
not be adequately accounted for in current hospital inpatient or 
observation E/M codes. Infectious diseases are unique in that they 
present infection control risks for the patient and close contacts, 
including healthcare staff, that require attention to safely care for 
the patient. They present unique challenges in diagnosis in that any 
previous healthcare interaction could affect the individual resistance 
patterns of pathogens infecting the individual patient and require 
close contact with public health agencies since resistance patterns are 
constantly changing, so a much more extensive medical review is 
required. Additionally, individual decisions regarding treatment are 
unique in that use in one patient affects resistance patterns of the 
entire population, which requires additional expertise to inform 
antimicrobial selection and management.
    We believe that the timing is appropriate for establishing a 
payment rate for infectious disease physician services since the COVID-
19 PHE has ignited a hypervigilance for infectious diseases. Therefore, 
for CY 2025, we are proposing a new HCPCS code to describe intensity 
and complexity inherent to hospital inpatient or observation care 
associated with a confirmed or suspected infectious disease performed 
by a physician with specialized training in infectious diseases. The 
full proposed descriptor for the hospital I/O E/M visit complexity add-
on code is HCPCS code GIDXX (Visit complexity inherent to hospital 
inpatient or observation care associated with a confirmed or suspected 
infectious disease by an infectious diseases consultant, including 
disease transmission risk assessment and mitigation, public health 
investigation, analysis, and testing, and complex antimicrobial therapy 
counseling and treatment. (add-on code, list separately in addition to 
hospital inpatient or observation evaluation and management visit, 
initial, same day discharge, or subsequent). We anticipate that HCPCS 
code GIDXX would be reported by physicians with specialized infectious 
disease training.
    We do not believe we should limit the scope of codes with which 
this proposed add-on HCPCS code could be billed based on visit level; 
or initial, same day discharge, or subsequent hospital inpatient or 
observation codes. We are proposing HCPCS code GIDXX as an add-on code 
(ZZZ global period) separately reportable in addition to CPT codes 
99221 (Initial hospital inpatient or observation care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and straightforward or low level 
medical decision making. When using total time on the date of the 
encounter for code selection, 40 minutes must be met or exceeded.), 
99222 (Initial hospital inpatient or observation care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and moderate level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 55 minutes must be met or exceeded.), 99223 (Initial 
hospital inpatient or observation care, per day, for the evaluation and 
management of a patient, which requires a medically appropriate history 
and/or examination and high level of medical decision making. When 
using total time on the date of the encounter for code selection, 75 
minutes must be met or exceeded.), 99231 (Subsequent hospital inpatient 
or observation care, per day, for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and straightforward or low level of medical decision 
making. When using total time on the date of the encounter for code 
selection, 25 minutes must be met or exceeded.), 99232 (Subsequent 
hospital inpatient or observation care, per day, for the evaluation and 
management of a patient, which requires a medically appropriate history 
and/or examination and moderate level of medical decision making. When 
using total time on the date of the encounter for code selection, 35 
minutes must be met or exceeded.), 99233 (Subsequent hospital inpatient 
or observation care, per day, for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and high level of medical decision making. When using total 
time on the date of the encounter for code selection, 50 minutes must 
be met or exceeded.), 99234 (Hospital inpatient or observation care, 
for the evaluation and management of a patient including admission and 
discharge on the same date, which requires a medically appropriate 
history and/or examination and straightforward or low level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 45 minutes must be met or exceeded.), 99235 (Hospital 
inpatient or observation care, for the evaluation and management of a 
patient including admission and discharge on the same date, which 
requires a medically appropriate history and/or examination and 
moderate level of medical decision making. When using total time on the 
date of the encounter for code selection, 70 minutes must be met or 
exceeded.), and 99236 (Hospital inpatient or observation care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires a medically appropriate 
history and/or examination and high level of medical decision making. 
When using total time on the date of the encounter for code selection, 
85 minutes must be met or exceeded.). Based on feedback from commenters 
on the CY 2022 PFS proposed rule comment solicitation regarding 
infectious diseases (86 FR 65125 through 65126) and feedback from 
interested parties, HCPCS code GIDXX would include the following 
proposed service elements:
1. Disease Transmission Risk Assessment and Mitigation
     Developing, following, and supervising specialized, 
individualized infection control protocols for an individual patient 
based on their diagnosis and risks in order to reduce risk of disease 
transmission.
     Coordinating with human resources regarding infection 
prevention and control measures to enable healthcare facility staff to 
safely care for patient.
     Counseling patients, family members and caregivers 
regarding infection prevention.
     Managing infection prevention and treatment protocols 
associated with transitions of care for complex patients.
2. Public Health Investigation, Analysis, and Testing
     In-depth patient chart review that entails going back 
farther in time and assessing the complete breadth of all health care 
interactions, with higher-level synthesis for complex diagnoses.
     Communicating with the clinical microbiology lab and 
directly reviewing specimens.
     Coordinating specialized diagnostic evaluations (for 
example, identifying and facilitating diagnostic laboratory tests only 
available at specialized laboratories, the state health

[[Page 61664]]

department, and/or the Centers for Disease Control & Prevention).
     Coordinating with Federal, State and local public health 
agencies and laboratories to assist with contact tracing, obtaining 
specimens for specialized testing, and/or identifying prior testing and 
treatment for communicable diseases in other jurisdictions.
3. Complex Antimicrobial Therapy Counseling & Treatment
     Counseling patients, family members, and caregivers 
regarding antimicrobial stewardship and resistance for the patient.
     Engaging in complex medical decision-making associated 
with antimicrobial prescribing including considerations such as 
antimicrobial resistance patterns, emergence of new variants/strains, 
recent antibiotic exposure, interactions/complications from 
comorbidities including concurrent infections, public health 
considerations to minimize development of antimicrobial resistance, and 
emerging and re-emerging infections.
    For HCPCS code GIDXX, we are proposing a work RVU of 0.89 based on 
the work RVU for HCPCS code G2211 (Visit complexity inherent to 
evaluation and management associated with medical care services that 
serve as the continuing focal point for all needed health care services 
and/or with medical care services that are part of ongoing care related 
to a patient's single, serious condition or a complex condition. (add-
on code, list separately in addition to office/outpatient evaluation 
and management visit, new or established)), which is 0.33, multiplied 
by a ratio of the work RVUs for CPT codes 99223 and 99213 (Office or 
other outpatient visit for the evaluation and management of an 
established patient, which requires a medically appropriate history 
and/or examination and low level of medical decision making. When using 
total time on the date of the encounter for code selection, 20 minutes 
must be met or exceeded.), 3.50 and 1.30, respectively. (This ratio is 
the work RVU of CPT code 99223 divided by the work RVU of CPT code 
99213, 3.50 divided by 1.30, which equals 2.69. Multiplying the 0.33 
work RVU of HCPCS code G2211 times 2.69 results in our proposed work 
RVU of 0.89.) We believe the relationship between the complexity add-on 
HCPCS code G2211 and a common base code for the add-on code, CPT code 
99213, would strike the correct balance to estimate the time and 
complexity associated with the new HCPCS code GIDXX, compared to what 
we believe will be a common base code for this new add-on code, CPT 
code 99223. HCPCS code G2211 has a total time of 11 minutes, therefore, 
we are proposing a total time of 30 minutes for HCPCS code GIDXX based 
on the same ratio (11 minutes times the same 2.69 ratio equals 30 
minutes). HCPCS code G2211 has no direct PE inputs, and we are 
proposing the same for HCPCS code GIDXX.
    We believe that the proposed work RVU appropriately falls between 
the following bracket add-on codes: HCPCS code G0316 (Prolonged 
hospital inpatient or observation care evaluation and management 
service(s) beyond the total time for the primary service (when the 
primary service has been selected using time on the date of the primary 
service); each additional 15 minutes by the physician or qualified 
healthcare professional, with or without direct patient contact (list 
separately in addition to CPT codes 99223, 99233, and 99236 for 
hospital inpatient or observation care evaluation and management 
services). (do not report g0316 on the same date of service as other 
prolonged services for evaluation and management 99358, 99359, 99418, 
99415, 99416). (do not report g0316 for any time unit less than 15 
minutes)) with a work RVU of 0.61 and the professional principal care 
management, chronic care management, and complex chronic care 
management CPT codes 99425 (Principal care management services, for a 
single high-risk disease, with the following required elements: one 
complex chronic condition expected to last at least 3 months, and that 
places the patient at significant risk of hospitalization, acute 
exacerbation/decompensation, functional decline, or death, the 
condition requires development, monitoring, or revision of disease-
specific care plan, the condition requires frequent adjustments in the 
medication regimen and/or the management of the condition is unusually 
complex due to comorbidities, ongoing communication and care 
coordination between relevant practitioners furnishing care; each 
additional 30 minutes provided personally by a physician or other 
qualified health care professional, per calendar month (List separately 
in addition to code for primary procedure)), 99437 (Chronic care 
management services with the following required elements: multiple (two 
or more) chronic conditions expected to last at least 12 months, or 
until the death of the patient, chronic conditions that place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, comprehensive care plan 
established, implemented, revised, or monitored; each additional 30 
minutes by a physician or other qualified health care professional, per 
calendar month (List separately in addition to code for primary 
procedure)), and 99489 (Complex chronic care management services with 
the following required elements: multiple (two or more) chronic 
conditions expected to last at least 12 months, or until the death of 
the patient, chronic conditions that place the patient at significant 
risk of death, acute exacerbation/decompensation, or functional 
decline, comprehensive care plan established, implemented, revised, or 
monitored, moderate or high complexity medical decision making; each 
additional 30 minutes of clinical staff time directed by a physician or 
other qualified health care professional, per calendar month (List 
separately in addition to code for primary procedure)) with work RVUs 
of 1.00.
    To help inform whether our proposed descriptor is appropriate and 
reflects the typical service, we are seeking comment on the typical 
amount of time infectious disease physicians spend on the proposed 
service elements and the relative intensity compared to similar service 
elements of other CPT codes. We note that the valuation of HCPCS code 
GIDXX is meant to capture the visit complexity inherent to hospital 
inpatient or observation care associated with a confirmed or suspected 
infectious disease by an infectious diseases consultant that is not 
accounted for in the appropriate hospital inpatient or observation E/M 
base code billed by the infectious disease physician.
    Interested parties have stated that consultations are a common E/M 
service performed by infectious disease clinicians, particularly in the 
inpatient setting, but stated that these services are no longer 
recognized by Medicare. Interested parties have also stated that this 
has resulted in a significant reduction in reporting and payment for 
infectious disease physician services. We note that we address this in 
the CMS Claims Processing Manual, Chapter 12, section 30.6.9 F, stating 
that ``Physicians may bill initial hospital care service codes (99221-
99223), for services that were reported with CPT consultation codes 
(99241-99255) prior to January 1, 2010, when the furnished service and 
documentation meet the minimum key component work and/or medical 
necessity requirements. Physicians may report a subsequent hospital 
care CPT code for services that were reported as CPT consultation codes 
(99241-99255)

[[Page 61665]]

prior to January 1, 2010, where the medical record appropriately 
demonstrates that the work and medical necessity requirements are met 
for reporting a subsequent hospital care code (under the level 
selected), even though the reported code is for the provider's first E/
M service to the inpatient during the hospital stay.'' Accordingly, we 
are seeking comment on any potential barriers for infectious disease 
physicians to use the initial and subsequent day hospital inpatient or 
observation codes, CPT codes 99221 through 99223 and 99231 through 
99233, for consultations if they meet the coding requirements for time 
and/or medical decision making (MDM). We note that understanding the 
barriers to utilizing these codes is important, as these codes will 
serve as the base codes for HCPCS code GIDXX, and will need to be 
billed by the infectious disease physician prior to billing HCPCS code 
GIDXX.
    Finally, we recognize that historically, the CPT Editorial Panel 
has frequently created CPT codes describing services that we originally 
established using G codes and adopted them through the CPT Editorial 
Panel process. We note that we would consider using any newly available 
CPT coding to describe services similar to those described here in 
future rulemaking.
(37) Preexposure Prophylaxis (PrEP) of Human Immunodeficiency Virus 
(HIV)
    To facilitate prompt beneficiary access to PrEP for CY 2024, we 
established 3 HCPCS G codes that describe the service of counseling and 
administration of Human Immunodeficiency Virus (HIV) pre-exposure 
prophylaxis drugs. Specifically, HCPCS codes G0011 (Individual 
counseling for pre-exposure prophylaxis (PrEP) by physician or QHP to 
prevent human immunodeficiency virus (HIV), includes: HIV risk 
assessment (initial or continued assessment of risk), HIV risk 
reduction and medication adherence, 15-30 minutes) and G0013 
(Individual counseling for pre-exposure prophylaxis (PrEP) by clinical 
staff to prevent human immunodeficiency virus (HIV), includes: HIV risk 
assessment (initial or continued assessment of risk), HIV risk 
reduction and medication adherence) describe the counseling portion of 
the service, and G0012 (Injection of pre-exposure prophylaxis (PrEP) 
drug for HIV prevention, under skin or into muscle) describes the 
injection of the medication.
    CMS released a Proposed NCD for Pre-Exposure Prophylaxis (PrEP) for 
Human Immunodeficiency Virus (HIV) Infection Prevention on July 12, 
2023. This proposed NCD announced CMS' intent to cover and pay for 
those drugs under the 1861(ddd) additional preventive services 
authority, and a final decision on the NCD is forthcoming. For CY 2025, 
we are proposing national rates for these HCPCS codes that reflect the 
relative resource costs associated with the counseling and drug 
administration portions of the service, pending finalization of the 
NCD. For HCPCS code G0011, we are proposing a work RVU of 0.45 based 
off work and direct PE inputs crosswalked from HCPCS code G0445 (High 
intensity behavioral counseling to prevent sexually transmitted 
infection; face-to-face, individual, includes: education, skills 
training and guidance on how to change sexual behavior; performed semi-
annually, 30 minutes). For HCPCS code G0012, we are proposing a work 
RVU of 0.17 based on the work and direct PE crosswalked from CPT code 
96372 (Therapeutic, prophylactic, or diagnostic injection (specify 
substance or drug); subcutaneous or intramuscular), and for HCPCS code 
G0013 we are proposing a work RVU of 0.18 based on the work and direct 
PE inputs crosswalked from 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). We appreciate having this opportunity for 
interested parties to provide feedback on the most accurate way to 
value these services.
(38) Opfolda
    For CY 2024, to facilitate beneficiary access to treatment of late-
onset Pompe disease with miglustat in combination with cipaglucosidae 
alfa-atga, we created a new HCPCS code, G0138, describing the service 
of administration of cipaglucosidase alfa-atga (Pombiliti), which 
includes the intravenous administration of cipaglucosidase alfa-atga, 
the provider or supplier's acquisition cost of miglustat, clinical 
supervision, and oral administration of miglustat. HCPCS code G0138 
(Intravenous infusion of cipaglucosidase alfaatga, including provider/
supplier acquisition and clinical supervision of oral administration of 
miglustat in preparation of receipt of cipaglucosidase alfa-atga) was 
added to the PFS effective April 1, 2024, as a contractor priced 
service. More information regarding the creation of HCPCS code G0138 
can be found at https://www.cms.gov/files/document/2023-hcpcs-application-summary-quarter-4-2023-drugs-and-biologicals-updated-1/30/2024.pdf.
    For CY 2025, we are proposing national pricing for this service 
that reflects the relative resource costs associated with the infusion 
administration of Cipaglucosidae alfa-atga and clinical supervision and 
provision of Miglustat oral with acquisition costs. We are proposing a 
work RVU of 0.21 for HCPCS code G0138 based on a crosswalk from CPT 
code 96365 (Intravenous infusion, for therapy, prophylaxis, or 
diagnosis (specify substance or drug); initial, up to 1 hour). This 
includes a crosswalked total time of 9 minutes and an intraservice time 
of 5 minutes. We are also proposing to crosswalk the direct PE inputs 
from CPT code 96365 for use in valuing HCPCS code G0138. However, we 
are adding 1 minute of L056A clinical staff time during the preservice 
portion of the service period to capture the RN/OCN observation of the 
patient during administration of the Opfolda pill. In addition, to 
account for the cost of the provision of the self-administered Opfolda 
as a direct PE input, we are incorporating the wholesale acquisition 
cost (WAC) data from the most recent available quarter. We are 
proposing a price of $32.50 for the supply input that describes a 65mg 
capsule of Opfolda (supply code SH111). We are seeking feedback from 
interested parties on our proposal of national pricing, as well as our 
proposed work RVU and direct PE inputs for HCPCS code G0138 to ensure 
proper payment for this service.
(39) Payment for Caregiver Training Services
a. Background
    In the CY 2017 PFS final rule (81 FR 80330 through 80331), we 
finalized payment for new CPT code(s) describing administration of a 
patient-focused health risk assessment instrument as well as 
administration of a caregiver-focused health risk assessment 
instrument. In the CY 2024 PFS final rule (88 FR 78914), we finalized 
the assignment of a payable status for caregiver training services 
(CTS) for therapy and behavior management/modification services 
(without the patient present) and finalized the RUC-recommended 
valuations for these services to better recognize the role that 
caregivers play in reasonable and necessary care for Medicare 
beneficiaries. These codes allow treating practitioners to report the 
training furnished to a caregiver, in tandem with the diagnostic and 
treatment services furnished directly to the patient, in

[[Page 61666]]

strategies and specific activities to assist the patient in carrying 
out the treatment plan.
    We finalized in the CY 2024 PFS final rule that payment may be made 
for CTS services when the treating practitioner identifies a need to 
involve and train one or more caregivers to assist the patient in 
carrying out a patient-centered treatment plan. We also finalized that 
because CTS services are furnished outside the patient's presence, the 
treating practitioner must obtain the patient's (or representative's) 
consent for the caregiver to receive the CTS. Additionally, we 
finalized that the identified need for CTS and the patient's (or 
representative's) consent for one or more specific caregivers to 
receive CTS must be documented in the patient's medical record. These 
finalized policies apply to current CTS coding and we are also 
proposing for them to apply to the newly proposed CTS coding that 
follows. We continue to receive questions and requests from interested 
parties about how we can refine payment for these services.
b. Caregiver Assessment
    In response to interested parties' requests for assessment of a 
caregiver's knowledge to be included in caregiver training, we are 
clarifying that when reasonable and necessary, assessing the 
caregiver's skills and knowledge for the purposes of caregiver training 
services could be included in the service described by 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) to determine if 
caregiver training services are needed. We also note that CPT code 
96161 is currently on the Medicare Telehealth list.
    We note that, as specified in the CY 2017 PFS final rule (81 FR 
80330), in particular cases, caregiver-focused health risk assessments 
can be necessary components of services furnished to Medicare 
beneficiaries. Examples where this service may be reasonable and 
necessary may include assessment of maternal depression in the active 
care of infants, assessment of parental mental health as part of 
evaluating a child's functioning, assessment of caretaker conditions as 
indicated where atypical parent/child interactions are observed during 
care, and assessment of caregivers as part of care management for 
adults whose physical or cognitive status renders them incapable of 
independent living and dependent on another adult caregiver. Commenters 
cited that some examples of such individuals might include 
intellectually disabled adults, seriously disabled military veterans, 
and adults with significant musculoskeletal or central nervous system 
impairments (81 FR 80331).
    We are proposing that because the caregiver-focused health risk 
assessment may be furnished outside the patient's presence, the 
treating practitioner must obtain the patient's (or representative's) 
consent for the caregiver to receive the assessment. We are also 
proposing that the definition of ``caregiver'' specified in the CY 2024 
PFS final rule (88 FR 78917) will be the same for caregiver training 
services and the caregiver-focused health risk assessment.
    We are seeking comment on these proposals and clarifications.
c. Proposals and New Coding
(A) Proposed Direct Care Caregiver Training Services
i. Coding
    We are proposing to establish new coding and payment for caregiver 
training for direct care services and supports. The topics of training 
could include, but would not be limited to, techniques to prevent 
decubitus ulcer formation, wound dressing changes, and infection 
control. Unlike other caregiver training codes that are currently paid 
under the PFS, the caregiver training codes for direct care services 
and support focus on specific clinical skills aimed at the caregiver 
effectuating hands-on treatment, reducing complications, and monitoring 
the patient. For example, in the direct care CTS codes, a caregiver 
could be taught how to properly change wound dressings to promote 
healing and prevent infection. This skill, among other direct care 
services, would not fall into the categories of CTS codes that 
currently exist (behavior management/modification or strategies and 
techniques to facilitate the patient's functional performance in the 
home or community) but is integral in effectuating the patient's 
treatment plan. Like other codes describing caregiver training 
services, these proposed new codes would reflect the training furnished 
to a caregiver, in tandem with the diagnostic and treatment services 
furnished directly to the patient, in strategies and specific 
activities to assist the patient to carry out the treatment plan. We 
believe that CTS may be reasonable and necessary when they are integral 
to a patient's overall treatment and furnished after the treatment plan 
is established. The CTS themselves need to be congruent with the 
treatment plan and designed to effectuate the desired patient outcomes. 
We believe this is especially the case in medical treatment scenarios 
where assistance by the caregiver receiving the CTS is necessary to 
ensure a successful treatment outcome for the patient--for example, 
when the patient cannot follow through with the treatment plan for 
themselves.
    We are proposing three new HCPCS codes: GCTD1 (Caregiver training 
in direct care strategies and techniques to support care for patients 
with an ongoing condition or illness and to reduce complications 
(including, but not limited to, techniques to prevent decubitus ulcer 
formation, wound dressing changes, and infection control) (without the 
patient present), face-to-face; initial 30 minutes), GCTD2 (Caregiver 
training in direct care strategies and techniques to support care for 
patients with an ongoing condition or illness and to reduce 
complications (including, but not limited to, techniques to prevent 
decubitus ulcer formation, wound dressing changes, and infection 
control) (without the patient present), face-to-face; each additional 
15 minutes (List separately in addition to code for primary service) 
(Use GCTD2 in conjunction with GCTD1)), and GCTD3 (Group caregiver 
training in direct care strategies and techniques to support care for 
patients with an ongoing condition or illness and to reduce 
complications (including, but not limited to, techniques to prevent 
decubitus ulcer formation, wound dressing changes, and infection 
control) (without the patient present), face-to-face with multiple sets 
of caregivers)).
    We continue to believe that CTS may be reasonable and necessary 
when they are integral to a patient's overall treatment and furnished 
after the treatment plan is established. The medical or direct care CTS 
themselves need to be congruent with the treatment plan and designed to 
effectuate the desired patient outcomes. We believe this is especially 
the case in medical treatment scenarios where assistance by the 
caregiver receiving the CTS is necessary to ensure a successful 
treatment outcome for the patient--for example when the patient cannot 
follow through with the treatment plan for themselves. Direct care 
training for caregivers of Medicare beneficiaries should be directly 
relevant to the person-centered treatment plan for the patient in order 
for the services to be considered reasonable and necessary under the 
Medicare program. Each training activity should be clearly identified 
and documented in the treatment plan. Additionally, this would not be 
billable for patients under home

[[Page 61667]]

health plan of care, receiving at-home therapy, or receiving DME 
services for involved medical equipment and supplies.
    We are seeking additional information from commenters about 
potential service overlaps and potential examples of direct care 
services to receive caregiver training to inform our final policy. We 
are soliciting public comment on each of our proposals for direct care 
CTS.
ii. Valuation
    For GCTM1, we propose a direct crosswalk to CPT Code 97550 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem-
solving, safety practices) (without the patient present), face to face; 
initial 30 minutes), with a work RVU of 1.00 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code GCTM1. CPT code 97550 has an intraservice time of 
30 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code GCTM1. Therefore, we are proposing a work time of 
30 minutes intraservice time (40 minutes of total time) for HCPCS code 
GCTM1 based on this same crosswalk to CPT 97550. We are also proposing 
to use this crosswalk to establish the direct PE inputs for HCPCS code 
GCTM1.
    For GCTM2, we are proposing a direct crosswalk to CPT Code 97551 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)), with a work RVU of 0.54 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code GCTM2. CPT code 97551 has an intraservice time of 
17 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code GCTM2. Therefore, we are proposing a work time of 
17 minutes for HCPCS code GCTM2 based on this same crosswalk to CPT 
97551. We also propose to use this crosswalk to establish the direct PE 
inputs for HCPCS code GCTM2.
    For GCTM3, we propose a direct crosswalk to CPT Code 97552 (Group 
caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face 
with multiple sets of caregivers), with a work RVU of 0.23 as we 
believe this service reflects the resource costs associated when the 
billing practitioner performs HCPCS code GCTM3. CPT code 97552 has an 
intraservice time of 9 minutes, and the physician work is of similar 
intensity to our proposed HCPCS code GCTM1. Therefore, we are proposing 
a work time of 9 minutes intraservice time (14 minutes total time) for 
HCPCS code GCTM3 based on this same crosswalk to CPT 97552. We are also 
proposing to use this crosswalk to establish the direct PE inputs for 
HCPCS code GCTM3.
    We are seeking comment on supplies/equipment that would be typical 
for the newly created direct care strategies and techniques CTS codes.
    We believe these services would largely involve contact between the 
billing practitioner and the caregiver through in-person interactions, 
which could be conducted via telecommunications, as appropriate. 
Therefore, we are proposing to add these codes to the Medicare 
Telehealth Services List to accommodate a scenario in which the 
practitioner completes the caregiver training service via telehealth. 
Please see section II.D. for more information on Medicare Telehealth 
Services.
    We are seeking comments on these proposals.
(B) Individual Behavior Management/Modification Caregiver Training 
Services
i. Coding
    We are proposing to establish new coding and payment for caregiver 
behavior management and modification training that could be furnished 
to the caregiver(s) of an individual patient. Current CPT coding (CPT 
96202 and 96203) allows for ``multiple-family group behavior 
management/modification training services,'' meaning that this 
caregiver training service can only be furnished in a group setting 
with multiple sets of caregivers of multiple beneficiaries (please 
reference 88 FR 78818 for discussion of CPT 96202 and 96203). We are 
proposing two new HCPCS codes: GCTB1 (Caregiver training in behavior 
management/modification for caregiver(s) of a patient with a mental or 
physical health diagnosis, administered by physician or other qualified 
health care professional (without the patient present), face-to-face; 
initial 30 minutes) and GCTB2 (Caregiver training in behavior 
management/modification for caregiver(s) of a patient with a mental or 
physical health diagnosis, administered by physician or other qualified 
health care professional (without the patient present), face-to-face; 
each additional 15 minutes (List separately in addition to code for 
primary service) (Use GCTB2 in conjunction with GCTB1)).
    We continue to believe that CTS may be reasonable and necessary 
when they are integral to a patient's overall treatment and furnished 
after the treatment plan is established. The behavior management/
modification CTS themselves need to be congruent with the treatment 
plan and designed to effectuate the desired patient outcomes. We 
believe this is especially the case in medical treatment scenarios 
where assistance by the caregiver receiving the CTS is necessary to 
ensure a successful treatment outcome for the patient--for example when 
the patient cannot follow through with the treatment plan for 
themselves. Behavior management/modification training for caregivers of 
Medicare beneficiaries should be directly relevant to the person-
centered treatment plan for the patient in order for the services to be 
considered reasonable and necessary under the Medicare program. Each 
training activity should be clearly identified and documented in the 
treatment plan. All other policies and procedures surrounding CPT 96202 
and 96203 will also apply to these services (88 FR 78914-78920).
    We are seeking comment on these proposals.
ii. Valuation
    For GCTB1, we propose a direct crosswalk to CPT Code 97550 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
initial 30 minutes), with a work RVU of 1.00 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code GCTB1. CPT code 97550 has an intraservice time of 
30 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code GCTB1. Therefore, we are proposing a work time of 
30 minutes

[[Page 61668]]

intraservice time (40 minutes of total time) for HCPCS code GCTB1 based 
on this same crosswalk to CPT 97550. We also propose to use this 
crosswalk to establish the direct PE inputs for HCPCS code GCTB1. We 
are seeking comment on supplies/equipment that would be typical for the 
newly created individual behavior management/modification CTS codes.
    For GCTB2, we propose a direct crosswalk to CPT Code 97551 
(Caregiver training in strategies and techniques to facilitate the 
patient's functional performance in the home or community (e.g., 
activities of daily living [ADLs], instrumental ADLs [iADLs], 
transfers, mobility, communication, swallowing, feeding, problem 
solving, safety practices) (without the patient present), face to face; 
each additional 15 minutes (List separately in addition to code for 
primary service)), with a work RVU of 0.54 as we believe this service 
reflects the resource costs associated when the billing practitioner 
performs HCPCS code GCTB2. CPT code 97551 has an intraservice time of 
17 minutes, and the physician work is of similar intensity to our 
proposed HCPCS code GCTB2. Therefore, we are proposing a work time of 
17 minutes for HCPCS code GCTB2 based on this same crosswalk to CPT 
97551. We also propose to use this crosswalk to establish the direct PE 
inputs for HCPCS code GCTB2.
    We are seeking comment on supplies/equipment that would be typical 
for the newly created individual behavior management/modification CTS 
codes.
    We believe these services would largely involve contact between the 
billing practitioner and the caregiver through in-person interactions, 
which could be conducted via telecommunications as appropriate. 
Therefore, we are proposing to add these codes to the Medicare 
Telehealth Services List to accommodate a scenario in which the 
practitioner completes the caregiver training service via telehealth. 
Please see section II.D. for more information on Medicare Telehealth 
Services.
    We are seeking comments on these proposals.
(C) Patient Consent
    In the CY 2024 PFS final rule (88 FR 78916), we finalized a 
requirement that the treating practitioner must obtain the patient's 
(or representative's) consent for the caregiver to receive the CTS and 
that the identified need for CTS and the patient's (or 
representative's) consent for one or more specific caregivers to 
receive CTS be documented in the patient's medical record.
    We are proposing that consent for CTS can be provided verbally by 
the patient (or representative). This would align consent requirements 
with other services paid under the PFS that may be furnished without 
the patient present, such as certain care management services. This 
proposal would apply to CPT codes 97550, 97551, 97552, 96202, and 
96203, as well as any caregiver training services HCPCS codes finalized 
in this year's rule, and any subsequently created caregiver training 
service codes. We are seeking comment on this proposal.
(D) Addition to Telehealth List
    Please see section II.D. of this proposed rule, Payment for 
Medicare Telehealth Services, for the discussion related to proposals 
to add CTS to the Medicare Telehealth list.
    (40) Request for Information for Services Addressing Health-Related 
Social Needs (Community Health Integration (G0019, G0022), Principal 
Illness Navigation (G0023, G0024), Principal Illness Navigation--Peer 
Support (G0140, G0146), and Social Determinants of Health Risk 
Assessment (G0136))
a. Background
    In the CY 2024 PFS final rule (88 FR 78920), we finalized G-codes 
to reflect new coding and payment for services describing Community 
Health Integration (CHI), G0019 (Community health integration services 
performed by certified or trained auxiliary personnel, including a 
community health worker, under the direction of a physician or other 
practitioner; 60 minutes per calendar month), and G0022 (Community 
health integration services, each additional 30 minutes per calendar 
month), which may include a community health worker (CHW), incident to 
the professional services and under the general supervision of the 
billing practitioner. We finalized a new stand-alone G code describing 
a SDOH Risk Assessment, G0136 (Administration of a standardized, 
evidence-based Social Determinants of Health Risk Assessment, 5-15 
minutes, not more often than every 6 months). SDOH risk assessment 
refers to a review of the individual's SDOH or identified social risk 
factors that influence the diagnosis and treatment of medical 
conditions. We also finalized PIN services, described by HCPCS code 
G0023 (Principal Illness Navigation services by certified or trained 
auxiliary personnel under the direction of a physician or other 
practitioner, including a patient navigator or certified peer 
specialist; 60 minutes per calendar month) and G0024 (Principal Illness 
Navigation services, additional 30 minutes per calendar month); G0140 
(Principal Illness Navigation--Peer Support by certified or trained 
auxiliary personnel under the direction of a physician or other 
practitioner, including a certified peer specialist; 60 minutes per 
calendar month) and G0146 (Principal Illness Navigation--Peer Support, 
additional 30 minutes per calendar month), to better recognize through 
coding and payment policies when certified or trained auxiliary 
personnel under the direction of a billing practitioner, which may 
include a patient navigator or certified peer support specialist, are 
involved in the patient's health care navigation as part of the 
treatment plan for a serious, high-risk disease expected to last at 
least 3 months, that places the patient at significant risk of 
hospitalization or nursing home placement, acute exacerbation/
decompensation, functional decline, or death.
b. Request for Information on Services Addressing Health-Related Social 
Needs
    For CY 2025 we are issuing a broad request for information (RFI) on 
the newly implemented Community Health Integration (CHI) (HPCCS codes 
G0019, G0022), Principal Illness Navigation (PIN) (HCPCS codes G0023, 
G0024), Principal Illness Navigation--Peer Support (PIN-PS) (HCPCS 
codes G0140, G0146), and Social Determinants of Health Risk Assessment 
(SDOH RA) (HCPCS code G0136) services to engage interested parties on 
additional policy refinements for CMS to consider in future rulemaking.
    We are interested in better addressing the social needs of 
beneficiaries and requesting information on the codes we created and 
finalized beginning in CY 2024 to fully encompass what interested 
parties and commenters believe should be included in the coding and 
payment we recently established. We are seeking comment on any related 
services that may not be described by the current coding that we 
finalized in the CY 2024 PFS final rule and that are medically 
reasonable and necessary ``for the diagnosis or treatment of illness or 
injury'' under section 1862(a)(1)(A) of the Act. We believe we can work 
within the current coding framework and explore additional 
opportunities to create codes that describe reasonable and necessary 
services furnished by billing practitioners and the auxiliary personnel 
under their general supervision. We are interested in feedback 
regarding any barriers to furnishing the services addressing health-
related social needs, and if the

[[Page 61669]]

service described by the codes we established are allowing 
practitioners to better address unmet social needs that interfere with 
the practitioners' ability to diagnose and treat the patient. This 
could include barriers specific to certain populations, including rural 
and tribal communities, residents of the U.S. Territories, individuals 
with disabilities, individuals with limited English proficiency, or 
other populations who experience specific unmet social needs.
    In response to the CY 2024 PFS proposed rule, we heard from 
commenters that CSWs often connect individuals with community-based 
resources to address unmet social needs that affect the diagnosis and 
treatment of medical problems. CSWs can bill Medicare directly for 
services they personally perform for the diagnosis or treatment of 
mental illness but are not authorized by statute to bill for services 
that are provided by auxiliary personnel incident to their professional 
services. Since CHI and PIN codes are typically provided by auxiliary 
personnel supervised by the billing practitioner, CSWs could serve as 
the auxiliary personnel. CSWs could not directly bill Medicare for CHI 
and PIN services if they were provided by auxiliary personnel, as they 
are not authorized to supervise, bill, and be paid directly by Medicare 
for services that are provided by auxiliary personnel incident to their 
professional services. We believe the current CHI and PIN coding 
accurately captures the services CSWs currently provide, including the 
work involved in connecting beneficiaries with community-based 
resources for unmet social needs that affect the diagnosis or treatment 
of medical problems. As we stated previously in the CY 2024 PFS final 
rule (88 FR 78926), ``the codes do not limit the types of other health 
care professionals, such as registered nurses and social workers, that 
can perform CHI services (and PIN services, as we discuss in the next 
section) incident to the billing practitioner's professional services, 
so long as they meet the requirements to provide all elements of the 
service included in the code, consistent with the definition of 
auxiliary personnel at Sec.  410.26(a)(1).'' We are clarifying that 
when we refer to ``certified or trained auxiliary personnel'' in the 
following codes: G0019, G0022, G0023, G0024, G0140, G0146, this also 
includes CSWs.
    We are requesting information if there are other types of auxiliary 
personnel, other certifications, and/or training requirements that are 
not adequately captured in current coding and payment for these 
services. We are also interested in hearing more about what types of 
auxiliary personnel are typically furnishing these services, including 
the certifications and/or licensure that they have. We are also 
interested in whether there are nuances or considerations that CMS 
should understand related to auxiliary personnel and training, 
certifications or licensure barriers or requirements that are 
specifically experienced by practitioners serving underserved 
communities. This could include settings such as community mental 
health centers, community health clinics including FQHCs and RHCs, 
tribal health centers, migrant farmworker clinics, or facilities 
located in and serving rural and geographically isolated communities 
including the U.S. Territories.
    As noted in the CY 2023 PFS final rule (87 FR 69790) and explained 
in the CY 2023 PFS proposed rule (87 FR 46102), when we refer to 
community-based organizations, we mean public or private not-for-profit 
entities that provide specific services to the community or targeted 
populations in the community to address the health and social needs of 
those populations. They may include community-action agencies, housing 
agencies, area agencies on aging, centers for independent living, aging 
and disability resource centers or other non-profits that apply for 
grants or contract with healthcare entities to perform social services. 
They may receive grants from other agencies in the U.S. Department of 
Health and Human Services, including Federal grants administered by the 
Administration for Children and Families (ACF), Administration for 
Community Living (ACL), the Centers for Disease Control and Prevention 
(CDC), the Substance Abuse and Mental Health Services Administration 
(SAMHSA), or State-funded grants to provide social services. We stated 
that, generally, we believe such organizations know the populations and 
communities they serve and may have the infrastructure or systems in 
place to assist practitioners to provide CHI and PIN services. We 
stated that we understood that many community-based organizations 
(CBOs) provide social services and do other work that is beyond the 
scope of CHI and PIN services, but we believed they are well-positioned 
to develop relationships with practitioners for providing reasonable 
and necessary CHI and PIN services.
    We are interested in hearing more about CBOs and their 
collaborative relationships with billing practitioners. The new codes 
for CHI and PIN services recognized CBOs and their role in providing 
auxiliary personnel under the general supervision of the billing 
practitioners. We are seeking comment regarding the extent to which 
practitioners are contracting with CBOs (including current or planned 
contracting arrangements) for auxiliary personnel purposes, and if 
there is anything else CMS should do to clarify services where 
auxiliary personnel can be employed by the CBO, so long as they are 
under the general supervision of the billing practitioner. Given that 
the CHI and PIN services may be provided incident to the billing 
practitioner's professional services, we are also seeking comment on 
whether the incident to billing construct is appropriate for CBOs to 
supplement pre-existing staffing arrangements and the CBO/provider 
interface. We are also seeking comment on CBOs' roles, the extent to 
which practitioners are contracting with CBOs, incident to billing, and 
auxiliary personnel employed by CBOs under general supervision of 
practitioners serving and located in rural, tribal and geographically 
isolated communities, including the U.S. Territories.
    We are also interested in any comments from interested parties 
across provider types and from practitioners in geographically isolated 
communities (for example, rural, tribal, and island communities) and 
otherwise underserved communities about coding Z codes on claims 
associated with billing for CHI, PIN, and SDOH risk assessment codes. 
We recognize that when screening for social needs, such needs may be 
identified and are interested in learning whether practitioners are 
also capturing unmet social needs on claims using Z codes for social 
risk factors or in some other way, and any barriers or opportunities to 
increase coding of Z codes when social risk factors screen positive.
    Over the past several years, we have worked to develop payment 
mechanisms under the PFS to improve the accuracy of valuation and 
payment for the services furnished by physicians and other health care 
professionals, especially in the context of evolving models of care and 
addressing unmet social needs that affect the diagnosis and treatment 
of medical problems. Given the Agency's broader policy goals of 
increasing access to care, we are requesting information from 
interested parties and commenters on anything else that we should 
consider in the context of these codes and what else we could consider 
to be included in this newly established code set.
    We are seeking comments on ways to identify specific services and 
to recognize possible barriers to improved access to these kinds of 
high-value,

[[Page 61670]]

potentially underutilized services by Medicare beneficiaries.
    We are seeking public comment to understand more clearly how often 
evidence-based care for persons with fractures, for example, is not 
provided and the reasons for this, and how recent or new PFS codes, or 
their revaluation, might help resolve specific barriers to its 
provision. The PFS currently includes many codes that pay for various 
components of care to manage patients with fractures over a course of 
treatment, such as transitional care management (TCM) and other care 
management services, evaluation and management visits (including the 
inherent complexity add-on for office/outpatient visits), principal 
illness navigation services, community health integration services, and 
the social determinants of health risk assessment. We refer readers to 
our recent guidance on these services on the CMS website at https://www.cms.gov/files/document/health-related-social-needs-faq.pdf. 
Medicare also pays for bone mass measurement/density tests (MLN006559--
https://www.cms.gov/medicare/prevention/prevntiongeninfo/medicare-preventive-services/mps-quickreferencechart-1.html#BONE_MASS, and for 
outpatient osteoporosis medication under Part D and, in some cases, 
Part B (https://www.medicare.gov/coverage/osteoporosis-drugs). These 
services can be billed on their own, or in combination, where 
applicable. We note that in the CY 2020 PFS final rule (84 FR 62685) 
and CY 2021 PFS final rule (85 FR 84547), CMS indicated that TCM may be 
billed concurrently with other care management codes when relevant, 
medically necessary, and not duplicative.
    We are proposing new coding in other sections of this CY 2025 
proposed rule that might be used to bill for managing fractures under a 
treatment plan, including the global post-operative add-on code, HCPCS 
code GPOC1, in section II.G.5 of this proposed rule and the advanced 
primary care management codes in section II.G.2 of this proposed rule. 
Interested parties have indicated that orthopedic surgeons, skilled 
nursing facilities (SNFs), and other practitioners and providers may 
not be providing comprehensive patient centered fracture management 
care for quality, payment, or administrative reasons, and that there is 
inadequate ``hand-off'' when post-discharge fracture care is 
transferred to practitioners in the community. They indicate a systemic 
disconnect on which provider and/or specialty is responsible for 
osteoporosis diagnosis and treatment, and that global surgical periods 
focus on acute fracture recovery rather than addressing osteoporosis. 
We are interested in hearing if the proposed global postop add-on code 
could help resolve these issues.
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F. Evaluation and Management (E/M) Visits

1. Office/Outpatient (O/O) Evaluation and Management (E/M) Visit 
Complexity Add-On
    In the CY 2024 PFS final rule (88 FR 78970 through 78982), we 
finalized separate payment for the O/O E/M visit complexity add-on 
code. The full descriptor for the O/O E/M visit complexity add-on code, 
HCPCS code G2211, is (Visit complexity inherent to evaluation and 
management associated with medical care services that serve as the 
continuing focal point for all needed health care services and/or with 
medical care services that are part of ongoing care related to a 
patient's single, serious condition or a complex condition. (Add-on 
code, list separately in addition to office/outpatient evaluation and 
management visit, new or established)).
    The O/O E/M visit complexity add-on code ``reflects the time, 
intensity, and PE resources involved when practitioners furnish the 
kinds of O/O E/M visit services that enable them to build longitudinal 
relationships with all patients (that is, not only those patients who 
have a chronic condition or single high-risk disease) and to address 
the majority of a patient's health care needs with consistency and 
continuity over longer periods of time.'' (88 FR 78970

[[Page 61697]]

through 78971). We explained in the CY 2024 PFS final rule that it is 
the relationship between the patient and the practitioner that is the 
determining factor for when the add-on code should be billed. The add-
on code captures the inherent complexity of the visit that is derived 
from the longitudinal nature of the practitioner and patient 
relationship. The first part of the code descriptor, the ``continuing 
focal point for all needed health care services,'' describes a 
relationship between the patient and the practitioner when the 
practitioner is the continuing focal point for all health care services 
that the patient needs. The second part of the add-on code also 
describes a relationship involving medical services that are part of 
ongoing care related to a patient's single, serious condition or a 
complex condition. There is previously unrecognized but important 
cognitive effort of utilizing the longitudinal relationship in making a 
diagnosis, developing a treatment plan, and weighing the factors that 
affect a longitudinal doctor-patient relationship. The practitioner 
must decide what course of action and choice of words in the visit 
itself would lead to the best health outcome in the single visit while 
simultaneously building up an effective, trusting longitudinal 
relationship with the patient. Weighing these various factors, even for 
a seemingly simple condition, makes the entire visit inherently 
complex, which is what this add-on code is intended to capture (88 FR 
78973 through 78974).
    We responded to concerns raised by commenters about potential 
duplicative payment and potential misreporting of the code, noting that 
when procedures or other services are reported on the same day by the 
same billing practitioner as a significant, separately identifiable O/O 
E/M visit (the base codes that the visit complexity add-on code can be 
billed with), we believed that the services involve resources that are 
sufficiently distinct from the costs associated with furnishing stand-
alone O/O E/M visits to warrant a different payment policy (88 FR 
78971). We finalized our proposal that the O/O E/M visit complexity 
add-on code is not payable when the O/O E/M visit is reported with CPT 
Modifier-25, which denotes a significant, separately identifiable O/O 
E/M visit by the same physician or other qualified health care 
professional on the same day as a procedure or other service (88 FR 
78974).
    Some commenters expressed concern about our proposal to exclude 
payment for the visit complexity add-on code when the O/O E/M base code 
is reported with Modifier-25 because some preventive services such as 
the annual wellness visit (AWV) or a preventive vaccine are often 
provided on the same day as a separately identifiable O/O E/M visit, 
appropriately billed with Modifier-25. The commenters were concerned 
that practitioners might avoid the policy by not providing a preventive 
service on the same day as another O/O E/M service. We acknowledged 
that immunizations and AWVs were sometimes furnished on the same day as 
an O/O E/M visit and that our policy would prevent payment of the add-
on code with such office visits billed with Modifier-25 and indicated 
that we would monitor utilization of the visit complexity add-on code 
and continue engagement with interested parties as the policy is 
implemented (88 FR 78975).
    We have begun to monitor utilization of HCPCS code G2211 and are 
continuing to engage with interested parties. We continue to hear from 
some practitioners that our non-payment of the O/O E/M visit complexity 
add-on code when the O/O E/M base code is reported on the same day as a 
preventive immunization or other Medicare preventive service is 
disruptive to the way such care is usually furnished and contrary to 
our policy objective for establishing the add-on payment. An early 
analysis of practitioner claims from the first few months of 2024 shows 
relatively few Medicare preventive services being billed on the day 
preceding or following an O/O E/M visit. We cannot conclude from this 
analysis that our policy to deny payment of the O/O E/M visit 
complexity add-on code when the O/O E/M base code is reported on the 
same day as a preventive immunization or other Medicare preventive 
service is disruptive to the way such care is usually furnished. 
However, we do agree with practitioners expressing concerns that the 
current policy is not well-aligned with our policy objective for 
establishing the add-on payment.
    In response to these concerns, we are proposing to refine our 
current policy for services furnished beginning in CY 2025. We are 
proposing to allow payment of the O/O E/M visit complexity add-on code 
when the O/O E/M base code is reported by the same practitioner on the 
same day as an AWV, vaccine administration, or any Medicare Part B 
preventive service furnished in the office or outpatient setting. 
Allowing payment for the O/O E/M visit complexity add-on code in this 
scenario as proposed would support our policy aims, which include 
paying for previously unaccounted resources inherent in the complexity 
of all longitudinal primary care office visits. In part, the O/O E/M 
visit complexity add-on code recognizes the inherent costs of building 
trust in the practitioner-patient relationship. We believe that trust-
building in the longitudinal relationship is more significant than ever 
in making decisions about the administration of immunizations and other 
Medicare Part B preventive services. We welcome comments on this 
proposal.

G. Enhanced Care Management

1. Background
    The CMS Center for Medicare and Medicaid Innovation (CMS Innovation 
Center) tests innovative payment and service delivery models to reduce 
program expenditures while preserving or enhancing quality of care. CMS 
Innovation Center models are assessed for their impact on quality of 
care and expenditures under Medicare, Medicaid, and the Children's 
Health Insurance Program (CHIP) and the scope and duration of the model 
test may be expanded through rulemaking if expected to either reduce 
spending without compromising quality of care or enhance quality of 
care without increasing spending (section 1115A of the Act). After more 
than a decade of testing over 50 innovative payment and service 
delivery models, the CMS Innovation Center has enabled broad 
transformative changes to service delivery and payment in the Medicare, 
Medicaid, and CHIP programs which inspire additional transformation 
throughout the health care delivery system. Participants in CMS 
Innovation Center models have demonstrated improvements in care 
delivery and patient experience. The CMS Innovation Center undertook a 
retrospective review and synthesis of select model evaluations where 
care delivery changes have been observed, and the review indicated 
demonstrable evidence of enhanced care delivery in several areas, such 
as care coordination, team-based care, and leveraging data to risk-
stratify patients.\21\
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    \21\ Fowler, Ph.D., JD, E., Rudolph, MPH, N., Davidson, LCSW, 
MSW, K., Finke, MD, B., Flood, S., Bernheim, MD, Ph.D., S. M., & 
Rawal, Ph.D., P. (2023). Accelerating Care Delivery Transformation--
The CMS Innovation Center's Role in the Next Decade. New England 
Journal of Medicine, 4(11). https://doi.org/10.1056/cat.23.0228. 
CMS. Synthesis of Evaluation Results across 21 Medicare Models, 
2012-2020. Fowler, Ph.D. 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/wp-eval-synthesis-21models.
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    Under the Medicare Physician Fee Schedule (PFS) statute at section 
1848 of the Act, we establish payment

[[Page 61698]]

amounts for covered physicians' services, and update our payment 
policies to address changes, including changes in medical practice. In 
this proposed rule, we are proposing to incorporate key payment and 
service delivery elements from CMS Innovation Center models tested and 
evaluated over the prior decade into permanent coding and payment under 
the PFS. Specifically, we are proposing to recognize a primary care 
practice delivery model trend which we will refer to as ``advanced 
primary care'' and which we propose to define using the 2021 National 
Academies of Sciences, Engineering, and Medicine (NASEM) report on 
Implementing High-Quality Care as: ``whole-person, integrated, 
accessible, and equitable health care by interprofessional teams that 
are accountable for addressing the majority of an individual's health 
and wellness needs across settings and through sustained relationships 
with patients, families, and communities.'' \22\ Using this definition, 
we are proposing to recognize the resources involved in furnishing 
services using an ``advanced primary care'' approach to care under the 
PFS.\23\ Under this approach, the delivery of care is supported by a 
team-based care structure and involves a restructuring of the primary 
care team, which includes the billing practitioner and the auxiliary 
personnel under their general supervision, within practices. This 
restructuring creates several advantages for patients, and provides 
more broad accessibility and alternative methods for patients to 
communicate with their care team/practitioner about their care outside 
of in-person visits (for example, virtual, asynchronous interactions, 
such as online chat), which can lead to more timely and efficient 
identification of, and responses to, health care needs (for example, 
practitioners can route patients to the optimal clinician and setting--
to a synchronous visit, an asynchronous chat, or a direct referral to 
the optimal site of care).\24\ Practitioners using an advanced primary 
care delivery model can more easily collaborate across clinical 
disciplines through remote interprofessional consultations with 
specialists as well as standardize condition management into evidence-
based clinical workflows, which allow for closed-loop follow-up and 
more real-time management for patients with acute or evolving complex 
issues. Practitioners can then use synchronous interactions to build 
rapport with patients and families, partner on complex decisions, and 
personalize their patients' care plans.
---------------------------------------------------------------------------

    \22\ National Academies of Sciences, Engineering, and Medicine. 
2021. Implementing high-quality primary care: Rebuilding the 
foundation of health care. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/25983.
    \23\ Team-based approaches to care can achieve improved provider 
and care team satisfaction, improved team communication, improved 
patient safety, and improved patient and family engagement in care. 
Coleman, M. Dexter. D., & Nankivill, N. (2015, August). Factors 
affecting physician satisfaction and Wisconsin Medical Society 
strategies to drive change. Wisconsin Medical Journal. 114(4), 135-
142. Retrieved from https://www.wisconsinmedicalsociety.org/professional/wmj/archives/volume-114-issue-4-august-2015/.
    \24\ Ellner, A., Basu, N. & Phillips, R.S. From Revolution to 
Evolution: Early Experience with Virtual-First, Outcomes-Based 
Primary Care. J GEN INTERN MED 38, 1975-1979 (2023). https://doi.org/10.1007/s11606-023-08151-1.
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    Specifically, we are proposing to adopt coding and payment policies 
to recognize advanced primary care management (APCM) services for use 
by practitioners who are providing services under this specific model 
of advanced primary care, when the practitioner is the continuing focal 
point for all needed health care services and responsible for all 
primary care services. This new proposed coding and payment makes use 
of lessons learned from the CMS Innovation Center's testing of a series 
of advanced primary care models, such as Comprehensive Primary Care 
(CPC),\25\ Comprehensive Primary Care Plus (CPC+),\26\ and Primary Care 
First (PCF) 27 28 (see discussion in section II.G.2.a.(1) in 
this proposed rule) to inform the elements upon which the delivery of 
APCM services under an advanced primary care delivery model depend. As 
detailed below in sections II.G.2.b. through II.G.2.d., this proposed 
coding and payment will incorporate elements of several specific, 
existing care management and communication technology-based services 
(CTBS) into a bundle of services, that reflects the essential elements 
of the delivery of advanced primary care, for payment under the PFS 
starting in 2025.
---------------------------------------------------------------------------

    \25\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-initiative.
    \26\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
    \27\ https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options.
    \28\ Finke, Bruce, et al. ``Addressing Challenges in Primary 
Care--Lessons to Guide Innovation.'' JAMA Health Forum, vol. 3, no. 
8, 19 Aug. 2022, p. e222690, https://doi.org/10.1001/jamahealthforum.2022.2690.
---------------------------------------------------------------------------

    In the context of the proposal, we are also interested in feedback 
on other related policies for our consideration in future rulemaking. 
To gather information from interested parties to inform potential 
future proposals, we have included an Advanced Primary Care Hybrid 
Payment Request for Information (RFI) (Advanced Primary Care RFI) in 
this proposed rule. The Advanced Primary Care RFI seeks feedback on 
whether and how we should consider additional payment policies that 
reflect our efforts to recognize the delivery of advanced primary care, 
including bundling of additional individual services, which may 
currently be furnished together as primary care services but paid 
separately. This focused approach to seeking feedback on advanced 
primary care payment policies is an important step in our ongoing 
efforts to emphasize accountable care and supports CMS' goal of having 
100 percent of Traditional Medicare beneficiaries in accountable care 
relationships by 2030.\29\
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    \29\ CMS White Paper on CMS Innovation Center's Strategy: 
Driving Health System Transformation--A Strategy for the CMS 
Innovation Center's Second Decade (https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper).
---------------------------------------------------------------------------

    In addition to recognizing advanced primary care, this proposed 
rule also recognizes physician and practitioner work that draws from 
evidence generated by the CMS Innovation Center's Million 
Hearts[supreg] model.\30\ The Million Hearts[supreg] model found that 
quantitative assessment of patients' atherosclerotic cardiovascular 
disease (ASCVD) risk and providing high-risk beneficiaries with 
cardiovascular-focused care management services improved quality of 
care, including mortality.\31\ We discuss a proposal in this section to 
establish coding and PFS payment for these services based in part on 
the evidence generated by the Million Hearts[supreg] model.
---------------------------------------------------------------------------

    \30\ https://www.cms.gov/priorities/innovation/innovation-models/million-hearts-cvdrrm.
    \31\ Peterson G, Steiner A, Powell R, et al. Evaluation of the 
Million Hearts[supreg] Cardiovascular Disease Risk Reduction Model: 
Fourth Annual Report. Mathematica. February 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/mhcvdrrm-fourthannevalrpt.
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2. Advanced Primary Care Management (APCM) Services (HCPCS Codes GPCM1, 
GPCM2, and GPCM3)
a. Background
    We have been analyzing opportunities to strengthen and invest in 
primary care in alignment with the goals of the U.S. Department of 
Health and Human Services (HHS) Initiative to Strengthen Primary 
Care.\32\ Research has

[[Page 61699]]

demonstrated that greater primary care physician supply is associated 
with improved population-level mortality and reduced disparities,\33\ 
and also, that establishing a long-term relationship with a primary 
care provider leads to reduced emergency department (ED) visits,\34\ 
improved care coordination, and increased patient satisfaction.\35\ HHS 
recognizes that effective primary care is essential for improving 
access to healthcare, for the health and wellbeing of individuals, 
families, and communities, and for achieving health equity. The first 
coordinated set of HHS-wide actions to strengthen primary care, as part 
of the Initiative, is in primary care payment; for example, adjusting 
payment to ensure it supports delivery of advanced primary care. CMS 
Innovation Center models, described in section II.G.2.a.(1) in this 
proposed rule, reflect the ongoing work within HHS and the unified, 
comprehensive approach to HHS primary care activities that we are 
accomplishing through our current statutory authorities and funding.
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    \32\ U.S. Department of Health and Human Services. (2023). 
Primary Care: Our First Line of Defense. https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
    \33\ Basu S, Berkowitz SA, Phillips RL, Bitton A, Landon BE, 
Phillips RS. Association of Primary Care Physician Supply With 
Population Mortality in the United States, 2005-2015. JAMA Intern 
Med. 2019;179(4):506-514. doi:10.1001/jamainternmed.2018.7624. 
https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
    \34\ Willemijn L.A. Sch[auml]fer et al, ``Are People's Health 
Care Needs Better Met When Primary Care Is Strong? A Synthesis of 
the Results of the QUALICOPC Study in 34 Countries,'' Primary Health 
Care Research and Development 20 (2019): e104. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6609545/.
    \35\ Michael J. van den Berg, Tessa van Loenen, and Gert P 
Westert, ``Accessible and Continuous Primary Care May Help Reduce 
Rates of Emergency Department Use: An International Survey in 34 
Countries,'' Family Practice 33, no. 1 (Feb. 2016): 42-50. https://academic.oup.com/fampra/article/33/1/42/2450446.
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    Over the last decade, we have updated PFS payment policies as 
appropriate, and we remain committed to improving how Medicare payment 
recognizes the resources involved in furnishing covered services that 
encompass aspects of advanced primary care furnished by 
interprofessional care teams and typically concentrating on the 
delivery of appropriate preventive care to patients and the management 
of individuals' chronic conditions as they progress over time. As part 
of the CY 2014 PFS final rule, we reaffirmed our support of primary 
care and recognized care management as one of the critical components 
of primary care that contributes to better health outcomes for 
individuals and reduced expenditure growth, and explained our 
prioritization of the development and implementation of several 
initiatives (such as those discussed in section II.G.2.a.(1) in this 
proposed rule) (77 FR 68978). Since then, we have implemented coding 
and payment for many care management services to better recognize the 
resources involved in furnishing medically necessary care management 
activities that generally are performed outside the context of a face-
to-face, in-person visit--most often by the billing practitioner's 
clinical staff on behalf of patients with complex health care needs, 
including transitional care management in the CY 2013 PFS final rule 
(77 FR 68979); non-complex and complex chronic care management (CCM) in 
the CY 2015, 2017, and 2019 PFS final rules (78 FR 74414, 83 FR 58577, 
and 81 FR 80244); and principal care management (PCM) in the CY 2020 
PFS final rule (84 FR 62962). The CCM and PCM code families now include 
5 sets of codes which are reported monthly on a timed basis, each set 
with a base code of 20 to 60 minutes and an add-on code for each 
additional 30 minutes. The code sets vary by the degree of complexity 
of patient conditions (that is, non-complex and complex CCM for 
multiple chronic conditions or PCM for a single high-risk condition), 
and whether the number of minutes spent by clinical staff or the 
physician or non-physician practitioner (NPP) is used to meet time 
thresholds for billing.
    Additionally, we have established coding and payment for certain 
services where a medical professional evaluates a patient's medical 
information remotely using communication technology. As discussed in 
the CY 2019 PFS final rule, this set of services is defined by and 
inherently involves the use of communications technology, and includes 
certain remote patient monitoring services, virtual check-in services, 
remote evaluation of pre-recorded patient information, remote 
interpretations of diagnostic imaging tests, and interprofessional 
consultations. We recognize that technological advances have changed 
and continue to change the practitioner-patient care delivery 
interaction. We have recognized these technology-enabled interactions 
through separately billable CTBS over the last several years. However, 
we acknowledge, as we learn more about how advanced primary care 
services are furnished to patients, that in some clinical care delivery 
scenarios, practitioners furnishing the type of care highlighted in 
this discussion may furnish certain aspects of the CTBS services in 
complement to care management services (for example, by allowing 
interprofessional care teams to answer patient questions, refer 
patients to higher levels of care, view and interpret patient images, 
order needed treatments, and offer reassurance or advice), in an effort 
to more efficiently manage the quantity and quality of medical 
information that is necessary to support effective patient-centered 
treatment plans.
    Despite these important steps to pay separately for these care 
management services, there has been limited uptake of care management 
services and Medicare still overwhelmingly pays for primary care 
through traditional office/outpatient (O/O) Evaluation and Management 
(E/M) visit codes, which describe a broad range of physicians' services 
but do not fully distinguish and account for the resources associated 
with primary care and other longitudinal care. As we stated in the CY 
2024 PFS final rule, we believe that because E/M visit codes are 
intended to be used very broadly, the complexity of services required 
to provide this type of care is not fully incorporated as part of the 
valuation of the work RVUs when the E/M code itself is used as the 
primary way to report the work of the professional (88 FR 78972). In 
the CY 2024 PFS final rule, we took steps to better recognize the 
inherent complexity of visits associated with primary and longitudinal 
care of patients by finalizing a new add-on code (HCPCS code G2211) for 
use by practitioners furnishing services as the continuing focal point 
for all the patient's needed health care services, such as a primary 
care practitioner (88 FR 78969). When furnishing primary and 
longitudinal care, practitioners must be attuned to the factors that 
develop and maintain trusting practitioner-patient relationships that 
enable effective diagnosis, management, and treatment on an ongoing 
basis. In finalizing the O/O E/M visit complexity add-on code, we 
recognized the feedback from interested parties indicating that the 
care management codes alone may not have mitigated the deficiencies in 
the ability of existing E/M codes to reflect the time and resources 
involved in furnishing visits in the context of longitudinal care--of 
which, advanced primary care is one model. Many commenters responded, 
as reflected in the CY 2024 PFS final rule, that they did not view the 
coding and payment currently available under the PFS as capable of 
recognizing the broad range of elements that define primary care (88 FR 
52326). Other commenters responded that they did not believe that the 
existing E/M service codes alone reflect the work and resources 
involved in furnishing non-

[[Page 61700]]

procedural care to Medicare beneficiaries (88 FR 78976).
    Over the years, interested parties have focused attention on the 
ongoing need to improve how practitioners are paid, in and outside of 
payment bundles, including but not limited to the possibility of E/M 
codes designed specifically to be billed in conjunction with care 
management codes and the elimination of multiple disparities between 
the payment for E/M services in global periods and those furnished 
individually. Based on feedback from the physician and practitioner 
community, we understand that advanced primary care encompasses the 
work of interprofessional teams who are accountable for addressing the 
majority of an individual's health and wellness needs across settings 
and through sustained relationships, which necessarily involves time 
spent by primary care practitioners and their clinical staff outside of 
individual E/M visits.
    As with many services paid under the PFS, we balance making payment 
that recognizes and supports technological developments in healthcare 
and the resources involved in evolving medical practice to allow for 
appropriate and expanded access to innovative technologies and newer 
services with promoting stability and efficiency in coding and billing 
rules for practitioners and institutions. We recognize the important 
role of gathering input and information from the CMS Innovation Center 
models (described in more detail in section II.G.2.a.(1) in this 
proposed rule), comment solicitations, research from other public and 
private entities, the work of all parties involved in furnishing 
primary care, and from the public at large. As previously noted, 
interested parties have given ample feedback over the years to inform 
our recognition of care management services; for example, as part of 
the CY 2022 PFS rulemaking, interested parties specifically requested 
our consideration of a ``30-day global period bundling care management 
services'' and we responded that we would consider this suggestion for 
future rulemaking (86 FR 65118). We have continued to incorporate 
feedback into our rulemaking and strengthen our care management code 
sets with the goal of better recognizing the elements of advanced 
primary care as part of a multi-year strategy. Based on this feedback, 
we are proposing to establish a set of codes to better describe 
advanced primary care management services broadly, to provide more 
stability in payment and coding for practitioners in the context of 
continued evolution in advanced primary care, as well as to provide us 
with a mechanism for continued and intentional improvements to advanced 
primary care payment.
(1) Key Care Delivery Methods in Select CMS Innovation Center Models
    We have prioritized the implementation or testing of a series of 
initiatives designed to improve payment for, and encourage long-term 
investment in, primary care and care management services. By supporting 
enhanced care management and coordination, these initiatives 
contributed to the growing practice of advanced primary care and have 
also provided valuable lessons learned that we are incorporating into 
our proposals.
    Several CMS Innovation Center models address payment for care 
management services and CTBS. The CPC initiative,\36\ the CPC+ 
model,\37\ and the PCF model \38\ all included payments for care 
management services that closely aligned with the care management 
services included in the PFS. In these initiatives, primary care 
practices received risk-adjusted, per beneficiary per month (PBPM) 
payments for care management services furnished to Medicare FFS 
beneficiaries attributed to their practices. These model payments were 
designed to offer practices a stable, predictable revenue stream that 
supported required infrastructure and appropriately compensated 
practices for the enhanced services they would provide. Practices 
participating in CPC+ consistently cited these payments as the most 
useful type of model payment support they received; these stable, 
prospectively paid payments typically served as the main funding source 
for compensating care managers, behavioral health providers, and other 
staff hired to improve care delivery.\39\ Because these payments were 
paid prospectively and could be used to support a range of care 
management and coordination activities, they provided participants with 
greater financial stability and flexibility to develop and expand 
capabilities to meet patients' care needs.\40\ Table 19 identifies a 
number of CMS Innovation Center models and key care delivery methods 
from each.\41\
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    \36\ https://downloads.cms.gov/files/cmmi/CPC-initiative-fourth-annual-report.pdf.
    \37\ https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \38\ Evaluation of the Primary Care First Model. February 2024. 
https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \39\ O'Malley A, Singh P, Fu N, et al. Independent Evaluation of 
the Comprehensive Primary Care Plus (CPC+): Final Report. 
Mathematica. December 2023. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \40\ O'Malley A, Singh P, Fu N, et al. Independent Evaluation of 
the Comprehensive Primary Care Plus (CPC+): Final Report. 
Mathematica. December 2023. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \41\ For more information on how the Innovation Center is 
supporting primary care, https://www.cms.gov/files/document/primary-care-infographic.pdf.
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BILLING CODE P

[[Page 61701]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.041


[[Page 61702]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.042

BILLING CODE C
b. Proposed HCPCS G-Codes for Advanced Primary Care Management (APCM)
    We are proposing to establish coding and make payment under the PFS 
for a newly defined set of APCM services described and defined by three 
new HCPCS G-codes. To recognize the resource costs associated with 
furnishing APCM services to Medicare beneficiaries, we are proposing to 
establish and pay for three new G-codes that describe a set of care 
management services and CTBS furnished under a broader application of 
advanced primary care. This new coding and payment would reflect the 
recognized effectiveness and growing adoption of the advanced primary 
care approach to care.\42\ It would also encompass a broader range of 
services and simplify the billing and documentation requirements, as 
compared to existing care management and CTBS codes, for clinicians who 
care for their patients using an advanced primary care model. We 
recognize that there are primary care physicians, practitioners, and 
practices beyond those that have participated in CMS Innovation Center 
primary care models (such as those discussed in section II.G.2.a.(1) in 
this proposed rule), that may incur resource costs associated with 
their treatment of patients based on the advanced primary care delivery 
model. Providing care using an advanced primary care delivery model 
involves resource costs associated with maintaining certain practice 
capabilities and continuous readiness and monitoring activities to 
support a team-based approach to care, where significant resources are 
used on virtual, asynchronous patient interactions, collaboration 
across clinical disciplines, and real-time management of patients with 
acute and complex concerns, that are not fully recognized or paid for 
by the existing care management codes. We have observed medical 
practice trends in primary care for several years. We note that in 
prior rulemaking, for example, in the CY 2013 PFS final rule, we 
stated, ``we further consider[ed] how advanced primary care practices 
can fit within a fee-for-service model'' (77 FR 68987), and in the CY 
2015 PFS final rule, we stated our commitment ``to supporting advanced 
primary care, including the recognition of care management as one of 
the critical components of primary care that contributes to better 
health for individuals and reduced expenditure growth'' (79 FR 67715). 
In the CY 2017 PFS final rule, we discussed changes to retain elements 
of the CCM service that are ``most characteristic of the changes in 
medical practice toward advanced primary care'' (81 FR 80251). As the 
delivery of primary care has evolved to embrace advanced primary care 
more fully, we believe that it is prudent to now adopt specific coding 
and payment policy to better recognize the resources involved in care 
management under an advanced primary care delivery model.
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    \42\ National Academies of Sciences, Engineering, and Medicine 
(NASEM). 2021. Implementing high-quality primary care: Rebuilding 
the foundation of health care. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/25983.; Maeng DD et al. 
Reducing long-term cost by transforming primary care: evidence from 
Geisinger's medical home model. Am J Manag Care. 2012 Mar;18(3):149-
55. PMID: 22435908. Available here: https://pubmed.ncbi.nlm.nih.gov/22435908.;/ Jones C et al. Vermont's Community-Oriented All-Payer 
Medical Home Model Reduces Expenditures and Utilization While 
Delivering High-Quality Care. Popul Health Manag. 2016;19(3):196-
205. Available here: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4913508/.
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    Below, we explain the proposed new codes and their descriptors. In 
the next section, we propose to define the elements of the scope of 
service for APCM that would be required for a practitioner to bill 
Medicare for the APCM service, and we explain the proposed standards 
for practices that furnish APCM services to ensure that the physicians 
and practitioners who bill for these services have the capability to 
fully furnish advanced primary care, including APCM services (see 
section II.G.2.c. of this proposed rule). At this time, we are 
proposing to identify specific care management and CTBS services that 
are a part of advanced primary care delivery and would be bundled into 
the PFS payment for the APCM services. As such, we will identify the 
services that we are proposing would overlap substantially with the new 
codes and which would not be separately billable with the APCM codes 
under our proposal (see section II.G.2.d. of this proposed rule). 
Finally, we propose to establish relative values for these codes for 
purposes of payment under the PFS (see section II.G.2.e. of this 
proposed rule).
    We are proposing to establish the following G-codes and descriptors 
for APCM services, and as explained in the next section, due to the 
similar scope of APCM and other care management and CTBS services, we 
are proposing to include some of the same language from the CCM and PCM 
service elements in the APCM code descriptors, as well as emphasize 
that certain practice capabilities and requirements are inherent in 
these elements and must be met in order to bill for APCM services:
    HCPCS code GPCM1 (Advanced primary care management services 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar

[[Page 61703]]

month, with the following elements, as appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.).
    HCPCS code GPCM2 (Advanced primary care management services for a 
patient with multiple (two or more) chronic conditions expected to last 
at least 12 months, or until the death of the patient, which place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
elements included in GPCM1, as appropriate) and HCPCS code GPCM3 
(Advanced primary care management services for a patient that is a 
Qualified Medicare Beneficiary with multiple (two or more) chronic 
conditions expected to last at least 12 months, or until the death of 
the patient, which place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline, provided by 
clinical staff and directed by a physician or other qualified health 
care professional who is responsible for all primary care and serves as 
the continuing focal point for all needed health care services, per 
calendar month, with the elements included in GPCM1, as appropriate).
    HCPCS codes GPCM1 through GPCM3 would describe APCM services 
furnished per calendar month, following the initial qualifying visit 
(see section II.G.2.c.(1) for more on the initiating visit). Physicians 
and NPPs, including nurse practitioners (NPs), physician assistants 
(PAs), certified nurse midwives (CNMs) and clinical nurse specialists 
(CNSs), could bill for APCM services. As we will describe in more 
detail in section II.G.2.c., within the code descriptors for GPCM1, 
GPCM2, and GPCM3, we are including the elements of the scope of service 
for APCM as well as the practice capabilities and requirements that we 
believe to be inherent to care delivery by the care team/practitioner 
who is billing under a practice using an advanced primary care delivery 
model, and necessary to fully furnish and, therefore, bill for APCM 
services.
    As described in more detail below, within the code descriptors for 
GPCM1, GPCM2, and GPCM3, we are proposing that the practitioner who 
bills for APCM services intends to be responsible for the patient's 
primary care and serves as the continuing focal point for all needed 
health care services. We anticipate that most practitioners furnishing 
APCM services will be managing all the patient's health care services 
over the month and have either already been providing ongoing care for 
the beneficiary or have the intention of being responsible for the 
patient's primary care and serving as the continuing focal point for 
all the patient's health care services. We anticipate that these codes 
will mostly be used by the primary care specialties, such as general 
medicine, geriatric medicine, family medicine, internal medicine, and 
pediatrics, but we are also aware that, in some instances, certain 
specialists function as primary care practitioners--for example, an OB/
GYN or a cardiologist. In contrast to situations where the patient's 
overall, ongoing care is being managed, monitored, and/or observed by a 
practitioner, we believe that there are situations when care is 
provided by a practitioner who would not serve as

[[Page 61704]]

``the continuing focal point for all needed health care services.''
    Similarly, there are some time- or condition-limited practitioner-
patient relationships that are clearly not indicative of the ongoing 
care that we anticipate practitioners would be responsible for when 
furnishing APCM services. As we stated in the CY 2021 PFS proposed rule 
and CY 2024 PFS final rule in the context of our policies for the O/O 
E/M visit complexity add-on code (HCPCS code G2211), a practitioner 
whose ``relationship with the patient is of a discrete, routine, or 
time-limited nature; such as, but not limited to, a mole removal or 
referral to a physician for removal of a mole; for treatment of a 
simple virus, for counseling related to seasonal allergies, initial 
onset of gastroesophageal reflux disease; treatment for a fracture; and 
where comorbidities are either not present or not addressed, and/or 
when the billing practitioner has not taken responsibility for ongoing 
medical care for that particular patient with consistency and 
continuity over time, or does not plan to take responsibility for 
subsequent, ongoing medical care for that particular patient with 
consistency and continuity over time'' (85 FR 84570 and 84571, 88 FR 
78971). For example, a patient who spends one month of the year in 
another location could require physicians' services in that location if 
they experience exacerbation of one of their chronic conditions, but 
the practitioner who treats them would not intend to manage or monitor 
that patient's overall, ongoing care. Finally, HCPCS code G2211 can 
also be billed when medical services are ``part of ongoing care related 
to a patient's single, serious condition or complex condition,'' but 
this is different from the APCM requirement. A practitioner's 
management of one or more serious conditions (as is often the case with 
specialty care), without more, does not mean that the practitioner is 
also responsible for all primary care services and the focal point for 
all needed care (the requirement for APCM), and thus would not 
necessarily mean that the practitioner could bill for APCM.
    As is our current policy for other care management services, and 
consistent with both CPT guidance and Medicare rules for CPT codes 
99487, 99489, 99490, we are proposing that HCPCS codes GPCM1, GPCM2, 
and GPCM3 may only be reported once per service period (calendar month) 
and only by the single practitioner who assumes the care management 
role with a particular beneficiary for the service period. That is, 
based on a patient's status, a physician or practitioner would identify 
the patient to receive Level 1, Level 2, or Level 3 APCM services 
during a given service period (calendar month), and we would make 
payment for only one claim for APCM services for that service period. 
At this time, we do not see the need or value of proposing restrictions 
or complex operational mechanisms to identify a single physician or NPP 
who may bill for APCM services for a specific beneficiary. However, we 
recognize that other initiatives, such as the Medicare Shared Savings 
program, have operational mechanisms in place to attribute patients to 
certain ACOs (Sec.  425.400). While a similar approach could be used to 
attribute patients for APCM services, we are reluctant to introduce 
unnecessary complexity for these services. As we continue to develop 
our policies in this area, we are seeking feedback from interested 
parties on methodologies that could allow for identification of the 
beneficiary's primary care practitioner. We are also seeking comment on 
whether there should be additional requirements to prevent potential 
care fragmentation or service duplication.
    We anticipate that APCM services would ordinarily be provided by 
clinical staff incident to the professional services of the billing 
practitioner in accordance with our regulation at Sec.  410.26. We are 
proposing that APCM services would be considered a ``designated care 
management service'' under Sec.  410.26(b)(5) and, as such, could be 
provided by auxiliary personnel under the general supervision of the 
billing practitioner.
    Unlike the current coding to describe care management services, we 
are further proposing that the code descriptors for GPCM1, GPCM2, and 
GPCM3 would not be time-based. Based on feedback from the physician and 
practitioner community, we understand that ongoing care management and 
coordination services are standard parts of advanced primary care, even 
in months when documented clinical staff or billing professional 
minutes may not reach the required thresholds for billing or the 
patient's condition does not meet the clinical conditions for care 
management services under the existing code set. In consideration of 
the extensive feedback from interested parties, we have learned that 
practitioners who currently furnish monthly care management services 
may already be providing APCM services in a variety of clinical 
circumstances, documenting all necessary aspects of the patient-
centered care furnished monthly to the patient without meeting the 
requirements to bill for care management services, such as satisfying 
the administrative requirement to count clinical staff minutes to reach 
specific time-based thresholds. As we stated in the CY 2024 PFS final 
rule in the context of the O/O E/M visit complexity add-on code (HCPCS 
code G2211), primary care physicians may diagnose and treat a condition 
in an O/O E/M visit that is not expected to last as long as three 
months or would not reasonably be expected to result in a risk of 
hospitalization, and the practitioner's clinical staff may provide 
significant care management and coordination services relating to that 
condition. For example, COVID-19 cases are clinical circumstances that 
generally do not last three months but may require significant acute 
management, care coordination, and follow-up within a given month, 
particularly for patients with comorbidities (88 FR 78973). 
Practitioners may also provide care management and coordination 
services to a patient whose condition meets the criteria in one or more 
care management codes, but the documented minutes of service may not 
reach the minimum time threshold to bill for a care management service. 
For example, the practitioner might provide care coordination for a 
month that includes 20 minutes of consulting with the patient's other 
healthcare providers and modifying medications to address an acute 
exacerbation of hypertension, but would not meet the requirements for 
billing the PCM service. We also note that, unlike the current coding 
to describe certain CTBS services, we are proposing that the code 
descriptors for GPCM1, GPCM2, and GPCM3 would not include the timeframe 
restrictions for billing certain CTBS (for example, the restriction for 
virtual check-in services that there is not a related E/M service 
provided within the previous 7 days or an E/M service or procedure 
within the next 24 hours or the soonest available appointment). As 
addressed in the CY2019 Final Rule, we have heard from interested 
parties that the timeframe restrictions for billing certain CTBS are 
administratively burdensome (83 FR 59686).
    We are also proposing that not all elements included in the code 
descriptors for APCM services must be furnished during any given 
calendar month for which the service is billed. APCM services are 
largely designed to be person-centered and focused on the individual 
patient, such that the elements that are provided depend on medical 
necessity and individual patient need. Therefore, we anticipate that 
all the APCM scope of service

[[Page 61705]]

elements (for example, comprehensive care management and care 
coordination) will be routinely provided, as deemed appropriate for 
each patient, acknowledging that not all elements may be necessary for 
every patient during each month (for example, the beneficiary may have 
no hospital admissions that month, so there is no management of a care 
transition after hospital discharge). We also anticipate that there may 
be some months where it may be appropriate for some service elements to 
be performed more than once for the patient. For example, in one month 
a patient with heart failure and chronic kidney disease receiving APCM 
Level 2 services (GPCM2) may be on a stable medication regimen, receive 
communication about their care plan, but no virtual check-ins. The next 
month, the patient may experience a heart failure exacerbation 
requiring inpatient admission, and then receive as part of their APCM 
service timely communication and follow-up with new labs ordered, 
multiple virtual check-ins ensuring that the patient understands their 
new medications, a phone call to help the patient understand the lab 
results, and an interprofessional consultation with the patient's 
cardiologist to help decide if the patient's diuretic dosage should be 
changed.
    However, even if not all elements of the APCM service are furnished 
each month for which APCM is billed, we propose that billing 
practitioners and auxiliary personnel must have the ability to furnish 
every service element and furnish these elements as is appropriate for 
any individual patient during any calendar month. As described in more 
detail in section II.G.2.c. of this proposed rule, we believe that 
maintaining certain advanced primary care practice capabilities and 
requirements is inherent in these elements and must be met to fully 
furnish and bill APCM. For example, if in our previous example, the 
patient with heart failure and chronic kidney disease receiving Level 2 
APCM experiences swollen legs, the patient should be able to submit a 
photo or video to the practitioner via a secure communications system, 
and the practitioner must be able to interpret and communicate remotely 
with the patient about those images.
    While we are proposing that specific minutes spent furnishing APCM 
services for purposes of billing HCPCS codes GPCM1-GPCM3 need not be 
documented in the patient's medical record, we would expect that any 
actions or communications that fall within the APCM elements of service 
would be described in the medical record and, as appropriate, its 
relationship to the clinical problem(s) they are intended to resolve 
and the treatment plan, just as all clinical care is documented in the 
medical record.
    We are seeking feedback on these service descriptions, and on 
whether there are elements of other care management services that 
should be removed or altered for purposes of APCM services.
    Finally, while the service descriptors above are consistent across 
all three APCM levels because the scope of service elements are 
consistent across all levels of APCM and the elements that are provided 
depend on medical necessity and individual patient need, we are 
proposing that the APCM codes would be stratified into three levels 
based on certain patient characteristics that are broadly indicative of 
patient complexity and the consequent resource intensity involved in 
the provision of these services in the context of advanced primary 
care. We are proposing that the new APCM coding schema would be 
stratified based on APCM services being furnished using the advanced 
primary care model to patients with one or fewer chronic conditions 
(``Level 1''); patients with two or more chronic conditions (``Level 
2''); and Qualified Medicare Beneficiaries (QMBs) \43\ with two or more 
chronic conditions (``Level 3'') (see Table 20 for the three APCM code 
levels). This stratification of APCM into three levels allows us to 
distinguish among different levels of patient complexity and more 
accurately reflect the resources required to furnish APCM services for 
certain categories of beneficiaries. We anticipate that a practitioner 
using the advanced primary care model would bill for APCM services for 
all or nearly all the patients for whom they intend to assume 
responsibility for primary care.
---------------------------------------------------------------------------

    \43\ See 42 CFR 435.123. The proposal includes both individuals 
in the QMB eligibility group who also have full scope Medicaid 
coverage (``QMB-plus'') and individuals in the QMB eligibility group 
who do not have Medicaid eligibility under any other Medicaid 
coverage group (``QMB-only''). However, this proposal would not 
include those QMBs who are in the Medicare Part B Immunosuppressive 
Drug benefit, which provides coverage of immunosuppressive drugs 
based on eligibility requirements described in Sec.  407.55, because 
such individuals would not qualify for Medicare coverage of the 
services described in this rulemaking. See 42 CFR 435.123(c)(2).
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    Furthermore, we recognize the ways in which this new APCM coding 
intersects with current care management codes around number of chronic 
conditions. We note that the current care management codes are 
generally stratified in a similar, though more granular way, by the 
degree of complexity of care based on the presence of chronic 
conditions and complexity of medical decision making, who directly 
performs the service, and the time spent furnishing the service. In 
establishing separate payment for CCM services in the CY 2014 PFS final 
rule, we recognized that the resources involved in furnishing 
comprehensive, coordinated care management services to patients with 
multiple (two or more) chronic conditions were greater than those 
included in a typical non-face-to-face care management service, which 
we continued to consider as bundled into the payment for face-to-face 
E/M visits (78 FR 43337). In the CY 2017 PFS final rule, based on 
robust feedback from interested parties indicating that the new CCM 
codes did not fully capture the service time required to furnish care 
to beneficiaries with more complex conditions, we finalized new codes 
for patients with complex care management needs. In the CY 2016 PFS 
final rule, in considering how to improve the accuracy of our payments 
for care coordination, particularly for patients requiring more 
extensive care management, we stated that we believe the care 
coordination and management for Medicare beneficiaries with multiple 
chronic conditions, a particularly complicated disease or acute 
condition, or certain behavioral health conditions often requires 
extensive discussion, information-sharing, and planning between a 
primary care physician and a specialist (for example, with a 
neurologist for a patient with Alzheimer's disease plus other chronic 
diseases) (80 FR 70919).

[[Page 61706]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.043

(1) Level 1 APCM
    We are proposing the Level 1 APCM code for patients with one or 
fewer chronic conditions because of the increased import and use of 
non-face-to-face interactions in advanced primary care even for 
patients with relatively fewer health needs, which has increased over 
time for several observable reasons, including broad evolution in 
information and communication technology in everyday life, diffusion of 
practices first adopted for higher-acuity patients, and continuing 
practices widely adopted during the COVID-19 pandemic that reduce 
reliance on in-person interactions. We believe APCM services for a 
patient diagnosed with one or fewer chronic conditions will require 
significantly less time and resources than one with two or more chronic 
conditions since, in general, there would be fewer ongoing health needs 
and other health care resources to coordinate, a lower risk of drug 
interactions, and less complicated physiology. Based on CY 2010 
Medicare claims data, the difference in annual expenditures per 
beneficiary between patients with one or fewer chronic conditions and 
those with two or three chronic conditions was $3,673.\44\ Our current 
care management coding similarly delineates patient complexity between 
patients with a single serious chronic condition (PCM codes) and those 
with two or more serious chronic conditions (CCM codes). We anticipate 
that practitioners who would furnish APCM services may have already had 
experience with care management services coding and payment for much of 
this population. The Level 1 APCM code would also address the current 
gap in coding and payment for care management services furnished using 
an advanced primary care model for patients without multiple chronic 
conditions.
---------------------------------------------------------------------------

    \44\ Centers for Medicare and Medicaid Services. Chronic 
Conditions among Medicare Beneficiaries, Chartbook, 2012 Edition. 
Baltimore, MD. 2012. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronic-conditions/downloads/2012chartbook.pdf.
---------------------------------------------------------------------------

(2) Level 2 APCM
    We are proposing the Level 2 APCM code for patients with two or 
more chronic conditions because of the frequency of chronic conditions 
in the Medicare population. In fact, nearly four in five Medicare 
beneficiaries have two or more chronic conditions.\45\ Furthermore, as 
noted previously, our current care management coding delineates patient 
complexity for the CCM codes for patients with two or more serious 
chronic conditions, and we anticipate that practitioners who would 
furnish APCM services may have already had experience with care 
management services coding and payment for much of this population.
---------------------------------------------------------------------------

    \45\ Lochner, K., Goodman, R., Posner, S., & Parekh, A. (n.d.). 
Multiple Chronic Conditions Among Medicare Beneficiaries. CMS. 
https://www.cms.gov/mmrr/Downloads/MMRR2013_003_03_b02.pdf.
---------------------------------------------------------------------------

    For example, someone with chronic kidney disease and heart failure 
requires regular check-ins, coordination with specialty care, follow-up 
after hospital admissions for heart failure exacerbations, regular 
modifications of the care plan, and more. These services are typically 
described by the existing CCM services. The patient may also typically 
need to reach out more often to their primary care practitioner with 
questions or new symptoms via the patient portal. For instance, the 
person sends a message through the patient portal to ask whether or not 
they should come into the primary care office after gaining ten pounds 
in the last week--which could be a sign of increased fluid retention 
and the need for increased diuretic dosages to avoid pleural edema (an 
accumulation of fluid in the lungs). The primary care team books the 
patient for a same-day urgent care appointment to assess for signs of 
swelling and pleural edema. Again, this on-demand access to their 
primary care team can help treat the patient's chronic conditions in a 
patient-centered way and avoid unnecessary complications.
(3) Level 3 APCM
    We are proposing the Level 3 APCM code for patients with QMB status 
and two or more chronic conditions based on our understanding that 
people with both multiple chronic conditions and social risk factors 
generally require even more time and resources from primary care 
practitioners and their teams to ensure that the patient's chronic 
conditions are managed appropriately and effectively. We are proposing 
to use a patient's QMB status as a method to identify beneficiaries 
with social risk factors that generally necessitate relatively greater 
resource requirements to effectively furnish advanced primary care than 
people without such risk factors. There is significant evidence that 
such dually eligible beneficiaries, on average, are more medically 
complex and have higher healthcare needs; \46\ for example, dually 
eligible beneficiaries are more likely to have poor functional status 
\47\ and recent expenditure data found that the difference in Medicare 
spending on a per person per year basis between dually eligible and 
non-dually eligible Medicare beneficiaries was $13,198 in CY 2021.\48\
---------------------------------------------------------------------------

    \46\ Kaiser Family Foundation. (n.d.). A primer on Medicare: 
What is the role of Medicare for dual-eligible beneficiaries? 
Retrieved June 24, 2024, from https://www.kff.org/report-section/a-
primer-on-medicare-what-is-the-role-of-medicare-for-dual-eligible-
beneficiaries/
#:~:text=A%20larger%20share%20of%20dual,beneficiaries%3B%20and%20more
%20than%20half%20(.
    \47\ ASPE. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
December 2016. https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
    \48\ https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
---------------------------------------------------------------------------

    QMBs are the largest eligibility group within the Medicare-Medicaid 
dually eligible enrollee population, comprising of 66 percent of the 
12.8 million individuals per the most recent available data.\49\ For 
the approximately 8.5 million dually eligible beneficiaries who are 
QMBs, Medicaid provides assistance for patients to meet Medicare's 
cost-sharing requirements. The QMB eligibility group helps to ensure 
full access to the Medicare benefit for the lowest income enrollees by 
covering these costs. Individuals can qualify for QMB status if their 
income is below 100 percent of the Federal Poverty Level ($15,300/year 
in 2024) and assets are no more than $9,430/$14,130 (one person/married 
couple in 2024), although states can request CMS approval to disregard 
certain income and assets.\50\ Beneficiaries apply for this

[[Page 61707]]

benefit with their State's Medicaid program and must be redetermined 
eligible at least annually.
---------------------------------------------------------------------------

    \49\ Beneficiaries Dually Eligible for Medicare and Medicaid. 
Data from CY 2021. (January 2024). Medpac and Macpac. https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
    \50\ Access to Care Issues Among Qualified Medicare 
Beneficiaries (QMB). (2015). Centers for Medicare & Medicaid 
Services. https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/Access_to_Care_Issues_Among_Qualified_Medicare_Beneficiaries.pdf.
---------------------------------------------------------------------------

    There is growing recognition that social risk factors--such as 
income, education, access to food and housing, and employment status--
play a major role in health,\51\ such that social risk factors may 
affect a person's ability to reach their health goals, as well as the 
diagnosis and treatment of their medical problems. A report submitted 
to Congress by the Office of the Assistant Secretary for Planning and 
Evaluation (ASPE) in response to the Improving Medicare Post-Acute Care 
Transformation (IMPACT) Act of 2014 (Pub. L. 113-185) found that dual 
Medicare-Medicaid enrollment as a marker for low income was typically 
the most powerful predictor of poor outcomes on quality measures among 
social risk factors examined.\52\ Beneficiaries with social risk 
factors may have worse health outcomes due to a host of factors, 
including higher levels of medical risk, worse living environments (for 
example, availability of community services, pollution, safety), 
greater challenges in adherence to medication regimens and medical 
recommendations (for example, diet/lifestyle), and/or bias or 
discrimination. Evidence suggests that many health outcomes are related 
more to social, environmental, and economic factors (which may be 
beyond practitioners' control) than to clinical interventions.\53\ Dual 
enrollees, and more specifically, QMBs, are therefore a category of 
Medicare beneficiaries who we believe to be the most socially at-risk 
of poorer clinical outcomes. As stated in the ASPE report, ``Some of 
the observed relationship between social risk factors and outcomes may 
be the result of underlying differences in medical complexity, frailty, 
disability, and/or functional status. For example, dually-enrolled 
beneficiaries are more likely to have poor functional status, and 
therefore, may be more likely to be readmitted after a 
hospitalization.'' As another example, a patient with diabetes, heart 
failure, and QMB status may experience food, transportation, or housing 
insecurity that contributes to difficulty maintaining blood glucose 
control which can contribute to medical complications including 
potentially preventable heart failure exacerbations. The primary care 
practitioner's team may need to check-in regularly to ensure, for 
example, that the patient gets needed specialty care such as an 
ophthalmologic examination to avoid the ocular manifestations of 
diabetes; and consider the availability of transportation vouchers so 
the patient can attend the ophthalmology appointment. We are proposing 
the Level 3 APCM code to recognize the unique characteristics of QMBs 
as beneficiaries with social risk factors for whom significantly more 
resources are involved in comprehensive care management by 
practitioners that furnish advanced primary care services to them.
---------------------------------------------------------------------------

    \51\ Long P, Abrams M, Milstein A, Anderson G, Apton KL, 
Dahlberg M, Whicher D. Effective care for high-need patients. 
Washington, DC: National Academy of Medicine. 2017. https://nam.edu/wp-content/uploads/2017/06/Effective-Care-for-High-Need-Patients.pdf; Schroeder, S. (2007, September 20). We Can Do Better--
Improving the Health of the American People. New England Journal of 
Medicine, 357(12), 1221-1228. https://www.nejm.org/doi/full/10.1056/NEJMsa073350.
    \52\ ASPE. Report to Congress: Social Risk Factors and 
Performance Under Medicare's Value-Based Purchasing Programs. 
December 2016. https://aspe.hhs.gov/reports/report-congress-social-risk-factors-performance-under-medicares-value-based-purchasing-programs.
    \53\ World Health Organization. (2018). Health Impact Assessment 
(HIA): The determinants of health. http://www.who.int/hia/evidence/doh/en/.
---------------------------------------------------------------------------

    Additionally, we note that patients with QMB status are not 
responsible for the Medicare cost-sharing associated with covered 
Medicare Part A or B services, including for any APCM services. 
Generally, States cover such cost-sharing on behalf of QMBs, although 
many states use a ``lesser-of'' policy through which states pay less 
than the full cost sharing amounts.\54\ We solicit comments from States 
on how they would cover cost sharing for the proposed APCM bundle, 
considering lesser-of policies.
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    \54\ Under the ``lesser of'' policy, a State caps its payment of 
Medicare cost-sharing at the Medicaid rate for a particular service. 
For example, if the Medicare rate for a service is $100, of which 
$20 is beneficiary coinsurance, and the Medicaid rate for the 
service is $90, the state would only pay $10. If the Medicaid rate 
is $80 or lower, the state would make no payment.
---------------------------------------------------------------------------

    We are also seeking feedback on the use of QMB status and multiple 
(two or more) chronic conditions as the basis to bill for APCM Level 3 
(GPCM3), whether QMB status is an appropriate indicator to identify 
beneficiaries with added social risk, and whether there is an 
equivalent marker of social deprivation for use in commercial markets 
that might be a possible alternative identifier.
c. APCM Service Elements and Practice-Level Capabilities
    All the elements within the scope of APCM services are included in 
the service descriptors for GPCM1, GPCM2, and GPCM3, listed in Table 
22, and described in this section. As described above, we are proposing 
that APCM services would include nearly the same scope of service 
elements and conditions we established for CCM and PCM services 
(including elements of 24/7 access and care continuity, care management 
and care plan, care coordination, management of care transitions, and 
enhanced communication). We believe this is appropriate because care 
management is a key component of care delivery using an advanced 
primary care model. The proposed phrasing in the code descriptors for 
APCM services generally tracks the code descriptors for CCM and PCM 
services, except for references to ``time spent'' or ``minutes'' of 
service.
    We are seeking to ensure that the APCM codes would fully and 
appropriately capture the care management and CTBS services that are 
characteristic of the changes in medical practice toward advanced 
primary care, as demonstrated in select CMS Innovation Center models. 
As we do for CCM and PCM services, we propose to require for APCM 
services that the practitioner provide an initiating visit and obtain 
beneficiary consent (see section II.G.2.c.(1) and II.G.2.c.(2) of this 
proposed rule). As described in more detail below, we are proposing to 
incorporate as elements of APCM services ``Management of Care 
Transitions'' and ``Enhanced Communications Opportunities.'' For the 
``Management of Care Transitions'' APCM service element, we are 
proposing to specify timely follow-up during care transitions (see 
section II.G.2.c.(6) of this proposed rule). For the ``Enhanced 
Communications Opportunities'' APCM service element, we are proposing 
to incorporate access to CTBS services, including remote evaluation of 
pre-recorded patient information and interprofessional telephone/
internet/EHR referral service(s), to maintain ongoing communication 
with the patient, as well as access to patient-initiated digital 
communications that require a clinical decision, such as virtual check-
ins and digital online assessment and management and E/M visits (or e-
visits) (see section II.G.2.c.(8) of this proposed rule).
    We are also proposing to specify for APCM services the practice-
level characteristics and capabilities that are

[[Page 61708]]

inherent to, and necessarily present when a practitioner is providing 
covered services using an advanced primary care delivery model. As 
described in more detail below, included in the service descriptors for 
GPCM1, GPCM2, and GPCM3, and listed in Table 22, our proposed practice-
level capabilities that reflect care delivery using an advanced primary 
care model are focused around 24/7 access and continuity of care (see 
section II.G.2.c.(3) of this proposed rule), patient population-level 
management (see section II.G.2.c.(9) of this proposed rule), and 
performance measurement (see section II.G.2.c.(10) of this proposed 
rule). These practice capabilities are indicative of, and necessary to, 
care delivery using an advanced primary care model. Further, APCM 
services, as we propose to define them, could not be fully performed in 
the absence of these practice capabilities; and, in such cases, APCM 
services should not be billed.
    We are proposing that practitioners participating in the ACO REACH 
model, the Making Care Primary model, and the Primary Care First model 
would satisfy the proposed initiating visit, patient population-level 
management, and performance measurement APCM service elements and 
practice-level capabilities by virtue of their model participation. 
These CMS Innovation Center models promote advanced primary care 
delivery consistent with the proposed APCM service elements and 
practice-level capabilities described in Table 21. The models all 
utilize attribution methods that review the most recently available two 
years of Medicare claims to identify whether a model participant is 
responsible for a Medicare beneficiary's primary care, aligning with 
the initiating visit requirements for APCM services. Additionally, 
these three models also include risk stratification and quality and 
cost performance metrics that are aligned or overlap with the Value in 
Primary Care MVP.\55\ Around-the-clock access and continuity of care, 
patient population-level management, and performance measurement are 
indicative of, and necessary to, care delivery using an advanced 
primary care model. We are also considering whether certain 
practitioners in other types of CMS Innovation Center models also 
satisfy the proposed service elements and requirements and seek 
comments on this question.
---------------------------------------------------------------------------

    \55\ See, e.g., ACO Realizing Equity, Access, and Community 
Health (REACH) Model Request for Applications. Available at https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, ACO 
Realizing Equity, Access, and Community Health (REACH) Model PY 2024 
Quality Measurement Methodology. Available at https://www.cms.gov/files/document/aco-reach-quality-msr-meth-py24.pdf; Making Care 
Primary Payment and Attribution Methodologies. Available at https://www.cms.gov/files/document/mcp-pymt-att-methodologies.pdf, Primary 
Care First Payment and Attribution Methodologies PY 2024. Available 
at https://www.cms.gov/files/document/pcf-py24-payment-meth.pdf.
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BILLING CODE P

[[Page 61709]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.044


[[Page 61710]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.045

BILLING CODE C
    We are seeking comment on whether the proposed elements and 
requirements are appropriately reflective of care management services 
for advanced primary care, and whether there are proposed elements of 
APCM services or proposed practice capabilities that should be modified 
or removed. We are also seeking feedback on ways to align the APCM 
services with other Medicare programs and initiatives, such as the 
Shared Savings Program, ACO REACH, and advanced primary care models, 
and the Quality Payment Program, including MIPS and Advanced 
Alternative Payment Models (Advanced APMs). We seek to create a low 
burden way for practitioners to furnish APCM services by appropriately 
recognizing ways in which they may meet APCM billing requirements as 
part of these programs and initiatives. We note that under the Quality 
Payment Program, practitioners who are MIPS eligible clinicians would 
report measures and activities as specified by CMS under the four MIPS 
performance categories: quality, cost, improvement activities, and 
Promoting Interoperability (PI). To report to MIPS for a performance 
period (Sec.  414.1320(i)) for the PI performance category, a MIPS 
eligible clinician must use Certified EHR Technology (CEHRT), as 
defined at paragraph (2) under CEHRT at Sec.  414.1305, report on the 
objectives and associated measures as specified by CMS, and submit 
required attestations as specified in Sec.  414.1375(b)(3) (Sec.  
414.1375(b)). Eligible clinicians who participate in Advanced APMs 
under the Quality Payment Program are required under the terms of those 
APMs to use CEHRT as specified in Sec.  414.1415(a)(1)(iii); and are 
paid under the terms of those APMs based on MIPS-comparable quality 
measures as specified in Sec.  414.1415(b).
    As described in the sections below, we are proposing that a billing 
practitioner who is part of a Shared Saving Program ACO, or CMS 
Innovation Center ACO or participating in Making Care Primary or 
Primary Care First would already satisfy the proposed practice-level 
requirements for patient population-level management (see section 
II.G.2.c.(9) of this proposed rule), and performance measurement (see 
section II.G.2.c.(10) of this proposed rule) by meeting separately 
applicable participation requirements within the Shared Savings 
Programs and models. As noted previously, we are considering whether 
practitioners in other types of CMS Innovation Center models also 
satisfy certain proposed service elements and practice-level 
requirements through their participation in the models, and seek 
comments on this question.
(1) Beneficiary Consent
    Consistent with other care management services, we are proposing 
that the beneficiary's consent to receive APCM services must be 
documented in the medical record as a condition of payment for APCM 
services, as not all Medicare beneficiaries for whom APCM services 
would be medically necessary may want to receive these services. As we 
do for CCM and PCM services, we are proposing to require billing 
practitioners to inform the beneficiary of the availability of APCM 
services, and ensure the beneficiary is aware that Medicare cost-
sharing usually applies (though these costs may be covered through 
supplemental health coverage). The practitioner should also inform the 
beneficiary that, by providing APCM services, they intend to assume 
responsibility for all of the patient's primary care services and serve 
as the continuing focal point for all needed health care services; and 
that only one

[[Page 61711]]

practitioner can furnish and be paid for APCM services during a 
calendar month, but that their consent to receive APCM services does 
not limit their option to receive Medicare covered health care services 
from other practitioners. The practitioner should inform the 
beneficiary that APCM is an ongoing, monthly service and of their right 
to stop APCM services at any time (effective at the end of the calendar 
month), and that they only need to provide consent once to receive APCM 
services from the practitioner. We are proposing that the practitioner 
would document in the beneficiary's medical record that this 
information was explained and note whether the beneficiary accepted or 
declined APCM services. We note that practitioners can still elect to 
obtain written consent rather than verbal consent.
    Practitioners have informed us that beneficiary cost sharing is a 
significant barrier to provision of similar care management services, 
such as CCM services. The proposed patient consent requirement is 
intended to ensure that patients do not incur unexpected expenses for 
care that is largely, or in significant part, non-face-to-face in 
nature. The proposed requirement for patient consent would also help to 
avoid duplicative practitioner billing, as the patient would understand 
that the practitioner intends to serve as the focal point for all their 
care, and that only one practitioner can furnish and be paid for APCM 
services in any particular month.
    We seek feedback on these proposed requirements, including how best 
to effectively educate both practitioners and beneficiaries on the 
benefits of APCM, especially as it reflects a new bundle of services 
that may have previously been separately billed, and whether a CMS-
provided template to facilitate patient consent would be helpful. We 
also seek feedback on whether CMS should require practitioners to 
revisit consent for APCM services on an ongoing basis with patients.
(2) Initiating Visit
    Consistent with CCM services (CPT codes 99437, 99439, 99487, and 
99489-99491) and PCM services (CPT codes 99424-99427), we are proposing 
to require an initiating visit for APCM services only for new patients 
instead of for all beneficiaries receiving APCM services. Consistent 
with the definition of ``new patient'' as described in the CPT[supreg] 
2024 Professional Edition Code Book on page 4, we are proposing to 
define a ``new patient'' as a person who did not receive any 
professional services from the physician or other qualified health care 
professional or another practitioner in the same group practice within 
the previous 3 years.\56\ The initiating visit furnished in advance of 
APCM services establishes the beneficiary's relationship with the 
billing practitioner, ensures the billing practitioner assesses the 
beneficiary prior to initiating APCM services, facilitates collection 
of comprehensive health information to inform the care plan, and 
provides an opportunity to obtain beneficiary consent (although 
beneficiary consent can be obtained outside of the initiating visit). 
We are proposing that the same services that can serve as the 
initiating visit for CCM services could serve as the initiating visit 
for APCM, including a Level 2 through 5 E/M visit, initial preventive 
physician exam (IPPE), or TCM service, and we propose that the 
initiating visit could be provided in person or as a Medicare 
telehealth service.
---------------------------------------------------------------------------

    \56\ American Medical Association. CPT Professional 2024. 
American Medical Association, 2023.
---------------------------------------------------------------------------

    We are proposing that an initiating visit would not be required for 
``established patients'' based on certain circumstances that we believe 
demonstrate an established patient-practitioner relationship in advance 
of furnishing APCM services: (1) if the beneficiary is not a new 
patient (has been seen by the practitioner or another practitioner in 
the same practice within the past three years) or (2) if the 
beneficiary received another care management service (including an APCM 
service, non-complex or complex CCM service (CPT codes 99487, 99489, 
99490, 99491, 99439, 99437), or PCM service (CPT codes 99424, 99425, 
99426, 99427)) within the previous year with the practitioner or 
another practitioner in the same practice. We do not believe there 
necessarily is a need for an initiating visit for APCM services for 
patients with whom the practitioner (or another in the same practice) 
has an established relationship; and we would not want to require an 
initiating visit under circumstances where a visit may not be medically 
necessary. The proposed policy not to require an initiating visit for 
beneficiaries who have received any professional service from the 
physician or other qualified health care professional or another 
practitioner in the same group practice within the previous 3 years is 
consistent with CPT's definition of the term ``established patient,'' 
such that we believe this captures patients who have been seen 
relatively recently and who have an existing relationship with the 
practice. In the case of beneficiaries who have received care 
management services from a practitioner within the practice in the past 
year, we believe this indicates that the patient is also an 
``established patient'' in that the patient has an existing 
relationship with the practice, and the patient previously has 
consented to the receipt of care management services, which have 
overlapping service elements with APCM services.
    We note that these standards would be consistent with applicable 
Shared Savings Program and CMS Innovation Center patient attribution 
standards in ACO REACH, Making Care Primary, and Primary Care First. 
Any beneficiary eligible to be assigned to an ACO because of an 
established care relationship between the beneficiary and a billing 
practitioner who would be billing for APCM services under the ACO 
participant's TIN, including beneficiaries who voluntarily aligned to a 
practitioner in the ACO, would not be considered a new patient and 
would not require an initiating visit. Medicare rules governing patient 
attribution to an ACO on the basis of care provided by an ACO-
participating clinician similarly establishes where an existing care 
relationship exists. Similarly, beneficiaries eligible to be assigned 
to a REACH ACO, or a Making Care Primary or Primary Care First practice 
because of an established care relationship between the beneficiary and 
a billing practitioner who would be billing for APCM services under the 
model participant's TIN, including beneficiaries who voluntarily 
aligned to a practitioner participating in one of these three models 
would not be considered a new patient and would not require an 
initiating visit. While we are proposing certain exceptions to the 
initiating visit requirement for APCM services, we note that an 
initiating visit may still be needed even when not required, and the 
billing practitioner can always furnish and bill for medically 
necessary visits, including before initiating APCM services.
    We seek feedback on these proposed requirements, including whether 
additional services could serve as the initiating visit and whether a 
different period of time (for example, patients not seen within one or 
two years) would be more appropriate.
(3) 24/7 Access and Continuity of Care
    Access and continuity build on the patient-practitioner 
relationship to ensure patients receive the right care at the right 
time from the right care team member. We are proposing to include for 
APCM services the same scope of service elements we established for CCM 
and PCM services for 24/7 Access

[[Page 61712]]

and Continuity of Care with some modifications. For 24/7 Access to 
Care, the scope of the service element we propose for APCM services 
would be to provide 24/7 access for urgent needs to the care team/
practitioner with real-time access to patient's medical records, 
including providing patients/caregivers with a way to contact health 
care professionals in the practice to discuss urgent needs regardless 
of the time of day or day of week.
    As described in the CY 2017 PFS final rule, this accurately 
reflects the potential role of clinical staff or call-sharing services 
in addressing after-hours care needs, and that after-hours services 
typically would and should address any urgent needs and not only those 
explicitly related to the beneficiary's chronic conditions (79 FR 
67722). In advanced primary care models of care, primary care practices 
should be at the center of that care--providing an effective ``first 
contact'' for patients, supporting patients in their management of 
care, and coordinating across different settings of care. Achieving 
this level of access to primary care requires timeliness and an 
effective relationship with those in the practice who are providing 
that care. True access is fully informed by knowledge about the patient 
and their care, which is only possible through real-time access to the 
patient's electronic health information. Access to primary care, 
informed by health information technology (IT), makes the right care at 
the right time possible, potentially avoiding costly urgent and 
emergent care. Practices can achieve 24/7 access to care informed by 
health IT through call coverage by a practitioner with health IT system 
access. This can be a practitioner from the practice or a covering 
practitioner who has system access. Many practices and systems use 
nurse call lines or answering services working with standard protocols 
to provide the initial point of contact after hours and effectively 
address common problems. In this situation, an escalation protocol will 
engage a practitioner with system access when needed for decision 
making. Other successful practices expand hours, add urgent care 
services or partner with other practices to provide these services, or 
contract with existing urgent care providers to manage and coordinate 
care after regular office hours.
    For Continuity of Care, the scope of service element would be to 
provide continuity of care with a designated member of the care team 
with whom the patient is able to schedule successive routine 
appointments. Continuity of care refers to the ability of patients to 
receive care from practitioners who know them and are known by them. 
This continuity builds and reinforces a relationship based in trust and 
shared experience that is highly valued by both practitioners and 
patients. Practice focus on continuity of care can translate to 
improved preventive and chronic care, patient and practitioner 
satisfaction, lower hospital utilization, and lower costs.\57\ 
Depending on the type and setting of care, there are three components 
of continuity that improve patient outcomes and experience: \58\ 
relational continuity (defined as the ``ongoing therapeutic 
relationship between a patient (and often their family/caregiver)'' 
which is foundational in advanced primary care), informational 
continuity (where practitioners have access to information on patients' 
past events and personal circumstances to inform current care 
decisions); and longitudinal continuity (which refers to ongoing 
patterns of healthcare visits that occur with the same practice over 
time). A key strategy to optimize continuity is ensuring that all 
practitioners and/or the care team have access to the same patient 
information to guide care within health IT, and successful practices 
start with a review and discussion of the practice-level data developed 
through measurement of continuity.\59\ Practices can develop the 
capability to measure continuity of care between the patient and the 
practitioner/care team using health IT, practice management software, 
or other tracking mechanisms, allowing them to track improvements over 
time.
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    \57\ Hussey, P.S., Schneider, E.C., Rudin, R.S., Fox, D.S., Lai, 
J., & Pollack, C.E. (2014). Continuity and the costs of care for 
chronic disease. JAMA Internal Medicine, 174(5), 742-748; Bayliss, 
E.A., Ellis, J.L., Shoup, J.A., Zeng, C., McQuillan, D.B., & 
Steiner, J.F. (2015). Effect of continuity of care on hospital 
utilization for seniors with multiple medical conditions in an 
integrated health care system. The Annals of Family Medicine, 13(2), 
123-129; Nyweide, D.J., Anthony, D.L., Bynum, J.P., Strawderman, 
R.L., Weeks, W.B., Casalino, L.P., & Fisher E.S. (2013). Continuity 
of care and the risk of preventable hospitalization in older adults. 
JAMA Internal Medicine, 173(20), 1879-1885; Haggerty, J.L., Reid, 
R.J., Freeman, G.K., Starfield, B.H., & Adair, C.E. (2003). 
Continuity of care: a multidisciplinary review. BMJ, 327, 1219. 
doi:10.1136/bmj.327.7425.1219; Gupta, R., & Bodenheimer, T. (2013). 
How primary care practices can improve continuity of care. JAMA 
Internal Medicine, 173(20), 1885-1886. doi:10.1001/
jamainternmed.2013.7341; Willard R., & Bodenheimer T. (2012, April). 
The building blocks of high-performing primary care: Lessons from 
the field. California Healthcare Foundation. http://www.chcf.org/publications/2012/04/building-blocks-primary-care.
    \58\ Haggerty, J.L., Reid, R.J., Freeman, G.K., Starfield, B.H., 
& Adair, C.E. (2003). Continuity of care: a multidisciplinary 
review. BMJ, 327, 1219. doi:10.1136/bmj.327.7425.1219.
    \59\ Gupta, R., & Bodenheimer, T. (2013). How primary care 
practices can improve continuity of care. JAMA Internal Medicine, 
173(20), 1885-1886. doi:10.1001/jamainternmed.2013.7341; Willard R., 
& Bodenheimer T. (2012, April). The building blocks of high-
performing primary care: Lessons from the field. California 
Healthcare Foundation. http://www.chcf.org/publications/2012/04/building-blocks-primary-care.
---------------------------------------------------------------------------

    As included in the APCM code descriptors, we are proposing to 
specify for the ``24/7 Access to Care'' APCM service element that the 
practice would maintain the capability to deliver care in alternative 
ways to traditional office visits to best meet the patient population's 
needs, such as e-visits, phone visits, home visits, and/or expanded 
hours. This proposed standard for alternatives to office visits is 
similar to several requirements tested in CMS Innovation Center models 
(such as the CPC+ model's requirement that participating practices 
regularly offer at least one alternative to traditional office visits 
\60\), and reflects the understanding that providing alternatives to 
traditional office visits is an essential element of the delivery of 
care under an advanced primary care model of care. Moving care out of 
traditional office visits can reduce demand and open supply for 
prioritized visits. By changing where and how care is delivered, 
practices may have increased availability for patients with complex 
needs who may be better served by more time-intensive visits in the 
office, at home, or in a nursing home. We are not proposing that a 
practice would need to regularly deliver care in all these alternative 
ways--for example, a practice may routinely offer e-visits and phone 
visits, but not regularly furnish home visits, and still demonstrate 
this primary care practice capability. Another practice might offer 
extended hours on certain days to help patients who may find it hard to 
take off work to see their clinician, and this would satisfy this 
practice requirement.
---------------------------------------------------------------------------

    \60\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
---------------------------------------------------------------------------

    We seek feedback on these proposed requirements.
(4) Comprehensive Care Management
    We are proposing for APCM services the ``Comprehensive Care 
Management'' service element we established for CCM and PCM services 
with some modifications. Rather than ``care management for chronic 
conditions,'' the APCM service element would be ``overall comprehensive 
care management'' which, like the element for CCM and PCM services, may 
include, as applicable, ``systematic assessment of the patient's 
medical, functional, and psychosocial needs;

[[Page 61713]]

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.'' This care management standard is similar 
to several requirements tested in CMS Innovation Center models (such as 
the CPC+ model's requirement that participating practices provide 
targeted, proactive, relationship-based care management to all patients 
identified as at increased risk and likely to benefit from intensive 
care management and provide short-term care management, including 
medication reconciliation, to patients following hospital admission/
discharge/transfer, including observation stays, and, as appropriate, 
following an ED discharge) \61\ and is an essential element of the 
delivery of care under an advanced primary care model of care. Care 
management is a resource-intensive process of working with patients, 
generally outside of face-to-face office visits, to help them 
understand and manage their health, navigate the health system, and 
meet their health goals. Practices working with patients who have 
complex care needs have found care management to be an effective and 
necessary strategy for mitigating risk and improving health outcomes. 
Practices have found it valuable to think in terms of two broad types 
of patients who might benefit from different approaches to care 
management: patients with some combination of multiple comorbidities, 
complex treatment regimens, frailty and functional impairment, 
behavioral and social risks, and serious mental illness who would often 
benefit from long-term, proactive, and relationship-based longitudinal 
care management; and patients who are otherwise stable and will benefit 
from short-term, goal-oriented episodic care management during periods 
of increased risk like transitions of care; diagnosis of a new, serious 
illness or injury involving complex treatment regimens; or newly 
unstable chronic illness.
---------------------------------------------------------------------------

    \61\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.
---------------------------------------------------------------------------

    Successful practices use on-site, non-physician, practice-based, or 
integrated shared care managers to provide longitudinal care management 
for the highest risk cohort of patients, with assistance from other 
practice staff, as needed. Multiple team members may engage in care 
management, but each patient identified as eligible should have a 
clinically trained individual in the practice who is accountable for 
active, ongoing care management that goes beyond office-based clinical 
diagnosis and treatment.\62\ Longitudinal care management is captured 
in health IT and includes providing proactive care that moves beyond 
traditional office visits or crisis-driven care (for example, ED care 
or hospitalization) and is not primarily visit-based. Although office 
visits are opportunities to define goals, plan patient care, engage in 
shared decision making, and build a trusting relationship, most care 
management activities take place by phone, patient portal, email, mail, 
or home visits (and through visits to skilled nursing facilities or 
hospitals to support transitional care).
---------------------------------------------------------------------------

    \62\ Taylor, E.F., Machta, R.M., Meyers, D.S., Genevro, J., & 
Peikes, D.N. (2013). Enhancing the primary care team to provide 
redesigned care: The roles of practice facilitators and care 
managers. Annals of Family Medicine, 11(1), 80-83. doi:10.1370/
afm.1462.
---------------------------------------------------------------------------

    Practices use the concept of episodic care management to identify 
patients who have acute or urgent needs using ``triggering events'' 
(for example, hospital discharge, new diagnoses, medical crisis, major 
life event, decompensation in otherwise controlled chronic condition) 
for short-term, problem-focused care management services. Episodic care 
management is generally time-limited and problem focused and most often 
includes coordination of services and follow-up, patient education and 
support for self-management, and medication reconciliation.
    We seek feedback on these proposed requirements.
(5) Patient-Centered Comprehensive Care Plan
    We are proposing for APCM services the ``Comprehensive Electronic 
Care Plan'' service element we established for CCM and PCM services 
with some modifications. As included in the APCM code descriptors, we 
are proposing to specify that the care plan is ``patient-centered'' 
which, as for CCM and PCM services, ``is available timely within and 
outside the billing practice'' as appropriate to individuals involved 
in the beneficiary's care, can be routinely accessed and updated by 
care team/practitioner, and ``copy of care plan to patient/caregiver.''
    Providing longitudinal care management, which is an essential 
element of the delivery of care under an advanced primary care model of 
care, includes the process of personalized care planning. The 
personalized care planning process helps practices engage and 
collaborate with patients to ensure that their care aligns with patient 
preferences, goals, and values.\63\ A care plan is a mutually agreed-
upon document that outlines the patient's health goals, needs, and 
self-management activities and is accessible to all team members 
providing care for the patient. The care plan should be patient-
friendly, accessible to the patient, and should limit use of unfamiliar 
medical jargon and acronyms. The care plan should also be structured 
and standardized, documented in health IT to enable sharing among 
patient, caregivers, and care team members. All high-risk patients 
receiving longitudinal care management should have a personalized care 
plan developed in a joint, open-ended conversation between the patient 
and care team. Personalized care planning is a dynamic process; 
therefore, the care plan document should be updated at regularly 
defined intervals by the care team and patient. In addition, when 
patients' health status, preferences, goals, and values change, their 
plans of care should, too.
---------------------------------------------------------------------------

    \63\ Coulter A., Entwistle, V.A., Eccles, A., Ryan, S., 
Shepperd, S., & Perera, R. (2015). Personalised care planning for 
adults with chronic or long-term health conditions. Cochrane 
Database System Review, 3, CD010523; Edwards, S.T., Dorr, D.A., & 
Landon, B.E. (2017). Can personalized care planning improve primary 
care? JAMA, 318(1), 25-26.
---------------------------------------------------------------------------

    As described in the CY 2020 final rule, we proposed language to 
describe the ``typical'' care plan elements which do not comprise a set 
of strict requirements that must be included in a care plan for purpose 
of billing but are intended to reflect those that are typically 
included in a care plan as medically appropriate for a particular 
beneficiary. The comprehensive care plan for all health issues 
typically includes, but is not limited to, the following elements: 
problem list; expected outcome and prognosis; measurable treatment 
goals; cognitive and functional assessment; symptom management; planned 
interventions; medical management; environmental evaluation; caregiver 
assessment; interaction and coordination with outside resources and 
practitioners and providers; requirements for periodic review; and when 
applicable, revision of the care plan.
    We seek feedback on these proposed requirements.
(6) Management of Care Transitions
    We are proposing to adopt for APCM services the ``Management of 
Care Transitions'' service element we established for CCM and PCM 
services with some modifications. Rather than

[[Page 61714]]

requiring that the practice must facilitate communication of relevant 
patient information through electronic exchange of continuity of care 
documents with other health care providers regarding these transitions, 
we are proposing more simply to require the billing practitioner to 
``ensure timely exchange of electronic health information'' with other 
practitioners and providers. As included in the APCM code descriptors, 
we are also proposing to specify for the ``Management of Care 
Transitions'' APCM service element that the care team/practitioner 
would follow up with the patient and/or caregiver within 7 days after 
each ED visit and hospital discharge. This proposed timely follow-up 
standard is similar to several requirements tested in CMS Innovation 
Center models (such as the CPC+ model's requirement that participating 
practices ensure patients with ED visits received a follow-up 
interaction within one week of discharge \64\ and the MCP model's 
requirement that participating practices implement episodic care 
management to provide timely follow-ups for high-risk patients post ED 
visit and hospitalization \65\), and we patterned the timely follow-up 
element after our policy for TCM services which requires, for example, 
``communication (direct contact, telephone, electronic) with the 
patient and/or caregiver with 2 business days of discharge'' and a 
``face-to-face visit within 7 calendar days of discharge.'' Providing 
timely follow-ups for patients is an essential element of the delivery 
of care under an advanced primary care model of care, and we believe 
this will help achieve timely, seamless care across settings especially 
after discharge from a facility. Key aspects of follow-up after ED 
visits and hospitalizations include identifying and partnering with 
target hospitals and EDs where the majority of a practice's patients 
receive services to achieve timely notification and transfer of 
information following hospital discharge and ED visits.\66\ When 
developing a standardized process for data exchange and timely follow-
up, successful practices include the following processes: information 
and data exchange about patients seen in an ED or admitted to/
discharged from a hospital (for example, via HIE, hospital portal, 
hospital-generated report, EHR, or additional health IT system); 
definition for ``timely'' follow-up after discharge (for example, no 
later than within 2 days of discharge from hospital admission or 
observation stay and within 1 week of discharge from the ED); protocols 
for when follow-up will be done (for example, before discharge or 
following a standardized follow-up protocol); process of incorporating 
into the patient's medical record so the information is available at 
the time of the follow-up visit or other patient contact; and 
standardized processes and protocols for data exchange and formalized 
partnerships to develop an efficient workflow to ensure timely follow-
up and facilitate efficient and safe transitions of care.
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    \64\ https://www.cms.gov/priorities/innovation/files/x/cpcplus-practicecaredlvreqs.pdf.
    \65\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
    \66\ Carrier, E., Yee, T., & Holzwart, R.A. (2011). Coordination 
Between Emergency and Primary Care Physicians (NIHCR Research Brief 
No. 3). National Institute for Health Care Reform. http://nihcr.org/analysis/improving-care-delivery/prevention-improving-health/ed-coordination/; Ventura, T., Brown, D., Archibald, T., et al. (2010, 
January-February). Improving care transitions and reducing hospital 
readmissions: establishing the evidence for community-based 
implementation strategies through the care transitions theme. http://www.communitysolutions.com/assets/2012_Institute_Presentations/caretransitioninterventions051812.pdf.
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    Practices use a variety of scheduling strategies to prioritize 
same-day or next-day access for acutely ill patients and to provide 
timely follow-up for patients experiencing care transitions. Successful 
practices are those that can strike the right balance between timely 
access to visits and the offering patients a provider of their choice 
(Continuity of Care). Establishing standardized protocols and pathways 
to improve and ensure responsiveness and timely callbacks to patients 
is an effective way to impact patient-practitioner/care team 
communication and to ensure a safeguard for addressing emergent and 
urgent patient phone calls. Successful practices routinely evaluate the 
degree to which patients' phone calls are answered promptly or returned 
within a practices' established guidelines (for example, non-urgent, 
emergent, urgent) and routed to the appropriate practitioner or care 
team member, incorporating patients' clinical needs and 
preferences.\67\ Such strategies are paramount for practices whose 
patients may be contacting the practice with care needs that require 
care team prioritization and urgent reply.
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    \67\ Hempel, S., Stockdale, S., Danz, M., Rose, D.E., Kirsh, S., 
Curtis, I., & Rubenstein, L.V. (2018). Access management in primary 
care: Perspectives from an expert panel (Research Report No. RR-
2536-DVA). Rand Corporation. https://www.rand.org/content/dam/rand/pubs/research_reports/RR2500/RR2536/RAND_RR2536.pdf; O'Brien, L.K., 
Drobnick, P., Gehman, M., Hollenbeak, C., Iantosca, M.R., Luchs, S., 
Manning, M., Palm, S.K., Potochny, J., Ritzman, A., Tetro-Viozzi, 
J., Trauger, M., & Armstrong, A.D. (2017). Improving responsiveness 
to patient phone calls: A pilot study. Journal of Patient 
Experience, 4(3), 101-107. doi:10.1177/2374373517706611.
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    We seek feedback on these proposed requirements.
(7) Practitioner, Home-, and Community-Based Care Coordination
    We are proposing to adopt for APCM services the ``Home- and 
Community-Based Care Coordination'' service element we established for 
CCM and PCM services with some modifications. As included in the APCM 
code descriptors, we are proposing to specify that the ``ongoing 
communication and coordinating receipt of needed services'' is with not 
only with home- and community-based service providers, but also with 
``practitioners,'' ``community-based social service providers, 
hospitals, and skilled nursing facilities (or other health care 
facilities), as applicable.'' We are also proposing to add more detail 
about the communication documented in the patient's medical record in 
that it would include ``the patient's psychosocial strengths and needs, 
and functional deficits, goals, preferences, and desired outcomes, 
including cultural and linguistic factors.''
    Coordinated referral management with specialty groups and other 
community or healthcare organizations ensures referrals are properly 
managed, coordinated, and communicated. These efforts help practices 
achieve goals of enhancing the quality of patient care, improving the 
patient's care experience, and lowering cost, particularly for 
practices serving high-risk patient populations. Evidence suggests that 
the development of formal relationships (for example, collaborative 
care agreements) between the primary care practice and referred groups/
organizations that define shared goals and responsibilities, facilitate 
the coordinated referral management process.\68\ The foundation of 
successful coordinated referral management with specialty groups and 
other community or healthcare organizations is the development of 
processes and procedures to ensure high-value referrals, such as 
collaborative care agreements and electronic consultations (e-
Consults). Establishing clear and agreed-upon expectations regarding 
communication and clinical responsibilities with specialty practices 
and other care organizations, through a collaborative care agreement, 
improves the process. Collaborative care agreements often

[[Page 61715]]

include the following elements: defining the types of referrals, 
consultation, and co-management arrangements available; specifying who 
is accountable for which processes and outcomes for care within the 
referral, consultation, or co-management arrangement; and specifying 
what clinical and other information should be provided, how the 
information is transferred, and timeliness expectations. The electronic 
e-Consults process is typically conducted through a system-wide EHR or 
a secure, web-based system by which a practice receives guidance from a 
specialty provider or other care organization.\69\ In this process, a 
practitioner sends a clinical question and relevant clinical 
information to the specialist (or other care organization), who 
responds by providing a clinical opinion and guidance and/or confirms 
the need for a face-to-face appointment with the patient. This tool and 
process has the potential to streamline consultations, reduce cost and 
burden for patients, and improve access to specialty care for high-
value referrals. As part of the CY 2019 PFS final rule, we finalized 
interprofessional consultation services codes, which support payment 
both to the treating, requesting (primary care) practitioner (CPT code 
99452) and the receiving, consultative specialist (CPT codes 99446-
99449 and 99451) who engage in e-Consults, and so some practitioners 
have already become accustomed to providing and billing for these 
services.
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    \68\ Medicare Payment Advisory Commission (MedPAC). (2012, 
June). Report to the Congress: Medicare and the Health Care Delivery 
System. http://medpac.gov/docs/default-source/reports/jun18_medpacreporttocongress_sec.pdf?sfvrsn=0.
    \69\ Vimalananda, V., Gupte, G., Seraj, S., Orlander, J., 
Berlowitz, D., Fincke, B., & Simon, S. (2015, September). Electronic 
consultations (e-consults) to improve access to specialty care: A 
systematic review and narrative synthesis. Journal of Telemedicine 
and Telecare 21(6), 323-330. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4561452/.
---------------------------------------------------------------------------

    Strategies for addressing common health-related social needs 
(HRSNs) for a practice's high-risk patients include conducting needs 
assessments at regular intervals, creating a resource inventory for the 
most pressing needs of the patient population, and establishing 
relationships with key community organizations. Practices can focus on 
developing relationships with community-based organizations that 
support patients' most significant HRSNs. Practices can also seek to 
find common ground with community and social service organizations, 
focus on the structure and process of referrals, and develop a 
bidirectional flow of information. Successful practices work with their 
patients to ensure there is a shared understanding of the purpose of 
the referral and aim to understand bottlenecks and barriers to meeting 
their needs through the process. Many practices identify a care team 
member to be a community referral resource for their patients. 
Successful referrals can help practices determine the most useful and 
available resources in their community.
    We seek feedback on these proposed requirements.
(8) Enhanced Communications Opportunities
    We are proposing to include for APCM services the element of 
``Enhanced Communications Opportunities'' we established for CCM and 
PCM services with some modifications. Specifically, we would add 
``internet and patient portal'' as examples of asynchronous non-face-
to-face consultation methods and specify that the practitioner would 
provide ``other communication technology-based services, including 
remote evaluation of pre-recorded patient information and 
interprofessional telephone/internet/EHR referral service(s), to 
maintain ongoing communication with patients, as appropriate'' as well 
as specify ``access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).'' 
Providing asynchronous non-face-to-face consultation methods and other 
CTBS services is an essential element of the delivery of care under an 
advanced primary care model of care, and we believe this will allow 
patients to access their usual source of care more conveniently (see 
section II.G.2.c.(3) of this proposed rule). There is growing consensus 
that incorporating telehealth into primary care will allow patients to 
access their usual source of care more conveniently.\70\ Patients using 
telehealth visits have reported high satisfaction, identifying 
convenience and perceived high quality of care as contributors,\71\ 
such that these may be a good alternative and, in some cases, 
preferable to in-person communication.\72\ Expansion of telehealth to 
address episodic and chronic conditions has been a significant trend in 
the evolution of telehealth applications, and there is some evidence 
that video visits may enable more timely communication of test results 
than in-person appointments.
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    \70\ Levine DM, Linder JA. Retail Clinics Shine a Harsh Light on 
the Failure of Primary Care Access. J Gen Intern Med. 
2016;31(3):260-262.; Dorsey ER, Topol EJ. State of Telehealth. N 
Engl J Med. 2016;375(2): 154-161.; Powell, Rhea E., et al. ``Patient 
perceptions of telehealth primary care video visits.'' The Annals of 
Family Medicine 15.3 (2017): 225-229.
    \71\ Polinski JM, Barker T, Gagliano N, Sussman A, Brennan TA, 
Shrank WH. Patients' Satisfaction with and Preference for Telehealth 
Visits. J Gen Intern Med. 2016;31(3):269-275.
    \72\ Krishnan N, Fagerlin A, Skolarus TA. Rethinking Patient-
Physician Communication of Biopsy Results--The Waiting Game. JAMA 
Oncol. 2015;1(8):1025-1026.; Cusack CM, Pan E, Hook JM, Vincent A, 
Kaelber DC, Middleton B. The value proposition in the widespread use 
of telehealth. J Telemed Telecare. 2008;14(4):167-168.
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    As noted in section II.G.2.b. of this proposed rule, we are not 
proposing timeframe restrictions for this proposed element, which 
includes access to certain CTBS (for example, the restriction for 
virtual check-in services that there is not a related E/M service 
provided within the previous 7 days or an E/M service or procedure 
within the next 24 hours or the soonest available appointment).
    We seek feedback on these proposed requirements.
(9) Patient Population-Level Management
    As specified in the proposed APCM code descriptors, we are 
proposing to establish an APCM service element for Patient Population-
Level Management that would include practice capabilities for 
population-based, data-driven approaches to manage preventive and 
chronic care for their patient population and to plan and implement 
strategies to improve care and outcomes. We are proposing that all 
practices would use data to develop clear improvement strategies and 
analytic processes to proactively manage population health, including 
analyzing patient population data to identify gaps in care and risk-
stratifying the practice population based on defined diagnoses, claims, 
or other electronic data to identify and target services to patients 
(such as those at risk for poor health outcomes), and then would offer 
additional interventions, as appropriate.
    These proposed patient population-level management standards are 
similar to several requirements tested in CMS Innovation Center models, 
including CPC+, which found that model participants used data to 
identify and resolve gaps in care. We have modeled the proposed patient 
population-level management standards on the CPC+ care delivery 
requirements. In the CPC+ Model, participating practices were required, 
for example, to ``use a two-step risk stratification process for all 
empaneled patients, addressing medical need, behavioral diagnoses, and 
health-related social needs'' and ``define at least one subpopulation 
of patients with specific complex needs, develop capabilities necessary 
to better address

[[Page 61716]]

those needs, and measure and improve the quality of care and 
utilization of this subpopulation.'' \73\ Central to the delivery of 
advanced primary care is the organization of the practice into care 
teams that have the data they need to manage their patient populations 
and that have time allocated to plan and implement practice improvement 
strategies.\74\ Using evidence-based protocols, registries, and the 
registry functionality of the EHR, reminders and outreach help 
practices deliver appropriate preventive care and consistent evidence-
based management of chronic conditions for the entire patient 
population.\75\ Measurement of clinically relevant data at the 
practice-level guides testing and implementing strategies to improve 
care and outcomes. Patient population-level management capabilities are 
essential to the delivery of care under an advanced primary care model 
of care and enable practices to meet the preventive and chronic care 
needs of their entire patient population. Regular use of data to 
identify populations or groups of patients with similar needs allows 
practices and care teams to use streamlined strategies, including 
setting goals with measurable outcomes, to positively impact their 
patient populations. Evidence shows that primary care teams supported 
with real-time, population-level clinical outcomes data effectively 
manage population health and address care gaps which eliminates 
external costs to close gaps in care.\76\ More specifically, risk 
stratification allows practitioners to identify beneficiaries for 
longitudinal care management, track beneficiaries with higher levels of 
need and manage their conditions, and prevent beneficiaries from 
falling through the cracks, while developing strategies to address 
those patients who are at increased and rising risk and most likely to 
benefit from targeted, proactive, relationship-based care management 
and other strategies essential to APCM.\77\ Empanelment, which assigns 
each active patient to a practitioner and/or care team with 
consideration of patient and caregiver preferences, allows practices to 
build responsive care teams to optimize patient care and to address the 
preventive, chronic, and acute needs of all patients, and provides a 
way for practices to identify care gaps and proactively reach out to 
patients who have not been seen or contacted in a while.\78\ For 
example, we believe these elements of advanced primary care management 
could increase screening rates and ultimately improve care of chronic 
conditions, such as hypertension and diabetes.
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    \73\ CPC+ Care Delivery Resource. January 2019.
    \74\ CPC+ Care Delivery Resource. January 2019.
    \75\ O'Malley AS, Draper K, Gourevitch R, Cross DA, Scholle SH. 
Electronic health records and support for primary care teamwork. J 
Am Med Inform Assoc. 2015 Mar;22(2):426-34. doi: 10.1093/jamia/
ocu029. Epub 2015 Jan 27. PMID: 25627278; PMCID: PMC4394968.
    \76\ https://www.cms.gov/priorities/innovation/files/x/cpcplus-practicecaredlvreqs.pdf.
    \77\ Hayes, S.L., & McCarthy, D. (2016, December 7). Care 
Management Plus: Strengthening Primary Care for Patients with 
Multiple Chronic Conditions. The Commonwealth Fund. http://www.commonwealthfund.org/publications/case-studies/2016/dec/care-management-plus; Hong, C.S., Siegel, A.L., & Ferris, T.G. (2014, 
August). Caring for High-Need, High-Cost Patients: What Makes for a 
Successful Care Management Program? The Commonwealth Fund http://
www.commonwealthfund.org/~/media/files/publications/issue-brief/
2014/aug/
1764_hong_caring_for_high_need_high_cost_patients_ccm_ib.pdf; Lakin, 
J.R., Robinson, M.G., Obermeyer, Z., Powers, B.W., Block, S.D., 
Cunningham, R., Tumblin, J. M.m Vogeli, c., & Bernacki, R.E. (2019). 
Prioritizing primary care patients for a communication intervention 
using the ``Surprise Question'': A prospective cohort study. Journal 
of General Internal Medicine, 8.
    \78\ Grumbach, K., & Olayiwola, N.J. (2015). Patient 
empanelment: The importance of understanding who is at home in the 
medical home. Journal of the American Board of Family Medicine, 
28(2), 170-272.; Altschuler, J., Margolius, D., Bodenheimer, T., & 
Grumbach, K. (2012). Estimating a reasonable patient panel size for 
primary care physicians with team-based task delegation. Annals of 
Family Medicine, 10(5), 396-400. doi:10.1370/afm.1400.
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    We note that this Patient Population-Level Management requirement 
of the APCM services would be met for practitioners billing for APCM 
services through a TIN that is participating in an ACO in the Shared 
Savings Program by virtue of the practitioner's participation in the 
ACO which must meet eligibility requirements for population management, 
care coordination and quality improvement, including required processes 
and patient-centeredness criteria in Sec.  425.112. We note that ACOs 
in the Shared Savings Program and their practitioners are already 
engaged in analyzing the patient population for care gaps, risk-
stratifying patients to further identify those at risk for poor health 
outcomes, and identifying patients for whom additional interventions 
are appropriate. Similarly, the ACO REACH, Making Care Primary, and 
Primary Care First CMS Innovation Center Models all require their 
participants to deploy population health strategies to identify and 
offer interventions to mitigate health risks.\79\ Participants in these 
models and their practitioners are already engaged in population health 
management as described in Table 21.
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    \79\ ACO Realizing Equity, Access, and Community Health (REACH) 
Model Request for Applications. Available a: https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, Making Care 
Primary Request for Applications. Available at https://www.cms.gov/files/document/mcp-rfa.pdf, Primary Care First Request for 
Applications Cohort 2. Available at https://www.cms.gov/priorities/innovation/media/document/pcf-cohort2-rfa.
---------------------------------------------------------------------------

    We seek feedback on these proposed requirements.
(10) Performance Measurement
    We are proposing for the APCM services a practice-level requirement 
of performance measurement of primary care quality, total cost of care, 
and meaningful use of CEHRT. Performance measurement is a critical 
element of care management services delivered in the context of 
advanced primary care, and it forms the basis for practice improvement 
efforts by enabling practices to identify key measures for improvement 
activities (for example, cost and utilization data, clinical quality 
measures, patient experience of care data). Quality measurement 
improves care delivery, including prevention of heart attacks, 
increasing vaccination rates, and improving patient safety,\80\ and 
quality measures are also effective tools to ensure that high-quality 
advanced primary care, including care management, is being delivered. 
Several performance measurement requirements were tested in CMS 
Innovation Center models (such as the CPC+ model's requirement that 
participating practices use data at both the practice- and panel-level 
to set goals to improve population health management and to 
continuously improve patients' health, experience, and quality of care, 
and decrease cost). Using data resources and developing workflows and 
analytics to guide practice changes can help practices achieve 
reductions in total utilization and cost of care, and improvements in 
patient experience and quality of care. Improving upon key outcome 
measures requires engaged clinical and administrative leadership and a 
commitment to continuous, data-driven improvement.\81\ In the context 
of the PFS, performance management through quality measurement as a 
practice-level requirement also ensures integrity to the provision of 
advanced primary care because it holds billing practitioners 
accountable to factors that are affected by several service elements of 
APCM coding. For example, effective patient-population level management 
can mean the practices close care gaps in diabetes management, and the 
billing practitioner would perform better on diabetes quality measures 
that assess for a patient's control of hemoglobin A1c.
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    \80\ https://www.ahrq.gov/patient-safety/quality-measures/21st-century/challenges.html.
    \81\ https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus.

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[[Page 61717]]

    We are proposing that this performance measurement practice-level 
requirement can be met in several ways. For MIPS-eligible clinicians, 
the requirement would be met by registering for and reporting the 
``Value in Primary Care'' MIPS Value Pathway (MVP). A practitioner who 
is part of a TIN that is participating as a Shared Savings Program ACO 
or a REACH ACO, or a Primary Care First or Making Care Primary practice 
would meet these requirements by virtue of the Shared Savings Program 
and CMS Innovation Center quality reporting, assessment of quality 
performance, accountability for total cost of care, and other program 
and model requirements.
    In the CY 2024 PFS final rule (88 FR 80042 through 80047), we 
finalized ``The Value in Primary Care'' Merit-based Incentive Payment 
System (MIPS) Value Pathway (MVP), which focuses on the clinical theme 
of promoting quality care for patients in order to reduce the risk of 
diseases, disabilities, and death; and it includes cost measures, 
Promoting Interoperability (PI) measures, improvement activities, and 
quality measures for common chronic conditions (for example, 
hypertension, diabetes, depression).\82\ The Value in Primary Care MVP 
contains the Adult Universal Foundation quality measure set, which is 
consistent with the National Quality Strategy goal of using the 
Universal Foundation measures across as many programs as is 
feasible.\83\ This MVP is especially well-suited to reflect the 
delivery of care using the advanced primary care model as it was 
developed to include quality metrics that reflect clinical actions that 
should be considered the foundations of primary care. The quality 
measures include key elements such as cancer screening, immunization, 
blood pressure management, behavioral health, care coordination, 
person-centered care, and screening for social drivers of health. The 
improvement activities include engaging community resources to address 
drivers of health, implementing changes in the practice's patient 
portal to improve communication and patient engagement, reviewing 
practices in place on targeted patient population needs, and chronic 
care and preventive care management for empaneled patients, aspects of 
advanced primary care already discussed in this proposal. The cost 
measures include costs for common chronic conditions, such as asthma/
chronic obstructive pulmonary disease (COPD), diabetes, depression, and 
heart failure, as well as the Total Per Capita Cost (TPCC) measure, 
which assesses the overall cost of care delivered to a patient with a 
focus on the primary care they receive from their provider(s) and 
captures the broader healthcare costs influenced by primary care.\84\ 
The Value in Primary Care MVP serves to demonstrate performance 
measurement that is reflective of the care furnished using advanced 
primary care delivery. To ensure performance measurement consistent 
with the delivery of advanced primary care services, we are proposing 
as an element of the APCM services that a practitioner who is a MIPS 
eligible clinician as defined in Sec.  414.1305 can satisfy the 
performance measurement requirement by registering for and reporting 
the Value in Primary Care MVP for the performance year in which they 
bill for APCM services. A MIPS eligible clinician can report to MIPS as 
an individual, subgroup, group, APM Entity, or in any combination of 
these four participation options, and can participate in multiple ways 
to report MVPs.\85\
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    \82\ Value in Primary Care. Quality Payment Program. https://qpp.cms.gov/mips/explore-mips-value-pathways/2024/M0005.
    \83\ https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-universal-foundation.
    \84\ https://qpp.cms.gov/docs/cost_specifications/2023-12-13-mif-tpcc.pdf.
    \85\ https://qpp.cms.gov/mips/mvps/learn-about-mvp-reporting-option?option=Group.
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    MIPS-eligible clinicians who report the MVP are also required to 
report the PI performance category measures and attestations throughout 
the performance period in which they bill for APCM services,\86\ as 
required under Sec.  414.1375(b) (Sec.  414.1365(c)(4)(i)) (see section 
IV of this proposed rule for details on reporting the objectives and 
measures for the MIPS PI performance category for CY 2025 performance 
period/2027 MIPS payment year). The measures in the MIPS PI performance 
category include measures such as electronic referral loops, receiving 
and reconciling health information, and providing patients with 
electronic access to their health information, all of which are 
reflective of important communication and coordination channels between 
primary care, other specialist practitioners caring for the patient, 
and the patient themselves. In addition, as set forth in 42 CFR 
414.1375(b)(3), the MIPS PI performance category also requires 
submission of affirmative attestations: (1) regarding their cooperation 
in good faith with ONC direct review of their CEHRT; and (2) that they 
did not knowingly and willfully take action (such as to disable 
functionality) to limit or restrict the compatibility or 
interoperability of CEHRT.\87\
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    \86\ The MIPS PI performance period is a minimum of 180 
consecutive days in the calendar year that occurs 2 years prior to 
the MIPS payment year (see 42 CFR 414.1320(i)).
    \87\ Note that, under the Quality Payment Program, CMS may 
reweight the MIPS PI performance category to zero percent of the 
MIPS final score, and not require an individual, group, or virtual 
group to use CEHRT and demonstrate whether they are a meaningful 
user of CEHRT, by granting a significant hardship exception or other 
type of exception based on certain circumstances as set forth in 42 
CFR 414.1380(c)(2)(i)(C).
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    For CCM services (CPT codes 99437, 99439, 99487, and 99489-99491) 
and PCM services (CPT codes 99424-99427), we established that 
practitioners must use CEHRT to record certain patient health 
information in a structured format, provide patients with access to 
their health information, and exchange all relevant patient health 
information, including in providing the ``Management of Care 
Transitions'' element of CCM services. For the APCM services, which are 
furnished as part of a practitioner's care delivery using the advanced 
primary care model, we are proposing for practitioners who are MIPS 
eligible clinicians a practice-level requirement to register for and 
report the MVP, including but not limited to the PI performance 
category measures which focus on meaningful use of CEHRT, ensuring that 
patients/caregivers and physicians or other qualified practitioners or 
clinical staff have real-time access to patient's medical information. 
We believe that comprehensive CEHRT use is a critical element of care 
management services delivered in the context of advanced primary care.
    As we stated in adopting the CEHRT use element for CCM and PCM 
services, we believe that the meaningful use of CEHRT is vital to 
ensure that practitioners are capable of providing the full scope of 
services, such as timely care coordination and continuity of care (see 
our prior discussion of this issue at 79 FR 67723 and 84 FR 62696), and 
we believe that flexibility in how practices can provide the requisite 
24/7 access to care, continuity of care, and management of care 
transitions, can facilitate appropriate access to these services for 
Medicare beneficiaries. The meaningful use of CEHRT helps ensure that 
members of the care team have timely access to the patient's most 
updated health information and offer an integrated view of a patient's 
clinical history from different points of care, supporting continuing, 
quality, and integrated healthcare while avoiding duplication of 
efforts and costs, such as

[[Page 61718]]

repeated exams.\88\ For example, practices use EHRs to identify high-
risk patients with chronic conditions to better coordinate care and can 
supplement the practice's EHR data with data from external sources (for 
example, State-level quality organizations) to obtain a more 
comprehensive view of patients. Practices can also integrate clinical 
data from EHRs, health plan claims data, and county-level social 
services data to evaluate population needs, stratify by risk, and 
assess what programs would be most effective for supporting at-risk 
patients.\89\ Standardized communication methods, enabled by CEHRT, are 
a significant part of the advanced primary care delivery model. Health 
IT systems that include remote access to the care plan or the full EHR 
after hours, or a feedback loop that communicates back to the primary 
care physician and others involved in the beneficiary's care regarding 
after-hours care or advice provided, are extremely helpful.\90\ They 
help ensure that the beneficiary receives necessary follow up, 
particularly if the patient is referred to the ED, and follow up after 
an ED visit is required under the element of ``Management of Care 
Transitions.'' Accordingly, we believe the use of CEHRT or remote 
access to the care plan is fundamental to providing the APCM service 
elements of 24/7 Access to Care, Continuity of Care, and Management of 
Care Transitions under an advanced primary care delivery model. 
Requiring performance of the requirements in these measures and 
attestations to the meaningful use of CEHRT is similar to several 
requirements tested in CMS Innovation Center models (such as the PCF 
model's requirement that participating practices adopt and maintain 
CEHRT for electronic clinical quality measure reporting, support data 
exchange with other providers and health systems, and connect to their 
regional health information exchange (HIE),\91\ and the MCP model's 
requirement that participating practices use EHR technology that has 
been certified under the ONC Health IT Certification Program \92\). 
Furthermore, the Shared Savings Program requires practitioners (that 
is, MIPS eligible clinicians, QPs and Partial QPs) in all ACOs to 
demonstrate meaningful CEHRT use through the reporting of the MIPS 
Promoting Interoperability annually beginning in 2025.
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    \88\ McDonald, C.J., Tang, P.C., Hripcsak, G. and In: (eds) 
Biomedical Informatics. Springer, L. (2014), ``Electronic Health 
Record Systems,'' in Biomedical Informatics, Shortliffe, E.H. and 
Cimino, J.J., eds. London: Springer, pp. 391-421.
    \89\ Harvey, Jillian B., et al. ``Understanding how health 
systems facilitate primary care redesign.'' Health Services Research 
55 (2020): 1144-1154.
    \90\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/#CR25.
    \91\ https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options.
    \92\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
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    We recognize that many practitioners who are not MIPS eligible 
clinicians for a year would be excluded from MIPS by achieving 
Qualifying APM Participant (QP) status based on their levels of 
participation in an Advanced APM. Based on the characteristics of 
Advanced APMs detailed in Sec.  414.1415, including the requirement 
that payment is based on MIPS or MIPS-comparable quality measures, 
practitioners who with QP status are necessarily engaging in 
performance measurement through the Advanced APMs in which they 
participate in a way that is consistent with advanced primary care. We 
also recognize there are other practitioners who are not MIPS eligible 
clinicians for other reasons, such as practitioners who are newly 
enrolled in Medicare or bill a low volume of Medicare services. These 
practitioners technically could bill for APCM services. However, newly 
enrolled practitioners are only excluded from MIPS for one year, after 
which the practitioner would either be a MIPS eligible clinician who 
would need to report the MVP in order to bill for APCM services, or 
excluded from MIPS on another basis such as QP status. In the case of 
practitioners with low Medicare volume, we anticipate that they would 
be unlikely to bill for APCM services since the delivery of advanced 
primary care generally involves time and resources to establish 
practice-level infrastructure, and the economies of scale usually make 
this a more likely investment if the infrastructure can be utilized 
across a larger patient panel.
    We are also proposing that the performance measurement element of 
the APCM services would be satisfied for practitioners billing for APCM 
services through a TIN that is participating in a Shared Savings 
Program ACO for a performance year in which they furnish APCM services. 
ACOs are currently required to report the APP quality measure set on 
behalf of their practitioners, and would be required to report the APP 
Plus quality measure set as proposed in Section III.G. of this proposed 
rule. Practitioners in ACOs are also already being held accountable for 
reporting and performance and outcomes on many of the Universal 
Foundation measures already, which are used in the Value in Primary 
Care MVP, and the APP Plus quality measure set would fully align the 
Shared Savings Program's quality performance standard with the 
Universal Foundation measures upon the complete implementation of the 
APP Plus measure set.
    We propose to include the performance measurement requirement as an 
element of APCM services furnished by practitioners. MIPS eligible 
clinicians who intend to report on the Value in Primary Care MVP for 
the CY 2025 must register to report the Value in Primary Care MVP as 
described under Sec.  414.1365(b), a MIPS eligible clinician must 
register for an MVP during between April 1 and November 30 of the 
applicable CY performance period to report the MVP. MIPS eligible 
clinicians submit data on measures and activities in the first quarter 
of the year following (CY 2026) the MIPS performance period. Under this 
proposal, a MIPS eligible clinician billing for APCM services furnished 
in 2025 and who is satisfying the performance measurement requirement 
through reporting the Value in Primary Care MVP, would need to register 
for the MVP between April and November of 2025 and report data between 
January and March 2026 on measures and activities in the Value in 
Primary Care MVP relating to services furnished in 2025. A MIPS 
eligible clinician billing for APCM services furnished in 2026 and who 
is satisfying the performance measurement requirement through reporting 
the Value in Primary Care MVP, would need to register for the Value in 
Primary Care MVP between April and November of 2026, and report data 
between January and March of 2027 on measures and activities in the 
Value in Primary Care MVP relating to services furnished in 2026, and 
so on in subsequent years.
    As described above, we are seeking feedback on ways to align the 
APCM services with other Medicare programs and initiatives, such as the 
Shared Savings Program and the Quality Payment Program, including MIPS 
and Advanced APMs. We seek to create a low burden way for practitioners 
to furnish APCM services by appropriately recognizing ways in which 
they may meet APCM billing requirements as part of these programs and 
initiatives, including other ways that practitioners may be fulfilling 
these performance measurement requirements. We are seeking feedback on 
whether there are areas of duplication within the APCM service elements 
and practice capabilities that we should consider addressing. We are 
also seeking comment on how to appropriately align

[[Page 61719]]

the time period for which the practitioner bills the monthly APCM code 
with the calendar year reporting period covered by the MVP, and how we 
would verify and enforce the performance measurement requirement of the 
APCM service.
    We seek feedback on these proposed requirements.
d. Duplicative Services and Concurrent Billing Restrictions
    In this section, we identify the services that would overlap 
substantially with APCM services based on the proposed elements of the 
scope of service for APCM which we have built into the service 
descriptors for GPCM1, GPCM2, and GPCM3 (see sections II.G.2.b. and 
II.G.2.c. of this proposed rule). As such, we are proposing that APCM 
services could not be billed by the same practitioner or another 
practitioner within the same practice for the same patient concurrent 
with these other services: CCM, PCM, TCM, interprofessional 
consultation, remote evaluation of patient videos/images, virtual 
check-in, and e-visits. Given that we have intentionally designed the 
proposed elements of APCM services to track closely with the elements 
of several other care management service and CTBS codes, these services 
are substantially duplicative of APCM services. Further, these specific 
services (shown in Table 19) are duplicative with APCM services because 
there is significant overlap in the patient populations included in the 
code descriptors for these services and APCM services, such as patients 
who have chronic conditions, high-risk conditions, or both complex and 
chronic conditions.
BILLING CODE P

[[Page 61720]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.046

BILLING CODE C
    As we have described in the sections above, comprehensive care 
management services are essential to providing advanced primary care in 
the context of this proposal, and many of the service elements for CCM/
PCM/TCM shown in Table 19 are substantially the same as the elements we 
are proposing for APCM services.
    Also described above, providing CTBS is an essential element of the 
delivery of care under an advanced primary care model of care. 
Recognizing this, we designed the proposed APCM service elements to 
substantially overlap with the elements of the CTBS (for example, 
interprofessional consultation and e-Visits) shown in Table 22. CTBS 
are used in delivery of advanced primary care to maintain ongoing 
communication with patients and enable interprofessional care teams to 
provide comprehensive support to manage chronic conditions over time, 
which we believe will allow patients to access their usual source of 
care more

[[Page 61721]]

conveniently.\93\ We also believe that interprofessional consultation 
can help promote integration of behavioral health and primary care.\94\
---------------------------------------------------------------------------

    \93\ Levine DM, Linder JA. Retail Clinics Shine a Harsh Light on 
the Failure of Primary Care Access. J Gen Intern Med. 
2016;31(3):260-262.; Dorsey ER, Topol EJ. State of Telehealth. N 
Engl J Med. 2016;375(2):154-161.; Powell, Rhea E., et al. ``Patient 
perceptions of telehealth primary care video visits.'' The Annals of 
Family Medicine 15.3 (2017): 225-229.
    \94\ We are planning a separate proposal on expanding who can 
bill for IPC, including clinical psychologists, LCSWs, marriage and 
family therapists (MFTs), and MHCs; see further discussion in 
section II.I of this proposed rule.
---------------------------------------------------------------------------

    We also considered whether other care management services (such as 
Behavioral Health Integration (BHI)), services addressing HRSNs 
(Community Health Integration (CHI), Social Determinants of Health Risk 
Assessment, and Principal Illness Navigation (PIN)), and/or other CTBS 
(Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring 
(RTM)) would be duplicative of the proposed APCM services. We believe 
that these services, when appropriate, may complement APCM services 
rather than substantially overlap or duplicate services, and that these 
other services are sufficiently different from the APCM services in the 
nature and extent of the interventions and the qualifications of 
individuals providing the services, to allow concurrent billing for 
services when appropriate. While these may be services that a 
practitioner using the advanced primary care model would be likely to 
furnish, when appropriate, they are not part of the core, routinely and 
universally essential elements of the advanced primary care model. We 
also believe that several of these other services (such as BHI, CHI, 
SDOH Risk Assessment, and PIN) could be supplemental to APCM for 
patients that have very specific identified health care needs.
    We are seeking more information from interested parties through our 
Advanced Primary Care RFI about whether to consider incorporating 
additional service elements into the APCM service elements and 
valuation for APCM codes; and whether and, if so, how to best 
incorporate E/M services into future coding (see section II.G.3. of 
this proposed rule). We note that, for BHI services, there is an 
established evidence base for approaches to caring for beneficiaries 
with behavioral health conditions which involve integration in the 
primary care setting, are typically provided by a primary care team, 
and include structured care management with regular assessments of 
clinical status and modification of treatment. BHI is a term that 
refers broadly to collaborative care that integrates behavioral health 
services with primary care. BHI is a team-based approach to care that 
focuses on integrative treatment of patients with medical and mental or 
behavioral health conditions. For BHI in particular, including CPT 
codes 99492, 99493, 99494, and 99484 and HCPCS code G0323, we are also 
seeking information regarding how evolving changes in practice may 
warrant reconsideration of payment and coding policies.
    We propose that the care management and CTBS codes that are 
identified in Table 19 could not be separately billed with the APCM 
codes for the same beneficiary by the same practitioner, or a different 
one within the same practice, for the same service period. This would 
prevent duplicative payments for substantially similar services and is 
consistent with how we have paid for potentially overlapping care 
management services in the past.
    As we refine our APCM policies, we note that we are not currently 
proposing to make changes to the coding and payment policies for the 
existing care management and CTBS services, other than to prohibit 
concurrent billing for the same patient during the same month by the 
same practitioner or another in the same practice. For CY 2025, those 
codes would still be available for practitioners who do not furnish 
care using the advanced primary care model or who may prefer to 
document the existing care management and CTBS codes rather than use 
the new proposed APCM codes.
    We are also seeking comment on potential overlap between APCM 
services and other services currently paid under the PFS, including but 
not limited to care management and care coordination and other CTBS. If 
interested parties identify overlaps between APCM and other services, 
we are seeking comment on whether the degree of overlap would warrant a 
policy to restrict the services from being billed concurrently with 
APCM. We also seek comment on whether any overlap would depend upon 
whether the same or a different practitioner reports the services.
    As we test new CMS Innovation Center models that include payments 
for the services defined above, including CCM, PCM, TCM, 
interprofessional consultation, remote evaluation of patient videos/
images, virtual check-in, and e-visits, or as changes in the advanced 
primary care model of care or more general changes to Medicare payment 
policy take place that affect existing CMS Innovation Center models, 
consistent with existing policy, we will address potential overlaps 
between payments made to model participants with our proposed payment 
for APCM, elements of the proposed APCM service, and these duplicative 
services, and seek to implement appropriate payment policies.
e. Valuation of APCM Services--GPCM1, GPCM2, and GPCM3
    To improve the accuracy of payment for the kinds of services 
furnished as part of advanced primary care and reduce the 
administrative burden associated with current coding and billing rules, 
we are proposing to create three HCPCS codes to use for reporting the 
proposed APCM service (GPCM1, GPCM2, and GPCM3) (sections II.G.2.b. and 
II.G.2.c. of this proposed rule). Although these codes are unique in 
that they would be created to differentially pay for advanced primary 
care management, the proposed APCM services incorporate elements of 
existing services with the understanding that some patients will 
require more resources and some fewer based on variability in patient 
complexity and needs (see section II.G.2.b of this proposed rule). As 
we ordinarily do, we are proposing to base the PFS valuation for APCM 
codes on the resources involved in furnishing the typical case of the 
service which may not necessarily reflect the actual resources involved 
in furnishing every individual service.
    In this section, we detail our proposed methods to identify a 
typical case and set of resources involved in furnishing APCM, and the 
proposed valuation of these codes. To value APCM, we compared the 
service elements described by the proposed APCM codes to the values we 
have established for the specific care management and CTBS codes on 
which we modeled the proposed the service elements of the APCM codes 
and which we built into the service descriptors for GPCM1, GPCM2, and 
GPCM3 (see Table 19 and sections II.G.2.b. through II.G.2.d. of this 
proposed rule). As stated above, we believe that the proposed elements 
of APCM services reflect the comprehensive approach to care management 
involved in care delivery using the advanced primary care model. This 
is a model of primary care that is being integrated into current 
medical practice. As such, we believe that it would be appropriate to 
use the current valuation and uptake of the codes on which we modeled 
the APCM codes to inform our valuation of APCM services. Using Medicare 
FFS claims data and evidence from our primary care models, we sought to 
understand how these

[[Page 61722]]

different services have been used historically and relate that 
information to the way we are thinking about the service elements for 
APCM and the valuation of the three APCM code levels. We know that for 
Medicare beneficiaries who receive care management services during a 
year, the non-complex CCM base code is billed on average for five 
months and with three add-on codes during those five months. We also 
know that initial information from practitioner interviews conducted as 
part of our CCM evaluation efforts indicates that practitioners 
overwhelmingly meet and exceed the 20-minute threshold time for billing 
the non-complex CCM base code; typically, these practitioners reported 
spending between 45 minutes and an hour per month on CCM services for 
each patient, with times ranging between 20 minutes and several hours 
per month (81 FR 80244). However, this does not account for the care 
management services that are provided beyond one time-based billing 
interval and without reaching the next; nor does it account for the 
resources involved in maintaining certain advanced primary care 
practice capabilities and continuous readiness and monitoring 
activities, including patient population monitoring and care needs 
assessment, to fully furnish and bill APCM services as is medically 
reasonable and necessary for any individual patient during any calendar 
month. Finally, this does not account for changes to utilization of 
APCM that may occur as a result of the billing and documentation 
requirements for APCM services when compared to the current coding and 
payment for care management and CTBS services. While our aim is to 
value APCM services based on refined assumptions that we believe better 
recognize likely utilization of the new proposed codes and the work 
required to furnish APCM services, this is challenging without more 
information. We welcome comments on ideas for other sources of data 
that would help us to assess APCM services valuation.
    We considered various alternatives for valuing the APCM services 
and how these may impact the broader health care landscape given that 
primary care is of such import across the country. We are proposing to 
set baseline APCM code values for this first year based on historical 
utilization of the care management services we have drawn upon in 
designing the APCM codes. We note that utilization of the care 
management services has been significantly higher than CTBS, and we 
found that CTBS are not typically billed for a patient in the same 
month as care management services. It is unclear whether the kinds of 
services described by the CTBS are not typically provided during these 
months or whether they are being provided but not separately reported. 
We will continue to seek information, including from public comments on 
this proposed rule, to help us identify the best approach to reflecting 
the proposed CTBS elements incorporated into the APCM monthly bundle, 
and we are particularly interested in data that could illuminate 
differences between what services are furnished and what is being 
reported separately. We will continue to consider refinements to the 
valuation of APCM codes to reflect available information about changes 
in the volume and mix of care management and communication activities 
being furnished as part of APCM services in the delivery of advanced 
primary care.
    For APCM Level 1, we assumed the typical case would involve fewer 
resources than the current care management services based upon the 
proposed GPCM1 code descriptor and a broad eligible population that 
would require limited monthly APCM services; however, it would also 
involve certain resources inherent to maintaining advanced primary care 
practice capabilities and continuous readiness and monitoring 
activities, including patient population monitoring and care needs 
assessment, to fully furnish and bill APCM. As described in sections 
II.G.2.b. and II.G.2.c. above, certain elements of the APCM service 
require resources to maintain continuous readiness and monitoring 
activities to furnish covered services consistent with the advanced 
primary care model of care. We concluded that the APCM Level 1 services 
would be similar in work to that of two billing units of the non-
complex code for CCM services (CPT code 99490 (CCM services provided by 
clinical staff per calendar month)) over the course of a year, and 
therefore based the proposed inputs on CPT code 99490 multiplied by \1/
6\ (or 2 units over 12 months). Specifically, we proposed a work RVU 
for GPCM1 of 0.17, which is the work RVU for CPT code 99490 multiplied 
by \1/6\. The resulting proposed PE and MP RVUs are proportionately 
similar to those for CPT code 99490 and are available in Addendum B 
(see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\95\ Table 23 displays 
payment amount estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \95\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
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    For APCM Level 2, which describes APCM services to patients with 
two or more chronic conditions we assumed the typical, higher intensity 
work associated with managing a patient with multiple chronic 
conditions would involve significantly more resources and require more, 
and more frequent, APCM service elements. We concluded that the APCM 
Level 2 services would be similar to current utilization assumptions of 
five billing units of the non-complex CCM code (CPT codes 99490) (CCM 
services provided by clinical staff per calendar month) and three 
billing units of add-on codes annually, given that, for Medicare 
beneficiaries who receive these CCM services during a year, the non-
complex CCM base code is billed on average for five months and with 
three add-on codes during those 5 months. Additionally, we are 
proposing to account for what we believe to be continued 
underutilization of CCM services in this patient population by adding 
one billing unit of the complex CCM code (CPT code 99490 (CCM services 
provided by clinical staff per calendar month) annually. As we noted in 
the CY 2020 PFS final rule, ``utilization [of CCM services] has reached 
approximately 75 percent of the level we initially assumed under the 
PFS when we began paying for CCM services separately under the PFS; 
while these are positive results, we believe that CCM services 
(especially complex CCM services) continue to be underutilized'', 81 FR 
80244 and 84 FR 62688, considering the number of eligible Medicare 
beneficiaries. In 2019, approximately 22.6 million FFS beneficiaries 
were identified as being potentially eligible for CCM (or 63.4 percent 
of the 35.6 million Medicare FFS beneficiaries); however, the use of 
CCM services was low among potentially eligible beneficiaries, such 
that just 4.0 percent of beneficiaries potentially eligible for CCM 
received any CCM services.\96\ Therefore, we based the proposed inputs 
on CPT code 99490 multiplied by \5/12\ (or, five units

[[Page 61723]]

over 12 months), plus CPT add-on code 99439 (CCM services each 
additional 30 minutes by clinical staff directed by a physician or 
other qualified health care professional, per calendar month) 
multiplied by \1/6\ (or two units), plus CPT add-on code 99489 (Complex 
CCM services each additional 30 minutes by clinical staff directed by a 
physician or other qualified health care professional, per calendar 
month) multiplied by \1/12\ (one unit), plus CPT code 99487 (Complex 
CCM services provided by clinical staff directed by a physician or 
other qualified health care professional, per calendar month) 
multiplied by \1/12\ (one unit). Specifically, we proposed a work RVU 
for GPCM2 of 0.77, which is the sum of the work RVU for CPT codes 
99490, 99439, 99489, and 99487 multiplied by their respective 
proportions above. The resulting proposed PE and MP RVUs are 
proportionately similar and are available in Addendum B (see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\97\ Table 23 displays payment amount 
estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \96\ The determination of potential eligibility for CCM was 
based on presence of two or more Chronic Condition Warehouse (CCW) 
chronic condition flags, one of which was hypertension, 
hyperlipidemia, or diabetes. Beneficiaries on Medicare Advantage, 
with end stage renal disease (ESRD) or using the hospice benefit 
were excluded. ASPE. Analysis of 2019 Medicare Fee-for-Service (FFS) 
Claims for Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Services. March 2022. https://aspe.hhs.gov/sites/default/files/documents/31b7d0eeb7decf52f95d569ada0733b4/CCM-TCM-Descriptive-Analysis.pdf.
    \97\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
---------------------------------------------------------------------------

    For APCM Level 3 (HCPCS code GPCM3), which describes APCM services 
to patients with QMB status and two or more chronic conditions, we are 
proposing to value the service as a relative increase to the valuation 
of APCM Level 2 based on recent Medicare expenditure data for dually 
eligible Medicare beneficiaries. In CY 2021, per person per year 
spending on dually eligible beneficiaries was $24,370 and for non-
dually eligible beneficiaries was $11,172. The difference between these 
two amounts is 218 percent. We have considered the likely resource 
demands and intensity of the practitioner-patient interaction for this 
patient population, consistent with our coding and valuation policies 
that reflect variations in resource cost and patient-centered care 
delivery policies.\98\ By taking into consideration the difference in 
Medicare spending on a per person per year basis between dually 
eligible and non-dually eligible Medicare beneficiaries, we believe 
that we can capture the increased resources involved in furnishing APCM 
services to patients with QMB status and multiple chronic conditions. 
Therefore, we based the proposed inputs for the APCM Level 3 code on 
the APCM Level 2 inputs multiplied by 218 percent. Specifically, we 
proposed a work RVU for GPCM3 of 1.67, which is the proposed work RVU 
for GPCM2 multiplied by 218 percent. The resulting proposed PE and MP 
RVUs are proportionately similar to those and are available in Addendum 
B (see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).\99\ Table 23 
displays payment amount estimates using the 2024 PFS Conversion Factor.
---------------------------------------------------------------------------

    \98\ https://www.macpac.gov/wp-content/uploads/2024/01/Jan24_MedPAC_MACPAC_DualsDataBook-508.pdf.
    \99\ https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending.
---------------------------------------------------------------------------

    Table 23 includes the proposed placeholder codes (which, if 
finalized, will be replaced with numeric G-codes announced in the final 
rule), short descriptors, crosswalk codes, proposed RVUs (work, PE, and 
MP), and approximate payment rate. For illustration purposes, we 
multiplied the proposed APCM relative values for work, practice expense 
(PE), and malpractice (MP), without geographic adjustment, by the CY 
2024 conversion factor (CF) ($32.7442) to convert the proposed relative 
value units (RVUs) into approximate national payment rates.
[GRAPHIC] [TIFF OMITTED] TP31JY24.047

    We are seeking feedback on whether these proposed values 
appropriately reflect the resource costs involved in furnishing these 
services, or whether adjustments to the proposed values or additional 
coding may be needed. We are broadly interested in public comments and 
input from interested parties on potential refinements in code and 
service definitions, including how we might refine our utilization 
assumptions for these codes, and other important information involving 
coding and payment for APCM services to better reflect the current 
practice of advanced primary care, including elements of CTBS and care 
management services. We are interested in developing a better 
understanding of the resource costs involved in furnishing 
comprehensive care management as part of advanced primary care to 
various patient populations, including specifically QMBs.
    We intend to engage in further discussions with the public over the 
next several years to potentially refine our policies for 2025 and 
future years, and we expect that having APCM utilization data, once the 
proposed codes are established, would inform future refinement of the 
valuations for these codes.
    Finally, as described in the Advanced Primary Care RFI that 
follows, we note that there is potential for the valuation of these 
codes and future related codes to change and/or scale into larger units 
if we expand them to incorporate more

[[Page 61724]]

service elements (see section II.G.3. of this proposed rule). As we 
receive more information about how these codes are being used and 
implemented in medical practice, we anticipate that these codes and 
future related codes will be refined over time. We note that the 
development of payment and coding policies for these and other kinds of 
services under the PFS is typically an iterative process that responds 
to changes in medical practice and may be best refined over several 
years through annual rulemaking for the PFS, and through the 
development of CPT codes by the AMA's CPT Editorial Committee.
    As described in the next section, we believe that this new proposed 
APCM code set could serve as a chassis to incorporate primary care 
model learnings over time under the PFS and an additional pathway to 
accountable care for primary care practitioners.
3. Request for Information: Advanced Primary Care Hybrid Payment
a. Background
    Recent evidence reviews show that while primary care is the only 
part of the health system in which investments routinely result in not 
only improved outcomes but also increased equity,\100\ the practice and 
sustainability of the primary care sector is under significant 
strain.\101\ The NASEM found that many of these challenges relate to a 
primary care payment system that principally rewards visit volume 
versus creation and maintenance of longitudinal \102\ care 
relationships over time.\103\ We have set a goal of having 100 percent 
of traditional Medicare beneficiaries and the vast majority of Medicaid 
beneficiaries in accountable care relationships by 2030. Accountable 
care occurs when a person-centered care team takes responsibility for 
improving quality of care, care coordination and health outcomes for a 
defined group of individuals, to reduce care fragmentation and avoid 
unnecessary costs for individuals and the health system.\104\ Advanced 
primary care is a core mechanism for achieving this goal. With this 
goal, we acknowledge the need to increase the capability of primary 
care clinicians to engage, maintain, and promote longitudinal and 
accountable relationships with beneficiaries through incentives and 
flexibilities to manage quality and total cost of care.
---------------------------------------------------------------------------

    \100\ National Academies of Sciences, Engineering, and Medicine 
(NASEM); Implementing High-Quality Primary Care (https://nap.nationalacademies.org/read/25983).
    \101\ Milbank Memorial Fund, The Health of US Primary Care: 2024 
Scorecard (https://www.milbank.org/wp-content/uploads/2024/02/Milbank-Scorecard-2024-ACCESS_v06.pdf).
    \102\ Longitudinal care management is long-term, proactive, 
relationship-based care management that augments routine and acute 
visits with intentional, proactive outreach, especially during times 
of illness and transitions of care.
    \103\ NASEM, Implementing High-Quality Primary Care (https://nap.nationalacademies.org/read/25983).
    \104\ https://www.cms.gov/priorities/innovation/key-concepts/accountable-care-and-accountable-care-organizations.
---------------------------------------------------------------------------

    Over the past 11 years, the CMS Innovation Center has tested a 
number of primary care models: CPC, CPC+, Maryland Primary Care 
Program, PCF, as well as the upcoming MCP and ACO Primary Care Flex. 
Each of these primary care models has focused on testing what happens 
when we pay for primary care services with hybrid payments (a mix of 
fee-for-service and population-based payments), as described earlier. 
While these models have not met the criteria for expansion to date, the 
findings suggest advanced primary care may reduce unnecessary 
utilization and improve diabetes care and cancer screening rates.
    In addition to testing new approaches to improve care for 
beneficiaries by supporting primary care, we have focused on approaches 
to incorporating these innovations into Medicare programs. For example, 
lessons learned from the CMS Innovation Center's ACO models may be 
incorporated into the Shared Savings Program. As such, part of the 
intent of our proposal to create new APCM payment and coding is that we 
would have a similar foundation to scale advanced primary care model 
learnings over time.
    Previous Innovation Center primary care model tests have helped us 
learn lessons to inform our current and future work. For example, 
participants in primary care models have indicated difficulty investing 
in and maintaining primary care redesign activities due to a range of 
challenges. First, additional non-visit-based primary care payments 
have been generally layered upon base payments still predominantly FFS 
in structure. As such, the incentives and abilities of practices to 
focus on proactive, population-based non-visit activities may be 
limited if the funding stream for these activities is limited in scope 
and duration.105 106 (Examples of non-visit-based activities 
include, but are not limited to: activities to improve care 
coordination, implement data-driven quality improvement, or enhance 
targeted care management for beneficiaries identified as high-risk.) 
Further, model funding for the clinical and administrative staff needed 
to accomplish advanced primary care coordination and population health 
functions is contingent on continued participation in these 
models.\107\ Once the models end, practices are left without the 
funding that they received under the models for the clinical and 
administrative staff that had supported population health functions 
under the model. Moreover, because these models involve additional 
payments tied to performance rather than changes to base primary care 
payment, practices report that the funding they use to support non-
visit activities is sometimes received well after the non-visit 
services have occurred, leading to further challenges sustaining these 
efforts fiscally. Solving these challenges is a key goal of future 
Innovation Center model work.\108\
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    \105\ Independent Evaluation of Comprehensive Primary Care Plus 
(CPC+): Final Report. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report.
    \106\ Schurrer J, Timmins L, Gruszczynski M, et al. Evaluation 
of the Primary Care First Model: Second Annual Report. Mathematica. 
February 2024. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \107\ CMS defines population health as health behaviors and 
outcomes of a broad group of individuals, including the distribution 
of such outcomes affected by the contextual factors within the 
group.
    \108\ https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan.
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    To strengthen the primary care infrastructure within FFS Medicare, 
we are exploring opportunities to create new sustainable pathways to 
support advanced primary care, equitable access to high-quality primary 
care, and continued transformation among a wide variety of practices. 
One potential strategy to increase access to advanced primary care and 
prepare practitioners in traditional Medicare to engage in more 
accountable care is through the creation and ongoing refinement of 
specific billing and coding under the PFS that better recognizes 
advanced primary care and incorporates the resources involved in 
furnishing longitudinal care and maintaining relationships with 
patients over time. In section II.G.2. of this proposed rule, we are 
proposing a set of APCM services that make use of lessons learned from 
the CMS Innovation Center's primary care models, grouping existing care 
management and CTBS service elements into a bundle for use starting in 
CY 2025.
    We are seeking feedback regarding potential further evolution in 
coding and payment policies to better recognize advanced primary care. 
Through this Advanced Primary Care RFI, we are committed to 
collaborating with

[[Page 61725]]

interested parties to lay the path for a more transparent movement to 
value-based care. Specifically, we are requesting input on a broader 
set of questions related to care delivery and incentive structure 
alignment and five foundational components:

 Streamlined Value-Based Care Opportunities
 Billing Requirements
 Person-Centered Care
 Health Equity, Clinical, and Social Risk
 Quality Improvement and Accountability

    We encourage input on the questions below from diverse voices, 
including beneficiaries and advocates, community-based organizations, 
providers, clinicians, researchers, unions, and all other interested 
parties.
b. Solicitation of Public Comments
    We are seeking feedback regarding potential changes to coding and 
payment policies for advanced primary care services to be incorporated 
in traditional Medicare. For example, in the future, coding for APCM 
services (proposed in section II.G.2. of this proposed rule) could be 
revised to include additional service elements, including traditional 
E/M services. This Advanced Primary Care RFI is designed to solicit 
feedback on how we can further the goals of reducing administrative 
burden to refocus time on patient care; better recognizing the relative 
resources involved in furnishing care; recognizing interdisciplinary, 
team-based primary care; and supporting primary care sustainability and 
stability (especially for underserved communities). Whenever possible, 
respondents are requested to draw their responses from objective, 
empirical, and actionable evidence and to cite this evidence within 
their responses. We anticipate potential changes to primary care coding 
and payment policies, such as use of coding that recognizes groups of 
services furnished over a fixed time period, that would offer a new 
opportunity within the PFS for primary care clinicians to move to 
payment structures that are not fully dependent on billing for each 
discrete component of overall care and act as a step toward 
accountability for the cost and quality of patient care. Therefore, we 
are seeking feedback on building advanced primary care payment 
mechanisms that create pathways to recognize how primary care practice 
has moved away from an encounter-based orientation toward population-
based care. This Advanced Primary Care RFI is the first step in 
ensuring ample opportunity for public input, followed by notice and 
comment rulemaking in subsequent years.
(1) Streamlined Value-Based Care Opportunities
    We are seeking to create a steppingstone for primary care 
clinicians, including those new to value-based care, to move away from 
either encounters or other discrete components of overall care as the 
dominant method of primary care payment and toward payments in larger 
units that are better tied to the relative resource costs involved in 
population-based, longitudinal care. Feedback from interested parties 
has been helpful when considering how to scale the availability of 
payments into larger units, and incorporate population-based 
variability in resources, all while driving toward accountability, and 
person-centered care. Ultimately, to create more opportunities for 
beneficiaries to receive high-quality, accountable primary care, we are 
focused on creating multiple pathways to recognize delivery of 
integrated care across settings, and engagement in comprehensive, team-
based, longitudinal care.
    When considering the evolution of a hybrid payment system within 
the PFS, we seek input on the following questions:
     How can CMS better support primary care clinicians and 
practices who may be new to population-based and longitudinal care 
management?
     What are the primary barriers to providing particular 
strategies or supports needed for pediatric clinicians and practices?
     How can CMS ensure that potential future advanced primary 
care payment will not induce clinicians to leave effective accountable 
care relationships and clinician networks that already produce positive 
results? Additionally, how can CMS support growth over time in existing 
effective accountable care relationships and clinician networks?
     Should CMS evolve the proposed APCM services into an 
advanced primary care payment that includes E/M and other relevant 
services, or maintain a separate code set for APCM?
     If E/M services are bundled together for advanced primary 
care payments, how can CMS ensure that there is not a disincentive for 
primary care clinicians to continue to provide E/M visits, or increase 
accountability to E/M visits as warranted?
     As many codes depend on E/M visits (for example, as the 
base code for an add-on code, or to initiate specific care management 
activities), how should CMS consider the downstream impacts of 
incorporating E/M visits into advanced primary care payments?
     Should CMS consider incorporating other CTBS services into 
advanced primary care hybrid payments, such as Remote Physiologic 
Monitoring and/or Remote Therapeutic Monitoring?
     Should CMS consider incorporating other services that 
involve comprehensive care management and care coordination, such as 
Behavioral Health Integration, End-Stage Renal Disease Monthly 
Capitation Payment (ESRD MCP), Assessment/Care Planning for Cognitive 
Impairment, and/or Advance Care Planning?
     Should CMS consider incorporating other services while the 
patient is under care of home health agencies or hospices, such as Care 
Plan Oversight?
     Newly finalized HCPCS codes are eligible for use by other 
payers, including commercial insurers, state Medicaid agencies, and 
others. We note that value-based alignment is a key goal of CMS. If the 
APCM codes are finalized, they would be eligible for use by these other 
payers as well. To what extent are other payers interested in adopting 
the APCM codes? Are there any other changes that would be necessary for 
other payers to adopt the codes?
     CMS has historically used information presented by the 
Relative Value Scale Update Committee to determine PFS payment rates. 
Are there other sources of data on the relative value of primary care 
services that CMS should consider when setting hybrid payment rates?
(2) Billing Requirements
    Previous CMS Innovation Center primary care models have provided 
key lessons learned about how to increase comfort with population-based 
payments, the importance of reducing the administrative burden of 
billing, and how to begin addressing gaps in equitable access to 
population-based payments.\109\ Specifically, we have learned through 
Innovation Center initiatives that retrospective reconciliation or 
adjustment of payments for services rendered can be especially 
frustrating for practitioners, as it reduces the predictability and 
stability of payments.\110\
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    \109\ Independent Evaluation of Comprehensive Primary Care Plus 
(CPC+): Final Report. https://www.cms.gov/priorities/innovation/data-and-reports/2023/cpc-plus-fifth-annual-eval-report; Independent 
Evaluation of Primary Care First: Second Annual Report. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.
    \110\ Independent Evaluation of Primary Care First: Second 
Annual Report. https://www.cms.gov/priorities/innovation/data-and-reports/2024/pcf-second-eval-rpt.

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[[Page 61726]]

    For these reasons, we are seeking to understand how advanced 
primary care hybrid payments can balance program integrity, high-
quality care, payment stability, and clinician burden.
    We seek input on the following questions:
     How can CMS reduce the potential burden of billing for 
population-based and longitudinal care services?
     Are there particular types of items or services that 
should be excluded from the advanced primary care bundle?
     Are there particular services paid under the PFS today 
that should be included in the advanced primary care bundle?
     Care management activities are currently billed monthly. 
What episode lengths should CMS consider when thinking about an 
advanced primary care bundle of services for hybrid payment? Include 
evidence to support the proposed episode length.
     Should CMS attribute the advanced primary care clinical 
episode to a single clinician, or consider weighted attribution and 
payment for multiple entities or clinicians? How could weighted 
attribution and payment work? What rules or processes should CMS 
consider to attribute the episode?
     Care management coding and payment have historically 
required an initiating visit prior to starting monthly billing, to 
ensure that the services are medically reasonable and necessary and 
consistent with the plan of care. Are there other ways that CMS could 
ensure the clinician billing APCM is responsible for the primary care 
of the Medicare beneficiary?
     Care management coding and payment require beneficiary 
cost sharing. Has beneficiary cost sharing been a barrier to 
practitioners providing such services?
     Consistent with the initiating visit requirement in the 
APCM proposal, should CMS require the billing of specific qualifying 
services for billing of an advanced primary care bundle that is larger 
in scale and scope than APCM?
     Are there Health IT functions beyond what is proposed for 
APCM services that clinicians should be required to have to bill for an 
advanced primary care bundle? What should CMS consider in the design of 
the advanced primary care bundle to effectively incorporate Health IT 
standards and functionality, to support interoperability and the aims 
of advanced primary care?
     Should CMS limit the types of non-physician clinicians 
that can bill for an advanced primary care bundle that is larger in 
scale and scope than APCM? If so, include evidence to support the 
restriction.
     How should CMS reconcile instances where an advanced 
primary care bundle is billed, but primary care services are then 
billed for and provided by separate entities?
(3) Person-Centered Care
    Person-centered care integrates individuals' clinical needs across 
providers and settings, while addressing their social needs.\111\ We 
strive for better, more affordable care and improved health outcomes. 
Key to this mission are care innovations that empower beneficiaries and 
clinicians, while reducing the administrative burden of providing 
episode-based and longitudinal care management. We are seeking comment 
on how an advanced primary care code(s) could be structured to both 
increase efficiency and promote the use of high-value services.
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    \111\ CMS White Paper on CMS Innovation Center's Strategy: 
Driving Health System Transformation--A Strategy for the CMS 
Innovation Center's Second Decade (https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper).
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    We seek input on the following questions:
     What activities that support the delivery of care that is 
coordinated across clinicians, support systems, and time should be 
considered for payment in an advanced primary care bundle that are not 
currently captured in the PFS?
     How can CMS structure advanced primary care hybrid 
payments to improve patient experience and outcomes?
     How can CMS structure advanced primary care hybrid 
payments to ensure appropriate access to telephonic and messaging 
primary care services?
     What is the best reporting structure to ensure that 
targeted services are delivered without causing undue or excessive 
documentation?
     How can CMS facilitate coordination between primary care 
clinicians that bill for advanced primary care bundles and specialists 
to reduce costs and improve patient outcomes?
(4) Health Equity, Social and Clinical Risk
    We define health equity as, ``the attainment of the highest level 
of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes.'' \112\ The CMS 
Framework for Health Equity lays out how we are working to advance 
health equity by designing, implementing, and operationalizing policies 
and programs that support health for all the people served by our 
programs, eliminating avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved, and 
providing the care and support that our beneficiaries need to 
thrive.\113\ For advanced primary care hybrid payments, this may mean 
incorporating different types of social and clinical risk into the 
payment than have typically been considered in traditional E/M or care 
management codes.
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    \112\ https://www.cms.gov/pillar/health-equity.
    \113\ Centers for Medicare & Medicaid Services, The CMS 
Framework for Health Equity (2022-2032). April 2022. https://www.cms.gov/files/document/cms-framework-health-equity-2022.pdf.
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    Recent models such as ACO REACH \114\ and Making Care Primary \115\ 
have incorporated risk adjustment for social risk factors, such as Part 
D Low Income Subsidy enrollment status and Area Deprivation Index, to 
better capture factors relevant to care of the patient. We seek input 
on how advanced primary care billing and payment policy could be used 
to reduce health disparities and social risk. Furthermore, we are 
seeking to balance a simple payment structure that encourages the 
uptake of advanced primary care services, while ensuring that the risk 
adjustment method used to develop the payment rates incentivizes the 
appropriate coding of patient conditions and needs, including those 
that have previously been under-documented, such as dementia and 
patient frailty.\116\
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    \114\ https://www.cms.gov/priorities/innovation/innovation-models/aco-reach.
    \115\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
    \116\ National Academies of Sciences, Engineering, and Medicine 
(NASEM); Committee on the Decadal Survey of Behavioral and Social 
Science Research on Alzheimer's Disease and Alzheimer's Disease-
Related Dementias. Reducing the Impact of Dementia in America: A 
Decadal Survey of the Behavioral and Social Sciences. National 
Academies Press. July 26, 2021. https://nap.nationalacademies.org/catalog/26175/reducing-the-impact-of-dementia-in-america-a-decadal-survey.
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    We seek input on the following questions:
     What non-claims-based indicators could be used to improve 
payment accuracy and reduce health disparities, and how can CMS ensure 
that they are collected uniformly and documented consistently without 
unduly increasing administrative burden?
     What risk factors, including clinical or social, should be 
considered in developing payment for advanced primary care services?

[[Page 61727]]

     How can CMS account for apparent changes in risk that are 
due to changes in coding patterns rather than changes in health status?
     What risk adjustments should be made to proposed payments 
to account for higher costs of traditionally underserved populations?
     What indicators are used to capture added social risk in 
commercial insurance? Should CMS consider using these?
     What metrics should be used or monitored to adjust payment 
to ensure that health disparities are not worsened as an unintended 
consequence?
     How can CMS ensure that advanced primary care hybrid 
payment increases access to health care services for patients without a 
usual source of primary care?
     Are there steps CMS can take to ensure advanced primary 
care billing and coding is utilized for dually eligible beneficiaries, 
and by safety net providers?
     Should CMS incorporate Community Health Integration and/or 
Principal Illness Navigation services and payment into an advanced 
primary care bundle?
(5) Quality Improvement and Accountability
    We are committed to affordable quality health care for all people 
with Medicare. We seek feedback regarding how we can continue to 
strengthen beneficiary access to high-quality health services within 
FFS Medicare. One goal of the CMS Innovation Center Strategy Refresh is 
to increase the capability of practitioners furnishing advanced primary 
care to engage in accountable care relationships with beneficiaries 
through incentives and flexibilities to manage clinical quality, 
outcomes, patient experience, and total cost of care. As such, part of 
the intent of evolving and creating over time advanced primary care 
hybrid payments is that the practitioners who bill for these services 
are engaged in a relationship where they are responsible for the 
quality and cost of care for the beneficiary, counting toward the 
overall 2030 goal of every person with Traditional Medicare being in an 
accountable care relationship. This Advanced Primary Care RFI seeks 
input from beneficiaries and their caregivers, primary care and other 
clinicians, and health plans on how advanced primary care bundles could 
support that goal.
    We seek input on the following questions:
     How can CMS ensure clinicians will remain engaged and 
accountable for their contributions to managing the beneficiary's care?
     What are key patient-centered measures of quality, 
outcomes and experience that would help ensure that hybrid payment 
enhances outcome and experience for patients?
     How could measures of quality, outcomes, and experience 
guard against and decrement in access or quality?
     As described in the APCM proposal, reporting of the 
``Value in Primary Care'' MVP would be an APCM service element for MIPS 
eligible clinicians beginning in 2026. Since this MVP contains measures 
focused on both the total cost and quality of care, would its inclusion 
as an APCM service element be sufficient to count as ``accountable 
care?'' If not, what other service delivery or quality reporting would 
be expected in ``accountable care?''
     What should CMS consider so that that advanced primary 
care bundles could be used to promote accountable care across payers, 
both commercial and Medicaid?
     What quality measures are other payers using to drive 
improvements in primary care?
     What utilization measures are other payers using to drive 
improvements in primary care?
     What patient experience measures are other payers using to 
drive improvements in primary care?
     Should CMS consider flexibilities for smaller practices to 
bill the advanced primary care bundle? Should CMS consider 
flexibilities for entities exempt from MIPS to bill the advanced 
primary care bundle?
     Would clinicians be willing to take on more accountability 
to further reduce the frequency and/or administrative burden of 
billing?
     For APCM services, are there other key practice-level 
elements of the service that should be considered for advanced primary 
care practices to bill for advanced primary care?
4. Cardiovascular Risk Assessment and Risk Management
a. Background
    Cardiovascular disease (CVD) is a leading cause of death, 
disability, and health care expenditures in the U.S.\117\ The burden of 
CVD is unequal, with black Americans experiencing higher rates of CVD-
related morbidity than white Americans.\118\ Atherosclerotic CVD \119\ 
is also distinct among leading causes of death for Americans in the 
proportion of CVD attributable to behavioral causes,\120\ making 
improvement in modifiable CVD risk factors (for example, diet, 
exercise, smoking cessation) is a key treatment target to reduce the 
burden of CVD across populations.\121\
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    \117\ Heart Disease and Stroke Statistics--2023 Update: A Report 
from the American Heart Association Connie W. Tsao, MD, MPH, FAHA 
et. al. Circulation. 2023;147:e93-e621.
    \118\ Cardiovascular Health in African Americans: A Scientific 
Statement From the American Heart Association Mercedes R. Carnethon, 
Ph.D., FAHA et al. Circulation. 2017;136:e393-e423.
    \119\ What is Atherosclerosis? NIH NHLBI. https://www.nhlbi.nih.gov/health/atherosclerosis.
    \120\ Libby, P., Buring, J.E., Badimon, L. et al. 
Atherosclerosis. Nat Rev Dis Primers 5, 56 (2019). https://doi.org/10.1038/s41572-019-0106-z.
    \121\ Ebrahim S, Taylor F, Ward K, Beswick A, Burke M, Davey 
Smith G. Multiple risk factor interventions for primary prevention 
of coronary heart disease. Cochrane Database Syst Rev. 
2011;(1):CD001561 https://pubmed.ncbi.nlm.nih.gov/21249647/.
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    The CMS Innovation Center's Million Hearts[supreg] Cardiovascular 
Disease (CVD) Risk Reduction model \122\ (hereafter referred to as 
Million Hearts[supreg] model) was launched in 2017 as part of the 
ongoing HHS Million Hearts[supreg] Initiative.\123\ The model's goals 
were to decrease the incidence of first-time heart attacks and strokes 
among medium and high-risk Medicare beneficiaries over five years and 
reduce Medicare spending on cardiovascular events. The model was 
implemented as a randomized design where participant organizations in 
the intervention group agreed to (1) calculate traditional Medicare 
beneficiaries' risk of having a heart attack or stroke over 10 years, 
and (2) provide cardiovascular care management services to high-risk 
patients (defined as a risk of a cardiovascular event in the next 
decade of greater than thirty percent). The model also identified 
medium-risk patients (more than fifteen percent risk of an event in the 
next decade) in its evaluation. In exchange for doing so, CMS paid 
participant organizations $10 for each eligible traditional Medicare 
beneficiary for whom the organizations assessed risk, and in the first 
year of the model, $10 for each high-risk beneficiary during each month 
when cardiovascular care management services were provided.\124\ In

[[Page 61728]]

subsequent years of the model (2018 to 2022) participants were expected 
to reassess cardiovascular risk and were paid based on cardiovascular 
risk reduction ($0 to $10 per beneficiary per month) for high-risk 
beneficiaries.
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    \122\ Sanghavi DM, Conway PH. Paying for prevention: a novel 
test of Medicare value-based payment for cardiovascular risk 
reduction. JAMA. 2015;314(2):123-124. https://jamanetwork.com/journals/jama/fullarticle/2300705.
    \123\ Frieden TR, Berwick DM. The ``Million Hearts'' initiative: 
preventing heart attacks and strokes. N Engl J Med. 
2011;365(13):e27. https://pubmed.ncbi.nlm.nih.gov/21913835/.
    \124\ Blue L, Kranker K, Markovitz AR, et al. Effects of the 
Million Hearts Model on Myocardial Infarctions, Strokes, and 
Medicare Spending: A Randomized Clinical Trial. JAMA. 
2023;330(15):1437-1447. doi:10.1001/jama.2023.19597.
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    All CMS Innovation Center models are independently evaluated \125\ 
and the evaluation of the Million Hearts[supreg] model found the model 
reduced the rate of death from any cause for medium and high-risk 
beneficiaries by four percent, as well as reduced the risk of death 
from a cardiovascular event (that is, heart attack or stroke) by eleven 
percent.\126\ We consider this to be due to increased rates of 
cardiovascular risk assessment, discussion of cardiovascular risk by 
participants' clinicians, and the use of appropriate medications to 
reduce cardiovascular risk (for example, aspirin and statins).\127\
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    \125\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
    \126\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model, p. 43. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
    \127\ Evaluation of the Million Hearts Cardiovascular Disease 
Risk Reduction Model, p. 26. Final Report. August 2023. Mathematica. 
https://www.cms.gov/priorities/innovation/data-and-reports/2023/mhcvdrrm-finalannevalrpt.
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    During the Million Hearts[supreg] (MH) model (which was tested from 
2017-2022), there was a recently-introduced ASCVD risk assessment tool 
to incorporate demographic (age, sex, race), clinical (blood pressure, 
cholesterol, history of diabetes), and risk behavior (smoking status, 
use of anti-hypertensives, use of statins, use of aspirin) established 
by the American College of Cardiology (ACC),\128\ as well as a 
longitudinal re-assessment tool used within the model.\129\ This tool 
calculated the 10-year risk of a cardiovascular event for beneficiaries 
ages 40-79. Subsequently, additional ASCVD risk assessment tools have 
been developed.\130\
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    \128\ Grundy SM, Stone NJ, Bailey AL, Beam C, Birtcher KK, 
Blumenthal RS, Braun LT, de Ferranti S, Faiella-Tommasino J, Forman 
DE, Goldberg R, Heidenreich PA, Hlatky MA, Jones DW, Lloyd-Jones D, 
Lopez-Pajares N, Ndumele CE, Orringer CE, Peralta CA, Saseen JJ, 
Smith SC, Sperling L, Virani SS, Yeboah J. 2018 ACC guideline on the 
management of blood cholesterol: a report of the American College of 
Cardiology Foundation/American Heart Association Task Force on 
Clinical Practice Guidelines. J Am Coll Cardiol. 2018. https://tools.acc.org/ldl/ascvd_risk_estimator/index.html#!/calulate/estimator/.
    \129\ Lloyd-Jones DM, Huffman MD, Karmali KN, Sanghavi DM, 
Wright JS, Pelser C, Gulati M, Masoudi FA, Goff DC Jr. Estimating 
Longitudinal Risks and Benefits From Cardiovascular Preventive 
Therapies Among Medicare Patients: The Million Hearts Longitudinal 
ASCVD Risk Assessment Tool: A Special Report From the American Heart 
Association and American College of Cardiology. Circulation. 2017 
Mar 28;135(13):e793-e813.
    \130\ Leading Cardiologists reveal new cardiovascular disease 
prevention risk calculator. https://newsroom.heart.org/news/leading-
cardiologists-reveal-new-heart-disease-risk-
calculator#:~:text=The%20American%20Heart%20Association%20PREVENT,CKM
%20syndrome%20into%20CVD%20prevention.
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    Today in clinical practice, ASCVD risk is generally calculated 
using a tool combining demographic data, personal history (risk 
behaviors and medical history), and laboratory data (lipid panel).\131\ 
This information is used to calculate into a 10-year estimate of a 
patient's ASCVD risk for use in determining treatment advice provided 
by the treating practitioner. This determination requires both data 
collection at a visit and laboratory data, which may not be available 
at an initial visit. This change in clinical practice occurred over 
time after a series of guidelines from the American Heart Association 
(AHA) recommended using ASCVD risk in determining treatment decisions 
for patients without a prior history of CVD.\132\ This treatment 
guideline also includes recommendations for lifestyle modifications for 
all patients. The CMS Innovation Center Million Hearts[supreg] model 
contributed to this change in clinical practice by demonstrating 
through a rigorous randomized control trial that the quantitative 
assessment of 10-year cardiovascular risk improves quality of care, 
including mortality, compared to prior practice.\133\
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    \131\ 2019 ACC/AHA Primary Prevention of Cardiovascular Disease. 
https://www.ahajournals.org/doi/pdf/10.1161/CIR.0000000000000678.
    \132\ Arnett DK et al. 2019 ACC/AHA Guideline on the Primary 
Prevention of Cardiovascular Disease: A Report of the American 
College of Cardiology/American Heart Association Task Force on 
Clinical Practice Guidelines. Circulation. 2019 Sep 10;140(11):e596-
e646. doi: 10.1161/CIR.0000000000000678.
    \133\ Blue L, Kranker K, Markovitz AR, et al. Effects of the 
Million Hearts Model on Myocardial Infarctions, Strokes, and 
Medicare Spending: A Randomized Clinical Trial. JAMA. 
2023;330(15):1437-1447. doi:10.1001/jama.2023.19597.
---------------------------------------------------------------------------

    In the Million Hearts[supreg] model, cardiovascular-focused care 
management services included an initiating visit where an ASCVD risk 
assessment is performed, structured recording of patient health 
information using CEHRT, and a comprehensive care plan focused on 
cardiovascular risk reduction (including the ABCS focused on in the 
Million Hearts[supreg] model), but did not require 24/7 access to care, 
management of care transitions, or home and community-based 
coordination because these services are necessary for the management of 
complex conditions placing a beneficiary at high risk of death, acute 
exacerbation/decompensation, or functional decline, and these services 
are provided to prevent the development of these complex chronic 
conditions. In the Million Hearts[supreg] model, cardiovascular-focused 
risk management services were provided to beneficiaries at high risk 
for CVD (more than a thirty percent risk of a cardiovascular event in 
the next 10 years).
    We interpret the findings of the Million Hearts[supreg] model to be 
both reflective of and perhaps augmenting an evolution in clinical 
practice toward quantitative ASCVD risk assessment. We also do not 
believe the resources involved in these activities are appropriately 
reflected in current coding and payment policies. As such, we are 
proposing to establish codes to describe a separately billable 
cardiovascular disease risk assessment that is furnished in conjunction 
with an E/M visit and cardiovascular-focused risk management, when 
reasonable and necessary due to the presence of increased 
cardiovascular risk factors identified for the individual patient.
b. ASCVD Risk Assessment
    We are proposing a new stand-alone G-code, HCPCS code GCDRA, 
Administration of a standardized, evidence-based Atherosclerotic 
Cardiovascular Disease (ASCVD) Risk Assessment for patients with ASCVD 
risk factors on the same date as an E/M visit, 5-15 minutes, not more 
often than every 12 months. Atherosclerotic Cardiovascular Disease 
(ASCVD) Risk Assessment refers to a review of the individual's 
demographic factors, modifiable risk factors for CVD, and risk 
enhancers for CVD. We are proposing this new code to identify and value 
the work involved in administering an ASCVD risk assessment when 
medically reasonable and necessary in relation to an E/M visit.
    We further propose that the ASCVD risk assessment must be furnished 
by the practitioner on the same date they furnish an E/M visit, as the 
ASCVD risk assessment would be reasonable and necessary when used to 
inform the patient's diagnosis, and treatment plan established during 
the visit. ASCVD risk assessment is reasonable and necessary for a 
patient who has at least one predisposing condition to cardiovascular 
disease that may put them at increased risk for future ASCVD diagnosis. 
These conditions could include but are not limited to, obesity, a 
family history of CVD, a history of high blood pressure, a history of 
high cholesterol, a history of smoking/

[[Page 61729]]

alcohol/drug use, pre-diabetes, or diabetes. We further propose that 
the ASCVD risk assessment would not be separately billable for patients 
with a cardiovascular disease diagnosis or those who have history of a 
heart attack or stroke.
    We are not proposing any specific tool that would have to be used 
for the ASCVD risk assessment, although the assessment tool must be 
standardized and evidence-based. Proposed elements of the ASCVD risk 
assessment service would include:
     Current (from the last 12 months) laboratory data (lipid 
panel) for inputs needed for the risk assessment tool.
     Administration of a standardized, evidence-based ASCVD 
risk assessment tool that has been tested and validated through 
research, and includes the following domains:
    ++ The output of the tool must include a 10-year estimate of the 
patient's ASCVD risk. This output must be documented in the patient's 
medical record.
    ++ Demographic factors (such as age, sex).
    ++ Modifiable risk factors for CVD (such as blood pressure & 
cholesterol control, smoking status/history, alcohol and other drug 
use, physical activity and nutrition, obesity).
    ++ Possible risk enhancers (such as pre-eclampsia, pre-diabetes, 
family history of CVD).
    ++ Billing practitioners may choose to assess for additional 
domains beyond those listed above if the tool used requires additional 
domains. Examples of tools include but are not limited to, the ACC 
ASCVD Risk Estimator \134\ and the ACC PREVENT tool.\135\ CMS expects 
that the tool that is used would not introduce discriminatory bias, 
consistent with Section 1557 final rule.
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    \134\ Lloyd-Jones DM, Huffman MD, Karmali KN, Sanghavi DM, 
Wright JS, Pelser C, Gulati M, Masoudi FA, Goff DC Jr. Estimating 
Longitudinal Risks and Benefits From Cardiovascular Preventive 
Therapies Among Medicare Patients: The Million Hearts Longitudinal 
ASCVD Risk Assessment Tool: A Special Report From the American Heart 
Association and American College of Cardiology. Circulation. 2017 
Mar 28;135(13):e793 e813.
    \135\ Leading Cardiologists reveal new cardiovascular disease 
prevention risk calculator. https://newsroom.heart.org/news/leading-
cardiologists-reveal-new-heart-disease-risk-
calculator#:~:text=The%20American%20Heart%20Association%20PREVENT,CKM
%20syndrome%20into%20CVD%20prevention.
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    We are proposing for HCPCS code GCDRA to have a duration of 5-15 
minutes for the administration of an ASCVD risk assessment tool, billed 
no more often than once every 12 months.
    We are requesting comments on these proposals, as well as 
information pertaining to potential clinician education for these 
proposed codes.
(1) Proposed Valuation for ASCVD Risk Assessment GCDRA
    We propose a direct crosswalk to HCPCS Code G0136 (Administration 
of a standardized, evidence-based SDOH assessment, 5-15 minutes, not 
more often than every 6 months), with a work RVU of 0.18 as we believe 
this service reflects the resource costs associated when the billing 
practitioner performs the service described. HCPCS code G0136 has an 
intra-service time of 15 minutes, and the physician work is of similar 
intensity to proposed HCPCS code GCDRA. Therefore, we are proposing a 
work time of 15 minutes for HCPCS code GCDRA based on this same 
crosswalk to G0136. We are also proposing to use this crosswalk to 
establish the direct PE inputs for HCPCS code GCDRA.
    We are seeking comments on these proposals.
c. Atherosclerotic Cardiovascular Disease Risk Management Services 
(GCDRM)
    Over the past several years, we have worked to develop payment 
mechanisms under the PFS to improve the accuracy of valuation and 
payment for the services furnished by physicians and other healthcare 
professionals, especially in the context of evolving changes in medical 
practice using evidence-based models of care, such as the Million 
Hearts[supreg] model. We are proposing to establish a G-code to 
describe ASCVD risk management services that incorporate the ``ABCS'' 
of CVD risk reduction (aspirin, blood pressure management, cholesterol 
management, and smoking cessation) for beneficiaries at medium or high 
risk for ASCVD (>15 percent in the next 10 years) as previously 
identified through an ASCVD risk assessment. We believe that ASCVD risk 
management services include continuous care and coordination to reduce 
or eliminate further elevation of ASCVD risk over time, and potentially 
prevent the development of future cardiovascular disease diagnoses or 
first-time heart attacks or strokes.
    We are proposing new G-code, GCDRM, Atherosclerotic Cardiovascular 
Disease (ASCVD) risk management services with the following required 
elements: patient is without a current diagnosis of ASCVD, but is 
determined to be at medium or high risk for CVD (15 percent 
in the next 10 years) as previously determined by the ASCVD risk 
assessment; ASCVD-Specific care plan established, implemented, revised, 
or monitored that addresses risk factors and risk enhancers and must 
incorporate shared decision-making between the practitioner and the 
patient; clinical staff time directed by physician or other qualified 
health care professional; per calendar month. Atherosclerotic 
Cardiovascular Disease (ASCVD) risk management services refer to the 
development, implementation, and monitoring of individualized care 
plans for reducing cardiovascular risk, including shared decision-
making and the use of the ABCS of cardiovascular risk reduction, as 
well as counseling and monitoring to improve diet and exercise. We 
propose that the elements of the Atherosclerotic Cardiovascular Disease 
(ASCVD) risk management service would include:

 ASCVD Specific Risk Management, which may include:
    ++ Promoting receipt of preventive services (including tobacco 
cessation counseling, diabetes screening, diabetes self-management 
training)
    ++ Medication management (including aspirin or statins to maintain 
or decrease risk of CVD)
    ++ Ongoing communication and care coordination via certified 
electronic health record (EHR) technology
    --Synchronous, non-face-to-face communication methods must be 
offered
 ASCVD-Specific, Individualized, Electronic Care Plan
    ++ Must address modifiable risk factors and risk enhancers specific 
to CVD, as applicable, such as:
    --blood pressure and cholesterol control
    --smoking, alcohol, and other drug use status, history, and 
cessation
    --physical activity and nutrition
    --obesity
    ++ Plan must be established, implemented, and monitored and must 
incorporate shared decision-making between the practitioner and the 
patient

    Although there is no minimum service time requirement for ASCVD 
risk management services in a month, each of the proposed elements must 
be addressed to bill for the service, unless a particular element is 
not medically indicated or necessary at that time for that specific 
patient. For example, the element of smoking cessation would not be 
addressed for a patient who does not use tobacco. Documentation of each 
service element in the patient's medical record is required.
    Physicians and non-physician practitioners (NPPs) who can furnish 
E/M services could bill for ASCVD risk

[[Page 61730]]

management services. We anticipate that ASCVD risk management services 
would ordinarily be provided by clinical staff incident to the 
professional services of the billing practitioner in accordance with 
our regulation at Sec.  410.26. We are proposing that ASCVD risk 
management services would be considered a ``designated care management 
service'' under Sec.  410.26(b)(5) and, as such, could be provided by 
auxiliary personnel under the general supervision of the billing 
practitioner.
    We are proposing that patient consent must be obtained before 
starting ASCVD risk management services. Like other care management 
services, ASCVD risk management services would typically be provided by 
clinical staff outside of face-to-face patient visits. Consent can be 
written or verbal and must be documented in the medical record. Consent 
should also include informing the patient about these services, as well 
as potentially applicable Medicare cost-sharing.
    We are proposing that ASCVD risk management services could be 
billed no more often than once per calendar month, and that payment is 
limited to one practitioner per beneficiary per month. Patients must be 
determined to be at medium or high risk for CVD (>15 percent in the 
next 10 years) as previously determined by the ASCVD risk assessment 
and must not have a current diagnosis of cardiovascular disease or have 
a history of heart attack or stroke.
    We are seeking comments on each of these proposals.
(1) Proposed Valuation for ASCVD Risk Management Services (GCDRM)
    We propose a direct crosswalk to 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), with a work RVU of 0.18 as we 
believe this service reflects the resource costs associated when the 
billing practitioner performs HCPCS code GCDRM. CPT code 99211 has a 
physician intraservice time of 5 minutes, and the physician work is of 
similar intensity to our proposed HCPCS code GCDRM. Therefore, we are 
proposing a work time of 5 minutes for HCPCS code GCDRM based on this 
same crosswalk to CPT 99211. We are also proposing to use this 
crosswalk to establish the direct PE inputs for HCPCS code GCDRM, with 
modifications to reflect non-face-to-face services. These modifications 
include eliminating PE inputs used in face-to-face services such as 
preparing and cleaning the room. We are seeking comments on these 
proposals.
5. Strategies for Improving Global Surgery Payment Accuracy
a. Background
    Currently, there are approximately 4,100 physicians' services that 
are coded and valued under the PFS as global surgical packages (herein 
``global packages''). Global packages are single codes that are valued 
to include all services provided during a specified period of days (0-
day, 10-day, or 90-day global packages) by a physician (or another 
practitioner in the same group practice (as defined at 42 CFR 411.352)) 
for a specific surgical procedure. The Medicare Physician Fee Schedule 
(MPFS) look-up tool provides information on each procedure code, 
including the global surgery indicator. This tool is available at 
https://www.cms.gov/medicare/physician-fee-schedule/search/overview.
    The global packages include:
     The surgical procedure itself, including day-of pre-
service activities and day-of recovery care;
     Post-operative evaluation and management (E/M) visits and 
discharge services provided during specified post-operative periods 
(10- or 90-day periods for most minor and major procedures, 
respectively; 0-day global packages do not include post-operative 
visits);
     Pre-operative visits on the day of the procedure (for 
services with 10- and 90-day periods) and pre-operative visits on the 
day prior to the procedure (for major procedures with 90-day periods 
only);
     Services provided during the post-operative period (for 
services with 10- and 90-day periods) related to the procedure (for 
example, treatment of complications, pain management).
    Any medical care that requires a return to the operating room 
during the global period is paid separately and starts a new global 
period. Like other services paid under the PFS, post-operative visits 
that are part of the global packages can vary by level and site of 
service. Global packages, including the pre-operative, day-of, and 
post-operative visits associated with the surgical procedure, are 
valued using our annual PFS rulemaking process.
    As we discussed in the CY 2015 PFS final rule, we have identified 
and articulated several concerns with the global packages related to 
the accuracy of valuation and payment under the PFS. Foremost, we have 
longstanding concerns regarding whether the packages are valued based 
on estimates consistent with the number and kind of services actually 
being furnished. Findings from multiple OIG reports suggest that 
practitioners perform fewer post-operative visits than are expected and 
accounted for in the valuation of the global packages. We provided a 
detailed discussion of these concerns in the CY 2015 PFS final rule (79 
FR 67582 through 67591). Similarly, we described concerns that global 
packages as currently constructed may cause potential distortions in 
valuation among PFS services, and that the structure of the current 
packages assumes a single model of care delivery (a single practitioner 
or other practitioners in the same group practice furnishing the 
surgical procedure and all associated care) and does not appropriately 
address scenarios where the surgical procedure and follow-up care are 
provided by different practitioners in different group practices. 
Taking these findings and concerns into account, we finalized a policy 
to transition all 10-day and 90-day global packages to 0-day global 
packages, which would allow any post-operative visits furnished after 
the day of the procedure to be billed separately as standalone visits 
by any practitioner who furnishes them. However, in 2015, through 
amendments made by section 523 of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA; Pub. L. 114-10, enacted April 16, 
2015), we were prohibited under section 1848(c)(8)(A) of the Act from 
implementing this finalized policy. Further, under section 
1848(c)(8)(B), we were required to collect data beginning in 2017 on 
the number and level of post-operative visits typically provided to 
patients during 10- and 90-day global periods and to use this newly 
collected data and other data beginning in 2019 to improve the accuracy 
of global package valuation.
    In response to these requirements, over the past 9 years, we have:
     Initiated research contracts and implemented a data-
collection process to analyze data to understand the extent to which 
post-operative visits are furnished to patients and improve the 
accuracy of payment rates for the global surgical packages. This 
research contract was funded by CMS (HHSM-500-2014-00036I) and carried 
out within the Payment, Cost, and Coverage Program in RAND Health Care.
     Released three reports (located at https://www.cms.gov/medicare/payment/fee-schedules/physician/global-surgery-data-collection) on the number of E/M visits furnished during post-operative 
periods, the most recent finding that only 4 percent of expected post-
operative visits in 10-day global

[[Page 61731]]

packages and 38 percent of expected post-operative visits following 90-
day global packages were furnished to patients.
     Fielded and released a report on a survey of selected 
global packages, collecting information related to the level and 
complexity of medical visits furnished during post-operative periods. 
This research contract was funded by CMS (HHSM-500-2014-00036I) and 
carried out within the Payment, Cost, and Coverage Program in RAND 
Health Care.
     Released two reports on potential approaches for revaluing 
the global packages based on these findings.
     Analyzed the prevalence of transfer of care modifiers (-54 
for surgical care only; -55 for post-operative management only; and -56 
pre-operative management only) applied to global packages.
    More recently, in the CY 2023 PFS proposed and final rules, we 
reviewed the prior work and conversations around the accuracy of global 
package valuations and solicited comments from the public on (1) 
suggested strategies for revaluing these services, (2) information on 
how changes to healthcare delivery and payment may be impacting the 
relevance or accuracy of global package payments, and (3) possible 
impact of changes to global packages on health care access for 
beneficiaries (see 87 FR 69432 through 69437). In response to the 
comment solicitation in the CY 2023 PFS proposed rule, some commenters 
generally disagreed with our findings that the post-operative visits in 
the global packages are not performed as frequently as assumed in our 
valuation of global surgical packages. However, opposition from 
commenters was based on anecdotal assertions rather than alternative 
data. Many of these commenters' specific points restated earlier 
comments submitted in response to our request for feedback in the CY 
2020 PFS proposed rule on claims-based reporting of post-operative 
visits, survey findings on the level of visits, and potential 
revaluation approaches. Some commenters supported eliminating 10-day 
global package periods and requested that the AMA RUC review these 
services. However, these commenters also acknowledged that the AMA RUC 
review process could take years. In addition to the comments we 
received in response to the CY 2023 PFS proposed rule, we have received 
feedback over several years from many interested parties regarding the 
findings from claims-based reporting of post-operative visits and 
considered revaluation methodologies presented in our prior reports.
    Overall, we have continued exploring ways to improve the accuracy 
of valuation and payment for global packages to ensure appropriate 
payments to the practitioners providing pre-operative, surgery, and 
post-operative care to Medicare beneficiaries while considering 
feedback from interested parties. In addition, commenters have not 
proposed specific alternative strategies to revalue global surgical 
packages.
    Separately, we continue to review approaches to better describe 
physicians' services in the context of the evolving care delivery 
landscape and to allow practitioners to furnish patient-centered care. 
Our review work includes considering care delivery models discussed 
with interested parties (and developed though our CMS Innovation Center 
work), reviewing our policies and billing requirements, identifying 
care elements that could serve as the building blocks for describing 
newer, impactful services, and seeking opportunities to reduce 
administrative burdens for practitioners while ensuring accurate 
payment. Through this lens, we have also recently reviewed our billing 
requirements and payment policies for the global packages, concurrent 
with continued analysis of the Medicare claims data.
    While ongoing, our review highlights opportunities for us to 
clarify or revise longstanding policy and billing instructions for 
global packages, using data and experience gathered over the last 
several years, consistent with our overall objectives to pay more 
accurately for services and to right-size the valuation of PFS services 
based on how practitioners currently furnish these services. In this 
proposed rule, we discuss proposals (1) to revise our transfer of care 
policy for global packages to address instances where one practitioner 
furnishes the surgical procedure and another practitioner furnishes 
related post-operative E/M visits during the global period, and (2) to 
develop a new add-on code that would account for resources involved in 
post-operative care provided by a practitioner who did not furnish the 
surgical procedure. We believe that addressing the use of transfer of 
care modifiers, and the resources involved when practitioners who do 
not furnish the surgical procedure provide post-operative care, are 
essential steps in aligning payment with the way in which surgical 
procedures are currently furnished as evidenced in our data, and would 
make meaningful progress toward more accurate payment for these 
services in particular and improve relative valuation for PFS services 
overall.
b. Clarifying the Scope of Global Surgical Packages
    We have valued global packages to include the surgical procedure 
and services furnished during the specified global period related to 
the surgical procedure when furnished by the practitioner who performs 
the surgery (hereafter in this section, the proceduralist) or by 
another practitioner in the same group practice as the proceduralist.
    Under current Medicare payment policy, certain services furnished 
during the global period by the proceduralist or by another 
practitioner in the same group practice may be separately billed with 
an appropriate modifier:
     Initial decision for surgery: E/M service billed with 
modifier -57 (Decision for Surgery).
     E/M services unrelated to the procedure: billed with 
modifier -24 (Unrelated E/M Service During a Global Period).
     Other services unrelated to the procedure (including 
underlying condition treatment, diagnostic tests, distinct procedures) 
not including care for complications/returns to the operating room: no 
modifier required.
     Failure of a less extensive procedure requiring a more 
extensive procedure: no modifier required.
     Organ transplant immunosuppressive therapy: no modifier 
required.
     Critical care services unrelated to surgery: billed with 
modifier -FT if in the post-operative period.
    In general, except where a formal transfer of care modifier 
applies, a practitioner other than the proceduralist or a practitioner 
in the same group practice as the proceduralist can bill separately for 
an E/M visit for services they furnish during the global period for a 
global package, including post-operative E/M visits related to the 
procedure. We established formal transfer of care modifiers to apply in 
cases where the work, time, and resources involved in furnishing 
services included in the global packages are split between the 
proceduralist (or another practitioner in the same group practice) and 
other practitioners providing related post-operative visits during the 
global period. Under our current transfer of care policy, transfer of 
care modifiers must be reported when a formal transfer of care 
arrangement is documented by both the proceduralist and another 
practitioner providing the related post-operative visits. Based on our 
analysis of Medicare fee-for-service

[[Page 61732]]

claims data, these formal transfer of care modifiers are rarely used 
and, when they are, it is often with respect to certain ophthalmologic 
procedures (for example, cataract surgery).
    Based on our analysis of claims data, we believe that it may be 
helpful to review our current policy regarding the applicability of 
transfer of care modifiers for the medical and billing communities. 
Under our current policy, the scope of the global package extends to 
services furnished by the entire group practice of the proceduralist, 
including services furnished by practitioners in the group practice who 
are a different specialty from the proceduralist. In other words, the 
PFS payment for post-operative visits and other services furnished 
during the global period that are related to the surgical procedure and 
provided by the proceduralist or a practitioner in the same group 
practice as the proceduralist is bundled into the global package, and 
those services are not separately billable. If the proceduralist or a 
practitioner in the same group practice as the proceduralist wants to 
bill during the global period for a service furnished to the surgical 
patient, but unrelated to the global package, the correct modifier must 
be used to indicate that the service is not related to the global 
package. Without a modifier to indicate otherwise, during the global 
period for a global package, all E/M services furnished to the patient 
by the proceduralist or another practitioner in the same group practice 
as the proceduralist are presumed to be related to, and included in the 
payment for, the global package. Modifiers for separate payment (such 
as modifier -24) are required when services unrelated to the global 
package are billed by the proceduralist or a practitioner in the same 
group practice as the proceduralist during the global period.
c. Strategies To Address Global Package Valuation
    We recognize that we are precluded under section 1848(c)(8)(A) of 
the Act from revisiting the policy we established in the CY 2015 PFS 
final rule to revalue all 10-day and 90-day global packages to 0-day 
global packages (79 FR 67582-67591). Further, we note that 
transitioning all global packages to 0-day global periods could take 
several years and require substantial CMS resources (see CY 2014 PFS 
final rule (77 FR 44737 through 44738) for previous discussion). We 
have also considered revaluing 10-day and 90-day global packages to 
reflect the observed number of post-operative visits furnished to 
patients based on data we have collected over nearly a decade and note 
that this approach would be quicker to implement, assuming there would 
be straightforward ways to revalue the services with the data. However, 
interested parties have continued to express uncertainty about the 
validity of claims-based counts of post-operative visits. This 
uncertainty stems primarily from CMS not having complete information 
surrounding the use of the transfer of care modifiers since they are 
not currently routinely used. The same interested parties also object 
conceptually to revaluing the 10-day and 90-day global packages using 
the ``building block'' framework, where each component of a service, 
including bundled post-operative visits, contributes to total valuation 
to align valuation with the number of post-operative visits typically 
provided to patients. Some interested parties have expressed larger 
concerns about the redistributive impacts across the PFS among 
specialties if we were to implement and revalue all global packages.
    We acknowledge the practical challenges involved in revaluing 10-
day and 90-day global packages, whether they remain as 10-day and 90-
day periods with fewer post-operative visits or are transitioned to 0-
day global packages, and continue to carefully consider how to best 
improve global package valuation given access to administrative claims 
data and other inputs that help us understand the scope of services 
provided to patients within global packages. Ultimately, we want to 
ensure payments to practitioners and the relative values assigned to 
global surgical packages are accurate and, to the extent possible, 
driven by real-world objective and updatable information regarding the 
relative resources involved in furnishing the services.
    For CY 2025, we are focused on different aspects of our policy 
objectives for global packages and propose the following policies, 
which are not mutually exclusive, to obtain information and allow for 
more accurate payment to reflect time and resources spent on post-
operative care associated with the current global packages. We will 
continue to assess and monitor for potential future opportunities to 
improve our payment approach for the global packages more broadly.
    Additionally, in developing our proposed policies to pay more 
accurately for the global packages, we also considered whether, when, 
or how our policies may be affected when services are provided by the 
proceduralist, versus another practitioner who did not perform the 
procedure but is providing follow up care. We also recognize that there 
may be multiple practitioners in the same or different specialties in 
the same group practice and considered how our policies should apply to 
practitioners in a range of specialties within the same group practice. 
We are seeking comment on these considerations in the context of our 
proposed policies and welcome feedback that may further inform our 
payment policy for global packages. Additionally, as we continue to 
better understand what services are being furnished in the global 
period, by whom, and how the global surgical packages are valued and 
billed, we are seeking comment on how remote monitoring and other types 
of new technologies represent new resource costs and/or produce 
efficiencies and effectiveness of post-operative care. This information 
could be useful both for purposes of valuation for surgical and post-
operative care, as well as for policies regarding when specific PFS 
codes should be reported during global periods for global packages.
d. Expand Applicability of Transfer of Care Modifiers
    We created transfer of care payment modifiers at the inception of 
the PFS. Under our current policy, these modifiers are required to be 
appended to the relevant global package code when billing for services 
that are within the scope of the global package (within the global 
period and related to the surgical procedure) only when the 
proceduralist and one or more other practitioners who are not in the 
same group practice as the proceduralist formally document their 
agreement to provide distinct portions of the global package.
    The following transfer of care modifiers describe the different 
portions of the global surgical package that could be provided by 
different practitioners:
     Modifier -54 Surgical Care Only: this modifier is appended 
to the relevant global package code to indicate that the proceduralist 
performed only the surgical procedure portion of the global package.
     Modifier -55 Post-operative Management Only: this modifier 
is appended to the relevant global package code to indicate that the 
practitioner performed only the post-operative management portion of 
the global package.
     Modifier -56 Pre-operative Management Only: this modifier 
is appended to the relevant global package code to indicate that the 
practitioner performed only the pre-operative portion of the global 
package.

[[Page 61733]]

    For each of these modifiers, the payment for the global package is 
adjusted based on the applicable percentage noted in the PFS Relative 
Value files (https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files).
    As previously noted, we currently require the transfer of care 
modifiers (-56 pre-operative care, -54 for procedures, and -55 for 
post-operative care) to be appended in cases where there is a formal 
documented transfer of care agreement, that is, ``in the form of a 
letter or an annotation in the discharge summary, hospital record, or 
Ambulatory Surgical Center (ASC) record'' (CMS Manual System, Pub 100-
04 Medicare Claims Processing, Transmittal 11287). In our recent 
analyses of 2022 Medicare claims data, we identified that these 
modifiers were rarely used other than for certain ophthalmology global 
packages. We found over 99 percent of claim lines for 90-day surgical 
procedures billed with modifier -54 were ophthalmology services 
(primarily cataract-related procedures). We also identified a 
difference in the number of claim lines annually for a given 90-day 
global package with modifier -54 and with modifier -55. In other words, 
there are sometimes more claim lines billed with modifier -54 than 
there are corresponding lines with modifier -55 and vice versa during a 
year. We note that modifier -56 (pre-operative management only) is only 
very rarely used in practice. These recent observations suggest (1) the 
overwhelming concentration of reported transfer of care modifiers is in 
ophthalmology procedures, and (2) a potential mismatch in billing for 
formal transfer of care cases between proceduralists and other 
practitioners providing post-operative care.
    While we recognize the benefits to continuity of care when the 
proceduralist also provides pre-operative and follow-up care for the 
procedure, we also recognize that it is not always feasible, or even 
perhaps typical practice for the same practitioner to furnish all 
portions of the global package; for example, in instances when the 
practitioner furnishing the procedure does not schedule a post-
operative visit(s) on the day of the procedure or plans for the patient 
to follow up with their primary care provider, or when the practitioner 
performing the surgery arranges alternative follow-up care because it 
would be difficult for the beneficiary to travel to return for follow-
up care. Because our current policies require use of the transfer of 
care modifiers only where there is a formal documented agreement 
between practitioners to provide specific portions of the global 
package, we believe there are many practical and potentially common 
circumstances under which the transfer of care modifiers would not be 
required or used.
    Beginning for services furnished in 2025, we are proposing to 
broaden the applicability of the transfer of care modifiers for the 90-
day global packages. We are proposing to require the use of the 
appropriate transfer of care modifier (modifier -54, -55, or -56) for 
all 90-day global surgical packages in any case when a practitioner 
plans to furnish only a portion of a global package (including but not 
limited to when there is a formal, documented transfer of care as under 
current policy, or an informal, non-documented but expected, transfer 
of care). Practitioners billing for a global package procedure code 
with modifier -54 and other practitioners in the same group practice as 
that practitioner would still be able to bill during the global period 
for any separately identifiable E/M services they furnish to the 
patient that are unrelated to the global package procedure. To do so, 
the practitioner would append modifier -24 to the claim line for the E/
M service.
    This proposed policy, which would be a first step toward improved 
valuation and payment while retaining the fundamental structure of the 
global packages, would provide us with more accurate information on the 
resources involved in furnishing components of global surgical 
packages. This proposal would prevent duplicative Medicare payment for 
post-operative care because the global surgical package payment would 
be adjusted based on the appended modifier, and payment for post-
operative care would not be made both as part of a global surgical 
package and through separately billed E/M visits. We also anticipate 
that the proposed policy would provide us with insight into changes in 
standards of practice and post-operative patient care for services that 
are not billed with transfer of care modifiers pursuant to our current 
policy (that is, services other than certain ophthalmology procedures).
    We acknowledge the potential challenge associated with anticipating 
whether other practitioners will furnish portions of the global package 
and, accordingly, appending the appropriate modifier when billing 
global package services.
    We are interested in understanding and are seeking comment on the 
circumstances under which practitioners in separate group practices 
furnish different portions of the care included in global packages, and 
what that means for reporting the transfer of care modifiers. While we 
are making proposals related to the 90-day global periods beginning for 
services furnished in 2025, we are also seeking comment on whether we 
should consider proposing these changes for the 10-day global packages 
in future rulemaking.
e. Payment for Global Packages
    Under our current policy for global packages where the transfer of 
care modifiers are used (required only where there is a formal transfer 
of care arrangement), the total combined PFS payment made for the 
global package during the global period does not exceed the total 
global surgical package payment established for the procedure when 
billed without any transfer of care modifier. In general, we continue 
to believe this is the appropriate result when more than one 
practitioner furnishes portions of a global package. Under our 
proposal, we would require that practitioners performing the surgical 
procedure but not intending to furnish the post-operative portions of a 
90-day global service would appropriately append the -54 modifier that 
we have previously discussed, which would adjust the portion of payment 
received to accurately reflect the service furnished.
    More specifically, as noted in the discussion above, the transfer 
of care modifiers correspond to three distinct portions of the global 
package (pre-operative services, the surgical procedure itself, and 
post-operative care). We have assigned a proportion of the global 
package payment to each portion of the service based on longstanding 
assumptions. Under our current policy, the payment for the entire 
global package is paid to the billing practitioner unless a transfer of 
care modifier is included on the claim. Payment is only adjusted if a 
transfer of care modifier is included on the claim. We are requesting 
comments, as we further develop our payment policies for global 
packages, on how best to determine the appropriate payment proportions 
for the three portions of the global package, which impact payment to 
the different practitioners who furnish the different portions of the 
service.
    We are continuing to consider approaches to establishing the 
payment allocations for portions of the global package when the 
transfer of care modifiers are used, and anticipate revising the 
allocations through future rulemaking. We are seeking comment on

[[Page 61734]]

potential approaches to revise these payment allocations and how they 
could be established to better reflect current medical practice and 
conventions for post-operative follow-up care. We seek to identify a 
procedure-specific, data-driven method for assigning shares to portions 
of the global package payment to more appropriately reflect the 
resources involved in each portion. We would appreciate and carefully 
consider recommendations from interested parties, including the AMA 
RUC, on what those allocation percentages should be, based on how the 
global package codes are valued and any other relevant information.
    We have contracted with RAND to support data collection and 
analysis in the past and, as identified in RAND's prior reports and 
described in detail, we surmise that the policy to apportion and pay 
for the three portions of the global package based on the presence of 
transfer of care modifiers does not always work smoothly. In 
considering RAND's reports, one reason for this is that fewer post-
operative visits are provided to patients compared to the number of 
visits reflected in the valuation of global packages. The global 
packages reflect a certain number of post operative visits (noted in 
the Physician Time File) that typically occur during the post-operative 
global period. However, there is no easy way within a global package to 
separate the RVUs for the procedure itself from the RVUs for post-
operative visits that are not typically provided to patients. If our 
allocation of the global package payment based on the presence of 
transfer of care modifiers were to undervalue the surgical procedure 
portion or the post-operative care portion of the global package, we 
are concerned that we could unintentionally introduce incentives that 
influence current medical practice for transfers of care. This gets at 
RAND's prior recommendation that we revalue global packages to reflect 
the actual number of post-operative visits provided to patients. After 
revaluation, separating the procedure and post-operative payments would 
reflect observed data and mitigate any possible inappropriate 
incentives in place for practitioners to initiate transfers of care and 
support use of transfer of care modifiers as medically appropriate. 
This approach has the advantage of anchoring the valuation of separate 
-54 and -55 components using real-world information on post-operative 
visits reported to CMS rather than on historical assumptions or current 
survey data reflecting estimates of the typical number and level of 
visits.
    In our internal review of the percentages assigned for the pre-
operative, surgical care, and post-operative portions of the global 
package, we found that there are a small number of codes that do not 
have any assigned percentages in our files even though these codes are 
identified as global packages. HCPCS codes 77750 (Infusion or 
instillation of radioelement solution (includes 3-month follow-up 
care)), HCPCS code 77761 (Intracavitary radiation source applic 
simple), HCPCS code 77762 (Intracavitary radiation source applic 
intermed), and HCPCS code 77763 (Intracavitary radiation source applic 
complex) do not have assigned percentages in our RVU files. It is our 
understanding, however, that the MACs have local edits in place to 
ensure appropriate payment for these services when billed with the 
transfer of care modifiers. We are seeking comment on whether we should 
consider, first, whether these codes are appropriately categorized as 
90-day global package codes. If these are appropriately considered to 
be 90-day global package codes, we are seeking comment on what the 
assigned percentages should be for the pre-operative, surgical care, 
and post-operative portions of the service.
f. Post-Operative Care Services Add-On Code
    We recognize the importance of continuity in surgical and post-
operative care. However, we recognize that there are instances where 
post-operative care is not furnished by the proceduralist or another 
practitioner in the same group practice, or even by a practitioner who 
is in the same specialty as the proceduralist, despite there being no 
formal transfer of care. We also recognize that there is an extra level 
of complexity involved when a practitioner sees a patient post-
operatively after a surgical procedure performed by another 
practitioner in those circumstances. The practitioner providing the 
post-operative care may not be involved in creating the surgical plan, 
and may not have access to the operative notes to know how the surgery 
went or be abreast of any particular considerations related to the 
procedure that may factor in medical care decisions for the post-
operative care. As such, we recognize that there are comparatively more 
resource costs incurred when a practitioner who did not furnish the 
surgical procedure in a global package provides the follow-up care. We 
are proposing to address these scenarios, which can occur in a few 
different ways, by establishing a new add-on code that would account 
for resources involved in post-operative care for a global package 
provided by a practitioner who did not furnish the surgical procedure 
and does not have the benefit of a formal transfer of care. However, we 
note that when a patient is seen by practitioners in the same group 
practice or specialty as the surgeon, the same resources are not 
incurred during follow-up and therefore, the add-on code should not be 
billed by another practitioner in the same group practice as the 
practitioner who performed the surgical procedure, or in the same 
specialty as the practitioner who performed the surgical procedure. In 
the case of a practitioner providing follow up care who is of a 
different specialty and not within the same group practice as the 
proceduralist, researching the procedure to determine expected post-
operative course and potential complications may be needed, which would 
warrant using the add-on code. We also acknowledge that sometimes the 
proceduralist does not schedule the patient to follow up with them 
post-operatively and directs the patient to follow up with other 
practitioners as needed, such as with the patient's primary care 
provider. The patient may independently choose to follow up with their 
primary care provider or another practitioner based on other 
considerations such as convenience of the practice location or ease of 
scheduling. We understand and acknowledge that the patient can choose 
to see another practitioner without the knowledge of the practitioner 
who performed the procedure.
    To more appropriately reflect the time and resources involved in 
these kinds of visits, we are proposing to make payment using a new 
add-on code to be billed with an office/outpatient E/M visit for post-
operative follow-up care during the global period of a global package 
to capture additional resources associated with practitioners who were 
not involved in furnishing the surgical procedure. This follow-up care 
may include, but is not limited to, obtaining and reviewing the 
surgical notes and surgical history, monitoring for signs and symptoms 
of infection, taking into account any considerations from the surgical 
procedure that may affect the medical care, and monitoring for any 
potential post-operative complications that may arise. It is often 
difficult in these circumstances for the practitioner who did not 
perform the surgical procedure to know how the wound looked after the 
procedure, and so it is more challenging to recognize possible changes 
that may have occurred since

[[Page 61735]]

the time of the procedure (when this is something the operating surgeon 
would have been able to know). This new code would be billed by the 
practitioner who furnishes the post-operative office/outpatient E/M 
visits when that practitioner is not the proceduralist and is not in 
the same specialty or group practice as the proceduralist. 
Documentation in the medical record must justify use of the add-on code 
and that the E/M visit was, as clinically understood by the reporting 
practitioner, related to a post-operative visit furnished during the 
90-day post operative period. As noted earlier, we are proposing to 
expand the required use of the transfer of care modifiers as a first 
step toward improving payment for the global packages to promote 
improved valuation and payment for these services. Instituting an add-
on code to capture the time and intensity of post-operative work absent 
a formal transfer of care, would be an essential step in recognizing 
how the services are currently furnished and make meaningful progress 
toward `right-sizing' the structure of the global packages.
    Given the history of the global packages since data collection 
began, as specified in section 1848(c)(8) of the Act, and in 
consideration of our policies for post-operative care and our proposal 
requiring the use of the transfer of care modifiers in a broader set of 
circumstances, we believe that the timing is appropriate to establish 
an add-on code and payment for post-operative care provided in the 
office/outpatient setting by a practitioner other than the 
proceduralist (or another practitioner in the same specialty) to 
account for the additional time, intensity, and resources that are 
involved in post-operative care. We are proposing a new HCPCS code, 
GPOC1, to capture the additional time and resources spent in providing 
follow up post-operative care by a practitioner who did not perform the 
surgical procedure and who has not been involved in a formal transfer 
of care agreement.
    We propose the following code and descriptor for the proposed add-
on code: GPOC1 (Post-operative follow-up visit complexity inherent to 
evaluation and management services addressing surgical procedure(s), 
provided by a physician or qualified health care professional who is 
not the practitioner who performed the procedure (or in the same group 
practice), and is of a different specialty than the practitioner who 
performed the procedure, within the 090-day global period of the 
procedure(s), once per 090-day global period, when there has not been a 
formal transfer of care and requires the following required elements, 
when possible and applicable:
     Reading available surgical note to understand the relative 
success of the procedure, the anatomy that was affected, and potential 
complications that could have arisen due to the unique circumstances of 
the patient's operation.
     Research the procedure to determine expected post-
operative course and potential complications (in the case of doing a 
post-op for a procedure outside the specialty).
     Evaluate and physically examine the patient to determine 
whether the post-operative course is progressing appropriately.
     Communicate with the practitioner who performed the 
procedure if any questions or concerns arise. (List separately in 
addition to office/outpatient evaluation and management visit, new or 
established)).
    We are proposing that HCPCS code GPOC1 would be reported by a 
physician or other practitioner who did not perform the surgical 
procedure for a global package and provides related post-operative 
visits during the global period despite the absence of a formal 
transfer of care. We are proposing that the add-on code (HCPCS code 
GPOC1) would only be reported with an office or other outpatient E/M 
visit for the evaluation and management of a new or established 
patient. We would expect the documentation in the medical record to 
indicate the relevant surgical procedure, to the extent the billing 
practitioner can readily identify it, in order to aid in our 
understanding of the post-operative care being furnished and when there 
is no transfer of care modifier appended on the claim.
    We are proposing that this code could be billed only once during 
the 90-day global period for the global package because we believe the 
practitioner would only have additional resource costs upon the first 
visit following the procedure. We are proposing to assign a ZZZ global 
period payment indicator for HCPCS code GPOC1, as this allows the add-
on code to be billed during the post-operative time frame that applies 
to payment for each surgical procedure and, under our proposed policy, 
this code would be reportable with an E/M visit. The ZZZ global period 
payment indicator would identify this code as a service that is related 
to another service paid under the PFS and is always included in the 
global period of the other service.
g. Proposed Valuation for GPOC1 Add-On Code
    We note that the proposed valuation of HCPCS code GPOC1 is meant to 
capture the additional resource costs, including for visit complexity 
inherent to office/outpatient care associated with a post-operative 
visit that is not accounted for in the appropriate office/outpatient E/
M base code billed by the physician or practitioner. Therefore, we 
believe that CPT code 90785 (Interactive complexity (List separately in 
addition to the code for primary procedure)) serves as an appropriate 
reference for the purposes of valuing HCPCS code GPOC1. CPT code 90785 
was created to capture additional work that occurs during diagnostic 
psychiatric evaluation, psychotherapy, psychotherapy performed with an 
E/M service and group psychotherapy sessions, and the service refers to 
specific communication factors that complicate the delivery of a 
psychiatric/psychotherapy procedure. However, we believe there may be 
relatively less work involved for GPOC1 when compared to the work of 
CPT code 90785, considering the amount of time needed to gather the 
operative history and conduct the elements discussed above. Therefore, 
we are proposing a work RVU of 0.16, which represents approximately 
half of the assigned work for minutes of CPT code 90785. Additionally, 
we are proposing a work time of 5.5 minutes (or half of the 11 minutes 
established for CPT code 90785), personally performed by the billing 
practitioner including the elements discussed above during the post-
operative E/M visit furnished during the global period, that is, no 
later than 90-days following a 90-day global code, respectively. CPT 
code 90785 has no direct PE inputs, and we are proposing the same for 
HCPCS code GPOC1.
    To help inform whether our proposed valuation reflects the typical 
service, we are seeking comment the typical time and intensity 
physicians and practitioners spend over and above a separately billed 
E/M visit when providing post-operative care to a patient when they did 
not perform the surgical procedure, gathering the surgical history as 
well as the pre-operative, intra-operative, and post-operative, and on 
the proposed service elements and the relative intensity compared to 
similar service elements of other CPT codes. For the individual 
practitioner, not having an intimate knowledge of the procedure itself 
and not having a before/after comparison to look at for the wound can 
all complicate

[[Page 61736]]

their E/M visit. The proposed work RVUs are intended to account for the 
additional relative resource costs in time and intensity in addition to 
those involved in the E/M visit.
    Finally, we recognize that historically, the CPT Editorial Panel 
has frequently created CPT codes describing services for which we 
originally established G-codes and adopted them through the CPT 
Editorial Panel process. We note that we would consider using any newly 
available CPT coding to describe services similar to those described 
here in future rulemaking.
    For discussion of our expected utilization assumptions for this 
service, see the discussion in the Regulatory Impact Analysis section 
of this proposed rule.

H. Supervision of Outpatient Therapy Services in Private Practices, 
Certification of Therapy Plans of Care With a Physician or NPP Order, 
and KX Modifier Thresholds

1. Supervision of Outpatient Therapy Services in Private Practices
    In the CY 2024 PFS final rule, we finalized our proposal to allow 
remote therapeutic monitoring (RTM) services to be furnished by 
occupational therapy assistants (OTAs) and physical therapy assistants 
(PTAs) under the general supervision of occupational therapists (OTs) 
and physical therapists (PTs) in private practice, in an effort to 
align with the general supervision policy for these services for 
physicians and other practitioners described in the CY 2023 final rule 
(88 FR 78990). We also noted that we would consider for possible future 
rulemaking the commenters' responses to our request for information 
(RFI) on changing the supervision of therapy assistants in the private 
practice setting to general supervision for all therapy services (88 FR 
78990 through 78992).
    In the CY 2024 PFS proposed rule, we reviewed the statutory 
provisions at sections 1861(p) and 1861(g) (by cross-reference to 
section 1861(p)) of the Act that describe outpatient physical therapy 
and occupational therapy services furnished to individuals by physical 
therapists (PTs) and occupational therapists (OTs) meeting licensing 
and other standards prescribed by the Secretary if the services meet 
the necessary conditions for health and safety. These statutory 
provisions refer separately to outpatient therapy services furnished by 
a provider of services (such as a rehabilitation agency) and those 
services furnished in the therapist's office or the individual's home, 
thus distinguishing therapists who work for an institutional provider 
of therapy services from therapists who furnish and bill independently 
for these outpatient therapy services (88 FR 52358 through 52359). In 
regulations, we have addressed these therapists as physical or 
occupational therapists in private practice (PTPPs and OTPPs) (63 FR 
58868 through 58870). The regulations specific to services furnished by 
occupational or physical therapists in private practice are found at 
Sec. Sec.  410.59(c) and 410.60(c), respectively.
    We also summarized a history of related regulatory provisions in 
the CY 2024 PFS proposed rule. In the CY 2005 PFS final rule with 
comment period (69 FR 66236, 66351 through 66354), we explained that 
the personnel requirements that are applicable for Home Health Agencies 
(HHAs) at 42 CFR part 484 for therapists, therapy assistants and 
speech-language pathologists (SLPs) apply to all outpatient physical 
therapy, occupational therapy, and speech-language pathology services. 
In the CY 2005 PFS final rule, we also added a basic rule at Sec. Sec.  
410.59(a) and 410.60(a), respectively, by cross-referencing the 
qualifications for OTs and their OTAs and PTs and their PTAs for all 
occupational therapy and physical therapy services, respectively, 
including those who work in private practices, to 42 CFR part 484. 
Later, in the CY 2008 PFS final rule (72 FR 66328 through 66332), we 
updated the qualification standards at 42 CFR part 484 for OTs, OTAs, 
PTs, PTAs, and SLPs.
    In the CY 2024 PFS proposed rule, through our RFI on general 
supervision of OTAs and PTAs by OTPPs and PTPPs, respectively, we 
solicited public comment, along with supporting data, for our 
consideration for possible future rulemaking about the following: (a) 
the questions and concerns we highlighted related to access, patient 
safety, and utilization; (b) revising Sec. Sec.  410.59(a)(3)(ii) and 
(c)(2) and 410.60(a)(3)(ii) and (c)(2) to permit general supervision of 
OTAs and PTAs by the OTPP and PTPP, respectively, when furnishing 
therapy services; and (c) any appropriate exceptions to allowing 
general supervision in the furnishing of therapy services (88 FR 52358 
through 52359).
    In the CY 2024 PFS final rule, we reviewed the comments we received 
in response to the proposed rule (please refer to (88 FR 78990 through 
78992)). We noted that we would consider these comments for possible 
future rulemaking--see our review of comments on the RFI in the CY 2024 
PFS final rule (88 FR 78992).
    Over the past several years and again more recently, we have heard 
from interested parties that the direct supervision requirements in the 
private practice setting are problematic for OTPPs and PTPPs who must 
remain on-site and immediately available when Medicare patients are 
treated in order to bill for therapy services furnished by their 
supervised OTAs and PTAs. As a remedy to this situation, interested 
parties have requested that we revise our requirement for PTPPs and 
OTPPs to provide direct supervision of OTAs and PTAs to align with the 
general supervision policies for OTs and PTs that work in Medicare 
institutional settings that provide therapy services (for example, 
rehabilitation agencies, outpatient hospitals, SNFs and comprehensive 
outpatient rehabilitation facilities (CORFs), etc.), to allow for the 
general supervision of their therapy assistants. These interested 
parties tell us that their respective State laws and policies allow 
general supervision of therapy assistants (most often requiring the OT 
or PT to be in touch with their therapy assistants via 
telecommunication) in at least 44 States for PTAs,\136\ and all but one 
State for OTAs.
---------------------------------------------------------------------------

    \136\ Federation of State Boards of Physical Therapy 
Jurisdiction Licensure Reference Guide https://www.fsbpt.net/lrg/Home/SupervisionRequirementLevelsBySetting.
---------------------------------------------------------------------------

    Some interested parties have reported that allowing for general 
supervision of OTAs and PTAs by OTPPs and PTPPs, respectively, would 
allow for patients to have increased access to outpatient therapy 
services, even with ongoing healthcare workforce shortages. The 
shortages of OTs \137\ and OTAs,\138\ PTs,\139\ and PTAs,\140\ are 
noted by the United States Bureau of Labor Statistics, which shows 
thousands of open positions in all of these fields. Interested parties 
noted that over 22,000 PTs left the workforce in 2021.\141\ 
Additionally,

[[Page 61737]]

these interested parties noted that workforce shortages have greater 
impact on private practices in rural and underserved areas where hourly 
wages are lower, and the OTPPs and PTPPs in these areas tend to have 
small practices. The interested parties stated that Medicare's direct 
supervision policy, which requires the PTPP and the PTA to both be 
present when a Medicare patient is treated, does not allow small 
practices with one PT and one or two PTAs, for example, to work 
different or overlapping schedules in order to accommodate all 
patients' availability by allowing the OTA/PTA to work before or after 
the OTPP/PTPP normal hours. The interested parties also stated that the 
direct supervision requirement can unfairly delay care for Medicare 
patients when, for example, a PTPP or OTPP is out sick, the practice 
does not have alternative coverage, and appointments for Medicare 
patients must be canceled.
---------------------------------------------------------------------------

    \137\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Occupational Therapists, at https://www.bls.gov/ooh/healthcare/occupational-therapists.htm (visited 
April 17, 2024).
    \138\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Occupational Therapy Assistants and 
Aides, at https://www.bls.gov/ooh/healthcare/occupational-therapy-assistants-and-aides.htm (visited April 17, 2024).
    \139\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Physical Therapists, at https://www.bls.gov/ooh/healthcare/physical-therapists.htm (visited April 
17, 2024).
    \140\ Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Outlook Handbook, Physical Therapist Assistants and 
Aides, at https://www.bls.gov/ooh/healthcare/physical-therapist-assistants-and-aides.htm (visited April 17, 2024).
    \141\ See the report by Definitive Healthcare dated October 2022 
at https://www.definitivehc.com/sites/default/files/resources/pdfs/Addressing-the-healthcare-staffing-shortage.pdf.
---------------------------------------------------------------------------

    In light of this input, we believe that the direct supervision 
requirement for OTPPs and PTPPs of OTAs and PTAs, respectively, may 
have had an unintended consequence of limiting access to needed therapy 
services. As noted by interested parties, both the OTPP/PTPP and their 
respective OTA/PTA must be present in the office in order to bill and 
receive Medicare payment for therapy services furnished by OTAs and 
PTAs. This means, for example, that an OTPP/PTPP cannot bill and 
receive payment for therapy services furnished to a Medicare patient in 
their home when furnished by an OTA/PTA, without the presence of the 
OTPP/PTPP. The direct supervision requirement for OTAs and PTAs in the 
private practice setting is more stringent than the supervision 
requirements for OTAs and PTAs in institutional settings. For example, 
as we noted in the CY 2024 PFS proposed rule, 42 CFR 485.713 specifies 
that when an OTA or PTA provides services at a location that is off the 
premises of a clinic, rehabilitation agency, or public health agency, 
those services are supervised by a qualified occupational or physical 
therapist who makes an onsite supervisory visit at least once every 30 
days. We also cited Table 4 in our Report to Congress, titled 
``Standards for Supervision of PTAs and the Effects of Eliminating the 
Personal PTA Supervision Requirement on the Financial Caps for Medicare 
Therapy Services,'' \142\ in the CY 2024 PFS proposed rule to 
demonstrate that the minimum level of supervision by PTs and OTs for 
services performed by PTAs and OTAs working in institutional settings 
is a general level of supervision, in accordance with various 
regulations (88 FR 52359). Therefore, we believe that a change from 
direct to general supervision would allow OTPPs and PTPPs the 
flexibility to better accommodate patients' availability and act to 
ensure access to necessary therapy services. A change from direct to 
general supervision would also allow OTPPs and PTPPs to bill and 
receive Medicare payment for therapy services furnished by their OTAs 
and PTAs when they are not in the office or patient's home at the same 
time.
---------------------------------------------------------------------------

    \142\ See Table 4 of the Report to Congress titled Standards for 
Supervision of PTAs and the Effects of Eliminating the Personal PTA 
Supervision Requirement on the Financial Caps for Medicare Therapy 
Services at https://www.cms.gov/Medicare/Billing/TherapyServices/Downloads/61004ptartc.pdf.
---------------------------------------------------------------------------

    We also believe that it is important to better align our 
supervision policies for OTPPs and PTPPs with the majority of state-
established supervision levels for therapy assistants providing 
occupational therapy and physical therapy services. We note that the 
majority of states allow OTs and PTs to provide general supervision of 
their respective OTAs and PTAs when furnishing occupational therapy and 
physical therapy services. We believe that States are well aware of the 
health and safety needs for their residents who receive therapy 
services from OTs and their supervised OTAs, and PTs and their 
supervised PTAs. Given these beliefs and the input from interested 
parties, we are proposing to revise our regulations at Sec. Sec.  
410.59(a)(3)(ii) and (c)(2) and 410.60(a)(3)(ii) and (c)(2) to allow 
for general supervision of OTAs and PTAs by OTPPs and PTPPs, when the 
OTAs and PTAs are furnishing outpatient occupational and physical 
therapy services, respectively. We expect that this proposal would both 
increase access to therapy services and more closely align Medicare 
policy with the majority of State practice acts for occupational 
therapy and physical therapy. This will parallel the 44 States that 
allow general supervision of PTAs and the 49 States that allow general 
supervision of OTAs (most often described as requiring the PT or OT to 
be in touch via telecommunication). For the States with more 
restrictive supervision levels, such as direct supervision, those 
therapy services are always furnished to the extent that is permitted 
under State law. We note that while we are proposing to allow for 
general supervision by OTPPs and PTPPs of their OTAs/PTAs, an OTPP or 
PTPP would still be required to provide direct supervision to 
unenrolled OTs and PTs, respectively, in accordance with Sec. Sec.  
410.59(c)(2) and 410.60(c)(2).
    We are soliciting comment on our proposals.
2. Certification of Therapy Plans of Care With a Physician or NPP Order
    Sections 1861(p), (g), and (ll)(2) of the Act require that an 
individual outpatient is under the care of a physician and for whom a 
plan for the physical therapy, occupational therapy, or speech-language 
pathology services that are to be furnished has been established by a 
physician or by a qualified PT, OT, or SLP and is periodically reviewed 
by a physician. Sections 1835(a)(2)(C) and 1835(a)(2)(D) of the Act 
require that payment for Medicare therapy services may be made for 
outpatient physical therapy, occupational therapy, and speech-language 
pathology services only if a physician certifies (and recertifies, 
where such services are furnished over a period of time) that: (a) the 
services are or were required because the patient needs or needed 
therapy services; (b) a plan for furnishing such services was 
established by a physician or qualified therapist providing such 
services, and is periodically reviewed by the physician; and (c) the 
services are or were furnished while the individual was under the care 
of a physician.
    In accordance with the statute and Sec.  424.24(b), Medicare Part B 
pays for outpatient physical therapy and speech-language pathology 
services furnished by providers only if a physician certifies the 
content specified in Sec.  424.24(c)(1) or (4). We recognize that it 
may not be clear that Sec.  424.24(c) applies to the occupational 
therapy services furnished by providers, since occupational therapy 
services are currently only explicitly mentioned in the recertification 
requirements at Sec.  424.24(c)(4).
    We note that there are multiple references to Sec.  424.24(c) in 
the Medicare Benefit Policy Manual, Pub. 100-02, chapter 15, sections 
220.1--Conditions of Coverage and Payment for Outpatient Physical 
Therapy, Occupational Therapy, or Speech-Language Pathology Services, 
220.1.2--Plans of Care for Outpatient Physical Therapy, Occupational 
Therapy, or Speech-Language Pathology Services, and 220.1.3--
Certification and Recertification of Need for Treatment and Therapy 
Plans of Care, which convey our current policy that all outpatient 
physical therapy, occupational therapy, and speech-

[[Page 61738]]

language pathology services are subject to requirements for 
certification and recertification at Sec.  424.24, whether furnished by 
providers or by suppliers such as therapists in private practice 
(TPPs). We note that while section 1835 of the Act explicitly refers to 
services furnished by providers of services, which would include 
hospitals and other institutional providers as defined in section 
1861(u) of the Act, and clinics, rehabilitation agencies, or public 
health agencies as further described in section 1835(a) of the Act, we 
have interpreted the requirements of section 1835(a)(2)(C) and 
1835(a)(2)(D) as applying to therapy services furnished by both 
providers and suppliers. See Medicare Benefit Policy Manual, Pub. 100-
02, chapter 15, sections 220.1, 220.1.2, and 220.1.3. We believe that 
this interpretation is based on the certification and recertification 
requirements under section 1835(a) of the Act as a way to effectuate 
the requirement in sections 1861(p), (g), and (ll)(2) of the Act that 
the patient is under the care of a physician, and that the plan of 
treatment/care for the physical therapy, occupational therapy, or 
speech-language pathology services has been established by a physician 
or by a qualified PT, OT, or SLP and is periodically reviewed by a 
physician. Additionally, we thought it was important to establish 
conforming policies for these therapy services in both the outpatient 
provider and private practice settings.
    Due to the foregoing concerns, we are proposing to revise the 
headings of paragraphs (c) introductory text and (c)(1)(i) to include 
the term ``occupational therapy'' after physical therapy. We propose to 
replace the term speech pathology with the accepted term speech-
language pathology in 42 CFR 424.24(c)(1)(i). We are also proposing to 
add the term ``occupational therapist'' to 42 CFR 424.24(c)(3)(ii) 
between physical therapist and speech-language pathologist.
    The regulations at 42 CFR 424.24(c) require that a physician, nurse 
practitioner (NP), physician assistant (PA), or clinical nurse 
specialist (CNS) who has knowledge of the case sign the initial 
certification for the patient's plan of treatment. We remind readers 
that plan of treatment is synonymous with the ``plan of care'' 
mentioned above. This terminology appears in several sections of Pub. 
100-02, chapter 15, and both terms may be used interchangeably. In 
accordance with Sec.  424.24(c)(2), the initial certification must be 
obtained as soon as possible after the plan is established by a PT, OT, 
or SLP. In Pub. 100-02, chapter 15, section 220.1.3 for Certification 
and Recertification of Need for Treatment and Therapy Plans of Care, we 
specify that the physician or nonphysician practitioner (NPP) must sign 
the initial plan of care (POC) with a dated signature or verbal order 
within 30 days from the first day of treatment, including evaluation 
(or 14 days if a verbal order), in order for the PT, OT, or SLP to be 
paid for the services. For this reason, the manual also states that the 
therapist should forward the treatment plan to the physician/NPP as 
soon as it is established rather than waiting to do so. The manual 
allows for a delayed certification when the physician or NPP completes 
certification and includes a reason for the delay, and delayed 
certifications are accepted without justification up to 30 days after 
the due date.
    The regulations at Sec.  424.24(c)(4) require recertification at 
least every 90 days, and the plan or other documentation in the 
patient's medical record must indicate the continuing need for physical 
therapy, occupational therapy, or speech-language pathology services. 
The physician, nurse practitioner, clinical nurse specialist, or 
physician assistant who reviews the plan must recertify the plan by 
signing the medical record. Pub. 100-02, chapter 15, section 220.1.4.C 
clarifies that payment and coverage conditions require that the plan of 
care be reviewed as often as necessary but at least whenever it is 
certified or recertified, in order to meet the certification 
requirements. We explained in the CY 2008 PFS final rule, when changing 
the plan of care recertification interval from 30 to 90 days, this was 
done in order to allow more flexibility to the physician/NPP to order 
the appropriate amount of therapy for each patient's needs (72 FR 
66333). Thus, a physician or non-physician practitioner (NPP) may 
certify or recertify a plan of care at an interval the physician or NPP 
determines is appropriate, as long as the amount of time between each 
recertification does not exceed 90 calendar days. As many episodes of 
therapy treatment are completed in less than 30 calendar days, we 
expect that physicians and NPPs will continue to certify plans of care 
that appropriately estimate the duration of needed therapy treatment 
for a patient, even if the duration is less than 90 days.
    Over the past two years, representatives of several therapy-related 
organizations have requested that CMS reduce the administrative burden 
involved with attempting to obtain signed plans of treatment from the 
physician/NPP. They expressed concern that therapists are held 
accountable for the action or inaction of physicians/NPPs who may be 
overwhelmed with paperwork. These interested parties report that 
therapists make exhaustive efforts to obtain the physician/NPP's 
signature--some reporting that they contact physician offices (via 
phone, email, or fax, etc.) more than 30 times. Without the required 
signature, the therapist will not meet the conditions to be paid for 
the services they deliver. These interested parties recommend that 
payment for therapy services should be determined by the medical 
necessity of the service and whether the therapist has met their 
statutory and regulatory requirements. Some of these interested parties 
have noted that Pub. 100-02, chapter 15, section 220.1.1, states that 
the physician/NPP order provides evidence that the patient is under the 
care of a physician and that the services are medically necessary. 
Interested parties told us that while CMS allows treatment to begin 
before the physician's/NPP's signature is obtained, PTs, OTs, and SLPs 
in private practice do so at their own risk, knowing that they might 
not be paid for the services if the physician's office does not send 
back the signed plan of treatment. Accordingly, such interested parties 
have said that care is delayed while awaiting a physician's signature, 
which could place the beneficiary's health at risk due to the delay in 
obtaining outpatient therapy services.
    While we do not require an order or referral for a Medicare patient 
to see a PT, OT, or SLP, we have explained that the presence of a 
signed order from the treating physician satisfies statutory 
requirements that therapy is/was medically necessary and the patient 
is/was under the care of a physician (Pub. 100-02, chapter 15, section 
220.1.1). However, with this order documented in the medical record, 
after the therapist evaluates the patient and establishes the plan of 
treatment, based on the evaluation's findings, the therapist forwards 
the patient's plan of treatment back to the referring physician/NPP to 
obtain a dated signature for the same patient with the same diagnosis 
to meet coverage and payment conditions to satisfy the initial 
certification requirement--creating an administrative burden for both 
the physician/NPP and the therapist. Interested parties have reported 
to us that most patients seeking outpatient therapy services have 
written orders from their physician, not to be confused with a written 
plan of treatment. These interested parties have suggested that we 
amend the regulation

[[Page 61739]]

at Sec.  424.24(c) to permit the presumption of a physician/NPP 
signature for purposes of certification and recertification in cases 
where a signed written order or referral from the patient's physician/
NPP is on file and there is written documentation in the patient's 
medical record to substantiate the method and date (such as a fax, 
email, etc.) that the therapist forwarded the plan of care to the 
physician/NPP.
    Additionally, interested parties representing all therapy 
disciplines requested that CMS allot time for plan of treatment 
changes. Interested parties requested that when a physician/NPP orders 
the therapy services, the physician/NPP be allotted ten business days 
to modify the plan of treatment by contacting the therapist directly 
after receiving it from the therapist. For patients without a 
physician/NPP order, interested parties requested that physician/NPPs 
be given 30 days after receipt of the plan of treatment to modify the 
treatment plan.
    After reviewing our current regulatory requirements and considering 
the suggestions of interested parties, we believe it would be 
appropriate to propose to amend the regulation at Sec.  424.24(c) for 
those cases when a patient has a signed and dated order/referral from a 
physician/NPP for outpatient therapy services. Since our policy has 
been to accept the physician or NPP's signature on the plan of 
treatment to be their certification of the treatment plan's conditions 
in the content requirements of Sec.  424.24(c)(1)--that the patient 
needs or needed physical therapy, occupational therapy or speech-
language pathology services, the services were furnished while the 
individual was under the care of a physician, NP, PA, or CNS, and the 
services were furnished under a plan of treatment that meets the 
requirements of Sec.  410.61--we propose that a signed and dated order/
referral from a physician/NPP combined with documentation of such 
order/referral in the patient's medical record along with further 
evidence in the medical record that the therapy plan of treatment was 
transmitted/submitted to the ordering/referring physician or NPP is 
sufficient to demonstrate the physician or NPP's certification of these 
required conditions. Rather than characterizing this proposal as a 
``presumption,'' we are taking the view that when the patient's medical 
record includes a signed and dated written order or referral indicating 
the type of therapy needed, CMS (and our contractors) would treat the 
signature on the order or referral as equivalent to a signature on the 
plan of treatment. We believe our proposal would be reflective of the 
intent of the ordering/referring physician/NPP when that order/referral 
is on file in the patient's medical record. We further believe that 
this would still be consistent with the initial certification required 
under section 1835(a) of the Act for providers of therapy services and 
our current policy for therapy in the private practice setting. When 
the ordering/referring physician writes the referral for the type of 
therapy services they determine their patient needs or needed, they 
also review the treatment plan the therapist established at the time it 
is forwarded to them, and they verify that the services are or were 
furnished while the patient is or was under their care. As such, we 
propose to carve out an exception to the physician signature 
requirement at Sec.  424.24(c) by adding a new paragraph (c)(5). The 
proposed policy would be an exception to the physician signature 
requirement for purposes of an initial certification in cases where a 
signed and dated order/referral from a physician, NP, PA, or CNS is on 
file and the therapist has documented evidence that the plan of 
treatment has been delivered to the physician, NP, PA, or CNS within 30 
days of completion of the initial evaluation. However, at this time, we 
are not proposing and do not intend to establish an exception to the 
signature requirement for purposes of recertification of the therapy 
plan of treatment. We believe that physicians and NPPs should still be 
required to sign a patient's medical record to recertify their therapy 
treatment plans, in accordance with Sec.  424.24(c)(4), to ensure that 
a patient does not receive unlimited therapy services without a 
treatment plan signed and dated by the patient's physician/NPP.
    Under our proposal, CMS or its contractors would be able to treat 
the physician/NPP signature on the order or referral as equivalent to a 
signature on the plan of treatment for purposes of the initial 
certification if that physician/NPP has not signed and returned the 
patient's plan of treatment to the therapist within 30 days of the 
initial evaluation, but only in cases where the patient's physician/NPP 
has signed and dated the written order or referral and indicated the 
type of therapy needed, and that written order or referral is on file 
in the medical record. This proposed policy would not affect a 
contractor's ability or authority to determine whether therapy services 
are reasonable and necessary for a given beneficiary. Lastly, because 
there is no requirement for a physician/NPP order or referral for 
patients to obtain outpatient therapy services, we propose to make 
clear in proposed Sec.  424.24(c)(5) that the references to an order or 
referral in Sec.  424.24(c)(5) shall not be construed to require an 
order or referral for outpatient physical therapy, occupational 
therapy, or speech-language pathology services. We welcome comments on 
this proposal.
    In addition, we are soliciting comments to gather more information 
about the need for a regulation that would address the amount of time 
for changes to plans of treatment. Our regulations at 42 CFR 410.61(d), 
which are further clarified in our manual provisions in Pub. 100-02, 
chapter 15, section 220.1.2.C, currently allow for changes to the 
treatment plan by the physician/NPP without time restrictions. 
Interested parties have suggested that CMS allow physicians/NPPs to 
have just ten business days from the date of receipt of a plan of care 
to modify that plan of care (in the case of a patient with an order for 
the therapy services). Additionally, we are also soliciting comment as 
to whether there should be a 90 calendar day time limit on the order/
referral for outpatient therapy services in cases where the order/
referral is intended to be used in relation to the proposed regulatory 
amendment for the initial certification of the treatment plan at Sec.  
424.24(c)(5) discussed above--that 90-day limit would span from the 
order/referral date until the initial treatment of the patient, 
including the evaluation furnished by the PT, OT, or SLP. We also seek 
feedback about whether this limit, or one of a different duration, 
should be incorporated into the regulatory provision we proposed above 
for Sec.  424.24(c)(5).
    We want to clarify that we are not proposing to amend Sec.  424.27 
for CORF physical therapy, occupational therapy, and speech-language 
pathology treatment plans to align with our proposed amendments at 
Sec.  424.24 because section 1861(cc) of the Act and regulation at 42 
CFR 410.105(c) require these treatment plans to be established by a 
physician.
    We are soliciting comments on these proposals and comment 
solicitations.
3. KX Modifier Thresholds
    The KX modifier thresholds were established through section 50202 
of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 
2018) (BBA) and were formerly referred to as the therapy cap amounts. 
These per-beneficiary amounts under section 1833(g) of the Act (as 
amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L. 
105-33, August 5, 1997) are updated

[[Page 61740]]

each year based on the percentage increase in the Medicare Economic 
Index (MEI). Specifically, these amounts are calculated by updating the 
previous year's amount by the percentage increase in the MEI for the 
upcoming calendar year and rounding to the nearest $10.00. Thus, for CY 
2025, we propose to increase the CY 2024 KX modifier threshold amount 
by the most recent forecast of the 2017-based MEI. For CY 2025, the 
proposed MEI increase is estimated to be 3.6 percent and is based on 
the expected historical percentage increase of the 2017-based MEI. 
Multiplying the CY 2024 KX modifier threshold amount of $2,330 by the 
proposed CY 2025 percentage increase in the MEI of 3.6 percent ($2,330 
x 1.036) and rounding to the nearest $10.00 results in a proposed CY 
2025 KX modifier threshold amount of $2,410 for physical therapy and 
speech-language pathology services combined and $2,410 for occupational 
therapy services. We propose to update the MEI increase for CY 2025 
based on historical data through the second quarter of 2024, and we 
would use such data, if appropriate, to determine the final MEI 
percentage increase and the CY 2025 KX modifier threshold amounts in 
the CY 2025 PFS final rule.
    Section 1833(g)(7)(B) of the Act describes the targeted medical 
review (MR) process for services of physical therapy, speech-language 
pathology, and occupational therapy services. The threshold for 
targeted MR is $3,000 through CY 2027. Effective beginning with CY 
2028, the MR threshold levels would be annually updated by the 
percentage increase in the MEI, per section 1833(g)(7)(B) of the Act. 
Consequently, for CY 2025, the MR threshold is $3,000 for physical 
therapy and speech-language pathology services combined and $3,000 for 
occupational therapy services. Section 1833(g)(5)(E) of the Act states 
that CMS shall identify and conduct targeted medical review using 
factors that may include the following:
    (1) The therapy provider has had a high claims denial percentage 
for therapy services under this part or is less compliant with 
applicable requirements under this title.
    (2) The therapy provider has a billing pattern for therapy services 
under this part that is aberrant compared to peers or otherwise has 
questionable billing practices for such services, such as billing 
medically unlikely units of services in a day.
    (3) The therapy provider is newly enrolled under this title or has 
not previously furnished therapy services under this part.
    (4) The services are furnished to treat a type of medical 
condition.
    (5) The therapy provider is part of a group that includes another 
therapy provider identified using the factors described previously in 
this section.
    We track each beneficiary's incurred expenses for therapy services 
annually and count them towards the KX modifier and MR thresholds by 
applying the PFS rate for each service less any applicable MPPR amount 
for services of CMS-designated ``always therapy'' services (see the CY 
2011 PFS final rule at 75 FR 73236). We also track therapy services 
furnished by critical access hospitals (CAHs), applying the same PFS-
rate accrual process, even though they are not paid for their therapy 
services under the PFS and may be paid on a cost basis (effective 
January 1, 2014) (see the CY 2014 PFS final rule at 78 FR 74406 through 
74410).
    When the beneficiary's incurred expenses for the year for 
outpatient therapy services exceed one or both of the KX modifier 
thresholds, therapy suppliers and providers use the KX modifier on 
claims for subsequent medically necessary services. Using the KX 
modifier, the therapist and therapy provider attest that the services 
above the KX modifier thresholds are reasonable and necessary and that 
documentation of the medical necessity for the services is in the 
beneficiary's medical record. Claims for outpatient therapy services 
exceeding the KX modifier thresholds without the KX modifier included 
are denied.

I. Advancing Access to Behavioral Health Services

1. Safety Planning Interventions and Post-Discharge Telephonic Follow-
up Contacts
a. Background
    In the CY 2024 PFS proposed rule, we sought comment on whether 
there is a need for potential separate coding and payment for 
interventions initiated or furnished in the emergency department (ED) 
or other crisis settings for patients with suicidality or at risk of 
suicide, such as safety planning interventions and/or telephonic post-
discharge follow-up contacts after an emergency department visit or 
crisis encounter, or whether existing payment mechanisms are sufficient 
to support furnishing such interventions when indicated. Several 
commenters encouraged CMS to enable wider implementation under Medicare 
of the Safety Planning Intervention (SPI) and the Post-Discharge 
Telephonic Follow-up Contacts Intervention (FCI) and expressed that the 
current payment mechanisms are not sufficient, noting that the lack of 
adequate payment mechanisms and suitable billing codes for these 
interventions are barriers that are essential to address. The 
commenters noted that EDs are not the only care setting where there is 
need and opportunity to enhance suicide prevention, but that elevated 
suicide risk is particularly prevalent among ED patients. One commenter 
noted that a designated code for SPI would make it significantly easier 
to document that SPI was furnished, including in quality reporting and 
value-based payment programs.
    More than 49,000 people died by suicide in 2022 and death by 
suicide is growing significantly in older adults, who comprise most of 
the Medicare population. We recognize data showing that suicide by 
intentional overdose is a growing concern, particularly among young 
people, older people, and Black women, although researchers acknowledge 
the complexities of distinguishing intentional from unintentional 
death.\143\
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    \143\ https://www.nih.gov/news-events/news-releases/suicides-drug-overdose-increased-among-young-people-elderly-people-black-women-despite-overall-downward-tren.
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b. Safety Planning Interventions (SPI)
    Safety planning interventions involve a patient working with a 
clinician to develop a personalized list of coping strategies and 
sources of support that the person can use in the event of experiencing 
thoughts of harm to themselves or others. This is not a suicide risk 
assessment, but rather, an intervention provided to people determined 
to have elevated risk. Safety planning interventions have also been 
used to reduce the risk of overdose. The basic components of a safety 
plan include the following: (1) recognizing warning signs of an 
impending suicidal crisis or actions that increase the risk of suicide; 
(2) employing internal coping strategies; (3) utilizing social contacts 
and social settings as a means of distraction from suicidal thoughts 
and/or taking steps to reduce the risk of suicide; (4) utilizing family 
members, significant others, caregivers, and/or friends to help resolve 
the crisis; (5) contacting mental health professionals, crisis 
services, or agencies; and (6) making the environment safe, including 
restricting access to lethal means, as applicable.\144\ One important 
aspect of making an environment safe could be,

[[Page 61741]]

for example, addressing a person's access to lethal means, such as 
firearms.
---------------------------------------------------------------------------

    \144\ Barbara Stanley, Gregory K. Brown, Safety Planning 
Intervention: A Brief Intervention to Mitigate Suicide Risk, 
Cognitive and Behavioral Practice, Volume 19, Issue 2, 2012, Pages 
256-264, ISSN 1077-7229, https://doi.org/10.1016/j.cbpra.2011.01.001.
---------------------------------------------------------------------------

    We understand that safety planning is consistent with current 
practice standards and that many hospitals and clinicians in other 
settings are already providing some or all of these services to the 
people who need them, including through the Department of Veterans 
Affairs (VA).\145\ \146\ However, in one survey of EDs, only 15.3 
percent could confirm routinely implementing safety planning with all 
of the structured elements mentioned above. Provision of individual 
safety planning elements ranged from 24.8 percent (n = 492) to 79.2 
percent (n = 1710), with 2 of 6 elements being routinely provided more 
than 50 percent of the time: lists of professionals or agencies to 
contact in a crisis (1710 [79.2 percent]) and helping patients to 
recognize warning signs of suicide (1075 [52.2 percent]).\147\ Suicide 
risk among people with substance use disorders who also are at high 
risk for or may have experienced an intentional overdose is not well 
recognized.\148\
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    \145\ https://www.mentalhealth.va.gov/docs/vasafetyplancolor.pdf.
    \146\ https://www.mirecc.va.gov/visn19/research/our-research/implementation.asp.
    \147\ Bridge JA, Olfson M, Caterino JM, Cullen SW, Diana A, 
Frankel M, Marcus SC. Emergency Department Management of Deliberate 
Self-harm: A National Survey. JAMA Psychiatry. 2019 Jun 1;76(6):652-
654. doi: 10.1001/jamapsychiatry.2019.0063. PMID: 30865243; PMCID: 
PMC6552299.
    \148\ Ries RK, Livengood AL, Huh D, et al. Effectiveness of a 
Suicide Prevention Module for Adults in Substance Use Disorder 
Treatment: A Stepped-Wedge Cluster-Randomized Clinical Trial. JAMA 
Netw Open. 2022;5(4):e222945. doi:10.1001/jamanetworkopen.2022.2945.
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    Therefore, we are proposing to establish separate coding and 
payment under the PFS describing safety planning interventions. 
Specifically, we are proposing to create an add-on G-code that would be 
billed along with an E/M visit or psychotherapy when safety planning 
interventions are personally performed by the billing practitioner in a 
variety of settings. We recognize that training and expertise are 
needed to perform these interventions safely and appropriately and are 
seeking comment regarding whether clinical staff who meet the 
definition of auxiliary personnel defined at 42 CFR 410.26(a)(1) or who 
are employed by a hospital could participate in furnishing this service 
under the supervision of the billing practitioner in certain settings 
with the relevant training needed to perform the service as well as 
what sort of training would be needed.
    The proposed G-code is HCPCS code GSPI1: Safety planning 
interventions, including assisting the patient in the identification of 
the following personalized elements of a safety plan: recognizing 
warning signs of an impending suicidal crisis; employing internal 
coping strategies; utilizing social contacts and social settings as a 
means of distraction from suicidal thoughts; utilizing family members, 
significant others, caregivers, and/or friends to help resolve the 
crisis; contacting mental health professionals or agencies; and making 
the environment safe; (List separately in addition to an E/M visit or 
psychotherapy). We welcome comments on the proposed elements of the 
safety planning code.
    We are proposing to value HCPCS code GSPI1 based on the valuation 
for CPT code 90839 (Psychotherapy for crisis), which describes 60 
minutes, and which we believe describes a similar level of intensity as 
HCPCS code GSPI1. For HCPCS code GSPI1, we are assuming a typical time 
of 20 minutes, resulting in a proposed work RVU of 1.09 (based on one 
third of the work value currently assigned to CPT code 90839, which is 
3.28). We welcome comments on whether 20 minutes accurately captures 
the typical amount of time spent with a patient on safety planning 
interventions, including all six elements enumerated in this section. 
Additionally, we welcome comments on whether these interventions 
typically occur in the context of an encounter, such as an E/M visit or 
psychotherapy, or whether there may be times when they may be furnished 
as a standalone service and whether we should consider allowing this 
code to be billed on its own. We also welcome comments regarding which 
clinician types might be most likely to bill such a code on its own.
c. Post-Discharge Telephonic Follow-Up Contacts Intervention (FCI)
    Some research suggests that patients seen in the ED with deliberate 
self-harm, intentional overdose, and/or suicidal ideation have been 
associated with substantially increased risk of suicide and other 
mortality during the year following their visit to the ED.\149\ FCI is 
a specific protocol of services for individuals with suicide risk 
involving a series of telephone contacts between a provider and patient 
in the weeks and sometimes months following discharge from the 
emergency department and other relevant care settings, that occurs when 
the person is in the community and is designed to reduce the risk for 
subsequent adverse outcomes. FCI calls are typically 10-20 minutes in 
duration and aim to encourage use of the Safety Plan (as needed in a 
crisis) and updating it to optimize effectiveness, expressing 
psychosocial support, and helping to facilitate engagement in any 
indicated follow-up care and services. We note that this service would 
not be within the scope of Medicare telehealth services and not subject 
to the restrictions described in Section 1834(m) because these services 
are specifically structured to be delivered via audio-only phone calls 
and are not a substitute for an in-person service.
---------------------------------------------------------------------------

    \149\ Goldman-Mellor S, Olfson M, Lidon-Moyano C, Schoenbaum M. 
Association of Suicide and Other Mortality With Emergency Department 
Presentation. JAMA Netw Open. 2019 Dec 2;2(12):e1917571. doi: 
10.1001/jamanetworkopen.2019.17571. PMID: 31834399; PMCID: 
PMC6991205.
---------------------------------------------------------------------------

    In a recent study led by the Joint Commission, which surveyed a 
national sample of hospitals to assess the prevalence of SPI and 
several other recommended suicide prevention services, fewer than half 
of responding hospitals reported furnishing any post-discharge follow-
up contacts. Of these, only 33 percent (16 percent of responding 
hospitals overall) reported reaching discharged patients ``most of the 
time.'' Further, among hospitals that furnish follow-up contacts, fewer 
than half reported covering any of the main aims of FCI, for example, 
41 percent review the Safety Plan, 49 percent provide psychosocial 
support, and 38 percent facilitate outpatient care.\150\
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    \150\ https://www.sciencedirect.com/science/article/pii/S1553725024000679?via%3Dihub.
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    However, some studies have demonstrated that SPI and other services 
may be able to reduce suicidal behaviors. For example, in the ED-SAFE 
trial for emergency department (ED) patients identified with elevated 
suicide risk, the intervention included SPI and up to seven post-
discharge follow-up calls with the patient ``focused on identifying 
suicide risk factors, clarifying values and goals, safety and future 
planning, facilitating treatment engagement/adherence, and facilitating 
patient-significant other problem-solving.'' \151\ In the SAFE VET 
study \152\ of ED patients identified with elevated suicide risk, the 
intervention included SPI and at least two follow-up calls with 
patients ``to monitor suicide risk, review and revise the SPI, and

[[Page 61742]]

support treatment engagement.'' \153\ Each of these studies reported 
significantly lower suicide behaviors--attempts and/or deaths--among 
intervention patients compared to the respective control conditions.
---------------------------------------------------------------------------

    \151\ Miller IW, Camargo CA Jr, Arias SA, Sullivan AF, Allen MH, 
Goldstein AB, Manton AP, Espinola JA, Jones R, Hasegawa K, Boudreaux 
ED; ED-SAFE Investigators. Suicide Prevention in an Emergency 
Department Population: The ED-SAFE Study. JAMA Psychiatry. 2017 Jun 
1;74(6):563-570. doi: 10.1001/jamapsychiatry.2017.0678. PMID: 
28456130; PMCID: PMC5539839.
    \152\ https://pubmed.ncbi.nlm.nih.gov/29998307/.
    \153\ Stanley B, Brown GK, Brenner LA, Galfalvy HC, Currier GW, 
Knox KL, Chaudhury SR, Bush AL, Green KL. Comparison of the Safety 
Planning Intervention With Follow-up vs Usual Care of Suicidal 
Patients Treated in the Emergency Department. JAMA Psychiatry. 2018 
Sep 1;75(9):894-900. doi: 10.1001/jamapsychiatry.2018.1776. PMID: 
29998307; PMCID: PMC6142908.
---------------------------------------------------------------------------

    In light of this, we are proposing to create a monthly billing code 
to describe the specific protocols involved in furnishing post-
discharge follow-up contacts that are performed in conjunction with a 
discharge from the emergency department for a crisis encounter, as a 
bundled service describing four calls in a month, each lasting between 
10-20 minutes. The proposed G-code is HCPCS code GFCI1: Post discharge 
telephonic follow-up contacts performed in conjunction with a discharge 
from the emergency department for behavioral health or other crisis 
encounter, per calendar month. We seek comment on whether we should 
consider finalizing a specified duration that HCPCS code GFCI1 could be 
billed) following discharge, for example, allowing this code to be 
billed for up to two months following discharge or whether a longer 
duration would be appropriate, the number of calls per month, the 
billing structure (for example, four calls for each discharged 
patient), and any other relevant feedback.
    We are proposing to price this service based on a direct crosswalk 
to CPT code 99426 (Principal care management; first 30 minutes of 
clinical staff time directed by a physician or other qualified 
healthcare professional), which is assigned a work value of 1.00 work 
RVUs. Since CPT code 99426 describes care management for a single 
condition, we believe the work would be similar in nature and 
intensity. We note that under this proposal, proposed HCPCS code GFCI1 
could be billed regardless of whether proposed HCPCS code GSPI1 was 
also furnished and billed for the same patient. We propose that the 
billing practitioner would need to meet a threshold of at least one 
real-time telephone interaction with the patient in order to bill HCPCS 
code GFCI1, and that unsuccessful attempts to reach the patient would 
not qualify as a real-time telephone interaction. We welcome comments 
on this proposed threshold to bill HCPCS code GFCI1, recognizing that 
while practitioners may attempt to reach the patient, there may be 
times when the patient cannot be reached. We are also proposing that 
the billing practitioner could not count time or effort more than once 
for the purposes of billing this code and another service.
    Additionally, as we recognize that behavioral health practitioners, 
training programs, and institutions have worked conscientiously to have 
risk assessment and safety planning for high-risk patients integrated 
into their workflows for many years and that discharge instructions and 
after visit planning may represent one of many final products from the 
synthesis of all the steps involved in these encounters, we note that 
we do not intend to unnecessarily disaggregate aspects of streamlined 
clinical workflows that providers are successfully using to treat high 
risk patients. Moreover, we also recognize that practitioners may 
currently be billing for safety planning activities using existing 
coding, such as E/M visits, psychotherapy, and crisis management codes 
or potentially for follow-up calls using existing care management 
services. However, to the extent that this intervention is part of the 
standard of care, we believe that Medicare payment should accurately 
reflect the additional resource costs involved in furnishing this 
service.
    Lastly, as applicable Part B cost sharing would apply for HCPCS 
code GFCI1, we are proposing to require the treating practitioner to 
obtain verbal (or written) beneficiary consent in advance of furnishing 
the services described by GFCI1, which would be documented by the 
treating practitioner in the medical record, similar to the conditions 
of payment associated with care management and other non-face-to-face 
services paid under the PFS. We note that under this proposal, 
obtaining advance consent would include: (1) ensuring that the patient 
is aware that Medicare cost sharing applies to these services; (2) 
furnishing and receiving the necessary information to enable the 
patient to receive these services (for example, obtaining the patient's 
telephone number(s)); and (3) confirming that the patient consents to 
the contacts.
2. Digital Mental Health Treatment (DMHT)
    We are proposing Medicare payment to billing practitioners for 
digital mental health treatment (DMHT) devices furnished incident to or 
integral to professional behavioral health services used in conjunction 
with ongoing behavioral health care treatment under a behavioral health 
treatment plan of care. We are refining the digital cognitive 
behavioral therapy ``digital CBT'' terminology that we have used 
previously (88 FR 52262, 52370 through 52371, 88 FR 78818, 79012 and 
79013). We are proposing Medicare payment to billing practitioners for 
digital mental health treatment (DMHT) devices furnished incident to or 
integral to professional behavioral health services used in conjunction 
with ongoing. In this proposed rule we use the term ``digital mental 
health treatment (DMHT) device'' to include the term ``digital CBT'' we 
used in prior rulemaking and in general to refer to software devices 
cleared by the Food and Drug Administration (FDA) that are intended to 
treat or alleviate a mental health condition, in conjunction with 
ongoing behavioral health care treatment under a behavioral health 
treatment plan of care, by generating and delivering a mental health 
treatment intervention that has a demonstrable positive therapeutic 
impact on a patient's health. We note first that the Diagnostic and 
Statistical Manual of Mental Disorders-5 (DSM) does not refer to 
psychiatric disorders but to mental disorders. In this section, 
following the DSM, we use the term behavioral health conditions and 
mental disorders interchangeably and to mean psychiatric disorders as 
referenced in FDA regulation, 21 CFR 882.5801. Second, we note that FDA 
guidance refers to computerized behavioral therapy by the acronym CBT. 
We aim to both provide access to vital behavioral health services and 
gather further information about the delivery of digital behavioral 
health therapies, their effectiveness, their adoption by practitioners 
as complements in the care they furnish, and their use by patients for 
the treatment of behavioral health conditions. We also recognize that 
there are certain statutory limitations on payment for products under 
the broader category of ``digital health interventions.'' We 
acknowledge that the field of digital therapeutics is evolving and are 
open to feedback from the public on this topic, including the CPT 
Editorial Panel. Additionally, we recognize that historically, the CPT 
Editorial Panel has frequently created CPT codes describing services 
that we originally established using G codes and adopted them through 
the CPT Editorial Panel process. We note that we would consider using 
any newly available CPT coding to describe services similar to those 
described here in future rulemaking.
a. Background
    Over the last 5 years the AMA CPT Editorial Panel and CMS have

[[Page 61743]]

developed coding and separate payment for monitoring physiologic status 
using software enabled devices that capture and record or transmit data 
that may be reported to and interpreted by practitioners to manage a 
patient under a specific treatment plan. (83 FR 59452, 59574) Medicare 
payment has long been available for practitioner provision of 
monitoring equipment and other kinds of devices provided incident to or 
integral to the practitioner's professional services. Most recently we 
have finalized payment for devices which record data related to signs, 
symptoms, and functions of a therapeutic response (typically for use in 
association with physical or occupational therapy care) (86 FR 64996, 
65114-65116).
    However, technologies that rely primarily on software, licensing, 
and analysis fees, with minimal costs in equipment and hardware may not 
have been typical and are not well accounted for in our practice 
expense (PE) methodology. PE resources involved in furnishing services 
are characterized as either direct or indirect costs. Direct costs of 
the PE resources involved in furnishing a service are estimated for 
each HCPCS code and include clinical labor, medical supplies, and 
medical equipment. Indirect costs include administrative labor, office 
expenses, and all other expenses. Indirect PE is allocated to each 
service based on physician work, direct costs, and a specialty-specific 
indirect percentage. The source of the specialty specific indirect 
percentage is the Physician Practice Information Survey (PPIS), last 
administered in 2007 and 2008, prior to the adoption of digital therapy 
technologies (86 FR 65037). Nevertheless, in past rulemaking, we have 
recognized that in some cases practitioners do incur resource costs for 
the purchase and ongoing use of software (86 FR 65038).
    In the CY 2023 PFS final rule, we finalized our proposal to accept 
the RUC recommendation to contractor price CPT code 98978 (Remote 
therapeutic monitoring (e.g., therapy adherence, therapy response); 
device(s) supply with scheduled (e.g., daily) recording(s) and/or 
programmed alert(s) transmission to monitor cognitive behavior therapy, 
each 30 days), a PE-only device code (86 FR 69523, 69646). At the time, 
specialty societies indicated that the technologies for this service 
are still evolving, and that as a result, there were no invoices for 
devices specific to the cognitive behavioral therapy monitoring 
services described by the code that could be shared. There was no 
professional work associated with the code.
    In the CY 2024 PFS proposed rule, we requested information on 
digital therapeutics for behavioral health. Among many questions, we 
asked how practitioners determine which patients might be best served 
by digital therapeutics and how practitioners monitor the effectiveness 
of prescribed interventions on an ongoing basis once the intervention 
has begun. We also asked how the treating clinician was involved in the 
services received. We asked what scientific and clinical evidence of 
effectiveness CMS should consider when determining whether digital 
therapeutics for behavioral health, including care for substance use 
disorders, depression, sleep disorders and other conditions are 
reasonable and necessary. We asked whether DMHT devices were used as 
incident to supplies or independent of a patient visit with a 
practitioner and if practitioners in such cases issued an order for 
such devices (88 FR 52262, 52370 through 52371). These factors related 
to the nature of this treatment compared to other PFS services pose 
challenges for fitting DMHT services into the existing benefit 
structure under the PFS.
    Setting appropriate pricing under the PFS has also presented 
challenges. As noted previously, technologies that rely primarily on 
software, licensing, and analysis fees, with minimal costs in equipment 
and hardware are not well accounted for in our practice expense (PE) 
methodology, even though these items may be appropriately considered 
practice expenses. Consequently, over the past several years, we have 
relied on a crosswalk methodology to approximate relative resource 
costs for these kinds of services relative to other PFS services, or 
contractor pricing.
    Interested parties requested that we adopt coding specifically for 
DMHT devices, where the digital software device is the actual therapy/
intervention (the algorithm software is the DMHT) as opposed to a 
therapeutic monitoring device that transmits patient data as described 
by CPT code 98978 for which we finalized contractor pricing in CY 2023. 
Interested parties have also asked us to set national pricing for the 
service to supply the DMHT device and education/onboarding that 
reflects the direct practice expense incurred by practitioners when 
furnishing DMHT. One of the interested parties submitted invoices to 
provide data we could use as the basis to set payments for DMHT coding. 
The interested party submitted four invoices reflecting considerable 
variation in the cost of the DMHT treatment over 30-day and 90-day 
periods. There is still more variation in pricing for comparable 
products that are available for considerably lower prices in various 
markets, with prices ranging from free to $140 per year, based on an 
online search (https://www.carepatron.com/app/cbt-therapy-apps, 
accessed March 20, 2024).
    As the field of innovative products including digital therapeutics 
and computerized behavioral therapy devices for psychiatric or mental 
disorders develops and expands, the FDA and Substance Abuse and Mental 
Health Services Administration (SAMHSA) among other agencies such as 
the Veterans Health Administration (VHA) are also monitoring the 
development of the field of digital therapeutic devices, including for 
behavioral health purposes. For example, VHA is providing digital 
behavioral health applications as self-help tools, not independent 
treatment interventions. The FDA has a regulatory framework, discussed 
below in this section, to classify devices and review computerized 
behavioral therapy devices for psychiatric disorders.
b. Payment for Digital Mental Health Treatment (DMHT) Devices
    We recognize that digital therapeutics may offer innovative means 
to access certain behavioral health care services. The FDA definition 
of devices encompasses software intended by the manufacturer to be 
used, alone or in combination for the specific medical purpose of 
diagnosis, prevention monitoring treatment or alleviation of disease 
and does not achieve its primary intended action by pharmacological, 
immunological or metabolic means.\154\ SAMHSA has defined digital 
therapeutics (DTx) in the behavioral health context as ``health 
software intended to treat or alleviate a disease, disorder, condition, 
or injury by generating and delivering a medical intervention that has 
a demonstrable positive therapeutic impact on a patient's health.'' 
\155\ SAMHSA also notes that ``DTx may be used independently or in 
concert with medications, devices, or other therapies to optimize 
patient care and health outcomes.'' Given nationwide behavioral health 
workforce shortages combined with increasing demand for behavioral 
health care services, some Medicare beneficiaries may have limited

[[Page 61744]]

access to these services.\156\ This proposal encompasses only part of 
what may be a spectrum of broadly similar products, most of which might 
require a new statutory Medicare benefit category. Our proposed coding 
and payment policy only applies to DMHT devices that have been cleared 
by the FDA. Many digital platforms and applications are marketed as 
behavioral health and wellness interventions; this proposal does not 
extend to such platforms and applications in part because other than 
some DTx, few have evidence demonstrating improved behavioral health 
outcomes.\157\
---------------------------------------------------------------------------

    \154\ https://www.imdrf.org/sites/default/files/docs/imdrf/final/technical/imdrf-tech-131209-samd-key-definitions-140901.pdf.
    \155\ https://store.samhsa.gov/product/advisory-digital-therapeutics-management-and-treatment-behavioral-health/pep23-06-00-001.
    \156\ https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/behavioral-health-2013-2025.pdf.
    \157\ https://store.samhsa.gov/product/advisory-digital-therapeutics-management-and-treatment-behavioral-health/pep23-06-00-001.
---------------------------------------------------------------------------

    We propose to create three new HCPCS codes for DMHT devices modeled 
on coding for RTM services. Effective beginning in CY 2025, we propose 
that physicians and practitioners who are authorized to furnish 
services for the diagnosis and treatment of mental illness would be 
able to bill a new HCPCS code: GMBT1 (Supply of digital mental health 
treatment device and initial education and onboarding, per course of 
treatment that augments a behavioral therapy plan) for furnishing a 
DMHT device. GMBT1 would be payable only if the DMHT device has been 
FDA cleared and the billing practitioner is incurring the cost of 
furnishing the DMHT device to the beneficiary. Furnishing of the DMHT 
device must be incident to the billing practitioner's professional 
services in association with ongoing treatment under a plan of care by 
the billing practitioner. The billing practitioner must diagnose the 
patient and prescribe or order the DMHT device. The patient could then 
use the DMHT device at home or perhaps in an office or other outpatient 
setting, if that is how the device has been cleared by FDA for use 
under 21 CFR 882.5801. The DMHT device furnished must have demonstrated 
a reasonable assurance of safety and effectiveness. The FDA makes a 
determination of safety and effectiveness under 21 CFR 860.7. When 
making this determination, the FDA will consider a variety of factors 
including users, conditions of use, probable benefit to health weighed 
against probable injury, and reliability. The regulation at 21 CFR 
860.7, states that ``[t]here is reasonable assurance that a device is 
safe when it can be determined, based upon valid scientific evidence, 
that the probable benefits to health from use of the device for its 
intended uses and conditions of use, when accompanied by adequate 
directions and warnings against unsafe use, outweigh any probable 
risks.'' GMBT1 would not be payable in cases where the billing 
practitioner incurs no cost in acquiring and furnishing the DMHT 
device, or a patient procures the DMHT device independent of the 
practitioner. We will continue to monitor how DMHT devices are used as 
part of overall care.
    We seek comment about other parameters that we should consider 
regarding the services described by GMBT1:
     Whether payment should be made if the practitioner 
furnishes a digital device that has not been cleared by FDA for mental 
health treatment for a specific use, even if the digital device has 
been cleared by the FDA for another specific use;
     Whether payment should be made for DMHT devices cleared by 
the FDA not only under 21 CFR 882.5801 but also under other 
regulations;
     Whether and how payment might be limited if a patient 
discontinues use of the DMHT device before completing a course of 
treatment; and
     Whether and how payment might be limited to a set number 
of DMHT devices per calendar month per patient.
    In light of the pricing variability, as discussed above, we are 
proposing contractor pricing for code GMBT1. We seek comment regarding 
what national pricing methodology we might consider, including what 
potential crosswalks would be appropriate.
    We are also proposing to establish payment for two additional new 
codes. These proposed codes are GMBT2 (First 20 minutes of monthly 
treatment management services directly related to the patient's 
therapeutic use of the digital mental health treatment (DMHT) device 
that augments a behavioral therapy plan, physician/other qualified 
health care professional time reviewing data generated from the DMHT 
device from patient observations and patient specific inputs in a 
calendar month and requiring at least one interactive communication 
with the patient/caregiver during the calendar month) and GMBT3 (Each 
additional 20 minutes of monthly treatment management services directly 
related to the patient's therapeutic use of the digital mental health 
treatment (DMHT) device that augments a behavioral therapy plan, 
physician/other qualified health care professional time reviewing data 
generated from the DMHT device from patient observations and patient 
specific inputs in a calendar month and requiring at least one 
interactive communication with the patient/caregiver during the 
calendar month). Under this proposal, GMBT1 requires that the billing 
practitioner who diagnosed the patient and prescribed or ordered the 
DMHT device or that billing practitioner's clinical staff must monitor 
the patient's therapeutic response to the DMHT device and adjust the 
behavioral health therapy plan as needed. GMBT2 and GMBT3 should only 
be billed when there is ongoing use of the DMHT device and should not 
be billed in cases where the patient discontinues use of the DMHT 
device.
    For GMBT2 (first 20 minutes of monthly treatment management 
services directly related to use of the DMHT device), we propose 
valuing the first 20 minutes of treatment management services based on 
a direct crosswalk to CPT code 98980 (remote therapeutic monitoring 
first 20 minutes), which is assigned a work RVU of .62. For GMBT3 (each 
additional 20 minutes of monthly treatment management services directly 
related to DMHT device), we propose to value this code based on a 
crosswalk to CPT code 98981 (remote therapeutic monitoring each 
additional 20 minutes), which is assigned a work RVU of .61. We believe 
that the work and PE described by these crosswalk codes are analogous 
to the services described in GMBT2 and GMBT3, respectively, because 
they include similar physician/other qualified health care professional 
time in a calendar month requiring at least one interactive 
communication with the patient/caregiver during the calendar month. We 
welcome comments on the proposed RVUs.
3. Interprofessional Consultation Billed by Practitioners Authorized by 
Statute To Treat Behavioral Health Conditions
a. Background
    In the CY 2019 PFS final rule (83 FR 59489), we finalized payment 
for six CPT codes regarding interprofessional consultations (99451, 
99452, 99446, 99447, 99448, 99449). The six codes describe assessment 
and management services conducted through telephone, internet, or 
electronic health record consultations furnished when a patient's 
treating physician or other qualified healthcare professional requests 
the opinion and/or treatment advice of a consulting physician or 
qualified healthcare professional with specific specialty expertise to 
assist with the diagnosis and/or management of the patient's condition 
without the need for the patient's face-to-face contact with the 
consulting physician or qualified healthcare professional. We 
established coding and payment for

[[Page 61745]]

these services to reflect changing healthcare practices, technology, 
and the shift to treatment of chronic conditions in the Medicare 
population. In the CY 2019 PFS final rule (83 FR 59491), we established 
a policy to limit billing of these codes to the types of practitioners 
who can independently bill Medicare for E/M visits. We did not finalize 
the expansion of practitioners beyond those who can furnish E/M visits 
in the CY 2019 PFS final rule due to our belief that interprofessional 
consultations are primarily for the ongoing evaluation and management 
of the patient, including collaborative medical decision making among 
practitioners (83 FR 59491).
    In the CY 2024 PFS proposed rule (88 FR 52369), we sought comment 
on expanding access to behavioral health services, including whether we 
should consider new coding to allow interprofessional consultation to 
be billed by practitioners in specialties whose covered services are 
limited by statute (Clinical psychologists at section 1861(ii) of the 
Act, Clinical social workers at section1861(hh) of the Act, Marriage 
and Family Therapists and Mental Health Counselors at sections 
1861(lll)(1) and 1861(lll)(3) of the Act, respectively) to services for 
the diagnosis and treatment of mental illness (which includes substance 
use disorders). The CPT codes describing interprofessional consultation 
(CPT codes 99451, 99452, 99446, 99447, 99448, 99449) are currently 
limited to being billed by practitioners who can independently bill 
Medicare for E/M visits. As such, they cannot be billed by clinical 
psychologists, clinical social workers, marriage and family therapists, 
or mental health counselors because these practitioners cannot 
independently bill Medicare for E/M visits. We are proposing new codes 
that would allow clinical psychologists, clinical social workers, 
marriage and family therapists, and mental health counselors to bill 
for interprofessional consultations with other practitioners whose 
practice is similarly limited, as well as with physicians and 
practitioners who can bill Medicare for E/M services and would use the 
current CPT codes to bill for interpersonal consultations. These new 
codes would facilitate interprofessional consultations between 
treating/requesting practitioners and consultant practitioners, whether 
one or both of the practitioners is in a specialty whose practice is 
limited to the diagnosis and treatment of mental illness. When the 
treating/requesting practitioner or consultant practitioner is a 
physician or practitioner authorized to bill Medicare for E/M services, 
the practitioner would continue to bill using the current CPT codes 
that describe interprofessional consultation, listed previously in this 
section. Depending on which practitioner type is billing, and assuming 
all service requirements of the code descriptors are met, the 
consulting practitioner could bill the applicable codes, either HCPCS 
code (GIPC1-5) or CPT code (99451, 99452, 99446, 99447), determined by 
the amount of time spent on the consultation and whether a written and 
verbal consultation is provided or only a written consultation is 
provided. Similarly, depending on which practitioner type is billing, 
and assuming all service requirements of the code descriptors are met, 
the treating/requesting practitioner could bill either HCPCS code GIPC6 
or CPT code 99449 for the time spent on their referral service.
    We believe that proposing payment for these interprofessional 
consultations performed via communications technology such as telephone 
or internet (including videoconference) is consistent with our ongoing 
efforts to appropriately recognize and reflect behavioral health care 
within the PFS. Currently, there is no payment mechanism to recognize 
the time and effort of performing these services by clinical 
psychologists, clinical social workers, marriage and family therapists, 
or mental health counselors. We have also previously received comments 
from interested parties that by not making separate payment for these 
services, CMS would not be accurately paying for the work of both the 
treating and consulting practitioner in a consultative scenario. With 
the proliferation of team-based approaches to care that are often 
facilitated by electronic medical record technology, we believe that 
making separate payment for interprofessional consultations undertaken 
for the benefit of treating a patient will contribute to payment 
accuracy under the PFS for behavioral health services.
b. Coding
    To further expand access to behavioral health services, we are 
proposing payment for six new G codes: GIPC1 (Interprofessional 
telephone/internet/electronic health record assessment and management 
service provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness, including a verbal and written report to 
the patient's treating/requesting practitioner; 5-10 minutes of medical 
consultative discussion and review), GIPC2 (Interprofessional 
telephone/internet/electronic health record assessment and management 
service provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness, including a verbal and written report to 
the patient's treating/requesting practitioner; 11-20 minutes of 
medical consultative discussion and review), GIPC3 (Interprofessional 
telephone/internet/electronic health record assessment and management 
service provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness, including a verbal and written report to 
the patient's treating/requesting practitioner; 21-30 minutes of 
medical consultative discussion and review), GIPC4 (Interprofessional 
telephone/internet/electronic health record assessment and management 
service provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness, including a verbal and written report to 
the patient's treating/requesting practitioner; 31 or more minutes of 
medical consultative discussion and review), GIPC5 (Interprofessional 
telephone/internet/electronic health record assessment and management 
service provided by a practitioner in a specialty whose covered 
services are limited by statute to services for the diagnosis and 
treatment of mental illness, including a written report to the 
patient's treating/requesting practitioner, 5 minutes or more of 
medical consultative time), and GIPC6 (Interprofessional telephone/
internet/electronic health record referral service(s) provided by a 
treating/requesting practitioner in a specialty whose covered services 
are limited by statute to services for the diagnosis and treatment of 
mental illness, 30 minutes). We welcome comments on this proposal.
    Additionally, since these codes describe services that are 
furnished by the treating/requesting practitioner and the consultant 
practitioner without the involvement of the patient, we are proposing 
to require the treating practitioner to obtain the patient's consent in 
advance of these services, which would be documented by the treating 
practitioner in the medical record, similar to the conditions of 
payment associated with the CPT interprofessional consultation codes 
and certain other non-face-to-face services paid under the PFS. 
Obtaining advance patient consent includes ensuring that

[[Page 61746]]

the patient is aware that Medicare cost sharing applies to these 
services, including informing the patient that there may be cost 
sharing for two services (one for the treating/requesting 
practitioner's service and another for the consultant practitioner's 
service). We welcome comments on this proposal.
c. Valuation
    We are proposing to value the six proposed new G codes based on 
crosswalks to the six CPT codes for interprofessional consultations for 
practitioners who can independently bill Medicare for E/M visits (CPT 
codes 99451, 99452, 99446, 99447, 99448, 99449). We are proposing a 
work RVU of 0.35 for GIPC1 based on a crosswalk to CPT code 99446, a 
work RVU of 0.70 for GIPC2 based on a crosswalk to CPT code 99447, a 
work RVU of 1.05 for GIPC3 based on a crosswalk to CPT code 99448), a 
work RVU of 1.40 for GIPC4 based on a crosswalk to CPT code 99449, a 
work RVU of 0.70 for GIPC5 based on a crosswalk to CPT code 99451, and 
a work RVU of 0.70 for GIPC6 based on a crosswalk to 99452. Since there 
are no direct PE inputs assigned to the six CPT codes describing 
interprofessional consultation services on which we are basing the 
proposed valuation for the new HCPCS codes GIPC1 through GIPC6, we are 
not proposing any direct PE inputs for these codes. We welcome comments 
on this proposal.
4. Comment Solicitation on Payment for Services Furnished in Additional 
Settings, Including Freestanding SUD Treatment Facilities, Crisis 
Stabilization Units, Urgent Care Centers, and Certified Community 
Behavioral Health Clinics (CCBHCs)
    In the CY 2024 OPPS final rule (88 FR 81809 through 81858), we 
finalized payment for IOP services furnished in hospital outpatient 
departments (HOPDs), Community Mental Health Centers (CMHCs), Federally 
Qualified Health Centers (FQHCs), and Rural Health Clinics (RHCs), and 
Opioid Treatment Programs (OTPs). We note that Section 4124 of the 
Consolidated Appropriations Act (CAA), 2023, authorized payment for IOP 
services in HOPDs, CMHCs, FQHCs, RHCs, and that we additionally used 
existing statutory authority to propose and finalize payment for IOP 
services furnished in OTPs. CMS is monitoring utilization and uptake of 
IOP services in these settings. We have heard from other treatment 
settings that furnish IOP services that do not fall into the categories 
of HOPDs, CMHCs, FQHCs, RHCs, or OTPs, such as freestanding SUD 
facilities, that have an interest in billing Medicare for these 
services. In light of this, we are seeking comment on whether IOP 
services are furnished in other settings in order to determine whether 
potential coding and payment for IOP services under the PFS would 
facilitate these services being billed in additional settings.
    In particular, we are interested in feedback on the following 
questions, as well as any other relevant feedback:
     To what extent do freestanding SUD facilities or other 
entities that furnish IOP services employ practitioner types who can 
supervise auxiliary personnel and bill Medicare for their services? For 
example, do they typically employ physicians, clinical psychologists, 
nurse practitioners, clinical nurse specialists, certified nurse 
midwives and physician assistants who are eligible to provide general 
supervision to auxiliary personnel who furnish behavioral health 
services?
     Would bundled payments under the PFS similar to those 
finalized in the CY 2024 OPPS final rule (88 FR 81809-81858) better 
facilitate billing for IOP services in a broader range of settings?
     If CMS outlined how freestanding SUD facilities could bill 
Medicare under the PFS, would there be an impact in underserved areas?
     To what extent do freestanding SUD facilities see patients 
with Medicare or who are dually eligible for Medicare and Medicaid?
    Additionally, we are seeking comment on entities that offer 
community-based crisis stabilization, including 24/7 receiving and 
short-term stabilization centers, that provide immediate access to 
voluntary and/or involuntary care, without the need for a referral. 
Regarding such crisis stabilization units, we are interested in 
feedback on the following questions, as well as any other relevant 
feedback:
    ++ What kind of services do crisis stabilization units provide? Do 
crisis stabilization units provide services similar to those described 
by the psychotherapy for crisis codes (CPT codes 90839 and 90840)?
    ++ Does the definition of crisis stabilization unit vary by State? 
If so, what are the variations and similarities across States?
    ++ If CMS outlined how crisis stabilization units could bill 
Medicare under the PFS, would there be an impact in underserved areas?
    ++ To what extent do crisis stabilization units see patients with 
Medicare or who are dually eligible for Medicare and Medicaid?
    ++ To what extent do crisis stabilization units employ practitioner 
types who can supervise auxiliary personnel and bill Medicare for their 
services. For example, do crisis stabilization units typically employ 
physicians, clinical psychologists, nurse practitioners, clinical nurse 
specialists, certified nurse midwives and physician assistants who are 
eligible to provide general to auxiliary personnel who furnish 
behavioral health services?
    Additionally, as a separate example, we've received information 
from interested parties that there is a similar concern regarding 
urgent care centers more broadly. These interested parties note that 
hospital emergency departments are often used by beneficiaries to 
address non-emergent urgent care needs that could be appropriately 
served in less acute settings, but where other settings, such as 
physician offices, urgent care centers or other clinics, are not 
available or readily accessible. Patients enter EDs to treat common 
conditions like allergic reactions, lacerations, sprains and fractures, 
common respiratory illnesses (for example, flu or RSV), and bacterial 
infections (for example, strep throat, urinary tract infections or 
foodborne illness). Conditions like these often can be treated in less 
acute settings. We are interested in system capacity and workforce 
issues broadly and are interested in hearing more on those issues, 
including how entities such as urgent care centers can play a role in 
addressing some of the capacity issues in emergency departments. In 
particular, we are interested in feedback on the following questions, 
as well as any other relevant feedback:
     What types of services would alternative settings to EDs 
need to offer to meet beneficiaries' non-emergent, urgent care needs?
     Does the current ``Urgent Care Facility'' Place of Service 
code (POS 20) adequately identify and define the scope of services 
furnished in such settings? Is this place of service code sufficiently 
distinct from others such as ``Walk-in Retail Health Clinic (POS 17) 
and ``Office'' (POS 11)? If not, how might these Place of Service code 
definitions be modified?
     Does the existing code set accurately describe and value 
services personally performed by professionals and costs incurred by 
the facility in these settings?
     How might potential strategies to reduce overcrowding and 
wait times in EDs advance equity in access to health care services?
    Lastly, we are seeking comment regarding Certified Community 
Behavioral Health Clinics (CCBHCs).

[[Page 61747]]

Specifically, we are interested in feedback on the following questions:
    ++ What kind of services do CCBHCs provide? Do they provide IOP 
services, services for the treatment of substance use disorders, 
psychotherapy, behavioral health integration, community health 
integration, or principal illness navigation services to patients with 
either Medicare or another payer?
    ++ If CMS outlined how CCBHCs could bill Medicare under the PFS, 
would there be an impact in underserved areas?
    ++ To what extent do CCBHCs see patients with Medicare or who are 
dually eligible for Medicare and Medicaid?
    ++ To what extent do CCBHCs employ practitioner types who can 
supervise auxiliary personnel and bill Medicare for their services? For 
example, do CCBHCs employ physicians, clinical psychologists, nurse 
practitioners, clinical nurse specialists, certified nurse midwives and 
physician assistants who are eligible to provide general supervision to 
auxiliary personnel who furnish behavioral health services?

J. Proposals on Medicare Parts A and B Payment for Dental Services 
Inextricably Linked to Specific Covered Services

1. Medicare Payment for Dental Services
a. Overview
    Section 1862(a)(12) of the Act generally precludes payment under 
Medicare Parts A or B for any expenses incurred for services in 
connection with the care, treatment, filling, removal, or replacement 
of teeth or structures directly supporting teeth. (Collectively here, 
we will refer to ``the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth'' as 
``dental services.'') That section of the statute also includes an 
exception to allow payment to be made for inpatient hospital services 
in connection with the provision of such dental services if the 
individual, because of their underlying medical condition and clinical 
status or because of the severity of the dental procedure, requires 
hospitalization in connection with the provision of such services. Our 
regulation at Sec.  411.15(i) similarly excludes payment for dental 
services except for inpatient hospital services in connection with 
dental services when hospitalization is required because of: (1) the 
individual's underlying medical condition and clinical status; or (2) 
the severity of the dental procedure.
    Fee for service (FFS) Medicare Parts A and B also make payment for 
certain dental services in circumstances where the services are not 
considered to be in connection with dental services within the meaning 
of section 1862(a)(12) of the Act. In the CY 2023 PFS final rule (87 FR 
69663 through 69688), we clarified and codified at Sec.  411.15(i)(3) 
that Medicare payment under Parts A and B could be made when dental 
services are furnished in either the inpatient or outpatient setting 
when the dental services are inextricably linked to, and substantially 
related and integral to the clinical success of, other covered 
services. We also added several examples of clinical scenarios that are 
considered to meet that standard under Sec.  411.15(i)(3) and amended 
that regulation to add more examples in the CY 2024 PFS final rule (88 
FR 79022 through 79029).
    In the CY 2023 PFS final rule, we also established a process 
whereby we accept and consider submissions from the public (the 
``public submission process'') to assist us to identify additional 
dental services that are inextricably linked to, and substantially 
related and integral to the clinical success of, other covered services 
(87 FR 69663 through 69688). Hereafter in this section we will refer to 
these services as dental services that are ``inextricably linked to 
other covered services.''
    We also note that the examples provided in our regulation at Sec.  
411.15(i)(3)(i) are not exclusive. Medicare administrative contractors 
(MACs) retain discretion to determine on a claim-by-claim basis whether 
a patient's circumstances do or do not fit within the terms of the 
preclusion or exceptions specified in section 1862(a)(12) of the Act 
and Sec.  411.15(i).
    In the CY 2024 PFS final rule, we discussed our plans to issue 
educational and outreach materials to inform billing and payment for 
finalized policies for dental services. We reiterated our commitment to 
review submissions we receive through the public submissions process. 
We also expressed our intention to continue to engage in discussions 
with the public on a wide spectrum of issues relating to Medicare 
payment for dental services that may be inextricably linked to other 
covered services. We also described our partnership with the Agency for 
Healthcare Research and Quality (AHRQ) to assist us to review available 
clinical evidence and consider the relationship between dental services 
and specific covered medical services and to identify other potential 
clinical circumstances in which dental services are inextricably linked 
to other covered services (88 FR 79029).
    In this proposed rule, we (1) describe recent literature review 
conducted by our partner agency, AHRQ, on the potential connection 
between sickle cell disease and hemophilia and dental services; (2) 
summarize submissions we received through the public submission process 
for consideration in CY 2025 rulemaking; (3) propose to codify in 
section Sec.  411.15(i)(3)(i)(A) additional policies to permit payment 
for certain dental services that are inextricably linked to other 
covered services (certain dental services for patients receiving 
dialysis services to treat end-stage renal disease (ESRD)); (4) request 
public comment and information related to other clinical scenarios that 
may involve dental services that are inextricably linked to other 
covered services; and (5) include proposals related to Medicare billing 
and payment policy for dental services. We also include a request for 
information regarding oral sleep apnea appliances.
b. Consideration of Dental Services That May Be Inextricably Linked to 
Other Covered Services
    We have partnered with AHRQ to help us consider the relationship 
between dental services and other specific covered services. 
Specifically, AHRQ reviews available clinical evidence regarding this 
relationship, and provides analysis of clinical scenarios where dental 
services may be inextricably linked to other covered services. To 
better address the public's immediate dental needs, AHRQ conducted 
rapid response reports instead of comprehensive assessments. With these 
rapid response reports, we can better specify which payments can be 
made under Medicare Parts A and B for certain dental services that are 
inextricably linked to other covered services.
    Through the public submissions process for consideration in CY 2024 
rulemaking, interested parties nominated dental services for 
individuals living with sickle cell disease (SCD) or hemophilia, urging 
us to consider adding payment for these services (88 FR 52374). The 
submissions included information and references supporting the 
inclusion of dental services that are inextricably linked to, and 
substantially related and integral to the clinical success of, the 
covered services used in the treatment of SCD or hemophilia, because 
such dental services serve to mitigate the substantial risk to the 
success of the medical services. Submissions supported the importance 
of preventing dental

[[Page 61748]]

infections among individuals with SCD to reduce the need for the 
extensive procedures that may lead to bleeding complications and 
hospitalization. They also provided information detailing increased 
dental caries and periodontal disease in people with SCD,\158\ many of 
whom lose a number of teeth, which greatly limits nutrition, general 
well-being, and overall quality of life. Interested parties recommended 
that we adopt a policy to allow payment for dental services for 
individuals with hemophilia (88 FR 79032). They emphasized that 
periodic dental care reduces the risks of dental complications that may 
require hemostatic therapy or oral surgeries requiring clotting factor 
replacement treatment.159 160 161 Many submitters suggested 
that maintaining good oral health leads to improved outcomes for 
patients with these two conditions.
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    \158\ Kakkar M, Holderle K, ShethM, Arany S, Schiff L, Planerova 
A. Orofacial Manifestation and Dental Management of Sickle Cell 
Disease: A Scoping Review. Anemia. 2021 Oct 22; 2021:5556708. Doi: 
10.1155/2021/5556708. PMID: 34721900; PMCID: PMC8556080.
    \159\ Raso S, Napolitano M, Sirocchi D, Siragusa S, Hermans C. 
The important impact of dental care on haemostatic treatment burden 
in patients with mild haemophilia. Haemophilia. 2022 Nov;28(6):996-
999. doi:10.1111/hae.14626. Epub 2022 Jul 25. PMID: 35879819.
    \160\ Srivastava A, Santagostino E, Dougall A, Kitchen S, 
Sutherland M, Pipe SW, Carcao M, Mahlangu J, Ragni MV, Windyga J, 
Llina[acute]s A, Goddard NJ, Mohan R, Poonnoose PM, Feldman BM, 
Lewis SZ, van den Berg HM, Pierce GF; WFH Guidelines for the 
Management of Hemophilia panelists and co-authors. WFH Guidelines 
for the Management of Hemophilia, 3rd edition. Haemophilia. 2020 
Aug;26 Suppl 6:1-158. doi: 10.1111/hae.14046. Epub 2020 Aug 3. 
Erratum in: Haemophilia. 2021 Jul;27(4):699. PMID: 32744769.
    \161\ Peisker A, Raschke GF, Schultze-Mosgau S. Management of 
dental extraction in patients with Haemophilia A and B: a report of 
58 extractions. Med Oral Patol Oral Cir Bucal. 2014 Jan 1;19(1):e55-
60. doi: 10.4317/medoral.19191. PMID:24121912; PMCID: PMC3909433.
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    Acknowledging the importance of dental health to overall well-being 
of patients with these two types of diseases, in the CY 2024 proposed 
rule, we summarized information provided by submitters utilizing the 
public submission process and solicited comment on whether certain 
dental services are inextricably linked to covered services in the 
treatment of SCD (88 FR 52374). In the CY 2024 PFS final rule, we noted 
that several commenters suggested expanding dental service coverage for 
individuals with SCD. They supported covering dental services essential 
for treating SCD, including hydroxyurea therapy. Another commenter 
advocated for expanding coverage for dental services in cases of pain 
crises or dental abscesses in individuals with SCD. They emphasized 
that improved access to dental care could improve the quality of life 
for individuals with SCD and reduce healthcare costs by enabling more 
suitable treatment options and decreasing hospital stays. One commenter 
questioned the clinical basis for providing dental benefits for SCD or 
hemophilia due to their low prevalence in the Medicare population. 
Ultimately, after consideration of public comments, we did not expand 
the examples under Sec.  411.15(i)(3)(i) to include additional covered 
medical services for SCD. We concluded that the information provided by 
commenters did not sufficiently demonstrate that dental services are 
essential to the clinical success of hydroxyurea therapy or other 
treatments for SCD (88 FR 79032). Please refer to CY 2024 final rule 
(88 FR 79031 through 79032) for more detailed information.
    In the CY 2024 PFS proposed rule, we similarly solicited comments 
on hemophilia regarding whether certain dental services are considered 
so integral to the primary covered services that the necessary dental 
interventions are inextricably linked to, and substantially related and 
integral to clinical success of, the primary covered services for 
individuals with hemophilia (88 FR 52382). Several commenters advocated 
for allowing Medicare Part A and Part B payment for dental services for 
individuals with hemophilia citing guidelines from Hemophilia Treatment 
Centers (HTCs), the Centers for Disease Control and Prevention (CDC), 
and the World Federation of Hemophilia (WFH). They emphasized the 
importance of good oral health to prevent complications like gum 
bleeding and major dental surgeries, especially in those with severe/
moderate hemophilia. Another commenter supported this perspective, 
noting that regular dental care reduces the need for clotting factor 
replacement therapy. While we acknowledged the importance of 
maintaining oral health to prevent complications such as serious gum 
bleeding, especially problematic for those with hemophilia, we also 
reiterated that for the purposes of the PFS payment policy for dental 
services inextricably linked to covered medical services, our statute 
and regulations require that specific evidence supports the integral 
connection between dental services and clinical success in managing 
hemophilia-related medical services, and, therefore, we did not expand 
the examples under Sec.  411.15(i)(3)(i) to include additional covered 
medical services for hemophilia. Please refer to CY 2024 final rule (88 
FR 79032 through 79033) for more detailed information.
    While interested parties have suggested the interaction of oral 
health care for SCD or hemophilia, we noted that further research is 
necessary to find specific evidence supporting specific medical 
services for which dental services are inextricably linked to their 
clinical success. To gain further understanding of any potential 
relationship between dental services and specific covered SCD or 
hemophilia medical services, we again partnered with researchers at the 
Agency for Healthcare Research and Quality (AHRQ) to review available 
clinical evidence regarding the relationship between dental services 
and covered SCD or hemophilia medical services. AHRQ created two rapid 
response reports, which summarized recent evidence, aiming to inform 
CMS policy development related to the possible linkage between dental 
services and treatment modalities and services for SCD or hemophilia 
patients. For more detailed information about the search strategies and 
findings, please refer to the two AHRQ rapid response reports available 
at https://effectivehealthcare.ahrq.gov/products/sickle-cell-dental/research and https://effectivehealthcare.ahrq.hgov/products/hemophilia-dental/research.
1. Consideration of Dental Services That May Be Inextricably Linked to 
Covered Services for the Treatment of Sickle Cell Disease
    As stated in the AHRQ rapid response report, SCD is a genetic 
hematologic disorder affecting approximately 100,000 individuals in the 
U.S.,\162\ characterized by abnormal hemoglobin formation in red blood 
cells, leading to complications such as pain, infection, acute chest 
syndrome, and stroke. Hydroxyurea, a commonly used therapeutic 
measure,\163\ which increases fetal hemoglobin levels, which has a 
higher affinity for oxygen than adult hemoglobin. This therapy can 
prevent sickling or curvature of red blood cells and help SCD patients. 
SCD patients can experience dental complications due to

[[Page 61749]]

ischemia,\164\ including delayed tooth eruption, enamel disorders, and 
tongue cell changes. Ischemic and inflammation affects enamel, gums, 
and jawbones that can cause paresthesia and tooth pain. In response to 
a producing more red blood cells to make up for anemia, bone marrow 
expansion can lead to malocclusion and reduced bone 
density.165 166 The AHRQ's rapid response report highlights 
that despite hydroxyurea's long-term use to treat SCD, uncertainty 
remains regarding whether dental care before, during, or after 
treatment of SCD with hydroxyurea (and other lesser prescribed 
treatments) influences clinical outcomes in patients.
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    \162\ Prevention CDC. Learn more about sickle cell disease, 
Centers for Disease Control and Prevention. (Available at https://www.cdc.gov/ncbddd/sicklecell/index.html.)
    \163\ U.S. Food and Drug Administration. FDA approves 
hydroxyurea for treatment of pediatric patients with sickle cell 
anemia, U.S. Food and Drug Administration. (Available at https://www.fda.gov/drugs/resources-information-approved-drugs/fda-approves-hydroxyurea-treatment-pediatric-patients-sickle-cell-anemia.)
    \164\ da Fonseca M, Oueis HS, Casamassimo PS. Sickle cell 
anemia: a review for the pediatric dentist. Pediatr Dent 
2007;29(2):159-69. (In eng).
    \165\ Hsu LL, Fan-Hsu J. Evidence-based dental management in the 
new era of sickle cell disease: A scoping review. J Am Dent Assoc 
2020;151(9):668-677.e9. (In eng). DOI: 10.1016/j.adaj.2020.05.023.
    \166\ Kane SF. The effects of oral health on systemic health. 
Gen Dent 2017;65(6):30-34. (In eng).
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    In their rapid response, the Preferred Reporting Items for 
Systematic Reviews and Meta-Analyses (PRISMA) flow diagram, a flow 
diagram used in systematic reviews and meta-analyses intended to 
describe findings of the review, revealed that initially, 762 records 
were identified from large databases, and 934 records were identified 
from grey literature sources covering 57 years. Following the exclusion 
of ineligible studies, a total of five unique records were included, 
extracted, and evaluated in the rapid response report. The rapid 
response report found that no studies examined the specific impact of 
dental care on SCD treatment outcomes; however, the rapid response 
identified three relevant clinical practice guidelines and two reviews 
with recommendations for dental care for patients with SCD. According 
to the rapid response, all guidelines and reviews highlighted the 
importance of preventive dental measures, with the Sickle Cell Society 
in the UK recommending the inclusion of a hematologist in the dental 
care team for SCD patients. However, these guidelines primarily focused 
on managing SCD during dental services rather than the impact of dental 
care on the improvement of SCD treatment outcomes, which differs from 
the regulatory standard in Sec.  411.15(i)(3)(i) that the dental 
services are inextricably linked to, and substantially related and 
integral to the clinical success of, other covered services.
    The two rapid reviews with recommendations highlighted several key 
areas of dental management for SCD patients. They emphasized the 
importance of preventive dental care to reduce the risk of oral 
infections, periodontal diseases, and major dental procedures. 
Additionally, the studies recommended that a complete blood count 
should be evaluated prior to invasive dental procedures to mitigate 
infection risks in SCD patients.167 168 Overall, the 
findings from the AHRQ rapid response reports underscore the gaps in 
the current literature concerning the management of oral health care 
for individuals with SCD. The body of evidence evaluating dental 
services before, during, or after the treatment of SCD is lacking in 
primary clinical data and is limited to available clinical practice 
guidelines and reviews with recommendations. While guidelines and 
reviews have addressed particular aspects of dental care, such as early 
intervention and the importance of collaboration between dentists and 
hematologists, there is an absence of primary evidence that informed 
the potential effect of dental care on SCD treatment outcomes.
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    \167\ Kawar N, Alrayyes S, Yang B, Aljewari H. Oral health 
management considerations for patients with sickle cell disease. Dis 
Mon 2018;64(6):296-301. (In eng). DOI: 10.1016/
j.disamonth.2017.12.005.
    \168\ Kakkar M, Holderle K, Sheth M, Arany S, Schiff L, 
Planerova A. Orofacial Manifestation and Dental Management of Sickle 
Cell Disease: A Scoping Review. Anemia 2021;2021:5556708. (In eng). 
DOI:10.1155/021/5556708.
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2. Consideration of Dental Services That May Be Inextricably Linked to 
Covered Services for the Treatment of Hemophilia
    As stated in their report, hemophilia is a rare inherited disorder 
characterized by the deficiency or absence of blood-clotting proteins, 
affecting approximately 20,000-33,000 males in the U.S.\169\ There are 
three distinct types of hemophilia (A, B, and C) according to the 
specific clotting factor that is deficient or missing (VIII, IX, and 
XI, respectively). Treatment for all three types of hemophilia is 
similar but may vary based on the severity of disease, and typically 
involves replacing the deficient or missing clotting factor.\170\ 
Anticoagulation issues in hemophilia patients can pose challenges for 
dental specialists due to the increased risk of secondary bleeding 
after oral surgery.\171\ Severe hemophilia patients face spontaneous 
bleeding in joints, muscles, or soft tissues, sometimes life-
threatening, while mild to moderate cases may experience excessive 
bleeding, including after dental extractions.\172\
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    \169\ Prevention CfDCa. Hemophilia Treatment. (https://
www.cdc.gov/ncbddd/hemophilia/
treatment.html#:~:text=The%20best%20way%20to%20treat,concentrates%2C%
20into%20a%20person's%20vein.)
    \170\ Ibid.
    \171\ Givol N, Hirschhorn A, Lubetsky A, Bashari D, Kenet G. 
Oral surgery-associated postoperative bleeding in haemophilia 
patients--a tertiary centre's two decade experience. Haemophilia 
2015;21(2):234-240. (In eng). DOI: 10.1111/hae.12573.
    \172\ Oomen I, Camelo RM, Rezende SM, et al. Determinants of 
successful immune tolerance induction in hemophilia A: systematic 
review and meta-analysis. Res Pract Thromb Haemost 2023;7(1):100020. 
(In eng). DOI: 10.1016/j.rpth.2022.100020.
---------------------------------------------------------------------------

    According to the rapid response reports provided by AHRQ, clotting 
factor replacement therapy is the standard treatment for individuals 
with hemophilia. Replacement therapy, which can be self-administered or 
given at a hemophilia treatment center, can be used to stop a 
spontaneous bleeding episode (episodic care), or to prevent bleeding 
from occurring (prophylactic care). However, consistent/prolonged 
factor replacement can cause antibody inhibitor development.\173\ While 
clotting factor replacement therapy remains the standard treatment for 
hemophilia, uncertainty persists regarding whether dental care before, 
during, or after treatment of hemophilia improves clinical outcomes in 
patients. Excessive bleeding, often associated with invasive or 
traumatic dental procedures, poses challenges when treating patients 
with hemophilia. Hence, the timing of dental treatment in relation to 
factor replacement therapy may influence outcomes.
---------------------------------------------------------------------------

    \173\ Castaman G, Matino D. Hemophilia A and B: molecular and 
clinical similarities and differences. Haematologica 
2019;104(9):1702-1709. (In eng). DOI: 10.3324/haematol.2019.221093.
---------------------------------------------------------------------------

    In AHRQ's rapid response, a total of 1,414 records from large 
databases and 2,238 records from grey literature, spanning 73 years, 
were identified. Strictly following the exclusion criteria depicted in 
the PRISMA diagram, the response included, extracted, and evaluated a 
total of four unique publications in this rapid response. The rapid 
response report identified four publications: two practice guidelines 
and two reviews with recommendations. The included publications advised 
hemophilia patients to consult hematologists or hemophilia treatment 
centers before dental procedures. They emphasized interdisciplinary 
collaboration between dentists and hematologists for treatment 
planning. Included guidelines recommended performing dental services 
during hemophilia treatment with coagulation factor replacement 
therapy. However, all four reviewed publications mainly addressed 
hemophilia A and B, with little mention

[[Page 61750]]

of hemophilia C. Similar to the findings related to SCD, the body of 
evidence evaluating dental services before, during, or after the 
treatment of hemophilia is lacking in primary clinical data and is 
currently limited to available guidelines. These guidelines emphasize 
the importance of professional dental care during hemophilia treatment 
with clotting factor replacement therapy to reduce bleeding 
complications, rather than the inextricable link between certain dental 
services and covered services for hemophilia, which is the regulatory 
standard in Sec.  411.15(i)(3)(i) for clinical scenarios under which 
payment can be made for dental services under Medicare Parts A and B.
    After reviewing AHRQ's comprehensive rapid reviews for both SCD and 
hemophilia, we found the evidence related to the linkage between dental 
services and outcomes for covered medical services for both SCD and 
hemophilia lacking in the current research and literature. Both rapid 
responses noted a limited number of studies examining the impact of 
dental care on outcomes for individuals with SCD or hemophilia. 
Currently, the evidence base does not appear to support that dental 
services may be inextricably linked to covered services for SCD or 
hemophilia. Also, the body of evidence evaluating dental services 
before, during, or after the treatment of SCD and hemophilia lacks 
primary clinical data and relies on available guidelines and reviews. 
Given limited information, however, both the SCD and hemophilia rapid 
responses support the need for preventive care and patient education as 
essential practices for both SCD and hemophilia patients to minimize 
the likelihood of oral infections, periodontal disease, and major 
dental procedures. In addition, both rapid response reports recommend 
collaborative efforts between dentists, hematologists, and specialized 
clinics as crucial for improved patient care, despite the lack of 
primary evidence informing the potential effect of dental care on 
treatment. While both rapid response reports discuss their findings on 
the importance of a multidisciplinary approach, both rapid response 
reports also found that the current reviews and guidelines do not 
address dental care as a standard of care that is inextricably linked 
to hemophilia or SCD treatment. Instead, their focus was on managing 
the respective conditions during dental services, not on the 
inextricable linkage between the dental and medical services.
    In conclusion, interested parties, including industry 
organizations, public commenters, and organizations submitting through 
the public submissions process, requested that CMS consider the 
conditions of SCD and hemophilia for the purposes of the Medicare Parts 
A and B payment policy for dental services that are inextricably linked 
to other covered services. As part of our commitment to exploring the 
inextricable link between dental and covered services associated with 
SCD and hemophilia, we partnered with AHRQ to generate comprehensive 
rapid responses on these topics. However, the AHRQ's rapid response 
reports show that the current evidence base does not appear to support 
that dental services may be inextricably linked to services for SCD or 
hemophilia within the meaning of the standard at Sec.  411.15(i)(3), 
and we are not proposing to add these conditions to our regulation. 
Moreover, the findings of the AHRQ rapid response reports highlight 
that this area merits further study by researchers and industry in 
order to further explore potential connections between dental services 
and improved outcomes for individuals with SCD or hemophilia. Given the 
new and evolving therapies and treatments in this space, we will 
consider conducting additional evaluations as new studies are carried 
out to examining the impact of dental services on SCD and hemophilia 
outcomes and will take any future studies into consideration.
    We continue to seek clinical evidence demonstrating the integral 
connection between dental services and other covered services for SCD 
and hemophilia, and we welcome any comments or literature regarding 
these two conditions. We are not proposing to amend Sec.  
411.15(i)(3)(i) as we have not identified additional dental services 
that are inextricably linked to certain services associated with SCD or 
hemophilia. However, we remain open to considering any such services 
identified by public commenters, and, if sufficient evidence is 
presented, we may consider adding such services to our regulations in 
the final rule. In addition, we encourage interested parties to supply 
additional submissions for consideration in future PFS rulemaking 
through the public submission process, which may include relevant 
medical evidence, peer-reviewed literature, clinical guidelines, or 
supporting documentation as described in section II.J.1.c. of this 
proposed rule.
c. Submissions Received Through Public Submission Process
    As we have in the CY 2023 and CY 2024 PFS final rules, we continue 
to encourage interested parties to engage with us regularly and to 
submit recommendations through our public submissions process for our 
consideration of additional clinical scenarios where dental services 
may be inextricably linked to covered services under Sec.  
411.15(i)(3)(i). Through our annual public submissions process, 
interested parties should provide clinical evidence and other 
documentation to support their recommendations (87 FR 69685). We are 
using the PFS annual rulemaking process to discuss public submissions 
and to consider whether the clinical scenario described in the 
submissions should be added to Sec.  411.15(i)(3)(i) as an example of a 
circumstance where payment can be made for dental services inextricably 
linked to other covered services. Using our annual notice and comment 
rulemaking process to discuss submitted recommendations allows the 
public to comment and submit further medical evidence and important 
feedback to assist us in evaluating whether certain dental services 
furnished in certain clinical scenarios would meet the standard to 
permit Medicare payment for the dental services.
    We review clinical evidence included in submissions and public 
comments in rulemaking, as well as information and analysis provided by 
AHRQ in rapid response reports, to assess whether there is an 
inextricable link between certain dental services and certain covered 
services. We would find that there is an inextricable link where the 
standard of care for a service is such that the practitioner would not 
proceed with the procedure or service without performing the dental 
service(s), for example, because the covered services would or could be 
significantly and materially compromised absent the provision of the 
inextricably-linked dental services, or where dental services are a 
clinical prerequisite to proceeding with the primary medical procedure 
and/or treatment. As such, documentation accompanying recommendations 
should include medical evidence to support that certain dental services 
are inextricably linked to certain covered services. Specifically, as 
we specified in the CY 2023 PFS final rule, we request that the medical 
evidence included in submissions through the public submissions process 
should:
    (1) Provide support that the provision of certain dental services 
leads to improved healing, improved quality of surgery outcomes, and 
the reduced likelihood of readmission and/or surgical revisions because 
an infection has interfered with the integration of the

[[Page 61751]]

medical implant and/or interfered with the medical implant to the 
skeletal structure;
    (2) Be clinically meaningful and demonstrate that the dental 
services result in a material difference in terms of the clinical 
outcomes and success of the procedure such that the dental services are 
inextricably linked to other covered services; and,
    (3) Be compelling to support that certain dental services would 
result in clinically significant improvements in quality and safety 
outcomes (for example, fewer revisions, fewer readmissions, more rapid 
healing, quicker discharge, and quicker rehabilitation for the patient) 
(87 FR 69686).
    This evidence should include at least one of the following:
    (1) Relevant peer-reviewed medical literature and research/studies 
regarding the medical scenarios requiring medically necessary dental 
care;
    (2) Evidence of clinical guidelines or generally accepted standards 
of care for the suggested clinical scenario;
    (3) Other ancillary services that may be integral to the covered 
services; and/or
    (4) Other supporting documentation to justify the inclusion of the 
proposed medical clinical scenario requiring dental services (87 FR 
69686).
    Submissions should focus on the inextricably linked relationship 
between dental services and other services necessary to diagnose and 
treat the individual's underlying medical condition and clinical 
status, and whether it would not be clinically advisable to move 
forward with the other covered services without performing certain 
dental services. To be considered for purposes of CY 2026 PFS 
rulemaking, submissions through our public submissions process should 
be received by February 10, 2025, via email at 
[email protected]. To facilitate processing, 
interested parties should include the words ``dental recommendations 
for CY 2026 review'' in the subject line of their email submission. We 
continue to stress to submitters that recommendations must include at 
least one of the types of evidence listed earlier. We further note that 
we may also consider recommendations that are submitted as public 
comments during the comment period following the annual publication of 
the PFS proposed rule.
    We thank all those who submitted recommendations for additional 
clinical scenarios for which they believe Medicare payment for dental 
services will be consistent with the policies we codified at Sec.  
411.15(i)(3)(i), under which Medicare payment may be made for dental 
services when they are inextricably linked to other covered services. 
We received thirteen submissions from various organizations and 
individuals on or before February 10, 2024. Several submitters 
represented dozens or hundreds of other organizations in making these 
recommendations. We received one submission after the deadline that 
presented nominations for clinical scenarios addressed by other 
submitters, and a proposal outside the scope of clinical scenarios 
where dental services may be inextricably linked to covered medical 
services under Sec.  411.15(i)(3)(i).
    One submitter recommended that oral health care is essential to the 
success of treatments for individuals with sickle cell disease and 
other hematologic disorders. The submitter asserted that providing 
appropriate and timely dental care is a crucial component for the 
successful treatment of many hematologic diseases, including SCD, 
hemophilia, and many blood cancers, such as acute myeloid leukemia, 
acute lymphoblastic leukemia, chronic lymphocytic leukemia, chronic 
myeloid leukemia, and multiple myeloma. The submitter noted that we 
finalized that payment can be made for certain dental services prior to 
or contemporaneously with chemotherapy, CAR T-Cell therapy, and the 
administration of high-dose bone-modifying agents (anti-resorptive 
therapy), when used in the treatment of cancer. The evidence submitted 
showed that among individuals with a sickle cell crisis, those with 
dental infections were 72% more likely to be admitted to the hospital 
than those without dental infections. The same submitter also requested 
that we consider payment of dental services following organ 
transplantations (including bone marrow or hematopoietic stem cell 
transplantation (HSTC)) because maintenance of oral hygiene after HSCT 
minimizes the severity of oral and dental infections, which is 
important because chronic graft versus host disease (cGVHD) is common 
following allogeneic HSCT. The submitter stated that frequent dental 
evaluations of patients with cGVHD are critical because of the 
increased rate of dental caries associated with this disease; 
furthermore, gingivitis and periodontal disease should be monitored and 
managed appropriately to avoid additional infection. Finally, the 
submitter also stated that multiple tooth extractions without 
replacement of dentition leave patients with a poor capacity to eat and 
may negatively impact the success of the transplant and quality of 
life. This submitter also recommended including cell and gene therapy 
for SCD as a clinical treatment scenario for future consideration of 
potentially inextricably linked dental services.
    Another submitter asserted that patients frequently present with 
complications extending three years or more following the direct 
treatment of not only head and neck cancers but also other cancer 
types. The submitter also asserted that a comparable trend may be seen 
in patients experiencing complications following anti-resorptive drug 
therapy, for non-cancer-related conditions. They recommended that 
payment be available for specific dental services during a minimum of 2 
years post-treatment for head and neck cancer and up to 5 years for 
those who have received radiotherapy. They emphasized the current 
evidence and literature as supporting the provision of Medicare payment 
for a minimum of 2 years, with the understanding that some patients may 
require dental or oral healthcare beyond this period due to delayed or 
late-onset complications, and that the timeline for the emergence of 
oral or dental complications post- treatment is not uniformly linear 
and can significantly vary among patients. They also stated that 
literature supports the extension of Medicare payment to include 
certain dental services furnished post-anti-resorptive therapy, when 
used in the treatment of cancer for at least two years following 
treatment. Lastly, this submitter stated there is an inextricable risk 
of the development of severe dental and oral complications, such as 
osteoradionecrosis/medication-related osteonecrosis of the jaw, in 
patients who have undergone the specific treatments for which we have 
identified certain inextricably linked dental services. They suggested 
that once patients receive these treatments, patients are perpetually 
at risk for developing such complications and recommended that current 
Medicare payment for dental services should align with the long-term 
healthcare needs of these patients.
    We are not accepting the commenters' suggestion to include specific 
time limits within the exception in Sec.  411.15(i)(3). We note again 
that MACs have the flexibility to determine on a claim-by-claim basis 
whether payment can be made for certain dental services for 
beneficiaries, such as those receiving other immunotherapies that may 
involve a lymphodepleting component, consistent with Sec.  
411.15(i)(3). That regulation states the general rule that

[[Page 61752]]

Medicare Parts A and B payment can be made for certain dental services 
that are inextricably linked to, and substantially related and integral 
to the clinical success of, covered services; and then provides a non-
exclusive list of examples of clinical scenarios under which payment 
can be made. Thus, a MAC has discretion to decide on a case-by-case 
basis that payment can be made for certain dental services in other 
circumstances not specifically addressed under Sec.  411.15(i)(3)(i)
    Several submitters recommended that we provide for payment of 
medically necessary dental services for individuals with autoimmune 
diseases who are initiating or undergoing immunosuppressive or 
immunomodulator therapy (``immunosuppressive therapy''). They stated 
that immunosuppressive therapy can be severely complicated and 
compromised by oral/dental disease and conditions. The submitters 
provided references to numerous clinical studies and other supporting 
documentation in support of dental services in these clinical 
circumstances being inextricably linked to immunosuppressive therapies 
for which payment may be made in accordance with Sec.  411.15(i)(3). 
They noted that while higher dosing is used for cancer chemotherapy and 
organ transplant rejection prevention, the therapy's duration is 
generally much shorter than when used in autoimmune disease therapy and 
that the longer-term duration of use for managing symptoms of 
autoimmune disease can expose patients to ongoing serious risk of 
complicating infections for decades. They relayed that the American 
College of Rheumatology states it is vital for patients to receive 
appropriate dental evaluation and prompt treatment so they can continue 
their immune suppressant medications. The submitter explained that 
dental infections could spread more easily, and therefore faster, when 
host immunity is compromised by immunosuppressing/immunomodulating 
drugs via three pathways for the bacteria to spread: locally through 
facial spaces, through the bloodstream, and by aspiration. They stated 
that outcomes similar to systemic infection or sepsis and other 
complications can follow for those receiving immunosuppressive therapy 
to treat autoimmune diseases. They recommended immunosuppressive 
therapy to treat autoimmune diseases should not proceed until a dental 
or oral exam is performed to address the oral complications and/or 
clear the patient of an oral or dental infection. We discuss these 
recommendations and supporting evidence in section II.J.4. of this 
proposed rule.
    Several submitters recommended that dental treatments can be 
integral to the clinical success of covered nephrology-related medical 
services including services received by beneficiaries who are 
immunocompromised by end-stage renal disease (ESRD), chronic kidney 
disease (CKD), other renal diseases, as well as kidney transplant 
candidates maintained on immunosuppressive medications. They stated 
that all of these patients are at increased risk of infection, 
complications, and malnutrition from dentally sourced pathogens. 
Submitters stated that Medicare ESRD beneficiaries on dialysis are at 
greater risk for developing complications such as cardiovascular 
conditions, malnutrition, anemia, and infections, making dental 
services more critical to the success of kidney care treatments. They 
further stated that pre-transplantation dental care involves 
eliminating possible sources of oral infection that can lead to a 
systemic infection following transplant and that without access to 
dental services, individuals on dialysis may not qualify for kidney 
transplantation or may have severe complications after the transplant. 
One of the submitters noted that dialysis clinicians report that many 
bloodstream infections (BSI) begin with bacteria in the mouth and that 
regular dental visits could have a positive impact on reducing BSI. 
They added that the Society for Vascular Surgery has noted that 
transient bacteremia from dental infections can seed hemodialysis 
access grafts. Among strategies to prevent infection of vascular 
grafts, recommended preoperative measures include identifying and 
treating remote site infections, including dental sites. We discuss 
these recommendations and supporting evidence in section II.J.2. of 
this proposed rule.
    More than half of the submissions expressed support for almost 
identical proposals from a couple of other submitters, recommending 
that dental services are inextricably linked to covered medical 
services used for the treatment of Medicare beneficiaries with 
diabetes. They agreed that the delivery of appropriate dental services 
in accordance with clinical guidelines and standard of care is 
substantially related and integral to the optimal outcome of these 
covered medical services. They offered clinical studies documenting 
that treatment of oral infections, such as periodontitis and its 
related inflammation, meaningfully improves the treatment and 
management of diabetes. They stated, by contrast, the absence of 
treatment of chronic dental infections complicates covered medical 
treatment for the management of diabetes and exacerbates insulin 
resistance, worsens glycemic control, and other diabetes related 
complications. They noted that the relationship between oral diseases 
and diabetes mellitus is complex. Diabetes is known to increase the 
risk and severity of oral diseases, such as periodontitis (gum 
inflammation and bone loss), tooth loss, dry mouth, and oral fungal 
infections. Additionally, oral diseases are documented as affecting 
blood glucose control and contributing to the development of diabetes 
complications, such as retinopathy, neuropathy, cardiovascular disease, 
and kidney disease. They believe reciprocal management of glycemic 
control and periodontal disease decreases risk for and actual cases and 
severity of diabetes and periodontal disease. We discuss these 
recommendations and the supporting clinical evidence in section II.J.3 
of this proposed rule.
2. Proposed Additions to Current Policies Permitting Payment for Dental 
Services Inextricably Linked to Other Covered Services
    We have received information and requests from interested parties, 
including entities submitting information through the public 
submissions process as well as organizations providing comments in 
response to prior rulemaking efforts, that an inextricable linkage 
exists between dental services and dialysis treatment services for 
individuals diagnosed with end-stage renal disease (ESRD) who are 
receiving dialysis services, particularly those experiencing 
comorbidities. Commenters and submitters have stated that dental 
treatment is inextricably linked and integral, and substantially 
related to the clinical success and outcomes of covered dialysis 
medical services.
    In the CY 2024 PFS final rule, we stated that commenters had 
provided comments in response to the CY 2024 PFS proposed rule 
supporting the coverage of annual dental examinations, and treatment as 
clinically indicated, for individuals with chronic kidney disease and 
ESRD. The commenters stated that chronic immunosuppression increases 
the risk of dental infections leading to potentially deadly 
complications including BSI, peritoneal dialysis-associated 
peritonitis, and the exacerbation of chronic cardiovascular conditions. 
They also stated that when established by patient-specific medical and 
dental parameters, dental services can be unquestionably integral to 
the

[[Page 61753]]

outcome of covered medical procedures. We thanked the commenters for 
the information they submitted regarding these suggestions; however, at 
that time, commenters did not provide sufficient evidence to support an 
inextricable link between certain dental services and certain covered 
services for chronic kidney disease and ESRD (88 FR 79034).
    Additionally, submitters provided information through the public 
submissions process as described in section II.J.1.c. of this proposed 
rule for our consideration in CY 2025 rulemaking. The submitters stated 
that there is a connection between dental services to identify and 
address dental or oral infections and covered medical services for 
individuals receiving dialysis in the treatment of ESRD.
    ESRD is a medical condition in which a person's kidneys 
successively experience loss of functionality on a permanent basis, 
leading to the need for a regular course of long-term dialysis or a 
kidney transplant to maintain life.\174\
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    \174\ https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
---------------------------------------------------------------------------

    Chronic kidney disease (CKD) is a progressively debilitating 
disease and is marked by the presence of kidney damage or reduction in 
the kidneys' filtration rate. CKD is a state of progressive loss of 
kidney function, in that the disease worsens over time and cannot be 
reversed, ultimately resulting in the need for renal replacement 
therapy, generally dialysis or transplantation.\175\ The Kidney Disease 
Improving Global Outcomes (KDIGO) Foundation established guidelines 
that define five stages of CKD using kidney damage markers, including 
factors that determine proteinuria (level of protein in the urine) and 
glomerular filtration rate (level of kidney function/filtration) in its 
KDIGO 2012 Clinical Practice Guideline for the Evaluation and 
Management of Chronic Kidney Disease.\176\ Chronic kidney disease is 
generally defined as the presence of two factors (glomerular filtration 
rate [GFR] less than 60 mL/min and albumin greater than 30 mg per gram 
of creatinine) along with abnormalities of kidney structure or function 
for greater than three months. Stage 5 of CKD is labeled end-stage 
renal disease (ESRD) with a GFR of less than 15 mL/min.\177\ According 
to the NIH, more than 500,000 people in the United States live with 
ESRD.\178\
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    \175\ https://www.ncbi.nlm.nih.gov/books/NBK535404/.
    \176\ https://kdigo.org/wp-content/uploads/2017/02/KDIGO_2012_CKD_GL.pdf.
    \177\ https://www.ncbi.nlm.nih.gov/books/NBK499861/.
    \178\ https://www.ncbi.nlm.nih.gov/books/NBK499861/.
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    Per the American Academy of Family Physicians, individuals with 
ESRD are typically referred to nephrologists for the development of 
treatment plans. Collectively the various modalities utilized to 
replicate kidney function are referred to as renal replacement therapy 
(RRT). Most ESRD patients are treated with dialysis, regardless of 
whether transplantation ultimately occurs. Generally, kidney 
transplantation typically yields the best patient outcomes; however, 
not all patients with ESRD are eligible for or able to undergo 
transplantation, and therefore continue dialysis treatment.\179\ 
Standards of medical care for CKD outline the need for monitoring for 
signs of progression of the disease and early referral to specialists 
for RRT.\180\ Dialysis is generally supplied via two primary modes: 
hemodialysis or peritoneal dialysis. In hemodialysis, blood is filtered 
through a dialyzer, outside of the body. A dialyzer is sometimes 
referred to as an ``artificial kidney.''\181\ To access the circulatory 
system, several access points may be placed and utilized, including an 
arteriovenous (AV) fistula, AV graft, and in some cases a central 
venous catheter.182 183 184 In peritoneal dialysis, a fixed 
catheter is placed in the abdomen, and dialysis solution is 
administered into the abdomen. The solution absorbs wastes and excess 
fluid from the patient's body. 185 186
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    \179\ Am Fam Physician. 2021;104(5):493-499. https://www.aafp.org/pubs/afp/issues/2021/1100/p493.html.
    \180\ https://pubmed.ncbi.nlm.nih.gov/29763036/.
    \181\ https://www.niddk.nih.gov/health-information/kidney-disease/kidney-failure/hemodialysis.
    \182\ https://www.ncbi.nlm.nih.gov/books/NBK563296/.
    \183\ https://www.mayoclinic.org/tests-procedures/hemodialysis/about/pac-20384824.
    \184\ https://www.cdc.gov/dialysis/patient/.
    \185\ https://www.mayoclinic.org/tests-procedures/peritoneal-dialysis/about/pac-20384725
    \186\ https://www.niddk.nih.gov/health-information/kidney-disease/kidney-failure/peritoneal-dialysis.
---------------------------------------------------------------------------

    Submissions we received through the public submissions process for 
consideration in CY 2025 rulemaking provided information regarding the 
potential linkage between dental services and specific covered medical 
services associated with ESRD and dialysis including:
     CPT codes 36901-36906: Dialysis circuit procedures;
     CPT codes 90935, 90937, 90940: Hemodialysis procedures;
     CPT code 90961: Physician or other qualified healthcare 
professional visits for ESRD;
     CPT codes 90989-90999: Other dialysis procedures; and,
     DRG code 872: Hospitalization for septicemia or severe 
sepsis.
    We note that Medicare provides coverage for individuals with ESRD, 
regardless of age, when certain requirements are met.\187\
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    \187\ https://www.cms.gov/medicare/coordination-benefits-recovery/overview/end-stage-renal-disease-esrd.
---------------------------------------------------------------------------

    We also note that dialysis procedures may be utilized for 
individuals who do not have ESRD in the treatment of acute intoxication 
or poisoning. For example, in the case of a patient experiencing 
poisoning, dialysis hemoperfusion may be employed, which passes the 
blood through a column packed with granules that include a resin that 
act as absorbents. In this procedure, physicochemical properties of an 
absorbent are used to remove toxins. Conversely, in hemodialysis 
utilized in the treatment of ESRD, there is a concentration gradient 
between the blood and the solvent across the dialysis membrane.\188\ We 
note that the patient accessing dialysis treatment for the treatment of 
acute intoxication or poisoning would not present with the same 
diagnostic profile, treatment needs, nor face the same risks of 
immunodeficiency and infection as individuals with ESRD as described 
below.\189\
---------------------------------------------------------------------------

    \188\ Durakovic Z. Combined hemoperfusion and hemodialysis 
treatment of poisoning with cholinesterase inhibitors. Korean J 
Intern Med. 1993 Jul;8(2):99-102. doi: 10.3904/kjim.1993.8.2.99. 
PMID: 8031730; PMCID: PMC4532091. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4532091.
    \189\ Ouellet G, Bouchard J, Ghannoum M, Decker BS. Available 
extracorporeal treatments for poisoning: overview and limitations. 
Semin Dial. 2014 Jul;27(4):342-9. https://pubmed.ncbi.nlm.nih.gov/24697909/.
---------------------------------------------------------------------------

    Periodontal diseases and dental caries are the main chronic 
infectious diseases of the oral cavity. Periodontal diseases include a 
group of chronic inflammatory diseases that affect the periodontal 
supporting tissues of teeth and encompass destructive and 
nondestructive diseases. Gingivitis is inflammation of the soft tissue 
without apical migration of the junctional epithelium. It is a 
reversible, nondestructive disease that does not involve loss of 
periodontal tissues. Periodontitis is inflammation of the periodontium 
that is accompanied by apical migration of the junctional epithelium, 
leading to destruction of the

[[Page 61754]]

connective tissue attachment and alveolar bone loss.\190\
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    \190\ Albandar, J.M. (2005). Epidemiology and risk factors of 
periodontal diseases. Dent Clin North Am, 49(3), 517-532, v-vi. 
doi:10.1016/j.cden.2005.03.003.
---------------------------------------------------------------------------

    Periodontitis serves as a prime example of a disrupted balance 
between the local microbiome and the host's inflammatory response, a 
condition known as dysbiosis. Although the inflammatory response is 
ostensibly triggered to manage the microbial threat, it proves to be 
ineffective and inadequately regulated in individuals prone to the 
condition. This leads to the inflammatory destruction of the 
periodontium, which encompasses the tissues that encase and support the 
teeth, including the gingiva, periodontal ligament, and alveolar bone. 
Without appropriate treatment, this disease can progress to tooth loss, 
adversely affecting chewing, appearance, and overall quality of 
life.\191\
---------------------------------------------------------------------------

    \191\ Hajishengallis, G., & Chavakis, T. (2021). Local and 
systemic mechanisms linking periodontal disease and inflammatory 
comorbidities. Nature Reviews Immunology, 21(7), 426-440. 
doi:10.1038/s41577-020-00488-6.
---------------------------------------------------------------------------

    In 2017, the American Academy of Periodontology (AAP) and the 
European Federation of Periodontology (EFP) co-presented the 2017 
Classification of Periodontal and Peri-Implant Diseases and Conditions. 
This disease classification framework serves to guide treatment 
planning for periodontitis and aims to support customized approaches to 
patient care. The revised classification includes a multi-dimensional 
staging and grading system for periodontitis classification, a 
recategorization of various forms of periodontitis, and a 
classification for peri-implant diseases and conditions.\192\
---------------------------------------------------------------------------

    \192\ https://www.perio.org/wp-content/uploads/2019/08/Staging-and-Grading-Periodontitis.pdf.
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    Individuals with ESRD experience compromised immune systems as the 
immune system and the kidneys are closely integrated and 
interdependent. In healthy individuals, the kidneys contribute to 
immune homeostasis and regulation, while components of the immune 
system mediate many acute forms of renal disease and play a central 
role in the progression of chronic kidney disease. A dysregulated 
immune system can have either direct or indirect renal effects.\193\ 
Moreover, uremia, the buildup of waste products in the blood that 
occurs as a result of declining or decreasing kidney function, can lead 
to inflammation and reduction in the immune system's ability to 
function as evidenced by an increased risk of viral-associated cancers, 
increased susceptibility to infections, and decreased vaccination 
responses in patients with ESRD.\194\ ESRD is also characterized by 
diminished endocrine and metabolic functions of the kidney with 
subsequent retention and accumulation of toxic metabolites.\195\ 
Additionally, the presence of indwelling catheters and grafts utilized 
for the administration of dialysis, malnutrition, dysregulated 
inflammation, and acquired immune dysfunction due to uremia contribute 
to the immune deficiency in ESRD and increase susceptibility to 
infection.\196\ Notably, infection is the second leading cause of death 
in hemodialysis patients.197 198
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    \193\ Tecklenborg J, Clayton D, Siebert S, Coley SM. The role of 
the immune system in kidney disease. Clin Exp Immunol. 2018 
May;192(2):142-150. doi: 10.1111/cei.13119. Epub 2018 Mar 24. PMID: 
29453850; PMCID: PMC5904695.
    \194\ Betjes MG. Immune cell dysfunction and inflammation in 
end-stage renal disease. Nat Rev Nephrol. 2013 May;9(5):255-65. doi: 
10.1038/nrneph.2013.44. Epub 2013 Mar 19. PMID: 23507826. https://pubmed.ncbi.nlm.nih.gov/23507826/.
    \195\ Costantinides F, Castronovo G, Vettori E, Frattini C, 
Artero ML, Bevilacqua L, Berton F, Nicolin V, Di Lenarda R. Dental 
Care for Patients with End-Stage Renal Disease and Undergoing 
Hemodialysis. Int J Dent. 2018 Nov 13;2018:9610892. doi: 10.1155/
2018/9610892. PMID: 30538746; PMCID: PMC6258100.
    \196\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7404977/.
    \197\ U.S. Renal Data System. USRDS 2015 Annual Data Report: 
Atlas of End-Stage Renal Disease in the United States, Bethesda, 
National Institutes of Health, National Institute of Diabetes and 
Digestive and Kidney Diseases, 2015.
    \198\ Dalrymple LS, et al. Infection-related hospitalizations in 
older patients with ESRD. Am. J. Kidney Dis. 2010;56:522-530. doi: 
10.1053/j.ajkd.2010.04.016.
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    Several submitters providing information through the public 
submissions process stated that comorbidities frequently occur in the 
ESRD patient population and can cause complications for the patient, 
potentially jeopardizing the outcomes of the dialysis treatment. For 
example, submitters stated that comorbid diabetes can result in 
clinical complications for individuals receiving dialysis services in 
the treatment of ESRD, stating that periodontitis can worsen blood 
glucose control in diabetics by increasing levels of inflammatory 
mediators and may interfere with insulin, resulting in clinical 
complications. Additionally, periodontitis is associated with oral 
health-related quality of life in individuals with ESRD. One study 
evaluated whether periodontitis may be independently associated with 
oral health-related quality of life (OHRQoL) in individuals with ESRD. 
Researchers assessed 180 adults with ESRD and evaluated for impacts on 
various domains, and found that periodontitis exerts an influence on 
OHRQoL in individuals with ESRD, with a more severe condition impacting 
different domains.\199\ Moreover, a prospective cohort study aimed to 
determine the association between an index of radiographically assessed 
oral health, Panoramic Tomographic Index (PTI), and cardiovascular and 
all-cause mortality, major adverse cardiovascular events (MACEs) and 
episodes of bacteremia and laboratory measurements during a three-year 
prospective follow-up in chronic kidney disease (CKD) stage 4-5 
patients not on maintenance dialysis at baseline. The study showed that 
radiographically assessed and indexed dental health is independently 
associated with all-cause and cardiovascular mortality and MACEs in CKD 
stage 4-5 patients transitioning to maintenance dialysis and renal 
transplantation during follow-up (but not with the incidence of 
bacteremia).\200\
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    \199\ Oliveira, L.M., Sari, D., Schoffer, C., Santi, S.S., 
Antoniazzi, R.P., & Zanatta, F.B. (2020). Periodontitis is 
associated with oral health-related quality of life in individuals 
with end-stage renal disease. Journal of Clinical Periodontology, 
47(3), 319-329. doi:10.1111/jcpe.13233.
    \200\ Jarvisalo, M.J., Jokihaka, V., Hakamaki, M., Lankinen, R., 
Helin, H., Koivuviita, N.S., . . . Metsarinne, K. (2021). Dental 
health assessed using panoramic radiograph and adverse events in 
chronic kidney disease stage 4-5 patients transitioning to dialysis 
and transplantation-A prospective cohort study. PLOS ONE, 16(9), 
e0258055. doi:10.1371/journal.pone.0258055.
---------------------------------------------------------------------------

    Submitters providing information through the public process also 
stated that BSI, poor glycemic control, and other complications arising 
from dental infection can jeopardize the clinical success of medical 
therapies employed to manage ESRD. Research provided by submitters 
described that issues and changes in the mouth and oral cavity, such as 
periodontitis and other consequences of poor oral health, frequently 
occur in patients with CKD and may contribute to increased morbidity 
and mortality because of systemic consequences such as inflammation, 
infections, protein-energy wasting, and atherosclerotic 
complications.\201\
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    \201\ Harun Akar, Gulcan Coskun Akar, Juan Jesus Carrero, Peter 
Stenvinkel, and Bengt Lindholm. Systemic Consequences of Poor Oral 
Health in Chronic Kidney Disease Patients, Clin J Am Soc Nephrol 6: 
218-226, 2011. doi: 10.2215/CJN.05470610.
---------------------------------------------------------------------------

    Several submitters also stated that addressing oral health issues, 
including identifying and resolving dental infections through the 
provision of dental and oral services, can be inextricably linked and 
integral and related to the clinical success of Medicare covered 
dialysis services for the treatment of ESRD. The submitters

[[Page 61755]]

stated that the consequences of poor oral health are worse for ESRD 
patients than the general population due to ESRD patient 
characteristics such as advanced age, higher prevalence of comorbid 
diabetes, polypharmacy, and impaired immune function, and that 
medically necessary dental care may improve the clinical success of the 
dialysis services.
    A few submitters supplied a general position paper on the need for 
dental care and services in the ESRD patient population receiving 
dialysis services, describing the unique risks for individuals with 
ESRD and the increased risk of infection from oral sources. 
Specifically, the position paper states that ``oral diseases represent 
a potential and preventable cause of poor health outcomes in people 
with ESRD due to their relation to infection, inflammation, and 
malnutrition. Oral health represents a potential determinant of health 
outcomes in patients with end-stage renal diseases (ESRD).''\202\ 
Several submitters also provided a cohort outcomes study of 675 
randomly selected individuals receiving peritoneal dialysis 
services.\203\ The study outcomes described that ``poor oral health was 
associated with lower educational levels, diabetes, older age, 
marriage, and worse nutritional indicators (including lower time-
averaged serum albumin and phosphate concentrations).''\204\
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    \202\ Costantinides F, Castronovo G, Vettori E, Frattini C, 
Artero ML, Bevilacqua L, Berton F, Nicolin V, Di Lenarda R. Dental 
Care for Patients with End-Stage Renal Disease and Undergoing 
Hemodialysis. Int J Dent. 2018 Nov 13;2018:9610892. doi: 10.1155/
2018/9610892. PMID: 30538746; PMCID: PMC6258100.
    \203\ Sirirat Purisinsith, Patnarin Kanjanabuch, Jeerath 
Phannajit, Bruce Robinson, Kriang Tungsanga, et al. ``Oral Health-
Related Quality of Life, A Proxy of Poor Outcomes in Patients on 
Peritoneal Dialysis.'' doi: https://doi.org/10.1016/j.ekir.2022.07.008 (August 5, 2022).
    \204\ Ibid.
---------------------------------------------------------------------------

    The research further isolated that poor oral health is 
independently associated with an increased risk of peritonitis, an 
infection of the peritoneum where the peritoneal access graft is 
placed, and mortality in patients receiving peritoneal dialysis. The 
authors describe that ``after adjusting for age, sex, comorbidities, 
serum albumin, shared frailty by study sites, and PD vintage, poor oral 
health was associated with increased risks of peritonitis (adjusted 
hazard ratio [HR] = 1.45, 95 percent confidence interval [CI]: 1.06-
2.00) and all-cause mortality (adjusted HR = 1.55, 95 percent CI: 1.04-
2.32) but not hemodialysis (HD) transfer (adjusted HR = 1.89, 95 
percent CI: 0.87-4.10) compared to participants with good oral 
health.'' Furthermore, the study explained that ``poor oral health 
status was present in one-fourth of peritoneal dialysis patients and 
was independently associated with a higher risk of peritonitis and 
death.''\205\ Moreover, submitters provided information that suggests 
that patients with ESRD receiving hemodialysis services and receiving 
preventive oral and dental services experience increased survival while 
those not receiving dental services were associated with increased 
mortality. A prospective cohort outcomes study of 4,205 hemodialysis 
patients assessed the impact of dental health on mortality from 2010 to 
2012. The study described that ``in adults treated with hemodialysis, 
poorer dental health was associated with early death, whereas 
preventive dental health practices were associated with longer 
survival.''\206\
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    \205\ Ibid.
    \206\ See, e.g., Palmer S.C., Ruospo M., Wong G., et al. Oral-D 
study investigators. Dental health and mortality in people with end-
stage kidney disease treated with hemodialysis: a multinational 
cohort study. American Journal of Kidney Diseases. 2015;66:666-676.
---------------------------------------------------------------------------

    Additionally, in a systematic review supplied by several 
submitters, studies show that patients on RRT (for example 
hemodialysis, peritoneal dialysis, and/or transplantation) experience a 
high prevalence of dental caries, common chronic infection resulting 
from tooth-adherent cariogenic bacteria.\207\ The observational data 
presented in the review suggests a link between oral health and 
mortality in patients on RRT.\208\ The review highlighted the need for 
further research in this area but also stated that improved, 
multidisciplinary, patient-centered dental care concepts are required 
to support dental and overall oral health in individuals on RRT.
---------------------------------------------------------------------------

    \207\ https://www.ncbi.nlm.nih.gov/books/NBK551699/.
    \208\ Deborah Kreher et.al., Prevalence of Dental Caries in 
Patients on Renal Replacement Therapy--A Systematic Review J. Clin. 
Med. 2023, 12, 1507. https://doi.org/10.3390/jcm12041507.
---------------------------------------------------------------------------

    Several submitters also noted that the Society for Vascular Surgery 
has stated that transient bacteremia from dental infections can seed 
hemodialysis access grafts. Among strategies to prevent infection of 
vascular grafts, recommended preoperative measures include identifying 
and treating remote site infections, including dental or oral sites of 
infection.209 210 Statements regarding best practices for 
managing infection control advise that sources of infection, including 
those within the oral cavity, should be addressed in order to minimize 
the risk of broader infection in the ESRD patient receiving 
hemodialysis.\211\
---------------------------------------------------------------------------

    \209\ Surgical Site Infection Toolkit, CDC, SSI Toolkit Activity 
C: ELC Prevention Collaboratives (cdc.gov).
    \210\ Pear S, Patient Risk Factors and Best Practices for 
Surgical Site Infection Prevention, https://www.halyardhealth.com/wp-content/uploads/patient_risk_factors_best_practices_ssi.pdf.
    \211\ Ibid.
---------------------------------------------------------------------------

    In conclusion, the evidence base indicates that evaluation for and 
treatment of oral infection leads to improved outcomes and reduced risk 
of mortality for individuals with ESRD receiving covered dialysis 
services.
    In the CY 2023 PFS final rule, we agreed with commenters that there 
is clinical evidence to support that medically necessary dental care 
may advance the clinical success of organ transplants and finalized 
that payment can be made under Medicare Parts A and B for dental 
services such as dental examinations, including necessary treatment, 
performed as part of a comprehensive workup prior to organ transplant 
surgery and medically necessary diagnostic and treatment services 
immediately necessary to eliminate or eradicate the infection or its 
source that are provided before transplantation because such services 
are inextricably linked to, and substantially related and integral to 
the clinical success of, the organ transplant procedure (87 FR 69676).
    Furthermore, we stated that we appreciated commenters' feedback 
regarding those individuals who are awaiting organ transplantation and 
the commenters' request that Medicare provide payment for medically 
necessary dental services prior to transplantation. We described that 
in a case where an individual is awaiting organ transplantation, we 
believe that it is appropriate for Medicare to provide payment for, 
including but not limited to, an oral or dental examination, and 
medically necessary diagnosis and treatment for only those services 
that are considered immediately necessary to eliminate or eradicate the 
infection or its source prior to the organ transplant (87 FR 69676).
    In consideration of research and recommendations provided by the 
public and our analyses of the studies and research available regarding 
the connection between dental services and the clinical success of 
dialysis services for individuals with ESRD, we believe that dental 
services to diagnose and treat infection prior to dialysis services in 
the treatment of ESRD represent a clinically analogous scenario to 
dental services for which Medicare payment under Parts A and B is 
currently permitted when furnished in the

[[Page 61756]]

inpatient or outpatient setting, such as prior to organ transplant. The 
clinical evidence supports that the medically necessary dental care may 
similarly advance the clinical success of dialysis services in the 
treatment of ESRD because an oral or dental infection can present 
substantial risk to the success and outcomes of these procedures 
(including the risk of systemic infection, BSI, sepsis, and death).
    As such, we believe that if a patient requiring dialysis services 
in the treatment of ESRD has an oral infection, the success of those 
dialysis services could be compromised if the infection is not properly 
diagnosed and treated prior to the covered medical services. Without an 
oral or dental examination to identify such an infection and the 
provision of necessary treatment, such as restorative dental services, 
to eradicate the infection prior to the dialysis procedure, the 
patient's ability to complete the dialysis services could be seriously 
complicated or compromised and the risk of infection would further 
increase the risk of mortality for the patient.
    Examples of restorative dental services to eradicate infection 
could include: extractions (removal of the entire infection, such as 
pulling of teeth--for example, CDT D7140, D7210), restorations (removal 
of the infection from tooth/actual structure, such as fillings--for 
example, CDT D2000-2999), periodontal therapy (removal of the infection 
that is surrounding the tooth, such as scaling and root planning--for 
example, CDT D4000-4999, more specifically D4341, D4342, D4335 and 
D4910), or endodontic therapy (removal of infection from the inside of 
the tooth and surrounding structures, such as root canal--for example, 
CDT D3000-3999).
    If such an infection is not treated prior to dialysis services in 
the treatment of ESRD, then there is an increased likelihood for 
morbidity and mortality resulting from spreading of the local infection 
to BSI and sepsis. Likewise, we believe that infections occurring 
during the course of dialysis treatment should similarly be addressed 
and resolved in order to minimize the risk of infection and death for 
the patient with ESRD receiving dialysis services.
    Because an oral or dental infection can present substantial risk to 
the success of dialysis treatment for ESRD, we believe dental services 
furnished to identify, diagnose, and treat oral or dental infections 
prior to or contemporaneously with dialysis services in the treatment 
of ESRD are not in connection with the care, treatment, filling, 
removal, or replacement of teeth or structures directly supporting 
teeth, but instead are inextricably linked to, and substantially 
related and integral to the clinical success of, these other covered 
medical services. We note that, in these circumstances, the necessary 
treatment to eradicate an infection may not be the totality of 
recommended dental services for a given patient. For example, if an 
infected tooth is identified in a patient requiring dialysis services 
in the treatment of ESRD, the necessary treatment would be to eradicate 
the infection, which could result in the tooth being extracted. 
Additional dental services, such as a dental implant or crown, may not 
be considered immediately necessary to eliminate or eradicate the 
infection or its source prior to surgery. Therefore, such additional 
services would not be inextricably linked to, and substantially related 
and integral to the clinical success of, Medicare-covered dialysis 
services when used in the treatment of ESRD. As such, no Medicare 
payment would be made for the additional services that are not 
immediately necessary prior to or contemporaneously with dialysis for 
ESRD to eliminate or eradicate the infection.
    In conclusion, we are proposing to add this clinical scenario to 
the examples of clinical scenarios under which payment can be made for 
certain dental services in our regulation at Sec.  411.15(i)(3)(i)(A). 
Specifically, we propose to amend the regulation at paragraph A to 
include dental or oral examination performed as part of a comprehensive 
workup in either the inpatient or outpatient setting prior to Medicare-
covered dialysis services when used in the treatment of ESRD; and 
medically necessary diagnostic and treatment services to eliminate an 
oral or dental infection prior to, or contemporaneously with Medicare-
covered dialysis services when used in the treatment of ESRD. We seek 
comments on all aspects of this proposal.
3. Request for Comment on Dental Services Integral To Specific Covered 
Services to Treat Diabetes
    As described in section II.J.1.c. of this proposed rule, we have 
received information from interested parties, including submitters 
providing evidence through the public submissions process as well as 
commenters on prior proposed rules suggesting that dental services are 
inextricably linked to treatment services for individuals with diabetes 
mellitus. Several interested parties using the public submissions 
process have urged us to provide Medicare payment for dental services 
for individuals diagnosed with diabetes for consideration in CY 2025 
rule making. These submissions included information and references 
supporting oral and dental treatment of advanced periodontitis among 
individuals with diabetes to improve markers related to management of 
the diabetes.
    Submitters stated that clinical studies demonstrate that dental 
treatments for oral infections, such as advanced periodontitis and 
related inflammation, meaningfully advance and improve the treatment 
of, management of, and outcomes for patients with diabetes. Submitters 
also stated that conversely, the absence of treatment of chronic dental 
infections in turn complicates covered medical treatment for the 
management of diabetes and potentially exacerbates insulin resistance, 
worsens glycemic control, and other diabetes-related complications, 
leading to poor outcomes for the individuals with diabetes. Submitters 
also noted that studies demonstrate cost savings when dental services 
are employed in the treatment of individuals with diabetes and also 
serve to advance health equity among vulnerable populations.
    Submitters provided information detailing the increased risk of 
dental caries and periodontal disease in people with diabetes, many of 
whom lose teeth, which greatly limits nutrition, general well-being, 
and overall quality of life. Submitted studies demonstrated the 
bidirectional nature of periodontal disease and diabetes, suggesting 
that both conditions influence each other and can worsen or conversely 
improve outcomes.
    As described by submitters, numerous basic and clinical studies 
describe the relationship between oral diseases and inflammation in 
persons with diabetes, which increases risks for micro- and 
macrovascular complications including retinopathy, nephropathy, 
neuropathy, cardiovascular diseases, and stroke. Several submitters 
stated that there is a documented reduction in hospitalizations in 
persons with diabetes who receive conservative periodontal treatment. 
Consequently, submitters stated that periodontal treatment is 
recommended for patients with diabetes by American Diabetes Association 
Clinical Guidelines and is also promoted by the American Association of 
Clinical Endocrinologists and others.\212\
---------------------------------------------------------------------------

    \212\ Nuha A. El Sayed, Grazia Aleppo, Vanita R. Aroda, 
Raveendhara R. Bannuru, Florence M. Brown, Dennis Bruemmer, Billy S. 
Collins, Kenneth Cusi, Sandeep R. Das, Christopher H. Gibbons, John 
M. Giurini, Marisa E. Hilliard, Diana Isaacs, Eric L. Johnson, Scott 
Kahan, Kamlesh Khunti, Mikhail Kosiborod, Jose Leon, Sarah K. Lyons, 
Lisa Murdock, Mary Lou Perry, Priya Prahalad, Richard E. Pratley, 
Jane Jeffrie Seley, Robert C. Stanton, Jennifer K. Sun, Crystal C. 
Woodward, Deborah Young-Hyman, Robert A. Gabbay; on behalf of the 
American Diabetes Association, Summary of Revisions: Standards of 
Care in Diabetes--2023. Diabetes Care 1 January 2023; 46 
(Supplement_1): S5-S9. https://doi.org/10.2337/dc23-Srev.

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[[Page 61757]]

    Diabetes mellitus is a chronic, metabolic disease characterized by 
elevated levels of blood glucose (or blood sugar), which, over time, 
may lead to serious damage to the heart, blood vessels, eyes, kidneys, 
and nerves. Type 2 diabetes, which usually occurs in adults, causes the 
body to become resistant to insulin or not to make enough insulin. Type 
1 diabetes, previously referred to as juvenile diabetes or insulin-
dependent diabetes, is a chronic condition in which the pancreas 
produces little or no insulin.\213\
---------------------------------------------------------------------------

    \213\ https://www.who.int/health-topics/diabetes.
---------------------------------------------------------------------------

    A primary goal for the treatment of diabetes is glycemic control 
and requires accurate individualization and customization of available 
treatment options. Interventions to address lipoproteins, blood 
pressure, weight control, mental health, and lifestyle are important 
factors that contribute to quality of life and the frequency of 
diabetes-associated complications.\214\ According to recent statistics 
from the Centers for Disease Control and Prevention, approximately 38 
million people in the United States may have diabetes, and the CDC 
estimates that 1 in 5 of them do not know they have the condition. 
Approximately 98 million U.S. adults likely have prediabetes, and more 
than 8 in 10 of them may not know they have prediabetes. Notably, 
diabetes is the eighth leading cause of death in the United States (and 
may be underreported). Type 2 diabetes accounts for approximately 90 to 
95 percent of all diagnosed cases of diabetes, while Type 1 diabetes 
accounts for approximately 5-10 percent. The CDC reports that over the 
last 20 years, the number of adults diagnosed with diabetes has more 
than doubled as the American population has aged and become more 
overweight or obese.\215\
---------------------------------------------------------------------------

    \214\ Melmer A, Laimer M. Treatment Goals in Diabetes. Endocr 
Dev. 2016;31:1-27. doi: 10.1159/000439364. Epub 2016 Jan 19. PMID: 
26824869.https://pubmed.ncbi.nlm.nih.gov/26824869/.
    \215\ https://www.cdc.gov/diabetes/basics/quick-facts.html.
---------------------------------------------------------------------------

    One key marker for the measurement of glycemic control, a key goal 
in the treatment of diabetes, in individuals with diabetes is the 
hemoglobin A1c test. The hemoglobin A1c (also referred to as glycated 
hemoglobin, glycosylated hemoglobin, HbA1c, or A1c) test is used to 
evaluate a person's level of glucose control and shows an average of 
the blood sugar level over the past 90 days and represents a 
percentage.\216\
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    \216\ https://www.ncbi.nlm.nih.gov/books/NBK549816/.
---------------------------------------------------------------------------

    Submitters through the public submissions process provided multiple 
research studies regarding the interaction between dental services and 
outcomes for medical services to treat diabetes. The Cochrane Library 
(ISSN 1465-1858) is a collection of databases that contain high-
quality, independent evidence to inform healthcare decision-making. The 
Cochrane Library is owned by Cochrane and published by Wiley.\217\ In 
the Cochrane Review entitled Treatment of periodontitis for glycaemic 
control in people with diabetes mellitus, evidence from 30 trials 
(results from 2,443 participants) showed that periodontitis treatment 
reduces blood sugar levels (measured by HbA1c) in diabetic patients on 
average by 0.43 percentage points (for example, from 7.43 to 7 percent; 
4.7 mmol/mol) 3 to 4 months after receiving the treatment compared with 
no active treatment or usual care. A difference of 0.30 percent (3.3 
mmol/mol) was seen after 6 months (12 studies), and 0.50 percent (5.4 
mmol/mol) at 12 months (one study).\218\ All studies in the review used 
a parallel randomized controlled trials (RCT) design and followed 
participants for between 3 and 12 months. The studies generally focused 
on people with type 2 diabetes, save one study that included 
participants with type 1 or type 2 diabetes. Most studies were mixed in 
terms of whether metabolic control of participants at baseline was 
good, fair, or poor and were carried out in secondary care. Researchers 
compared periodontitis treatment with control, which could be no (or 
delayed) treatment or usual care (oral hygiene instruction (OHI) or 
supragingival scaling with or without OHI). The degree and nature of 
advanced periodontitis were not specifically defined in the context of 
the studies. Additionally, the studies did not control for other types 
of interventions deployed in the treatment of diabetes (that is, 
strategies used to manage glycemic control), so patients may have been 
receiving other types of treatment during the study periods.
---------------------------------------------------------------------------

    \217\ https://www.cochranelibrary.com/about/about-cochrane-library.
    \218\ Simpson TC, et al. Treatment of periodontitis for 
glycaemic control in people with diabetes mellitus. Cochrane 
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
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    The types of periodontal treatment provided covered a wide range of 
oral services: subgingival instrumentation, surgical periodontitis 
treatment-flap surgery or gingivectomy; antimicrobial therapy 
(encompassing antibacterials and antibiotics), either locally applied 
(including mouth rinses, gels, or dentifrices) or systemically 
administered; other drug therapy with a possible benefit of improving 
the periodontal condition of the participant; other novel interventions 
to manage periodontitis; supragingival scaling (also known as 
professional mechanical plaque removal (PMPR)); oral hygiene 
instruction; and/or, education or support sessions to improve 
self[hyphen]help or self[hyphen]awareness of oral hygiene.
    In summary, the Cochrane review demonstrated that individuals with 
diabetes who have periodontitis who receive dental services for the 
treatment of the periodontitis experience a statistically significant 
reduction of HbA1c. Again, measurement of HbA1c is a metric for gauging 
glycemic control and is a primary goal of treatment for all individuals 
with diabetes. The study suggests that individuals with diabetes who 
also have a diagnosis of periodontitis who receive treatment to address 
the periodontitis subsequently experience a reduction in HbA1c. The 
study authors described the clinical outcomes related to preventive 
dental care, conservative periodontal treatment, and reduction in HbA1c 
as statistically and clinically significant. Moreover, the authors of 
the research stated that ``further trials evaluating no treatment vs 
usual care are unlikely to change this conclusion.'' \219\
---------------------------------------------------------------------------

    \219\ Simpson TC, et al. Treatment of periodontitis for 
glycaemic control in people with diabetes mellitus. Cochrane 
Database Syst Rev. 2022;4:CD004714 https://www.ncbi.nlm.nih.gov/pubmed/35420698.
---------------------------------------------------------------------------

    Submitters providing information through the public submissions 
process suggested that dental services could be inextricably linked to 
the following specific medical services in the treatment of diabetes:
     CPT 36901-36906: Dialysis circuit procedures.
     CPT 82947: Chemistry procedures, blood glucose testing.
     CPT 83036: Hemoglobin A1C testing.
     CPT 90935, 90937, 90940: Hemodialysis procedures.
     CPT 90961: Physician or other qualified healthcare 
professional visits for ESRD.

[[Page 61758]]

     CPT 90989-90999: Other dialysis procedures.
     CPT 92227-92229: Diabetic retinopathy screening.
     CPT 99091: Collection and interpretation of physiologic 
data.
     CPT 99202-99215: Evaluation and Management (E/M) Services.
     CPT 99211: Office visit for an established patient.
     CPT 99487: Complex chronic care management services.
     CPT 99490-99491: Chronic care management services.
     CPT 99497: Remote physiologic monitoring services.
     CPT 99605-99607: Medication Management.
     CPT 99802-99804: Assessment, Intervention, Face to Face 
(F2F).
     DRG 637: Hospitalization for diabetes with major 
complications.
     G0108: Diabetes Self-Management Training.
     G0109: Group Diabetes Self-Management Training.
     G0270: Nutrition Therapy.
     G0466: FQHC visit new patient.
     G0467: FQHC visit established patient.
    As described in this section, research provided by submitters 
suggests that periodontal treatment for an individual with both a 
diagnosis of diabetes and periodontitis led to improved HbA1c measures.
    We have explained that there are instances where dental services 
are so integral to other medically necessary services that they are 
inextricably linked to the clinical success of that medical service(s), 
and, as such, they are not in connection with the care, treatment, 
filling, removal, or replacement of teeth or structures directly 
supporting teeth within the meaning of section 1862(a)(12) of the Act. 
Rather, these dental services are inextricably linked to the clinical 
success of an otherwise covered medical service and are payable under 
Medicare Parts A and B.
    In the case of an individual with diabetes who also has a diagnosis 
of periodontitis, oral services and treatment to address the 
periodontitis potentially lead to a reduction in HbA1c, a marker of 
glycemic control that may be used to determine the effectiveness of 
interventions for treatment of diabetes. In the description of the 
studies submitted, the research seems to indicate that the improvement 
of glycemic control as evidenced by the HbA1c is due to the provision 
of treatment for the periodontitis. The dental and oral services may 
not be integral to other specific medically necessary, covered 
services, but rather the dental and oral services may serve to 
influence clinical outcomes directly. The studies compare the impact of 
the treatment for the periodontitis to the impact of pharmacological 
interventions.
    We recognize that evidence submitted by interested parties 
demonstrates that an individual with both a diagnosis of diabetes and a 
diagnosis of periodontitis who in turn receives periodontal treatment 
services may experience improvements in markers for HbA1c, which is a 
key target outcome for the patient population with diabetes. However, 
the interaction between these diagnoses and the potential improvements 
due to periodontal treatment services does not appear to align with the 
framework we have established to pay for dental services inextricably 
linked to covered services; in our framework, the delivery of certain 
dental services are integral to the successful completion of or 
outcomes related to the covered services.
    Under Sec.  411.15(i)(3), we have specified that payment can be 
made for certain dental services that are inextricably linked to other 
services when the specific covered services with which the dental 
services are inextricably linked are identified. The studies that have 
been provided to CMS through submissions have not identified any 
specific covered services for the treatment of diabetes to which dental 
services are inextricably linked. Rather, the studies indicate that the 
primary treatment of periodontal disease in patients with diabetes 
generally leads to better outcomes in the management of the patients' 
diabetes. While the research makes the case that the dental services 
are medically necessary for patients with diabetes, medical necessity 
alone does not permit payment for dental services given the broad 
statutory prohibition under section 1862(a)(12) on payment for services 
``in connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth.'' In the 
case of patients with diabetes, the research does not appear to show 
that certain dental services are inextricably linked with certain other 
covered services for the treatment of diabetes, in accordance with our 
regulation at Sec.  411.15(i)(3) such that the statutory prohibition 
under section 1862(a)(12) does not apply.
    We note that some of the examples of medical services for diabetes 
treatment provided by submitters are general in nature and not specific 
to patients with diabetes who may also have periodontal disease, 
including CPT codes 99202-99215: Evaluation and Management (E/M) 
Services that broadly describe outpatient office visits for the 
diagnosis and medical management of practically any illness, disease, 
or condition.
    Additionally, submitters providing evidence for our consideration 
suggested that the services described by codes for diabetes self-
management training (for example, G0108: Diabetes Self-Management 
Training, and G0109: Group Diabetes Self-Management Training) are 
services with which dental services may be inextricably linked. 
However, we were not persuaded by this evidence and do not believe that 
dental services would be inextricably linked to improved outcomes for 
services for DSMT. Therefore, we seek comment from the public regarding 
specific covered services for management of patients with diabetes with 
which dental services may be inextricably linked. At this time, we are 
not proposing to amend Sec.  411.15(i)(3)(i) as we have not identified 
additional dental services that are inextricably linked to certain 
services in the treatment of diabetes. However, we note that we remain 
open to considering any such services identified by public commenters, 
and, if sufficient evidence is presented, we may consider adding such 
services to our regulations in the final rule.
    In the context of payment for dental services for an individual 
with diabetes, we seek information from the public regarding what the 
coordination between a medical and dental professional would entail in 
the scenario where an individual with a diagnosis of diabetes presents 
with suspected periodontitis. In the CY 2023 PFS final rule, we 
explained that we would make payment when a doctor of dental medicine 
or dental surgery (referred to as a dentist) furnishes dental services 
that are an integral part of the covered primary procedure or service 
furnished by another physician, or non-physician practitioner, treating 
the primary medical illness. However, if there is no exchange of 
information, or integration, between the medical professional 
(physician or other non-physician practitioner) in regard to the 
primary medical service and the dentist in regard to the dental 
services, then there would not be an inextricable link between the 
dental and covered medical service within the meaning of our regulation 
at Sec.  411.15(i)(3). Without both integration between the Medicare 
enrolled medical and dental professional, and the inextricable link 
between the dental and covered services, Medicare payment for dental 
services would be prohibited under section 1862(a)(12) because the 
services

[[Page 61759]]

are in connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth; though 
they may be covered by types of supplemental health or dental coverage 
(87 FR 69687 through 69688).
    In a situation where a medical professional believes that an 
individual with a diagnosis of diabetes may also have a diagnosis of 
periodontitis, how are recommendations conveyed between the medical and 
dental professionals? What coordination, if any, occurs between the 
medical and dental professionals? We expect that inextricably linked 
services related to the treatment of periodontitis in an individual 
with diabetes would require significant communication between the 
medical and dental professionals.
    Additionally, we have stated that an inextricable linkage may exist 
between dental services and covered services when the standard of care 
for the medical service is such that the practitioner would not proceed 
with the medical procedure or service without performing the dental 
services, because the covered medical services would or could be 
significantly and materially compromised, or where dental services are 
a clinical prerequisite to proceeding with the primary medical 
procedure and/or treatment (87 FR 69669). While evidence supports that 
individuals with diabetes and periodontitis who receive periodontal 
treatment experience improvements in their HbA1c markers, dental 
services do not appear to serve as a precondition to overall treatment 
for the diabetes. We seek information from the public on how oral 
treatment services may be a clinical prerequisite in the treatment 
protocol for the care of individuals with diabetes.
    We note that there does not appear to be a clear or singular 
definitional framework for categorizing the state of diabetes, such as 
``controlled'' or ``uncontrolled'' diabetes. Research submitted by the 
public discusses improvements in glycemic control as evidence by HbA1c 
markers, but does not delineate the characteristics of a patient that 
would require direct clinical intervention (pharmacological, 
behavioral, usage of DME such as insulin pumps, etc.) versus a patient 
that would not require interventions given that their disease state is 
not within a concerning range requiring direct medical treatment.
    In the current literature, there are two types of severity measures 
that can help categorizing the state of diabetes: the severity of 
diabetes itself and the severity of periodontal disease among 
individuals with diabetes. With respect to the severity of diabetes, 
the American Diabetes Association recommends that most adults with 
diabetes aim for a HbA1c level below 7.0% (<53 mmol/mol), along with 
other recommended targets such as blood pressure below 130/80 mmHg and 
LDL cholesterol below 100 mg/dL.\220\ In the current literature, 
uncontrolled hyperglycemia is typically defined as a HbA1c level above 
8.0% (>64 mmol/mol), according to guidelines from various medical 
organizations including the ADA, American College of Physicians, 
Association of Clinical Endocrinologists, and American College of 
Endocrinology.221 222 223 224 Based on the literature, this 
threshold serves as a ``take action'' point in managing diabetes and 
has been used in previous studies to indicate poor glycemic control. 
Achieving and maintaining target HbA1c levels is essential for 
individuals with diabetes (as well as the general population) and is a 
key goal of treatment. Moreover, we note that for the purposes of 
Quality Payment Program (QPP) measures, CMS has issued measures for 
diabetes (e.g. Quality ID #1 (NQF 0059): Diabetes: Hemoglobin A1c 
(HbA1c) Poor Control (>9%)).\225\ The measure is described as 
``Percentage of patients 18-75 years of age with diabetes who had 
hemoglobin A1c > 9.0% during the measurement period.'' Furthermore, 
measures of HbA1c may fluctuate over time; therefore, a strict 
threshold could lead to incentives for multiple rounds of testing in 
order to aim for the levels established. In general, guidelines exist, 
but standards vary for defining diabetes states based on multiple 
severity measures.
---------------------------------------------------------------------------

    \220\ American Diabetes Association. ``Standards of medical care 
in diabetes--2011.'' Diabetes care vol. 34 Suppl 1, Suppl 1 (2011): 
S11-61. doi:10.2337/dc11-S011.
    \221\ Liu, Longjian et al. ``Burden of Uncontrolled 
Hyperglycemia and Its Association with Patients Characteristics and 
Socioeconomic Status in Philadelphia, USA.'' Health equity vol. 4,1 
525-532. 30 Dec. 2020, doi:10.1089/heq.2020.0076.
    \222\ Qaseem, Amir et al. ``Glycemic control and type 2 diabetes 
mellitus: the optimal hemoglobin A1c targets. A guidance statement 
from the American College of Physicians.'' Annals of internal 
medicine vol. 147,6 (2007): 417-22. doi:10.7326/0003-4819-147-6-
200709180-00012.
    \223\ Cortez-Espinosa, Nancy et al. ``Abnormal expression and 
function of Dectin-1 receptor in type 2 diabetes mellitus patients 
with poor glycemic control (HbA1c>8%).'' Metabolism: clinical and 
experimental vol. 61,11 (2012): 1538-46. doi:10.1016/
j.metabol.2012.03.020.
    \224\ Hu, Huanhuan et al. ``Hba1c, Blood Pressure, and Lipid 
Control in People with Diabetes: Japan Epidemiology Collaboration on 
Occupational Health Study.'' PloS one vol. 11,7 e0159071. 20 Jul. 
2016, doi:10.1371/journal.pone.0159071.
    \225\ https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2023_Measure_001_MIPSCQM.pdf.
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    In addition, the severity of periodontal disease is not uniformly 
defined. ICD-10 codes, such as K05.2 for Aggressive Periodontitis and 
K05.3 for Chronic Periodontitis may be utilized to describe more severe 
instances of periodontitis (and in this instance when such diagnosis 
codes are also partnered with diagnoses related to diabetes for a 
particular individual). Another approach involves using the Armitage 
criteria for periodontal diagnosis.226 227 Severity 
assessment can be based on the clinical attachment level (CAL), with 
CAL between 1 mm and 2 mm classified as slight, 3 mm and 4 mm as 
moderate, and >=5 mm as severe.\228\ Again, some standards exist 
relative to the staging of periodontitis, but such criteria vary. 
Additionally, we believe that the current practice of medicine would 
allow for variation in clinical attributes as well as judgment and 
discernment by the referring practitioner regarding the clinical status 
of the individual when determining the need for consultation with other 
practitioner types, including the dentist. We seek comment on whether 
clinical standards exist that describe and define the disease state of 
diabetes that would serve to inform the selection of treatment 
modalities, including potential referrals to dental professionals with 
respect to concerns related to oral health. We also seek comment from 
the public regarding the ways that CMS could ensure that practitioners 
do not decrease the quality of diabetes treatment in an effort to 
maintain a beneficiary's potential access to Medicare payment for 
dental services.
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    \226\ Armitage, G C. ``Development of a classification system 
for periodontal diseases and conditions.'' Annals of periodontology 
vol. 4,1 (1999): 1-6. doi:10.1902/annals.1999.4.1.1.
    \227\ Caton, Jack G et al. ``A new classification scheme for 
periodontal and peri-implant diseases and conditions--Introduction 
and key changes from the 1999 classification.'' Journal of clinical 
periodontology vol. 45 Suppl 20 (2018): S1-S8. doi:10.1111/
jcpe.12935.
    \228\ Pinho, M Morado et al. ``Periodontitis and 
atherosclerosis: an observational study.'' Journal of periodontal 
research vol. 48,4 (2013): 452-7. doi:10.1111/jre.12026.
---------------------------------------------------------------------------

    Evidence supplied by submitters also described periodontitis but 
without clear and consistent definitional structure. The 2017 World 
Workshop on the Classification of Periodontal and Peri-Implant Diseases 
and Conditions resulted in a new classification of periodontitis 
characterized by a multidimensional staging and grading system. The 
staging considers the aspects of severity, complexity, extent, and 
distribution while the grading

[[Page 61760]]

contemplates primary criteria such as progression and grade modifiers, 
including risk factors such as smoking and diabetes.\229\
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    \229\ Tables from Tonetti, Greenwell, Kornman. J Periodontol 
2018;89 (Suppl 1): S159-S172. https://www.perio.org/wp-content/uploads/2019/08/Staging-and-Grading-Periodontitis.pdf.
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    For the purposes of our consideration of medical services for the 
treatment of diabetes for individuals with diabetes who have 
periodontitis, we seek comment from the public on clinical criteria 
that would determine eligibility for effectiveness of periodontal 
treatment as described in the Cochrane review and other studies. We do 
not believe that a condition such as gingivitis or early stages of 
periodontitis would require oral treatment that in turn would influence 
the outcomes for an individual with diabetes. However, we seek 
information to address the following questions. At what stages and 
grading would the periodontitis be considered advanced and/or requiring 
dental and oral treatment intervention? What types of practitioners are 
able to make determinations regarding the staging of periodontitis? We 
also seek comment on patient eligibility. What determines patient 
eligibility for treatment for advanced periodontitis? Are there other 
criteria for consideration?
    Additionally, we seek comment on the duration of potential 
periodontal treatment. How is the length of treatment determined? If a 
patient's clinical status improves with respect to the periodontal 
disease, what factors determine when periodontal treatment comes to an 
end? What does maintenance treatment entail? What services are provided 
in treatment of advanced periodontal disease? What is the service 
definition? Are services bundled? If yes, what is included in the 
bundle? When are the services provided and over what period? Is it 
provided over a calendar month period? A single day? Multiple days? Are 
services timed? Who provides the services? What specific terminology is 
involved? Are these services ever provided under supervision? Or 
``incident to'' by other clinical staff?
    We also seek information on how services for advanced periodontal 
disease are provided. Where and how are services for treatment of 
advanced periodontal disease provided? Are there any special rules, 
such as obtaining advance consent or performance of an initiating 
visit?
    We also seek information regarding coding and billing of 
periodontal services. What coding is utilized for the treatment 
services for advanced periodontal disease? What claims format is 
employed for the submission of claims with related oral and dental 
services (for example, 837D and/or 837P)?
    Additionally, we seek comment from the public regarding the risk of 
recurrence of periodontal disease for this patient population. What is 
the level of risk for re-development of advanced periodontitis and 
likelihood of recurrence?
    We also seek information regarding the role of caries in management 
of diabetes. What is the prevalence of caries in this patient 
population? What is the impact of caries on management of diabetes?
    We also seek information regarding the disease state of the 
diabetes itself and its interaction with dental services. Does evidence 
exist to support that certain characteristics related to diabetes 
management (for example, maintenance of HbA1c) are more closely tied to 
certain oral interventions' ability to yield clinical improvements?
    We reiterate that section 1862(a)(12) of the Act generally 
precludes payment under Medicare Parts A or B for any expenses incurred 
for services in connection with the care, treatment, filling, removal, 
or replacement of teeth or structures directly supporting teeth. Thus, 
payment is permitted only where the dental services are inextricably 
linked to covered medical services. We believe that general maintenance 
and management of oral disease processes clearly falls within the 
statutory exclusion and therefore Medicare would not permit payment for 
routine dental and oral services.
    We note that many submitters stated that good dental and oral 
health benefits a patient's overall health in general. Several 
commenters responding to the CY 2023 PFS proposed rule also expressed 
that good oral hygiene, along with routine dental services, contributes 
to better outcomes for patients. We recognized in the CY 2023 PFS final 
rule in response to those comments that there is a great deal of 
evidence suggesting that dental health is generally an important 
component of overall health; however, we are interested in comments on 
whether certain dental services are considered so integral to the 
primary covered services that the necessary dental interventions are 
inextricably linked to, and substantially related and integral to 
clinical success of, the primary covered services such that they are 
not subject to the statutory preclusion on Medicare payment for dental 
services under section 1862(a)(12) of the Act (88 FR 79033).
    In summary, we seek comment on whether certain dental services are 
inextricably linked to certain other covered services for diabetes, 
supported by clinical evidence as described in section II.J.1.c. of 
this proposed rule. We also seek comment specifically on whether dental 
services such as prophylaxis are a standard of care in the management 
of diabetes. We are committed to continuing to explore the potential 
inextricable relationship between dental services and covered medical 
services utilized in treatment for individuals with diabetes. We thank 
submitters for the information they provided through the public 
submissions process and may consider revisions to the clinical examples 
codified in our regulations at Sec.  411.15(i)(3)(i) based upon 
additional data and information received in response to this proposed 
rule.
4. Request for Comment on Dental Services Integral To Specific Covered 
Services To Treat Systemic Autoimmune Disease Requiring 
Immunosuppressive Therapies
    We have received information from submitters suggesting that 
certain dental services are inextricably linked to immunosuppressive 
therapies for individuals with autoimmune disorders.
    According to the NIH's National Institute of Environmental Health 
Sciences, a healthy immune system is able to defend the body against 
disease and infection. However, if the immune system malfunctions, it 
may mistakenly attack healthy cells, tissues, and organs. This scenario 
is called autoimmune disease, and these attacks can affect any part of 
the body, weaken bodily function, and in some cases become life-
threatening.\230\ There are over 100 autoimmune diseases, including 
Type 1 diabetes, multiple sclerosis, lupus, rheumatoid arthritis, and 
inflammatory bowel disease. There are also other autoimmune diseases 
that are rare and difficult to diagnose. In some cases, patients may 
suffer for years before receiving a proper diagnosis, and most of these 
diseases have no cure. Additionally, some autoimmune diseases require 
lifelong treatment for system management.\231\
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    \230\ https://www.niehs.nih.gov/health/topics/conditions/autoimmune.
    \231\ Ibid.
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    Autoimmune diseases are continuously affecting more people. 
Estimates indicate that as many as 50 million people in the U.S. have 
an autoimmune disease, making it the third

[[Page 61761]]

most prevalent disease category, surpassed only by cancer and cardiac 
disease. Generally speaking, a person's genes in combination with 
infections and other environmental exposures likely play a significant 
role in disease development, though in some instances pathology may be 
unknown. Additionally, nearly 80 percent of people with a chronic 
autoimmune condition are women.\232\ Symptoms of autoimmune diseases 
can include: fatigue, pain, dermatologic manifestations, weight loss or 
gain, insomnia, fever, and myriad other symptoms.\233\
---------------------------------------------------------------------------

    \232\ Ibid.
    \233\ https://www.womenshealth.gov/a-z-topics/autoimmune-diseases.
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    Many treatment modalities are employed in the management of 
autoimmune diseases. Treatments could include use of oral medications, 
including steroids, anti-inflammatory medications, as well as infusion 
immunotherapy. Some autoimmune conditions may present in a localized 
fashion, such as Sjogren's, and many of the independent organ 
inflammations, require immunosuppressive therapies, and may progress to 
a more systemic involvement. Conversely, some systemic autoimmune 
diseases, like sarcoidosis, may not require immunosuppression in mild 
cases.
    Submissions through the public submissions process urged us to 
provide that payment can be made for dental services for individuals 
with autoimmune diseases receiving immunosuppressive therapy. In 
submissions, several interested parties have asserted that 
immunosuppressive therapies utilized in the treatment of autoimmune 
disease have similar immunosuppressive effects as those of toxic 
chemotherapy utilized in the treatment of cancer and that these 
treatments are analogous to the clinical examples finalized in CY 2024 
PFS rulemaking for dental services inextricably linked to covered 
medical services in the treatment of cancer.
    Submitters stated that oral and dental treatment is also often 
integral to the successful care and management of beneficiaries with 
autoimmune diseases who are initiating or undergoing immunosuppressive 
or immunomodulator therapy because the absence of medically necessary 
oral and dental treatment can pose serious complications to those 
beneficiaries and the covered medical services they receive. Submitters 
state that, for example, dental infections can spread quickly when host 
immunity is compromised by immunosuppressing or immunomodulating drugs 
utilized in treatment. As such, submitters note that the American 
College of Physicians has described that the implications of dental 
disease in patients who are undergoing immunosuppressive therapy extend 
beyond their oral disease, with potentially life-threatening 
complications if the dental problems are not treated. For these 
reasons, submitters state that the covered services upon which 
immunocompromised patients depend (for example, immunosuppressive 
therapy) should not proceed until a dental or oral exam is performed to 
address the oral complications and/or clear the patient of an oral or 
dental infection.
    Submitters provided information regarding specific covered services 
that they believe could be associated with treatments for 
immunosuppressive therapy for the treatment of autoimmune disease and 
that may increase infection risk, such as:
     CPT codes 99212-99215: Evaluation and Management (E/M) 
Services.
     CPT codes 96365-96368: Infusion services.
    Submitters also provided coding information related to drug 
therapies, such as CPT codes for immunosuppressant drugs, including:
     J0129: Abatacept (Orencia) for Rheumatoid Arthritis.
     J0135: Adalimumad (Humira) for Crohn's, Ulcerative 
Colitis, Rheumatoid Arthritis.
     J0490: Belimumab (Benlysta) for systemic lupus 
erythematosus (SLE), Lupus Nephritis, and Sj[ouml]gren's.
     J0491: Anifrolumab-fnia (Saphnelo) for systemic lupus 
erythematosus (SLE).
     J1303: Ravulizumab-cwvz (Ultomiris) for Generalized 
Myasthenia Gravis.
     J1438: Etanercept (Enbrel) for Rheumatoid Arthritis, 
Ankylosing Spondylitis.
     J1595: Glatiramer (Copaxone) for Multiple Sclerosis.
     J1602: Golimumab (Simponi) for Rheumatoid Arthritis, UC, 
Ankylosing Spondylitis.
     J1745: Infliximab (Remicade) for Crohn's, Ulcerative 
Colitis, Rheumatoid Arthritis.
     J2250: Upadacitinib (Rinvoq) for Rheumatoid Arthritis, 
Ulcerative Colitis, Crohn's.
     J2323: Natalizumab (Tysabri) for Multiple Sclerosis.
     J2350: Ocrelizumab (Ocrevus) for Multiple Sclerosis.
     J3262: Tocilizumab (Actemra) for Scleroderma-associated 
lung fibrosis.
     J3357: Ustekinumab (Stelara) for Crohn's, Ulcerative 
Colitis, Psoriatic Arthritis.
     J3380: Vedolizumab (Entyvio) for Crohn's, Ulcerative 
Colitis.
     J3590: Secukinumab (Cosentyx) for Plaque Psoriasis.
     J7500: Azathioprine (Imuran) for Lupus, Crohn's, 
Sj[ouml]gren's.
     J7517: Mycophenolate (Cellcept) for Lupus, Sj[ouml]gren's.
     J9070: Cyclophosphamide (Cytoxan) for Sj[ouml]gren's, 
Vasculitis.
     J9250: Methotrexate for Sj[ouml]gren's, Rheumatoid 
Arthritis (unresponsive to other treatment).
     J9302: Ofatumumab (Kesimpta) for Multiple Sclerosis.
     J9312: Rituximab (Rituxan) for Rheumatoid Arthritis, 
Sj[ouml]gren's.
     J9332: Efgartigimod (Vyvgart) for Myasthenia Gravis.
    Submitters also provided coding information for potential medical 
services for medical treatment for pulmonary diseases when aspiration 
of dental pathogens risk or cause the initiation and/or recurrence of 
complications, such as:
     CPT codes 99212-99215: Evaluation and Management (E/M) 
Services.
     CPT code 99291: Critical Care Services.
     DRG code 177: Hospitalization for respiratory infections 
and inflammation.
     DRG code 190: COPD with complications.
    Submitters also provided coding regarding medical treatment for 
dentally sourced dissecting maxillofacial space infections:
     CPT 41000: Intraoral incision and drainage of abscess.
     CPT 87181: Antibiotic susceptibility study.
     CPT 96365: Infusion of antibiotic.
     CPT codes 99281-99285: Emergency department services.
     CPT codes 99291-99292: Critical care services.
     DRG code 135: Sinus procedures with CC/MCC.
     DRG code 141: Major head and neck procedures with CC.
     DRG code 872: Hospitalization for septicemia or severe 
sepsis.
    Submitters providing information through the public submissions 
process stated that if dental or oral infections are left undetected or 
untreated in the population of individuals undergoing immunosuppressive 
therapy for autoimmune disease, serious complications may occur and 
negatively impact the course and outcome of the covered medical 
procedures, which submitters state is analogous to previously finalized 
policies for dental

[[Page 61762]]

services inextricably linked to covered cancer treatment for the 
patient. Several submitters pointed out that we stated in the CY 2024 
PFS final rule that proceeding without a dental or oral exam of the 
mouth prior to chemotherapy could lead to systemic infection or sepsis, 
among other complications, and that similar outcomes can follow for 
those receiving immunosuppressive therapy to treat autoimmune diseases.
    The submitters noted that in the CY 2024 PFS final rule, we 
described that AHRQ identified evidence to support that dental 
evaluation/treatment prior to cancer treatment led to decreased 
incidence and/or less severity of serious oral infections and 
complications like oral mucositis and encouraged CMS to explore this 
connection to confirm that dental evaluations and treatment prior to 
immunosuppressive therapy would lead to decreased incidence of serious 
oral infections in a similar fashion. The submitters also stated that 
they believe it is critical that beneficiaries with an autoimmune 
disease that requires immunosuppressive therapy have access to 
necessary dental services, as proper dental care for this population 
can reduce the incidence of serious infection and improve overall 
patient outcomes for the covered service.
    We appreciate the evidence and information provided by submitters 
and agree that we should continue to research whether there is a 
connection between dental and oral evaluations and treatment prior to 
immunosuppressive therapy and outcomes for said therapies, including 
the potential decreased incidence of serious oral infections.
    However, we seek comment on whether the level of immunosuppression 
utilized in the treatment of autoimmune diseases is analogous to the 
immunosuppression levels employed in the treatment of cancer. We 
believe that the level of immunosuppression for systemic autoimmune 
disease has different characteristics versus therapies utilized in 
chemotherapy used in the treatment of cancer. For example, the usage of 
monoclonal antibodies in the treatment of autoimmune disease may not 
render the same level of immunosuppression and subsequent 
susceptibility to infection as chemotherapy used in the treatment of 
cancer.
    We also seek information on the connection between 
immunosuppressive therapy in the treatment of autoimmune disease and 
the likelihood of systemic infection and sepsis. Specifically, we seek 
information regarding the likelihood of dental and oral sources as the 
locus of the seeding of infection in this patient population. 
Additionally, we seek information regarding standards of care or 
clinical guidelines that recommend that a dental infection be addressed 
before proceeding with the immunosuppressive treatment or the 
administration of drugs or whether oral antibiotics would be prescribed 
to resolve the infection and that the therapy would advance without 
direct dental or oral services to address the infection.
    We also seek information regarding whether there is differential 
impact between drugs that are administered in an office setting or 
similar versus those medications that are taken in an oral fashion.
    We thank submitters for the information they provided through the 
public submissions process. We believe that additional information is 
necessary to consider whether there is an inextricable link between 
dental services and covered services to treat systemic autoimmune 
disease requiring immunosuppressive therapies and seek comment from the 
public. We remain open to considering any such services identified by 
public commenters, and, if sufficient evidence is presented, we may 
consider adding such services to Sec.  411.15(i)(3) in the final rule.
5. Implementation of Payment for Dental Services Inextricably Linked to 
Other Specific Covered Services
    In the CY 2024 PFS final rule (88 FR 79035 through 79039), we 
solicited comments on whether we should provide additional guidance 
that would aid in processing claims for dental services that are 
inextricably linked to a Medicare-covered medical service. Some 
commenters suggested the usage of a modifier on the dental claim format 
that would better identify when dental services are inextricably linked 
to specific covered medical services. As we continue to consider 
improvements to our payment policies and have gained experience around 
the provision of dental services inextricably linked to covered medical 
services, we have explored tools and resources that may help to 
facilitate the implementation and coordination of dental services that 
are currently covered under Medicare, including the possible usage of 
modifiers and diagnosis codes. The usage of modifiers on a dental claim 
would seek to identify the dental service as a service the billing 
practitioner identifies as inextricably linked to a specific covered 
medical service and for which there was an exchange of information, or 
integration, between the medical and dental professional (physician, 
including a dentist, or other non-physician practitioner) as specified 
in the CY 2023 PFS final rule (87 FR 69663 through 69688). We have 
explained that if there is no exchange of information, or integration, 
between the medical professional (physician or other non-physician 
practitioner) regarding the primary medical service and the 
practitioner furnishing the dental services, then there would not be an 
inextricable link between the dental and covered medical service within 
the meaning of our regulation at Sec.  411.15(i)(3). Furthermore, 
integration between medical and dental professionals can occur when 
these professionals coordinate care. This level of coordination can 
occur in various forms such as, but not limited to, a referral or 
exchange of information between the medical professional (physician or 
non-physician practitioner) and the dentist. This coordination should 
occur between a dentist and another medical professional (physician or 
other non-physician practitioner) regardless of whether both 
individuals are affiliated with or employed by the same entity.
    Currently, the KX modifier is submitted on a Medicare Part B claim 
to indicate that the service or item is medically necessary, and that 
the healthcare provider has included appropriate documentation in the 
medical record to support or justify the medical necessity of the 
service or item. We believe that usage of the KX modifier in the 
context of claims for dental services inextricably linked to covered 
services would be appropriate and support claims processing and program 
integrity efforts.
    Based on comments received and summarized in the CY 2024 PFS final 
rule (88 FR 79037), interested parties requested that we provide more 
guidance on how a practitioner submitting claims for dental services 
can attest that the dental and medical services are inextricably 
linked, and that the criteria have been met to support payment. We 
believe that the use of the KX modifier would allow practitioners to 
signal that the dental services meet the criteria to support payment. 
Also, use of the KX modifier may improve the MACs' ability to ascertain 
the volume of claims that are being submitted for dental services 
inextricably linked to covered services.
    Therefore we are proposing that, effective January 1, 2025, the KX 
modifier would be required for claims submission for dental services 
inextricably linked to covered medical services on both the dental 
claim format 837D and the professional claim format

[[Page 61763]]

837P. We are proposing that practitioners who bill for dental services 
for which they seek payment in accordance with Sec.  411.15(i)(3) must 
include the KX modifier on the 837D or 837P claim to indicate that they 
believe that the dental service meets the established payment criteria; 
that the practitioner has included appropriate documentation in the 
medical record to support or justify the medical necessity of the 
service or item and that demonstrates the inextricable linkage to 
covered medical services; and that coordination of care between the 
medical and dental practitioners has occurred. To help with this 
transition to potentially requiring use of the KX modifier for claims 
submission for dental services inextricably linked to covered medical 
services beginning in 2025, practitioners now have the option to 
utilize the KX modifier as proposed, for services with dates of service 
in CY 2024. This optional usage in CY 2024 would not be mandatory and 
would serve to support both clinician and MAC claims processing 
activities. We intend to provide additional instruction and education 
through subregulatory guidance regarding this voluntary phase of the 
usage of the KX modifier on claims submitted for dental services 
inextricably linked to covered medical services. We seek comment on all 
aspects of this proposal.
    While the KX modifier indicates that the services are medically 
necessary, the GY modifier (along with three other HCPCS denial 
modifiers) serves to indicate that a service is not covered because it 
is outside of the scope of Medicare coverage authorized by the statute. 
We reiterate that denial modifiers should be used when physicians, 
practitioners, or suppliers want to indicate that the item or service 
is statutorily non-covered.
    Use of the GY modifier could support MAC efforts to adjudicate 
claims and remove from the claims processing pipeline those claims that 
do not require further processing. We are seeking comment on whether we 
should recommend the usage of the GY modifier on the 837D or 837P 
dental claim format in instances where a Medicare claim denial is 
sought for purposes of submission to third party payers or when the 
service does not fit within a Medicare benefit category and is 
statutorily excluded from coverage.
    Additionally, in general, the Act and our regulations mandate the 
submission of diagnostic coding (for example, ICD-10 codes) on Medicare 
claims. Section 1842(p)(1) of the Act states that ``each request for 
payment, or bill submitted, for an item or service furnished by a 
physician or practitioner specified in subsection (b)(18)(C) for which 
payment may be made under this part shall include the appropriate 
diagnosis code (or codes) as established by the Secretary for such item 
or service.'' Under this section, each bill or request for payment for 
physicians' services under Medicare Part B must include the appropriate 
diagnostic code ``as established by the Secretary'' for each item or 
service for which the Medicare beneficiary received treatment. In the 
March 4, 1994 final rule entitled Medicare Program; Diagnosis Codes on 
Physician Bills, we codified that each bill or request for payment for 
a service furnished by a physician under Medicare Part B must include 
appropriate diagnostic coding for the diagnosis or the symptoms of the 
illness or injury for which the Medicare beneficiary received care and 
revised our regulations at Sec.  424.32, Basic requirements for all 
claims, to state specifically that a claim for physician services must 
include appropriate diagnostic coding using diagnostic information (59 
FR 10290).
    Additionally, in the CY 2023 PFS final rule, we stated that 
dentists are included in the statutory definition of physician at 
section 1861(r)(2) of the Act and would generally be considered and 
treated as a physician for purposes of enrollment, compliance, and 
other administrative programs (87 FR 69673). Therefore, dentists, who 
are physicians for the purposes of the Medicare program, are required 
to submit diagnosis codes on claims for physician services as described 
in the statute and regulations. Furthermore, we note that diagnosis 
code information is currently required on the submission of the 
professional claim form 837P; professional claims lacking such 
information are returned to the healthcare provider and are not 
processed.
    In the CY 2023 PFS final rule (87 FR 69679 through 69680), we 
acknowledged the need to address and clarify certain operational issues 
related to Medicare payment for dental services inextricably linked to 
covered services and noted that we were working to address these 
issues, including claims processing questions raised by the commenters. 
We stated that we anticipated resolving many of the additional 
operational issues raised by commenters potentially as soon as CY 2024, 
including efforts to adopt the dental claim form (837D). Similarly, in 
the CY 2024 PFS final rule (88 FR 79036), we stated that we continue to 
work to address issues raised by commenters, such as questions related 
to claims processing and efforts to accommodate the dental claim form 
within our claims processing systems, effective 2024. The efforts 
related to adopting the dental claim form are ongoing, and as efforts 
advance to address the implementation and functionality of claims 
processing systems for the dental claim form, we intend to provide 
appropriate guidance and education to interested parties.
    We anticipate that our systems will be able to process claims 
submitted using the dental claim form 837D (OMB Control No. 0938-1471) 
by January 1, 2025. Consistent with the statutory and regulatory 
requirements discussed above, we intend to require a diagnosis code to 
be included on claims submitted for physicians' services for dental 
services inextricably linked to covered medical services on both the 
837P and 837D formats, beginning on January 1, 2025. However, given the 
complexities related to the operational launch of and transition to the 
837D dental claims format, we are also considering further delaying the 
requirement to include a diagnosis code on the 837D form. For example, 
interested parties have indicated that in current dental practice, 
claims processing systems may not require the submission of a diagnosis 
code on claims for dental services, and therefore dental practices may 
need time to adjust to this requirement for the 837D form. We believe 
that it may be appropriate to delay this requirement for a limited time 
to support clinicians and billing entities as they seek to change their 
workflows and transition to using the 837D form. We seek comment on our 
intention to require the inclusion of a diagnosis code on the 837D form 
beginning on January 1, 2025. We are particularly interested in any 
operational challenges that interested parties may face in attempting 
to comply, as well as other considerations that we should take into 
account with regard to the timing of this requirement.
    In the CY 2023 PFS final rule, we stated that we believed that MACs 
are appropriately situated to establish contractor prices for dental 
services inextricably linked to covered services until we have 
additional pricing data that could enable national pricing (87 FR 
69680). Therefore, dental services inextricably linked to covered 
services are currently contractor priced. However, we have received 
feedback from the MACs regarding pricing information for dental 
services inextricably linked to covered services, and the MACs have 
requested information that would support their efforts to assign 
payment amounts for such dental services. The MACs retain

[[Page 61764]]

broad flexibility with respect to assigning payment amounts to claims 
for dental services inextricably linked to covered services; however, 
we seek to facilitate the sharing of available pricing information with 
the MACs for these purposes. Thus, we seek comment from the public on 
potential sources of payment information for the pricing of dental 
services inextricably linked to covered services. We note, for example, 
that publicly available data (such as Fair Health cost data) are 
available for purchase; however, we understand that this information 
may not directly inform payment amounts in a manner useful for the 
payment of Medicare claims for dental services. According to Fair 
Health's website, cost estimate information is based on claims for 
medical and dental services paid for by private insurance plans, 
including the country's largest insurers.\234\ We are also aware of 
other fee schedules, such as those used by state governments for state 
employees, or discount fee schedules, such as discount dental programs 
(for example, https://www.dentalbenefitprogram.com/groupfees.php?id=NEV). We aim to support the ongoing efforts by the 
MACs to price these services and seek any information from the public 
that may serve to support and inform the MAC development of payment 
amounts for dental services inextricably linked to covered services.
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    \234\ https://www.fairhealthconsumer.org/#answer2; Accessed May 
22, 2024.
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6. Request for Information: Services Associated With Furnishing Oral 
Appliances Used for the Treatment of Obstructive Sleep Apnea
    Section 1861(s) of the Act defines the term ``medical and other 
health services'' that may be covered under Medicare, including 
physicians' services under section 1861(s)(1), services and supplies 
furnished incident to a physician's professional service under section 
1861(s)(2)(A), and durable medical equipment (DME) under section 
1861(s)(6) of the Act.\235\
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    \235\ https://www.ssa.gov/OP_Home/ssact/title18/1861.htm.
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    In addition to the statutory definition of DME, Sec.  414.202 of 
our regulations defines DME as equipment furnished by a supplier or a 
home health agency that meets the following conditions:
     Can withstand repeated use.
     Effective with respect to items classified as DME after 
January 1, 2012, has an expected life of at least 3 years.
     Is primarily and customarily used to serve a medical 
purpose.
     Generally is not useful to an individual in the absence of 
an illness or injury.
     Is appropriate for use in the home.
    For items to be considered DME, all five criteria of the definition 
must be met. The CMS policies for determining whether an item meets the 
definition of DME are further outlined in the Medicare Benefit Policy 
Manual (CMS Pub. 100-02), Chapter 15, section 110.1. With respect to 
the first and second criteria, DME items must be able to withstand 
repeated use in the home, potentially by successive patients.
    Different types of oral appliances are fabricated and furnished by 
licensed dentists (DDS or DMD) to reposition oral and pharyngeal 
tissues in an effort to create and maintain a patient's airway during 
sleep for treatment of obstructive sleep apnea. Obstructive sleep apnea 
is a medical disorder in which a person frequently stops breathing 
during sleep. It results from an obstruction of the upper airway during 
sleep that occurs because of inadequate motor tone of the tongue and/or 
airway dilator muscles. A treating practitioner may prescribe use of an 
oral appliance as the first line of treatment for obstructive sleep 
apnea, or in cases where other treatments, such as use of a continuous 
positive airway pressure (CPAP) device and/or bi-level positive airway 
pressure device have been tried and failed.
    The following two HCPCS Level II codes were established effective 
January 1, 2006, for these devices:
     E0485 ``Oral device/appliance used to reduce upper airway 
collapsibility, adjustable or non-adjustable, prefabricated, includes 
fitting and adjustment''.
     E0486 ``Oral device/appliance used to reduce upper airway 
collapsibility, adjustable or non-adjustable, custom fabricated, 
includes fitting and adjustment''.
    A very limited subset of custom fabricated oral appliances used to 
treat obstructive sleep apnea (HCPCS code E0486) have been covered for 
Medicare beneficiaries by the Durable Medical Equipment Medicare 
Administrative Contractors (DME MACs) under the DME benefit. These 
devices are considered durable equipment by the DME MACs because of the 
presence of a fixed mechanical hinge.
    An additional HCPCS code was established effective April 1, 2022, 
to describe custom fabricated oral appliances without a fixed 
mechanical hinge:
     K1027 ``Oral device/appliance used to reduce upper airway 
collapsibility, without fixed mechanical hinge, custom fabricated, 
includes fitting and adjustment''.
    The DME MACs have not covered any of the prefabricated devices 
(HCPCS code E0485) based on a determination that there is insufficient 
evidence to support that these items are effective therapy for 
obstructive sleep apnea. The DME MAC Local Coverage Determination for 
the devices is available at https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdId=33611&ver=25.
    For several years, manufacturers of products without fixed 
mechanical hinges that dentists use in custom fabricating oral 
appliances have raised concerns regarding why their versions of the 
custom fabricated oral appliances have not been classified as DME. 
There have been an increasing number of requests for HCPCS codes and 
Medicare benefit category determinations from several different 
manufacturers of these products. Using the public meeting consultation 
process outlined in regulations at Sec.  414.240, we obtained public 
consultation regarding these various products. National Medicare 
benefit category determinations have not been established for these 
appliances because we have not been able to confirm that any of the 
custom fabricated devices can withstand repeated use. As indicated 
above, equipment must be able to withstand repeated use in order to be 
classified as DME, which means they are items that can normally be 
rented and used by successive patients (repeated use).
    We are not aware of any oral appliances used to treat obstructive 
sleep apnea, regardless of whether they include a fixed mechanical 
hinge, that are prefabricated, or custom fabricated, and can withstand 
repeated use. These are oral appliances that do not seem to be the kind 
of equipment that could potentially be rented and used by successive 
patients. In addition, national fee schedule amounts have not been 
established for the devices with the mechanical hinge because of 
complexities related to pricing of the professional services of the 
dentist that are integral to the fabrication and furnishing of the 
device. The DME MACs have been paying claims for devices they have been 
covering as DME under code E0486 using local fee schedule amounts. 
Before making a final determination regarding whether these devices 
could be classified as DME, we are requesting information that would 
help us determine if oral appliances used to treat obstructive sleep 
apnea can withstand repeated use (furnished as rental equipment for use 
by successive patients).

[[Page 61765]]

    As described in section II.J.1.a. of this proposed rule, section 
1862(a)(12) of the Act generally precludes payment under Medicare Parts 
A or B for any expenses incurred for services in connection with the 
care, treatment, filling, removal, or replacement of teeth or 
structures directly supporting teeth. Oral sleep apnea appliances and 
similar appliances are used in the direct treatment of sleep apnea. A 
treating practitioner may prescribe the use of an oral sleep apnea 
appliance as the first line of treatment for obstructive sleep apnea, a 
medical condition, or in instances where other treatments, such as use 
of a CPAP device and/or bi-level positive airway pressure device have 
been tried and failed. Therefore, we believe that these appliances and 
related services, while utilized in the mouth and situated on the 
teeth, would not be considered services in connection with the care, 
treatment, filling, removal, or replacement of teeth or structures 
directly supporting the teeth. Rather, we believe that oral sleep apnea 
appliances, when prescribed by a practitioner for the treatment of a 
medical condition such as obstructive sleep apnea, as medically 
reasonable and necessary and therefore may be payable by Medicare. 
Further, we believe that payment for oral sleep apnea appliances would 
not fall within the payment policy for dental services inextricably 
linked to covered medical services, as the appliances are not services 
for dental care, but are instead services and supplies for the purposes 
of directly treating a medical condition unrelated to teeth or 
structures directly supporting the teeth (for example, sleep apnea).
    The statutory definition of physician includes a doctor of dental 
surgery or of dental medicine in section 1861(r)(2) of the Act, and, to 
the extent payment for dental services is not precluded under section 
1862(a)(12) of the Act, medically necessary services furnished by a 
dentist may be covered and paid as physicians' services under section 
1861(s)(1) and (2), and section 1848 of the Act.
    We are requesting information regarding the types of services 
furnished by a dentist or other practitioner related to oral sleep 
apnea appliances. Specifically, we are seeking information regarding 
details that may inform or support a future proposal regarding a code 
assignment for services related to oral sleep apnea appliances under 
the Medicare physician fee schedule.
    We are requesting details and information regarding the services 
related to the furnishment of oral appliances used to treat obstructive 
sleep apnea, as described in the questions below:
     Patient eligibility criteria: to whom is the service 
related to the furnishing of oral appliances being provided? How is the 
nuisance snorer differentiated from the medical condition of sleep 
apnea? What criteria are used to determine whether the provision of 
these services may be medically reasonable and necessary?
     Services provided: What is the service definition for oral 
sleep apnea appliances? Is a bundle of services provided? If yes, what 
services are included in the bundle? What does the process for 
evaluating, furnishing, and fitting of oral sleep apnea appliances 
involve? What work is involved? Which elements of the services are 
essential (particularly in terms of what work is essential to the 
effectiveness of the device)? What are the costs associated with 
providing these services? What are the payment amounts for these 
services?
     Timing of services: What is the service period? Are the 
services provided over a period of time? Are services timed in any way?
     Practitioner type: Who provides these services? What 
credentialing is required? Is supervision required? Who would be 
billing for these services? Would incident to payment policy rules 
apply?
     Location of services: Where and how are services for oral 
sleep apnea appliances provided? Are all services provided in an in-
person setting? Does the patient have to be present for all elements of 
this service? Does the service involve direct contact with the patient 
in each instance?
     Considerations for Telehealth: Are any of these services 
provided, or capable of being provided, via telehealth?
     Site of service: Can services related to oral sleep apnea 
appliances be provided by hospital-based physicians?
     Other considerations: What billing procedures exist for 
these oral sleep apnea appliances? What existing and/or additional 
coding may currently describe these types of services? In addition to 
the HCPCS Level II codes described above (for example, E0485 and 
E0486), we believe that the CDT codes D9947 through D9957 may describe 
both the fabrication of the appliance as well as services provided 
during and after fabrication.
    We will review any information provided by the public and consider 
potential refinements to PFS payment policy accordingly. We reiterate 
that we do not believe the evaluation services or fabrication and 
fitting of oral sleep apnea appliances by dentists or other physicians 
or non-physician practitioners would be subject to the prohibition on 
payment for dental services under section 1862(a)(12) or the payment 
policy for dental services inextricably linked to covered services. 
However, we seek information regarding the services associated with the 
provision of these appliances and may consider code creation or other 
refinements in the context of the Medicare physician fee schedule. 
Additionally, we note that as described in section II.C. of this 
proposed rule, individuals and groups may nominate codes that they 
believe may be potentially misvalued codes through our public 
nomination process for potentially misvalued codes, which was 
established in the CY 2012 PFS final rule with comment period (76 FR 
73026, 73058 through 73059). Individuals could consider nominating 
codes related to oral sleep apnea appliances for consideration under 
this process. Nominations may be submitted to CMS in one of two ways: 
via email or through postal mail. Email submissions should be sent to 
the CMS email box at [email protected], with the 
phrase ``Potentially Misvalued Codes'' and the referencing CPT code 
number(s) and/or the CPT descriptor(s) in the subject line. Physical 
letters for nominations should be sent via the U.S. Postal Service to 
the Centers for Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 
Security Blvd., Baltimore, Maryland 21244. Envelopes containing the 
nomination letters must be labeled ``Attention: Division of 
Practitioner Services, Potentially Misvalued Codes.'' Nominations for 
consideration in our next annual rule cycle should be received by our 
February 10th deadline.

K. Payment for Skin Substitutes

    In the CY 2023 PFS proposed rule (87 FR 46027 through 46029), we 
outlined several objectives related to refining skin substitute 
policies under Medicare, including: (1) ensuring a consistent payment 
approach for skin substitute products across the physician office and 
hospital outpatient department settings; (2) ensuring that appropriate 
HCPCS codes describe skin substitute products; (3) using a uniform 
benefit category across products within the physician office setting, 
regardless of whether the product is synthetic or comprised of human or 
animal-based material, to incorporate more consistent payment 
methodologies; and (4) maintaining clarity for interested parties on 
CMS skin substitutes policies and procedures. When considering 
potential changes to policies involving skin

[[Page 61766]]

substitutes, we noted that we believe it would be appropriate to take a 
phased approach over multiple rulemaking cycles to examine how we could 
appropriately incorporate skin substitutes as supplies under the PFS 
ratesetting methodology. After receiving feedback from commenters 
requesting more information on how CMS intends to achieve a consistent 
payment approach for skin substitute products, we did not finalize any 
policies in the CY 2023 PFS final rule.
    In alignment with our objectives, in the CY 2024 PFS final rule, we 
solicited comments on different approaches CMS could use to identify 
appropriate practice expense (PE) direct costs for skin substitute 
products, such as reviewing various sources for price information, 
including performing market research, reviewing invoices submitted by 
interested parties, or cost information on Medicare claims. Discussing 
these approaches in the CY 2024 PFS final rule provided interested 
parties with more details about payment mechanisms CMS is considering 
under our PFS ratesetting methodology.
    The CY 2024 PFS proposed rule did not contain a specific proposal 
for changing how skin substitute products are paid under the PFS; 
however, we continue to pursue our objectives for refining skin 
substitute payment policies under Medicare, as mentioned above. More 
specifically, we continue examining ways to treat skin substitute 
products as incident-to supplies under the PFS ratesetting methodology. 
Additionally, we believe continuing this dialogue with interested 
parties on payment for skin substitute products will help inform 
potential policy changes for future rulemaking.
    We recognize that skin substitute products may vary in composition, 
size, and applicability and will continue to consider these distinct 
characteristics in proposing a consistent payment approach and policy. 
We also note an increase in HCPCS Level II coding request applications 
for newly developed skin substitute products and are considering 
broadly all of our relevant payment policies. Such policies, for 
example, include the discarded drug refund policy and the Part B drug 
inflation rebate policy and how these policies may align with the usage 
and payment for skin substitute products. In the CY 2024 PFS final rule 
(88 FR 79060 through 79061), we finalized that billing and payment 
codes that describe products currently referred to as skin substitutes 
are not counted for identifying refundable drugs for calendar quarters 
during 2023 and 2024. While we continue to consider making changes to 
the Medicare Part B payment policies for such products, similar to last 
year, for CY 2025, we are proposing that billing and payment codes that 
describe products currently referred to as skin substitutes would not 
be counted for purposes of identifying refundable drugs for calendar 
quarters in 2025. We plan to revisit discarded drug refund obligations 
for skin substitutes in future rulemaking. In section III.I. of this 
proposed rule, CMS is proposing to codify existing policy by including 
products currently referred to as skin substitutes on the list of 
product categories that are not considered Part B rebatable drugs in 
proposed Sec.  427.101(b)(5).

III. Other Provisions of the Proposed Rule

A. Drugs and Biological Products Paid Under Medicare Part B

1. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs to Provide Refunds with Respect to Discarded Amounts 
(Sec. Sec.  [thinsp]414.902 and 414.940)
a. Background
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-58, November 15, 2021) (hereinafter referred to as ``the 
Infrastructure Act'') amended section 1847A of the Act to redesignate 
subsection (h) as subsection (i) and insert a new subsection (h), which 
requires manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug (hereinafter referred to as ``refundable drug'') for calendar 
quarters beginning January 1, 2023.
    In the CY 2023 PFS final rule (87 FR 69710 through 69734), we 
finalized many policies to implement this provision. First, we 
finalized the requirement that billing providers and suppliers report 
the JW modifier for all separately payable drugs and biologicals 
(hereinafter referred to as ``drugs'') with discarded drug amounts from 
single use vials or single use packages payable under Part B, beginning 
January 1, 2023 (87 FR 69719). We also finalized the requirement that 
billing providers and suppliers report the JZ modifier for all such 
drugs with no discarded amounts beginning no later than July 1, 2023, 
and we stated that we would begin claims edits for both the JW and JZ 
modifiers beginning October 1, 2023 (87 FR 69718 through 69719). After 
the issuance of the CY 2023 PFS final rule, CMS published a JW Modifier 
and JZ Modifier Policy Frequently Asked Questions (FAQ) document \236\ 
to provide further guidance on the correct use of these modifiers.
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    \236\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf.
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    Second, we adopted a definition of ``refundable single-dose 
container or single-use package drug'' at Sec.  414.902, which also 
specifies exclusions from this definition (87 FR 69724). These three 
exclusions are: radiopharmaceutical or imaging agents, certain drugs 
requiring filtration, and drugs approved by FDA on or after November 
15, 2021 for which payment has been made under Part B for fewer than 18 
months.
    Third, regarding reports to manufacturers, we specified that we 
would send reports (including information described in section 
1847A(h)(1) of the Act) for each calendar quarter, on an annual basis, 
to each manufacturer of a refundable drug (87 FR 69726).
    Fourth, we finalized how the refund amount will be calculated, 
which is specified in regulation at Sec.  [thinsp]414.940 (87 FR 
69731). We stated we would issue a preliminary report based on 
available claims data from the first two quarters of CY 2023 to provide 
manufacturers information regarding discarded amounts of refundable 
drugs prior to the initial refund report (87 FR 69725). In these 
reports, which were sent in December of 2023, we included preliminary 
information on estimated discarded amounts of refundable drugs for each 
labeler code based on available claims data from the first 2 quarters 
of CY 2023 for any refundable drug for which discarded units were 
billed using the JW modifier. More information about discarded drugs, 
including the discarded drug refund and the JW and JZ modifier policy, 
can be found at https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
    Fifth, we addressed drugs with unique circumstances for which we 
can, through notice-and-comment rulemaking, increase the applicable 
percentage otherwise applicable for determining the refund. Section 
1847A(h)(3)(B)(ii) of the Act provides that, in the case of a 
refundable drug that has unique circumstances involving similar loss of 
product as that described in section 1847A(h)(8)(B)(ii) of the Act, the 
Secretary may increase the applicable percentage otherwise applicable 
as determined appropriate by the Secretary. We adopted an increased 
applicable percentage of 35 percent for drugs reconstituted with a 
hydrogel and with variable dosing based on patient-

[[Page 61767]]

specific characteristics (87 FR 69731). Lastly, we adopted a dispute 
resolution process through which manufacturers can challenge refund 
calculations, and we established enforcement provisions, including 
manufacturer audits, provider audits, and civil money penalties 
required by statute (87 FR 69732 through 69734).
    In the CY 2024 PFS final rule (88 FR 79047 through 79064), we 
finalized the date of the initial refund report to manufacturers, the 
date for subsequent reports, method of calculating refunds for 
discarded amounts in lagged claims data, method of calculating refunds 
when there are multiple manufacturers for a refundable drug, increased 
applicable percentages for certain drugs with unique circumstances, and 
a future application process by which manufacturers may apply for an 
increased applicable percentage for a drug, which would precede 
proposals to increase applicable percentages in rulemaking.
    We also finalized that drugs separately payable under Part B from 
single-dose containers that are furnished by a supplier who is not 
administering the drug are required to be billed with the JZ modifier, 
since we believe it is unreasonable to collect discarded drug data from 
beneficiaries. We were concerned that claim rejections may occur in the 
absence of a claims modifier to designate that a drug was dispensed, 
but not administered, by the billing supplier.
b. Application for Increased Applicable Percentage
    Section 1847A(h)(3)(B)(ii) of the Act permits the Secretary to 
increase the applicable percentage for a refundable drug that has 
unique circumstances through notice and comment rulemaking. In the CY 
2024 PFS final rule (88 FR 79057 through 79060), we finalized an 
application process (CMS-10835, OMB 0938-1435) by which manufacturers 
could apply for an increased applicable percentage for a drug and may 
request that we consider an individual drug to have unique 
circumstances for which an increased applicable percentage is 
appropriate. We explained that manufacturers could benefit from a 
formal process through which they can provide information, including 
that which may not be publicly available, in order to request an 
increase in their refundable drug's applicable percentage and provide 
justification for why the drug has unique circumstances for which such 
an increase is appropriate, including in the case of a drug with an 
applicable percentage that has already been increased by virtue of its 
unique circumstances. We finalized the application deadline of February 
1 of each year, adopted a deadline of August 1 for the FDA-approval of 
the drug and the deadline for notifying and submitting the FDA-approved 
label to CMS of September 1 of the year before the year in which the 
increased applicable percentages would apply. We codified this process 
in regulation at Sec.  414.940(e). The application process requires the 
applicant to provide a written request comprising FDA-approved labeling 
for the drug; justification for the consideration of an increased 
applicable percentage based on such unique circumstances; and 
justification for the requested increase in the applicable percentage.
    We received one application for increased applicable percentage for 
CY 2025 from the manufacturer of Leukine[supreg] (sargramostim). 
Leukine[supreg] is a leukocyte growth factor that is primarily used in 
hematological malignancies to increase white blood cell counts. The 
applicant submitted the information required under Sec.  414.940(e)(1), 
including its justification for consideration for increased applicable 
percentage, and justification for the requested applicable percentage 
of 72 percent. The applicant did not submit FDA-approved labeling for 
the drug for the particular adjuvant uses described in the application 
(further described below in this paragraph) due to ongoing cancer 
vaccine adjuvant trials. The applicant states that there are several 
manufacturers in late-stage (Phase II and Phase III) development using 
Leukine[supreg] as a vaccine adjuvant in oncology indications, 
specifically in stimulating the immune response of dendritic cells when 
used alongside these vaccines. Cancer treatment vaccines are different 
from the vaccines that work against viruses (for example, influenza). 
These vaccines try to get the immune system to mount an attack against 
cancer cells in the body. Instead of preventing disease, they are meant 
to get the immune system to attack a disease that already exists.\237\ 
The applicant stated that it has no ownership stake in the development 
of these vaccines and does not possess control or influence over the 
design and execution of the clinical trials. The estimated completion 
dates for Phase III clinical trials vary, with the earliest expected in 
March 2025 \238\ and the latest in March 2029.\239\ The adjuvant use of 
Leukine[supreg] in predetermined dosage introduces a new use of the 
drug that is distinct from its six FDA-approved indications, all of 
which have dosages that are based on body weight or body surface area 
(BSA). The adjuvant use dosages of Leukine[supreg] in clinical trials 
are generally much smaller than dosages for indications in the FDA-
approved labeling. The smallest dose of Leukine[supreg] used for 
vaccine adjuvant purposes of which the applicant is aware (that is, 70 
mcg) would lead to as much as 72 percent of the drug being discarded 
from a single-dose 250 mcg lyophilized vial, which is the only size 
available commercially. The applicant suggested that if use of these 
small doses were to become more common, the percentage of discarded 
units could increase the discarded drug refund amount that could be 
owed by the applicant, even though the applicant lacks control or 
knowledge of the potential variability of the discarded amounts that 
may occur if Leukine[supreg] were used for such purposes. If an FDA 
approval for adjuvant use of Leukine[supreg] were to occur by another 
manufacturer, the available presentations of Leukine[supreg] would 
likely not be optimized for the small doses being studied in these 
trials.
---------------------------------------------------------------------------

    \237\ https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html.
    \238\ https://clinicaltrials.gov/study/NCT04229979.
    \239\ https://clinicaltrials.gov/study/NCT05100641.
---------------------------------------------------------------------------

    As part of CMS's review of the application, we analyzed existing 
claims data from the first quarter of 2023 through the first quarter of 
2024 and found the percentage of units discarded for the Healthcare 
Common Procedure Coding System (HCPCS) code for Leukine[supreg] (J2820) 
ranged from 1.2 percent to 3.8 percent, which is below the applicable 
percentage of 10 percent. Since we do not yet know the impact of a new 
adjuvant indication with a type of immunotherapy commonly referred to 
as cancer vaccines \240\ on the current percentage of units discarded, 
we are not proposing an increased applicable percentage without 
additional information. Because it is not yet known whether 
Leukine[supreg] will be approved for additional indications with 
varying dosage requirements and the information provided by the 
applicant; and available data does not provide enough information for 
CMS to determine whether Leukine[supreg] has unique circumstances that 
would prompt an increase in the applicable percentage, we are not 
proposing an increase in the applicable percentage for the drug at this 
time.
---------------------------------------------------------------------------

    \240\ https://www.cancerresearch.org/treatment-types/cancer-vaccines.
---------------------------------------------------------------------------

    The applicant may reapply in a future application cycle when more 
information becomes available.

[[Page 61768]]

c. Clarifications for the Definition of Refundable Single-Dose 
Container or Single-Use Package Drug
(1) Exclusions for Drugs for Which Payment Has Been Made Under Part B 
for Fewer Than 18 Months
    Section 1847A(h)(8)(B)(iii) of the Act excludes from the definition 
of refundable drug a drug approved or licensed by FDA on or after 
November 15, 2021, and for which payment has been made under Part B for 
fewer than 18 months. This is codified in the definition of refundable 
single-dose container or single-use package drug in Sec.  414.902. In 
the CY 2023 PFS final rule (87 FR 69720 through 69731), we finalized 
that the 18-month period begins on the first day of the calendar 
quarter following the date of first sale as reported to CMS for the 
first National Drug Code (NDC) assigned to the HCPCS code. We expected 
that the first date of sale would approximate the date of payment of 
the first Part B claim, and we finalized that we would use the first 
date of sale because it is more operationally feasible than identifying 
the date when the first Part B claim was paid for a new drug. We did 
not receive any opposing comments to this approach when the policy was 
proposed (87 FR 69719 through 69724). Since then, however, we have 
found one instance where the date of first sale for a drug, as reported 
to CMS, does not adequately approximate the first date for which 
payment was made under Part B.
    We propose that, while we would continue to use the first date of 
sale reported to CMS for most refundable drugs, we would use the date 
on which the drug is first paid under Part B if the date of first sale 
as reported to CMS does not adequately approximate the first date of 
payment under Part B due to an applicable National Coverage 
Determination (NCD). Under the exception, the first date for which the 
drug is actually paid under Part B (not the date of first sale) would 
be used to determine the beginning of the 18-month exclusion period.
    For example, in the case of Leqembi[supreg] (lecanemab-irmb), the 
second drug targeting cerebral amyloid-beta plaques in Alzheimer's 
disease to receive FDA approval, the first date of sale reported to CMS 
via the Average Sales Price (ASP) portal was in January 2023, as it was 
marketed and sold under accelerated approval granted on January 6, 
2023. However, because Leqembi[supreg] is subject to the NCD for 
Monoclonal Antibodies Directed Against Amyloid for the Treatment of 
Alzheimer's Disease under coverage with evidence development 
(CED),\241\ and because Leqembi[supreg] was initially marketed and sold 
under accelerated approval, Leqembi[supreg] coverage under Part B 
required the product to be furnished in a randomized controlled trial 
(RCT) conducted under an investigational new drug (IND) 
application.\242\ In public comments on the CY 2024 proposed rule, the 
manufacturer of Leqembi[supreg] explained that Leqembi[supreg]'s Phase 
III confirmatory trial was already fully enrolled and complete prior to 
FDA granting accelerated approval, and as such, there was no RCT in 
which to enroll Medicare beneficiaries. Leqembi[supreg] received 
traditional approval on July 6, 2023. The first Part B payments for 
Leqembi[supreg] did not occur until after traditional FDA approval of 
the drug on July 6, 2023, and Medicare paid for the drug beginning that 
month in CED studies using a registry.\243\ Under policies finalized in 
the CY 2023 PFS final rule, the 18-month exclusion period for 
Leqembi[supreg] would begin on April 1, 2023, which marks the first day 
of the calendar quarter after the drug's first date of sale as reported 
to CMS in January 2023. We believe that, in this situation, our current 
policy of using the date of first sale as reported in ASP data does not 
adequately approximate the beginning of the 18-month period for which 
payment has been made for the drug under Part B.
---------------------------------------------------------------------------

    \241\ Section 200.3 of the Medicare National Coverage 
Determinations Manual.
    \242\ https://www.cms.gov/medicare/coverage/coverage-evidence-development/monoclonal-antibodies-directed-against-amyloid-treatment-alzheimers-disease-ad.
    \243\ https://www.cms.gov/newsroom/press-releases/statement-broader-medicare-coverage-leqembi-available-following-fda-traditional-approval.
---------------------------------------------------------------------------

    Under this proposed rule, the 18-month exclusion for 
Leqembi[supreg] would be October 1, 2023, through March 31, 2025 (that 
is, six full calendar quarters following the date that the drug was 
first paid under Medicare Part B).
    To maintain operational feasibility of this provision and better 
align the policy with statutory language when the date of first sale 
reported to CMS does not adequately approximate the date of first 
payment under Medicare Part B, we are proposing to amend the exclusions 
in the definition of refundable single-dose container or single-use 
package drug at Sec.  414.902. We note that we are also proposing to 
revise the structure of the definition of Refundable single-dose 
container or single-use package drug and as part of that restructuring, 
we are proposing that exclusions would be defined at paragraph (2) of 
the definition. Moreover, we are proposing to add a fourth exclusion to 
paragraph (2) to address drugs for which the date of first sale does 
not adequately approximate the first date of payment under Part B due 
to an applicable NCD. We anticipate that instances of inadequately 
approximating the date of first payment under Medicare Part B based on 
the date of first sale due to an applicable NCD will be rare, as 
coverage of a drug under Part B is not often restricted by an NCD.
(2) Clarification for Identifying Single-Dose Containers
    In the CY 2023 PFS final rule (87 FR 69719), we finalized that the 
definition of refundable drug would apply to drugs paid under Medicare 
Part B (that is, under any payment methodology) that are described in 
FDA-approved labeling as being supplied in a ``single-dose'' container 
or ``single-use'' package. This definition also includes drugs 
described in FDA-approved labeling as a part of a ``kit'' that is 
intended for a single dose or single use. We also finalized that for a 
drug to meet the definition of refundable drug, all NDCs assigned to 
the drug's billing and payment code must be single-dose containers, as 
described in each product's labeling.
    During our analysis in identifying refundable drugs for the 
preliminary reports (which are based on available JW modifier data from 
the first and second quarters of 2023), we learned that some product 
labeling \244\ does not specify the package type terms (for example, 
whether the product is supplied in a single-dose or single-use package 
or a multiple-dose preparation). This may occur in drugs that were 
approved prior to October 2018 because at that time, FDA issued 
guidance \245\ regarding the selection of the appropriate package terms 
to address bacterial and viral infections among patients resulting from 
improper use of single-dose containers such as vials, ampules, and 
prefilled syringes. The guidance defines a single-dose container as a 
container of a sterile medication for parenteral administration 
(injection or infusion) that is not required to meet the antimicrobial 
effectiveness testing requirements. The guidance further states a 
single-dose container is designed for use with a single patient as a 
single injection/infusion and, when space permits, the label should 
include the correct package type term and appropriate discard 
statements. Discard statements include instruction for

[[Page 61769]]

discarding or, if appropriate, storage guidance for drugs remaining 
after preparation. The guidance defines a multiple-dose container as a 
container of sterile medication for parenteral administration that has 
met antimicrobial effectiveness testing requirements or is excluded 
from such testing requirements. In addition, the guidance defines the 
term ``single-patient-use'' container, which describes a package that 
contains multiple doses of an injectable medical product that is 
intended to be used in a single patient.
---------------------------------------------------------------------------

    \244\ ``Product labeling'' in this document means the container 
label, carton labeling, or prescribing information.
    \245\ https://www.fda.gov/media/117883/download.
---------------------------------------------------------------------------

    Some drugs approved prior to the release of this guidance (that is, 
those prior to October 2018) and some Orphan drugs do not include the 
package type terms and explicit discard statements. Examples of drugs 
without the package type terms and discard statements include certain 
manufacturers of digoxin (approved in 1954), oxytocin (approved in 
1980), diphenhydramine (approved in 1982), phenobarbital (orphan drug 
without FDA approval). Several of these drugs are available in small 
containers with only a few mL of labeled drug in the containers.
    In this proposed rule, we are proposing to include injectable drugs 
with a labeled volume of 2 mL or less and that lack the package type 
terms and explicit discard statements in their product labeling to be 
single-dose containers in the definition of refundable single-dose 
container or single-use package drugs. We identified 2 mL as a 
threshold for this proposal for several reasons. For intramuscular 
administration, the maximum volume administered at one time for 
diphenhydramine and digoxin is less than or equal to 2 mL. We also note 
that for adults, the maximum volume \246\ for intramuscular 
administration is typically limited to 3 mL. For drugs administered 
intravenously and supplied in containers containing 2 mL or less, like 
digoxin and phenobarbital, dosages are calculated based on body weight, 
potentially leading to discarded amounts. We believe that preparation 
of these drugs would likely be used for a single dose based on the 
range of dose sizes for these drugs and the amount of drug in the 
container. In other words, it is unlikely that more than one dose could 
be prepared from the amount of drug in the container.
---------------------------------------------------------------------------

    \246\ Open Resources for Nursing (Open RN); Ernstmeyer K, 
Christman E, editors. Nursing Skills [internet]. 2nd edition. Eau 
Claire (WI): Chippewa Valley Technical College; 2023. Chapter 18 
Administration of Parenteral Medications. Available from https://www.ncbi.nlm.nih.gov/books/NBK596739/.
---------------------------------------------------------------------------

    Another category of drugs approved before 2018 that lack discard 
statements is drugs contained in ampules (also spelled as ampoules or 
ampuls, hereinafter referred to as ``ampules''). The term ampule is an 
airtight vial made of glass, plastic, metal, or any combination of 
these materials.\247\ Examples of drugs currently contained in ampules 
include epinephrine (approved in 1939), lidocaine hydrochloride (1948), 
dicyclomine (1950), digoxin (1954), chlorpromazine (1957), fentanyl 
citrate (1968), promethazine (1973), alprostadil (1981), nalbuphine 
(1993), and tacrolimus (1994). Drugs contained in ampules are accessed 
by breaking the concaved part (``the neck''), and the content should be 
passed through a sterile filter to remove any residual glass 
particles.\248\
---------------------------------------------------------------------------

    \247\ 40 CFR 273.9.
    \248\ Pharmaceutical Compounding--Sterile Preparations. USP-NF 
2023. November 1, 2023.
---------------------------------------------------------------------------

    Therefore, we are proposing to amend the definition of refundable 
single-dose container or single-use package drug to include drugs 
contained in ampules and for which there is no discard statement. We 
are proposing to classify drugs supplied in ampules to be drugs in 
single-dose containers for purposes of this discarded drug policy 
because this approach would be consistent with the description of 
single-dose container in the October 2018 FDA guidance. We note that 
some drugs contained in ampules may be excluded from the definition of 
refundable drug under section 1847A(h)(8)(B)(ii) of the Act because 
dosage and administration instructions included in the product labeling 
require filtration during the drug preparation process, prior to 
dilution and administration, and require that any unused portion of 
such drug after the filtration process be discarded after the 
completion of such filtration process. This exclusion would still be 
applicable for ampules that can demonstrate that they meet that 
exclusion. However, this is not the case for the product labeling of 
all drugs contained in ampules.
    In summary, we are proposing to amend the definition of Refundable 
single-dose container or single-use package drug at Sec.  414.902 by 
including ``single-patient-use container'' as a package type term and 
adding three types of products that may be considered refundable 
single-dose container or single-use package drugs under paragraph (1). 
These are:
    (1) Product furnished from a single-dose container or single-use 
package based on FDA-approved labeling or product information.
    (2) Product furnished from an ampule for which product labeling 
does not have discard statement or language indicating the package type 
term, like ``single-dose container,'' ``single-use package,'' 
``multiple-dose container,'' or ``single-patient-use container''.
    (3) Product furnished from a container with a total labeled volume 
2 ml or less for which product labeling does not have language 
indicating the package type term, like ``single-dose container,'' 
``single-use package,'' ``multiple-dose container,'' or ``single-
patient-use container''.
    As noted above, we are also revising the organization of this 
definition in the regulatory text. We welcome comments on these 
proposals.
(3) Skin Substitutes
    As discussed in the CY 2023 PFS final rule (87 FR 69650 through 
69655), CMS aims to create a consistent coding and payment approach for 
the suite of products currently referred to as skin substitutes. In the 
CY 2024 PFS final rule (88 FR 79060 through 79061), we finalized that 
billing and payment codes that describe products currently referred to 
as skin substitutes are not counted for purposes of identifying 
refundable drugs for calendar quarters during 2023 and 2024. While we 
continue to consider making changes to the Medicare Part B payment 
policies for such products, similar to last year, for CY 2025, we are 
proposing again that billing and payment codes that describe products 
currently referred to as skin substitutes not be counted for purposes 
of identifying refundable drugs for calendar quarters in 2025. We plan 
to revisit discarded drug refund obligations for skin substitutes in 
future rulemaking. More information regarding the payment of skin 
substitutes is available in section II.K. of this proposed rule.
d. Discarded Amounts
    Effective January 1, 2017, providers and suppliers were required to 
report the JW modifier on all claims that bill for drugs separately 
payable under Medicare Part B with unused and discarded amounts (that 
is, discarded amounts) from single-dose containers or single-use 
packages. In the CY 2023 PFS, we finalized the requirement to use the 
JW modifier for single-dose container drugs that are separately payable 
under Part B, and we finalized the use of the JW modifier (or any 
successor modifier that includes the same data) to identify discarded 
billing units of a billing and payment code for the purpose of 
calculating the refund amount as described in section 1847A(h)(3) of 
the Act. In that final rule, to align with the JW modifier policy, we

[[Page 61770]]

also finalized the requirement that, beginning July 1, 2023, the JZ 
modifier is required when there are no discarded amounts of a single-
dose container drug for which the JW modifier would be required if 
there were discarded amounts.
    In the CY 2023 PFS final rule (87 FR 69723), we discussed the 
applicability of the JW and JZ modifiers to drugs that are not 
administered by the billing supplier, including drugs furnished through 
a covered item of DME that may be administered by the beneficiary. In 
such cases, we stated that the reporting requirement does not apply to 
drugs that are self-administered by a patient or caregiver in the 
patient's home. In the JW Modifier and JZ Modifier Policy FAQ document 
\249\ released on January 5, 2023, we reiterated that suppliers who 
dispense but do not actually administer a separately payable drug are 
not expected to report the JW or JZ modifier.
---------------------------------------------------------------------------

    \249\ https://www.cms.gov/medicare/medicare-fee-for-service-payment/hospitaloutpatientpps/downloads/jw-modifier-faqs.pdf.
---------------------------------------------------------------------------

    Then, in the CY 2024 PFS final rule (88 FR 79062), we finalized a 
change to this policy, such that drugs separately payable under Part B 
from single-dose containers that are furnished by a supplier who is not 
administering the drug be billed with the JZ modifier. This meant that 
the JW modifier would not be used on these claims. As we stated in that 
rule, in the absence of a claims modifier to designate that a drug was 
dispensed, but not administered, by the billing supplier (as finalized 
in the CY 2023 PFS), we were concerned that claims rejections may 
occur. Therefore, this change in policy required the JZ modifier on all 
such claims to ensure claims rejections did not occur unnecessarily. On 
October 16, 2023, we updated the JW Modifier and JZ Modifier Policy FAQ 
document to include the requirement of the JZ modifier by the supplier.
    However, after this policy was finalized, interested parties have 
requested further clarification on how to appropriately bill for 
discarded amounts from single-dose containers when there are amounts 
discarded during preparation by the billing supplier who is not 
administering the drug. To provide additional clarity, we are now 
proposing to require the JW modifier if a billing supplier is not 
administering a drug, but there are amounts discarded during the 
preparation process before supplying the drug to the patient. Such a 
supplier would report the JZ modifier if no amounts were discarded 
during the preparation process before supplying the drug to the 
patient.
    We believe this proposal is appropriate because drug preparation 
occurs before supplying a drug to the beneficiary and the billing 
supplier can determine the discarded amount at the site of drug 
preparation. These discarded units should be billed using the JW 
modifier in the same way as a drug that is administered incident-to 
physician service. In addition, suppliers and other interested parties 
have expressed that suppliers are accustomed to using the JW modifier 
in this context already. Therefore, we propose to require the JW 
modifier if a billing supplier is not administering a drug, but there 
are amounts discarded during the preparation process before supplying 
the drug to the patient. For example, if a billing supplier prepares a 
dose from a single-dose vial labeled as containing a total of 50 
billing units such that 45 billing units of the drug are used in the 
prepared dose and 5 billing units are discarded during preparation, and 
then the drug is supplied to the patient (but not administered by the 
supplier), the claim should be submitted on two lines: 45 units 
(without a modifier) and 5 units with the JW modifier. We reiterate 
that suppliers who dispense a drug, but do not actually administer the 
drug, are not expected to monitor or bill for discarded amounts that 
are discarded after the drug is supplied because they are not at the 
site of administration to measure discarded amounts. For example, if 
the patient who was supplied the above dose with 45 billing units 
subsequently only receives 35 of those billing units, the above billing 
supplier would not be expected to account for the 10 subsequently 
discarded billing units on the claim.
    We welcome comments on this proposal.
2. Payment Limit Calculation When Manufacturers Report Negative or Zero 
Average Sales Price (ASP) Data (Sec.  [thinsp]414.904)
a. Background
    Drugs payable under Medicare Part B fall into three general 
categories: those furnished incident to a physician's service 
(hereinafter referred to as ``incident to'') (section 1861(s)(2) of the 
Act), those furnished via a covered item of durable medical equipment 
(DME) (section 1861(s)(6) of the Act), and other drugs for which 
coverage is specified by statute (for example, certain vaccines 
described in sections 1861(s)(10)(A) and (B) of the Act). Payment 
limits for most drugs separately payable under Medicare Part B are 
determined using the methodology in section 1847A of the Act, and in 
many cases, payment is based on the average sales price (ASP) plus a 
statutorily mandated 6 percent add-on. If CMS determines a payment 
limit for a drug, it is published in the ASP pricing file or Not 
Otherwise Classified (NOC) pricing file,\250\ which are both updated 
quarterly.
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    \250\ https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
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    CMS generally calculates the payment limits for drugs payable under 
Part B on a quarterly basis using the manufacturer's ASP (as defined in 
Sec.  [thinsp]414.902). Manufacturers are required to report ASP to CMS 
pursuant to sections 1847A(f)(2) and 1927(b)(3) of the Act. 
Manufacturers are instructed to calculate ASP in accordance with 
section 1847A(c) of the Act and Sec.  [thinsp]414.804(a).
    For each NDC, in most cases, the manufacturer's ASP is a positive 
dollar value, along with a positive number of units sold (hereinafter 
referred to as ``positive manufacturer's ASP data''). However, 
sometimes the reported data is not positive manufacturer's ASP data. 
Specifically, a manufacturer could report that an NDC has a negative or 
zero-dollar value for the manufacturer's ASP with a positive, negative, 
or zero number of units sold, or a positive dollar value for the 
manufacturer's ASP with a negative or zero number of units sold (each 
of these scenarios is hereinafter referred to as ``negative or zero 
manufacturer's ASP data''). Such negative or zero manufacturer's ASP 
data could occur because of lagged discounts, units returned to the 
manufacturer, drug shortages, discontinuation of a drug, or other 
reasons that are not known to CMS. Negative or zero manufacturer's ASP 
data can occur when a manufacturer calculates its ASP in accordance 
with section 1847A of the Act.
    First, section 1847A(c)(3) of the Act requires that the 
manufacturer's calculation of its ASP for an NDC must include volume 
discounts, prompt pay discounts, cash discounts, free goods that are 
contingent on any purchase requirement, chargebacks, and rebates (other 
than rebates under the Medicaid drug rebate program or the Medicare 
Prescription Drug Inflation Rebate Program) (hereinafter referred to as 
``price concessions''). Second, section 1847A(c)(5)(A) of the Act 
requires each manufacturer to apply a methodology based on a 12-month 
rolling average for the manufacturer to estimate costs attributable to 
price concessions if there is a lag in the reporting of the information 
on rebates and chargebacks

[[Page 61771]]

under section 1847A(c)(3) of the Act. These provisions may result in 
the inclusion of large price concessions from a quarter or quarters 
with a higher sales price prior to price concessions in the ASP 
calculation for a subsequent quarter with a much lower sales price, 
which can result in negative dollar value ASP. The same situation could 
happen in a quarter if more units were returned to the manufacturer 
than are sold, which can result in a negative dollar value ASP as well 
as a negative number of units sold. The requirement to use a rolling 
average for lagged price concessions is codified at Sec.  
414.804(a)(3), which states that, to the extent data on price 
concessions are available on a lagged basis, the manufacturer must 
estimate its ASP in accordance with the described methodology in that 
paragraph. In certain instances, as stated above, lagged price 
concessions can lead to negative or zero manufacturer's ASP data.
    In 2022, the U.S. Department of Health and Human Services Office of 
Inspector General (OIG) issued a report assessing potential 
inaccuracies in manufacturer reporting of ASP and noted that 
manufacturers believe additional guidance may be needed to reduce 
distortions and inconsistencies in the calculation of payment 
limits.\251\ The report found that several manufacturers would like 
additional guidance regarding reporting of negative ASP data and how 
CMS uses negative ASP data in payment limit calculations. CMS concurred 
with the OIG's recommendation to actively review current guidance and 
determine whether additional guidance would ensure more accurate and 
consistent ASP calculations.
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    \251\ OEI-BL-21-00330. https://oig.hhs.gov/oei/reports/OEI-BL-21-00330.asp.
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    Accordingly, we reviewed our current guidance and determined that 
it is appropriate for us to provide additional guidance regarding how 
CMS will handle payment for drugs separately payable under Part B when 
the manufacturer's ASP for at least one NDC within the billing and 
payment code (that is, HCPCS code) of the drug is negative or zero. 
Currently, when all NDCs assigned to a HCPCS code have negative or zero 
manufacturer's ASP data, CMS establishes the payment limit in other 
ways. As appropriate given the data available for a drug, CMS will 
either calculate a payment limit for a billing and payment code based 
on other applicable and available pricing data or not include a payment 
limit for the billing and payment code on the ASP pricing file. When a 
payment limit for a drug separately payable under Part B is not 
included in the ASP pricing file, the payment limit is based on either 
the published or Wholesale Acquisition Cost (WAC) or invoice pricing, 
as described in section 20.1.3, Chapter 17 of the Medicare Claims 
Processing Manual.\252\
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    \252\ https://www.cms.gov/%E2%80%8BRegulations-and-Guidance/%E2%80%8BGuidance/%E2%80%8BManuals/%E2%80%8BDownloads/%E2%80%8Bclm104c17.pdf.
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    CMS previously contemplated how to set a payment limit in certain 
situations in which ASP data is ``not available'' for multiple source 
drugs. In the CY 2011 PFS final rule (75 FR 73461 through 73465), CMS 
addressed situations in which ASP data for some, but not all, NDCs in a 
multiple source drug billing and payment code are not available for the 
calculation of an ASP payment limit (for example, if a manufacturer's 
entire submission of data was not received or manufacturer's ASP data 
for specific NDCs was not reported).\253\ In that rule, we finalized a 
process, consistent with authority in section 1847A(c)(5)(B) of the 
Act, to update payment limits based on the manufacturer's ASP reported 
for the most recent quarter for which data is available. We specified 
that if manufacturer's ASP data is not available for some but not all 
NDCs in a multiple source drug billing and payment code prior to the 
publication deadline for quarterly payment limits and such 
unavailability of manufacturer's ASP data significantly changes the 
quarterly payment limit for the billing and payment code when compared 
to the prior quarter's payment limit, CMS will calculate the payment 
limit by carrying over the most recent available manufacturer's ASP 
price from a previous quarter for an NDC, adjusted by the weighted 
average of the change in the manufacturer's ASPs for the NDCs that were 
reported for both the most recently available previous quarter and the 
current quarter, and codified this policy in Sec.  414.904(i).\254\ In 
that final rule, we explained that such circumstances are limited to 
when a manufacturer's data for a multiple source drug product with 
sales during a quarter is missing, and efforts to obtain manufacturer 
reported ASP data before Medicare ASP payment limits publication 
deadlines have not been successful. We continue to believe that this 
process, which we apply in cases ASP data is ``not available'' for some 
but not all NDCs associated with a multiple source billing and payment 
code, is appropriate.
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    \253\ https://www.govinfo.gov/content/pkg/FR-2010-11-29/pdf/2010-27969.pdf.
    \254\ https://www.ecfr.gov/current/title-42/part-414/section-414.904#p-414.904(i).
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b. Approach to Payment Limit Calculations When Manufacturer's ASP Data 
is Not Available
    As described in the previous section, we determined that it is 
appropriate for CMS to provide additional guidance regarding how we 
will handle payment for drugs separately payable under Part B when the 
reported manufacturer's ASP for at least one NDC within the billing and 
payment code (that is, HCPCS code) of the drug is negative or zero 
(that is, has negative or zero manufacturer's ASP data). As detailed 
below, we are proposing to consider ASP data to be not ``available'' 
for the purposes of calculating a payment limit in circumstances in 
which negative or zero manufacturer's ASP data is reported, consistent 
with section 1847A(c)(5)(B) of the Act. We are also proposing how CMS 
would calculate a payment limit in these circumstances, consistent with 
section 1847A(c)(5)(B) of the Act.
    Our current policy does not address how payment limits are 
calculated for several situations in which a drug separately payable 
under Part B does not have available ASP data. The set of situations in 
which this might occur include circumstances in which either some or 
all NDCs for a billing and payment code have a negative or zero 
manufacturer's ASP data; in which negative or zero manufacturer's ASP 
data is reported for a drug which has been discontinued; and vary 
further depending on whether a drug is multiple source or single source 
(both as defined in Sec.  414.902). In each of these circumstances, 
there are various other pricing data available that we believe can 
appropriately be used to calculate a payment limit.
    Therefore, we are proposing, consistent with section 1847A(c)(5)(B) 
of the Act, a methodology for calculating payment limits in certain 
circumstances based on manufacturer's ASP for the most recent quarter 
for which data is available. Specifically, we propose to specify that 
positive manufacturer's ASP data are considered ``available'' and that 
negative or zero manufacturer's ASP data are considered ``not 
available'' for purpose of CMS calculating a payment limit under the 
statute. We believe it is appropriate to consider negative or zero 
manufacturer's ASP data to be not available because if used to 
calculate a payment limit, this data can result in a negative or zero 
payment limit, which would require CMS to collect payment from 
providers and suppliers for a drug, rather than

[[Page 61772]]

make payment for a drug. Negative or zero payment limits for a drug are 
not reasonable because Medicare does not expect to collect payment from 
providers and suppliers for their provision of separately payable 
drugs. Therefore, we are proposing to specify the methodology we will 
use for calculating the payment limit in such circumstances to ensure 
reasonable payment amounts based on the best available data for 
separately payable drugs. Below, we propose how payment limits would be 
determined using available ASP data for each scenario.
c. Single and Multiple Source Drugs When Negative or Zero 
Manufacturer's ASP Data Is Reported for Some, But Not All NDCs
    In the case that a drug separately payable under Part B has 
negative or zero manufacturer's ASP data reported for some, but not 
all, NDCs associated with a billing and payment code for that drug, we 
are proposing to calculate a payment limit using only NDCs with 
positive manufacturer's ASP data (and omitting NDCs with negative or 
zero manufacturer's ASP data) for that drug and propose to codify this 
at Sec.  414.904(i). We are proposing this policy to apply to both 
single source drugs, including biosimilar biological products, and 
multiple source drugs. We believe this is appropriate because it would 
result in payment limits based on the most recent positive 
manufacturer's ASP data reported by manufacturers with NDCs associated 
with a billing and payment code.
    However, we note that, as discussed in section III.A.2.a of this 
proposed rule, CMS already has a policy in place for multiple source 
drugs for which the absence of ASP data would result in a significant 
change (that is, a 10 percent or greater change) in the ASP payment 
limit compared to the payment limit of the previous quarter, as 
finalized in the CY 2011 PFS final rule (75 FR 73461 through 73465). In 
that discussion (75 FR 73462), we noted several examples of situations 
in which data is not available to be included in the calculation of a 
payment limit, such as when a manufacturer's entire submission was not 
received or when the manufacturer's ASP data for specific NDCs has not 
been reported. We do not intend for our proposed policy to override 
that existing policy; rather, we intend for the proposed policy 
described above to address circumstances not addressed in that 
rulemaking (that is, we intend to address circumstances of single 
source drugs when negative or zero manufacturer's ASP data is reported 
for some, but not all NDCs, and of multiple source drugs when negative 
or zero manufacturer's ASP data is reported for some, but not all NDCs 
and the absence of such data from the calculation of the payment limit 
does not result in a significant change in the payment limit compared 
to the payment limit of the previous quarter) and thus fill a policy 
gap. In addition, the circumstances we provided as examples in which 
ASP data is not available in the CY 2011 PFS final rule continue to be 
circumstances we consider manufacturer's ASP data not available under 
current Sec.  414.904(i) (which we propose to move within Sec.  
414.904(i) to fit within the structure of the proposed new set of 
payment limit methodologies); but, as noted in section III.A.2.b, we 
are expanding what we consider to be not available to include 
circumstances in which negative or zero manufacturer's ASP data is 
reported.
d. Multiple Source Drugs With Only Negative or Zero Manufacturer's ASP 
Data
    In the case of a multiple source drug (as defined in Sec.  414.902) 
separately payable under Part B that has negative or zero 
manufacturer's ASP data reported for all NDCs associated with a billing 
and payment code for that drug (and at least one NDC for the is 
actively being marketed (that is, not discontinued)), we are proposing 
to carry over all positive manufacturer's ASP data from the most 
recently available previous quarter with positive manufacturer's ASP 
data for at least one NDC until at least one NDC for the drug has 
positive manufacturer's ASP data for a quarter. Specifically, we are 
proposing to calculate the payment limit for the applicable quarter 
using data from the most recent calendar quarter for which data is 
available, i.e., for which there is positive manufacturer's ASP data. 
We believe this is appropriate because, similar to the methodology 
described in section III.A.2.c, it would result in payment limits based 
on the most recent positive manufacturer's ASP data reported by 
manufacturers with NDCs associated with a billing and payment code. 
Similarly, we believe the most recent available positive manufacturer's 
ASP data from NDCs associated with a billing and payment code are more 
likely to be reflective of providers' acquisition costs for drugs 
associated with that billing and payment code in a given quarter than 
other pricing data, and unlikely to result in challenges to access for 
these drugs for providers and beneficiaries.
    We note that because section 1847A of the Act provides for payment 
limit calculations that differ between single-source drugs (as defined 
in section 1847A(c)(6)(D) of the Act and Sec.  414.902) and multiple 
source drugs (as defined in section 1847A(c)(6)(C) of the Act and Sec.  
414.902), we are proposing different ways to determine payment limits 
for each, in cases in which only negative or zero manufacturer's ASP 
data is reported, to reflect these differences. Specifically, the 
payment limit for single source drugs is described in section 
1847A(b)(1)(B) of the Act; for multiple source drugs, the payment limit 
is described in section 1847A(b)(1)(A) of the Act. The payment limit 
for single source drugs is determined using the lesser of ASP or WAC; 
but WAC is not used for multiple source drugs whose ASP exceeds WAC. 
Nonetheless, our proposals for the calculation of the payment limit for 
single source and multiple source drugs with only negative or zero 
manufacturer's ASP data are consistent in that, where ASP is used, we 
propose to use the most recent available positive manufacturer's ASP 
data from at least one NDC for the drug. We believe using similar input 
data in our calculation of the payment limit is consistent with our 
goal to ensure reasonable payment amounts based on the best available 
data for separately payable drugs.
    We are proposing to amend Sec.  414.904(i) to include the above 
proposal regarding how CMS would calculate the payment limit in 
circumstances in which only negative or zero manufacturer's ASP data is 
reported for a multiple source drug.
e. Single Source Drugs With Only Negative or Zero Manufacturer's ASP 
Data, Excluding Biosimilar Biological Products
    In the case of a single source drug, excluding biosimilar 
biological products (both as defined in Sec.  414.902), separately 
payable under Part B that has negative or zero manufacturer's ASP data 
reported for all NDCs associated with a billing and payment code for 
that drug (and at least one NDC for the drug is actively being marketed 
(that is, not discontinued)), we are proposing to set the payment limit 
for the given quarter for the single source drug at the lesser of the 
following until at least one NDC for the drug has positive 
manufacturer's ASP data for a quarter:
     106 percent of the volume-weighted average of the most 
recent available positive manufacturer's ASP data from a previous 
quarter in which at least one NDC for the drug has positive 
manufacturer's ASP data for a quarter. If the payment limit from the 
quarter with the most recent available positive manufacturer's ASP data 
was based on

[[Page 61773]]

106 percent of the WAC because of the application of Sec.  
414.904(d)(1), that payment limit would be carried over; or
     106 percent of the WAC for the given quarter. If there is 
more than one WAC per billing unit for the drug, the payment limit 
would be set using the lowest WAC per billing unit.
    We would only use the lesser of the positive manufacturer's ASP or 
WAC data from that previous quarter or the WAC data from the given 
quarter until positive manufacturer's ASP data is available for a 
future quarter. Once positive manufacturer's ASP data for a drug is 
available again in a future quarter, CMS will have data available to 
input into the routinely used methodologies described in section 
1847A(b) of the Act and Sec.  414.904.
    As discussed above, we believe it is appropriate to propose 
different policies for determining payment limits for single and 
multiple source drugs when negative or zero manufacturer's ASP data is 
reported because of statutory differences in the payment limit 
calculations.
f. Biosimilars With Only Negative or Zero Manufacturer's ASP Data
    In circumstances in which negative or zero manufacturer's ASP data 
is reported for all NDCs for a biosimilar biological product (defined 
at Sec.  414.902) (hereinafter referred to as a ``biosimilar'') for a 
given quarter (and at least one NDC for the biosimilar is actively 
being marketed (that is, not discontinued)), and positive 
manufacturer's ASP data is available for another biosimilar(s) with the 
same reference biological product (hereinafter referred to as a 
``reference product'') for the given quarter, we are proposing to set 
the payment limit for the given quarter equal to the sum of the 
following until at least one NDC for the particular biosimilar for 
which all NDCs report negative or zero manufacturer's ASP data has 
positive manufacturer's ASP data for a quarter:
     The volume-weighted average of the positive manufacturer's 
ASP data from all other biosimilars with the same reference product, 
and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals as defined in Sec.  414.902, as appropriate) of the amount 
determined under section 1847A(b)(4) of the Act for the reference 
biological product (as defined in Sec.  414.902) for the given quarter.
    We believe this is appropriate because Section 351(i)(2) of the 
Public Health Service Act defines the terms biosimilar and 
biosimilarity to mean that a biosimilar is highly similar to its 
reference product, notwithstanding minor differences in clinically 
inactive components, and that there are no clinically meaningful 
differences between the biosimilar and the reference product in terms 
of the safety, purity, and potency of the product. In addition, 
biosimilars with the same reference product likely compete in the 
marketplace since both rely on FDA's previous determination of safety, 
purity, and potency for the reference product clinical data for 
approval. For these reasons, we believe that when a biosimilar has only 
negative or zero manufacturer's ASP data, the volume-weighted average 
of positive manufacturer's ASP data of biosimilars with the same 
reference product would be an appropriate payment limit for a 
biosimilar that, under this proposal, would be considered to have ASP 
data that is not available. As such, we are proposing to calculate the 
payment limit for a biosimilar with only negative or zero 
manufacturer's ASP data based on the positive manufacturer's ASP data 
of other biosimilars with the same reference product.
    We note that in the CY 2016 PFS final rule (80 FR 71096 through 
71101), we finalized that we would group all biosimilars with a common 
reference product in a single billing and payment code with a single 
payment rate, in a manner similar to how we price multiple source or 
generic drugs because of the significant similarities between each 
biosimilar and its reference product. In the CY 2018 PFS final rule (82 
FR 53182 through 53187), we changed the initial policy and finalized 
separate coding and payment for biosimilars. In that final rule, we 
stated that that there is a program need for assigning Part B 
biosimilars into separate billing and payment codes; specifically, that 
this policy change addressed concerns about the public interest in a 
stronger marketplace, access to these drugs in the United States 
marketplace, and provider and patient choice and competition. Our 
proposal for biosimilars with negative or zero manufacturer's ASP data 
reported for all NDCs is consistent with the CY 2018 PFS rulemaking, as 
it would not result in grouping biosimilars with a shared reference 
product in a single billing and payment code. Rather, it would allow 
CMS to calculate an operationally reasonable payment limit using 
positive manufacturer's ASP data for highly similar products in limited 
instances.
    This proposal would also provide payment limit stability that could 
help avoid potential access issues for providers and beneficiaries that 
could otherwise occur if we were to calculate a payment limit for a 
drug with negative or zero manufacturer's ASP data that is far below 
the provider's cost for acquiring the drug. If a biosimilar's ASP falls 
below zero only after several quarters of declining but still positive 
manufacturer's ASP data, the most recent positive manufacturer's ASP 
data from a previous quarter for a drug may be significantly lower than 
the volume-weighted average of the biosimilars with the same reference 
product as the biosimilar with negative ASP data. In such a case, the 
payment limit based on the ASPs of competitor biosimilars would be 
higher than if we were constrained to use ASP data only from the 
biosimilar that has most recently reported negative or zero 
manufacturer's ASP data. We note that under the methodology proposed in 
section III.A.2.c, in circumstances in which some, but not all NDCs of 
a single or multiple source drug are negative or zero, we would 
similarly calculate the payment limit using only NDCs with positive 
manufacturer's ASP data from the given quarter and omitting those that 
had declined to zero or a negative value in ASP or sales. Likewise, we 
believe that such an approach would likely result in a payment limit 
reflective of providers' acquisition costs of biosimilars and be 
helpful in avoiding access issues for providers and beneficiaries.
    In circumstances in which negative or zero manufacturer's ASP data 
is reported for all NDCs for a biosimilar for a given quarter and 
either no other biosimilars have been approved for the same reference 
product or no other biosimilars with the same reference product report 
positive manufacturer's ASP data for the given quarter, we propose that 
we would set the payment limit for the given quarter equal to the sum 
of the following until at least one NDC for the biosimilar has positive 
manufacturer's ASP data for a quarter:
     The volume-weighted average of the most recent available 
positive manufacturer's ASP data from a previous quarter, and
     6 percent (or 8 percent for qualifying biosimilar 
biologicals, as appropriate) of the amount determined under section 
1847A(b)(4) of the Act for the reference biological product (as defined 
in Sec.  414.902) for the given quarter.
    In situations in which CMS would use the volume-weighted average of 
the most recent available positive manufacturer's ASP data from a 
previous quarter, we would only use positive manufacturer's ASP data 
from that previous quarter until positive manufacturer's ASP data is 
available for

[[Page 61774]]

a future quarter. This proposed methodology is similar to the proposed 
methodology for multiple source drugs and single source drugs that are 
not biosimilars when manufacturers report negative or zero 
manufacturer's ASP for all NDCs.
    In addition to the payment approaches we are proposing for 
biosimilars with only negative or zero manufacturer's ASP data, we 
considered two alternatives for which we are seeking public comment. 
Under the first alternative, the volume-weighted ASP calculation would 
include the ASP data and billing units sold of its reference product 
for a given quarter along with those of the other biosimilars that 
reference the same reference product in the volume-weighted average 
calculation. We believe including the reference product's data in the 
blended calculation for a biosimilar's payment limit in the limited 
circumstance described could be appropriate in determining an 
operationally reasonable payment limit because the FDA approval for the 
biosimilar relies in part on FDA's previous determination of safety, 
purity, and potency for the reference product, and the biosimilar and 
reference product are necessarily approved for at least one shared 
condition of use, as required under the 351(k) approval pathway; \255\ 
therefore, the case that the two are comparable is at least as strong 
as that for any two biosimilars with the same reference product. If it 
is preferable, as we propose, to base the payment limit on the 
available positive manufacturer's ASP data submitted by manufacturers 
of market competitor biosimilars (in this context, biosimilars that 
reference the same reference product), then including the ASP data and 
billing units sold of the reference product would also increase the 
likelihood that positive data in such a group is available, 
particularly in the case that a reference product only has one 
biosimilar. Under this alternative, the payment limit would be set 
equal to the sum of the volume-weighted average of the positive 
manufacturer's ASP data from all other biosimilars with the same 
reference product and the reference product plus 6 or 8 percent, as 
appropriate, of the amount determined under section 1847A(b)(4) of the 
Act for the reference biological product for the given quarter. We are 
seeking public comments about whether including ASP data from the 
reference product in a variant of the proposed calculation would 
produce a more appropriate payment limit for a biosimilar with only 
negative or zero manufacturer's ASP data.
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    \255\ https://www.fda.gov/science-research/fda-stem-outreach-education-and-engagement/development-biosimilar-351k-bla-clinical-pharmacology-study-database.
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    Under the second alternative, we would calculate payment limits for 
all biosimilars with only negative or zero manufacturer's ASP data in 
the manner described above for biosimilars when either no other 
biosimilars have been approved for the same reference product or no 
other biosimilars with the same reference product report positive 
manufacturer's ASP data for the given quarter. That is, under this 
alternative we would not consider the manufacturer's ASP data of other 
biosimilars with the same reference product; rather, we would base the 
payment limit of the biosimilar on the volume-weighted average of the 
its own most recent available positive manufacturer's ASP data from a 
previous quarter and either 6 or 8 percent, as appropriate, of the 
amount determined under section 1847A(b)(4) of the Act for the 
reference biological product for the given quarter. We are interested 
in comments from interested parties about whether, and if so, why, it 
is preferable for the payment limit to be calculated only using 
manufacturer's ASP data from the biosimilar that reports negative or 
zero manufacturer's ASP data in a given quarter.
g. Discontinued Drugs
    Generally, for single source drugs and multiple source drugs for 
which negative or zero manufacturer's ASP data is reported for all NDCs 
and for which all relevant applications (for example, new drug 
applications (NDAs), biologics license applications (BLAs), or 
abbreviated new drug applications (ANDAs)) have a marketing status of 
``discontinued'' on the FDA website,\256\ \257\ we propose that the 
drug be priced by MACs consistent with section 20.1.3 in Chapter 17 of 
the Medicare Claims Processing Manual for developing payment limits for 
covered drugs when CMS does not supply the payment allowance limit on 
the ASP drug pricing file.\258\
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    \256\ https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm.
    \257\ https://purplebooksearch.fda.gov/.
    \258\ Medicare Claims Processing Manual Chapter 17, section 
20.1.3: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
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    Once a drug is discontinued, as indicated by the marketing status 
on the FDA website (either at Drugs@FDA \259\ for drugs or the Purple 
Book \260\ for biologicals), the manufacturer might not have sales to 
calculate an ASP and, therefore, the manufacturer often reports zero 
sales for the drug or a negative number for its calculated ASP or 
number of sales. However, even if a drug has a marketing status of 
discontinued on the FDA website, there may theoretically be available 
product that could be billed by the provider until the expiration date 
of the last lot sold for the drug. Relatedly, we have observed that 
very few claims are paid for drugs following their discontinuation. For 
these reasons, setting a payment limit for drugs with a marketing 
status of discontinued on the FDA website is not expected to be 
practically useful for claims processing and is not a prudent use of 
CMS resources.
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    \259\ https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm.
    \260\ https://www.fda.gov/drugs/therapeutic-biologics-applications-bla/purple-book-lists-licensed-biological-products-reference-product-exclusivity-and-biosimilarity-or.
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h. Summary
    We are proposing to amend Sec.  414.904(i) to reflect CMS's 
approach to setting a payment limit in circumstances in which negative 
or zero manufacturer's ASP data is reported by a manufacturer for a 
drug. Specifically, we are proposing to codify that in cases where 
negative or zero manufacturer's ASP data is reported for some, but not 
all, NDCs of a multiple source drug, we would calculate the payment 
limit using the positive manufacturer's ASP data reported for the drug, 
except for the existing carryover policy for multiple source drugs that 
we would apply when unavailable data results in a significant change in 
the ASP payment limit. We are proposing to move this carryover policy 
for multiple source drugs within Sec.  414.904(i) to fit within the 
structure of the proposed new set of payment limit methodologies. We 
are also proposing to codify that in the case of a multiple source drug 
for which negative or zero manufacturer's ASP data is reported for all 
NDCs, we would set the payment limit using the most recent available 
positive manufacturer's ASP data from a previous quarter until at least 
one NDC for the drug has positive manufacturer's ASP data for a 
quarter.
    We are proposing to codify that in cases where negative or zero 
manufacturer's ASP data is reported for some, but not all, NDCs of a 
single source drug that is not a biosimilar, we would calculate the 
payment limit using the positive manufacturer's ASP data reported for 
the drug. We are proposing to codify that for single source drugs that 
are not biosimilars with all negative or zero manufacturer's ASP data 
for a given quarter, the payment limit would

[[Page 61775]]

be, until at least one NDC for the drug has positive manufacturer's ASP 
data for a quarter, the lesser of 106 percent of the volume-weighted 
average of the most recent available positive manufacturer's ASP data 
for at least one NDC from a previous quarter and 106 percent of the 
WAC, and we would use 106 percent of the lowest WAC per billing unit if 
there is more than one WAC per billing unit available.
    We are also proposing to codify that in cases where negative or 
zero manufacturer's ASP data is reported for some, but not all, NDCs of 
a biosimilar, we would calculate the payment limit using the positive 
manufacturer's ASP data reported for the biosimilar. Lastly, we are 
proposing to codify two scenarios when the manufacturer reports 
negative or zero manufacturer's ASP for all NDCs for a biosimilar for a 
given quarter:
     When positive manufacturer's ASP data is available for 
another biosimilar(s) with the same reference product for the given 
quarter, we are proposing to set the payment limit equal to the sum of 
the volume-weighted average of the positive manufacturer's ASP data 
from all other biosimilars with the same reference product plus 6 
percent (or 8 percent for a qualifying biosimilar biological) of the 
amount determined under section 1847A(b)(4) of the Act for the 
reference biological product for the given quarter; and
     When either no other biosimilars have been approved for 
the same reference product or no other biosimilars with the same 
reference product report positive manufacturer's ASP data for the given 
quarter, we are proposing to set the payment limit equal to the sum of 
the volume-weighted average of the most recent available positive 
manufacturer's ASP data from a previous quarter plus 6 percent (or 8 
percent for a qualifying biosimilar biological) of the amount 
determined under section 1847A(b)(4) of the Act for the reference 
biological product for the given quarter.
    We welcome comments on these proposals.
3. Payment of Radiopharmaceuticals in the Physician Office
    Section 303(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted December 8, 
2003) revised the payment methodology for most Medicare-covered Part B 
drugs by adding section 1847A to the Act, which established a new 
average sales price (ASP) drug payment methodology for separately 
payable Medicare Part B drugs, beginning January 1, 2005. Specifically, 
section 303(h) of the MMA states, ``Nothing in the amendments made by 
this section [303 of the MMA] shall be construed as changing the 
payment methodology under [Medicare] Part B . . . for 
radiopharmaceuticals, including the use by carriers of invoice pricing 
methodology.''
    In accordance with the law, radiopharmaceuticals are not required 
to be paid using payment methodology under section 1847A of the Act, as 
currently described in the Medicare Claims Processing Manual (MCPM) 
Chapter 17, section 20.1.3. The manual instructs MACs to determine 
payment limits for radiopharmaceuticals based on the methodology in 
place as of November 2003, before the passage of the MMA, in the case 
of radiopharmaceuticals furnished in settings other than the hospital 
outpatient department. Currently, payment can vary by MAC. For example, 
payment can be based on 95 percent of Average Wholesale Price (AWP), 
invoices, or other reasonable payment methods/data made available when 
the product is contractor priced.261 262 263 264 265 266
---------------------------------------------------------------------------

    \261\ How Does Palmetto GBA Price Drugs and Biologics?, Palmetto 
GBA. https://www.palmettogba.com/palmetto/jjb.nsf/DIDC/
8EELKH2211~Specialties~DrugsandBiologicals.
    \262\ Radiopharmaceutical Fee Schedule 2024 Update, Noridian. 
https://med.noridianmedicare.com/web/jeb/fees-news/fee-schedules/radiopharmaceutical-fees.
    \263\ Radiopharmaceutical Drugs--Billing Instructions, A 
Celerian Group Company. https://www.cgsmedicare.com/partb/pubs/news/2013/0313/cope21543.html.
    \264\ Reimbursement Guidelines for Radiopharmaceuticals HCPCS 
Level II Codes, Novitas Solutions. https://www.novitas-solutions.com/webcenter/portal/MedicareJL/pagebyid?contentId=00231502.
    \265\ Reimbursement Guidelines for Radiopharmaceuticals 
Procedure Codes (Prior to January 2023), First Coast Service 
Options, Inc. https://medicare.fcso.com/Coverage_News/0494780.asp.
    \266\ Radiopharmaceutical Reimbursement, National Government 
Services. https://www.ngsmedicare.com/web/ngs/fee-schedule-lookup-details?lob=93617&state=97256&rgion=93623&selectedArticleId=4920515.
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    CMS has heard from MACs and other interested parties that there is 
confusion about which exact methodologies are available to MACs for 
pricing of radiopharmaceuticals in the physician office setting, as 
different MACs had different methodologies in place as of November 
2003. MACs are uncertain whether they can use any of these payment 
policies that were in place, or only the policy that was in place for 
their jurisdiction as of November 2003.
    Accordingly, while we evaluate our broader policies in this space 
for future rulemaking, we are proposing to clarify that any payment 
methodology that was being used by any MAC prior to the enactment of 
the MMA can continue to be used by any MAC, including the use of 
invoice pricing. That is, we are proposing to clarify that any 
methodology that was in place to set pricing of radiopharmaceuticals in 
the physician office setting prior to November 2003 can be used by any 
MAC, whether or not that specific MAC used the methodology prior to 
November 2003.
    Thus, we are proposing to codify in regulations at Sec.  
414.904(e)(6) that, for radiopharmaceuticals furnished in a setting 
other than the hospital outpatient department, MACs shall determine 
payment limits for radiopharmaceuticals based on any methodology used 
to determine payment limits for radiopharmaceuticals in place on or 
prior to November 2003. Such methodology may include, but is not 
limited to, the use of invoice-based pricing.
    We welcome comments on these proposals.
4. Immunosuppressive Therapy (Sec. Sec.  410.30 and 414.1001)
a. Background
    Medicare Part B coverage of drugs used in immunosuppressive therapy 
was established by section 9335(c) of the Omnibus Budget Reconciliation 
Act of 1986 (Pub. L. 99-509) (OBRA '86). OBRA '86 added subparagraph 
(J) to section 1861(s)(2) of the Act to provide Medicare Part B 
coverage for immunosuppressive drugs, furnished to an individual who 
receives an organ transplant for which Medicare payment is made, for a 
period not to exceed 1 year after the transplant procedure. Coverage of 
these drugs under Medicare Part B began January 1, 1987. Section 4075 
of the Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100-203) 
(OBRA '87) revised section 1861(s)(2)(J) of the Act so that the scope 
of coverage was expanded from coverage of ``immunosuppressive drugs'' 
to coverage of ``prescription drugs used in immunosuppressive 
therapy.'' For the purposes of this proposed rule, we refer to this 
benefit as the immunosuppressive drug benefit.
    In the Medicare Coverage of Prescription Drugs Used in 
Immunosuppressive Therapy final rule (60 FR 8951 through 8955), we 
finalized policies for the scope of drugs for which payment may be made 
under this benefit. We finalized that payment may be made for 
prescription drugs used in immunosuppressive therapy that have

[[Page 61776]]

been approved for marketing by the U.S. Food and Drug Administration 
(FDA) and meet one of the following conditions:
    (1) The approved labeling includes the indication for preventing or 
treating the rejection of a transplanted organ or tissue.
    (2) The approved labeling includes the indication for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue.
    (3) Have been determined by a Part B carrier, in processing a 
Medicare claim, to be reasonable and necessary for the specific purpose 
of preventing or treating the rejection of a patient's transplanted 
organ or tissue, or for use in conjunction with immunosuppressive drugs 
for the purpose of preventing or treating the rejection of a patient's 
transplanted organ or tissue. (In making these determinations, the 
carriers may consider factors such as authoritative drug compendia, 
current medical literature, recognized standards of medical practice, 
and professional medical publications.)
    We also finalized the period of coverage eligibility for a 
transplant patient.\267\ Lastly, we established the policy that drugs 
are covered under this provision irrespective of whether they can be 
self-administered. We codified these policies at Sec.  410.31 (later 
redesignated as Sec.  410.30).
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    \267\ Since the establishment of the benefit by the enactment of 
OBRA '86, the period of coverage for a transplant patient under 
section 1861(s)(2)(J) of the Social Security Act has been 
subsequently amended by section 202 of the Medicare Catastrophic 
Coverage Act of 1988 (Pub. L. 100-360), the Medicare Catastrophic 
Coverage Repeal Act of 1989 (Pub. L. 101-234), section 13565 of the 
Omnibus Reconciliation Act of 1993 (OBRA '93) (Pub. L. 103-66), 
section 160 of the Social Security Act Amendments of 1994 (Pub. L. 
103-432), section 113 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (Pub. L. 106-554) (BIPA 
2000). The last of these statutory changes eliminates the time 
limits for coverage of prescription drugs used in immunosuppressive 
therapy under the Medicare program, effective with immunosuppressive 
drugs furnished on or after December 21, 2000.
---------------------------------------------------------------------------

    We note that we do not maintain a list of drugs covered under this 
benefit; rather, MACs are expected to maintain a list of these drugs, 
as stated in section 80.3, Chapter 17 of the Medicare Claims Processing 
Manual. MACs are expected to keep informed of FDA approvals of 
immunosuppressive drugs and update guidance as applicable.
    While the eligibility timeframe has been extended and eligibility 
has been expanded since the immunosuppressive drug benefit under 
Medicare Part B was revised by OBRA '87, the scope of drugs payable 
under this benefit has not changed. Some examples of how the benefit 
has been extended and expanded include: section 13565 of the Omnibus 
Reconciliation Act of 1993 (OBRA '93) (Pub. L. 103-66), amended section 
1861(s)(2)(J) of the Act to extend the duration of coverage for the 
immunosuppressive drug benefit to 36 months from the hospital discharge 
date following a covered transplant procedure for drugs furnished after 
CY 1997; section 113 of the Medicare, Medicaid and SCHIP Benefits 
Improvement and Protection Act of 2000 (Pub. L. 106-554) (BIPA) revised 
section 1861(s)(2)(J) of the Act to eliminate the time limits for 
coverage of prescription drugs used in immunosuppressive therapy under 
the Medicare program; and most recently, section 402 of the 
Consolidated Appropriations Act, 2021 (Pub. L. 116-260) amended section 
226A(b)(2) to allow certain individuals whose Medicare entitlement 
based on ESRD would otherwise end 36 months after a kidney transplant 
to continue enrollment under Medicare Part B only for the coverage of 
immunosuppressive drugs described in section 1861(s)(2)(J) of the Act.
    After reviewing our longstanding policies for the immunosuppressive 
drug benefit and engaging with interested parties about current 
practices and challenges, we are proposing policies aimed to reduce 
barriers faced by beneficiaries receiving immunosuppressive drugs under 
this benefit, as described below.
b. Compounded Immunosuppressive Drugs With Oral or Enteral Routes of 
Administration
    As discussed in the previous section, the immunosuppressive drug 
benefit currently includes immunosuppressive therapies that have been 
approved for marketing by the FDA (and meet other regulatory 
requirements at Sec.  410.30). Interested parties have expressed 
concern that compounded formulations of immunosuppressive drugs (for 
example, a liquid formulation of an immunosuppressive drug not 
commercially available from a manufacturer but prepared by a 
pharmacist) are not included in the immunosuppressive therapy benefit 
because these formulations are not approved by the FDA (that is, FDA 
does not review these drugs to evaluate their safety, effectiveness, or 
quality before they reach patients),\268\ which is a regulatory 
requirement under the current benefit. These interested parties 
communicated that compounded formulations are frequently used in the 
treatment of transplant recipients who cannot swallow oral capsules or 
tablets due to age or oral-motor dysfunction. Some examples of drugs 
compounded for preventing or treating the rejection of a transplanted 
organ or tissue include, but are not limited to, azathioprine,\269\ 
cyclophosphamide,\270\ and tacrolimus.\271\
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    \268\ https://www.fda.gov/drugs/human-drug-compounding/compounding-laws-and-policies.
    \269\ United States Pharmacopeia (2024). USP Monographs, 
Azathioprine Compounded Oral Suspension. USP-NF. Rockville, MD: 
United States Pharmacopeia.
    \270\ United States Pharmacopeia (2024). USP Monographs, 
Cyclophosphamide Compounded Oral Suspension. USP-NF. Rockville, MD: 
United States Pharmacopeia.
    \271\ United States Pharmacopeia (2024). USP Monographs, 
Tacrolimus Compounded Oral Suspension. USP-NF. Rockville, MD: United 
States Pharmacopeia.
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    We recognize certain patient groups, such as those with dysphagia, 
those with enteral feeding tubes (for example, a nasogastric feeding 
tube or a percutaneous endoscopic gastrostomy (PEG) tube), and many 
pediatric patients \272\ \273\ covered under Medicare rely on 
compounded immunosuppressive drugs for maintenance therapy and believe 
that their inclusion in the immunosuppressive drug benefit would help 
to ensure that each beneficiary is able to access the most clinically 
appropriate formulation of an immunosuppressive 
drug.274 275 276 Nonadherence to lifelong maintenance 
immunosuppressive therapy contributes to unfavorable post-transplant 
outcomes, with obstacles to accessing medication being a prominent risk 
factor for such nonadherence.\277\

[[Page 61777]]

Therefore, we are proposing revisions at Sec.  410.30 to include orally 
and enterally administered compounded formulations with active 
ingredients derived only from FDA-approved drugs where approved 
labeling includes an indication for preventing or treating the 
rejection of a transplanted organ or tissue, or for use in conjunction 
with immunosuppressive drugs to prevent or treat rejection of a 
transplanted organ or tissue, or have been determined by a MAC, in 
processing a Medicare claim, to be reasonable and necessary for this 
specific purpose as outlined in the immunosuppressive drug benefit. As 
we intend this proposal to enhance access and address adherence 
concerns for patients who are not able to swallow capsules or tablets 
and we do not believe there are access concerns with other types of 
formulations, we propose to limit the included compounded formulations 
to those products with oral and enteral routes of administration (for 
example, oral suspensions or solutions).
---------------------------------------------------------------------------

    \272\ In the United States, children under 18 years of age 
comprise only 0.14 percent of the total Medicare ESRD population. 
Source: CY 2024 End-Stage Renal Disease Prospective Payment System 
final rule (88 FR 76374).
    \273\ Lentine, K, Smith, JM, Lyden, GR, Miller, JM, Dolan, TG, 
Bradbrook, K, Larkin, L, Temple, K, Handarova, DK, Weiss, S, Israni, 
AK, Snyder, JJ (2024). OPTN/SRTR 2022 Annual Data Report: Kidney. 
American Journal of Transplantation, 24(2), S19-S118. https://doi.org/10.1016/j.ajt.2024.01.012.
    \274\ Silva RME, Portela RDP, da Costa IHF, et al. 
Immunosuppressives and enteral feeding tubes: An integrative review. 
J Clin Pharm Ther. 2020;45:408-418. https://doi.org/10.1111/jcpt.13093.
    \275\ Goorhuis JF, Scheenstra R, Peeters PM, Albers MJ. Buccal 
vs. nasogastric tube administration of tacrolimus after pediatric 
liver transplantation. Pediatr Transplant. 2006 Feb;10(1):74-7. doi: 
10.1111/j.1399-3046.2005.00402.x. PMID: 16499591.
    \276\ Liverman, R, Chandran, MM, Crowther, B. Considerations and 
controversies of pharmacologic management of the pediatric kidney 
transplant recipient. Pharmacotherapy. 2021 Jan;41(1): 77-102. 
https://doi.org/10.1002/phar.2483.
    \277\ Fine RN, Becker Y, De Geest S, et al. Nonadherence 
consensus conference summary report. Am J Transplant. 2009; 9(1): 
35-41. doi: 10.1111/j.1600-6143.2008.02495.x.
---------------------------------------------------------------------------

    We solicit comment on these proposals.
c. Immunosuppressive Refill Policy and Supplying Fee
    Section 303(e)(2) of the MMA added section 1842(o)(6) of the Act 
which requires the Secretary to pay a supplying fee (less applicable 
deductible and coinsurance) to pharmacies for certain Medicare Part B 
drugs and biologicals, as determined appropriate by the Secretary, 
including for immunosuppressive drugs described in section 
1861(s)(2)(J) of the Act.
    In the CY 2005 PFS, we established a supplying fee of $50 for the 
initial oral immunosuppressive prescription supplied in the first month 
after a transplant (69 FR 66312 through 66313). In the CY 2006 
Physician Fee Schedule, we established a supplying fee of $16 for all 
subsequent prescriptions after the initial prescription supplied during 
a 30-day period (70 FR 70233 through 70236).
    Following the CY 2006 rulemaking, we issued program instruction 
\278\ to the MACs that prohibits payment for refills of 
immunosuppressive drug prescriptions in most circumstances and limits 
payment for prescriptions to 30-day supplies. We state in Chapter 17 of 
the Medicare Claims Processing Manual that contractors should limit 
payment for prescriptions to those of 30-day supplies, except in 
special circumstances, because dosage frequently diminishes over time; 
it is not uncommon for the provider to change the prescription from one 
drug to another; and coinsurance liability on unused drugs could be a 
financial burden to the beneficiary.
---------------------------------------------------------------------------

    \278\ Section 80.3, Chapter 17 of the Medicare Claims Processing 
Manual.
---------------------------------------------------------------------------

    We have heard from interested parties that both the 30-day limit on 
supplies and prohibition on payment for refills no longer align with 
current practice for treating patients on maintenance immunosuppression 
regimens who are prescribed a stable dosage for months or years and 
receive refillable supplies for several months' use at a time. Frequent 
dosage adjustments for some immunosuppressive drugs that require 
therapeutic drug monitoring and dose titration based on blood 
concentrations, such as tacrolimus, tend to occur more often in newly 
transplanted recipients, and less frequently once patients are on 
stable regimens.\279\ Other immunosuppressive drugs, such as 
mycophenolate mofetil, do not require routine therapeutic drug 
monitoring and have fixed recommended dosages per labeling where 
patients may be maintained on stable dosages for several months unless 
patients experience complications.\280\ Transplant recipients must take 
immunosuppressive drugs on a lifelong basis to prevent rejection, 
maintain allograft function, and, for some transplanted organs, prevent 
death. Most patients are eventually prescribed stable maintenance 
immunosuppressive drug dosages post-transplant for extended periods of 
time. For example, liver transplant guidelines recommend review of the 
immunosuppressive drug regimen at least every 6 months.\281\ For 
transplant beneficiaries, we believe that the limitation on payment to 
a maximum 30-day supply of immunosuppressive therapy by our program 
instruction is an unnecessary burden that poses a greater risk to 
adherence than does the potential for a sudden change in dosage needs. 
There is considerable concern among providers and advocates that 
interrupted access to immunosuppressive drugs caused by running out of 
or having insufficient medication supply can decrease medication 
adherence, increase risk of organ transplant rejection, and ultimately 
decrease the rate of survival of transplant recipients.\282\ \283\ We 
agree with interested parties that it would be beneficial to patients 
to reduce barriers that complicate access to immunosuppressive 
medication and reasonable for CMS to make programmatic changes 
consistent with this objective.
---------------------------------------------------------------------------

    \279\ Tacrolimus [package insert]. Northbrook, IL: Astellas 
Pharma, Inc.; 2022. https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/050708s055,010115s007lbl.pdf.
    \280\ Cellcept [package insert]. San Francisco, CA: Genentech 
USA, Inc.; 2022. https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/050722s050,050723s050,050758s048,050759s055lbl.pdf.
    \281\ Lucey MR, Terrault N, Ojo L, et al. Long-term management 
of the successful adult liver transplant: 2012 practice guideline by 
the American Association for the Study of Liver Diseases and the 
American Society of Transplantation. Liver Transpl. 2013 
Jan;19(1):3-26. doi: 10.1002/lt.23566.
    \282\ Nelson J, Alvey N, Bowman L, et al. Consensus 
recommendations for use of maintenance immunosuppression in solid 
organ transplantation: Endorsed by the American College of Clinical 
Pharmacy, American Society of Transplantation, and the International 
Society for Heart and Lung Transplantation. Pharmacotherapy. 2022; 
42:599-633. doi: 10.1002/phar.2716.
    \283\ Chisholm MA, Lance CE, Williamson GM, Mulloy LL. 
Development and validation of an immunosuppressant therapy adherence 
barrier instrument. Nephrol Dial Transplant. 2005 Jan;20(1): 181-
188. https://doi.org/10.1093/ndt/gfh576.
---------------------------------------------------------------------------

    Accordingly, we are proposing two changes regarding supplying fees 
and refills for immunosuppressive drugs. First, we are proposing to 
allow payment of a supplying fee for a prescription of a supply of up 
to 90 days. To reflect this proposal, we are proposing to revise Sec.  
414.1001 to allow payment of a supplying fee to a pharmacy for first 
prescriptions and for prescriptions following the first prescription 
for greater than a 30-day supply. We are proposing additional 
modifications at Sec.  414.1001 to combine paragraphs (a) (for 
supplying fees) and (b) (for supplying fees following a transplant). 
Accordingly, we are also proposing to remove paragraph (b) and 
redesignate paragraphs (c) and (d) as paragraphs (b) and (c), 
respectively. We intend to further study the supplying fee schedule for 
immunosuppressive drugs and are not proposing to make any changes to 
the supplying fee amounts at this time (meaning the current 30-day 
supplying fees would apply to any amount of days' supply). The 
dispensing and supplying fees under Part B (Sec.  414.1001) have been 
shown to be higher than dispensing fees paid in the commercial 
market.\284\ So, until additional study is done regarding input costs 
for dispensing drugs billed to Medicare Part B and subsequent notice-
and-comment rulemaking can be done, if appropriate, in response to such 
information, we aim to continue the current fee schedule regardless of 
the days' supply dispensed. Second, we are proposing to allow payment 
of refills for

[[Page 61778]]

these immunosuppressive drugs. Under our proposal, if finalized, the 
prescribing healthcare provider may adjust the days' supply up to 90 
days and allow refills for an immunosuppressive drug based on the 
individual circumstance of the beneficiary in accordance with 
applicable state laws.
---------------------------------------------------------------------------

    \284\ https://www.pcmanet.org/rx-research-corner/mandating-
pharmacy-reimbursement-increase-spending/08/31/2021/
#:~:text=The%20average%20dispensing%20fee%20in,the%20state's%20Medica
id%20FFS%20rate.
---------------------------------------------------------------------------

    We welcome comments on these proposals.
5. Blood Clotting Factors (Sec.  410.63)
a. Background
    Hemophilia is a genetic bleeding disorder resulting in a deficiency 
of coagulation Factor VIII (hemophilia A) or coagulation Factor IX 
(hemophilia B) due to mutations in the respective clotting factor 
genes.\285\ \286\ Prophylactic use of clotting factors has been proven 
to improve quality of life by preventing joint bleeds but requires 
maintenance therapy, usually throughout the life of the patient. 
Preventing joint damage early is crucial because the initial damage 
will progress, irrespective of whether further bleeds occur in the 
affected joints.\287\ Currently, clotting factor treatments include: 
plasma-derived products, which are virally inactivated and made from 
human donor plasma; recombinant products, such as recombinant Factors 
VIIa, VIII, IX, X, XIII, which are created using genetically engineered 
cells and recombinant technology; and a monoclonal antibody product 
that binds to specific receptor sites of missing clotting factor, which 
is needed for effective hemostasis.\288\ \289\ Individuals with 
hemophilia generally self-infuse clotting factor at home, often 
learning to do so in childhood.290 291 292
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    \285\ https://www.hemophilia.org/bleeding-disorders-a-z/types/hemophilia-a, accessed April 9, 2024.
    \286\ https://www.hemophilia.org/bleeding-disorders-a-z/types/hemophilia-b, accessed April 9, 2024.
    \287\ Aledort LM, Haschmeyer RH, Pettersson H. A longitudinal 
study of orthopaedic outcomes for severe factor-VIII-deficient 
haemophiliacs. The Orthopaedic Outcome Study Group. J Intern Med. 
1994 Oct;236(4):391-9.
    \288\ Srivastava A, et al. Haemophilia. 2020;26(suppl 6):1-158.
    \289\ https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=2483adba-fab6-4d1b-96c5-c195577ed071.
    \290\ GAO-03-184 Medicare: Payment for Blood Clotting Factor. 
www.gao.gov/assets/gao-03-184.pdf.
    \291\ Valentino, L.A., Baker, J.R., Butler, R., Escobar, M., 
Frick, N., Karp, S., . . . Skinner, M. (2021). Integrated Hemophilia 
Patient Care via a National Network of Care Centers in the United 
States: A Model for Rare Coagulation Disorders. Journal of Blood 
Medicine, 12, 897-911. https://doi.org/10.2147/JBM.S325031.
    \292\ https://www.hemophilia.org/bleeding-disorders-a-z/treatment/current-treatments, accessed April 9, 2024.
---------------------------------------------------------------------------

    Section 2324 of the Deficit Reduction Act of 1984 (Pub. L. 98-369) 
added subparagraph (I) to section 1861(s)(2) of the Act to provide 
Medicare Part B coverage of blood clotting factor treatments for 
hemophilia patients who are competent to use such factors to control 
bleeding without medical supervision (that is, self-administered), and 
items related to the administration of such factors; this is codified 
at Sec.  410.63(b). As set forth in 1842(o)(1)(C) of the Act, payment 
for clotting factor product is the amount provided for under section 
1847A of the Act.
    In January of 2003, the Comptroller General of the United States 
published a report entitled ``Payment for Blood Clotting Factor Exceeds 
Providers Acquisition Cost'' \293\ (hereinafter referred to the January 
2003 report). Among other things, the report found that ``providers 
incur additional costs associated with delivering clotting factor that 
are not separately reimbursed by Medicare.'' Specifically, the report 
cited delivery costs generated in inventory management, specialized 
refrigerated storage, shipping, and the provision of ancillary supplies 
such as needles, syringes, and tourniquets to patients that were not 
accounted for by Medicare payment for the clotting factor product 
alone.
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    \293\ https://www.gao.gov/assets/gao-03-184.pdf.
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    After the release of the January 2003 report, section 303I(1) of 
the MMA amended section 1842(o) of the Act by adding a new paragraph 
(5), requiring the Secretary to establish a furnishing fee for the 
items and services associated with the furnishing of blood clotting 
factor. Specifically, section 1842(o)(5) of the Act requires that for 
clotting factors furnished on or after January 1, 2005, the Secretary 
shall provide for a separate payment to the entity which furnishes 
blood clotting factors for items and services related to the furnishing 
of such factors in an amount that the Secretary determines to be 
appropriate. Accordingly, the clotting factor furnishing fee was 
codified at Sec.  410.63(c), which states that the furnishing fee is 
added on a per unit basis to the clotting factor.
    In 2005, CMS established a furnishing fee of $0.14 per unit of 
clotting factor. The clotting factor furnishing fee is increased by the 
percentage increase in the Consumer Price Index (CPI) for Medical Care 
for the 12-month period ending with June of the previous year, as 
required by Section 1842(o)(5)(C) of the Act, and updated annually in 
chapter 17, section 80.4.1 of the Medicare Claims Processing Manual. 
For 2024, the clotting factor furnishing fee is $0.250 per unit. 
Chapter 17 of the Medicare Claims Processing Manual, section 80.4.1 
indicates that ``CMS includes this clotting factor furnishing fee in 
the nationally published payment limit for clotting factor billing 
codes'' along with the pricing file, which denotes which HCPCS codes 
have the furnishing fee added. The payment limit in the pricing file 
includes the payment limit for the clotting factor product (under 
methodology in section 1847A of the Act) plus furnishing fee.
    As was the case at the time the clotting factor furnishing fee 
regulations were originally finalized, we continue to believe the 
products eligible for payment of the clotting factor furnishing fee and 
those eligible for payment as clotting factor products are the same 
subset of products: that is, self-administered clotting factor 
products, as described above. Similar to section 1861(s)(2)(I) of the 
Act, section 1842(o)(5) of the Act specifically contemplates that 
clotting factors are self-administered. In particular, section 
1842(o)(5)(A)(ii) of the Act specifies that the furnishing fee can take 
into account ``ancillary supplies and patient training for the self-
administration of such factors.'' As stated in the CY 2005 PFS final 
rule, the furnishing fee accounts for the costs associated with 
supplying the clotting factor, including patient training necessary for 
self-administration of such factors (69 FR 47523; 69 FR 66311). Thus, 
the clotting factor furnishing fee, as implemented, pays for services 
and supplies in connection with the patient's self-administration of 
the product.
    We note that section 1842(o)(5)(A) of the Act directed the 
Secretary to ``review [. . .] the January 2003 report'' when 
establishing the separate payment for entities which furnish blood 
clotting factors to the patient. The January 2003 report refers to 
self-administration of clotting factor and the benefits beneficiaries 
receive from home-use of the product throughout the report. For 
example, the report states, ``Individuals with hemophilia generally 
self-infuse clotting factor. Clotting factor can be infused on demand, 
when a bleeding episode occurs, or for prevention, known as 
prophylactic use. By self-infusing, individuals can avoid waiting for 
care at a medical facility.''
    Most notably, for purposes of understanding the Medicare clotting 
factor payment inadequacy that was addressed by Congress by adding the 
furnishing fee, the report states ``[t]he method of delivery of 
clotting factor has implications for Medicare payment. Most outpatient 
drugs covered by Medicare are administered in a

[[Page 61779]]

physician's office. When a beneficiary visits a physician in order to 
receive a drug, the physician receives one payment from Medicare for 
the drug and another payment through the physician fee schedule for 
administering the drug. Clotting factor, however, is generally not 
administered in a physician's office.'' That is, the report highlighted 
that Medicare payment for clotting factor, in particular, was 
inadequate because there are costs associated with supplying the 
clotting factor, but because it is self-administered, the furnishing of 
clotting factor was generally not eligible for the administration fee. 
Generally, the report noted that payment for supplying other outpatient 
drugs covered by Medicare Part B were adequate because they are 
eligible for the administration fee. Again, as stated above, Congress 
addressed this issue by creating the furnishing fee for these self-
administered clotting factor products in the MMA.
    More recently, gene therapies have been FDA-approved for the 
treatment of hemophilia. These gene therapies introduce a functional 
gene to the patient, which provides the genetic information needed for 
the patient to produce the missing or nonfunctional protein. A viral 
vector in the gene therapies, engineered with adeno-associate virus, 
delivers the functional copy of the clotting factor gene into the 
patient's liver cells. The viral vector then releases the functional 
gene which integrates into the cell's DNA and starts producing the 
missing clotting factor protein (that is, Factor VIII or Factor IX) to 
restore normal clotting function.
    In the case of hemophilia A or B, the gene therapy introduces the 
functional gene that enables the patient to produce Factor VIII or 
Factor IX, respectively, on their own. Unlike clotting factors, which 
promptly restore balance in the coagulation cascade at the point of 
deficiency or bridge activated Factor IX and Factor X to restore the 
function of missing activated Factor VIII,\294\ allowing for stable 
blood clot formation and hemostasis, the gene therapies do not directly 
integrate into the coagulation cascade.295 296 In the 
coagulation cascade, clotting factors become activated in response to 
damaged tissues or exposure to collagen at the injury site. This 
activation initiates the conversion of prothrombin to thrombin. 
Thrombin then converts fibrinogen into fibrin strands, forming the 
blood clot. Clotting factors restore normal clotting function by 
replacing deficient factors through repeated, dose-adjustable infusions 
or injections. In contrast, a single administration of gene therapies 
maintains a consistent and adequate level of clotting factors over the 
long term by enabling the self-production of the clotting factor 
proteins--an indirect method that relies on the patient's cells to 
increase clotting factor levels. However, as the self-production of 
clotting factor proteins takes time, the sustained outcomes of gene 
therapies may take several weeks to fully manifest. Interested parties 
have asked if CMS considers these gene therapies to be clotting factors 
for which the clotting factor furnishing fee would be paid.
---------------------------------------------------------------------------

    \294\ Genentech, Inc. Hemlibra (emicizumab-kxwh) injection, for 
subcutaneous use. South San Francisco, CA: Genentech, Inc.; 2023. 
Package insert.
    \295\ Hoffman, M., & Monroe, D.M. (2001). A cell-based model of 
hemostasis. Thrombosis and Haemostasis, 85(6), 958-965.
    \296\ Schenone M, Furie BC, Furie B. The blood coagulation 
cascade. Curr Opin Hematol. 2004 Jul;11(4):272-7.
---------------------------------------------------------------------------

    Gene therapies for hemophilia are administered via a one-time, 
single-dose intravenous infusion in a setting where personnel and 
equipment are immediately available to treat infusion-related 
reactions. They are not typically administered by the patient in his or 
her home, and close monitoring is required for at least three hours 
after the end of the infusion.\297\ While these gene therapy products 
may have a similar goal to clotting factor products, in that both 
products are designed to improve outcomes for patients with hemophilia, 
gene therapy products prompt the body to make clotting factors, but are 
not clotting factors themselves. Given that the administration would 
occur incident to a physician service (that is, the product is not 
self-administered), the differing mechanism of action from replacing 
deficient factors (that is, triggering the body to make clotting 
factors rather than infusing clotting factors into the body), and the 
requirement of close monitoring by a healthcare professional post-
infusion, these gene therapies do not have the characteristics 
described in the January 2003 report that is referenced in section 
1842(o)(5) of the Act, which the Secretary relied on in drafting Sec.  
410.63(c). Therefore, they do not constitute ``clotting factors'' for 
purposes of Medicare payment.
---------------------------------------------------------------------------

    \297\ Carvalho M, Sepodes B, Martins APPatient access to gene 
therapy medicinal products: a comprehensive reviewBMJ Innovations 
2021;7:123-134.
---------------------------------------------------------------------------

    Accordingly, gene therapies for hemophilia are eligible for payment 
as drugs or biologicals under Part B as part of (or incident to) a 
physician's service. The ``incident to'' coverage is limited to drugs 
that are not usually self-administered and the physician generally must 
incur a cost for the drug and must bill for it. Furnishing entities 
will bill for its administration, and the administration fees will 
reflect the resources necessary to furnish the drug. For example, 
certain CPT codes for administering drugs include preparation of the 
dose and patient monitoring. Specifically, CPT codes 96401-96549 
(chemotherapy administration and nonchemotherapy injections and 
infusions) include clinical labor activities such as clinical staff 
preparation of chemotherapy agent(s) as well as evaluation and 
management services.\298\
---------------------------------------------------------------------------

    \298\ Section 30.5, Chapter 12 of the Medicare Claims Processing 
Manual.
---------------------------------------------------------------------------

    For the reasons explained above, we do not believe gene therapies 
for hemophilia meet the definition of a clotting factor for purposes of 
Medicare payment, but even if they did, they still would not be 
eligible for the furnishing fee because the costs associated with 
furnishing these gene therapies would already be reflected in 
applicable administration codes paid under the Physician Fee Schedule. 
In accordance with Sec.  410.63(c)(1), a clotting factor furnishing fee 
is not payable when the costs associated with furnishing a clotting 
factor are paid through another payment system. In this case, the 
payment system is the payment system established under the Physician 
Fee Schedule. Furnishing fees for drugs that are physician administered 
would result in physicians being paid twice for incidental costs of 
administering the drug because the furnishing fee is intended to 
compensate for supplies like needles, syringes, and tourniquets as well 
as storage costs, and so is the Part B payment for administering the 
drug. We do not believe this double payment is appropriate, nor do we 
believe this is what Congress intended in directing CMS to establish a 
clotting factor furnishing fee.
    Accordingly, in this proposed rule, we are proposing to update 
Sec.  410.63(b) to clarify existing CMS policy that blood clotting 
factors must be self-administered to be considered clotting factors for 
which the furnishing fee applies. Additionally, we are proposing to 
clarify at Sec.  410.63(c) that the furnishing fee is only available to 
entities that furnish blood clotting factors, unless the costs 
associated with furnishing the clotting factor are paid though another 
payment system, including the Physician Fee Schedule. That is, we are 
proposing to clarify through revisions to Sec.  410.63 that

[[Page 61780]]

clotting factors (as specified in section 1861(s)(2)(I) of the Act) and 
those eligible to receive the clotting factor furnishing fee (as 
specified in section 1842(o)(5) of the Act) are the same subset of 
products.

B. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)

1. Background on RHC and FQHC Payment Methodologies
    As provided in 42 CFR part 405, subpart X, of our regulations, RHC 
and FQHC visits generally are defined as face-to-face encounters 
between a patient and one or more RHC or FQHC practitioners during 
which one or more RHC or FQHC qualifying services are furnished. RHC 
and FQHC practitioners are physicians, NPs, PAs, CNMs, clinical 
psychologists (CPs), licensed marriage and family therapists, mental 
health counselors, and clinical social workers, and under certain 
conditions, a registered nurse or licensed practical nurse furnishing 
care to a homebound RHC or FQHC patient in an area verified as having 
shortage of home health agencies. Transitional Care Management (TCM) 
services can also be paid by Medicare as an RHC or FQHC visit. In 
addition, Diabetes Self-Management Training (DSMT) or Medical Nutrition 
Therapy (MNT) sessions furnished by a certified DSMT or MNT program may 
also be considered FQHC visits for Medicare payment purposes. 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 generally are paid an all-inclusive rate (AIR) for all 
medically necessary medical and mental health services and qualified 
preventive health services furnished on the same day (with some 
exceptions). The AIR is subject to a payment limit, meaning that an RHC 
will not receive any payment beyond the specified limit amount. As of 
April 1, 2021, all RHCs are subject to upper payment limits determined 
in accordance with section 1833(f) of the Act.
    FQHCs were paid under the same AIR methodology until October 1, 
2014. Beginning on that date, in accordance with section 1834(o) of the 
Act (as added by section 10501(i)(3) of the Patient Protection and 
Affordable Care Act (Pub. L. 111-148)), FQHCs began to transition to 
the 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 at 
the individual level for the complexity of individual patient health 
care needs, the length of an individual visit, or the number or type of 
practitioners involved in the patient's care. Instead for RHCs, all 
costs for the facility over the course of the year are aggregated and 
an AIR is derived from these aggregate expenditures. The FQHC PPS base 
rate is updated annually by the percentage increase in the FQHC market 
basket reduced by a productivity adjustment. For CY 2025, CMS is 
proposing to rebase and revise the FQHC market basket to reflect a 2022 
base year; see section III.B.7 of this proposed rule.
2. General Care Management Services in RHCs and FQHCs
a. Background
    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 PFS to independently 
recognize and pay for these important services. The care coordination 
included in services, such as office visits, does not always adequately 
describe the non-face-to-face care management work involved in primary 
care and similar care relationships. Payment for office visits may not 
reflect all the services and resources required to furnish 
comprehensive, coordinated care management for certain categories of 
beneficiaries, such as those who are returning to a community setting 
following discharge from a hospital or skilled nursing facility (SNF) 
stay.
    Before we get into the detailed background of our RHC and FQHC 
payment policies for care coordination services, we want to acknowledge 
that we have used several terms to describe these services and are 
providing clarification. We use the terms ``care coordination'' 
services interchangeably with the term ``care management'' services in 
preamble and manual guidance to describe the type of work discussed 
above. We began to use the term ``general care management'' when we 
established the HCPCS code G0511 for CY 2018. Use of ``general care 
management'' is meant to describe certain non-face-to-face care 
management work involved in primary care that we have identified as 
appropriate for separate payment as discussed in the following 
paragraphs.
    As we discussed in the CY 2016 PFS final rule (80 FR 71081 through 
71088), to address the concern that the non-face-to-face care 
management work involved in furnishing comprehensive, coordinated care 
management for certain categories of beneficiaries is not adequately 
paid for as part of an office visit, beginning on January 1, 2015, 
practitioners billing under the PFS are paid separately for chronic 
care management (CCM) services when CCM service requirements are met. 
We explained that RHCs and FQHCs cannot bill under the PFS for RHC or 
FQHC services and individual practitioners working at RHCs and FQHCs 
cannot bill under the PFS for RHC or FQHC services while working at the 
RHC or FQHC. Although many RHCs and FQHCs pay for coordination of 
services within their own facilities and may sometimes help to 
coordinate services outside their facilities, the type of structured 
care management services that are now payable under the PFS for 
patients with multiple chronic conditions, particularly for those who 
are transitioning from a hospital or SNF back into their communities, 
are generally not included in the RHC or FQHC payment. Therefore, 
separate payment was established in the CY 2016 PFS final rule (80 FR 
71080 through 71088) for RHCs and FQHCs that furnish CCM services. We 
believe the non-face-to-face time required to coordinate care is not 
captured in the RHC AIR or the FQHC PPS payment, particularly for the 
rural and/or low-income populations served by RHCs and FQHCs. Allowing 
separate payment for CCM services in RHCs and FQHCs is intended to 
reflect the additional resources necessary for the unique components of 
CCM services.
    In the CY 2018 PFS final rule (82 FR 53169 through 53180), we 
finalized revisions to the payment methodology for CCM services 
furnished by RHCs and FQHCs and established requirements for general 
behavioral health integration (BHI) and psychiatric collaborative care 
management (CoCM)

[[Page 61781]]

services furnished in RHCs and FQHCs, beginning on January 1, 2018. We 
also initiated the use of HCPCS codes G0511 and G0512. HCPCS code G0511 
is a general care management code for use by RHCs or FQHCs when at 
least 20 minutes of qualified CCM or general BHI services are furnished 
to a patient in a calendar month. HCPCS code G0512 is for psychiatric 
CoCM and can be billed by RHCs or FQHCs when at least 60 minutes of 
qualified psychiatric CoCM services are furnished to a patient in a 
calendar month.
    For CY 2018 the payment amount for HCPCS code G0511 was 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. 
That is, for CY 2018 the 3 codes that comprised HCPCS code G0511 were 
CPT code 99490 (20 minutes or more of CCM services), CPT code 99487 (60 
minutes or more of complex CCM services), and CPT code 99484 (20 
minutes or more of BHI services).
    In the CY 2019 PFS final rule (83 FR 59683), we explained that 
another CCM code was introduced for practitioners billing under the 
PFS, CPT code 99491, which would correspond to 30 minutes or more of 
CCM furnished by a physician or other qualified health care 
professional and is similar to CPT codes 99490 and 99487. Therefore, 
for RHCs and FQHCs, we added CPT code 99491 as a general care 
management service and included it in the calculation of HCPCS code 
G0511. Starting on January 1, 2019, RHCs and FQHCs were paid for HCPCS 
code G0511 based on the average of the national non-facility PFS 
payment rates for CPT codes 99490, 99487, 99484, and 99491 (83 FR 
59687).
    In the CY 2021 PFS final rule (85 FR 84697 through 84699), we 
explained that the requirements described by the codes for principal 
care management (PCM) services were similar to the requirements for the 
services described by HCPCS code G0511; therefore, we added HCPCS codes 
G2064 and G2065 to HCPCS code G0511 as general care management services 
for RHCs and FQHCs. Consequently, effective January 1, 2021, RHCs and 
FQHCs are paid when a minimum of 30 minutes of qualifying PCM services 
are furnished during a calendar month. The payment rate for HCPCS code 
G0511 for CY 2021 was the average of the national non-facility PFS 
payment rate for the RHC and FQHC care management and general 
behavioral health codes (CPT codes 99490, 99487, 99484, and 99491), and 
PCM codes (HCPCS codes G2064 and G2065). We noted that in the CY 2022 
PFS final rule (86 FR 65118), HCPCS codes G2064 and G2065 were replaced 
by CPT codes 99424 and 99435. Therefore, for CY 2022 the payment rate 
for HCPCS code G0511 was the average of the national non-facility PFS 
payment rate for CPT codes 99490, 99487, 99484, 99491, 99424, and 
99425).
    In the CY 2023 PFS final rule (87 FR 69735 through 69737), we 
included chronic pain management (CPM) services described by HCPCS code 
G3002 in the general care management HCPCS code G0511 when at least 30 
minutes of qualifying non-face-to-face CPM services are furnished 
during a calendar month. We explained since HCPCS code G3002 is valued 
using a crosswalk to the PCM CPT code 99424, which is currently one of 
the CPT codes that comprise HCPCS code G0511, there was no change made 
to the average used to calculate the HCPCS code G0511 payment rate to 
reflect CPM services.
    Most recently, in the CY 2024 PFS final rule (88 FR 79071 through 
79073) we included the CPT codes that are associated with the suite of 
services that comprise remote physiologic monitoring (RPM) and remote 
therapeutic monitoring (RTM) in the general care management HCPCS code 
G0511 when these services are furnished by RHCs and FQHCs. In addition, 
we included community heath integration (CHI), principal illness 
navigation (PIN), and PIN--peer support services in HCPCS code G0511 
when these services are furnished by RHCs and FQHCs (88 FR 79073 
through 79081). We noted that for each of these newly included services 
that they must be medically reasonable and necessary, meet all 
requirements, and not be duplicative of services paid to RHCs and FQHCs 
under the general care management code for an episode of care in a 
given calendar month. We also clarified RHCs and FQHCs may bill HCPCS 
code G0511 multiple times in a calendar month, as long as all of the 
requirements are met and resource costs are not counted more than once 
(88 FR 79075).
    Additional information on care management requirements is available 
on the CMS Care Management web page and on the CMS RHC and FQHC web 
pages.299 300 301
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    \299\ https://www.cms.gov/medicare/payment/fee-schedules/physician/care-management.
    \300\ https://www.cms.gov/center/provider-type/rural-health-clinics-center.
    \301\ https://www.cms.gov/medicare/payment/prospective-payment-systems/federally-qualified-health-centers-fqhc-center.
---------------------------------------------------------------------------

b. Proposed Regulatory Update (Sec.  405.2464(c))
    During our development of the proposals discussed in section 
III.B.2.c. and III.B.2.d. of this proposed rule, we determined that the 
language located in Sec.  405.2464(c) could use additional information 
to streamline and provide clarity on our payment policy for care 
coordination services. For example, using consistent terms, effective 
dates, and the description of the basis of payment. Therefore, we 
propose technical changes to Sec.  405.2464(c) to accurately reflect 
the iterations of our payment policy for care coordination services as 
detailed in this background section.
c. Proposed Payment Policy for General Care Management Services
    As discussed previously, in the last few years of PFS payment rules 
we have expanded the scope of care management services billable using 
HCPCS code G0511. Prior to CY 2024, HCPCS code G0511 was based on the 
national average non-facility PFS payment rate for each base code 
identified as billable general care management services. That is, we 
added each payment rate divided by the total number of codes to arrive 
at the payment amount for HCPCS code G0511. This payment amount was a 
flat rate that was not subsequently adjusted for locality.
    In the CY 2024 PFS final rule (88 FR 79076 through 79079), we 
explained continuing to calculate the value of HCPCS code G0511 using 
an approach based on an average may no longer be appropriate payment 
for those services since we are simply dividing by the number of codes 
that comprise HCPCS code G0511 and as that number of services with 
lower payment rates increases, the payment rate decreases. We noted 
that while the policy may address providing a payment for furnishing 
non-face-to-face services, the magnitude of the value may not 
appropriately account for the costs. Therefore, we finalized a revised 
methodology for the calculation of HCPCS code G0511 by looking at the 
actual utilization of the services. We used a weighted average of the 
services that comprise HCPCS code G0511. For the utilization data of 
the services, we used the most recently available utilization data from 
the services paid under the PFS in the physician office setting. We 
explained that the physician office setting may provide an appropriate 
proxy for utilization of these services in the absence of actual data 
because this setting most closely aligns with the types of services

[[Page 61782]]

furnished in RHCs and FQHCs since they typically furnish primary care.
    To ensure we accounted for payments accurately, we explained that 
we looked at PFS utilization of the base code for the service and any 
applicable add-on codes used in the same month as well as any base 
codes reported alone in a month for all of the services comprising 
general care management (that is, the array of services that made up 
HCPCS code G0511). We believed we needed to account for the payment 
associated with the base code along with an applicable add-on code in 
our calculation as this demonstrates a complete encounter. Then to 
arrive at the payment rate for HCPCS code G0511 for CY 2024, we took 
the weighted average of the base code and add-on code pairs, in 
addition to the individual base codes for all of the services that 
comprise HCPCS code G0511 by using the CY 2021 PFS utilization.
    We determined that this approach was a more accurate representation 
of the payment since it is consistent with practitioners billing under 
the PFS, and it accounts for the additional time spent in care 
coordination.
    Subsequent to the issuance of the CY 2024 PFS final rule, 
interested parties have requested that CMS give them the ability to 
bill Medicare for each of the care management services that comprise 
HCPCS code G0511 when they are furnished in RHCs and FQHCs. RHCs, 
FQHCs, and associations supporting access to health care for rural 
populations have expressed concerns regarding the transparency of the 
services being billed with HCPCS code G0511. We note, in the CY2024 PFS 
final rule we stated that HCPCS code G0511 could be billed multiple 
times in a calendar month for each care management code that comprised 
HCPCS code G0511 as long as all requirements were met, there was no 
overlapping of resource time and services were furnished in accordance 
with CPT coding guidelines and conventions. However, providing this 
guidance triggered questions on how CMS tracks which general care 
management service is being furnished if the bundled code is reported 
so they would know when it was appropriate to bill multiple care 
management services on a single claim. RHCs and FQHCs have also 
requested the ability to bill the add-on codes that describe additional 
minutes spent on furnishing care management services and often ask for 
guidance on how to account for additional time spent.
    We have also heard from interested parties that RHCs and FQHCs 
would not find it burdensome to report the actual HCPCS code that 
describes the care management service furnished, which was the main 
concern we had when we implemented HCPCS code G0511 (82 FR 53172). We 
understand that RHCs and FQHCs have become more sophisticated with 
billing and therefore reporting multiple codes has become less 
burdensome than in CY 2018 when we implemented G0511. In addition, we 
have heard that RHCs and FQHCs are interested in having more exposure 
and recognition in playing their part the delivery of quality primary 
care and believe that this could be achieved with data that shows their 
utilization of services which could also be used in future payment 
refinements.
    Due to these concerns, we have reevaluated our payment policy for 
care management services. We agree with interested parties that it is 
important to identify the actual services being furnished and 
understand the utilization of these services, especially given our 
strong interest in their volume and their contribution to initiatives 
on health equity and social needs of services in the care coordination 
space. Therefore, we are proposing to require RHCs and FQHCs to bill 
the individual codes that make up the general care management HCPCS 
code, G0511. The current list of base and add-on codes that make-up 
G0511 are listed in Table 24, titled ``General Care Management HCPCS 
Codes and Descriptors.'' Under this proposal, HCPCS code G0511 would no 
longer be payable when billed by RHCs and FQHCs. We note that the 
payment amounts for some services that made up G0511 are less than the 
payment amount for G0511 and if an RHC or FQHC mostly furnishes these 
services, they could see a potential decline in payment. We are also 
proposing to allow RHCs and FQHCs to bill the add-on codes for 
additional time spent once the minimum threshold of time was met to 
account for a complete encounter. This could potentially offset any 
decrease in payments. Payment for these services would be the national 
non-facility PFS payment rate when the individual code is on an RHC or 
FQHC claim, either alone or with other payable services and the payment 
rates are updated annually based on the PFS amounts for these codes. We 
believe that these proposals promote transparency in billing and 
payment and allowing RHCs and FQHCs to bill the individual care 
management codes would take into account the complexity of the service 
and the time spent furnishing the service.
BILLING CODE P

[[Page 61783]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.048


[[Page 61784]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.049


[[Page 61785]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.050


[[Page 61786]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.051


[[Page 61787]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.052

BILLING CODE C
    We are proposing revisions at Sec.  405.2464(c) to reflect the 
proposed payment method for care management services furnished in RHCs 
and FQHCs beginning January 1, 2025. We welcome comments on this 
proposed payment methodology.
d. New Codes for Advanced Primary Care Management (APCM) Services
    As discussed in section II.G of this proposed rule, HHS and CMS 
have been analyzing opportunities to strengthen and invest in primary 
care in alignment with the goals of the HHS Initiative to Strengthen 
Primary Care.\302\ Research has demonstrated that greater primary care 
physician supply is associated with improved population-level mortality 
and reduced disparities,\303\ and also that establishing a long-term 
relationship with a primary care provider leads to reduced emergency 
department (ED) visits,\304\ improved care coordination, and increased 
patient satisfaction.\305\ HHS recognizes that effective primary care 
is essential for improving access to healthcare, for the health and 
wellbeing of individuals, families, and communities, and for achieving 
health equity. The first coordinated set of HHS-wide actions to 
strengthen primary care, as part of the Initiative, is in primary care 
payment; for example, adjusting payment to ensure it supports delivery 
of advanced primary care. CMS Innovation Center models, described in 
section II.G.2.a.(1) of this proposed rule, reflect the ongoing work 
within HHS and the unified, comprehensive approach to HHS primary care 
activities that we are accomplishing through our current statutory 
authorities and funding.
---------------------------------------------------------------------------

    \302\ U.S. Department of Health and Human Services. (2023). 
Primary Care: Our First Line of Defense. https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
    \303\ Basu S, Berkowitz SA, Phillips RL, Bitton A, Landon BE, 
Phillips RS. Association of Primary Care Physician Supply With 
Population Mortality in the United States, 2005-2015. JAMA Intern 
Med. 2019;179(4):506-514. doi:10.1001/jamainternmed.2018.7624. 
https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2724393.
    \304\ Willemijn L.A. Sch[auml]fer et al, ``Are People's Health 
Care Needs Better Met When Primary Care Is Strong? A Synthesis of 
the Results of the QUALICOPC Study in 34 Countries,'' Primary Health 
Care Research and Development 20 (2019): e104. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6609545/.
    \305\ Michael J. van den Berg, Tessa van Loenen, and Gert P 
Westert, ``Accessible and Continuous Primary Care May Help Reduce 
Rates of Emergency Department Use: An International Survey in 34 
Countries,'' Family Practice 33, no. 1 (Feb. 2016): 42-50. https://academic.oup.com/fampra/article/33/1/42/2450446.
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    In recent years, CMS has implemented significant changes aimed at 
better capturing the resources required for care management services, 
including chronic care management (CCM), principal care management 
(PCM), and transitional care management (TCM) and more recently, 
community health integration (CHI), principal illness navigation (PIN) 
and PIN-peer support services. For RHCs and FQHCs, we have established 
payment for these suites of care management services outside of the RHC 
AIR and FQHC PPS. The policy requirements for RHCs and FQHCs furnishing 
these various care coordination services are consistent with those 
finalized under the PFS.
    In section II.G.2.b. of this proposed rule, we are proposing to 
establish coding and make payment under the PFS for a newly defined set 
of APCM services described and defined by three new HCPCS G-codes. This 
new coding would reflect the recognized effectiveness and growing 
adoption of the advanced primary care approach to care. It would also 
encompass a broader range of services and simplify the billing and 
documentation requirements, as compared to existing care management 
codes. The proposed coding for APCM incorporates elements of several 
existing care management services into a bundle that we have already 
considered to be care coordination services paid separately to RHCs and 
FQHCs using HCPCS code G0511. For example, CCM and PCM. In addition, 
the coding for APCM incorporates elements of communication technology-
based services (CTBS) into a bundle that we have already considered to 
be virtual communications paid separately to RHCs and FQHCs using HCPCS 
code G0071. For example, remote evaluation of patient videos/images, 
virtual check-in, and e-visits. Therefore, to allow RHCs and FQHCs the 
ability to simplify the billing and documentation requirements 
associated with furnishing APCM services we are proposing to allow RHCs 
and FQHCs to bill for these services and receive separate payment. 
Consistent with section II.G.2.b. of this proposed rule, the APCM code 
sets vary by the degree of complexity of patient conditions (that is, 
non-complex and complex CCM for multiple chronic conditions or PCM for 
a single high-risk condition), and whether the number of minutes spent 
by clinical staff or the physician or non-physician practitioner (NPP) 
is used to meet time thresholds for billing. The proposed HCPCS codes 
are described below:
    HCPCS code GPCM1 (Advanced primary care management services 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar

[[Page 61788]]

month, with the following elements, as appropriate:
     Consent;
    ++ Inform the patient of the availability of the service; that only 
one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioner, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver;
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.).
    HCPCS code GPCM2 (Advanced primary care management services for a 
patient with multiple (two or more) chronic conditions expected to last 
at least 12 months, or until the death of the patient, which place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
elements included in GPCM1, as appropriate) and HCPCS code GPCM3 
(Advanced primary care management services for a patient that is a 
Qualified Medicare Beneficiary with multiple (two or more) chronic 
conditions expected to last at least 12 months, or until the death of 
the patient, which place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline, provided by 
clinical staff and directed by a physician or other qualified health 
care professional who is responsible for all primary care and serves as 
the continuing focal point for all needed health care services, per 
calendar month, with the elements included in GPCM1, as appropriate).
    As we've established previously, care coordination services are 
RHC/FQHC services and as such, we are proposing to align once again 
with the PFS and adopt the new codes for APCM services. Additionally, 
allowing separate payment for APCM services in RHCs and FQHCs is 
intended to reflect the additional time and resources necessary for the 
unique components of care coordination services.
    Further, in alignment with our proposal earlier in this section to 
require RHCs and FQHCs to utilize the same coding as when billing under 
the PFS and no longer use HCPCS code G0511, which described many care 
coordination services, we are proposing to require RHCs and FQHCs when 
furnishing APCM to use the codes created for the PFS, that is, the 
three HCPCS G-codes described above. We would pay for these services in 
addition to the RHC AIR or FQHC PPS because we consider these services 
as non-face-to-face services and similar to other care management 
services such as chronic care management, principal care management, 
and remote physiological monitoring, where these services are not 
captured in the RHC AIR or FQHC PPS payment. Similarly, we are 
proposing that payment for these services would be paid at the PFS non-
facility rate.
    It is important to note that if RHCs and FQHCs report these new 
codes, they are per calendar month bundles. If the RHC/FQHC decides to 
bill for APCM then they would not bill for individual services. For 
further discussion on duplicative services and concurrent billing 
restrictions with regard to APCM policies, we refer readers to section 
II.G.2.d. of this proposed rule.
e. Request for Information--Aligning With Services Paid Under the PFS
    As we discuss in section III.B.2.a. of this proposed rule, over the 
last several years we have been increasing our focus on care 
coordination. These services have evolved to focus on preventing and 
managing chronic disease, improving a beneficiary's transition from the 
hospital to the community setting, or on integrative treatment of 
patients with

[[Page 61789]]

behavioral health conditions. We have acknowledged that the care 
coordination included in services such as office visits does not always 
describe adequately the non-face-to-face care management work involved 
and may not reflect all the services and resources required to furnish 
comprehensive, coordinated care management for certain categories of 
beneficiaries. Therefore, under the PFS we have proposed new services 
over the years that practitioners billing under the PFS can be paid 
separately under the PFS. We have noted previously that RHCs and FQHCs 
cannot bill under the PFS for RHC or FQHC services and individual 
practitioners working at RHCs and FQHCs cannot bill under the PFS for 
RHC or FQHC services while working at the RHC or FQHC. Therefore, we 
have proposed payment policies for RHCs and FQHCs that complement the 
new services for care coordination under the PFS to align the RHC and 
FQHC resource cost for those services with payment.
    The increase in frequency of this complementary rulemaking has 
triggered us to consider operational efficiencies internally that we 
believe could result in more transparency and clarity for interested 
parties. Since RHCs and FQHCs are generally paid under encounter-based 
payment systems, we have not systematically analyzed all services paid 
under the PFS (nor do we analyze all new services proposed) to 
determine if they are included as a part of the visit versus are 
eligible for additional payment. Another reason that we do not analyze 
every code is because frequently codes created under the PFS for 
billing practitioners are to more appropriately account for resources 
paid under the PFS. Codes for these purposes are not applicable for 
RHCs and FQHCs since they are not paid under the PFS.
    Generally, for PFS services that are a part of the office visit, 
there is no separate payment under the RHC AIR or FQHC PPS 
methodologies. On the contrary, care coordination services where the 
focus is on care management, coordination, or certain activities needed 
to manage chronic illnesses or adapt to new models of care, we have 
allowed separate payment for RHCs and FQHCs.
    We are seeking comment on how we can improve the transparency and 
predictability regarding which HCPCS codes are considered care 
coordination services. Our goal is to classify care coordination 
services on the PFS in a way that makes it automated in the downstream 
effect on RHCs and FQHCs. We believe establishing a streamlined policy 
regarding which services are separately paid for RHCs and FQHCs versus 
included as part of the visit is more transparent. In addition, a 
policy where codes are communicated and updated through sub-regulatory 
guidance may be more efficient.
3. Telecommunication Services
a. Background
    Section 3704 of the Coronavirus Aid, Relief, and Economic Security 
Act (the CARES Act) (Pub. L. 116-136, March 27, 2020) directed the 
Secretary to establish Medicare payment for telehealth services 
provided by RHCs and FQHCs serving as a distant site (that is, where 
the practitioner is located) during the PHE for COVID-19. Separately, 
section 3703 of the CARES Act expanded CMS' emergency waiver authority 
to allow for a waiver of any of the statutory telehealth payment 
requirements under section 1834(m) of the Act for telehealth services 
furnished during the PHE. Specifically, section 1834(m)(8)(B) of the 
Act, as added by the CARES Act, requires that the Secretary develop and 
implement payment methods for FQHCs and RHCs that serve as a distant 
site during the PHE for the COVID-19 pandemic. The payment methodology 
outlined in the CARES Act requires that rates shall be based on rates 
that are similar to the national average payment rates for comparable 
telehealth services under the Medicare PFS. CMS established rates based 
on the average amount for all PFS telehealth services on the telehealth 
list, weighted by volume.
    In the CY 2022 PFS final rule with comment (86 FR 65211), we 
revised the regulatory requirement that an RHC or FQHC mental health 
visit must be a face-to-face (that is, in-person) encounter between an 
RHC or FQHC patient and an RHC or FQHC practitioner. We revised the 
regulations under Sec.  405.2463 to state that an RHC or FQHC mental 
health visit can also include encounters furnished through interactive, 
real-time, audio/video telecommunications technology or audio-only 
interactions in cases where beneficiaries are not capable of, or do not 
consent to, the use of devices that permit a two-way, audio/video 
interaction for the purposes of diagnosis, evaluation or treatment of a 
mental health disorder. We noted that these changes aligned with 
similar mental health services furnished under the PFS. We also noted 
that this change allows RHCs and FQHCs to report and be paid for mental 
health visits furnished via real-time, telecommunication technology in 
the same way they currently do when these services are furnished in-
person.
    In addition, we revised the regulation under Sec.  405.2463 to 
state that there must be an in-person mental health service furnished 
within 6 months prior to the furnishing of the telecommunications 
service and that an in-person mental health service (without the use of 
telecommunications technology) must be provided at least every 12 
months while the beneficiary is receiving services furnished via 
telecommunications technology for diagnosis, evaluation, or treatment 
of mental health disorders, unless, for a particular 12-month period, 
the physician or practitioner and patient agree that the risks and 
burdens outweigh the benefits associated with furnishing the in-person 
item or service, and the practitioner documents the reasons for this 
decision in the patient's medical record (86 FR 65210 and 65211).
    As discussed in the CY 2023 PFS final rule (87 FR 69738), the 
Consolidated Appropriations Act, 2022 (CAA, 2022) (Pub. L. 117-103, 
March 15, 2022) included the extension of several Medicare telehealth 
flexibilities established during the public health emergency (PHE) for 
COVID-19 for a limited 151-day period beginning on the first day after 
the end of the PHE for COVID-19. Specifically, Division P, Title III, 
section 304 of the CAA, 2022, delayed the in-person requirements under 
Medicare for mental health services furnished through telehealth under 
the PFS and for mental health visits furnished by RHCs and FQHCs via 
telecommunications technology until the 152nd day after the end of the 
PHE for COVID-19. Therefore, in the CY 2023 PFS final rule (87 FR 
69737), we revised the regulations under Sec. Sec.  405.2463 and 
405.2469 again to reflect these provisions.
    Further, in the CY 2024 PFS final rule (88 FR 79065), we discussed 
that the CAA, 2023 (Pub. L. 117-328, December 29, 2022) further 
extended the Medicare telehealth flexibilities enacted in the CAA, 2022 
for a period beginning on the first day after the end of the PHE for 
COVID-19 and ending on December 31, 2024, if the PHE ends prior to that 
date. Specifically related to RHCs and FQHCs, section 4113(c) of the 
CAA, 2023 amended section 1834(m)(8) of the Act to extend payment for 
telehealth services furnished by FQHCs and RHCs for the period 
beginning on the first day after the end of the COVID-19 PHE and ending 
on December 31, 2024, if the PHE ends prior to that date. We noted that 
payment continued to be made under the methodology established for

[[Page 61790]]

telehealth services furnished by FQHCs and RHCs during the PHE, which 
is based on payment rates that are similar to the national average 
payment rates for comparable telehealth services under the PFS.
    We explained that section 4113(d) of the CAA, 2023 continues to 
delay the in-person requirements under Medicare for mental health 
services furnished through telehealth under the PFS and for mental 
health visits furnished by RHCs and FQHCs via telecommunications 
technology. That is, for RHCs and FQHCs, in-person visits will not be 
required until January 1, 2025, or, if later, the first day after the 
end of the PHE for COVID-19. Therefore, we stated that we will continue 
to apply the delay of the in-person requirements under Medicare for 
mental health services furnished by RHCs and FQHCs. We noted that the 
Department of Health and Human Services declared an end to the Federal 
PHE for COVID-19 under section 319 of the Public Health Service Act on 
May 11, 2023.\306\ Therefore, we revised the regulations under 
Sec. Sec.  405.2463 and 405.2469 again to reflect these provisions (88 
FR 79066 through 79067).
---------------------------------------------------------------------------

    \306\ https://www.hhs.gov/coronavirus/covid-19-public-health-emergency/index.html.
---------------------------------------------------------------------------

b. Direct Supervision Via Use of Two-Way Audio/Video Communications 
Technology
    Under Medicare Part B, certain types of services are required to be 
furnished under specific minimum levels of supervision by a physician 
or practitioner. See section II.D.2.a. for the discussion regarding 
direct supervision for services provided using telecommunications 
technologies under the PFS.
    In the CY 2024 PFS final rule (88 FR 79067), we explained that 
extending this definition of direct supervision for RHCs and FQHCs 
under our regulations at Sec. Sec.  405.2413, 405.2415, 405.2448, and 
405.2452 through December 31, 2024, would align the timeframe of this 
policy with many of the previously discussed PHE-related telehealth 
policies that were extended under provisions of the CAA, 2023. In 
addition, we were concerned about an abrupt transition to the pre-PHE 
policy of requiring the physical presence of the supervising 
practitioner beginning after December 31, 2023, given that RHCs and 
FQHCs have established new patterns of practice during the PHE for 
COVID-19. We also believed that RHCs and FQHCs would need time to 
reorganize their practices established during the PHE to reimplement 
the pre-PHE approach to direct supervision without the use of audio/
video technology. Similar to services furnished in physician office 
setting, RHC and FQHC services and supplies furnished incident to 
physician's services are limited to situations in which there is direct 
physician supervision of the person performing the service, except for 
certain care coordination services which may be furnished under general 
supervision. For CY 2024, we continued to define ``immediate 
availability'' as including real-time audio and visual interactive 
telecommunications through December 31, 2024, and solicited comment on 
whether we should consider extending the definition of ``direct 
supervision'' to permit virtual presence beyond December 31, 2024.
(1) Proposal for CY 2025
    In the CY 2024 PFS proposed rule, we solicited comment on potential 
patient safety or quality concerns when direct supervision occurs 
virtually in RHCs and FQHCs; for instance, if certain types of services 
are more or less likely to present patient safety concerns, or if this 
flexibility would be more appropriate when certain types of auxiliary 
personnel are performing the supervised service. We were also 
interested in potential program integrity concerns such as 
overutilization or fraud and abuse that interested parties may have in 
regard to this policy.
    Comments provided were overall supportive of our proposal to 
continue to define ``immediate availability'' to include availability 
through virtual means, stating that it will benefit healthcare 
providers while greatly enhancing patient access to quality care, 
particularly in underserved areas. Commenters also noted that direct 
supervision has become increasingly challenging and the option to 
provide virtual direct supervision has enhanced the quality and 
provision of healthcare services beneficiaries have received in 
medically underserved, rural communities.
    We note that in section II.D.2.a. of this proposed rule, there is a 
proposal to permanently adopt a definition of direct supervision that 
allows ``immediate availability'' of the supervising practitioner using 
audio/video real-time communications technology (excluding audio-only), 
but only for the following subset of incident-to services described 
under Sec.  410.26, (1) services furnished incident to a physician or 
other practitioner's service when provided by auxiliary personnel 
employed by the billing practitioner and working under their direct 
supervision, and for which the underlying HCPCS code has been assigned 
a Professional Component/Technical Component indicator of `5'; and (2) 
services described by 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). In addition, under the PFS we are proposing for all 
other services required to be furnished under the direct supervision of 
the supervising physician or other practitioner, to continue to define 
``immediate availability'' to include real-time audio and visual 
interactive telecommunications technology only through December 31, 
2025.
    After evaluating the information gathered through the comment 
solicitation, we believe that we should maintain the current 
flexibility in RHCs and FQHCs as it continues to support access and 
preserve workforce capacity. We believe that there is value in allowing 
RHC and FQHC services to be furnished under direct supervision where 
virtual presence meets the definition of ``immediately available'' as 
status quo, so that we may further evaluate the services along with the 
analysis occurring for the remaining services that we are contemplating 
under the PFS. We note that there may be nuances in the RHC and FQHC 
settings since generally payment is at the AIR or PPS rate and not at 
the individual service code level to carve out services limited/obvious 
services from other services. We could seek to establish a final policy 
in RHCs and FQHCs once a final policy is determined under the PFS, to 
avoid confusion since they are taking an incremental approach at the 
code level for CY 2025.
    Therefore, we are proposing to maintain the virtual presence 
flexibility on a temporary basis, that is, the presence of the 
physician (or other practitioner) would include virtual presence 
through audio/video real-time communications technology (excluding 
audio-only) through December 31, 2025.
c. Telecommunications Technology
    As discussed above, section 3704 of the Coronavirus Aid, Relief, 
and Economic Security Act (the CARES Act) (Pub. L. 116-136, March 27, 
2020) directed the Secretary to establish Medicare payment for 
telehealth services provided by RHCs and FQHCs serving as a distant 
site (that is, where the practitioner is located) during the PHE for 
COVID-19. Separately, section 3703 of the CARES Act expanded CMS' 
emergency waiver authority to allow for a waiver of any of the 
statutory

[[Page 61791]]

telehealth payment requirements under section 1834(m) of the Act for 
telehealth services furnished during the PHE. Specifically, section 
1834(m)(8)(B) of the Act, as added by the CARES Act, required that the 
Secretary develop and implement payment methods for FQHCs and RHCs that 
serve as a distant site during the PHE for the COVID-19 pandemic. The 
payment methodology outlined in the CARES Act requires that rates shall 
be based on rates that are similar to the national average payment 
rates for comparable telehealth services under the Medicare PFS. 
Therefore, CMS established rates based on the average amount for all 
PFS telehealth services on the telehealth list, weighted by volume. 
RHCs and FQHCs bill for these Medicare telehealth services using HCPCS 
code G2025.
    In the CY 2022 PFS final rule with comment (86 FR 65211), we 
revised the regulatory requirement that an RHC or FQHC mental health 
visit must be a face-to-face (that is, in person) encounter between an 
RHC or FQHC patient and an RHC or FQHC practitioner. We revised the 
regulations under Sec.  405.2463 to state that an RHC or FQHC mental 
health visit can also include encounters furnished through interactive, 
real-time, audio/video telecommunications technology or audio-only 
interactions in cases where beneficiaries are not capable of, or do not 
consent to, the use of devices that permit a two-way, audio/video 
interaction for the purposes of diagnosis, evaluation or treatment of a 
mental health disorder. We noted that these changes aligned with 
similar mental health services furnished under the PFS. We also noted 
that this change allows RHCs and FQHCs to report and be paid for mental 
health visits furnished via real-time, telecommunication technology in 
the same way they currently do when these services are furnished in-
person.
    The temporary authority under section 1834(m)(8) of the Act was 
extended by statute through the end of CY 2024, meaning under current 
law, and absent additional changes in regulation, RHCs and FQHCs could 
not be paid for non-behavioral health services furnished remotely to 
beneficiaries enrolled in fee-for-service Medicare after December 31, 
2024.
(1) Payment Proposal for Non-Behavioral Health Telecommunication 
Technology Services
    Widespread use of telecommunications technology to furnish services 
during the PHE has illustrated interest within the medical community 
and among Medicare beneficiaries in furnishing and receiving care 
through the use of technology beyond the PHE. During the PHE, RHCs and 
FQHCs, much like other provider types, have had to change how they 
furnish care in order to meet the needs of their patients, and use of 
the temporary authority to bill Medicare for PFS telehealth services 
has been widely utilized by RHCs and FQHCs during the PHE. Eliminating 
flexibilities under which RHC and FQHC services have been furnished to 
beneficiaries via telecommunication technologies for over four years 
and resuming solely in-person, face-to-face medical visits after 
December 31, 2024, would cause disruptions in access to services from 
RHC and FQHC practitioners. This would be particularly problematic for 
the underserved populations that these settings furnish services to 
since it could fragment care. We believe that we need to preserve the 
flexibilities under which RHC and FQHC services have been furnished to 
beneficiaries via telecommunication technologies temporarily and to do 
so through an approach that these settings are familiar with in order 
to mitigate burden. Technologies used in this space and the quality of 
care associated with them continue to evolve. We believe that it would 
be prudent to allow time to engage interested parties while we consider 
how to incorporate telecommunication technology services on a more 
permanent basis.
    For these reasons, we propose, on a temporary basis, to allow 
payment for non-behavioral health visits furnished via 
telecommunication technology. We propose to facilitate payments using 
an approach that closely aligns with the mechanisms mandated by the 
statute but ends December 31, 2024. That is, RHCs and FQHCs would 
continue to bill for RHC and FQHC services furnished using 
telecommunication technologies by reporting HCPCS code G2025 on the 
claim, including services furnished using audio-only communications 
technology. Since the costs associated with non-behavioral health 
visits furnished via telecommunication technology are not included in 
the calculations for the RHC AIR methodology and FQHC PPS, we believe 
that we need to propose a proxy that would represent such resources 
used when furnishing these services. Therefore, we propose to continue 
to calculate the payment amount based on the average amount for all PFS 
telehealth services on the telehealth list, weighted by volume for 
those services reported under the PFS. We believe that using this 
weighted average is appropriate during this interim while we 
contemplate permanent policies for these services since there is a wide 
range of values for the telehealth services under the PFS. We believe 
that RHCs and FQHCs generally furnish services that are similar to and 
at a frequency the same as physicians and other practitioners paid 
under the PFS. While we do not have actual cost information, we believe 
that this weighted average is an appropriate proxy since it addresses 
certain resource costs experienced by professionals and would mitigate 
any potential over or under payments. Costs associated with these 
services would continue to not be used in determining payments under 
the RHC AIR methodology or the FQHC PPS.
    We believe that these proposals would preserve the 
telecommunication technology flexibility under which RHC and FQHC 
services have been furnished for over 4 years and would not impact 
access to care for Medicare beneficiaries who currently benefit from 
these services while CMS contemplates next steps. We solicit comment on 
whether there may be other payment methodologies that may be a proxy 
for costs associated with non-behavioral health visits furnished via 
telecommunication technology and why those payment methodology may be 
more appropriate than the weighted average of the telehealth services 
list under PFS.
    We propose to amend Sec.  405.2464 by adding new paragraph (g) to 
reflect our proposed payment policy for non-behavioral health services 
furnished in RHCs and FQHCs via telecommunication technology for CY 
2025.
(2) Alternative Proposal Considered for Payment of Medical Visits 
Furnished Via Telecommunication Technology
    We considered reevaluating the regulations regarding face-to-face 
visit requirements for encounters between a beneficiary and an RHC or 
FQHC practitioner in light of contemporary medical practices. That is, 
we considered proposing a revision to the regulatory requirement that 
an RHC or FQHC medical visit must be a face-to-face (that is, in-
person) encounter between a beneficiary and an RHC or FQHC practitioner 
to also include encounters furnished through interactive, real-time, 
audio and video telecommunications technology. This would result in 
payment for services furnished via telecommunication technology to be 
made under the RHC AIR methodology and under the FQHC PPS, similar to 
how we revised the

[[Page 61792]]

regulations for mental health visits. We believe interested parties may 
prefer the per visit payment that aligns with the RHC AIR or FQHC PPS. 
However, we did not propose this alternative because we determined that 
it would have unintended consequences, especially in cases where the 
RHC AIR or FQHC PPS per-visit rates would be significantly higher than 
the PFS rate that would apply if other entities furnished the same 
service to the same beneficiary in the same location.
    We believe that continuing to pay temporarily for RHC and FQHC 
services furnished via telecommunication technologies in the same 
manner as we have done over the past several years preserves the 
flexibility for RHCs and FQHCs to continue access to care, mitigates 
administrative burden, and mitigates potential program integrity 
concerns. However, we solicit comment on the alternative proposal we 
considered. That is, revising the definition of a visit to include 
interactive, real-time, audio/video telecommunication technology which 
would result in a capitated payment under the RHC AIR methodology or 
FQHC PPS.
d. In-Person Visit Requirements for Remote Mental Health Services 
Furnished by RHC and FQHCs
    The CAA, 2021, stipulated that the beneficiary needed to receive an 
in person, non-telehealth service 6 months prior to initiation of the 
telehealth mental health services and that the Secretary should 
determine an appropriate frequency for provision of subsequent periodic 
in person, non-telehealth services.
    In the CY 2022 PFS final rule with comment (86 FR 65210), we 
revised the regulation under Sec.  405.2463 to state that there must be 
an in-person mental health service furnished within 6 months prior to 
the furnishing of the telecommunications service and that an in-person 
mental health service (without the use of telecommunications 
technology) must be provided at least every 12 months while the 
beneficiary is receiving services furnished via telecommunications 
technology for diagnosis, evaluation, or treatment of mental health 
disorders, unless, for a particular 12-month period, the physician or 
practitioner and patient agree that the risks and burdens outweigh the 
benefits associated with furnishing the in-person item or service, and 
the practitioner documents the reasons for this decision in the 
patient's medical record.
    As discussed in the CY 2023 PFS final rule (87 FR 69738), the CAA, 
2022 included the extension of a number of Medicare telehealth 
flexibilities established during the PHE for COVID-19 for a limited 
151-day period beginning on the first day after the end of the PHE. 
Division P, Title III, section 304 of the CAA, 2022, delayed the in-
person requirements under Medicare for mental health services furnished 
through telehealth under the PFS and for mental health visits furnished 
by RHCs and FQHCs via telecommunications technology until the 152nd day 
after the end of the PHE for COVID-19.
    The CAA, 2023 (Pub. L. 117-328, December 29, 2022) extended the 
Medicare telehealth flexibilities enacted in the CAA, 2022 for a period 
beginning on the first day after the end of the PHE for COVID-19 and 
ending on December 31, 2024, if the PHE ended prior to that date. While 
the CAA, 2021 only applied to the PFS, we implemented similar policies 
for RHCs, FQHCs, and hospital outpatient departments. The in-person 
visit requirements are currently set to take effect for services 
furnished on or after January 1, 2025.
    However, given concerns from interested parties on the impact of 
enforcing these requirements after multiple years of delay, we are 
proposing an additional extension. We are proposing to continue to 
delay the in-person visit requirement for mental health services 
furnished via communication technology by RHCs and FQHCs to 
beneficiaries in their homes until January 1, 2026.
4. Intensive Outpatient Program Services (IOP)
a. Background
    As we discussed in the CY 2024 OPPS final rule (88 FR 81838) 
section 4124 of Division FF of the CAA, 2023 established Medicare 
coverage for intensive outpatient program (IOP) services furnished by a 
hospital to its outpatients, or by a community mental health center 
(CMHC), a FQHC or a RHC, as a distinct and organized intensive 
ambulatory treatment service offering less than 24-hour daily care in a 
location other than an individual's home or inpatient or residential 
setting, effective January 1, 2024.
    IOP is a distinct and organized outpatient program of psychiatric 
services provided for individuals who have an acute mental illness, 
which includes, but is not limited to conditions such as depression, 
schizophrenia, and substance use disorders. We noted an IOP is thought 
to be less intensive than a partial hospitalization program (PHP).
    This new provision mandated several areas of policy to implement an 
IOP program, including scope of benefits and services, certification 
and plan of care requirements, and special payment rules for IOP 
services in RHCs and FQHCs, all of which are discussed in the CY2024 
OPPS final rule (88 FR 81838 through 81845). We made corresponding 
regulation changes for IOP services at Sec. Sec.  405.2400, 405.2401, 
405.2410, 405.2411, 405.2446, 405.2462, 405.2463, 405.2464, 405.2468, 
and 405.2469.
b. Update to Special Payment Rules for Intensive Outpatient Services
    As we discussed in the CY 2024 OPPS final rule (88 FR 81841), 
section 4124(c) of the CAA, 2023 further amended section 1834(o) of the 
Act and section 1834(y) of the Act, to provide special payment rules 
for both FQHCs and RHCs, respectively, for furnishing IOP services. 
Section 4124(c)(1) of the CAA, 2023 amended section 1834(o) of the Act 
to add a new paragraph (5)(A) to require that payment for IOP services 
furnished by FQHCs be equal to the amount that would have been paid 
under Medicare for IOP services had they been covered outpatient 
department services furnished by a hospital. In addition, section 
4124(c)(2) of the CAA, 2023 amended section 1834(y) of the Act to add a 
new paragraph (3)(A) to require that payment for IOP services furnished 
by RHCs be equal to the amount that would have been paid under Medicare 
for IOP services had they been covered outpatient department services 
furnished by a hospital.
    In the CY 2024 OPPS final rule (88 FR 81841), we provided a 
detailed discussion of the final CY 2024 payment rate methodology for 
IOP. CMS finalized two payment rates, a 3- and a 4- or more services 
per day, for IOP services for hospitals and CMHCs. However, for RHCs 
and FQHCs we established a 3-service per day payment rate. We stated 
that we believed it was appropriate to establish the payment rate where 
the utilization is typically structured to be days with 3 or fewer 
services and solicited comment on whether the hospital-based IOP 
payment rate for 4-service days would be appropriate for RHCs and 
FQHCs. Although we previously stated that we would review the data and 
consider a 4 or more services per day for future rulemaking, we have 
since considered this further. We believe that we should provide parity 
for IOP services across the various settings with site neutral payments 
while continuing to monitor access to these services. Therefore, we

[[Page 61793]]

are proposing to provide a payment rate for 4 or more services per day 
in an RHC/FQHC setting. Additionally, as required in section 4124(c)(2) 
of the CAA, 2023 we would align with the 4 or more-services per day 
payment rate for hospital outpatient departments. As with the 3-
services per day, the 4 or more services per day payment rates will be 
updated annually.
c. Technical Correction (Sec. Sec.  405.2410 and 405.2462)
    In the CY 2024 Hospital Outpatient Prospective Payment (OPPS) and 
Ambulatory Surgical Center (ASC) Payment Systems final rule with 
comment (88 FR 81844) we finalized revisions to Sec. Sec.  405.2410, 
405.2462, and 405.2464 in the regulations to reflect the payment amount 
for IOP services and how the Medicare Part B deductible and coinsurance 
are applied in RHC's and FQHC's. For RHCs, the beneficiary is 
responsible for the Medicare Part B deductible and coinsurance amounts 
at an amount not to exceed 20 percent of the clinic's reasonable 
charges for IOP services. For FQHC's, the beneficiary is responsible 
for a coinsurance amount of 20 percent of the lesser of the FQHC's 
actual charge for the service or the IOP rate. We revised the 
regulatory requirements at Sec.  405.2410, Application of Part B 
deductible and coinsurance and Sec.  405.2462, Application of 
deductible and coinsurance for RHCs and FQHCs paid on the basis of the 
special payment rule under Sec.  405.2462(j) to reflect how the 
Medicare Part B deductible and coinsurance are applied.
    During a recent review of our regulations at Sec. Sec.  405.2410(c) 
and 405.2462(j), we noticed that both sections had errors. That is, 
Sec.  405.2410(c) does not reflect the correct policy that is 
applicable for beneficiary coinsurance when they receive IOP services 
in RHCs and FQHCs. With regard to the error at Sec.  405.2462(j), we 
inadvertently left language specific to RHCs in the introductory text 
when it should have been its own paragraph. Therefore, we propose 
revisions to Sec.  405.2410 to reflect the correct policy applicable 
for beneficiary coinsurance as described above in the previous 
paragraph. We also propose revisions to Sec.  405.2462(j) to 
accommodate the new paragraph (j)(1).
5. Payment for Preventive Vaccine Costs in RHCs and FQHCs
a. Background
    Section 1833(a)(3)(A) of the Act specifies that services described 
in section 1861(s)(10)(A)--pneumococcal, influenza and COVID-19 
vaccines and their administration--are exempt from the RHC and FQHC 
payment limit of 80 percent of reasonable costs. Therefore, payment for 
pneumococcal, influenza and COVID-19 vaccines and their administration 
in RHCs and FQHCs is governed by the statute at Section 1833(b) of the 
Act, which requires payment at 100 percent of reasonable cost. For 
RHCs, this means that costs associated with these vaccines and their 
administration are not included in determining the AIR or subject to 
the payment limit, and for FQHCs, these costs are not included under 
the FQHC PPS. We note that the hepatitis B vaccine, which is described 
at section 1861(s)(10)(B) of the Act, is not specified at 1833(a)(3)(A) 
as exempt from the RHC/FQHC payment limit of 80 percent of reasonable 
costs, and therefore, payment for a hepatitis B vaccine and its 
administration is included in the FQHCs PPS rate and the RHC AIR. 
However, since hepatitis B vaccines and their administration are 
considered a Part B preventive service, no coinsurance or deductible is 
charged when a hepatitis B vaccine is administered in an RHC or FQHC. 
Please see section III.H.2.c. of this proposed rule for more 
information on hepatitis B vaccines in RHCs and FQHCs.
    In the April 3, 1996 FQHC final rule (61 FR 14657), we codified at 
Sec.  [thinsp]405.2466(b)(1)(iv) that, for RHCs and FQHCs, payment for 
pneumococcal and influenza vaccine and their administration is 100 
percent of Medicare reasonable cost, which is paid as part of the 
annual reconciliation through the cost report. In the CY 2022 PFS final 
rule (86 FR 65207), we made conforming changes in that section to 
include the COVID-19 vaccine and its administration.
b. Revisions to Current Policy
    In the May 2, 2014 RHC/FQHC PPS final rule (79 FR 25449), we 
addressed commenters' recommendations that CMS apply a consistent 
approach to payment for Part B vaccines. One commenter specifically 
recommended that CMS allow RHCs and FQHCs to bill for Part B vaccines 
at the time of service, either with or without an encounter for a 
visit. The commenter stated that those bills could be paid using 
national Part B rates, to be followed by an annual reconciliation on 
the cost report between the payments and the reasonable costs of the 
vaccines and their administration. This commenter wished to reduce the 
time between vaccine administration and payment, and to enable the 
documentation on individual patient claims that these vaccines were 
furnished. Commenters generally asserted that streamlining Part B 
vaccine payment would help ensure broad vaccine access for Medicare 
beneficiaries.
    In response to these comments, we responded that we did not believe 
that any changes in our billing policies were necessary. We stated that 
RHCs and FQHCs are accustomed to reporting and receiving payment for 
the reasonable costs of Part B vaccines and their administration 
through the annual cost report, and we believed that an annual 
reconciliation between vaccine payments and reasonable costs would 
create an additional administrative burden for FQHCs and MACs. We also 
noted that as of January 1, 2011, FQHCs have been required to report 
pneumococcal and influenza vaccines and their administration on a 
patient claim with the appropriate HCPCS and revenue codes when 
furnished during a billable visit. Please note that this is not a 
requirement for RHCs.
    In the CY 2022 PFS final rule (86 FR 65207), in which we made 
conforming regulatory changes at Sec.  [thinsp]405.2466(b)(1)(iv) to 
include the COVID-19 vaccine, we received several comments regarding 
the timing of vaccine payments for RHCs and FQHCs. These comments 
echoed the sentiments expressed by the commenters on the same topic in 
the 2014 final rule mentioned above, and while they were out of the 
scope of our proposals for CY2022, we will elaborate on them here. 
These commenters expressed appreciation for measures taken by CMS in 
April 2021 to make lump-sum payments for COVID-19 vaccine 
administration available to RHCs and FQHCs in advance of cost report 
settlement, but commenters emphasized that those payments were only a 
temporary solution. Commenters urged CMS to update the RHC and FQHC 
cost report to ensure adequate, permanent reimbursement for COVID-19 
vaccines. Commenters added that RHCs and FQHCs have experienced 
challenges with burdensome reporting requirements and data collection, 
as well as slow distribution of payments from MACs. Another commenter 
stated that RHCs and FQHCs should not have to wait until settlement of 
cost report to be reimbursed for other preventive vaccines, and that 
delayed payment may hinder them from immunizing Medicare beneficiaries.
    While we did not respond directly to those comments in the CY 2022 
PFS final rule, as they were out of scope of the policies that were 
finalized at the time, we did make clarifications

[[Page 61794]]

regarding payment for preventive vaccines and their administration in 
the RHC and FQHC Frequently Asked Questions (FAQs) that accompanied the 
publication of the CY 2022 PFS final rule.\307\ In those FAQs, we 
clarified that the conforming change made to Sec.  
[thinsp]405.2466(b)(1)(iv) to reflect coverage and payment for COVID-19 
vaccines in RHCs and FQHCs did not reflect any other payment policy 
changes regarding payment for Part B vaccines and administration in 
those settings. We reiterated that RHCs and FQHCs are paid 100 percent 
of reasonable cost through their cost report for Part B vaccines and 
their administration. Since there is a gap in time from when costs are 
incurred in RHCs and FQHCs for furnishing vaccines and when payment is 
received, the Medicare Administrative Contractors (MACs) could provide 
early payments in the form of lump sum payments to RHCs and FQHCs in 
March of 2021 to facilitate COVID-19 vaccinations. RHCs and FQHCs can 
request additional lump sum payments from their MAC at any time.
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    \307\ RHCs CY 2022 PFS Final Rule Fact Sheet: https://www.cms.gov/files/document/rhcs-pfs-faqs.pdf; FQHCs CY 2022 PFS 
Final Rule Fact Sheet: https://www.cms.gov/files/document/fqhcs-pfs-faqs.pdf.
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    Since the publication of the CY 2022 PFS final rule, we have given 
additional consideration to the comments discussed above. During and 
since the COVID-19 PHE, CMS has especially promoted efforts aimed at 
facilitating increased access to vaccinations for both Medicare 
enrollees and all Americans. Vaccination promotion efforts also 
dovetail with CMS' overarching strategic priorities of expanding health 
care access and advancing health equity. For CY 2025, CMS has 
identified the issue of vaccination in RHCs and FQHCs as an area where 
payment policy can be updated to improve access to preventive vaccines 
for Medicare enrollees.
    We are proposing to allow RHCs and FQHCs to bill for the 
administration of Part B preventive vaccines at the time of service. 
Based on the proposed changes in section III.M. and III.H.2.c. of this 
proposed rule, this revision in policy would include all four Part B 
preventive vaccines: pneumococcal, influenza, hepatitis B, and COVID-19 
vaccines. These claims would initially be paid like other Part B 
vaccine and vaccine administration claims, whose payments are discussed 
at section III.H.1. of this proposed rule: vaccine products would be 
paid at 95 percent of their Average Wholesale Price (AWP), and vaccine 
administration would be paid according to the National Fee Schedule for 
Medicare Part B Vaccine Administration. The fee schedule's locality-
adjusted payment rate files for CY 2024 can be found on the CMS Vaccine 
Pricing website at https://www.cms.gov/medicare/payment/all-fee-service-providers/medicare-part-b-drug-average-sales-price/vaccine-pricing. Payment rate files for influenza, pneumococcal and hepatitis B 
vaccine administration can be found under the ``Seasonal Flu Vaccine'' 
tab, and payment rate files for COVID-19 vaccines can be found under 
the ``COVID-19 Vaccines & Monoclonal Antibodies'' tab. The CY 2025 
payment rates for Part B vaccine HCPCS codes G0008, G0009, G0010 and 
90480, with the annual update applied for CY 2025, will be made 
available at the time of publication of the CY 2025 PFS final rule, and 
Tables 45 and 46 in section III.H.1.f. of this proposed rule provide 
the CY 2025 projected payment rates for those amounts.
    We are also clarifying that RHC or FQHC providers are eligible to 
bill HCPCS code M0201 for an in-home additional payment for Part B 
preventive vaccine administration, provided that a home visit meets all 
the requirements of both part 405, subpart X, for RHCs and FQHCs 
services provided in the home, and Sec.  410.152(h)(3)(iii) for the in-
home additional payment for Part B preventive vaccine administration. 
More information regarding the in-home additional payment can be found 
at section III.H.1.d of this proposed rule, and current and projected 
payment rates for M0201 can be found together with Part B vaccine 
administration payment rates mentioned above.
    We emphasize that the statute at section 1833(b) of the Act 
requires that RHCs and FQHCs be paid at 100 percent of reasonable cost 
for Part B vaccines and their administration. Therefore, payments for 
these services received at the time they are furnished in RHCs and 
FQHCs will need to be annually reconciled with the facilities' actual 
vaccine and vaccine administration costs, including the in-home 
additional costs, on their cost reports. Due to the operational systems 
changes needed to facilitate payment through claims, we propose that 
RHCs and FQHCs begin billing for preventive vaccines and their 
administration at the time of service, for dates of service beginning 
on or after July 1, 2025. This will also allow ample time for CMS to 
release cost reporting instructions and sub-regulatory guidance with 
additional billing instructions for RHCs and FQHCs to bill Medicare 
Part B for preventive vaccines and their administration at the time of 
service.
    We believe that this proposal addresses the comments and requests 
of stakeholders who have suggested this payment approach over the last 
several years. We note that this payment approach was mentioned in the 
Senate Appropriations Committee's ``Explanatory Statement For 
Departments Of Labor, Health And Human Services, And Education, And 
Related Agencies Appropriations Bill, 2021.'' \308\ That report 
referenced a December 2019 white paper by the National Association of 
Community Health Centers, which noted that ``FQHCs can face significant 
delays in reimbursement for influenza and pneumococcal vaccines.'' 
\309\ The Committee thus encouraged CMS to promote the ability of FQHCs 
to bill Part B directly for vaccinations at the time of service, with 
reconciliation of payments at the time of cost report settlement.
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    \308\ https://www.appropriations.senate.gov/imo/media/doc/LHHSRept.pdf.
    \309\ https://www.nachc.org/wp-content/uploads/2023/10/adult-imm-fqhc-white-paper-11-01-2019.pdf.
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    We invite public comment on these proposals. We would especially 
appreciate comments on the benefits of payments for vaccine costs 
billed at the time of service, weighed against the potential additional 
burdens of annual reconciliation of vaccine claims payments against 
actual vaccine costs.
6. Productivity Standards
a. Background
    Productivity standards for RHCs were first established on March 1, 
1978 (43 FR 8260), and updated on December 1, 1982 (47 FR 54163-54165), 
to help determine the average cost per patient for Medicare 
reimbursement in RHCs. These productivity screening guidelines were 
intended to identify situations where costs would not be allowed 
without acceptable justification by the clinic and limits on the amount 
of payment (57 FR 24967). Physicians, nurse practitioners (NPs), 
physician assistants (PAs), and certified nurse midwives (CNMs) are 
held to a minimum number of visits per full time employee (FTE), as 
discussed in section 80.4, chapter 13 of the Medicare Benefit Policy 
Manual. The productivity standards policy requires 4,200 visits per 
full-time equivalent (FTE) physician and 2,100 visits per FTE non-
physician practitioner (e.g., nurse practitioner, physician assistant, 
or certified nurse midwife). Physician and non-physician practitioner 
productivity may be combined and if so, the number of visits

[[Page 61795]]

per full-time equivalent team is 6,300. If actual visits are less than 
the productivity standards, the average cost per visit will be computed 
based on the productivity standards rather than actual visits, which 
would result in the cost per visit to be lower than if actual visits 
were used. In other words, if the current productivity standards are 
not met, the results would be a reduction in the cost per visit, which 
could negatively impact the RHC AIR and reduce payments. There are 
exceptions to the productivity standards that can be made based on 
individual circumstances that is at the discretion of the MAC. We note 
that these standards of 4,200 visits per FTE physician and 2,100 visit 
per FTE nonphysician practitioner and 6,300 visits per combined FTE 
have not been updated since 1982. We also note similar requirements to 
contain costs in this way were not required in FQHCs or other settings 
paid on reasonable cost.
    Interested parties have requested that CMS re-evaluate or remove 
the productivity standards policy for RHCs because they believe that 
the environment today is very different than when the RHC benefit began 
and that the ``visit per FTE'' is too high for practitioners to meet 
and results in reducing the AIR. They also shared that the productivity 
standards matter even less now since the implementation of the CAA, 
2021 established payment limits for all RHCs.
    During the COVID-19 PHE, CMS issued a combination of emergency 
authority waivers, regulations, enforcement discretion, and 
subregulatory guidance to ensure and expand access to care and to give 
health care providers the flexibilities needed to help keep people 
safe. RHCs expressed concerns about how the productivity standards 
might impact them during the PHE. For example, many RHCs had trouble 
meeting the productivity standards due to a change in the way they 
staffed their clinics and billed for RHC services with increased 
telecommunications services. RHCs claimed that they were negatively 
impacted even more so than other health care settings because of these 
requirements. We have long standing guidance in the Medicare Benefit 
Policy Manual, chapter 13, section 80.4 that describes the MAC's role 
in providing flexibility to grant productivity exceptions to RHCs who 
experienced disruptions in staffing and services to minimize the burden 
on RHCs. During the PHE we reminded RHCs of the exception process in 
FAQs,\310\ and provided instructions to MACs to proactively reach out 
to RHCs reminding them of the exception process and to proactively 
grant exceptions as necessary.
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    \310\ https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf.
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    Section 130 of the CAA, 2021 restructured the payment limits for 
RHCs beginning April 1, 2021. That is, independent RHCs, provider-based 
RHCs in a hospital with 50 or more beds, and RHCs enrolled under 
Medicare on or after January 1, 2021, will receive a prescribed 
national statutory payment limit per visit increase over an 8-year 
period for each year from 2021 through 2028. This provision also 
established payment limits for provider-based RHCs in a hospital with 
less than 50 beds. See CY 2022 PFS final rule (86 FR 65199 through 
65202) for more detailed discussion.
    Since the CAA, 2021 restructured the payment limits for RHCs, and 
in some cases established payment limits for RHCs beginning April 1, 
2021, we believe that applying productivity standards may no longer be 
necessary with the payment limits set out by Congress. We believe that 
the productivity standards are outdated and redundant with the CAA, 
2021 provisions. Therefore, we are proposing to remove productivity 
standards for RHCs.
7. Proposed Rebasing of the FQHC Market Basket
a. Background
    Section 10501(i)(3)(A) of the Affordable Care Act added section 
1834(o) of the Act to establish a payment system for the costs of FQHC 
services under Medicare Part B based on prospectively set rates. In the 
Prospective Payment System (PPS) for FQHC final rule published in the 
May 2, 2014 Federal Register (79 FR 25436), we implemented a 
methodology and payment rates for the FQHC PPS. Beginning on October 1, 
2014, FQHCs began to transition to the FQHC PPS based on their cost 
reporting periods, and as of January 1, 2016, all FQHCs have been paid 
under the FQHC PPS.
    Section 1834(o)(2)(B)(ii) of the Act requires that the payment for 
the first year after the implementation year be increased by the 
percentage increase in the Medicare Economic Index (MEI). Therefore, in 
CY 2016, the FQHC PPS base payment rate was increased by the MEI. The 
MEI at that time was based on 2006 data from the American Medical 
Association (AMA) for self-employed physicians and was used in the PFS 
sustainable growth rate (SGR) formula to determine the conversion 
factor for physician service payments. (See the CY 2014 PFS final rule 
(78 FR 74264) for a complete discussion of the 2006-based MEI.) Section 
1834(o)(2)(B)(ii) of the Act also requires that beginning in CY 2017, 
the FQHC PPS base payment rate will be increased by the percentage 
increase in a market basket of FQHC goods and services, or if such an 
index is not available, by the percentage increase in the MEI.
    Beginning with CY 2017, FQHC PPS payments were updated using a 
2013-based market basket reflecting the operating and capital cost 
structures for freestanding FQHC facilities (hereafter referred to as 
the FQHC market basket). A complete discussion of the 2013-based FQHC 
market basket can be found in the CY 2017 PFS final rule (81 FR 80393 
through 80403). In the CY 2021 PFS final rule (85 FR 84699 through 
84710), we rebased and revised the FQHC market basket to reflect a 2017 
base year.
    For this CY 2025 PFS proposed rule, we are proposing to rebase and 
revise the 2017-based FQHC market basket to reflect a 2022 base year, 
which would maintain our historical frequency of rebasing the market 
basket every four years. The proposed 2022-based FQHC market basket is 
primarily based on Medicare cost report data for FQHCs for 2022, which 
are for cost reporting periods beginning on and after October 1, 2021, 
and prior to October 1, 2022. We propose to use data from cost reports 
beginning in FY 2022 because these data are the latest available 
complete set of Medicare cost report data for purposes of calculating 
cost weights for the FQHC market basket at the time of rulemaking.
    In the following discussion, we provide an overview of the proposed 
FQHC market basket, describe the methodologies for developing the 
proposed 2022-based FQHC market basket, and provide information on the 
proposed price proxies. We then present the CY 2025 FQHC market basket 
update based on the proposed 2022-based FQHC market basket.
b. Overview of the Proposed 2022-Based FQHC Market Basket
    Similar to the 2017-based FQHC market basket, the proposed 2022-
based FQHC market basket is a fixed-weight, Laspeyres-type price index. 
A Laspeyres price index measures the change in price, over time, of the 
same mix of goods and services purchased in the base period. Any 
changes in the quantity or mix (that is, intensity) of

[[Page 61796]]

goods and services purchased over time are not measured. The index 
itself is constructed using three steps. First, a base period is 
selected (we propose to use 2022 as the base period) and total base 
period expenditures are estimated for a set of mutually exclusive and 
exhaustive expenditure categories, with the proportion of total costs 
that each category represents being calculated. These proportions are 
called cost weights. Second, each cost category is matched to an 
appropriate price or wage variable, referred to as a ``price proxy.'' 
In almost every instance, these price proxies are derived from publicly 
available statistical series that are published on a consistent 
schedule (preferably at least on a quarterly basis). Finally, the cost 
weight for each cost category is multiplied by the level of its 
respective price proxy. The sum of these products (that is, the cost 
weights multiplied by their price index levels) for all cost categories 
yields the composite index level of the market basket in a given 
period. Repeating this step for other periods produces a series of 
market basket index levels over time. Dividing an index level for a 
given period by an index level for an earlier period produces a rate of 
growth in the input price index over that timeframe. As previously 
noted, the market basket is described as a fixed-weight index because 
it represents the change in price over time of a constant mix (quantity 
and intensity) of goods and services needed to furnish FQHC services. 
The effects on total expenditures resulting from changes in the mix of 
goods and services purchased subsequent to the base period are not 
measured. For example, a FQHC hiring more nurse practitioners to 
accommodate the needs of patients would increase the volume of goods 
and services purchased by the FQHC but would not be factored into the 
price change measured by a fixed-weight FQHC market basket. Only when 
the index is rebased would changes in the quantity and intensity be 
captured, with those changes being reflected in the cost weights. 
Therefore, we rebase the market basket periodically so that the cost 
weights reflect recent changes in the mix of goods and services that 
FQHCs purchase (FQHC inputs) to furnish care between base periods.
c. Development of the Proposed 2022-Based FQHC Market Basket Cost 
Categories and Weights
    We are inviting public comments on our proposed methodology, 
discussed in this section of this rulemaking, for deriving the proposed 
2022-based FQHC market basket.
(1) Use of Medicare Cost Report Data
    The major types of costs underlying the proposed 2022-based FQHC 
market basket are derived from the Medicare cost reports (CMS Form 224-
14, OMB Control Number 0938-1298) for freestanding FQHCs. Specifically, 
we use the Medicare cost reports for eleven specific costs: FQHC 
Practitioner Wages and Salaries, FQHC Practitioner Employee Benefits, 
FQHC Practitioner Contract Labor, Clinical Staff Wages and Salaries, 
Clinical Staff Employee Benefits, Clinical Staff Contract Labor, Non-
Health Staff Compensation, Medical Supplies, Pharmaceuticals, Fixed 
Assets, and Movable Equipment. A residual category is then estimated 
and reflects all remaining costs not captured in the 11 types of costs 
identified previously (such as non-medical supplies and utilities).
    The resulting proposed 2022-based FQHC market basket cost weights 
reflect Medicare allowable costs. We propose to define Medicare 
allowable costs centers for freestanding FQHC facilities as the 
expenses reported on: Worksheet A, lines 1 through 7, lines 9 through 
12, lines 23 through 36, and line 66. For the proposed 2022-based FQHC 
market basket, we are proposing to include data from the cost center 
from Worksheet A, line 66 (Telehealth) as effective for CY 2022 since 
CMS finalized a proposal to revise the current regulatory language for 
RHC or FQHC mental health visits to include visits furnished using 
interactive, real-time telecommunications technology and for RHCs and 
FQHCs to report and be paid for mental health visits furnished via 
real-time, telecommunication technology in the same way they currently 
do when these services are furnished in-person (86 FR 65208 through 
62511). As done with the 2017-based FQHC market basket, we are 
proposing to continue to exclude Professional Liability Insurance (PLI) 
costs from the total Medicare allowable costs because FQHCs that 
receive section 330 grant funds also are eligible to apply for medical 
malpractice coverage under Federally Supported Health Centers 
Assistance Act (FSHCAA) of 1992 (Pub. L. 102-501) and FSHCAA of 1995 
(Pub. L. 104-73 amending section 224 of the Public Health Service Act).
    Later in this section, we explain in more detail how the costs for 
each of the 11 categories are derived. Prior to estimating any costs, 
we apply three basic edits. First, we only include the last submitted 
cost report so there is no double counting of a FQHC provider. Second, 
we exclude providers that have less than half a year of reported cost 
data; this edit excludes 175 FQHC providers for 2022. Finally, we 
remove any providers that did not report net direct patient care 
expenses on the FQHC cost report Worksheet A, line 37, column 7; this 
edit excludes 717 FQHC cost reports, or about 29 percent of FQHC 
providers. If a provider does not have reported costs, then we are 
unable to use that provider's costs to calculate cost weights. We 
encourage providers to report net direct patient care expenses when 
reporting the data. After the three edits, there are 1,713 remaining 
FQHC providers in the 2022 data set that we use to estimate cost 
expenditures for, or roughly two-thirds of the total FQHCs in the 
original Medicare cost report data set.
(a) FQHC Practitioner Wages and Salaries Costs
    A FQHC practitioner is defined as one of the following occupations: 
physicians; nurse practitioners (NPs); physician assistants (PAs); 
certified-nurse midwife (CNMs); clinical psychologist (CPs); and 
clinical social workers (CSWs). We propose to calculate FQHC 
Practitioner Wages and Salaries Costs using three steps. First, we 
propose to calculate FQHC Practitioner Compensation Costs as equal to 
the net expenses (that is, costs after reclassifications and 
adjustments) as reported on Worksheet A, column 7, lines 23, 25, 26, 
29, 30, and 31. These lines represent the total net costs (after 
reclassifications and adjustments) for physicians, PAs, NPs, CNMs, CPs, 
and CSWs.
    Second, we propose to further divide the FQHC Practitioner 
Compensation Costs for these occupations into wages and salaries, 
employee benefits, and contract labor costs based on the ratios of 
practitioner wages and salaries, practitioner employee benefits, and 
practitioner contract labor costs to the sum of these three groups of 
costs. We do this by applying the ratios of practitioner wages and 
salaries, practitioner employee benefits, and practitioner contract 
labor to the net expense FQHC Practitioner Compensation Costs, and the 
determination of these ratios is described below. We propose to derive 
the practitioner wages and salaries costs as the sum of direct care 
wages and salaries reported on Worksheet A, column 1, lines 23, 25, 26, 
29, 30, and 31. These lines represent the wages and salaries costs for 
physicians, PAs, NPs, CNMs, CPs, and CSWs. We propose to derive the 
practitioner employee benefits costs for these occupations as the sum 
of costs reported on Worksheet

[[Page 61797]]

S-3, part II, column 2, lines 2, 3, 4, 7, 8, and 9. These lines 
represent the employee benefits costs for physicians, PAs, NPs, CNMs, 
CPs, and CSWs. We propose to derive the practitioner contract labor 
costs for these occupations as the costs reported on Worksheet S-3, 
part II, column 1, lines 2, 3, 4, 7, 8, and 9. These lines represent 
the contract labor costs for physicians, PAs, NPs, CNMs, CPs, and CSWs. 
This was the same method used to calculate the ratios to split the FQHC 
Practitioner Compensation Costs as was done for the 2017-based FQHC 
market basket. Approximately 56 percent of FQHCs that reported direct 
patient care wages and salaries costs also reported employee benefits 
costs data and approximately 99 percent of FQHCs that reported direct 
patient care wages and salaries costs also reported contract labor cost 
data on Worksheet S-3, part II for 2022. This is higher reporting than 
the percent of FQHCs reporting the same data compared to the 2017-based 
FQHC market basket, which had a 45 percent and 66 percent reporting 
incidence for the 2017 cost report data. We are encouraged by this 
improvement in the data and continue to encourage all providers to 
report these data on the Medicare cost report.
    The final step in the process to derive the FQHC Practitioner Wages 
and Salaries costs is to apply the ratio of practitioner wages and 
salaries to the sum of practitioner wages and salaries costs, 
practitioner employee benefits costs, and practitioner contract labor 
costs times the FQHC Practitioner Compensation costs (representing the 
net expenses for each occupation as reported on Worksheet A column 7) 
as described above. This calculation is done for each occupation 
individually (physicians, PAs, NPs, CNMs, CPs, and CSWs). The resulting 
proposed FQHC Practitioner Wages and Salaries costs are equal to the 
sum of each occupation's wages and salary costs. This is the same 
methodology that was used for the 2017-based FQHC market basket.
    As stated in the CY 2022 PFS final rule (86 FR 65209), effective 
for CY 2022 FQHC mental health visits furnished using interactive, 
real-time telecommunications technology are paid for at the same rate 
as other FQHC visits when these services are furnished in-person; 
therefore, we propose to include telehealth wages and salaries costs in 
the FQHC Practitioner Wages and Salaries cost category. We propose to 
derive telehealth wages and salaries by multiplying the net telehealth 
costs (as reported on Worksheet A, column 7, line 66) times the ratio 
of telehealth wages and salaries (as reported on Worksheet A, column 1, 
line 66) to the sum of telehealth costs (the sum of Worksheet A, column 
1 and 2, line 66).
(b) FQHC Practitioner Employee Benefits Costs
    To calculate FQHC Practitioner Employee Benefits costs, we propose 
to use a similar methodology as used to calculate the FQHC Practitioner 
Wages and Salaries costs. We propose to apply the ratio of practitioner 
employee benefits as described above to the FQHC Practitioner 
Compensation costs (representing the net expenses for each occupation 
as reported on Worksheet A column 7) as defined in the section 
III.B.7.(c)(1)(a). This calculation is done for each occupation 
individually (physicians, PAs, NPs, CNMs, CPs, and CSWs). The FQHC 
Practitioner Employee Benefits costs are equal to the sum of each 
occupation's employee benefits costs. This is the same methodology that 
was used for the 2017-based FQHC market basket. As stated previously, 
effective for CY 2022, telehealth services are covered under the FQHC 
PPS; therefore, we propose to also include in the FQHC Practitioner 
Employee Benefits the telehealth employee benefits. We propose to 
estimate telehealth employee benefits by multiplying telehealth wages 
and salaries (as described in section III.B.7.(c)(1)(a)) times the 
ratio of total direct patient care facility benefits (Worksheet S3 Part 
II, column 2, line 1) to total facility direct patient care salaries 
(the sum of Worksheet A, columns 1 and 2, lines 23 and 25 through 36), 
which is estimated to be 21 percent on average. This ratio is referred 
to as the overall employee benefit share and represents the ratio of 
employee benefits to wages and salaries for all patient care costs 
reported by FQHCs.
(c) FQHC Practitioner Contract Labor Costs
    To calculate FQHC Practitioner Contract Labor Costs, we propose to 
use a similar methodology as used to calculate FQHC Practitioner Wages 
and Salaries and FQHC Practitioner Employee Benefit Costs. We propose 
to multiply the ratio of practitioner contract labor, as described 
above, by the FQHC Practitioner Compensation costs (representing the 
net expenses for each occupation as reported on Worksheet A column 7) 
as defined in section III.B.7.(c)(1)(a). This calculation is done for 
each occupation individually (physicians, PAs, NPs, CNMs, CPs, and 
CSWs). The FQHC Practitioner Contract Labor costs are equal to the sum 
of each occupation's contract labor costs plus all net expenses 
reported for Physicians Services Under Agreement from Worksheet A, 
column 7, line 24. This is the same methodology used for the 2017-based 
FQHC market basket.
(d) Clinical Staff Wages and Salaries Costs
    We propose to calculate Clinical Staff Wages and Salaries Costs 
using three steps. First, we propose to define Clinical Staff 
Compensation costs as the sum of net expenses (that is, costs after 
reclassifications and adjustments) as reported on Worksheet A, column 
7, lines 27, 28, 32, 33, 34, 35, and 36. Clinical Staff Compensation 
includes any health-related clinical staff who do not fall under the 
definition of a FQHC Practitioner. These lines represent the net 
expenses for visiting RNs, visiting LPNs, laboratory technicians, 
registered dietician/Certified DSMT/MNT educators, PTs, OTs, and other 
allied health personnel.
    Second, we propose to further divide the Clinical Staff 
Compensation costs for these occupations into wages and salaries, 
employee benefits, and contract labor costs based on the ratio of 
clinical staff wages and salaries, clinical staff employee benefits, 
and clinical staff contract labor costs to the sum of these three 
groups of costs. We do this by applying the ratio of clinical staff 
wages and salaries, clinical staff employee benefits, and clinical 
staff contract labor to the net expense Clinical Staff Compensation 
costs, and the determination of these ratios is described later in this 
section. We propose to derive clinical staff wages and salaries costs 
as the sum of direct care cost salaries as reported on Worksheet A, 
column 1, lines 27, 28, 32, 33, 34, 35, and 36. These lines represent 
the wages and salaries costs for visiting registered nurses (RNs), 
visiting licensed practical nurses (LPNs), laboratory technicians, 
registered dietician/Certified DSMT/MNT educators, physical therapists 
(PTs), occupational therapists (OTs), and other allied health 
personnel. We propose to derive the clinical staff employee benefits 
costs for these occupations as the sum of costs reported on Worksheet 
S-3, part II, column 2, lines 5, 6, 10, 11, 12, 13, and 14. These lines 
represent the employee benefits costs for visiting RNs, visiting LPNs, 
laboratory technicians, registered dietician/Certified DSMT/MNT 
educators, PTs, OTs, and other allied health personnel. Similarly, we 
propose to calculate clinical staff contract labor costs for these 
occupations as the costs reported on Worksheet S-3, part II, column 1, 
lines 5, 6, 10, 11, 12, 13, and 14. These lines

[[Page 61798]]

represent the contract labor costs for visiting RNs, visiting LPNs, 
laboratory technicians, registered dietician/Certified DSMT/MNT 
educators, PTs, OTs, and other allied health personnel. This was the 
same method used to calculate the ratios to split the Clinical Staff 
Compensation net expenses as was done for the 2017-based FQHC market 
basket.
    The final step in the process to derive the Clinical Staff Wages 
and Salaries costs is to apply the ratio of clinical staff wages and 
salaries calculated in the prior step to the Clinical Staff 
Compensation costs (representing the net expenses for each occupation 
as reported on Worksheet A column 7) as described above. This 
calculation is done for each occupation individually (visiting RNs, 
visiting LPNs, laboratory technicians, registered dietician/Certified 
DSMT/MNT educators, PTs, OTs, and other allied health personnel). The 
Clinical Staff Wages and Salaries costs is equal to the sum of each 
occupation's wages and salary costs. This is the same methodology that 
was used for the 2017-based FQHC market basket.
(e) Clinical Staff Employee Benefits Costs
    To calculate Clinical Staff Employee Benefit costs, we propose to 
use a similar methodology as used to calculate the Clinical Staff Wages 
and Salaries costs. We propose to multiply the ratio of clinical staff 
employee benefits, as described above by the Clinical Staff 
Compensation costs (representing the net expenses for each occupation 
as reported on Worksheet A column 7) as defined in the section 
III.B.7.(c)(1)(d). This calculation is done for each occupation 
individually (visiting RNs, visiting LPNs, laboratory technicians, 
registered dietician/Certified DSMT/MNT educators, PTs, OTs, and other 
allied health personnel). The Clinical Staff Employee Benefits costs 
are equal to the sum of each occupation's Employee Benefits costs. This 
is the same methodology that was used for the 2017-based FQHC market 
basket.
(f) Clinical Staff Contract Labor Costs
    To calculate Clinical Staff Contract Labor costs, we propose to use 
a similar methodology as used to calculate Clinical Staff Wages and 
Salaries Costs and Clinical Staff Benefit Costs. We propose to multiply 
the ratio of clinical staff contract labor costs, as described above, 
by the Clinical Staff Compensation costs (representing the net expenses 
for each occupation as reported on Worksheet A column 7) as defined in 
the section III.B.7.(c)(1)(d). This calculation is done for each 
occupation individually (visiting RNs, visiting LPNs, laboratory 
technicians, registered dietician/Certified DSMT/MNT educators, PTs, 
OTs, and other allied health personnel). The Clinical Staff Contract 
Labor costs are equal to the sum of each occupation's contract labor 
costs. This is the same methodology that was used for the 2017-based 
FQHC market basket.
(g) Non-Health Staff Compensation Costs
    We propose to define Non-Health Staff Compensation costs using net 
expenses (that is, costs after reclassifications and adjustments) as 
the estimated share of compensation costs from Worksheet A, column 7 
for lines 3, 4, 5, 6, 7, 9, 10, 11, and 12. These lines represent the 
net expenses for the employee benefits department, administrative & 
general services, plant operations & maintenance, janitorial, medical 
records, pharmacy, medical supplies, transportation, and other general 
services. Since the net expenses for the General Service Cost centers 
include both compensation and other costs, we estimate the share of net 
expenses for each general service cost center that reflects 
compensation costs. First, we estimate a share of non-health staff 
wages and salaries costs for each general service cost center as 
reported on Worksheet A, column 1 for lines 3, 4, 5, 6, 7, 9, 10, 11, 
and 12 divided by Worksheet A, column 1 and 2 for lines 3, 4, 5, 6, 7, 
9, 10, 11, and 12. Then, we multiply the Non-Health Staff net expenses 
(that is, costs after reclassifications and adjustments) by the non-
health staff wages and salaries share to derive estimated Non-Health 
Staff Wages and Salaries costs for each general service cost center 
(lines 3-7 and lines 9-12). Second, we estimate Non-Health Staff 
Employee Benefit costs by multiplying the Non-Health Staff Wages and 
Salaries costs (step one) by the overall employee benefit share as 
described in section III.B.7.(c)(1)(b), or 21 percent. Finally, we sum 
the derived Non-Health Staff Wages and Salaries costs and the derived 
Non-Health Staff Employee Benefits costs for each general service cost 
center (lines 3-7 and lines 9-12) to calculate Non-Health Staff 
Compensation costs. This is the same methodology used for the 2017-
based FQHC market basket.
(h) Pharmaceutical Costs
    We propose to calculate Pharmaceutical costs as the non-
compensation costs for the Pharmacy cost center. We define this as 
Worksheet A, column 7, line 9 less derived pharmacy compensation costs. 
Derived pharmacy compensation costs are included in the Non-health 
Staff Compensation costs described in section III.B.7.(c)(1)(g). We 
note that the only pharmaceutical costs eligible for inclusion in the 
FQHC PPS market basket are those reported on line 9 of Worksheet A. 
These pharmaceutical costs would include only the costs of routine 
drugs (both prescription and over the counter), pharmacy supplies, and 
pharmacy services, provided incident to an FQHC visit. Other types of 
drugs and pharmacy supplies costs not included in this category are 
those reported on line 67 (drugs charged to patients), line 77 (retail 
pharmacy), line 48 (pneumococcal vaccine), and line 49 (influenza 
vaccine, COVID-19, and monoclonal antibody products for treatment of 
COVID-19), as these costs are reimbursed to FQHC providers outside of 
the FQHC PPS payment. The derived pharmacy compensation costs are equal 
to the sum of the estimated pharmacy wages and salaries and pharmacy 
employee benefits costs. This is the same methodology used for the 
2017-based FQHC market basket.
(i) Medical Supplies Costs
    We propose to calculate Medical Supplies costs as the non-
compensation costs for the Medical Supplies costs center. We define 
this as Worksheet A, column 7, line 10 less derived medical supplies 
compensation costs. Derived medical supplies compensation costs are 
included in the Non-health Staff Compensation costs described in 
section III.B.7.(c)(1)(g). The derived medical supplies compensation 
costs are equal to the sum of the estimated medical supplies wages and 
salaries and medical supplies benefits costs. This is the same 
methodology used for the 2017-based FQHC market basket.
(j) Fixed Assets Costs
    We propose to define Fixed Asset costs to be equal to costs 
reported on Worksheet A, line 1, column 7 of the Medicare cost report. 
This is the same methodology used for the 2017-based FQHC market 
basket.
(k) Movable Equipment Costs
    We propose to define Movable Equipment costs to be equal to the 
capital costs as reported on Worksheet A, line 2, column 7. This is the 
same methodology used for the 2017-based FQHC market basket.

[[Page 61799]]

(2) Proposed Major Cost Category Computation
    After we derive costs for the major cost categories for each 
provider using the Medicare cost report data as previously described, 
we propose to trim the data for outliers. For each of the 11 major cost 
categories, we propose to divide the calculated costs for the category 
by total Medicare allowable costs calculated for the provider to obtain 
cost weights for the universe of FQHC providers after basic trims 
described in section III.B.7.(c). For the proposed 2022-based FQHC 
market basket, total Medicare allowable costs would be equal to total 
net expenses (after reclassifications and adjustments) reported on: 
Worksheet A, column 7, for lines 1 through 7, lines 9 through 12; lines 
23 through 36, and line 66. This is the same method used to derive 
total Medicare allowable costs for the 2017-based FQHC market basket 
with the only difference being that we now include the net expenses for 
line 66, telehealth because as previously described, effective for CY 
2022 CMS finalized the policy for mental health visits furnished using 
interactive, real-time telecommunications technology to be paid in the 
same way they currently do when these services are furnished in-person 
(86 FR 65208 through 62511).
    For the FQHC Practitioner Wages and Salaries, FQHC Practitioner 
Employee Benefits, FQHC Practitioner Contract Labor, Clinical Staff 
Wages and Salaries, Clinical Staff Employee Benefits, Clinical Staff 
Contract Labor, Non-Health Staff Compensation, Pharmaceuticals, Medical 
Supplies, Fixed Assets, and Movable Equipment cost weights, after 
excluding cost weights that are less than or equal to zero, we propose 
to then remove those providers whose derived cost weights fall in the 
top and bottom 5 percent of provider-specific derived cost weights to 
ensure the exclusion of outliers. A 5 percent trim is the standard trim 
applied to the mean cost weights in most CMS market baskets and is 
consistent with the trimming used in the 2017-based FQHC market basket. 
After the outliers have been excluded, we sum the costs for each 
category across all remaining providers. We propose to then divide this 
by the sum of total Medicare allowable costs across all remaining 
providers to obtain a cost weight for the proposed 2022-based FQHC 
market basket for the given category. This trimming process is done for 
each cost weight separately.
    Finally, we propose to calculate the residual ``All Other'' cost 
weight that reflects all remaining costs that are not captured in the 
11 major cost categories listed. Table 25 provides the resulting cost 
weights for these major cost categories derived from the Medicare cost 
reports.
    Table 25 displays the proposed 2022-based FQHC market basket cost 
weights compared to the 2017-based FQHC market basket cost weights.
[GRAPHIC] [TIFF OMITTED] TP31JY24.053

    As we did for the 2017-based FQHC market basket, we propose to 
allocate the Contract Labor cost weight to the Wages and Salaries and 
Employee Benefits cost weights based on their relative proportions 
under the assumption that contract labor costs comprise both wages and 
salaries and employee benefits for both FQHC Practitioners and Clinical 
Staff. The contract labor allocation proportion for Wages and Salaries 
is equal to the Wages and Salaries cost weight as a percent of the sum 
of the Wages and Salaries cost weight and the Employee Benefits cost 
weight. This percentage based on the proposed 2022-based FQHC cost 
weights is 82.5 percent for FQHC practitioners and 80.8 percent for 
clinical staff. Therefore, we propose to allocate 82.5 percent of the 
FQHC Practitioner Contract Labor cost weight to the FQHC Practitioner 
Wages and Salaries cost weight and 17.5 percent to the FQHC 
Practitioner Employee Benefits cost weight. Similarly, we propose to 
allocate 80.8 percent of the Clinical Staff Contract Labor cost weight 
to the Clinical Staff Wages and Salaries cost weight and 19.2 percent 
to the Clinical Staff Employee Benefits cost weight. Table 26 shows the 
FQHC Practitioner and Clinical Staff Wages and Salaries and Employee 
Benefits proposed 2022-based cost weights after the contract labor cost 
weight has been allocated. Table 26 also includes the comparison of the 
weights to the 2017-

[[Page 61800]]

based cost weights for the same categories.
[GRAPHIC] [TIFF OMITTED] TP31JY24.054

(3) Derivation of the Detailed Operating Cost Weights
    To further divide the ``All Other'' residual cost weight estimated 
from the 2022 Medicare cost report data into more detailed cost 
categories, we propose to use the 2017 Benchmark Input-Output (I-O) 
``Use Tables/Before Redefinitions/Purchaser Value'' for NAICS 621100, 
Offices of Physicians, published by the Bureau of Economic Analysis 
(BEA). We note that the BEA benchmark I-O data is used to further 
disaggregate residual costs in other CMS market baskets. Therefore, we 
note that we believe the data from this industry are the most 
technically appropriate for disaggregation of the residual net expenses 
since both physician offices and FQHCs provide similar types of care. 
These data are publicly available at https://www.bea.gov/industry/input-output-accounts-data. For the 2017-based FQHC market basket, we 
used the 2012 Benchmark Input-Output (I-O) ``Use Tables/Before 
Redefinitions/Purchaser Value'' for NAICS 621100, Offices of 
Physicians, published by the BEA.
    The BEA Benchmark I-O data are scheduled for publication every 5 
years with the most recent data available for 2017. The 2017 Benchmark 
I-O data are derived from the 2017 Economic Census and are the building 
blocks for BEA's economic accounts. Therefore, they represent the most 
comprehensive and complete set of data on the economic processes or 
mechanisms by which output is produced and distributed.\311\ BEA also 
produces Annual I-O estimates. However, while based on a similar 
methodology, these estimates reflect less comprehensive and less 
detailed data sources and are subject to revision when benchmark data 
become available. Instead of using the less detailed Annual I-O data, 
we propose to inflate the 2017 Benchmark I-O data forward to 2022 by 
applying the annual price changes from the respective price proxies to 
the appropriate market basket cost categories that are obtained from 
the 2017 Benchmark I-O data. We repeat this practice for each year. We 
then calculate the cost shares that each cost category represents of 
the 2017 data inflated to 2022. These resulting 2022 cost shares were 
applied to the ``All Other'' residual cost weight to obtain the 
detailed cost weights for the proposed 2022-based FQHC market basket. 
For example, the cost for Medical Equipment represents 7.8 percent of 
the sum of the ``All Other'' 2017 Benchmark I-O Offices of Physicians 
Expenditures inflated to 2022. Therefore, the proposed Medical 
Equipment cost weight represents 7.8 percent of the proposed 2022-based 
FQHC market basket's ``All Other'' cost category (18.7 percent), 
yielding a Medical Equipment cost weight of 1.5 percent in the proposed 
2022-based FQHC market basket (0.078 x 18.7 percent = 1.5 percent).
---------------------------------------------------------------------------

    \311\ http://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------

    Using this methodology, we propose to derive six detailed FQHC 
market basket cost category weights from the proposed 2022-based FQHC 
market basket residual cost weight (18.7 percent). These categories 
are: (1) Utilities; (2) Medical Equipment; (3) Miscellaneous Products; 
(4) Professional, Scientific, and Technical Services; (5) 
Administrative and Facilities Support Services; and (6) All Other 
Services.
(4) Proposed 2022-Based FQHC Market Basket Cost Categories and Weights
    Table 27 shows the cost categories and cost weights for the 
proposed 2022-based FQHC market basket compared to the 2017-based FQHC 
market basket. The Total Compensation cost weight of 68.5 percent (sum 
of FQHC Practitioner Compensation, Clinical Staff Compensation, and 
Non-health Staff Compensation) calculated from the Medicare cost 
reports for the proposed 2022-based FQHC market basket is 4.1 
percentage points lower than the total compensation cost weight for the 
2017-based FQHC market basket (72.6 percent). The decrease in the 
compensation cost weight between the 2017-based and the proposed 2022-
based market basket is stemming from the decreasing FQHC Practitioner 
and Clinical Staff Compensation cost weights. The proposed 2022-based 
cost weights for FQHC Practitioner and Clinical Staff Compensation are 
5.3 percentage points lower compared to the 2017-based FQHC market 
basket, while the Non-Health Staff Compensation cost weight is 1.2 
percentage points higher. Analysis of the cost report data shows that 
the decline in the health-related compensation cost weights is stemming 
from a change in the mix of health-related workers from higher-paid to 
lower-paid occupations. Specifically, there has been a shift in full 
time equivalents (FTEs) from physicians to nurse practitioners and a 
shift from registered and licensed practical nurses to other allied 
health personnel. Additionally, the proposed 2022-based Pharmaceuticals 
cost weight, Non-Health Staff Compensation costs weight, and the 
Capital cost weight, are each roughly 1 percentage point higher than 
the cost weight in the 2017-based FQHC market basket.
    We note that our analysis of the Medicare cost report data over 
time shows the general trends in these cost weights (particularly for 
the Total Compensation and Pharmaceuticals cost weights) began after 
2017 with about half of the cost weight changes

[[Page 61801]]

occurring between 2017 and 2019. Consistent with our historical 
frequency of rebasing the other CMS market baskets, we believe it is 
important to rebase the FQHC market basket every four to five years to 
reflect the more recent data and changing cost structure. We are 
soliciting comments on our proposal to rebase and revise the market 
basket to reflect a 2022 base year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.055

d. Selection of Price Proxies
    After developing the cost weights for the proposed 2022-based FQHC 
market basket, we selected the most appropriate wage and price proxies 
currently available to represent the rate of price change for each 
expenditure category. For most of the cost categories, we rely on using 
the price proxies based on U.S. Bureau of Labor Statistics (BLS) data, 
as they produce indexes that best meet the criteria of reliability, 
timeliness, availability, and relevance, and group them into one of the 
following BLS categories:
     Employment Cost Indexes. Employment Cost Indexes (ECIs) 
measure the rate of change in employment wage rates and employer costs 
for employee benefits per hour worked. These indexes are fixed-weight 
indexes and strictly measure the change in wage rates and employee 
benefits per hour. ECIs are superior to Average Hourly Earnings (AHE) 
as price proxies for input price indexes because they are not affected 
by shifts in occupation or industry mix, and because they measure pure 
price change and are available by both occupational group and by 
industry. The industry ECIs are based on the North American Industry 
Classification System (NAICS) and the occupational ECIs are based on 
the Standard Occupational Classification System (SOC).
     Producer Price Indexes. Producer Price Indexes (PPIs) 
measure the average change over time in the selling prices received by 
domestic producers for their output. The prices included in the PPI are 
from the first commercial transaction for many products and some 
services (https://www.bls.gov/ppi/).
     Consumer Price Indexes. Consumer Price Indexes (CPIs) 
measure the average change over time in the prices paid by urban 
consumers for a market basket of consumer goods and services (https://www.bls.gov/cpi/). CPIs are only used when the purchases are similar to 
those of retail consumers rather than purchases at the producer level, 
or if no appropriate PPIs are available.
    We evaluate the price proxies using the criteria of reliability, 
timeliness, availability, and relevance:
     Reliability. Reliability indicates that the index is based 
on valid statistical methods and has low sampling variability. Widely 
accepted statistical methods ensure that the data were collected and 
aggregated in a way that can be replicated. Low sampling variability is 
desirable because it indicates that the sample reflects the typical 
members of the population. (Sampling variability is variation that 
occurs by chance because only a sample was surveyed rather than the 
entire population.)
     Timeliness. Timeliness implies that the proxy is published 
regularly, preferably at least once a quarter. The

[[Page 61802]]

market baskets are updated quarterly, and therefore, it is important 
for the underlying price proxies to be up-to-date, reflecting the most 
recent data available. We believe that using proxies that are published 
regularly (at least quarterly, whenever possible) helps to ensure that 
we are using the most recent data available to update the market 
basket. We strive to use publications that are disseminated frequently, 
because we believe that this is an optimal way to stay abreast of the 
most current data available.
     Availability. Availability means that the proxy is 
publicly available. We prefer that our proxies are publicly available 
because this will help ensure that our market basket updates are as 
transparent to the public as possible. In addition, this enables the 
public to be able to obtain the price proxy data on a regular basis.
     Relevance. Relevance means that the proxy is applicable 
and representative of the cost category weight to which it is applied.
    The CPIs, PPIs, and ECIs that we have selected to use in the 
proposed 2022-based FQHC market basket meet these criteria. Therefore, 
we believe that they continue to be the best measures of price changes 
for the cost categories to which they would be applied.
    Table 28 lists all price proxies we propose to use in the proposed 
2022-based FQHC market basket. Below is a detailed explanation of the 
price proxies we propose for each cost category.
(1) Price Proxies for the Proposed 2022-Based FQHC Market Basket
(a) FQHC Practitioner Wages and Salaries
    We propose to use the ECI for Wages and Salaries for Private 
Industry Workers in Professional and Related (BLS series code 
CIU2010000120000I) to measure price growth of this category. There is 
no specific ECI for physicians or FQHC Practitioners, and therefore, we 
propose to use an index that is based on professionals that receive 
advanced training similar to those performing at the FQHC Practitioner 
level of care. This index is consistent with the price proxy used to 
measure wages and salaries inflation pressure for physicians own time 
in the Medicare Economic Index (MEI) and is based on the MEI technical 
panel recommendation from 2012 for more details see the CY 2014 PFS 
final rule (78 FR 74266 through 74271). Additionally, this is the same 
price proxy used for the FQHC Practitioner Wages and Salaries cost 
category in the 2017-based FQHC market basket (85 FR 84708).
(b) FQHC Practitioner Employee Benefits
    We propose to use the ECI for Total Benefits for Private Industry 
Workers in Professional and Related to measure price growth of this 
category. This ECI is calculated using the ECI for Total Compensation 
for Private Industry Workers in Professional and Related (BLS series 
code CIU1016220000000I) and the relative importance of wages and 
salaries within total compensation. This is the same price proxy used 
for the FQHC Practitioner Employee Benefits cost category in the 2017-
based FQHC market basket (85 FR 84708).
(c) Clinical Staff Wages and Salaries
    We propose to use the ECI for Wages and Salaries for all Civilian 
Workers in Health Care and Social Assistance (BLS series code 
CIU1026200000000I) to measure the price growth of this cost category. 
This cost category consists of wage and salary costs for Nurses, 
Laboratory Technicians, and all other healthcare staff not included in 
the FQHC Practitioner compensation categories. Based on the clinical 
staff composition of these workers, we believe that the ECI for health-
related workers is an appropriate proxy to measure wage and salary 
price pressures for these workers. This is the same price proxy used 
for the Clinical Staff Wages and Salaries cost category in the 2017-
based FQHC market basket (85 FR 84708).
(d) Clinical Staff Employee Benefits
    We propose to use the ECI for Total Benefits for all Civilian 
Workers in Health Care and Social Assistance to measure price growth of 
this category. This ECI is calculated using the ECI for Total 
Compensation for all Civilian Workers in Health Care and Social 
Assistance (BLS series code CIU1016220000000I) and the relative 
importance of wages and salaries within total compensation. This is the 
same price proxy used for the Clinical Staff Employee Benefits cost 
category in the 2017-based FQHC market basket (85 FR 84708).
(e) Non-Health Staff Compensation
    We propose to use the ECI for Total Compensation for Private 
Industry Workers in Office and Administrative Support (BLS series code 
CIU2010000220000I) to measure the price growth of this cost category. 
The Non-health Staff Compensation cost weight is predominately 
attributable to administrative and facility type occupations, as 
reported in the data from the Medicare cost reports. This is the same 
price proxy used for the Non-Health Staff Compensation cost category in 
the 2017-based FQHC market basket (85 FR 84708).
(f) Pharmaceuticals
    We propose to use the PPI Commodities for Pharmaceuticals for Human 
Use, Prescription (BLS series code WPUSI07003) to measure the price 
growth of this cost category. This price proxy is used to measure 
prices of Pharmaceuticals in other CMS market baskets, such as the 
2018-based Inpatient Prospective Payment System market basket and is 
the same price proxy used for the Pharmaceuticals cost category in the 
2017-based FQHC market basket (85 FR 84708).
(g) Utilities
    We propose to use the CPI for Fuel and Utilities (BLS series code 
CUUR0000SAH2) to measure the price growth of this cost category. This 
is the same price proxy used for the Utilities cost category in the 
2017-based FQHC market basket (85 FR 84708).
(h) Medical Equipment
    We propose to use the PPI Commodities for Surgical and Medical 
Instruments (BLS series code WPU1562) as the price proxy for this 
category. This is the same price proxy used for the Medical Equipment 
cost category in the 2017-based FQHC market basket (85 FR 84708).
(i) Medical Supplies
    We propose to use a 50/50 blended index that comprises the PPI 
Commodities for Medical and Surgical Appliances and Supplies (BLS 
series code WPU156301) and the CPI-U for Medical Equipment and Supplies 
(BLS series code CUUR0000SEMG). The 50/50 blend is used in all market 
baskets where we do not have an accurate split available. We note that 
we believe FQHCs purchase the types of supplies contained within these 
proxies, including such items as bandages, dressings, catheters, 
intravenous equipment, syringes, and other general disposable medical 
supplies, via wholesale purchase, as well as at the retail level. 
Consequently, we propose to combine the two aforementioned indexes to 
reflect those modes of purchase. This is the same price proxy used for 
the Medical Supplies cost category in the 2017-based FQHC market basket 
(85 FR 84708 through 84709).
(j) Miscellaneous Products
    We propose to use the CPI for All Items Less Food and Energy (BLS 
series code CUUR0000SA0L1E) to measure the

[[Page 61803]]

price growth of this cost category. We believe that using the CPI for 
All Items Less Food and Energy is appropriate as it reflects a general 
level of inflation. This is the same price proxy used for the 
Miscellaneous cost category in the 2017-based FQHC market basket (85 FR 
84709).
(k) Professional, Scientific, and Technical Services
    We propose to use the ECI for Total Compensation for Private 
Industry Workers in Professional, Scientific, and Technical Services 
(BLS series code CIU2015400000000I) to measure the price growth of this 
cost category. This is the same price proxy used for the Professional, 
Scientific, and Technical Services cost category in the 2017-based FQHC 
market basket (85 FR 84709).
(l) Administrative and Facilities Support Services
    We propose to use the ECI Total Compensation for Private Industry 
Workers in Office and Administrative Support (BLS series code 
CIU2010000220000I) to measure the price growth of this cost category. 
This is the same price proxy used for the Administrative and Facilities 
Support Services cost category in the 2017-based FQHC market basket (85 
FR 84709).
(m) All Other Services
    We propose to use the ECI for Total Compensation for Private 
Industry Workers in Service Occupations (BLS series code 
CIU2010000300000I) to measure the price growth of this cost category. 
This is the same price proxy used for the All Other Services cost 
category in the 2017-based FQHC market basket (85 FR 84709).
(n) Fixed Assets
    We propose to use the PPI Industry for Lessors of Nonresidential 
Buildings (BLS series code PCU531120531120) to measure the price growth 
of this cost category (81 FR 80398). We believe this continues to be 
the most appropriate price proxy since fixed asset costs in FQHCs 
should reflect inflation for the rental and purchase of business office 
space. This is the same price proxy used for the Fixed Assets cost 
category in the 2017-based FQHC market basket (85 FR 84709).
(o) Movable Equipment
    We propose to continue to use the PPI Commodities for Machinery and 
Equipment (BLS series code WPU11) to measure the price growth of this 
cost category as this cost category represents nonmedical movable 
equipment. This is the same price proxy used for the Movable Equipment 
cost category in the 2017-based FQHC market basket (85 FR 84709).
(2) Summary of Price Proxies of the Proposed 2022-Based FQHC Market 
Basket
    Table 28 shows the cost categories and associated price proxies for 
the proposed 2022-based FQHC market basket.
[GRAPHIC] [TIFF OMITTED] TP31JY24.056


[[Page 61804]]


    We are soliciting comments on our proposal to rebase and revise the 
FQHC market basket to reflect a 2022 base year.
e. Proposed CY 2025 Productivity-Adjusted Market Basket Update for 
FQHCs
    For CY 2025 (that is, January 1, 2025, through December 31, 2025), 
we propose to use an estimate of the proposed 2022-based FQHC market 
basket to update payments to FQHCs based on the best available data. We 
propose to use the update based on the most recent historical data 
available at the time of publication of the final rule. For example, 
the final CY 2025 FQHC update would be based on the four-quarter 
moving-average percent change of the proposed 2022-based FQHC market 
basket through the second quarter of 2024 (based on the final rule's 
statutory publication schedule). At the time of this proposed rule, we 
do not have the second quarter of 2024 historical data, and therefore, 
we propose to use the most recent projection available at the time. 
Consistent with CMS practice, we estimate the market basket update for 
the FQHC PPS based on the most recent forecast from IHS Global, Inc. 
(IGI). IGI is a nationally recognized economic and financial 
forecasting firm with which CMS contracts to forecast the components of 
the market baskets and total factor productivity (TFP).
    Based on IGI's first quarter 2024 forecast with historical data 
through the fourth quarter of 2023, the proposed 2022-based FQHC market 
basket increase factor for CY 2025 is 4.0 percent. For comparison, the 
2017-based FQHC market basket percentage increase is also projected to 
be 4.0 percent in CY 2025; this estimate is based on IGI's first 
quarter 2024 forecast (with historical data through the fourth quarter 
of 2023). Table 29 compares the proposed 2022-based FQHC market basket 
and the 2017-based FQHC market basket annual percent changes from 2021 
through 2028.
[GRAPHIC] [TIFF OMITTED] TP31JY24.057

    Over the historical update time period covering CY 2021 through CY 
2024, the average growth rate of the proposed 2022-based FQHC market 
basket is the same as the average growth rate of the 2017-based FQHC 
market basket. Over the forecasted time period covering CY 2025 through 
CY 2028, the average growth rate of the proposed 2022-based FQHC market 
basket is also the same as the average growth rate of the 2017-based 
FQHC market basket. So, although the compensation cost weights in the 
proposed 2022-based FQHC market basket is lower than in the 2017-based 
FQHC market basket, and the weights for other products and services is 
higher, there is little impact on the historical or projected FQHC 
market basket percentage increase.
    Section 1834(o)(2)(B)(ii) of the Act describes the methods for 
determining updates to FQHC PPS payment. We have included a 
productivity adjustment to the FQHC PPS annual payment update since 
implementation of the FQHC PPS (81 FR 80393) and we propose to continue 
to include a productivity adjustment to the proposed 2022-based FQHC 
market basket. We propose to use the most recent estimate of the 10-
year moving average of changes in annual private nonfarm business 
(economy-wide) total factor productivity (TFP), which is the same 
measure of TFP applied to other CMS market basket updates including the 
MEI. The U.S. Department of Labor's Bureau of Labor Statistics (BLS) 
publishes the official measures of productivity for the U.S. economy. 
We note that previously the productivity published by BLS was referred 
to as multifactor productivity. Beginning with the November 18, 2021, 
release of productivity data, BLS replaced the term ``multifactor 
productivity'' (MFP) with ``TFP.'' Please see https://www.bls.gov/productivity/data.htm for the BLS historical published TFP data. For 
the final FQHC market basket update, we propose to use the most recent 
historical estimate of annual TFP as published by the BLS. Generally, 
the most recent historical TFP estimate is lagged two years from the 
payment year.
    Therefore, we propose to use the 10-year moving average percent 
change in annual private nonfarm business TFP through 2023 as published 
by BLS in the CY 2025 FQHC market basket update. We note that TFP is 
derived by subtracting the contribution of labor and capital input 
growth from output growth. Since at the time of development of this 
proposed rule the

[[Page 61805]]

measure of TFP for 2023 had not yet been published by BLS, we propose 
to use IGI's first quarter 2024 forecast of TFP. A complete description 
of IGI's TFP projection methodology is available on the CMS website at 
https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information.
    Using IGI's first quarter 2024 forecast, the productivity 
adjustment for CY 2025 (the 10-year moving average of TFP for the 
period ending CY 2023) is projected to be 0.5 percent. Therefore, the 
proposed CY 2025 productivity-adjusted proposed 2022-based FQHC market 
basket update is 3.5 percent, based on IGI's first quarter 2024 
forecast with historical data through the fourth quarter of 2023. This 
reflects a 4.0 percent increase in the proposed 2022-based FQHC market 
basket reduced by a 0.5 percentage point productivity adjustment. 
Finally, we propose that the CY 2025 market basket update and the 
productivity adjustment will be updated to reflect the most recent 
historical data available for the final rule.
8. Clarification for Dental Services Furnished in FQHCs
a. Payment for Dental Services Furnished in FQHCs
    Section 1862(a)(12) of the Act generally precludes payment under 
Medicare Parts A or B for any expenses incurred for services in 
connection with the care, treatment, filling, removal, or replacement 
of teeth or structures directly supporting teeth. (Collectively here, 
we will refer to ``the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth'' as 
``dental services.'') That section of the statute also includes an 
exception to allow payment to be made for inpatient hospital services 
in connection with the provision of such dental services if the 
individual, because of their underlying medical condition and clinical 
status or because of the severity of the dental procedure, requires 
hospitalization in connection with the provision of such services. Our 
regulation at 42 CFR 411.15(i) similarly excludes payment for dental 
services except for inpatient hospital services in connection with 
dental services when hospitalization is required because of: (1) the 
individual's underlying medical condition and clinical status; or (2) 
the severity of the dental procedure.
    Fee for service (FFS) Medicare Parts A and B also make payment for 
certain dental services in circumstances where the services are not 
considered to be in connection with dental services within the meaning 
of section 1862(a)(12) of the Act. In the CY 2023 PFS final rule (87 FR 
69663 through 69688), we clarified and codified at Sec.  411.15(i)(3) 
that Medicare payment under Parts A and B could be made when dental 
services are furnished in either the inpatient or outpatient setting 
when the dental services are inextricably linked to, and substantially 
related and integral to the clinical success of, other covered 
services. We also added several examples of clinical scenarios that are 
considered to meet that standard under Sec.  411.15(i)(3) and amended 
that regulation to add more examples in the CY 2024 PFS final rule (88 
FR 79022 through 79029).
    In the CY 2024 PFS final rule (88 FR 79038), we received comments 
requesting we provide payment for inextricably linked dental services 
in the FQHC setting. Commenters stated that it is critical that CMS 
consider FQHCs' unique Medicare payment structure and that CMS ensure 
that policy changes for FQHCs are analogous to any changes made under 
the PFS. Commenters noted that many FQHCs provide dental services on-
site, and health center patients could benefit from the payment 
policies for dental services inextricably linked to other covered 
services and suggested that the FQHC billing codes should be edited in 
tandem. Commenters further noted that ``physicians' services'' 
component of the Medicare FQHC benefit includes services furnished by 
dentists. Several commenters urged that the list of billable dental 
visit codes modified in the proposed rule be added to the list of codes 
that may be billed in the FQHC setting and requested that any expansion 
in codes recognized under the PFS for dental-related services also be 
applied to FQHCs. We acknowledged the commenters concerns and noted our 
intention to modify operational procedures in the FQHC setting to 
reflect the expansion of this PFS policy, including updates to billable 
code lists.
    We agree that RHC and FQHC Medicare beneficiaries could benefit 
from the payment policies established under the PFS for dental services 
that are inextricably linked to specific medical services. Dentists are 
defined as physicians in Medicare statute (42 CFR 491.2). Services 
furnished by physicians are billable visits in RHCs and FQHCs and they 
could bill for a face-to-face, medically necessary visit furnished by a 
dentist within their scope of practice. Therefore, we are clarifying in 
this proposed rule that dental services exactly as described in section 
II.J and furnished in an RHC or FQHC are RHC and FQHC visits and as 
such can be paid under the RHC AIR methodology or FQHC PPS.
    We would apply and operationalize the dental policies finalized in 
the CY 2023 and 2024 PFS final rules as applicable also to RHCs and 
FQHCs and update the FQHC qualifying visit list as appropriate. 
Consistent with the discussion in section II.J of this proposed rule, 
if an RHC or FQHC practitioner believes the dental services for which 
they submit Medicare claims are inextricably linked to a covered 
service, a modifier may be reported on an RHC or FQHC claim for payment 
purposes. The KX modifier is reported on an RHC or FQHC claim to 
indicate that the service is medically necessary, and that the provider 
has included appropriate documentation in the medical record to support 
or justify the medical necessity of the service or item. We believe 
that usage of the KX modifier in the context of claims for dental 
services inextricably linked to covered services to indicate that the 
clinician attests that the service is medically necessary, and that the 
provider has included appropriate documentation is appropriate and will 
support claims processing and program integrity efforts.
    We are clarifying that when RHCs and FQHCs furnish dental services 
that align with the policies and operational requirements in the 
physician setting, we would consider those services to be a qualifying 
visit and the RHC would be paid at the RHC AIR methodology and the FQHC 
would be paid under the FQHC PPS.
b. Medical and Dental Visits Furnished on the Same Day
    If an RHC or FQHC patient has a medically-necessary face-to-face 
visit with an RHC or FQHC practitioner, and is then seen by another RHC 
or FQHC practitioner, including a specialist, for further evaluation of 
the same condition on the same day, or is then seen by another RHC or 
FQHC practitioner, including a specialist, for evaluation of a 
different condition on the same day, the multiple encounters would 
constitute a single RHC or FQHC visit and be payable as one visit 
regardless of the length or complexity of the visit, whether the second 
visit is a scheduled or unscheduled appointment, or whether the first 
visit is related or unrelated to the subsequent visit.
    If the RHC or FQHC patient suffers an illness or injury that 
requires additional diagnosis or treatment on the same day subsequent 
to the first visit, or has a medical and a mental health visit on the 
same day, or an RHC patient has an

[[Page 61806]]

initial preventive physical exam (IPPE) and a separate medical and/or 
mental health visit on the same day, then the RHC or FQHC would be paid 
separately for each visit.
    We are seeking comment on whether the multiple visits policy should 
apply to patients who have an encounter with an RHC or FQHC 
practitioner and a dentist on the same day or should a subsequent 
encounter with a dentist be considered an exception to this policy and 
be paid as a separate billable visit. We are interested in 
understanding when these situations could occur.
9. ``Grandfathered'' Technical Refinement
a. Background
    We have conducted a review of our regulations and guidance to 
determine where preferred terms may be used. We found several sections 
in part 405, subpart X, that use the term ``grandfathered.'' For 
example, in Sec.  405.2462(f)(1) a ``grandfathered tribal FQHC'' is a 
FQHC that is operated by a tribe or tribal organization under the 
Indian Self-Determination and Education Assistance Act (ISDEAA); was 
billing as if it were provider-based to an IHS hospital on or before 
April 7, 2000, and is not currently operating as a provider-based 
department of an IHS hospital.
b. Technical Refinement
    We believe language in communication products should reflect and 
speak to the needs of people in the audience of focus. In an effort to 
represent an ongoing shift to non-stigmatizing language, we are 
proposing to make a technical change to remove the term 
``grandfathered'' from the regulation text in Sec. Sec.  405.2462, 
405.2463, 405.2464, and 405.2469 and replace it with ``historically 
excepted'' to describe a level of protection provided to certain tribal 
FQHCs that predates applicable restrictions.

C. Rural Health Clinic (RHC) and Federally Qualified Health Center 
(FQHC) Conditions for Certification and Conditions for Coverage (CfCs)

1. Background and Statutory Authority
    The Rural Health Clinic Services Act of 1977 (Pub. L. 95-210 
enacted December 13, 1977) amended the Social Security Act (the Act) by 
enacting section 1861(aa) to extend Medicare and Medicaid entitlement 
and payment for outpatient services and emergency care services 
furnished at a rural health clinic (RHC) by physicians and certain 
other practitioners, and for services and supplies incidental to their 
services. Other practitioners include nurse practitioners and physician 
assistants, and subsequent legislation extended the definition of 
covered RHC services to include the services of clinical psychologists, 
clinical social workers, certified nurse midwives, marriage and family 
therapists, and mental health counselors.
    We have broad statutory authority to establish health and safety 
standards for most Medicare and Medicaid participating provider and 
supplier types. Section 1861(aa) of the Act authorizes the Secretary to 
establish the requirements that an RHC and Federally Qualified Health 
Center (FQHC) must meet to participate in the Medicare Program. As 
required by subparagraph (iv) of the flush material set out after 
section 1861(aa)(2)(K) of the Act, Medicare certified RHCs must not be 
a rehabilitation agency or a facility which is primarily for the care 
or treatment of mental diseases. These statutory CfC requirements are 
codified in regulations at 42 CFR part 491. RHCs and FQHCs must meet 
these requirements to receive Medicare payment for services. These 
regulations are intended to protect the health and safety of patients 
receiving care from these facilities. We note that there are 
approximately 5,462 Medicare-certified RHCs and 11,853 Medicare-
certified FQHCs.
    In this proposed rule, we also aim to ensure RHCs are provided 
flexibility in the services they offer, including specialty and 
laboratory services.
2. Proposed Changes to the RHC and FQHC Conditions for Certification 
and Conditions for Coverage (CfCs)
a. Provision of Services (42 CFR 491.9)
    In accordance with section 1861(aa) of the Act, Sec.  491.9, 
Provision of services, establishes the basic requirements for services 
RHCs and FQHCs must provide in accordance with applicable Federal, 
State, and local laws. This CfC also outlines patient care policies, 
including the development of written policies and the establishment of 
guidelines for medical management, record-keeping, and drug 
administration. Additionally, this section specifies the diagnostic, 
therapeutic, laboratory, and emergency services that RHCs and FQHCs 
must offer, as well as the necessary agreements or arrangements with 
other healthcare providers to furnish additional services not available 
onsite.
    RHCs and FQHCs play a crucial role in providing accessible and 
comprehensive healthcare services in underserved areas, often serving 
as the primary point of contact for healthcare services for residents 
living in these communities. Approximately 20 percent of the U.S. 
population lives in rural areas.\312\ When compared to their urban 
counterparts, rural residents are more likely to be living in poverty, 
unhealthy, older adults, uninsured or underinsured, and medically 
underserved.\313\ Accounting for the unique circumstances of 
individuals living in rural areas and the broad array of services RHCs 
and FQHCs provide to their communities, it is imperative to support 
rural facilities so they may continue to provide healthcare services to 
medically underserved populations.
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    \312\ U.S. Census Bureau. (2023, March 10). Nation's Urban and 
Rural Populations Shift Following 2020 Census. U.S. Department of 
Commerce. Retrieved April 12, 2024, from https://www.census.gov/newsroom/press-releases/2022/urban-rural-populations.html.
    \313\ Report to the Congress: Medicare and the Health Care 
Delivery System (June 2012) (medpac.gov). Medicare Payment Advisory 
Commission. (2012, June). Medicare and the Health Care Delivery 
System. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun12_entirereport.pdf.
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    Research shows that accessing primary care is associated with 
positive health outcomes.\314\ Individuals who receive primary care 
services are more likely to receive preventive care, which results in 
lower rates of illness and premature death.\315\ Furthermore, without 
access to primary care services, an individual may delay seeking 
treatment until their illness has worsened. In such cases, they may end 
up receiving care in the emergency department, which costs more and 
leads to poorer health outcomes.316 317 318 Rural residents 
also report difficulty accessing specialty care due to having to travel 
considerable distances, exacerbated by rural hospitals closing

[[Page 61807]]

and provider shortages.319 320 RHC practitioners have also 
reported additional barriers to receiving specialized care, which 
include a shortage of specialty providers, limited availability of the 
specialty providers, lack of transportation, and not accepting patients 
who are uninsured or specialists not accepting insurance coverage 
(Medicare, Medicaid, or private insurance).\321\
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    \314\ Shi L. (2012). The impact of primary care: a focused 
review. Scientifica, 2012, 432892. https://doi.org/10.6064/2012/432892.
    \315\ Hostetter, J., Schwarz, N., Klug, M., Wynne, J., & Basson, 
M. D. (2020). Primary care visits increase utilization of evidence-
based preventative health measures. BMC family practice, 21(1), 151. 
https://doi.org/10.1186/s12875-020-01216-8.
    \316\ Tang, N., Stein, J., Hsia, R. Y., Maselli, J. H., & 
Gonzales, R. (2010). Trends and characteristics of US emergency 
department visits, 1997-2007. JAMA, 304(6), 664-670. https://doi.org/10.1001/jama.2010.1112.
    \317\ Gallagher, A., Liu, J., Probst, J. C., Martin, A. B., & 
Hall, J. W. (2013). Maternal obesity and gestational weight gain in 
rural versus urban dwelling women in South Carolina. The Journal of 
rural health: official journal of the American Rural Health 
Association and the National Rural Health Care Association, 29(1), 
1-11. https://doi.org/10.1111/j.1748-0361.2012.00421.x.
    \318\ Bailey, B. A., & Cole, L. K. (2009). Rurality and birth 
outcomes: findings from southern appalachia and the potential role 
of pregnancy smoking. The Journal of rural health: official journal 
of the American Rural Health Association and the National Rural 
Health Care Association, 25(2), 141-149. https://doi.org/10.1111/j.1748-0361.2009.00210.x
    \319\ Akinlotan, M., Primm, K., Khodakarami, N., Bolin, J., 
Ferdinand, A. (2021). Rural-Urban Variations in Travel Burdens for 
Care: Findings from the 2017 National Household Travel Survey 
[Policy brief]. Southwest Rural Health Research Center. https://srhrc.tamu.edu/publications/travel-burdens-07.2021.pdf.
    \320\ Douthit, N., Kiv, S., Dwolatzky, T., & Biswas, S. (2015). 
Exposing some important barriers to health care access in the Rural 
USA. Public Health, 129(6), 611-620. https://doi.org/10.1016/j.puhe.2015.04.001.
    \321\ Lahr, M., Neprash, H., Henning-Smith, C., Tuttle, M., 
Hernandez, A. (2019). Access to Specialty Care for Medicare 
Beneficiaries in Rural Communities [Policy brief]. University of 
Minnesota Rural Health Research Center. https://rhrc.umn.edu/wp-content/uploads/2019/12/UMN-Access-to-Specialty-Care_12.4.pdf.
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    Based on feedback from interested parties, including RHC providers 
and rural health associations, we identified a discrepancy in the 
guidance, statute, and regulations. Specifically, interested parties 
questioned the language in the CMS State Operations Manual RHC 
interpretative guidance as it relates to Sec.  491.9(a)(2), which 
states that ``RHCs may not be primarily engaged in specialized 
services.'' \322\ The guidance goes on to state that, in this context, 
``primarily engaged'' is determined by considering the total hours of 
an RHC's operation and whether a majority, i.e., more than 50 percent, 
of those hours involve the provision of RHC services, whereas section 
1861(aa)(2)(A) of the Act only reference being primarily engaged in 
``furnishing to outpatients'' physician services and services furnished 
by a physician assistant or a nurse practitioner, clinical psychologist 
or by a clinical social worker, as cross-referenced by sections 
1861(aa)(1)(A) and (B) of the Act. This is codified in the CfCs at 
Sec.  491.9(a)(2), requiring RHCs and FQHCs to be primarily engaged in 
``providing outpatient health services.'' We have enforced a standard 
requiring that RHCs be primarily engaged in providing primary care 
services based on the interpretive guidance.
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    \322\ Centers for Medicare & Medicaid Services. (2020, February 
21). State Operations Manual Appendix G--Guidance for Surveyors: 
Rural Health Clinics (RHCs) (pp. 63-64). https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_g_rhc.pdf.
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    To clarify the requirements and intent of the program regarding the 
services provided by RHCs and FQHCs, we are proposing changes to the 
Provision of services CfCs. We also aim to ensure RHCs are provided 
flexibility in the services they offer, including specialty services. 
To align the requirements and preserve access to primary care services 
in rural areas, we are proposing to add standards to Sec.  491.9(a)(2) 
explicitly requiring RHCs and FQHCs to provide primary care services 
(at Sec.  491.9(a)(2)(i)) and explicitly noting that RHCs cannot be a 
rehabilitation agency or a facility which is primarily for the care and 
treatment of mental diseases (at Sec.  491.9(a)(2)(ii)). Under our 
proposal, RHCs and FQHCs would continue to be required to provide 
primary care services to their patient populations, but CMS would no 
longer determine or enforce the standard of RHCs ``being primarily 
engaged in furnishing primary care services'' and would no longer 
consider the total hours of an RHC's operation and whether a majority, 
that is, more than 50 percent, of those hours involve primary care 
services through the survey process. These proposed requirements, as 
well as the subsequent proposal discussed in section III.C.2.b. of this 
proposed rule, will be enforced in accordance with section 1864 of the 
Act, which requires that CMS use state surveyors to determine whether a 
provider or supplier subject to certification qualifies for an 
agreement to participate in Medicare. However, under section 1865 of 
the Act, providers and suppliers subject to certification may instead 
elect to be accredited by private accrediting organizations whose 
Medicare accreditation programs have been approved by CMS as having 
standards and survey procedures that meet or exceed all applicable 
Medicare requirements.
    This proposal would allow RHCs to provide more outpatient-specialty 
services within the practitioner's scope of practice to meet the needs 
of the patient population--for example, internal medicine, pediatrics, 
geriatrics, obstetrics and gynecology, dermatology, cardiology, 
neurology, endocrinology, and ear, nose and throat. Section 1861(aa) of 
the Act does not explicitly state that RHCs must provide primary care 
services, though we believe this is the intended purpose of the 
statute. Clause (i) of the second sentence of the flush material after 
section 1861(aa)(2)(K) of the Act, requires RHCs to be located in an 
area designated as either an area with a shortage of personal health 
services under section 330(b)(3) or 1302(7) of the Public Health 
Service Act or as a health professional shortage area described in 
section 332(a)(1)(A) of that Act because of its shortage of primary 
medical care manpower. Additionally, we use the phrase ``the entry 
point into the health care system'' in the RHC and FQHC CfCs at Sec.  
491.9(c)(1). We note that this language is consistent with language 
used in the Rural Emergency Hospital Conditions of Participation (CoPs) 
under the requirement for Additional outpatient medical and health 
services (Sec.  485.524(a)), and the Critical Access Hospital CoPs 
under the requirement for Provision of services (Sec.  
485.635(b)(1)(i)). The American Academy of Family Physicians (AAFP) 
defines primary care practice as ``A primary care practice serves as 
the patient's entry point into the health care system and as the 
continuing focal point for all needed health care services.'' 
Therefore, we expect RHCs and FQHCs to offer a range of primary health 
care services to ensure that patients receive the necessary care at the 
earliest possible point of contact. Primary care services are critical 
in promoting health, preventing illness, and managing chronic 
conditions.\323\
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    \323\ Primary Care. (n.d.). https://www.cms.gov/priorities/innovation/key-concepts/primary-care.
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    This proposal also provides clarification regarding the requirement 
that RHCs cannot be a rehabilitation agency or a facility which is 
primarily for the care and treatment of mental diseases. While this 
requirement is included under Sec.  491.2, Definitions--Rural health 
clinic or clinic, including this requirement under the Provision of 
services CfC at Sec.  491.9(a)(2)(ii) as a separate standard more 
clearly cites the requirement and allows for a clearer evaluation of 
compliance with the specific requirement. CMS defines a rehabilitation 
agency as ``[a]n agency that provides an integrated, multidisciplinary 
program designed to upgrade the physical functions of handicapped, 
disabled individuals by bringing together, as a team, specialized 
rehabilitation personnel.''\324\ Rehabilitation services may include 
physical therapy, occupational therapy, and speech-language pathology 
services.
---------------------------------------------------------------------------

    \324\ Centers for Medicare & Medicaid Services. (2023, September 
6). Outpatient Rehabilitation Providers. CMS.gov. https://
www.cms.gov/medicare/health-safety-standards/certification-
compliance/outpatient-rehabilitation-
providers#:~:text=Rehabilitation%20Agency%20%2D%20An%20agency%20that,
a%20team%2C%20specialized%20rehabilitation%20personnel.
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    CMS acknowledges that the term ``mental diseases'' is outdated and 
not often used in the field of mental health today. This term can cause 
stigma against people with mental health conditions and can be a major 
barrier to seeking help or treatment and can be a cause of reduced 
likelihood of engaging

[[Page 61808]]

in ongoing treatment. As discussed in section III.C.1 of this proposed 
rule, the U.S. Congress passed Public Law 95-210 (enacted December 13, 
1977) that established criteria for the establishment of Medicare-
certified RHCs and has included the term ``mental diseases'' since that 
time. As we are bound by the current statutory requirements, we have 
included the term in the RHC CfCs as it appears in the statute. We note 
that the statute is enacted by Congress and it would take an Act of 
Congress to make statutory changes.
    For the purpose of this proposed rule, the term ``mental diseases'' 
refers to behavioral health conditions (that is, mental and substance 
use disorders). As part of the Coverage to Care (C2C) initiative, CMS 
published the Roadmap to Behavioral Health, which defines behavioral 
health conditions to include mental and substance use disorders.\325\ 
The guide defines mental disorders as changes in a person's thinking, 
mood, and/or behavior and can only be diagnosed based on the person's 
ability to function as a result of their symptoms. The guide defines 
``substance use disorder'' as when a person's repeated use of alcohol 
and/or drugs causes clinically significant impairment.\326\ This may 
include health problems, disability, and failure to meet major 
responsibilities at home, school, or work.
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    \325\ Centers for Medicare & Medicaid Services, and the 
Substance Abuse and Mental Health Services Administration. (2023, 
October). Roadmap to Behavioral Health: Guide to Mental Health and 
Substance Use Disorder Services. https://www.cms.gov/files/document/roadmap-behavioral-health-english.pdf.
    \326\ SAMHSA. (2023, June 09). Mental Health and Substance Use 
Disorders. Retrieved June 17, 2024, from https://www.samhsa.gov/find-help/disorders.
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    These proposed changes to the RHC CfCs should not be construed as 
CMS prohibiting or discouraging the provision of RHC specialty services 
or behavioral health services. An RHC or FQHC may offer such specialty 
services and behavioral health services to its patients in addition to 
the primary care services it already provides. However, RHCs cannot be 
a rehabilitation agency or a facility, which is primarily for the care 
and treatment of mental diseases. As noted, the term ``mental 
diseases'' is outdated; therefore, this proposed rule aims to define 
``mental diseases'' for the purpose of the RHC and FQHC health and 
safety standards and future guidance will clarify how CMS will 
determine whether an RHC is primarily providing care and treatment of 
mental diseases. CMS would assess a facility's compliance with this 
proposed requirement based on policies published in subsequent 
interpretative guidance, which we would publish if this revision is 
adopted in a final rule.
    As we continue to focus on improved access to care for the rural 
communities served by RHCs, and to ensure that the proposed provisions 
do not have unintended consequences, we are soliciting public comment 
on the following questions to gain insight on the anticipated impact of 
this proposed policy on access to primary care services, behavioral 
health services, and specialty care services:
     What types of behavioral health services are currently 
offered by RHCs (that is, therapy, counseling, medication management, 
substance use disorder treatment, etc.), and how often are these 
services provided?
     For those RHCs that are currently providing behavioral 
health services, who provides those services (that is, physician, 
psychologist, social worker, marriage and family therapist, or mental 
health counselor)? What is the clinic's capacity to accept new 
behavioral health patients? What potential impacts do you anticipate 
for RHCs and the community if they were able to provide more behavioral 
health services? How would these impacts be addressed?
     Are there specific behavioral health conditions that your 
clinic is better equipped to treat than others, and if so, what are 
those behavioral health conditions?
     For those RHCs that are not currently providing behavioral 
health services, what barriers or challenges does the RHC face that 
limit the ability to furnish behavioral health services (that is, 
geographic location, transportation issues, service area size, staffing 
issues, stigma, regulatory or survey concerns)?
     What standards or criteria should surveyors use to 
evaluate whether a RHC is operating as a ``facility which is primarily 
for the care and treatment of mental diseases''?
    b. Laboratory Requirements (42 CFR 491.9)
    Section 1861(aa)(2)(G) of the Act requires RHCs to provide routine 
diagnostic services directly (that is, they must be furnished at the 
RHC, by RHC personnel), including clinical laboratory services. We have 
implemented this statutory provision through regulations at Sec.  
491.9(c)(2), which require RHCs to provide six specific diagnostic 
laboratory tests directly; chemical examinations of urine by stick or 
tablet method or both (including urine ketones); hemoglobin or 
hematocrit; blood glucose; examination of stool specimens for occult 
blood; pregnancy tests; and primary culturing for transmittal to a 
certified laboratory. This list reflects the same tests that have been 
required since RHCs were established in 1978 (43 FR 30529) and were 
chosen because they were commonly performed in physicians' offices at 
that time.
    The Clinical Laboratory Improvement Amendments of 1988 (CLIA) (Pub. 
L. 100-578), revised section 353 of the Public Health Service Act to 
require all clinical laboratories that test human specimens for health 
purposes to meet certain requirements. CLIA requires that the 
complexity of tests and the skill in interpreting results determine the 
extent of supervision and review. Tests are categorized from ``waived'' 
(those needing minimal supervision) to ``high complexity'' (those 
requiring the highest level of supervision and review). Regulations 
implementing CLIA are contained in 42 CFR part 493. Under these 
regulations, laboratories performing specified tests categorized as 
waived, physician-performed microscopy moderate or high complexity must 
obtain a certificate that shows they meet specific standards. All tests 
RHCs are required to perform are classified as waived under CLIA, as 
published in the 1992 Federal Register and listed at 42 CFR 493.15(c).
    We are proposing to remove hemoglobin and hematocrit (H&H) from the 
listed laboratory services in Sec.  491.9(c)(2) that RHCs must perform 
directly. In addition, we are proposing to revise paragraph (c)(2)(vi) 
to reflect current practice for microbiology specimens. Interested 
parties have expressed concerns with the existing laboratory 
requirements, citing the financial and physical burdens associated with 
maintaining the lab equipment that is used for laboratory tests that 
are ordered infrequently for patients receiving services at the RHC. 
RHC providers have reported that the H&H laboratory test in particular 
is overly burdensome. We are therefore proposing to remove the H&H 
laboratory test from the list of required laboratory tests to increase 
flexibility in the services offered by RHCs.
    A hemoglobin test evaluates the amount of hemoglobin in the blood, 
which is responsible for carrying oxygen to a person's organs and 
tissues and transporting carbon dioxide back to the lungs.\327\ 
Hematocrit is the percentage of red blood cells in a person's blood and 
is tested to evaluate red blood cells.\328\

[[Page 61809]]

Doctors test hemoglobin and hematocrit levels to evaluate overall 
health, diagnose a medical condition, or monitor an existing medical 
condition. While RHCs are currently required to have and maintain the 
equipment and supplies for these tests onsite, H&H blood tests are 
typically performed as part of a comprehensive blood count (CBC) and 
are not ordered separately in accordance with current clinical 
standards of practice. RHCs report that when laboratory tests are 
ordered that are not provided by the RHC, such as a CBC, their patients 
are often sent to the nearest hospital that would have a full-service 
laboratory available to perform the test. As a result, some RHCs 
located near hospitals may not be utilizing their laboratory equipment 
and supplies, or they may be utilizing them on a limited basis. This is 
because when laboratory tests are ordered by the RHC, and the order 
includes hemoglobin and hematocrit, and other tests that are not 
provided by the RHC, the patient will receive all of their ordered 
laboratory tests at the nearby hospital. Additionally, removing the 
requirement for these tests to be performed at the RHC limits the 
number of venipunctures the patient must experience.
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    \327\ Hemoglobin test: What it is, procedure & results. 
Hemoglobin Test. (n.d.). Retrieved May 7, 2024, from https://my.clevelandclinic.org/health/diagnostics/17790-hemoglobin-test.
    \328\ Hematocrit test: What it is, levels, high & low range. 
Hematocrit Test. (n.d.). Retrieved May 7, 2024, from https://my.clevelandclinic.org/health/diagnostics/17683-hematocrit.
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    In 2021, 66 percent of all RHCs were designated as provider-based 
RHCs, meaning they are owned and operated as an integral part of a 
hospital, nursing home, or home health agency.\329\ Provider-based RHCs 
are governed, supervised, and licensed by the parent organization, and 
most provider-based RHCs are hospital-owned. The remaining 34 percent 
of RHCs are independent clinics owned by a healthcare provider or 
entity and though not as common, may be owned and/or operated by a 
healthcare system. Therefore, we believe a large majority of provider-
based--and some independent--RHCs have access to a full-service 
laboratory, thereby maintaining access to the H&H laboratory test, even 
if it is no longer required to be provided directly by RHCs.
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    \329\ Gale, J. A., Croll, Z., Croom, J., Munk, L., & Jonk, Y. 
(2022). Community Characteristics and Financial and Operational 
Performance of Rural Health Clinics in the United States: A 
Chartbook. University of Southern Maine, Muskie School of Public 
Service, Maine Rural Health Research Center. https://digitalcommons.usm.maine.edu/cgi/viewcontent.cgi?article=1016&context=clinics.
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    We have also received feedback that the current requirement at 
Sec.  491.9(c)(2)(vi) does not reflect current clinical laboratory 
standards of practice and laboratory techniques. This standard 
currently lists the laboratory services that must be provided by RHCs, 
with the list specifically including ``primary culturing for 
transmittal to a certified laboratory.'' Primary culturing is an 
outdated microbiology practice that is no longer performed due to 
modern lab techniques. Instead, RHCs collect specimens using 
appropriate collection and storage techniques and send them to a 
certified laboratory without initial culturing. Therefore, we are 
proposing to update the language in this standard such that the 
laboratory services RHCs would be required to provide include the 
``collection of patient specimens for transmittal to a certified 
laboratory for culturing.'' This proposal, along with the proposal 
removing the H&H from the list of required labs, would require that an 
RHC provide the remaining following laboratory services at Sec.  
491.9(c)(2): (1) chemical examinations of urine by stick or tablet 
methods or both (including urine ketones); (2) blood glucose; (3) 
examination of stool specimens for occult blood; (4) pregnancy tests; 
and (5) collection of patient specimens for transmittal to a certified 
laboratory for culturing. RHCs would still be required under Sec.  
491.9(d)(1)(iii) to provide prompt access to a Medicare or Medicaid 
participating provider or supplier that can furnish an H&H laboratory 
test and any additional and specialized diagnostic and laboratory 
services the RHC is not equipped to perform.
    This proposal does not prevent RHCs from providing tests not listed 
in Sec.  491.9. An RHC is free to provide tests consistent with its 
CLIA certification and can choose a higher level CLIA certification 
than the certificate of waiver if it wishes to provide tests of higher 
complexity and comply with all CLIA requirements.
    Little information on RHC laboratory utilization is available, so 
while we are proposing to remove the H&H laboratory test from the list 
of diagnostic services RHCs are required to provide, we solicit public 
comment on how this may impact access to H&H laboratory tests in rural 
areas. We also are soliciting comments on data, evidence, and 
experience related to laboratory services in RHCs and alternative basic 
lab services that would be appropriate for RHCs to provide to meet the 
needs of underserved rural communities.

D. Clinical Laboratory Fee Schedule: Revised Data Reporting Period and 
Phase-in of Payment Reductions

1. Background on the Clinical Laboratory Fee Schedule
    Prior to January 1, 2018, Medicare paid for clinical diagnostic 
laboratory tests (CDLTs) on the Clinical Laboratory Fee Schedule (CLFS) 
under section 1833(a), (b), and (h) of the Act. Under the previous 
payment system, CDLTs were paid based on the lesser of: (1) the amount 
billed; (2) the local fee schedule amount established by the Medicare 
Administrative Contractor (MAC); or (3) a national limitation amount 
(NLA), which is a percentage of the median of all the local fee 
schedule amounts (or 100 percent of the median for new tests furnished 
on or after January 1, 2001). In practice, most tests were paid at the 
NLA. Under the previous payment system, the CLFS amounts were updated 
for inflation based on the percentage change in the Consumer Price 
Index for All Urban Consumers (CPI-U) and reduced by a productivity 
adjustment and other statutory adjustments but were not otherwise 
updated or changed. Coinsurance and deductibles generally do not apply 
to CDLTs paid under the CLFS.
    Section 1834A of the Act, as established by section 216(a) of the 
Protecting Access to Medicare Act of 2014 (PAMA), required significant 
changes to how Medicare pays for CDLTs under the CLFS. A final rule 
entitled ``Medicare Clinical Diagnostic Laboratory Tests Payment 
System'' (CLFS final rule), which appeared in the Federal Register on 
June 23, 2016 (81 FR 41036), implemented section 1834A of the Act at 42 
CFR part 414, subpart G.
    Under the CLFS final rule, ``reporting entities'' must report to 
CMS during a ``data reporting period'' ``applicable information'' 
collected during a ``data collection period'' for their component 
``applicable laboratories.'' The first data collection period occurred 
from January 1, 2016, through June 30, 2016. The first data reporting 
period occurred from January 1, 2017, through March 31, 2017. On March 
30, 2017, we announced a 60-day period of enforcement discretion for 
the application of the Secretary's potential assessment of civil 
monetary penalties for failure to report applicable information with 
respect to the initial data reporting period.\330\
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    \330\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-March-Announcement.pdf.

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[[Page 61810]]

    In the CY 2018 PFS proposed rule (82 FR 34089 through 34090), we 
solicited public comments from applicable laboratories and reporting 
entities to better understand the applicable laboratories' experiences 
with data reporting, data collection, and other compliance requirements 
for the first data collection and reporting periods. We discussed these 
comments in the CY 2018 PFS final rule (82 FR 53181 through 53182) and 
stated that we would consider the comments for potential future 
rulemaking or guidance.
    As part of the CY 2019 Medicare PFS rulemaking, we finalized two 
changes to the definition of ``applicable laboratory'' at Sec.  414.502 
(see 83 FR 59667 through 59681, 60074; 83 FR 35849 through 35850, 35855 
through 35862). First, we excluded Medicare Advantage plan payments 
under Part C from the denominator of the Medicare revenues threshold 
calculation to broaden the types of laboratories qualifying as an 
applicable laboratory. Second, consistent with our goal of obtaining a 
broader representation of laboratories that could potentially qualify 
as an applicable laboratory and report data, we also amended the 
definition of applicable laboratory to include hospital outreach 
laboratories that bill Medicare Part B using the CMS-1450 14x Type of 
Bill.
2. Payment Requirements for Clinical Diagnostic Laboratory Tests
    In general, under section 1834A of the Act, the payment amount for 
each CDLT on the CLFS furnished beginning January 1, 2018, is based on 
the applicable information collected during the data collection period 
and reported to CMS during the data reporting period and is equal to 
the weighted median of the private payor rates for the test. The 
weighted median is calculated by arraying the distribution of all 
private payor rates, weighted by the volume for each payor and each 
laboratory. The payment amounts established under the CLFS are not 
subject to any other adjustment, such as geographic, budget neutrality, 
or annual update, as required by section 1834A(b)(4)(B) of the Act. 
Additionally, section 1834A(b)(3) of the Act, implemented at Sec.  
414.507(d), provides for a phase-in of payment reductions, limiting the 
amounts the CLFS rates for each CDLT (that is not a new advanced 
diagnostic laboratory test (ADLT) or new CDLT) can be reduced as 
compared to the payment rates for the preceding year. Under the 
original provisions enacted by section 216(a) of PAMA, for the first 3 
years after implementation (CY 2018 through CY 2020), the reduction 
could not be more than 10 percent per year. For the next 3 years after 
implementation (CY 2021 through CY 2023), section 216(a) of PAMA stated 
that the reduction could not be more than 15 percent per year. Under 
sections 1834A(a)(1) and (b) of the Act, as enacted by PAMA, for CDLTs 
that are not ADLTs, the data collection period, data reporting period, 
and payment rate update were to occur every 3 years. As such, the 
second data collection period for CDLTs that are not ADLTs occurred 
from January 1, 2019, through June 30, 2019, and the next data 
reporting period was originally scheduled to take place from January 1, 
2020, through March 31, 2020, with the next update to the Medicare 
payment rates for those tests based on that reported applicable 
information scheduled to take effect on January 1, 2021.
    Section 216(a) of PAMA established a new subcategory of CDLTs known 
as ADLTs, with separate reporting and payment requirements under 
section 1834A of the Act. The definition of an ADLT is set forth in 
section 1834A(d)(5) of the Act and implemented at Sec.  414.502. 
Generally, under section 1834A(d) of the Act, the Medicare payment rate 
for a new ADLT is equal to its actual list charge during an initial 
period of 3 calendar quarters. After the new ADLT initial period, ADLTs 
are paid using the same methodology based on the weighted median of 
private payor rates as other CDLTs. However, under section 1834A(d)(3) 
of the Act, updates to the Medicare payment rates for ADLTs occur 
annually instead of every 3 years.
    Additional information on the private payor rate-based CLFS is 
detailed in the CLFS final rule, which implemented section 1834A of the 
Act as required by PAMA (81 FR 41036 through 41101), and this 
information is also available on the CMS website.\331\
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    \331\ https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs/pama-educational-resources.
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3. Previous Statutory Revisions to the Data Reporting Period and Phase-
In of Payment Reductions
    Beginning in 2019, Congress passed a series of legislation to 
modify the statutory requirements for the data reporting period and 
phase-in of payment reductions under the CLFS. First, section 105(a)(1) 
of the Further Consolidated Appropriations Act, 2020 (FCAA) (Pub. L. 
116-94, December 20, 2019) amended the data reporting requirements in 
section 1834A(a) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by 1 year so that data reporting would be 
required during the period of January 1, 2021, through March 31, 2021, 
instead of January 1, 2020, through March 30, 2020. The 3-year data 
reporting cycle for CDLTs that are not ADLTs would resume after that 
data reporting period. Section 105(a)(1) of the FCAA also specified 
that the data collection period that applied to the data reporting 
period of January 1, 2021, through March 30, 2021, would be the period 
of January 1, 2019, through June 30, 2019, which was the same data 
collection period that would have applied absent the amendments. In 
addition, section 105(a)(2) of the FCAA amended section 1834A(b)(3) of 
the Act regarding the phase-in of payment reductions to provide that 
payments may not be reduced by more than 10 percent as compared to the 
amount established for the preceding year through CY 2020, and for CYs 
2021 through 2023, payment may not be reduced by more than 15 percent 
as compared to the amount established for the preceding year. These 
statutory changes were consistent with our regulations implementing the 
private payor rate-based CLFS at Sec.  414.507(d) (81 FR 41036).
    Subsequently, section 3718 of the Coronavirus Aid, Relief, and 
Economic Security Act, 2020 (CARES Act) (Pub. L. 116-136, March 27, 
2020) further amended the data reporting requirements for CDLTs that 
are not ADLTs and the phase-in of payment reductions under the CLFS. 
Specifically, section 3718(a) of the CARES Act amended section 
1834A(a)(1)(B) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by one additional year, to require data 
reporting during the period of January 1, 2022, through March 31, 2022. 
The CARES Act did not modify the data collection period that applied to 
the next data reporting period for these tests. Thus, under section 
1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of the FCAA, 
the next data reporting period for CDLTs that are not ADLTs would have 
been based on the data collection period of January 1, 2019, through 
June 30, 2019.
    Section 3718(b) of the CARES Act further amended the provisions in 
section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2024 instead of CY 2023. It 
further amended section 1834A(b)(3)(B)(ii) of the Act to specify that 
the applicable percent for CY 2021

[[Page 61811]]

is 0 percent, meaning that the payment amount determined for a CDLT for 
CY 2021 shall not result in any reduction in payment as compared to the 
payment amount for that test for CY 2020. Section 3718(b) of the CARES 
Act further amended section 1834A(b)(3)(B)(iii) of the Act to state 
that the applicable percent of 15 percent would apply for CYs 2022 
through 2024, instead of CYs 2021 through 2023. In the CY 2021 PFS 
rulemaking (85 FR 50210 through 50211; 85 FR 84693 through 84694), in 
accordance with section 105(a) of the FCAA and section 3718 of the 
CARES Act, we proposed and finalized conforming changes to the data 
reporting and payment requirements at 42 CFR part 414, subpart G.
    Section 4 of the Protecting Medicare and American Farmers from 
Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, December 10, 2021) made 
additional revisions to the CLFS requirements for the next data 
reporting period for CDLTs that are not ADLTs and to the phase-in of 
payment reductions under section 1834A of the Act. Specifically, 
section 4(b) of PMAFSCA amended the data reporting requirements in 
section 1834A(a) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by 1 year, so that data reporting would be 
required during the period of January 1, 2023, through March 31, 2023. 
The 3-year data reporting cycle for CDLTs that are not ADLTs would 
resume after that data reporting period. As amended by section 4 of 
PMAFSCA, section 1834A(a)(1)(B) of the Act provided that in the case of 
reporting with respect to CDLTs that are not ADLTs, the Secretary shall 
revise the reporting period under subparagraph (A) such that--(i) no 
reporting is required during the period beginning January 1, 2020, and 
ending December 31, 2022; (ii) reporting is required during the period 
beginning January 1, 2023, and ending March 31, 2023; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 4 of PMAFSCA did not modify the data collection period that 
applies to the next data reporting period for these tests. Thus, under 
section 1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of 
the FCAA, the next data reporting period for CDLTs that are not ADLTs 
(January 1, 2023, through March 31, 2023) would continue to be based on 
the data collection period of January 1, 2019, through June 30, 2019, 
as defined in Sec.  414.502.
    Section 4 of PMAFSCA further amended the provisions in section 
1834A(b)(3) of the Act regarding the phase-in of payment reductions 
under the CLFS. First, it extended the statutory phase-in of payment 
reductions resulting from private payor rate implementation by an 
additional year, that is, through CY 2025. It further amended section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for each of CY 2021 and 2022 is 0 percent, meaning that the payment 
amount determined for a CDLT for CY 2021 and 2022 shall not result in 
any reduction in payment as compared to the payment amount for that 
test for CY 2020. Section 4(a) of PMAFSCA further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent would apply for CYs 2023 through 2025, instead of CYs 2022 
through 2024. In the CY 2023 PFS rulemaking (87 FR 46068 through 46070; 
87 FR 69741 through 69744, 70225), in accordance with section 4 of 
PMAFSCA, we proposed and finalized conforming changes to the data 
reporting and payment requirements at 42 CFR part 414, subpart G.
    Section 4114 of the Consolidated Appropriations Act, 2023 (CAA, 
2023) (Pub. L. 117-328, December 29, 2022) made further revisions to 
the CLFS requirements for the next data reporting period for CDLTs that 
are not ADLTs and to the phase-in of payment reductions under section 
1834A of the Act. Specifically, section 4114(b) of the CAA, 2023 
amended the data reporting requirements in section 1834A(a)(1)(B) of 
the Act to delay the next data reporting period for CDLTs that are not 
ADLTs by 1 year, so that data reporting would be required during the 
period of January 1, 2024, through March 31, 2024, instead of the data 
reporting period of January 1, 2023, through March 31, 2023. The 3-year 
data reporting cycle for CDLTs that are not ADLTs would resume after 
that data reporting period. As amended by section 4114(b) of the CAA, 
2023, section 1834A(a)(1)(B) of the Act now provides that in the case 
of reporting with respect to CDLTs that are not ADLTs, the Secretary 
shall revise the reporting period under subparagraph (A) such that--(i) 
no reporting is required during the period beginning January 1, 2020, 
and ending December 31, 2023; (ii) reporting is required during the 
period beginning January 1, 2024, and ending March 31, 2024; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 4114 of the CAA, 2023 did not modify the data collection 
period that applies to the next data reporting period for CDLTs. Thus, 
under section 1834A(a)(4)(B) of the Act, the next data reporting period 
for CDLTs that are not ADLTs (January 1, 2024, through March 31, 2024) 
would continue to be based on the data collection period of January 1, 
2019, through June 30, 2019, as reflected in the definitions of data 
collection period and data reporting period at Sec.  414.502.
    Section 4114(a) of the CAA, 2023 further amended the provisions in 
section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2026. It further amended 
section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable 
percent for CY 2023 is 0 percent, meaning that the payment amount 
determined for a CDLT for CY 2023 shall not result in any reduction in 
payment as compared to the payment amount for that test for CY 2022. 
Section 4114(a) of the CAA, 2023 further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent will apply for CYs 2024 through 2026, instead of CYs 2023 
through 2025. In the CY 2024 PFS rulemaking (88 FR 79083 through 79087; 
88 FR 79531), in accordance with section 4114 of the CAA, 2023, we 
proposed and finalized conforming changes to the data reporting and 
payment requirements at 42 CFR part 414, subpart G.
4. Additional Statutory Revisions to the Data Reporting Period and 
Phase-In of Payment Reductions
    On November 17, 2023, section 502 of the Further Continuing 
Appropriations and Other Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 
2024) was passed and delayed data reporting requirements for CDLTs that 
are not ADLTs, and it also delayed the phase-in of payment reductions 
under the CLFS from private payor rate implementation under section 
1834A of the Act. Specifically, section 502(b) of the FCAOEA, 2024 
amended the data reporting requirements in section 1834A(a)(1)(B) of 
the Act to delay the next data reporting period for CDLTs that are not 
ADLTs by one year, so that data reporting would be required during the 
period of January 1, 2025, through March 31, 2025, instead of the data 
reporting period of January 1, 2024, through March 31, 2024. The 3-year 
data reporting cycle for CDLTs that are not ADLTs would resume after 
that data reporting period. As amended by section 502(b) of the FCAOEA, 
2024, section 1834A(a)(1)(B) of the Act now provides that in the case 
of reporting

[[Page 61812]]

with respect to CDLTs that are not ADLTs, the Secretary shall revise 
the reporting period under subparagraph (A) such that--(i) no reporting 
is required during the period beginning January 1, 2020, and ending 
December 31, 2024; (ii) reporting is required during the period 
beginning January 1, 2025, and ending March 31, 2025; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    Section 502 of the FCAOEA, 2024 does not modify the data collection 
period that applies to the next data reporting period for these tests. 
Thus, under section 1834A(a)(4)(B) of the Act, the next data reporting 
period for CDLTs that are not ADLTs (January 1, 2025, through March 31, 
2025) will continue to be based on the data collection period of 
January 1, 2019, through June 30, 2019, as reflected in the definitions 
of data collection period and data reporting period at Sec.  414.502.
    Section 502(a) of the FCAOEA, 2024 further amends the provisions in 
section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extends the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2027. It further amends section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for CY 2024 is 0 percent, meaning that the payment amount determined 
for a CDLT for CY 2024 shall not result in any reduction in payment as 
compared to the payment amount for that test for CY 2023. Section 
502(a) of the FCAOEA, 2024 further amends section 1834A(b)(3)(B)(iii) 
of the Act to state that the applicable percent of 15 percent will 
apply for CYs 2025 through 2027.
    As a result of the statutory revisions under the FCAA, CARES Act, 
PMAFSCA, the CAA, 2023, and the FCAOEA, 2024, there have only been two 
data collection periods for CDLTs that are not ADLTs to date. The first 
data collection period for these tests occurred from January 1, 2016, 
through June 30, 2016, and the second occurred from January 1, 2019, 
through June 30, 2019. Thus far, there has been only one data reporting 
period for these tests, which took place from January 1, 2017, through 
March 31, 2017. We have established CLFS payment rates for these tests 
using the methodology established in PAMA only one time, effective 
January 1, 2018, based on the applicable information collected by 
applicable laboratories during the 2016 data collection period and 
reported to CMS during the 2017 data reporting period.
    Additionally, we have applied the phase-in of payment reductions 
for the first 3 years of PAMA implementation, CY 2018 through CY 2020, 
whereby reduction of payment rates could not be more than 10 percent 
per year as compared to the amount established the prior year. However, 
the phase-in of payment reductions set forth in PAMA for years 4 
through 6 after PAMA implementation, whereby payment cannot exceed 15 
percent per year as compared to the amount established the prior year, 
has not yet occurred.
5. Proposed Conforming Regulatory Changes
    In accordance with section 502 of the FCAOEA, 2024, we are 
proposing to make conforming changes to the data reporting and payment 
requirements at 42 CFR part 414, subpart G. Specifically, we are 
proposing to revise the definitions of both the ``data collection 
period'' and ``data reporting period'' at Sec.  414.502 to specify that 
for the data reporting period of January 1, 2025, through March 31, 
2025, the data collection period is January 1, 2019, through June 30, 
2019. We are also proposing to revise Sec.  414.504(a)(1) to indicate 
that initially, data reporting begins January 1, 2017, and is required 
every 3 years beginning January 2025. In addition, we are proposing to 
make conforming changes to our requirements for the phase-in of payment 
reductions to reflect the amendments in section 502(a) of the FCAOEA, 
2024. Specifically, we are proposing to revise Sec.  414.507(d) to 
indicate that for CY 2024, payment may not be reduced by more than 0.0 
percent as compared to the amount established for CY 2023, and for CYs 
2025 through 2027, payment may not be reduced by more than 15 percent 
as compared to the amount established for the preceding year.
    We note that the CYs 2024 and 2025 CLFS payment rates for CDLTs 
that are not ADLTs are based on applicable information collected in the 
data collection period of January 1, 2016, through June 30, 2016. Under 
current law, the CLFS payment rates for CY 2026 through CY 2028 will be 
based on applicable information collected during the data collection 
period of January 1, 2019, through June 30, 2019, and reported to CMS 
during the data reporting period of January 1, 2025, through March 31, 
2025.

E. Medicare Diabetes Prevention Program (MDPP)

    The Centers for Medicare & Medicaid Services' (CMS) Medicare 
Diabetes Prevention Program Expanded Model (hereafter, ``MDPP'' or 
``MDPP expanded model'') is an evidence-based behavioral intervention 
that aims to prevent or delay the onset of type 2 diabetes for eligible 
Medicare beneficiaries diagnosed with prediabetes. MDPP is an expansion 
in duration and scope of the Diabetes Prevention Program (DPP) model 
test, which was initially tested by CMS through a Round One Health Care 
Innovation Award (2012-2016).\332\ MDPP was established in 2017 as an 
``additional preventive service,'' \333\ covered by Medicare and not 
subject to beneficiary cost-sharing, in addition to being available 
once per lifetime to eligible beneficiaries. To facilitate delivery of 
MDPP in a non-clinical community setting (to align with the certified 
DPP model tested by The CMS Innovation Center), CMS created a new MDPP 
supplier type through rulemaking in the CY 2017 PFS final rule (81 FR 
80471), in addition to requiring organizations that wish to participate 
in MDPP to enroll in Medicare separately, even if they are already 
enrolled in Medicare for other purposes.
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    \332\ The Health Care Innovation Awards funds awards to 
organizations that implemented the most compelling new ideas to 
deliver better health, improved care, and lower costs to people 
enrolled in Medicare, Medicaid and Children's Health Insurance 
Program (CHIP), particularly those with the highest health care 
needs. The CMS Innovation Center announced the first batch of 
awardees for the Health Care Innovation Awards on May 8, 2012, and 
the second (final) batch on June 15, 2012. For more, see https://www.cms.gov/priorities/innovation/innovation-models/health-care-innovation-awards.
    \333\ 42 CFR 410.64--Additional preventive services.
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    MDPP is a non-pharmacological behavioral intervention consisting of 
up to 22 intensive sessions furnished over 12 months by a trained Coach 
who provides training on topics that include long-term dietary change, 
increased physical activity, and behavior change strategies for weight 
control and diabetes risk reduction. MDPP sessions must be one hour in 
length and adhere to a Centers for Disease Control and Prevention (CDC) 
approved National Diabetes Prevention Recognition Program (National 
DPP) curriculum.\334\ The primary goal of the MDPP expanded model is to 
help Medicare beneficiaries reduce their risk for developing type 2 
diabetes by achieving at least 5 percent weight loss from the first 
core session (81 FR 80465).
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    \334\ https://www.cdc.gov/diabetes/prevention/resources/curriculum.html.
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    Eligible organizations seeking to furnish MDPP began enrolling in 
Medicare as MDPP suppliers on January 1, 2018, and began furnishing 
MDPP on April 1, 2018. As of May 13, 2024, there

[[Page 61813]]

were 301 approved MDPP suppliers.\335\ The most recent MDPP evaluation 
report, reflected that between April 2018 and December 31, 2021, 4,848 
Medicare beneficiaries participated in MDPP, including 2,325 FFS 
beneficiaries and 2,523 MA beneficiaries.\336\ Through the Diabetes 
Prevention Recognition Program (DPRP), CDC administers a national 
quality assurance program recognizing eligible organizations that 
furnish the National DPP through its evidence based DPRP 
Standards,\337\ which are updated every 3 years. The CDC established 
the DPRP in 2012 and possesses significant experience assessing the 
quality of program delivery by organizations throughout the United 
States, applying a comprehensive set of national quality standards. For 
further information on the DPP model test,\338\ the CDC's National 
DPP,\339\ and DPRP Standards,\340\ please refer to the CY 2017 (81 FR 
80471) and CY 2018 PFS (82 FR 52976) final rules and related websites.
---------------------------------------------------------------------------

    \335\ Medicare Provider Enrollment, Chain, and Ownership System 
(PECOS). Unpublished data.
    \336\ RTI International. Evaluation of the Medicare Diabetes 
Prevention Program. November 2022. https://www.cms.gov/priorities/innovation/data-and-reports/2022/mdpp-2ndannevalrpt.
    \337\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \338\ Health Care Innovation Awards. https://www.cms.gov/priorities/innovation/innovation-models/health-care-innovation-awards.
    \339\ https://www.cdc.gov/diabetes/prevention/index.html.
    \340\ https://www.cdc.gov/diabetes/prevention/pdf/dprp-standards.pdf.
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    The Public Health Emergency (PHE) for COVID-19 prompted changes to 
allow virtual delivery of the MDPP, among other changes (85 FR 84830 
through 84841). Changes to MDPP in the CY 2024 PFS final rule (88 FR 
78818) included a simplified payment structure to allow for fee-for-
service (FFS) payments for beneficiary attendance while retaining the 
performance-based payments for diabetes risk reduction (that is, weight 
loss). Beginning January 1, 2024, payments are made to an MDPP supplier 
if an MDPP beneficiary attends any core session in the first 6 months 
or core maintenance session in the second 6 months, allowing payment 
for up to 22 sessions in a 12-month timeframe. The CY 2024 PFS final 
rule also extended certain PHE flexibilities, including the option to 
deliver some or all MDPP sessions via distance learning and for 
beneficiaries to virtually self-report weight for MDPP distance 
learning sessions, until December 31, 2027 (88 FR 79241).
    CDC released the 2024 DPRP Standards \341\ to replace the 2021 DPRP 
Standards in June 2024. To align MDPP with the 2024 CDC DPRP Standards, 
we are proposing conforming changes to align with CDC delivery modes. 
These changes are expected to reduce administrative burden, ensure 
compliance with existing MDPP regulations, and streamline data 
reporting for MDPP suppliers. In this year's rule, we are also 
proposing an additional option for self-reporting weight in an MDPP 
distance learning session, removing the MDPP bridge payment, and making 
minor edits to align current rule language pertaining to MDPP with 
previous rulemaking.
---------------------------------------------------------------------------

    \341\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

1. Proposed Changes to Sec.  410.79 by Amending Paragraphs (b) and 
(d)(1)
    We established MDPP as an expanded model in 2018 based on a Health 
Care Innovation Award (HCIA) to the National Young Men's Christian 
Association (YMCA) of the USA (Y-USA), who tested the CDC's National 
DPP in the Medicare population through their network of YMCAs in 
multiple U.S. markets (DPP model test).\342\ The DPP model test 
successfully met statutory criteria for model expansion,\343\ 
demonstrating 5 percent weight loss from their starting weight by 
participants (a key metric of the program's success) along with 
statistically significant reductions in Medicare spending, emergency 
department (ED) visits, and inpatient stays.\344\ The MDPP expanded 
model was implemented through the rulemaking process in two phases, in 
the CY 2017 PFS (81 FR 80459 through 80483) and CY 2018 PFS final rules 
(82 FR 53234 through 53339).
---------------------------------------------------------------------------

    \342\ L Hinnant, S Razi, R Lewis, A Sun, M Alva, T Hoerger et 
al. Evaluation of the Health Care Innovation Awards: Community 
Resource Planning, Prevention, and Monitoring, Annual Report 2015. 
RTI International. March 2016; https://www.cms.gov/priorities/innovation/files/reports/hcia-ymcadpp-evalrpt.pdf.
    \343\ Paul Spitalnic. Certification of Medicare Diabetes 
Prevention Program. Mar. 14, 2016. https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Diabetes-Prevention-Certification-2016-03-14.pdf.
    \344\ Rojas Smith. L., Amico, P., Hoerger, T. J., Jacobs, S., 
Payne. J., & Renaud, J.: Evaluation of the Health Care Innovation 
Awards: Community Resource Planning, Prevention, and Monitoring 
Third Annual Report Addendum--August 2017 https://downloads.cms.gov/files/cmmi/hcia-crppm-thirdannrptaddendum.pdf (pp. 858-914).
---------------------------------------------------------------------------

    MDPP went into effect in 2018, with supplier enrollment starting 
January 1, 2018, and beneficiary enrollment starting April 1, 2018 (82 
FR 53237). After nearly 6 years of implementation, through the CY 2024 
PFS final rule, we finalized updates to MDPP based on lessons learned 
since the expanded model's launch, including updates to definitions and 
the core services period and extended the flexibilities allowed under 
the PHE for COVID-19 for a period of 4 years (88 FR 79241).
    This year we propose to make conforming changes to Sec.  410.79(b), 
Conditions of Coverage, to align with the 2024 CDC DPRP Standards.\345\ 
In the CY 2018 PFS final rule, we stated our intention to align MDPP 
with CDC DPRP Standards whenever possible (82 FR 53245). Several 
commenters encouraged CMS to consider adopting the same definitions for 
MDPP as CDC uses for the National DPP, including distance learning, 
online, and combination modalities to better align MDPP and the 
National DPP. Commenters indicated that the addition of definitions 
that are consistent with the CDC's definitions will reduce confusion 
about MDPP (88 FR 79247). To increase this alignment, we worked closely 
with CDC to update the National DPP and MDPP for CY 2024 final rule (88 
FR 79240 through 79256), as well as the 2024 DPRP Standards.\346\ We 
agree in aligning terminology where applicable.
---------------------------------------------------------------------------

    \345\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \346\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    The CY 2024 PFS final rule introduced and defined ``distance 
learning'' and ``combination delivery'' for MDPP and provided a 
definition for ``online delivery'' (88 FR 79243). The 2024 CDC DPRP 
Standards include the following delivery modes with definitions: ``in-
person,'' ``distance learning (live),'' ``in-person with a distance 
learning component,'' ``online (non-live),'' and ``combination with an 
online component.'' \347\ These delivery

[[Page 61814]]

modes also serve as organization codes for CDC DPRP recognition. 
Through this proposed rule, we are proposing to amend Sec.  410.79(b) 
to add a new term for MDPP, ``in-person with a distance learning 
component,'' defined as ``MDPP sessions that are delivered in person by 
trained Coaches where participants have the option of attending 
sessions via MDPP distance learning. These sessions must be furnished 
in a manner consistent with DPRP Standards for in-person and distance 
learning sessions.'' The following examples of an acceptable delivery 
model for the ``in-person with a distance learning component'' delivery 
mode are provided in the 2024 CDC DPRP Standards: a combination of in-
person and distance learning during the core (first 6 months) and core 
maintenance (second 6 months) phases; some participants within a cohort 
using the in-person delivery mode and some participants using the 
distance learning delivery mode; or participants choosing from session 
to session which mode (in-person or distance learning) they wish to 
use.\348\
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    \347\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
    \348\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    To further align with 2024 CDC DPRP Standards, we also propose to 
add a new term at Sec.  410.79(b), ``combination with an online 
component,'' defined as ``sessions that are delivered as a combination 
of online (non-live) with in-person or distance learning. These 
sessions must be furnished in a manner consistent with the DPRP 
Standards for the modality being used.'' Furthermore, we propose to 
remove the ``combination delivery'' term from Sec.  410.79(b), which 
was added in the CY 2024 PFS final rule (88 FR 79241) and is defined as 
``MDPP sessions that are delivered by trained Coaches and are furnished 
in a manner consistent with the DPRP Standards for distance learning 
and in-person sessions for each individual participant.'' We believe 
that the MDPP ``combination delivery'' term and definition are no 
longer needed with the addition of ``in-person with a distance learning 
component,'' which includes any combination of in-person and distance 
learning sessions.
    Lastly, we are proposing to modify the current term and definition 
for ``online delivery'' at Sec.  410.79(b), also added by the CY 2024 
PFS final rule (88 FR 79241), to align with the 2024 CDC DPRP 
Standards.\349\ First, we are proposing to update the term from 
``online delivery'' to ``online'' to align with both the MDPP 
``distance learning'' term and CDC DPRP ``online (non-live)'' term. We 
propose to revise the definition for the MDPP ``online'' delivery mode 
to provide that sessions that are delivered one hundred percent (100%) 
through the internet via phone, tablet, or laptop in an asynchronous 
(non-live) classroom where participants are experiencing the content on 
their own time without a live (including non-artificial intelligence 
(AI)) Coach teaching the content. These sessions must be furnished in a 
manner consistent with the DPRP Standards for online sessions. Live 
Coach interaction must be offered to each participant during weeks when 
the participant has engaged with content. Emails and text messages can 
count toward the requirement for live Coach interaction if there is bi-
directional communication between the Coach and participant. Chat bots 
and AI forums do not count as live Coach interaction. This modified 
definition adds the term ``non-live'' and further clarifies that Chat 
bots and AI forums do not constitute live interaction.
---------------------------------------------------------------------------

    \349\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    In summary, we are revising the ``online'' definition and adding 
the ``combination with an online component'' term and definition to 
help align terminology between MDPP and DPRP and prevent confusion 
about acceptable CDC delivery modes for MDPP. We are confirming that 
only MDPP ``in-person,'' ``distance learning,'' and ``in-person with a 
distance learning component'' delivery modes, can be used during the 
extension of the flexibilities allowed under the COVID-19 PHE, as 
finalized in the CY 2024 PFS final rule (88 FR 79241), not ``online'' 
nor ``combination with an online component'' delivery modes.
    Furthermore, in the CY 2021 PFS final rule, we established that 
virtual sessions performed under flexibilities finalized in that rule 
could only be performed by MDPP suppliers who offered in-person 
services (85 FR 84830). For the MDPP Extended flexibilities period, we 
finalized in the CY 2024 PFS final rule to limit virtual delivery to 
the CDC DPRP definition of ``distance learning'' (88 FR 79243). We 
stated that the MDPP Extended flexibilities do not include online 
delivery (or asynchronous virtual), as defined in the CDC DPRP 
Standards through the ``online'' modality, including virtual make-up 
sessions (88 FR 79244). A make-up session in MDPP was described in CY 
2018 PFS final rule (82 FR 53241) and at Sec.  410.79(a) as ``a core 
session or a core maintenance session furnished to an MDPP beneficiary 
when the MDPP beneficiary misses a regularly scheduled core session or 
core maintenance session.'' The 2024 CDC DPRP Standards allow for 
National DPP make-up sessions to be furnished using any delivery mode, 
including online.\350\ In alignment with the CY 2024 final rule, we are 
proposing to amend Sec.  410.79(d)(1) to clarify that MDPP make-up 
sessions can only be furnished using the modalities permitted by the CY 
2024 final rule for MDPP sessions: distance learning and in-person 
delivery (88 FR 79243 through 79246). Specifically, we propose to add 
the following: ``MDPP make-up sessions may only use in-person or 
distance learning delivery.''
---------------------------------------------------------------------------

    \350\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    We are proposing to amend Sec.  410.79(b) and (d)(1) and seek 
comment on these proposals.
2. Proposed Changes to Sec.  410.79(e)(3)(iii)
    As part of MDPP's Emergency Policy finalized in the CY 2021 PFS 
final rule, we allowed for virtual weight collection (88 FR 79249). We 
summarized our policies for alternatives to the requirement for in-
person weight collection at Alternatives to the requirement for in-
person weight measurement (Sec.  410.79(e)(3)(iii)), which permit an 
MDPP supplier to obtain weight measurements for MDPP beneficiaries for 
the baseline weight and any weight loss-based performance achievement 
goals in the following manner: (1) via digital technology, such as 
scales that transmit weights securely via wireless or cellular 
transmission; or (2) via self-reported weight measurements from the at-
home digital scale of the MDPP beneficiary (88 FR 79243). We stated 
that self-reported weights must be obtained during live, synchronous 
online video technology, such as video chatting or video conferencing, 
wherein the MDPP Coach observes the beneficiary weighing themselves and 
views the weight indicated on the at-home digital scale. Alternatively, 
the MDPP beneficiary may self-report their weight by submitting to the 
MDPP supplier a date-stamped photo or video recording of the 
beneficiary's weight, with the

[[Page 61815]]

beneficiary visible in their home. The photo or video must clearly 
document the weight of the MDPP beneficiary as it appears on the 
digital scale on the date associated with the billable MDPP session. 
This flexibility has allowed suppliers to bill for MDPP beneficiaries 
achieving weight loss performance goals.
    Overall, commenters on the proposed MDPP Extended flexibilities in 
the CY 2024 PFS rule were very supportive of CMS continuing to allow 
virtual weight collection (88 FR 79240 through 79256). However, we 
received several comments regarding barriers suppliers experienced 
relating to virtual weight collection during the PHE for COVID-19. For 
example, several commenters recommended that CMS no longer require 
date-stamped photos to document the self-reported beneficiary weights 
(88 FR 79249). The commenters also reported that many of their 
beneficiaries are unable to take a picture while standing on their home 
scales due to risk of injury and physical health limitations. 
Commenters stated that this risk has prevented organizations from 
submitting claims accurately, since they have several participants who 
live alone and attend sessions via distance learning (88 FR 79249). We 
acknowledged in our responses to these comments that some MDPP 
beneficiaries may lack the technology or capacity to provide a date-
stamped photograph to document their body weight measurements. We 
stated that in situations in which beneficiaries may be unable to self-
report their weight according to the MDPP conditions of coverage, 
suppliers may want to consider collecting weight measurements from the 
MDPP beneficiary in person.
    We have continued to hear from MDPP suppliers and interested 
parties that the requirement to submit a photo with both the 
beneficiary's weight on the scale and the beneficiary visible is not 
physically possible. This problem has become even more relevant in CY 
2024 as suppliers continue to expand distance learning to help reach 
beneficiaries in rural and underserved areas, sometimes across state 
lines. We previously responded that for situations in which 
beneficiaries may be unable to self-report their weight according to 
the MDPP conditions of coverage, suppliers may want to consider 
collecting weight measurements from the MDPP beneficiary in person (88 
FR 79249). However, this may not be a practical option for 
beneficiaries who have chosen distance learning based on not living 
within driving distance from an MDPP supplier location. Therefore, we 
propose revising Sec.  410.79(e)(3)(iii)(C) to provide that self-
reported weights must be obtained during live, synchronous online video 
technology, such as video chatting or video conferencing, wherein the 
MDPP Coach observes the beneficiary weighing themselves and views the 
weight indicated on the at-home digital scale, or the MDPP supplier 
receives 2 (two) date-stamped photos or a video recording of the 
beneficiary's weight, with the beneficiary visible on the scale, 
submitted by the MDPP beneficiary to the MDPP supplier. Photo or video 
must clearly document the weight of the MDPP beneficiary as it appears 
on their digital scale on the date associated with the billable MDPP 
session. If choosing to submit 2 photos, one photo must show the 
beneficiary's weight on the digital scale, the second photo must show 
the beneficiary visible in their home, and both photos must be date-
stamped. Similar to options in paragraphs (e)(3)(iii)(A) and (B) in 
Sec.  410.79, this revised option in paragraph (e)(30(iii)(C) is only 
available for MDPP beneficiaries reporting their weight for an MDPP 
distance learning session. We are continuing to require the date-stamp 
on both photos to ensure program integrity in the virtual setting. We 
are proposing to amend Sec.  410.79(e)(3)(iii). We seek comment on 
these proposals.
    Lastly, we finalized in the CY 2021 PFS final rule that the 
flexibilities under Sec.  410.79(e)(3)(iii) and (iv) would only apply 
only to MDPP suppliers that have and maintain CDC DPRP ``in-person'' 
recognition (85 FR 84831). In the CY 2024 PFS final rule, we extended 
flexibilities allowed during the PHE for COVID-19 or 4 years, or 
through December 31, 2027 (88 FR 79241). We also confirmed that that 
the Extended flexibilities would continue to only apply to MDPP 
suppliers that have and maintain CDC DPRP ``in-person'' recognition, 
and that virtual only suppliers were not permitted to furnish the Set 
of MDPP services because MDPP beneficiaries may elect to return to in-
person services, and MDPP suppliers need to be able to accommodate 
their request (88 FR 79248).
    To reduce confusion as MDPP suppliers transition to the new CDC 
DPRP recognition for ``in-person with a distance learning component,'' 
we are clarifying that MDPP suppliers can have and maintain either 
CDC's ``in-person'' or the new ``in-person with a distance learning 
component'' CDC DPRP code. The 2024 CDC DPRP Standards, implemented in 
June 2024, introduced and defined the new ``in-person with a distance 
learning component'' modality and associated code.\351\ This new 
modality and code for recognition include a combination of in-person 
and distance learning delivery, which are both modalities currently 
permitted until December 31, 2027 (88 FR 79241). The new MDPP term and 
definition for ``in person with a distance learning component'' that we 
are proposing to align with the 2024 CDC DPRP Standards will replace 
the current MDPP ``combination delivery'' term, which we are proposing 
to remove in this rulemaking. Aligning terminology for delivery of MDPP 
that involves a combination of in-person and distance learning delivery 
with the 2024 CDC DPRP Standards would reduce administrative burden to 
MDPP suppliers and allow them to streamline CDC DPRP data submission 
(that is, they will not have to submit data for two CDC organization 
codes). MDPP suppliers will not be required to switch to this new code 
if they already have an in-person code; it is only being made available 
for their convenience.
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    \351\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

3. Proposed Changes to Sec.  414.84(a), (c), (d), and (e)
    We further propose to amend Sec.  414.84(a), (d), and (e) to remove 
the MDPP bridge payment. This payment is no longer necessary in MDPP's 
CY 2024 FFS payment structure for attendance and could introduce the 
potential for fraud, waste, or abuse.
    The CY 2017 PFS final rule confirmed that a beneficiary may change 
MDPP suppliers at any time (81 FR 80470). The MDPP bridge payment was 
introduced in the CY 2018 PFS final rule at Sec.  414.84(a) and is 
defined as follows: ``Bridge payment means a one-time payment to an 
MDPP supplier for furnishing its first MDPP session to an MDPP 
beneficiary who has previously received one or more MDPP services from 
a different MDPP supplier'' (81 FR 80470). The CY 2018 PFS final rule 
specified that an MDPP supplier that had previously been paid either a 
bridge payment or a performance payment for an MDPP beneficiary was not 
eligible to be paid a bridge payment for that beneficiary, along with 
other conditions. An MDPP supplier may only receive one bridge payment 
per MDPP beneficiary, however, there is no limit on how many MDPP 
suppliers can receive a bridge payment for the same beneficiary (82 FR 
53361).

[[Page 61816]]

    The CY 2018 PFS final rule also noted that the MDPP bridge payment 
was intended to be similar (that is, the same amount) to the payment 
for the first core session furnished by the previous supplier and would 
be received only if the subsequent supplier did not furnish the first 
core session to the MDPP beneficiary (82 FR 53361). In the performance-
based payment structure, the bridge payment was intended to prevent 
scenarios where subsequent MDPP suppliers would receive no payment for 
sessions furnished to MDPP beneficiaries who changed suppliers during 
the MDPP services period in the absence of the bridge payment. We 
stated that the bridge payment was not intended to be a performance 
payment; rather, it would account for the financial risk a subsequent 
MDPP supplier took on by furnishing services to a beneficiary changing 
MDPP suppliers during the MDPP services period (82 FR 53293). However, 
such risk is not applicable in an FFS payment structure.
    Along with the performance payments for weight loss, the MDPP 
bridge payment was retained in the CY 2024 Fee Schedule for MDPP (88 FR 
79252). Currently, a subsequent MDPP supplier can receive both an 
attendance payment and a bridge payment for the first session attended 
by an MDPP beneficiary who switches suppliers. For example, in CY 2024, 
if a beneficiary changed suppliers on MDPP session 8, the subsequent 
supplier could receive both the attendance payment for session 8 ($25) 
and the bridge payment ($25). The bridge payment for this beneficiary 
could only be received by this supplier once, but if the beneficiary 
changed suppliers again (for example, on session 17), the new (second) 
subsequent supplier could also receive the bridge payment in addition 
to the payment for session 17 ($25). This could continue as many times 
as the beneficiary changed suppliers until they have the maximum of 22 
sessions paid, across all suppliers, with no maximum on the total 
number of bridge payments. In the CY 2018 PFS final rule, we noted some 
program integrity risk that organizations could coordinate to bill 
multiple bridge payments that would ultimately increase total MDPP 
payments to separately enrolled MDPP suppliers to serve the financial 
interests of the umbrella organization. This scenario could occur if 
MDPP suppliers systematically encouraged beneficiaries to change 
suppliers for the purpose of being paid the bridge payment (82 FR 
53294). Due to these reasons, we propose to amend Sec.  414.84(a), (d), 
and (e) to remove reference to, and requirements of the MDPP bridge 
payment. Per our Regulatory Impact Analysis, we expect removal of the 
MDPP bridge payment to be budget neutral for the Medicare program. We 
seek comment on these proposals.
    Additionally, at Sec.  414.84(c), facilitate Medicare 
Administrative Contractors (MACs) in processing claims for same day 
make-up sessions in MDPP, we are proposing to require MDPP suppliers to 
append an existing claim modifier to any claim for G9886 or G9887 that 
indicates a make-up session that was held on the same day as a 
regularly scheduled MDPP session. The CY 2018 PFS final rule permits an 
MDPP beneficiary to have one make-up session on the same day as a 
regularly scheduled session and for a beneficiary to have one make-up 
session per week (82 FR 53360), consistent with CDC DPRP 
Standards.\352\ In the CY 2024 PFS final rule, we stated that we wanted 
to encourage suppliers to schedule make-up sessions on days other than 
the same day of a regularly scheduled session to avoid claims being 
rejected or denied under the new CY 2024 FFS payment schedule and to 
allow beneficiaries to receive the benefit as intended by having access 
to the full 12 months MDPP service period to build the skills needed to 
reduce their risk for diabetes (88 FR 79250).
---------------------------------------------------------------------------

    \352\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
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    However, since then, we have heard from MDPP suppliers that same 
day make-up sessions are an essential flexibility that assist an MDPP 
beneficiary in staying on track with the curriculum and their cohort 
after an MDPP beneficiary needs to miss a regularly scheduled session. 
To help prevent potential claim rejections for duplicate services, we 
are proposing to require MDPP suppliers to append a modifier to the 
applicable G-code for the second session held on the same day as a 
regularly scheduled MDPP session. Specifically, we are proposing to add 
Sec.  414.84(c)(4), which states that ``Current Procedural Terminology 
(CPT) Modifier 79 (repeat services by same physician) must be appended 
to any claim for G9886 or G9887 to identify a MDPP make-up session that 
was held on the same day as a regularly scheduled MDPP session.'' We 
believe this new requirement would contribute minimal additional 
complexity to the payment structure while creating a flexibility that 
would have value for the program, particularly for beneficiaries in the 
core phase of MDPP who may not have transportation to 2 in-person 
sessions in one week or have the flexibility to make time on more than 
one day per week for a distance learning session. Additionally, we 
believe the existing limitation on one make-up session per week would 
be sufficient to ensure program benefit because whether the make-up 
session is held on the same day, or the next day would likely have 
minimal impact on program duration and intensity. To clarify, we are 
proposing that the CPT Modifier 79 would only need to be appended to 
the HCPCS code (G9886 or G9887) that identifies the session that 
included content from a previously held session that serves as a makeup 
session for the session the MDPP beneficiary missed, which was held on 
the same day as a regularly scheduled MDPP session. This modifier would 
not need to be included on claims for make-up sessions held on 
different days than regularly scheduled MDPP sessions.
    Lastly, with the removal of Sec.  414.84(d), we are proposing to 
amend the current Sec.  414.84(e) to be the new Sec.  414.84(d). We are 
also removing from the new Sec.  414.84(d) the reference to updating 
the MDPP bridge payment, as the bridge payment has been proposed to be 
removed from this CY 2025 Physician Fee Schedule rulemaking.
    We also seek comment on these proposals.
4. Aligning language with previous rulemaking in Sec. Sec.  410.79, 
424.205, and 414.84
    We are proposing minor edits throughout Sec. Sec.  410.79, 424.205, 
and 414.84 to update outdated references and align with previous 
rulemaking pertaining to MDPP terminology, payment structure, and 
requirements. This includes updating references to the performance-
based payments for attendance and ongoing maintenance sessions, which 
were both removed from the 2024 MDPP Fee Schedule by the CY 2024 PFS 
final rule (88 FR 79252), as well as including the clarification that 
suppliers can offer MDPP sessions via distance learning, a flexibility 
extended by the CY 2024 PFS final rule (88 FR 79241), where applicable.
    At Sec.  410.79(b), we propose to update the definition for the 
``Set of MDPP services'' to remove the reference to ``ongoing 
maintenance'' sessions. All references to and requirements for the MDPP 
``ongoing maintenance'' phase were removed by the CY 2024 PFS finale 
rule (88 FR 79256). We are revising this definition to read: ``Set of 
MDPP services means the series of

[[Page 61817]]

MDPP sessions, composed of core sessions and core maintenance sessions, 
and subject to paragraph (c)(3) of this section offered over the course 
of the MDPP services period.''
    We also propose Sec.  410.79(e)(3)(iv)(F)(3) to state that no more 
than 12 virtual sessions offered monthly during the ongoing maintenance 
session intervals, months 13 through 24 for beneficiaries enrolled 
before January 1, 2022.
    This proposed revision adds the date that the CY 2022 PFS final 
rule was effective, which is the date when no more MDPP beneficiaries 
could enroll in ongoing maintenance sessions (86 FR 65317).
    At Sec.  410.79(e)(3)(v)(F)(2), we propose to remove the reference 
to weight measurement at an ongoing maintenance session, so the 
paragraph provides that for an MDPP beneficiary who began receiving the 
Set of MDPP services on or after January 1, 2021, has suspended 
services during an applicable 1135 waiver event, the MDPP supplier must 
use the baseline weight recorded at the beneficiary's first core 
session.
    At Sec.  424.205(c)(10), we propose revision to specify in-person 
and distance learning delivery for MDPP core and core maintenance 
sessions, to provide that, except as allowed under Sec.  424.205(d)(8), 
the MDPP supplier must offer an MDPP beneficiary no fewer than all of 
the following:
     16 in-person or distance learning core sessions no more 
frequently than weekly for the first 6 months of the MDPP services 
period, which begins on the date of attendance at the first such core 
session.
     1 in-person or distance learning core maintenance session 
each month during months 7 through 12 (6 months total) of the MDPP 
services period.
    At Sec.  424.205(f)(1)(ii), we propose to remove reference to the 
HICN, as Medicare is now using Medicare Beneficiary Identifiers 
(MBIs),\353\ to state: Basic beneficiary information for each MDPP 
beneficiary in attendance, including but not limited to beneficiary 
name, MBI, and age.
---------------------------------------------------------------------------

    \353\ https://www.cms.gov/training-education/partner-outreach-resources/new-medicare-card/medical-beneficiary-identifiers-mbis.
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    At Sec.  424.205(f)(2)(i), we propose to replace ``whether a core 
session, a core maintenance session, an in-person make-up session, or a 
virtual make-up session'' with the two currently permitted types of 
sessions (that is, in-person and distance learning), to state: 
Documentation of the type of session (in-person or distance learning).
    At Sec.  424.205(f)(5), we propose to remove the references to the 
MDPP performance-based payments for attendance in paragraphs (f)(5)(i) 
and (ii) because these payments were removed in the CY 2024 Fee 
Schedule for MDPP (88 FR 79252). In their place, we are adding 
references to the performance payment for the required minimum 5 
percent weight loss (82 FR 53289). We also propose to correct the 
references to Sec.  414.84(b), and also to remove the reference to the 
ongoing maintenance sessions from 424.205(f)(5)(iv).
    At Sec.  414.84(b)(1), we propose to clarify that the performance 
payment for the required minimum weight loss is made for 5 percent 
weight loss, as reflected in the CY 2024 Fee Schedule (88 FR 79252), 
and can be made for a distance learning, as well as an in-person MDPP 
session, as allowed by the COVID-19 PHE flexibilities (85 FR 84830 
through 84841) and their extension (88 FR 79241). Performance Goal 1 
provides that it achieves the required minimum 5-percent weight loss. 
CMS makes a performance payment to an MDPP supplier for an MDPP 
beneficiary who achieves the required minimum weight loss as measured 
in-person or during a distance learning session during a core session 
or core maintenance session furnished by that supplier.
    Similarly, we propose to revise Sec.  414.84(b)(2) for 9 percent 
weight loss. Performance Goal 2 provides that it achieves 9-percent 
weight loss. CMS makes a performance payment to an MDPP supplier for an 
MDPP beneficiary who achieves at least a 9-percent weight loss as 
measured in-person or in a distance learning session during a core 
session or core maintenance session furnished by that supplier.
    We seek comment on these proposals.

F. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished By Opioid Treatment Programs (OTPs)

1. Background
    Section 2005 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment (SUPPORT) for Patients and Communities 
Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018) established a new 
Medicare Part B benefit for OUD treatment services furnished by OTPs 
during an episode of care beginning on or after January 1, 2020. In the 
CY 2020 PFS final rule (84 FR 62630 through 62677 and 84 FR 62919 
through 62926), we implemented Medicare coverage and provider 
enrollment requirements and established a methodology for determining 
the bundled payments for episodes of care for the treatment of OUD 
furnished by OTPs. We also established in the CY 2020 PFS final rule 
new codes and finalized bundled payments for weekly episodes of care 
that include methadone, oral buprenorphine, implantable buprenorphine, 
injectable buprenorphine or naltrexone, and non-drug episodes of care, 
as well as add-on codes for intake and periodic assessments, take-home 
dosages for methadone and oral buprenorphine, and additional 
counseling.
    Since the CY 2020 PFS final rule, we have made several refinements 
and expansions to services covered under the Medicare OTP benefit. 
Specifically, we adopted new add-on codes for take home supplies of 
nasal naloxone and injectable naloxone (85 FR 84683 through 84692) in 
the CY 2021 PFS final rule, and a new add-on code and payment for a 
higher dose of nasal naloxone (86 FR 65340 and 65341) in the CY 2022 
PFS final rule. We have also finalized various telecommunications 
flexibilities, including: to allow OTPs to furnish individual and group 
therapy and substance use counseling via two-way interactive audio-
video telecommunications (84 FR 62630 through 62677 and 84 FR 62919 
through 62926) in the CY 2020 PFS final rule, and via audio-only 
telephone calls when audio-video telecommunications are not available 
to the beneficiary (86 FR 65342) in the CY 2022 PFS final rule; to 
allow the OTP intake add-on code to be furnished via two-way 
interactive audio-video telecommunications when billed for the 
initiation of treatment with buprenorphine, and via audio-only 
telecommunications when audio-video telecommunications are not 
available to the beneficiary, to the extent that these technologies are 
authorized by the Drug Enforcement Administration (DEA) and the 
Substance Abuse and Mental Health Services Administration (SAMHSA) at 
the time the service is furnished (87 FR 69775 through 69777) in the CY 
2024 final rule; and to allow periodic assessments to be furnished via 
two-way interactive audio-video telecommunications as clinically 
appropriate (85 FR 84690) in the CY 2021 final rule. OTPs may furnish 
these aforementioned services via telecommunications systems provided 
all other applicable requirements are met. Additionally, for the 
purposes of the geographic adjustment, we have clarified, in the CY 
2023 final rule, that services furnished via OTP mobile units will be 
treated as if the services were furnished in the physical location of 
the

[[Page 61818]]

OTP for purposes of determining payments to OTPs under the Medicare OTP 
bundled payment codes and/or add-on codes, as long as services are 
medically reasonable and necessary and comply with SAMHSA and DEA 
guidance (87 FR 69768 through 69777). Lastly, we have made a few 
changes to various pricing methodologies under the OTP benefit in the 
2023 PFS final rule, including: revising our methodology for pricing 
the drug component of the methadone weekly bundle and the add-on code 
for take-home supplies of methadone by using the Producer Price Index 
(PPI) for Pharmaceuticals for Human Use (Prescription) to better 
reflect the changes in methadone costs for OTPs over time (87 FR 69768 
through 69777); and modifying the payment rate for individual therapy 
in the non-drug component of the bundled payment to base the payment 
rate on the rate for longer therapy sessions that better account for 
the greater severity of needs for patients with an OUD (87 FR 69768 
through 69777).
    More recently, for CY 2024, CMS made further modifications and 
expansions to covered services for the treatment of OUD by OTPs. In the 
CY 2024 PFS final rule (88 FR 79089 through 79093), CMS finalized an 
extension to allow periodic assessments to be furnished audio-only 
through the end of CY 2024 when video is not available to the extent 
that use of audio-only communications technology is permitted under the 
applicable SAMHSA and DEA requirements at the time the service is 
furnished, and all other applicable requirements are met. In the final 
rule, we noted that extending these flexibilities another year would 
allow CMS time to further consider this issue, including whether 
periodic assessments should continue to be furnished using audio-only 
communication technology following the end of CY 2024. Lastly, in the 
CY 2024 Outpatient Prospective Payment System (OPPS) final rule (88 FR 
81845 through 81858), CMS finalized an add-on code for intensive 
outpatient program (IOP) services furnished by OTPs for the treatment 
of OUD and added a new paragraph (ix) in the definition of ``Opioid 
disorder treatment service'' at Sec.  410.67(b) to describe such 
services. We stated that Medicare would pay for IOP services provided 
by OTPs if each service is medically reasonable and necessary and not 
duplicative of any service paid for under any bundled payments billed 
for an episode of care in a given week, and other applicable 
requirements are met. We believe that payment for IOP services will 
improve continuity of care between different treatment settings and 
levels of care, and further promote health equity for Medicare 
beneficiaries that may face barriers to accessing treatment, such as 
racial/ethnic minorities and/or beneficiaries aged 65 or older. We 
continue to monitor utilization of OUD treatment services furnished by 
OTPs to ensure that Medicare beneficiaries have appropriate access to 
care. For CY 2025, we are proposing several modifications to the 
policies governing Medicare coverage and payment for OUD treatment 
services furnished by OTPs.
2. Telecommunication Flexibilities for Periodic Assessments and 
Initiation of Treatment With Methadone
    We have finalized several flexibilities for OTPs regarding the use 
of telecommunications, both during the Public Health Emergency (PHE) 
for the Coronavirus Disease 2019 (COVID-19) and outside of the PHE. In 
the CY 2020 PFS final rule, we finalized a policy allowing OTPs to 
furnish substance use counseling and individual and group therapy via 
two-way interactive audio-video communication technology. In the 
interim final rule with comment period (IFC) entitled ``Medicare and 
Medicaid Programs: Policy and Regulatory Revisions in Response to the 
COVID-19 Public Health Emergency,'' which appeared in the April 6, 2020 
Federal Register (85 FR 19258), we revised paragraphs (iii) and (iv) in 
the definition of opioid use disorder treatment service at Sec.  
410.67(b) on an interim final basis to allow the therapy and counseling 
portions of the weekly bundles, as well as the add-on code for 
additional counseling or therapy, to be furnished using audio-only 
telephone calls rather than via two-way interactive audio-video 
communication technology during the PHE for the COVID-19 if 
beneficiaries do not have access to two-way audio-video communications 
technology, provided all other applicable requirements are met. In the 
CY 2022 PFS final rule (86 FR 65341 through 65343), we finalized that 
after the conclusion of the PHE for COVID-19, OTPs are permitted to 
furnish substance use counseling and individual and group therapy via 
audio-only telephone calls when audio and video communication 
technology is not available to the beneficiary. As we explained in the 
CY 2022 PFS final rule (86 FR 65342), we interpret the requirement that 
audio/video technology is ``not available to the beneficiary'' to 
include circumstances in which the beneficiary is not capable of or has 
not consented to the use of devices that permit a two-way, audio/video 
interaction because in each of these instances audio/video 
communication technology is not able to be used in furnishing services 
to the beneficiary. In the CY 2023 PFS final rule (87 FR 69775 through 
69777), we further extended telecommunication flexibilities for the 
initiation of treatment with buprenorphine outside of the PHE for 
COVID-19 in paragraph (vi) in the definition of opioid use disorder 
treatment service at Sec.  410.67(b). Specifically, we allowed the OTP 
intake add-on code to be furnished via two-way, audio-video 
communications technology when billed for the initiation of treatment 
with buprenorphine, to the extent that the use of audio-video 
telecommunications technology to initiate treatment with buprenorphine 
is authorized by DEA and SAMHSA at the time the service is furnished. 
We also permitted the use of audio-only communication technology to 
initiate treatment with buprenorphine in cases where audio-video 
technology is not available to the beneficiary, provided all other 
applicable requirements are met.
a. Proposal To Allow Periodic Assessments To Be Furnished Via Audio-
Only Telecommunications on a Permanent Basis
    In recent years, we have finalized several telecommunication 
flexibilities for periodic assessments furnished by OTPs. In the IFC 
entitled ``Medicare and Medicaid Programs, Basic Health Program, and 
Exchanges; Additional Policy and Regulatory Revisions in Response to 
the COVID-19 Public Health Emergency and Delay of Certain Reporting 
Requirements for the Skilled Nursing Facility Quality Reporting 
Program,'' which appeared in the May 8, 2020 Federal Register (85 FR 
27558), we revised paragraph (vii) in the definition of ``Opioid use 
disorder treatment service'' at Sec.  410.67(b) on an interim final 
basis to allow periodic assessments to be furnished during the PHE for 
COVID-19 via two-way interactive audio-video telecommunication 
technology and, in cases where beneficiaries do not have access to two-
way audio-video communication technology, to permit the periodic 
assessments to be furnished using audio-only telephone calls rather 
than via two-way interactive audio-video communication technology, 
provided all other applicable requirements are met. In the CY 2021 PFS 
final rule (85 FR 84690), we finalized our proposal to revise paragraph 
(vii) in the definition of ``Opioid use disorder treatment service'' at 
Sec.  410.67(b) to provide that periodic assessments (HCPCS code G2077) 
must be furnished during a face-

[[Page 61819]]

to-face encounter, which includes services furnished via two-way 
interactive audio-video communication technology, as clinically 
appropriate, provided all other applicable requirements are met, on a 
permanent basis.
    Furthermore, in the CY 2023 PFS proposed rule (87 FR 46093), we 
sought comment on whether we should allow periodic assessments to 
continue to be furnished using audio-only communication technology 
following the end of the PHE for COVID-19 for patients who are 
receiving treatment via buprenorphine, and if this flexibility should 
also continue to apply to patients receiving methadone or naltrexone. 
In response, several commenters advocated for CMS to continue to allow 
periodic assessments to be furnished audio-only when video is not 
available after the end of the PHE. Commenters highlighted that 
allowing audio-only flexibilities would further promote health equity 
for individuals who are economically disadvantaged, live in rural 
areas, are members of racial and ethnic minorities, lack access to 
reliable broadband or internet access, or do not possess devices with 
video capability. Commenters also indicated that periodic assessments 
are no less complex than intake/initial assessments, and thus are 
equally appropriate for audio-video and audio-only care, and that 
permitting audio-only flexibilities would allow an opportunity for both 
the provider and patient to jointly determine that the patient would 
individually benefit from telehealth services. After considering these 
comments, we determined that it would be appropriate to allow periodic 
assessments to be furnished audio-only when video is not available 
through the end of CY 2023, to the extent that it is authorized by 
SAMHSA and DEA at the time the service is furnished and, in a manner 
consistent with all applicable requirements. We stated our belief that 
this modification would allow continued beneficiary access to these 
services for the duration of CY 2023 in the event the PHE terminated 
before the end of 2023 and that it would also grant additional time for 
CMS to further consider telecommunication flexibilities associated with 
periodic assessments.
    Moreover, section 4113 of Division FF, Title IV, Subtitle A of the 
Consolidated Appropriations Act, 2023 (CAA, 2023) (Pub. L. 117-328, 
December 29, 2022) extended the telehealth flexibilities enacted in the 
Consolidated Appropriations Act, 2022 (CAA, 2022) (Pub. L. 117-103, 
March 15, 2022). Specifically, it amended sections 1834(m), 1834(o), 
and 1834(y) of the Act to delay the requirement for an in-person visit 
prior to furnishing certain mental health services via 
telecommunications technology by physicians and other practitioners, 
Rural Health Clinics (RHCs), and Federally Qualified Health Centers 
(FQHCs) until dates of service on or after January 1, 2025, if the PHE 
for COVID-19 had ended prior to that date. Additionally, it extended 
the flexibilities that were available during the PHE that allowed for 
certain Medicare telehealth services defined in section 
1834(m)(4)(F)(i) of the Act to be furnished via an audio-only 
telecommunications system through December 31, 2024, if the PHE for 
COVID-19 had ended prior to that date. The PHE for COVID-19, which was 
declared under section 319 of the Public Health Service Act, expired at 
the end of the day on May 11, 2023, so the aforementioned flexibilities 
were extended through the end of CY 2024.
    To better align coverage for periodic assessments furnished by OTPs 
with the telehealth flexibilities described in section 4113 of the CAA, 
2023 for other settings under Medicare, in the CY 2024 PFS final rule 
(88 FR 79089 through 79093; 79528), we finalized extending the audio-
only flexibilities for periodic assessments furnished by OTPs through 
the end of CY 2024 in paragraph (vii) in the definition of ``Opioid use 
disorder treatment service'' at Sec.  410.67(b). We finalized to allow 
periodic assessments to be furnished audio-only when video is not 
available to the extent that use of audio-only communications 
technology is permitted under the applicable SAMHSA and DEA 
requirements at the time the service is furnished, and all other 
applicable requirements are met. In submitted comments supporting the 
proposal, commenters reiterated evidence showing that audio-only 
telehealth encounters are more prominent among individuals who are 
older, Black, Hispanic, American Indian/Alaska Native, Spanish-
speaking, living in areas with low broadband access, low-income, and 
with public insurance, suggesting that the proposal would have positive 
health equity implications for these populations.\354\ Several other 
commenters raised that audio-only flexibilities are important since 
many underserved populations may experience challenges in partaking in 
video-based telehealth services, due to not possessing the needed 
technological proficiencies to operate video-based services, not having 
a caregiver able to assist them with appointments, feeling discomfort 
with the use of video, and because of the cost of high-speed internet 
and data required for video technologies. Several other commenters 
shared evidence that audio-only visits produce many of the same 
benefits as video-based visits,\355\ and that patients often report 
that audio-only visits left them feeling supported and with greater 
privacy, provided increased access to behavioral health professionals, 
and helped reduce transportation barriers.\356\ Lastly, a large number 
of commenters requested that CMS make the extension for audio-only 
periodic assessments permanent beyond CY 2024. Commenters stated that 
extending this policy permanently would retain a beneficiary's right to 
decide with their provider how best to receive their care and would 
curtail existing barriers that Medicare beneficiaries with an OUD may 
face in accessing care. In response to these comments that requested 
indefinitely extending these audio-only flexibilities for periodic 
assessments, CMS stated that extending these flexibilities for one 
additional year at the time would allow the agency time to further 
examine the issue, including to understand if a permanent extension 
would be appropriate for patients who are receiving treatment via 
buprenorphine, methadone, and/or naltrexone at OTPs, and whether proper 
safeguards are in place so these services can be delivered in a way 
that would not diminish safety or quality of care for Medicare 
beneficiaries with an OUD.
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    \354\ J.A. Rodriguez et al., ``Differences in the Use of 
Telephone and Video Telemedicine Visits During the COVID-19 
Pandemic,'' The American Journal of Managed Care 27, no. 1 (2021), 
https://www.ajmc.com/view/differences-in-the-use-of-telephone-and-video-telemedicine-visits-during-the-covid-19-pandemic; R.P. Pierce 
and J.J. Stevermer, ``Disparities in Use of Telehealth at the Onset 
of the COVID-19 Public Health Emergency,'' Journal of Telemedicine 
and Telecare (2020): 1-7, https://doi.org/10.1177/1357633X20963893; 
J.E. Chang et al., ``Patient Characteristics Associated with Phone 
Versus Video Telemedicine Visits for Substance Use Treatment During 
COVID-19,'' J Addict Med 16, no. 6 (2022): 659-65; C. Shoff, T-C 
Yang, B.A. Shaw, ``Trends in Opioid Use Disorder Among Older Adults: 
Analyzing Medicare Data, 2013-2018,'' American Journal of Preventive 
Medicine 60, no.6 (2021): 850-855, https://doi.org/10.1016/j.amepre.2021.01.010.
    \355\ Danila, M.I., Sun, D., Jackson, L.E., Cutter, G., Jackson, 
E.A., Ford, E.W., DeLaney, E., Mudano, A., Foster, P.J., Rosas, G., 
Melnick, J.A, Curtis, J.R., & Saag, K.G. (2022, November). 
``Satisfaction with modes of telemedicine delivery during COVID-19: 
A randomized, single-blind, parallel group, noninferiority trial.'' 
The American Journal of the Medical Sciences, 364 (5).
    \356\ Kang AW, Walton M, Hoadley A, DelaCuesta C, Hurley L, 
Martin R. ``Patient Experiences with the Transition to Telephone 
Counseling during the COVID-19 Pandemic.'' Healthcare (Basel). 
2021;9(6):663. Published 2021 Jun 2. doi:10.3390/healthcare9060663.
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    We continue to monitor the services provided under the OTP benefit 
to

[[Page 61820]]

ensure flexibilities for OUD treatment services are consistent with 
flexibilities authorized in other settings under Medicare, as medically 
reasonable and necessary for the diagnosis and treatment of OUD. In the 
CY 2022 PFS final rule, we revised the regulatory definition of 
``interactive telecommunications system'' at Sec.  410.78(a)(3) for 
Medicare Telehealth services paid under the PFS beyond the termination 
of the PHE for COVID-19 to allow for inclusion of audio-only services 
under certain circumstances. Specifically, we redefined ``interactive 
telecommunications system'' to include audio-only communications 
technology when used for telehealth services for the diagnosis, 
evaluation, or treatment of mental health disorders furnished to a 
patient in their home. We also finalized to limit payment for audio-
only services to services furnished by a physician or practitioner that 
has the technical capability at the time of the service to use two-way 
audio-video telecommunications, but where the patient is not capable 
of, or does not consent to, the use video technology for the service, 
and the patient is located at their home at the time of service. 
Lastly, we clarified that SUD services are considered mental health 
services for purposes of the expanded definition of ``interactive 
telecommunications system'' to include audio-only services under Sec.  
410.78(a)(3). In short, these flexibilities and policy clarifications 
that permit audio-only telecommunication flexibilities for the 
treatment of a SUD, which can include an OUD, already exist under other 
payment systems in Medicare.
    Therefore, to better align coverage for periodic assessments 
furnished by OTPs with other telehealth services furnished under the 
PFS for the diagnosis, evaluation, or treatment of a mental health 
disorder including SUDs, and in response to many supportive comments 
received in response to the CY 2024 PFS proposed rule that advocated 
for allowing OTPs to furnish periodic assessments via audio-only 
telecommunications on a permanent basis, we are proposing to allow OTPs 
to furnish periodic assessments using audio-only communications 
technology when video is not available on a permanent basis beginning 
January 1, 2025. Under this proposal, we would allow periodic 
assessments to be furnished via audio-only when video is not available 
to the extent that use of audio-only communications technology is 
permitted under the applicable SAMHSA and DEA requirements at the time 
the service is furnished, and all other applicable requirements are 
met.
    We believe permanently extending this flexibility would 
meaningfully promote access to care for the Medicare population, as 
supported by our analysis of claims data showing the proportion of 
telephonic audio-only visits increases with the age of the patient, 
with 17-percent of visits delivered via audio-only interaction for 
patients 41-60 years of age, 30-percent for patients 61 to 80 years of 
age, and 47 percent of visits for patients over 81 years of age.\357\ 
Evidence further reveals that Medicare beneficiaries who are older than 
65 years old, racial/ethnic minorities, dual-enrollees in Medicare and 
Medicaid, or living in rural areas, or who experience low broadband 
access, low-income, and/or for whom English in not their primary 
language, are more likely to be offered and use audio-only telemedicine 
services than audio-video services.\358\ Other evidence also suggests 
that while Tribal populations, including American Indian and Alaska 
Natives, have the highest rates of OUD prevalence among Medicare 
beneficiaries, one-third of these populations do not have adequate 
access to high-speed broadband and continue to rely on audio-only 
visits.\359\ Telemedicine flexibilities have been shown to be feasible 
and effective for rural patients with an OUD with data supporting that 
telemedicine flexibilities have helped improve treatment retention in 
OUD treatment, especially for rural patients who are older and covered 
by Medicare.\360\ Lastly, these audio-only flexibilities would be 
meaningful for OTPs and their patients because telehealth services have 
become widely used among SUD treatment facilities as regular service 
offerings. During the COVID-19 pandemic, SUD treatment facilities 
increased telemedicine offerings by 143 percent, and as of 2021, almost 
60 percent of SUD treatment facilities offer telehealth.\361\ Now, 
telephone-based (that is, audio-only) therapy provided by SUD programs 
has been found to be one of the most common modes of telehealth for 
treatment of OUD.\362\ Given the prevalence of audio-only modalities of 
care for the treatment of OUD, permanently extending this flexibility 
could help prevent disruptions to care in OTP settings that may 
regularly provide periodic assessments via audio-only telehealth to 
Medicare beneficiaries. For these reasons, we believe a permanent 
extension would be appropriate for patients who are receiving 
buprenorphine, methadone, and/or naltrexone at OTPs, and that proper 
safeguards are in place so these services can be delivered in a way 
that would not diminish safety or quality of care for Medicare 
beneficiaries with an OUD.
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    \357\ Lee, G., & Stewart, K. (n.d.). ``2021 Medicare coverage 
and payment for audio only services (Telephone e/m).'' AAMC. https://www.aamc.org/media/55296/download.
    \358\ Rodriguez, J.A., Betancourt, J.R., Sequist, T.D., & 
Ganguli, I. (2021). ``Differences in the use of telephone and video 
telemedicine visits during the COVID-19 pandemic.'' The American 
Journal of Managed Care, 27(1), 21-26. https://doi.org/10.37765/ajmc.2021.88573; Koma, W., Cubanski, J., & Published, T.N. (2021, 
May 19). ``Medicare and telehealth: Coverage and use during the 
covid-19 pandemic and options for the future.'' KFF. https://www.kff.org/medicare/issue-brief/medicare-and-telehealth-coverage-and-use-during-the-covid-19-pandemic-and-options-for-the-future/; 
;Benjenk, I., Franzini, L., Roby, D., & Chen, J. (2021). 
``Disparities in Audio-Only Telemedicine use among Medicare 
beneficiaries during the coronavirus disease 2019 pandemic.'' 
Medical Care, 59(11), 1014. https://doi.org/10.1097/MLR.0000000000001631.
    \359\ Federal Communications Commission. (2020). ``2020 
Broadband Deployment Report'' (FCC 20-50). https://docs.fcc.gov/public/attachments/FCC-20-50A1.pdf; Centers for Medicare and 
Medicaid Services, Division of Tribal Affairs. (n.d.). Telehealth 
and COVID-19. https://www.cms.gov/files/document/aian-telehealthwebinar.pdf; Shoff, C., Yang, T.-C., & Shaw, B.A. (2021). 
``Trends in opioid use disorder among older adults: Analyzing 
Medicare data, 2013-2018.'' American Journal of Preventive Medicine, 
60(6), 850-855. https://doi.org/10.1016/j.amepre.2021.01.010.
    \360\ Lira, M.C., Jimes, C., & Coffey, M.J. (2023). ``Retention 
in telehealth treatment for opioid use disorder among rural 
populations: A retrospective cohort study.'' Telemedicine Journal 
and E-Health, 29(12), 1890-1896. https://doi.org/10.1089/tmj.2023.0044.
    \361\ Cantor, J., McBain, R.K., Kofner, A., Hanson, R., Stein, 
B.D., & Yu, H. (2022). ``Telehealth adoption by mental health and 
substance use disorder treatment facilities in the covid-19 
pandemic.'' Psychiatric Services (Washington, DC), 73(4), 411-417. 
https://doi.org/10.1176/appi.ps.202100191;
    \362\ Hughes, P.M., Verrastro, G., Fusco, C.W., Wilson, C.G., & 
Ostrach, B. (2021). ``An examination of telehealth policy impacts on 
initial rural opioid use disorder treatment patterns during the 
COVID-19 pandemic.'' The Journal of Rural Health, 37(3), 467-472. 
https://doi.org/10.1111/jrh.12570.
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    Accordingly, we are proposing to revise paragraph (vii) of the 
definition of ``Opioid treatment services'' at Sec.  410.67(b) of the 
regulations to remove the references to the ``Public Health Emergency, 
as defined in Sec.  400.200 of this chapter'' and ``through the end of 
CY 2024,'' in order to reflect that this flexibility would be 
implemented on a permanent basis. We would continue to state that ``in 
cases where a beneficiary does not have access to two-way audio-video 
communications technology, periodic assessments can be furnished using 
audio-only telephone calls if all other applicable requirements are 
met.'' We welcome comments on this proposal to permanently extend this 
audio-only flexibility for periodic assessments.

[[Page 61821]]

b. Proposal To Allow OTPs To Use Audio-Visual Telecommunications for 
Initiation of Treatment With Methadone
    Prior to the PHE for COVID-19, the Ryan Haight Online Pharmacy 
Consumer Protection Act of 2008 (Pub. L. 110-425) amended the 
Controlled Substances Act and instructed the DEA to promulgate 
regulations that required healthcare providers to conduct an in-person 
examination in the presence of a practitioner prior to prescribing 
controlled substances (for example, methadone, buprenorphine, etc.) to 
patients, with certain exceptions. These statutory provisions prevented 
the distribution and dispensing of controlled substances by means of 
the internet without at least one in-person medical evaluation before 
writing a prescription. Similarly, SAMHSA regulations under 42 CFR 
8.12(f)(2) have historically required a complete physical evaluation 
before a patient begins treatment at an OTP. However, after the 
declaration of the PHE for COVID-19, the DEA and SAMHSA jointly issued 
flexibilities for prescribing of controlled substances via telehealth 
to ensure patient therapies would remain accessible. Consequently, OTPs 
were exempted from the requirement to perform an in-person physical 
evaluation for any patient who would be treated by the OTP with 
buprenorphine if a program physician, primary care physician, or an 
authorized healthcare professional under the supervision of a program 
physician, determines that an adequate evaluation of the patient can be 
accomplished via telehealth through an audio-video or audio-only 
evaluation.\363\ At the time, this exemption applied exclusively to 
patients with an OUD being treated at an OTP with buprenorphine, and it 
did not apply to new patients initiating treatment with methadone. This 
meant that new OTP patients starting treatment with methadone would 
need to still receive an in-person physical evaluation prior to the OTP 
prescribing methadone. Accordingly, in the CY 2023 PFS final rule (87 
FR 69775 through 69777), we revised the regulation in paragraph (vi) of 
the definition of ``Opioid treatment services'' at Sec.  410.67(b) to 
allow the OTP intake add-on code to be furnished via two-way audio-
video communications technology when billed for the initiation of 
treatment with buprenorphine, to the extent that the use of audio-video 
telecommunications technology to initiate treatment with buprenorphine 
is authorized by DEA and SAMHSA at the time the service is furnished. 
We also permitted the use of audio-only communication technology to 
initiate treatment with buprenorphine in cases where audio-video 
technology is not available to the beneficiary. We stated that section 
1834(m)(7) of the Act allows telehealth services for the treatment of a 
diagnosed SUD or co-occurring mental health disorder to be furnished to 
individuals at any telehealth originating site, including in a 
patient's home, and that some codes describing new patient office/
outpatient visits are already under the Medicare Telehealth list (CPT 
codes 99202 through 99205). Therefore, we believed that these changes 
for the initiation of treatment with buprenorphine via audio-only or 
audio-video telecommunications would also be consistent with existing 
flexibilities under the PFS. Consistent with SAMHSA and DEA 
requirements at the time of CY 2023 PFS rulemaking, we also noted that 
this exemption applied exclusively to OTP patients treated with 
buprenorphine and did not apply to new patients treated with methadone. 
Notably, SAMHSA recently finalized and codified this flexibility at 42 
CFR 8.12(f)(2)(v)(B),\364\ so that OTPs may use audio-visual or audio-
only platforms when evaluating patients who are being admitted for 
treatment at the OTP with schedule III medications (such as 
buprenorphine) on a permanent basis.
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    \363\ https://www.deadiversion.usdoj.gov/GDP/(DEA-DC-
022)(DEA068)DEASAMHSAbuprenorphinetelemedicine(Final)+Esign.pdf; 
https://www.samhsa.gov/medications-substance-use-disorders/statutes-regulations-guidelines/buprenorphine-at-opioid-treatment-programs.
    \364\ 89 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-for-the-treatment-of-opioid-use-disorder).
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    Furthermore, in their recent final rule published in the Federal 
Register in February of 2024 (89 FR 7528), SAMHSA made reforms to full 
examination requirements for initiation of treatment with methadone at 
Sec.  8.12(f)(2)(v)(A). Specifically, SAMHSA now allows for audio-
visual telehealth initiation for any new patient who will be treated by 
the OTP with methadone if a practitioner or primary care provider 
determines that an adequate evaluation of the patient can be 
accomplished via an audio-visual telehealth platform. When audio-visual 
technologies are not available or their use is not feasible for a 
patient, it is acceptable to use audio-only devices, but only when the 
patient is in the presence of a licensed practitioner who is registered 
to prescribe (including dispense) controlled medications. In finalizing 
this new flexibility, SAMHSA reasoned that ``evidence underlying the 
initiation of buprenorphine using telehealth also is applicable to the 
treatment of OUD with methadone, and warrants expanding access to 
methadone therapy by applying some of the buprenorphine in-person 
examination flexibilities to treatment with methadone in OTPs (89 FR 
7533).'' \365\ They also noted that video-based telehealth was 
overwhelmingly supported by commenters for medical intake, periodic 
medical assessments, and methadone or buprenorphine initiation by OTP 
practitioners. SAMHSA did not extend the flexibility to allow the use 
of audio-only telehealth platforms in assessing new patients who will 
be treated by the OTP with methadone due to safety concerns, as they 
stated ``methadone, in comparison to buprenorphine, holds a higher risk 
profile for sedation in patients presenting with mild somnolence which 
may be easier to identify through an audio-visual telehealth platform 
(89 FR 7533).'' \366\
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    \365\ Chan, B., Bougatsos, C., Priest, K.C., McCarty, D., 
Grusing, S., & Chou, R. (2022). ``Opioid treatment programs, 
telemedicine and COVID-19: A scoping review.'' Substance Abuse, 
43(1), 539-546. https://doi.org/10.1080/08897077.2021.1967836.
    \366\ https://www.govinfo.gov/content/pkg/FR-2024-02-02/pdf/2024-01693.pdf.
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    These new flexibilities to allow new patients to initiate treatment 
with methadone via audio-visual telehealth is significant, as the 
majority of patients who are being treated at an OTP receive 
methadone.\367\ Methadone is used to treat those with a confirmed 
diagnosis of OUD, and is a synthetic opioid agonist that eliminates 
withdrawal symptoms and relieves drug cravings by acting on opioid 
receptors in the brain.\368\ Methadone has been associated with 
reducing the risk of drug overdose, opioid-related acute care, all-
cause mortality, and opioid-related mortality.\369\ It has also been 
shown to

[[Page 61822]]

retain patients in treatment, reduce consequences of injection drug use 
such as HIV/Hepatitis C transmission, and contribute to quality of life 
improvements for patients.\370\ However, many barriers currently exist 
for patients seeking to receive methadone treatment. Currently, only 
SAMHSA-certified OTPs can dispense and administer methadone for the 
treatment of OUD as provided under section 303(g)(1) of the Controlled 
Substances Act (21 U.S.C. 823(g)(1)) and 42 CFR part 8. This often 
means that daily travel might be necessary if it is determined that the 
risks of giving take-home doses outweigh the benefits, unless patients 
are eligible to receive take-home doses after meeting certain 
conditions. Most adults in methadone treatment report at least one 
barrier to accessing treatment, including lack of reliable 
transportation, distance from home to treatment, and work schedule 
conflicts.\371\ Frequent travel to an OTP also disproportionately 
impacts rural residents who already face lower odds of finding an OTP 
in their area, and therefore, must spend nearly 2-5 times the amount of 
average drive time to access the closest OTP compared to their urban 
counterparts.\372\ Research has also shown that the number of missed 
doses of methadone increases for residents living longer distances from 
an OTP. Additionally, people living with disabilities are less likely 
to receive Medications for Opioid Use Disorder (MOUDs), and some data 
also shows that many SUD treatment programs are not physically 
accessible for these populations.\373\ The existence of these physical 
barriers to accessing methadone and treatment at OTP facilities, 
especially among historically underserved populations, warrants 
additional considerations to the extent that telehealth flexibilities 
can mitigate these barriers to accessing care, as long as these 
flexibilities are medically appropriate and reasonable for the 
diagnosis and treatment of OUD.
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    \367\ American Association for the Treatment of Opioid 
Dependence, National Association of State Alcohol and Drug Abuse 
Directors, & Opioid Response Network. (2022). ``Technical Brief: 
Census of Opioid Treatment Programs.'' https://nasadad.org/wp-content/uploads/2022/12/OTP-Patient-Census-Technical-Brief-Final-for-Release.pdf.
    \368\ National Institute on Drug Abuse. (2021, December). ``How 
do medications to treat opioid use disorder work?'' https://nida.nih.gov/publications/research-reports/medications-to-treat-opioid-addiction/how-do-medications-to-treat-opioid-addiction-work.
    \369\ Wakeman, S.E., Larochelle, M.R., Ameli, O., Chaisson, 
C.E., McPheeters, J.T., Crown, W.H., Azocar, F., & Sanghavi, D.M. 
(2020). ``Comparative effectiveness of different treatment pathways 
for opioid use disorder.'' JAMA Network Open, 3(2), e1920622. 
https://doi.org/10.1001/jamanetworkopen.2019.20622; Sordo, L., 
Barrio, G., Bravo, M.J., Indave, B.I., Degenhardt, L., Wiessing, L., 
Ferri, M., & Pastor-Barriuso, R. (2017). ``Mortality risk during and 
after opioid substitution treatment: Systematic review and meta-
analysis of cohort studies.'' The BMJ, 357, j1550. https://doi.org/10.1136/bmj.j1550; Larochelle, M.R., Bernson, D., Land, T., Stopka, 
T.J., Wang, N., Xuan, Z., Bagley, S.M., Liebschutz, J.M., & Walley, 
A.Y. (2018). ``Medication for opioid use disorder after nonfatal 
opioid overdose and association with mortality: A cohort study.'' 
Annals of Internal Medicine, 169(3), 137. https://doi.org/10.7326/M17-3107.
    \370\ Mattick, R.P., Breen, C., Kimber, J., & Davoli, M. (2009). 
``Methadone maintenance therapy versus no opioid replacement therapy 
for opioid dependence.'' Cochrane Database of Systematic Reviews, 3. 
https://doi.org/10.1002/14651858.CD002209.pub2; Bruce, R.D. (2010). 
``Methadone as HIV prevention: High volume methadone sites to 
decrease HIV incidence rates in resource limited settings. The 
International Journal on Drug Policy, 21(2), 122-124. https://doi.org/10.1016/j.drugpo.2009.10.004; Alavian, S.M., Mirahmadizadeh, 
A., Javanbakht, M., Keshtkaran, A., Heidari, A., Mashayekhi, A., 
Salimi, S., & Hadian, M. (2013). ``Effectiveness of methadone 
maintenance treatment in prevention of hepatitis c virus 
transmission among injecting drug users.'' Hepatitis Monthly, 13(8), 
e12411. https://doi.org/10.5812/hepatmon.12411; Carlsen, S.-E.L., 
Lunde, L.H., & Torsheim, T. (2019). ``Predictors of quality of life 
of patients in opioid maintenance treatment in the first year in 
treatment.'' Cogent Psychology, 6(1), 1565624. https://doi.org/10.1080/23311908.2019.1565624.
    \371\ Pasman, E., Kollin, R., Broman, M., Lee, G., Agius, E., 
Lister, J.J., Brown, S., & Resko, S. M. (2022). ``Cumulative 
barriers to retention in methadone treatment among adults from rural 
and small urban communities.'' Addiction Science & Clinical 
Practice, 17(1), 1-10. https://doi.org/10.1186/s13722-022-00316-3.
    \372\ Calcaterra, S.L., Bach, P., Chadi, A., Chadi, N., Kimmel, 
S.D., Morford, K.L., Roy, P., & Samet, J. H. (2019). ``Methadone 
matters: What the United States can learn from the global effort to 
treat opioid addiction.'' Journal of General Internal Medicine, 
34(6), 1039-1042. https://doi.org/10.1007/s11606-018-4801-3; Jehan, 
S., Zahnd, W.E., Wooten, N.R., & Seay, K.D. (2024). ``Geographic 
variation in availability of opioid treatment programs across U.S. 
communities.'' Journal of Addictive Diseases, 42(2), 136-146. 
https://doi.org/10.1080/10550887.2023.2165869.
    \373\ Thomas, C.P., Stewart, M.T., Ledingham, E., Adams, R.S., 
Panas, L., & Reif, S. (2023). ``Quality of opioid use disorder 
treatment for persons with and without disabling conditions.'' JAMA 
Network Open, 6(3), e232052. https://doi.org/10.1001/jamanetworkopen.2023.2052; West, S.L. (2007). ``The accessibility of 
substance abuse treatment facilities in the United States for 
persons with disabilities.'' Journal of Substance Abuse Treatment, 
33(1), 1-5. https://doi.org/10.1016/j.jsat.2006.11.001.
---------------------------------------------------------------------------

    To be consistent with SAMHSA's reforms to telehealth flexibilities 
for initiation of treatment with methadone at Sec.  8.12(f)(2)(B)(v), 
past conforming regulations under the Medicare OTP benefit to allow 
telecommunication flexibilities for initiation of treatment with 
buprenorphine, and to contribute towards efforts to reduce barriers in 
accessing care for Medicare beneficiaries seeking treatment with 
methadone, we are proposing to make similar telecommunication 
flexibilities under the Medicare OTP benefit. Specifically, we are 
proposing to allow the OTP intake add-on code (HCPCS code G2076) to be 
furnished via two-way audio-video communications technology when billed 
for the initiation of treatment with methadone, to the extent that the 
use of audio-video telecommunications technology to initiate treatment 
with methadone is authorized by DEA and SAMHSA at the time the service 
is furnished. We note that under this proposal, the initiation of 
treatment with methadone using telecommunications technology would be 
considered an intake activity for purposes of paragraph (vi) of the 
definition of ``Opioid treatment services'' at Sec.  410.67(b) only to 
the extent that the use of such telecommunications technology is 
permitted under the applicable DEA and SAMHSA regulations and guidance 
at the time the services are furnished. However, at this time, we are 
not proposing to extend the flexibility to allow the use of audio-only 
telecommunications for intake activities described in paragraph (vi) of 
the definition of ``Opioid treatment services'' at Sec.  410.67(b) for 
initiation of treatment with methadone, as these flexibilities are not 
currently permitted by SAMHSA and the DEA. We recognize that methadone 
is characterized as a schedule II controlled substance, which means 
that it still has higher potential for misuse with potential physical 
dependence.\374\ Unlike buprenorphine that is a schedule III controlled 
substance, methadone is a full agonist and does not have a ``ceiling 
effect,'' which provides more protective overdose factors when taking 
additional doses of the drug.\375\ Thus, use of audio-visual 
telecommunications for initiation of treatment with methadone would 
balance potential safety concerns associated with methadone, such as 
its higher potential for misuse and risk for sedation in patients 
presenting with mild somnolence which may be easier to identify via a 
audio-visual telehealth platform, while still allowing patients the 
flexibility of initiating treatment via (audio-visual) telehealth at an 
OTP.
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    \374\ https://www.dea.gov/drug-information/drug-scheduling.
    \375\ Whelan, P.J., & Remski, K. (2012). ``Buprenorphine vs 
methadone treatment: A review of evidence in both developed and 
developing worlds.'' Journal of Neurosciences in Rural Practice, 
3(1), 45-50. https://doi.org/10.4103/0976-3147.91934.
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    We believe that this proposal may meaningfully improve access to 
care, promote positive health outcomes, and advance health equity among 
Medicare beneficiaries. Data indicate that expanded use of telehealth 
and flexibilities for the provision of MOUD during the COVID-19 
pandemic was associated with improved care retention and a reduction in 
medically treated overdoses among Medicare beneficiaries.\376\ 
Similarly, telehealth initiation for buprenorphine to treat OUD was 
associated with improved treatment retention in a subset of U.S 
states.\377\ Other research has not found

[[Page 61823]]

significant differences in clinical severity and complexity markers 
(for example, OUD-related emergency department visits) between patients 
receiving telemedicine inductions into treatment versus in-person 
examinations,\378\ suggesting that quality of care can be maintained 
through initiation of treatments via telehealth. Thus, many of these 
benefits associated with telehealth flexibilities for initiating 
treatment with other MOUDs can be potentially replicated by allowing 
initiation of treatment with methadone via audio-visual 
telecommunications. Additionally, we believe this proposal would 
meaningfully impact health equity. Individuals from Black, American 
Indian and Alaska Native, and Hispanic populations are significantly 
less likely to initiate treatment for a SUD, as well as individuals 
from economically disadvantaged communities.\379\ Despite these 
disparities, during the COVID-19 pandemic, the odds of initiating 
treatment for a SUD increased for most age, race, ethnicity, and 
socioeconomic status subgroups, which may have been explained by 
increases in treatment initiation occurring through telehealth.\380\ 
Thus, promoting flexibilities for telecommunication modalities of 
treatment initiation in regards to methadone may provide additional 
options for accessing treatment, especially for populations who often 
experience barriers in beginning treatment. Lastly, we believe this 
proposal is in alignment with the HHS Overdose Prevention Strategy, 
which aims to broaden access to evidence-based care that increases 
willingness to engage and remain in treatment.\381\ Similarly, this 
proposal would further the goals of the National Drug Control Strategy, 
which strives to expand policies that improve SUD treatment engagement 
by lowering various barriers to enter and participate in treatment, 
such as through telemedicine treatment initiation.\382\
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    \376\ Jones, C.M., Shoff, C., Hodges, K., Blanco, C., Losby, 
J.L., Ling, S.M., & Compton, W.M. (2022). ``Receipt of telehealth 
services, receipt and retention of medications for opioid use 
disorder, and medically treated overdose among Medicare 
beneficiaries before and during the covid-19 pandemic.'' JAMA 
Psychiatry, 79(10), 981-992. https://doi.org/10.1001/jamapsychiatry.2022.2284.
    \377\ Hammerslag, L.R., Mack, A., Chandler, R.K., Fanucchi, 
L.C., Feaster, D.J., LaRochelle, M.R., Lofwall, M.R., Nau, M., 
Villani, J., Walsh, S.L., Westgate, P.M., Slavova, S., & Talbert, 
J.C. (2023). ``Telemedicine buprenorphine initiation and retention 
in opioid use disorder treatment for Medicaid enrollees.'' JAMA 
Network Open, 6(10), e2336914. https://doi.org/10.1001/jamanetworkopen.2023.36914.
    \378\ Barsky, B.A., Busch, A.B., Patel, S.Y., Mehrotra, A., & 
Huskamp, H.A. (2022). ``Use of telemedicine for buprenorphine 
inductions in patients with commercial insurance or Medicare 
advantage.'' JAMA Network Open, 5(1), e2142531. https://doi.org/10.1001/jamanetworkopen.2021.42531.
    \379\ Acevedo, A., Panas, L., Garnick, D., Acevedo-Garcia, D., 
Miles, J., Ritter, G., & Campbell, K. (2018). ``Disparities in the 
treatment of substance use disorders: Does where you live matter?''. 
The Journal of Behavioral Health Services & Research, 45(4), 533-
549. https://doi.org/10.1007/s11414-018-9586-y.
    \380\ Palzes, V.A., Chi, F.W., Metz, V.E., Sterling, S., Asyyed, 
A., Ridout, K.K., & Campbell, C.I. (2023). ``Overall and telehealth 
addiction treatment utilization by age, race, ethnicity, and 
socioeconomic status in California after covid-19 policy changes.'' 
JAMA Health Forum, 4(5), e231018. https://doi.org/10.1001/jamahealthforum.2023.1018.
    \381\ https://www.hhs.gov/overdose-prevention/.
    \382\ https://www.whitehouse.gov/wp-content/uploads/2022/04/National-Drug-Control-2022Strategy.pdf.
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    Accordingly, we are proposing to revise the regulations for intake 
activities at paragraph (vi) within the definition of ``opioid use 
disorder treatment service'' at Sec.  410.67(b). We are proposing to 
add a new paragraph (vi)(A) within the description of intake activities 
to separately list flexibilities for intake activities furnished via 
communications technology, and we are proposing to add and reserve a 
new paragraph (vi)(B). We are proposing to move the language related to 
the existing flexibilities for the initiation of treatment with 
buprenorphine to paragraph (vi)(A)(1). Additionally, in the definition 
of ``opioid use disorder treatment service'' at Sec.  410.67(b), we are 
proposing to codify telecommunications flexibilities for initiation of 
treatment with methadone at paragraph (vi)(A)(2). Specifically, we 
propose that services to initiate treatment with methadone may be 
furnished via two-way interactive audio-video communication technology, 
as clinically appropriate, and in compliance with all applicable 
requirements, if an OTP determines that an adequate evaluation of the 
patient can be accomplished through audio-video communication 
technology. We look forward to comments related to this proposal.
3. Proposals Related to Reforms to 42 CFR Part 8
    In the CY 2020 PFS final rule, we implemented payment and coverage 
for opioid use disorder treatment services, including services such as 
substance use counseling by a professional to the extent authorized 
under State law to furnish such services, individual and group therapy 
with a physician, psychologist (or other mental health professional to 
the extent authorized under State law), and other items and services 
that the Secretary determines are appropriate (but in no event to 
include meals or transportation), as authorized by section 1861 of the 
Act (84 FR 62630 through 62677 and 84 FR 62919 through 62926). 
Consequently, we included these services within the definition of OUD 
treatment services at Sec.  410.67(b) and incorporated payment for 
these services as part of the non-drug component at Sec.  
410.67(d)(2)(ii). We also created an add-on code described by HCPCS 
code G2080 to reflect an additional 30 minutes of counseling or 
individual or group therapy provided in a week. We further finalized 
additional adjustments to the bundled payment for an episode of care, 
such as intake activities and periodic assessments. At the time, we 
noted that both initial and periodic assessments are required under 
SAMHSA regulations, and that they were integral services for the 
establishment and maintenance of OUD treatment for a beneficiary at an 
OTP (84 FR 62634). We codified definitions of these services within the 
definition of OUD treatment services at Sec.  410.67(b); at paragraph 
(vi), we stated that intake activities include initial medical 
examination services required under 42 CFR 8.12(f)(2) and initial 
assessment services required under Sec.  8.12(f)(4); at paragraph (vii) 
we stated that periodic assessment services include those required 
under Sec.  8.12(f)(4). Services under Sec.  8.12(f) are required 
services as part of Federal opioid treatment standards for OTPs, as 
regulated by SAMHSA. Accordingly, we created HCPCS code G2076 [Intake 
activities, including initial medical examination that is a complete, 
fully documented physical evaluation and initial assessment conducted 
by a program physician or a primary care physician, or an authorized 
healthcare professional under the supervision of a program physician or 
qualified personnel that includes preparation of a treatment plan that 
includes the patient's short-term goals and the tasks the patient must 
perform to complete the short-term goals; the patient's requirements 
for education, vocational rehabilitation, and employment; and the 
medical, psycho-social, economic, legal, or other supportive services 
that a patient needs, conducted by qualified personnel (provision of 
the services by a Medicare-enrolled Opioid Treatment Program); List 
separately in addition to code for primary procedure], and code G2077 
[Periodic assessment; assessing periodically by qualified personnel to 
determine the most appropriate combination of services and treatment 
(provision of the services by a Medicare-enrolled Opioid Treatment 
Program); List separately in addition to code for primary procedure] in 
order to have a mechanism to make payment under Medicare to OTPs for 
these required services. In the CY 2021 and CY 2022 PFS final rules (85 
FR 84682 through 84690; 86 FR 65338 through 65341), we also established 
payment for take-home supplies of naloxone and overdose education 
furnished in conjunction with

[[Page 61824]]

providing an opioid antagonist medication.
    Additionally, in the CY 2020 PFS final rule, we codified 
requirements specified in the section 1861(jjj)(2) of the Act for OTPs. 
Specifically, we defined an ``opioid treatment program'' at Sec.  
410.67(b) as an entity that is an OTP as defined in Sec.  8.2 (or any 
successor regulation) that meets the applicable requirements for an 
OTP. For an OTP to participate and receive payment under the Medicare 
program, the OTP must be enrolled in Medicare under section 1866(j) of 
the Act, have in effect a certification by SAMHSA for such a program, 
and be accredited by an accrediting body approved by SAMHSA. Lastly, an 
OTP must meet additional conditions as the Secretary may find necessary 
to ensure the health and safety of individuals being furnished services 
under such program and the effective and efficient furnishing of such 
services.
    Recently, SAMHSA issued a new final rule (89 FR 7528), which made 
major reforms to 42 CFR part 8, governing requirements for OTPs in 
providing medications for the treatment of OUD and many other services. 
The rule provides significant refinements, as 42 CFR part 8 was 
published over 21 years ago, by reflecting new paradigms of care for 
OUD that have become increasingly patient-centered and evidence-based. 
The regulatory reforms for opioid treatment standards reflect an 
understanding that OUD is a chronic condition, and to be successful, 
treatment interventions should be individualized and include harm 
reduction and recovery support services, among other services.\383\ 
Consequently, SAMHSA redefined comprehensive treatment at Sec.  8.2 to 
specify that treatment at OTPs includes ``the continued use of MOUD 
provided in conjunction with an individualized range of appropriate 
harm reduction, medical, behavioral health, and recovery support 
services.'' At the same time, SAMHSA constructed a new definition of 
harm reduction services at Sec.  8.2. In particular, harm reduction 
``refers to practical, evidence-based strategies, including: overdose 
education; testing and intervention for infectious diseases including 
counseling and risk mitigation activities forming part of a 
comprehensive, integrated approach to address human immunodeficiency 
virus (HIV), viral hepatitis, sexually transmitted infections, and 
bacterial and fungal infections; distribution of opioid overdose 
reversal medications; linkage to other public health services; and 
connecting those who have expressed interest in additional support to 
peer services.'' Harm reduction approaches are especially important to 
reduce certain health and safety issues associated with drug use 
through care that is intended to be free of stigma and centered on the 
needs of people who use drugs. Decades of research have shown that harm 
reduction strategies provide significant benefits in preventing drug 
overdose deaths and transmission of infectious diseases among those who 
use drugs, educate individuals and community members about reducing the 
negative consequences associated with drug use, and link individuals to 
SUD treatment and other recovery resources.\384\ Harm reduction is also 
a crucial component of the HHS Overdose Prevention Strategy, which aims 
to promote evidence-based harm reduction services, including those that 
are integrated within healthcare delivery, and to expand sustainable 
funding strategies for harm reduction services.\385\ Besides defining 
harm reduction, SAMHSA also finalized a new definition for ``recovery 
support services'' at Sec.  8.2. Specifically, recovery is the process 
of change through which people improve their health and wellness, live 
self-directed lives, and strive to reach their full potential. Recovery 
support services can include, but are not limited to, community-based 
recovery housing, peer recovery support services, social support, 
linkage to and coordination among allied service providers and a full 
range of human services that facilitate recovery and wellness 
contributing to an improved quality of life. The services extend the 
continuum of care by strengthening and complementing substance use 
disorder (SUD) treatment interventions in different settings and 
stages. Recovery support services are a vital part SUD treatment, as 
they take into account the relapsing and chronic nature of a SUD, and 
emphasize the need for continuous care to keep individuals engaged in 
treatment, especially along different stages of recovery.\386\ Recovery 
support services are also a component of the HHS Overdose Prevention 
Strategy, which recognizes that treatment alone may not be enough to 
support long-term recovery, and that enabling access to quality 
integrated and coordinated recovery support services is important to 
prevent drug overdoses.\387\
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    \383\ 89 FR 7528, February 2, 2024 (https://www.federalregister.gov/documents/2024/02/02/2024-01693/medications-for-the-treatment-of-opioid-use-disorder).
    \384\ https://www.cdc.gov/overdose-prevention/php/od2a/harm-reduction.html. https://nida.nih.gov/research-topics/harm-reduction.
    \385\ https://www.hhs.gov/overdose-prevention/harm-reduction.
    \386\ Stanojlovi[cacute], M., & Davidson, L. (2021). ``Targeting 
the barriers in the substance use disorder continuum of care with 
peer recovery support.'' Substance Abuse: Research and Treatment, 
15, 117822182097698. https://doi.org/10.1177/1178221820976988; 
https://www.samhsa.gov/find-help/recovery.
    \387\ https://www.hhs.gov/overdose-prevention/recovery-support.
---------------------------------------------------------------------------

    Furthermore, SAMHSA made updates to existing definitions that 
include some of the services currently covered under the Medicare OTP 
benefit. For example, a psychoeducational service element was added to 
the definition of counseling services at Sec.  8.12(f)(5), so that both 
counseling and psychoeducational services would also include harm 
reduction education and recovery-oriented counseling. New guidelines on 
counseling related to preventing exposure to and transmission of 
various infectious diseases were also added. As part of these services, 
at Sec.  8.12(f)(5)(iii), OTPs also must continue to provide directly, 
or through referral to adequate and reasonably accessible community 
resources, vocational training, education, and employment services for 
patients who request such services or for whom these needs have been 
identified and mutually agreed-upon as beneficial by the patient and 
program staff. Notably, SAMHSA also made updates to their descriptions 
of initial and periodic assessment activities at Sec.  8.12(f)(4), 
which initially informed the definitions of intake activities and 
periodic assessments in the definition of ``OUD treatment services'' at 
Sec.  410.67(b) and the creation of codes describing these services 
(HCPCS codes G2076 and G2077) when CMS first implemented the Medicare 
OTP benefit in the CY 2020 PFS final rule. When introducing these 
changes in their proposed rule in December 2022 (87 FR 77330), SAMHSA 
noted that ``changes to the initial and periodic medical services 
sections are intended to promote key issues for OTP medical 
practitioners and the OTP multi-disciplinary team to address with a 
patient as part of treatment. This includes areas that may increase the 
risk of a patient leaving care prematurely, such as unmet mental health 
or other disability, medical and oral health needs, the need for 
culturally supportive care that addresses race, ethnicity, sexual 
orientation, religion or gender identity, and social determinants of 
health, such as housing and transportation, that may pose barriers to 
treatment engagement, or harm reduction and recovery support service 
needs.'' New changes to the

[[Page 61825]]

definition of initial assessments now include patient-centered language 
regarding the need for care plans to include the patient's goals and 
mutually agreed-upon actions for the patient to meet those goals, and 
new references are added for harm reduction interventions and recovery 
support services to be included as components of care plans if a 
patient needs and wishes to pursue these services. For example, 
patient-centered care plans developed during initial assessments may 
reflect a ``patient's goals and mutually agreed-upon actions for the 
patient to meet those goals, including harm reduction interventions; 
the patient's needs and goals in the areas of education, vocational 
training, and employment; and the medical and psychiatric, 
psychosocial, economic, legal, housing, and other recovery support 
services that a patient needs and wishes to pursue (89 FR 73558).'' 
Lastly, regarding periodic assessment services at Sec.  8.12(f)(4)(ii), 
SAMHSA requires that these examinations should occur not less than one 
time each year and be conducted by an OTP practitioner. The periodic 
physical examination should include review of MOUD dosing, treatment 
response, other SUD treatment needs, responses and patient-identified 
goals, and other relevant physical and psychiatric treatment needs and 
goals. The periodic physical examination should be documented in the 
patient's clinical record. In whole, these regulatory changes largely 
reflect significant changes in evidence-based practice and towards 
patient-centered care in the treatment of OUD that have occurred in the 
past couple of decades, including considerations of the need to address 
unmet health related social needs (HRSN) that impose barriers on a 
patient's ability to initiate, engage, and remain in treatment, 
including in areas of education, employment, and housing as well as in 
harm reduction strategies that decrease the negative consequences 
associated with a patient's use or abuse of opioids, and recovery 
support services that address the chronic nature of OUD and the need 
for supports across the full continuum of care.
    In addition to these reforms to opioid treatment standards at 42 
CFR part 8, there have been recent activities under the PFS, and 
through other CMS programs, that have addressed the social determinants 
of health (SDOH), which often affect the diagnosis and treatment of a 
patient's medical problem. Healthy People 2030, which is a 10-year HHS 
initiative to identify public health priorities that help individuals, 
organizations, and communities across the U.S improve health and well-
being,\388\ defines the SDOH, as the ``conditions in the environments 
where people are born, live, learn, work, play, worship, and age that 
affect a wide range of health, functioning, and quality-of-life 
outcomes and risks.'' \389\ SDOH include many domains that largely 
impact health, including economic stability, education, healthcare, the 
neighborhood and built environment, and social and community context. 
Some studies have estimated that SDOH can affect as much as 50 percent 
of the variation in health outcomes compared to clinical care impacting 
only 20 percent.\390\ For example, individuals with a higher income 
have been found to exhibit lower mortality, higher life expectancy, and 
slower declines in physical mobility; individuals who lack insurance 
are less likely to obtain necessary medical care and prescription 
medications; and, food insecurity is associated with higher rates of 
birth defects, cognitive problems, hospitalization rates, asthma, and 
behavioral health problems.\391\ Moreover, SDOH act as structural and 
contextual factors that shape the conditions impacting health, and 
their unequal distribution impacts the development of HRSNs at the 
individual level, which refer to an individual's needs that might 
include housing, healthy foods, transportation, financial assistance, 
etc. An inability to address these HRSNs put individuals at a higher 
risk for exacerbating health conditions, and it is a major driver of 
health inequities.\392\ Health equity is the attainment of the highest 
level of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes, which is complicated by 
SDOH such as poverty, unequal access to healthcare, lack of education 
or employment, stigma, and discrimination.\393\ Therefore, in light of 
decades of research showing that these upstream factors drive health 
outcomes, and evidence suggesting interventions in healthcare settings 
that address social needs can improve the treatment of an individual's 
condition, CMS recently finalized coding and payment for SDOH risk 
assessments in the CY 2024 PFS final rule (88 FR 78932). HCPCS code 
G0136 describes SDOH risk assessments (Administration of a 
standardized, evidence-based Social Determinants of Health Risk 
Assessment, 5-15 minutes, not more often than every 6 months) that may 
be billed when practitioners spend time and resources assessing HRSNs 
that interfere with the practitioner's ability to diagnose or treat the 
patient. These assessments, which may also be provided during a 
behavioral health visit, are often administered as part of an 
assessment of patient histories, risk, and in informing medical 
decision-making around the care and treatment of the disease or 
illness. They are often accomplished through the use of a standardized 
evidence-based tool that include the domains of food insecurity, 
housing insecurity, transportation needs, and utility difficulties. 
Besides establishing standalone payment for SDOH risk assessments, in 
the CY 2024 PFS final rule, CMS also created coding and payment for 
community health integration (CHI) (HCPCS codes G0019 & G0022) and 
principal illness navigation services (PIN) (HCPCS codes G0023, G0024, 
G0140, and G0146). Both CHI and PIN services involve a person-centered 
assessment to better understand the patient's life story, care 
coordination, contextualizing health education, building patient self-
advocacy skills, health system navigation, facilitating behavioral 
change, providing social and emotional support, and facilitating access 
to community-based social services (for

[[Page 61826]]

example, housing, utilities, transportation, food assistance) to 
address unmet SDOH needs. The services described by the CHI codes 
address unmet SDOH needs that affect the diagnosis and treatment of the 
patient's medical problems. PIN services focus on Medicare 
beneficiaries diagnosed with high-risk conditions (for example, 
dementia, HIV/AIDS, and cancer) in order to identify and connect them 
with appropriate clinical and support resources.
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    \388\ https://health.gov/healthypeople/
about#:~:text=What%20is%20Healthy%20People%20202030,over%20the%20firs
t%204%decades.
    \389\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
    \390\ Whitman, A., Chapell, A., Aysola, V., Zuckerman, R., & 
Sommers, B. (2022). ``Addressing Social Determinants of Health: 
Examples of Successful Evidence-Based Strategies and Current Federal 
Efforts'' (ASPE, Office of Health Policy HP-2022-12). https://aspe.hhs.gov/sites/default/files/documents/e2b650cd64cf84aae8ff0fae7474af82/SDOH-Evidence-Review.pdf; Hood, C. 
M., Gennuso, K. P., Swain, G. R., & Catlin, B. B. (2016). ``County 
health rankings: Relationships between determinant factors and 
health outcomes.'' American Journal of Preventive Medicine, 50(2), 
129-135. https://doi.org/10.1016/j.amepre.2015.08.024.
    \391\ National Academies of Sciences, E., Medicine, N. A. of, 
Nursing 2020-2030, C. on the F. of, Flaubert, J. L., Menestrel, S. 
L., Williams, D. R., & Wakefield, M. K. (2021). ``Social 
determinants of health and health equity. In The Future of Nursing 
2020-2030: Charting a Path to Achieve Health Equity.'' National 
Academies Press (U.S.). https://www.ncbi.nlm.nih.gov/books/NBK573923/.
    \392\ Whitman, A., Chapell, A., Aysola, V., Zuckerman, R., & 
Sommers, B. (2022). ``Addressing Social Determinants of Health: 
Examples of Successful Evidence-Based Strategies and Current Federal 
Efforts'' (ASPE, Office of Health Policy HP-2022-12). https://aspe.hhs.gov/sites/default/files/documents/e2b650cd64cf84aae8ff0fae7474af82/SDOH-Evidence-Review.pdf.; https://www.whitehouse.gov/wp-content/uploads/2023/11/SDOH-Playbook-3.pdf.
    \393\ https://www.cms.gov/pillar/health-equity.
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    Moreover, many of these aforementioned services, including harm 
reduction interventions, recovery support services, addressing HRSN, 
and facilitating access to community-based social services to address 
these needs, ordinarily occur in OTP settings. In 2022, approximately 
92 percent of OTP facilities offered various recovery support services, 
including peer support (59.6 percent), assistance locating housing for 
clients (75.0 percent), employment counseling (49.5 percent), and 
assistance helping patients obtain social services (81.2 percent). The 
majority of OTPs also offered various types of harm reduction services, 
including testing for various types of infectious diseases (>55 
percent), health education (>77%), and naloxone and overdose education 
(92.3 percent). Many OTPs also conduct community outreach services to 
those in need of OUD treatment (76.1 percent) and case management 
services (87.8 percent).\394\ Additionally, as part of initial and 
periodic assessment services at Sec.  8.12(f)(4), OTPs must designate 
in the care plan a patient's needs and goals in the areas of harm 
reduction interventions, education, vocational training, and 
employment, along with the medical and psychiatric, psychosocial, 
economic, legal, housing, and other recovery support services that a 
patient needs and wishes to pursue, which all reflect consideration to 
various health-related social needs. The new definitions of harm 
reduction and recovery support services at Sec.  8.2 are also inclusive 
of activities that involve linkage to and coordination with providers 
that address a full range of human and public health services to 
facilitate recovery and wellness for a SUD. Lastly, in the CY 2020 PFS 
final rule we responded to public comments pertaining to the above-
mentioned activities. Specifically, several commenters stated that OTPs 
often provide case management and/or care management services and 
requested that CMS consider reimbursing for these services either as 
part of the standard bundle or as an adjustment to the bundled payment, 
as applicable. A few commenters stated that OTPs serve as a fixed point 
of responsibility in the provision of whole person-centered care and 
improving health outcomes through collaborative arrangements with 
health care providers outside of the OTP and that the goal of care 
management is to reduce health care costs, specifically preventable 
hospital admissions, readmissions, and avoidable emergency room visits. 
The commenters also stated in the CY 2020 final rule that OTP staff 
also help patients with accessing food benefits, housing, and 
employment searches, which are critical components for sustained 
recovery, as part of the goal of complete case management (84 FR 
62648). At the time, CMS stated that we would consider making payment 
for these type of care management activities for future rulemaking, 
including activities whereby OTPs collaborate with providers outside 
the OTPs to help patients access social services. We believed it was 
appropriate to work with OTPs to better understand how these services 
are furnished in an OTP setting, as well as to continue to look at data 
on specific items and services that may fit within the scope of OUD 
treatment services.
---------------------------------------------------------------------------

    \394\ Table SU17b: Substance use treatment facilities, by 
services provided and facility type: Number and column percent, 
2022: https://www.samhsa.gov/data/sites/default/files/reports/rpt42714/NSUMHSS-Annual-Detailed-Tables-22.pdf.
---------------------------------------------------------------------------

a. Proposal To Establish Payment for Social Determinants of Health Risk 
Assessments
    The recent refinements to initial assessments under Sec.  
8.12(f)(4)(i) likely necessitate additional resource costs for OTPs in 
order to comply with the opioid treatment standards for assessing 
various SDOHs (for example, education, vocational training, employment, 
economic, legal, housing, etc.) that impact a patient's HRSNs, and to 
identify a patient's goals for harm reduction interventions and needs 
for recovery support services as they relate to the treatment of an 
OUD. We recognize that the paradigm for OUD treatment and care has 
evolved rapidly since the implementation of the Medicare OTP benefit in 
CY 2020, and that providers have increasingly incorporated 
interventions to address HRSNs that increase the risk of a patient 
leaving OUD treatment prematurely or that pose barriers to treatment 
engagement. We additionally acknowledge that coding already exists 
under the PFS that accounts for the resources involved in conducting 
these types of assessments. For these reasons, we are proposing to 
establish payment for SDOH risk assessments as part of intake 
activities within OUD treatment services, as long as these assessments 
are medically reasonable and necessary for the diagnosis or treatment 
of an OUD, and OTPs have a reason to believe unmet HRSNs or the need 
for harm reduction intervention or recovery support services identified 
during such an assessment could interfere with the OTP's ability to 
diagnose or treat the patient's OUD. As previously stated, the SDOH 
include broad structural and contextual domains that may impact health 
(for example, economic stability, education, healthcare, neighborhood 
and built environment, and social and community context) and the 
development of HRSNs at the individual-level (for example, housing and 
utilities assistance, transportation assistance, financial assistance, 
healthy foods, personal safety, employment, recovery support and harm 
reduction services). We understand that there are multiple 
standardized, evidence-based SDOH risk-assessment tools utilized across 
the healthcare system that are structured to assess a patient across 
various SDOH domains.\395\ If an OTP furnishes SDOH risk assessments as 
part of initial assessments under Sec.  8.12(f)(4)(i), we would expect 
that the assessment tools used would allow the OTP to identify more 
specific individual-level HRSNs as part of the care plan, including 
giving consideration to potential harm reduction and recovery support 
services needs.
---------------------------------------------------------------------------

    \395\ https://prapare.org/wp-content/uploads/2021/10/What-is-PRAPARE_2.1.21-1.pdf; https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion.
---------------------------------------------------------------------------

    Specifically, we are proposing to update the payment rate for 
intake activities described by HCPCS code G2076 by adding in the value 
of the non-facility rate for SDOH risk assessments described by HCPCS 
code (G0136). We believe HCPCS code G0136 may serve as a reasonable 
proxy to reflect the value and resources required for the type of 
assessment service activities that OTPs are required to provide 
according to SAMHSA requirements under Sec.  8.12(f)(4)(i), including 
an assessment to identify a patient's unmet HRSNs or the need for harm 
reduction intervention and recovery support services that are critical 
to the treatment of an OUD. We understand that OTPs have been involved 
in collaborative agreements with organizations who address HRSN sand 
offer various recovery support services (84 FR 62648), and we believe 
that for OTPs to appropriately identify

[[Page 61827]]

these types of organizations that target a specific need, identifying 
these HRSNs as part of SDOH risk assessments is likely needed prior to 
engaging in activities to coordinate service delivery. However, we seek 
comment on whether these types of SDOH assessments ordinarily 
complement the type of community coordination activities that OTPs 
perform.
    Establishing payment to account for SDOH risk assessments as part 
of intake activities under the OTP benefit is important, as unmet HRSNs 
identified as part of such assessments significantly impact outcomes 
for OUD treatment. Evidence shows that healthcare providers who screen 
for SDOH in their settings have found that patients who screen positive 
for a HRSN were significantly more likely to have a history of 
substance use or mental illness compared to patients who did not have 
an HRSN.\396\ For example, one review found that between 50 to 90 
percent of patients in publicly funded OTPs were unemployed, and that 
older adults identified to have misused opioids were 22-percent less 
likely to be employed.\397\ Patients with an OUD are also more likely 
to have a lower educational attainment, encounter financial hardship, 
and housing instability.\398\ Even more, food insecurity has been 
indicated to be a strong predictor of prescription opioid misuse and 
abuse.\399\ The SDOH and their contribution to unmet HRSNs have also 
heavily impacted the rates of drug overdoses. For example, one study 
examined 28 different SDOH measures that collectively explained 89-
percent of the variance in drug-overdose mortality across states.\400\ 
Housing insecurity, in particular, negatively affects the population 
with an OUD, as this risk factor has been increasing over time among 
those seeking treatment with an OUD.\401\ One analysis conducted by the 
State of Massachusetts has revealed alarming evidence that the risk of 
death from an opioid overdose is 30-times higher for those who have 
experienced homelessness.\402\ Lower median household income and 
unemployment have also been associated with an increase in opioid death 
rates.\403\ Moreover, unmet HRSNs have also hampered access to 
treatment among Medicare beneficiaries with a SUD, as evidence has 
shown that among Medicare beneficiaries with an SUD who were not 
receiving treatment, one-third reported financial barriers and one-
fifth reported logistical barriers such as lack of access to 
transportation as rationales for not receiving treatment.\404\ Lastly, 
many of these SDOH factors have impaired treatment retention and 
completion rates. Those with lower levels of educational attainment and 
who are unemployed are less likely to complete SUD treatment, and 
individuals who are experiencing homelessness are significantly less 
likely to remain in treatment.\405\ Therefore, screening for the SDOH 
and identifying these unmet HRSNs as part of intake assessments may 
help OTPs link patients with an identified social need to appropriate 
resources that can impact the diagnosis of an OUD or address barriers 
to treating an OUD.
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    \396\ Chukmaitov, A., Dahman, B., Garland, S.L., Dow, A., 
Parsons, P.L., Harris, K.A., & Sheppard, V.B. (2022). ``Addressing 
social risk factors in the inpatient setting: Initial findings from 
a screening and referral pilot at an urban safety-net academic 
medical center in Virginia, USA.'' Preventive Medicine Reports, 29, 
101935. https://doi.org/10.1016/j.pmedr.2022.101935.
    \397\ Zanis, D.A., & Coviello, D. (2001). ``A case study of 
employment case management with chronically unemployed methadone 
maintained clients.'' Journal of Psychoactive Drugs, 33(1), 67-73. 
https://doi.org/10.1080/02791072.2001.10400470; Albright, D.L., 
Johnson, K., Laha-Walsh, K., McDaniel, J., & McIntosh, S. (2021). 
``Social determinants of opioid use among patients in rural primary 
care settings.'' Social Work in Public Health, 36(6), 723-731. 
https://doi.org/10.1080/19371918.2021.1939831.
    \398\ Albright, D.L., Johnson, K., Laha-Walsh, K., McDaniel, J., 
& McIntosh, S. (2021). ``Social determinants of opioid use among 
patients in rural primary care settings.'' Social Work in Public 
Health, 36(6), 723-731. https://doi.org/10.1080/19371918.2021.1939831; Arsene, C., Na, L., Patel, P., Vaidya, V., 
Williamson, A.A., & Singh, S. (2023). ``The importance of social 
risk factors for patients diagnosed with opioid use disorder.'' 
Journal of the American Pharmacists Association, 63(3), 925-932. 
https://doi.org/10.1016/j.japh.2023.02.016.
    \399\ Men, F., Fischer, B., Urquia, M.L., & Tarasuk, V. (2021). 
``Food insecurity, chronic pain, and use of prescription opioids.'' 
SSM--Population Health, 14, 100768. https://doi.org/10.1016/j.ssmph.2021.100768.
    \400\ Cesare, N., Lines, L.M., Chandler, R., Gibson, E.B., 
Vickers-Smith, R., Jackson, R., Bazzi, A.R., Goddard-Eckrich, D., 
Sabounchi, N., Chisolm, D.J., Vandergrift, N., & Oga, E. (2024). 
``Development and validation of a community-level social 
determinants of health index for drug overdose deaths in the HEALing 
Communities Study.'' Journal of Substance Use and Addiction 
Treatment, 157, 209186. https://doi.org/10.1016/j.josat.2023.209186.
    \401\ Sulley, S., & Ndanga, M. (n.d.). ``Inpatient opioid use 
disorder and social determinants of health: A nationwide analysis of 
the national inpatient sample (2012-2014 and 2016-2017).'' Cureus, 
12(11), e11311. https://doi.org/10.7759/cureus.11311.
    \402\ https://www.mass.gov/files/documents/2017/08/31/legislative-report-chapter-55-aug-2017.pdf.
    \403\ Rangachari, P., Govindarajan, A., Mehta, R., Seehusen, D., 
& Rethemeyer, R.K. (2022). ``The relationship between Social 
Determinants of Health (Sdoh) and death from cardiovascular disease 
or opioid use in counties across the United States (2009-2018).'' 
BMC Public Health, 22(1), 236. https://doi.org/10.1186/s12889-022-12653-8 Hollingsworth, A., Ruhm, C.J., & Simon, K. (2017). 
Macroeconomic conditions and opioid abuse (Working Paper 23192). 
National Bureau of Economic Research. https://doi.org/10.3386/w23192.
    \404\ Parish, W. J., Mark, T.L., Weber, E.M., & Steinberg, D.G. 
(2022). ``Substance use disorders among Medicare beneficiaries: 
Prevalence, mental and physical comorbidities, and treatment 
barriers.'' American Journal of Preventive Medicine, 63(2), 225-232. 
https://doi.org/10.1016/j.amepre.2022.01.021.
    \405\ Mennis, J., & Stahler, G. J. (2016). Racial and ethnic 
disparities in outpatient substance use disorder treatment episode 
completion for different substances. Journal of Substance Abuse 
Treatment, 63, 25-33. https://doi.org/10.1016/j.jsat.2015.12.007; 
Gaeta Gazzola, M., Carmichael, I.D., Christian, N.J., Zheng, X., 
Madden, L.M., & Barry, D. T. (2023). ``A national study of 
homelessness, social determinants of health, and treatment 
engagement among outpatient medication for opioid use disorder-
seeking individuals in the United States.'' Substance Abuse, 44(1-
2), 62-72. https://doi.org/10.1177/0889707723116729.
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    As previously stated above, we are proposing to update the 
adjustment to the bundled payment for an episode of care for intake 
activities (G2076) by adding in the value of the non-facility rate for 
SDOH risk assessments (G0136: Administration of a standardized, 
evidence-based Social Determinants of Health Risk Assessment, 5-15 
minutes, not more often than every 6 months), which is currently 
assigned a non-facility rate of $18.66 under the PFS. Currently, the CY 
2024 payment rate for the intake add-on code (G0276) is $201.73 and 
adding the value of a crosswalk to the CY 2024 non-facility rate of 
$18.66 would result in a payment rate of approximately $220.39. We 
believe that incorporating the value of G0136 into the intake 
activities adjustment would be the most appropriate, as we believe 
assessment activities related to SDOH are more likely to occur during 
intake assessments when a new patient is admitted to an OTP. SAMHSA 
treatment guidelines recommend that during initial screenings, OTPs 
should identify barriers and medical and psychosocial risk-factors that 
may hinder a patient's ability to meet treatment requirements, 
including co-occurring health conditions, and vocational, legal, 
financial, transportation, and family concerns.\406\ We note that 
intake activities (G2076) should only be billed for new patients (that 
is, patients starting treatment at the OTP), and since SDOH risk 
assessments would be bundled into the code describing intake 
activities, this billing requirement would similarly apply. However, we 
seek comment on the frequency with which these SDOH risk assessments 
occur, and whether it would be more appropriate if these assessments 
occur when OTPs furnish

[[Page 61828]]

periodic assessments described by HCPCS code G2077.
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    \406\ SAMHSA. (2012). Medication-assisted treatment for opioid 
addiction in opioid treatment programs. https://www.ncbi.nlm.nih.gov/books/NBK64164/pdf/Bookshelf_NBK64164.pdf.
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    When OTPs bill the intake add-on code (G2076), we are not proposing 
to require that OTPs performed SDOH risk assessments in a specific 
manner, but rather that OTPs continued to perform initial assessment 
services consistent with SAMHSA certification requirements at Sec.  
8.12(f)(4)(i) that already largely reflect these type of SDOH risk 
assessment activities; and, that OTPs abided by other applicable 
requirements under the Medicare OTP benefit at Sec.  410.67, including 
those listed in the definition of intake activities at paragraph (vi) 
within the definition of ``OUD treatment service'' at Sec.  410.67(b). 
This also means that for the purposes of Medicare payment, if SDOH risk 
assessments are furnished, they must be related to the diagnosis or 
treatment of OUD, and any HRSNs identified through SDOH risk 
assessments performed should be documented in the patient's medical 
record to indicate how assessing and addressing the HRSN relates to the 
treatment and diagnosis of an OUD. We reiterate that our proposal to 
incorporate the value of HCPCS code G0136 into the OTP intake add-on 
code (G2076) is meant to serve as a reasonable proxy to reflect the 
value and resources of the type of initial assessment service 
activities that OTPs are required to provide under SAMHSA requirements, 
which now include more specific updates to a patient's care plan with 
considerations of a patient's goals related to harm reduction 
interventions, needs for recovery support services, and other HRSNs. 
However, if OTPs utilize SDOH risk assessments during intake 
activities, CMS is not proposing to require OTPs to utilize a specific 
type of SDOH risk assessment tool, consistent with similar existing 
requirements under the PFS for these services. If OTPs do furnish these 
assessment services, CMS encourages OTPs to adopt evidence-based, 
validated tools that are already available (such as the CMS Accountable 
Health Communities tool, the Protocol for Responding to and Assessing 
Patients Assets, Risks and Experiences (PRAPARE), and instruments 
identified for Medicare Advantage Special Needs Population Health Risk 
Assessment); \407\ that include the domains of food insecurity, housing 
insecurity, transportation needs, and utility difficulties, and that 
can be furnished in a manner appropriate for the patient's educational, 
developmental, and health literacy level, and that are culturally and 
linguistically appropriate. We understand that there is not a national 
consensus around one specific tool, and OTPs should choose the tool 
that fits their needs and allows them to appropriately detect unmet 
HRSNs, as well as other needs for harm reduction interventions and 
recovery support services that are integral to the treatment of an OUD.
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    \407\ https://innovation.cms.gov/files/worksheets/ahcm-screeningtool.pdf.; https://www.nachc.org/research-and-data/prapare/
; CMS-10825.
---------------------------------------------------------------------------

    Lastly, in light of these proposed changes, we are proposing to 
revise the current descriptor for the intake add-on code for 
consistency with revisions to Sec.  8.12(f)(4)(i) and to reflect 
furnishing an SDOH risk assessment: G2076 (Intake activities, including 
initial medical examination that is a complete, fully documented 
physical evaluation and initial assessment conducted by a program 
physician or a primary care physician, or an authorized healthcare 
professional under the supervision of a program physician or qualified 
personnel that includes preparation of a care plan, which may be 
informed by administration of a standardized, evidence-based Social 
Determinants of Health Risk Assessment to identify unmet health-related 
social needs, and that includes the patient's goals and mutually 
agreed-upon actions for the patient to meet those goals, including harm 
reduction interventions; the patient's needs and goals in the areas of 
education, vocational training, and employment; and the medical and 
psychiatric, psychosocial, economic, legal, housing, and other recovery 
support services that a patient needs and wishes to pursue, conducted 
by qualified personnel (provision of the services by a Medicare-
enrolled Opioid Treatment Program); List separately in addition to code 
for primary procedure). We welcome public comments related to this 
proposal.
b. Request for Information on Payment for Coordinated Care and 
Referrals to Community-Based Organizations That Address Unmet Health-
Related Social Needs, Provide Harm Reduction Services, and/or Provide 
Recovery Support Services
    In the discussion above, we noted that SAMHSA's recent reforms to 
42 CFR part 8 finalized new definitions for harm reduction and recovery 
support services, which are included as components of the type of 
services that OTPs may provide. Some examples of harm reduction 
strategies include overdose education, distribution of opioid overdose 
reversal medications, and linkage to other public health services. 
Recovery support services can include, but are not limited to, 
community-based recovery housing, social support, and linkage to and 
coordination among allied service providers and a full range of human 
services that facilitate recovery and wellness. Under the Medicare OTP 
benefit, we have already established payment for some of these 
services, including take-home supplies of opioid antagonist medications 
for emergency treatment of known or suspected opioid overdose (for 
example, naloxone), overdose education furnished in conjunction with 
opioid antagonist medications, and social support via group therapy. 
However, we do not currently have specific coding for activities that 
OTPs may conduct to coordinate care and make referrals or ``link'' to 
community-based organizations (CBOs) that help facilitate a patient's 
needs and goals related to harm reduction and recovery support 
services, as well as to address unmet HRSNs. We understand that a 
referral is an important aspect of following up on unmet HRSNs 
identified during an initial assessment service and/or SDOH risk 
assessment so that a patient can be connected to resources or services 
that may help address their unmet HRSN that interferes with treatment 
of their OUD. Additionally, we have received previous comments that 
OTPs often have collaborative agreements with providers outside of the 
OTP. For these reasons, we are seeking comment to understand how OTPs 
are currently coordinating care and making referrals to CBOs that 
address unmet HRSNs, provide harm reduction services, and/or provide 
recovery support services.
    Some evidence has indicated that providers who coordinate care with 
CBOs to address HRSNs (for example, housing, transportation, care 
management, etc.) can positively influence health outcomes,\408\ and 
that SUD treatment facilities establishing relationships with 
community-based peer support services, educational and employment 
agencies, housing agencies, and other organizations have been able to 
better support a patient's engagement in SUD treatment.\409\ 
Additionally, harm

[[Page 61829]]

reduction organizations, including syringe service programs, function 
as important facilitators of entry to treatment, as individuals who 
partake in these programs are five times more likely to enter 
treatment, more likely to remain engaged in treatment, and more likely 
to reduce their injection drug use.\410\ Additionally, recovery support 
services, such as those linking individuals in SUD treatment who are 
also experiencing homelessness with supportive or transitional housing, 
have resulted in improved uptake of behavioral health visits; \411\ 
and, recovery support services facilitated by peers who have recovered 
from a SUD have been shown to reduce relapse rates, improve treatment 
retention, enhance the provider and patient relationship, and boost 
overall treatment experience.\412\ Therefore, there is evidence to 
suggest that linkage to these types of community-based resources may 
contribute to improved outcomes related to OUD treatment; however, we 
seek comment on additional evidence that demonstrates how this type of 
services would directly help OTPs address the diagnosis or treatment of 
an OUD. CMS would also be interested in additional evidence describing 
how these community-based resources and coordination of these services 
with MOUD provided by OTPs would impact access to treatment for 
Medicare beneficiaries who may face barriers in accessing treatment, 
such as those who are residents of rural areas, racial/ethnic 
minorities, living with a disability, dual-enrollees in Medicare and 
Medicaid, and low-income, or other populations who may face barriers in 
accessing treatment. Additionally, we seek to identify the types of 
entities, service providers, and organizations that OTPs may interact 
with on a regular basis to address a patient's unmet HRSNs and needs or 
goals related to harm reduction and recovery support services. For 
example, we seek to understand if these entities would typically 
include housing or transportation agencies, local support groups, 
syringe service programs, non-profits that provide financial 
assistance, etc. We are also seeking information on the types of 
collaborative arrangements that OTPs typically have with these CBOs, 
including how frequently (for example, weekly, monthly, annually, etc.) 
OTPs coordinate care or make referrals to these CBOs for patients with 
an OUD, the types of circumstances that warrant an OTP interacting with 
these CBOs, and the workflows originating from the initial SDOH 
assessment to identify these HRSNs to a beneficiary successfully 
receiving referred services. We are also interested in learning to what 
extent some of these programs are already integrated into OTP settings.
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    \408\ McCarthy, D., Lewis, C., Horstman, C., Bryan, A., & Shah, 
T. (2022). ``Guide to Evidence for Health-Related Social Needs 
Interventions: 2022 Update'' [ROI Calculator for Partnerships to 
Address the Social Determinants of Health]. The Commonwealth Fund. 
https://www.commonwealthfund.org/sites/default/files/2022-09/ROI_calculator_evidence_review_2022_update_Sept_2022.pdf.
    \409\ O'Brien, P., Crable, E., Fullerton, C., & Hughey, L. 
(2019). ``Best Practices and Barriers to Engaging People with 
Substance Use Disorders in Treatment.'' ASPE. https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf.
    \410\ Hagan, H., McGough, J.P., Thiede, H., Hopkins, S., Duchin, 
J., & Alexander, E.R. (2000). ``Reduced injection frequency and 
increased entry and retention in drug treatment associated with 
needle-exchange participation in Seattle drug injectors.'' Journal 
of Substance Abuse Treatment, 19(3), 247-252. https://doi.org/10.1016/s0740-5472(00)00104-5.
    \411\ Brennan, K., Buggs, K., Zuckerman, P., Muyeba, S., Henry, 
A., Gettens, J., & Kunte, P. (2020). ``The Preventive Effect of 
Housing First on Health Care Utilization and Costs among Chronically 
Homeless Individuals.'' https://www.bluecrossmafoundation.org/sites/g/files/csphws2101/files/2020-12/Housing%20First_summary_Final.pdf.
    \412\ Reif, S., Braude, L., Lyman, D.R., Dougherty, R.H., 
Daniels, A.S., Ghose, S.S., Salim, O., & Delphin-Rittmon, M.E. 
(2014). ``Peer recovery support for individuals with substance use 
disorders: Assessing the evidence.'' Psychiatric Services, 65(7), 
853-861. https://doi.org/10.1176/appi.ps.201400047.
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    Moreover, we are also interested in learning when these coordinated 
activities and/or referrals occur in the process of furnishing care to 
a beneficiary. For example, a component of SAMHSA's new revised 
standards for MOUD treatment under counseling and psychoeducational 
services at Sec.  8.12(f)(5)(iii) suggests that OTPs must provide 
directly, or through referral to adequate and reasonably accessible 
community resources, vocational training, education, and employment 
services for patients who request such services or for whom these needs 
have been identified and mutually agreed upon as beneficial by the 
patient and program staff. Thus, we are soliciting comment on whether 
these coordination and referral services typically occur during SUD 
counseling session services, or if they may occur during initial or 
periodic assessments, therapy sessions, or as part of other services. 
We are also interested in understanding if, when billing for intake 
activities (G2076), periodic assessments (G2077), additional therapy/
counseling (G2080), and/or the non-drug component code (G2074) under 
the Medicare OTP benefit, OTPs are already accounting for these 
coordinated care and referral services as part of those codes.
    We are also interested in additional information related to payment 
for these types of coordinated care or referral services. Specifically, 
we seek comment on the resource costs that OTPs must expend to 
coordinate or make referrals to community-based services that address 
HRSNs, harm reduction, or recovery support needs. We are also 
especially interested in whether there is existing coding that properly 
describes these types of coordinated care or referral services, or 
whether there are elements to these types of services that are unique 
to OTPs and require new coding. We seek comment on if any of the 
following codes below may describe the type of coordinated care or 
referral activities that OTPs may provide, or if there are other codes 
that more precisely match the type of coordinated care or referral 
activities at OTPs: community health integration (G0019& G0022), 
principal illness navigation (G0023, G0024, G0140, G0146), chronic care 
management (99437, 99439, 99490, 99491), complex chronic care 
management (99487, 99489), principal care management (99424, 99425, 
99426, 99427), or other codes, including any other relevant codes used 
by other payers.
    Lastly, we are seeking information on whether OTPs already receive 
funding for these types of coordinated care or referral services from 
other public or private sources, and if additional payment would be 
duplicative or unnecessary. We are interested in learning, for example, 
if OTPs already receive state or Federal grants for these types of 
activities (for example, the SAMHSA Harm Reduction Grant Program, Rural 
Communities Opioid Response Program, State Opioid Response Grants, 
Building Communities of Recovery, Substance Use Prevention, Treatment, 
and Recovery Services Block Grant, etc.).\413\ Additionally, CMS would 
like to understand if OTPs already receive payment from states who 
might already cover these services under state Medicaid programs, 
including through section 1115 waiver demonstrations and delivery 
system reform incentive payments, state plan amendments, managed care 
contracts, or other service benefits and payment arrangements,\414\ and 
if new coding under the Medicare OTP benefit may unintentionally 
supplant coverage for dually eligible beneficiaries. We appreciate any 
feedback submitted by the public on these questions and issues to 
better understand activities that OTPs conduct to coordinate care and 
make referrals to CBOs that address unmet health-related social needs, 
provide

[[Page 61830]]

harm reduction services, and/or provide recovery support services.
---------------------------------------------------------------------------

    \413\ https://www.samhsa.gov/grants/grant-announcements/sp-22-001; https://grants.hrsa.gov/2010/Web2External/Interface/FundingCycle/ExternalView.aspx?fCycleID=af0c3bac-6d99-4314-ab7b-c1602e6c471c; https://www.samhsa.gov/grants/grants-dashboard; 
https://nashp.org/funding-options-for-states/.
    \414\ Artiga, S., & Published, E. H. (2018, May 10). ``Beyond 
health care: The role of social determinants in promoting health and 
health equity.'' KFF. https://www.kff.org/racial-equity-and-health-policy/issue-brief/beyond-health-care-the-role-of-social-determinants-in-promoting-health-and-health-equity/;https://www.health.ny.gov/diseases/aids/consumers/prevention/medicaid_harm_reduction.htm.
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4. Establishing Payment for New FDA-Approved Opioid Agonist and 
Antagonist Medications
    Section 1861(jjj)(1)(A) of the Act establishes Medicare payment for 
opioid agonist and antagonist treatment medications (including oral, 
injected, or implanted versions) that are approved by the Food and Drug 
Administration under section 505 of the Federal Food, Drug, and 
Cosmetic Act (FFDCA) for use in the treatment of OUD and as part of OUD 
treatment services under the OTP benefit. Additionally, section 
1834(w)(2) of the Act granted CMS the authority to establish multiple 
bundled payments in stating that the ``Secretary may implement this 
subsection through one or more bundles based on the type of medication 
provided (such as buprenorphine, methadone, naltrexone, or a new 
innovative drug), the frequency of services, the scope of services 
furnished, characteristics of the individuals furnished such services, 
or other factors as the Secretary determine appropriate.'' In the CY 
2020 PFS final rule, we finalized basing the OTP bundled payments, in 
part, on the type of medication used for treatment that reflect those 
drugs currently approved by the FDA under section 505 of the FFDCA for 
use in treatment of OUD. Accordingly, at Sec.  410.67(d)(1) we 
specified that CMS would establish categories of bundled payments for 
OTPs for an episode of care, including categories for each type of 
opioid agonist and antagonist treatment medication, a category for 
medications not otherwise specified, and a category for episodes of 
care in which no medication is provided. At Sec.  410.67(d)(2) we 
finalized that the bundled payment amounts for an episode of care would 
be based on both a drug and non-drug component, and we codified the 
payment methodology for determining these components. At Sec.  
410.67(d)(4), we described various adjustments that could be made to 
the bundled payment. Since the implementation of the Medicare OTP 
benefit on January 1, 2020, we have established bundled payments and/or 
add-on codes for the following medications: methadone (G2067 & G2078), 
oral buprenorphine (G2068 & G2079), injectable buprenorphine (G2069), 
buprenorphine implants (G2070 through G2072), naltrexone (G2073), nasal 
naloxone (G2215 & G1028), injectable naloxone (G2216), and medication 
not otherwise specified (G2075) (for new FDA-approved opioid agonist or 
antagonist medications for OUD treatment that is not specified in one 
of our existing codes). In this CY 2025 PFS proposed rule, we are 
proposing new payment for injectable buprenorphine and nalmefene 
hydrochloride products furnished by OTPs.
a. Coding and Payment for a New Nalmefene Hydrochloride Product, 
Opvee[supreg]
    In May of 2023, the FDA approved the first nalmefene hydrochloride 
(nalmefene) nasal spray (under the brand name Opvee[supreg]), which is 
indicated for the emergency treatment of known or suspected opioid 
overdose induced by natural or synthetic opioids. This is the first FDA 
approval of a nasal spray for nalmefene hydrochloride for health care 
and community use, and it is intended for immediate administration as 
emergency therapy in settings where opioids may be present. Nalmefene 
acts as an opioid receptor antagonist and when administered quickly, it 
can reverse the effects of an opioid overdose including respiratory 
depression, sedation, and low blood pressure.\415\ Newly approved 
Opvee[supreg] delivers 2.7 milligrams (mg) of nalmefene in a single 
spray into the nasal cavity. After the first dose is administered, if 
the patient does not respond, or responds and then relapses into 
respiratory depression, additional doses of the Opvee[supreg] nasal 
spray may be administered with an additional spray every 2 to 5 minutes 
until emergency medical assistance arrives.\416\ Compared to naloxone 
which has a half-life of approximately 2 hours and also rapidly 
reverses the effects of an opioid overdose, nalmefene has a half-life 
of 11 hours which means that it remains in the body much longer than 
other overdose reversal drugs.\417\ The rise of dangerous synthetic 
opioids, such as fentanyl and its analogs sufentanil and carfentanil, 
have made it increasingly difficult for first responders to reverse the 
effects of an overdose. These synthetics have a high potency and longer 
half-lives than naloxone (7-8 hours for fentanyl; 6-9 hours for 
sufentanil; 5-6 hours for carfentanil; and 1.3-2.4 hours for naloxone), 
which means that very high doses of naloxone are often required to 
treat opioid overdose and prevent recurring overdose symptoms,\418\ 
which further demonstrates the necessity for new overdose reversal 
products that can counter these highly potent opioid synthetics. In one 
study, 2.7 mg of Opvee[supreg] reversed respiratory depression to 
baseline levels within 5 minutes, whereas 4 mg of intranasal naloxone 
did so within 20 minutes,\419\ demonstrating the effectiveness of 
Opvee[supreg] in quickly reversing symptoms of opioid overdose.
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    \415\ https://www.fda.gov/news-events/press-announcements/fda-approves-prescription-nasal-spray-reverse-opioid-overdose.
    \416\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/217470Orig1s000.pdf.
    \417\ Harris, E. (2023). ``FDA approves nalmefene, a longer-
lasting opioid reversal nasal spray.'' JAMA, 329(23), 2012. https://doi.org/10.1001/jama.2023.9608.
    \418\ Krieter, P., Gyaw, S., Crystal, R., & Skolnick, P. (2019). 
``Fighting fire with fire: Development of intranasal nalmefene to 
treat synthetic opioid overdose.'' The Journal of Pharmacology and 
Experimental Therapeutics, 371(2), 409-415. https://doi.org/10.1124/jpet.118.256115.
    \419\ Ellison, M., Hutton, E., Webster, L., & Skolnick, P. 
(2024). ``Reversal of opioid[hyphen]induced respiratory depression 
in healthy volunteers: Comparison of intranasal nalmefene and 
intranasal naloxone.'' The Journal of Clinical Pharmacology, 
jcph.2421. https://doi.org/10.1002/jcph.2421.
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    In the CY 2021 PFS final rule (85 FR 84683 through 84692), we 
adopted new add-on codes for take-home supplies of nasal naloxone 
(G2215) and injectable naloxone (G2216). Additionally, we used our 
discretionary authority in section 1861(jjj)(1)(F) of the Act (which 
generally authorizes us to include as an OTP treatment service other 
items and services we determine are appropriate) to extend the 
definition of OUD treatment services to include short-acting opioid 
antagonist medications for the emergency treatment of known or 
suspected opioid overdose, such as naloxone, and overdose education 
furnished in conjunction with opioid antagonist medication. We also 
established an adjustment at Sec.  410.67(d)(4)(i)(E) to the weekly 
bundled payments when the OTP furnishes take-home supplies of these 
medications. This adjustment includes both a drug component and a non-
drug component for overdose education. The payment methodology for the 
drug component of the adjustment was finalized at Sec.  410.67(d)(2)(i) 
and is updated annually using the most recent data available at the 
time of ratesetting. The amount of the non-drug component of the 
adjustment, which includes overdose education, is based on the CY 2020 
Medicare payment rate for 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 also finalized that any payment to an OTP 
for naloxone would be duplicative if a claim for the same medication is 
separately paid under Medicare Part B or Part D for the same 
beneficiary on the same date of service, and that we would

[[Page 61831]]

recoup any duplicative payment made to an OTP for naloxone.
    Furthermore, in the CY 2022 PFS final rule (86 FR 65340 and 65341), 
we established a new add-on code and payment for a higher dose of nasal 
naloxone (G0128). We also finalized that the adjustment includes take-
home supplies of opioid antagonist medications in the list of items for 
which the non-drug component will be geographically adjusted using the 
Geographic Adjustment Factor (GAF) and the payment amount will be 
updated annually by the growth in the Medicare Economic Index (MEI). 
Lastly, we revised our regulations at Sec.  410.67(d)(5) to state 
explicitly that payments for medications that are delivered, 
administered or dispensed to a beneficiary as part of an adjustment to 
the bundled payment are considered a duplicative payment if a claim for 
delivery, administration or dispensing of the same medication(s) for 
the same beneficiary on the same date of service was also separately 
paid under Medicare Part B or Part D. We clarified that this revision 
would apply not only to duplicative payments for take-home supplies of 
naloxone, but also to duplicative payments for additional take-home 
supplies of other medications that are made under Sec.  
410.67(d)(4)(i)(D).
    In light of a novel nalmefene product, Opvee[supreg], receiving FDA 
approval as an opioid antagonist medication for the emergency treatment 
of known or suspected opioid overdose, we are proposing to make payment 
for this new drug under the Medicare OTP benefit. Expanding access to 
overdose reversal medications, such as nalmefene, is a critical 
component to confronting the opioid crisis. The number of drug overdose 
deaths involving prescription opioids has grown by nearly five-fold in 
the past two decades. In 2021, almost 81,000 opioid overdose deaths 
occurred in the U.S, and nearly 88 percent of opioid-involved deaths 
involved synthetic opioids like fentanyl and fentanyl analogs 
(acetylfentanyl, furanylfentanyl, and carfentanil). Due to the high 
potency of drugs in the nation's drug supply, this has often meant that 
higher doses, or even multiple doses, of overdose reversal medications 
are needed per overdose event to revive a patient.\420\ These 
increasing rates of drug overdose deaths has also been seen among the 
Medicare-eligible population with adults aged 65 and over experiencing 
the largest percentage increase (28 percent) in drug overdose deaths 
rates between 2020 and 2021,\421\ and the rate of drug overdose deaths 
involving synthetic opioids among this age group increased by over 53 
percent in only one year (between 2019 and 2020).\422\ Over 50,000 
Medicare Part D beneficiaries were estimated to have experienced an 
opioid overdose in 2021, and the number of these beneficiaries 
receiving naloxone has grown.\423\ Not only has the opioid crisis 
impacted the Medicare-eligible population, but health disparities in 
drug overdose deaths have persisted. Non-Hispanic Black men aged 65 and 
over have experienced drug overdose death rates that are more than four 
times higher than Hispanics and non-Hispanic whites.\424\ In addition, 
death rates from drug overdoses among people aged 65 and over have 
increased at faster rates for men than women.\425\ Expanding access to 
overdose reversal medications is important, including for populations 
at a greater risk for drug overdose, as overdose reversal medications 
have been regarded as an evidence-based strategy to help individuals 
quickly respond to an overdose to reduce drug overdose deaths, increase 
survival rates, and reduce opioid-related emergency department 
visits.\426\ Lastly, we believe this proposal to pay for Opvee[supreg] 
under the OTP benefit would further the objectives of the HHS Overdose 
Prevention Strategy and the National Drug Control Strategy, which both 
aim to widen availability and access to opioid overdose reversal 
treatments.\427\
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    \420\ https://www.cdc.gov/drugoverdose/deaths/index.html.
    \421\ https://www.cdc.gov/nchs/products/databriefs/db457.htm.
    \422\ https://blogs.cdc.gov/nchs/2023/06/30/7408/.
    \423\ https://oig.hhs.gov/oei/reports/OEI-02-22-00390.pdf.
    \424\ https://www.cdc.gov/nchs/products/databriefs/db455.htm.
    \425\ https://blogs.cdc.gov/nchs/2022/11/30/7193/.
    \426\ https://www.cdc.gov/drugoverdose/pdf/pubs/2018-evidence-based-strategies.pdf.
    \427\ https://www.hhs.gov/overdose-prevention/; https://www.whitehouse.gov/wp-content/uploads/2022/04/National-Drug-Control-2022Strategy.pdf.
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    Section 1861(jjj)(1)(A) of the Act recognizes opioid agonist and 
antagonist treatment medications (including oral, injected, or 
implanted versions) that are approved by the FDA under section 505 of 
the FFDCA for the use in treatment of OUD, but nalmefene is not on the 
list of drugs for the treatment of OUD.\428\ When CMS first finalized 
payment for nasal and injectable naloxone under the OTP benefit in the 
CY 2021 PFS final rule (85 FR 84682 through 84689 and 85026 through 
85027), we used our discretionary authority under section 
1861(jjj)(1)(F) of the Act to finalize and extend the definition of OUD 
treatment services to include short acting opioid antagonist 
medications (e.g naloxone) that are approved by the FDA under section 
505 of the FFDCA for the emergency treatment of known or suspected 
opioid overdose. Since nalmefene was approved by the FDA under section 
505(b)(2) authority,\429\ and is an opioid antagonist and on the list 
of overdose reversal drugs approved by the FDA,\430\ we believe 
nalmefene is consistent with our definition of OUD treatment service at 
Sec.  410.67(d), which describes opioid antagonist medications that are 
approved by the FDA under section 505 of the FFDCA for the emergency 
treatment of known or suspected opioid overdose at paragraph (viii). 
Therefore, we believe it is appropriate to propose new payment for 
nalmefene as it would align with existing authority under Sec.  
410.67(b) that recognizes opioid antagonist medications which treat 
known or suspected opioid overdose as an OUD treatment service.
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    \428\ https://www.fda.gov/drugs/information-drug-class/information-about-medication-assisted-treatment-mat.
    \429\ https://www.fda.gov/media/171605/download.
    \430\ https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/information-about-naloxone-and-nalmefene.
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    We are proposing to create a new adjustment to the bundled payment 
for nalmefene hydrochloride (Opvee[supreg]) described by GOTP1 [Take-
home supply of nasal nalmefene hydrochloride; one carton of two, 2.7 mg 
per 0.1 mL nasal sprays (provision of the services by a Medicare-
enrolled Opioid Treatment Program); (List separately in addition to 
each primary code)]. We would price this new add-on code based on the 
established methodology under the OTP benefit for determining the 
adjustment for take-home supplies of opioid antagonist medications at 
Sec.  410.67(d)(4)(i)(E). This adjustment would include both a drug 
component and a non-drug component. The amount of the drug component 
would be determined using the methodology for pricing the drug 
component of an episode of care at Sec.  410.67(d)(2)(i), which tends 
to use ASP data when available (with certain exceptions). Accordingly, 
consistent with the approach used to price the drug component for nasal 
naloxone (HCPCS code G2215 & G1028), we would apply the average sales 
price (ASP) payment methodology set forth in section 1847A of the Act 
to determine the payment for the new naloxone hydrochloride nasal spray 
product, except that payment amounts would not include any add-on 
percentages if either ASP or wholesale acquisition cost (WAC) is used. 
As stated in the CY 2021 PFS final rule (85

[[Page 61832]]

FR 84685), we continue to believe that using ASP provides a transparent 
and public benchmark for manufacturers' actual pricing as it reflects 
the manufacturers' actual sales prices to all purchasers (with limited 
exceptions as noted in section 1847A(c)(2) of the Act) and is the only 
pricing methodology that includes off-invoice rebates and discounts as 
described in section 1847A(c)(3) of the Act. Therefore, we believe ASP 
to be the most market-based approach to set drug prices, including for 
the new nalmefene nasal product. As we stated in the CY 2020 PFS final 
rule, we also continue to believe that limiting the payment amount to 
100-percent of the volume-weighted ASP for a HCPCS code will 
incentivize the use of the most clinically appropriate drug for a given 
patient (84 FR 62651 through 62656). We understand that many OTPs 
purchase medications directly from manufacturers, thereby limiting the 
markup from distribution channels.
    Furthermore, as stated in the CY 2020 PFS final rule (84 FR 62650), 
we usually use the typical maintenance dose to calculate the drug 
component for the OTP benefit. As part of determining a payment rate 
for the proposed bundles for OUD treatment services, a dosage of the 
applicable medication is often selected to calculate the costs of the 
drug component of the bundle. According to the product information for 
Opvee[supreg], each unit-dose nasal spray device delivers 2.7 mg of 
nalmefene in 0.1 mL.\431\ Each unit-dose device contains a single dose 
of nalmefene, so it delivers its entire contents automatically and 
cannot be reused. Each carton contains two unit-dose nasal spray 
devices to allow for an additional repeat dose if needed. Thus, we are 
proposing to price the drug component of the code for nalmefene based 
on an assumption of a typical dosage for this new product to be a 
carton containing two 2.7 mg nasal sprays. We would, therefore, 
multiply the payment amount of 100-percent of the volume-weighted ASP 
reported for 2.7 mg of nalmefene by two in order to reflect a carton of 
two nasal spray devices. We seek comment on whether this amount (a 
carton of two, 2.7 mg nasal sprays) reflects the typical maintenance 
dosage for this drug when administered. The payment limit for 
Opvee[supreg] in the April 2024 ASP pricing file is $92.033, which 
reflects a carton of two, 2.7mg nasal sprays and would be used to price 
the drug component of GOTP1.
---------------------------------------------------------------------------

    \431\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/217470Orig1s000.pdf.
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    Additionally, consistent with the methodology established in Sec.  
410.67(d)(4)(i)(E), we propose to include a non-drug component for 
GOTP1 that would include payment for overdose education. Overdose 
education is an important component of overdose prevention and includes 
educating patients and caregivers on how to recognize respiratory 
depression, the signs and symptoms of a possible opioid overdose, how 
to administer overdose reversal medications, and the importance of 
calling 911 or getting emergency medical help right away, even after 
the overdose reversal medication is administered.\432\ Additionally, 
overdose education paired with distribution of overdose reversal 
medications has been found to be effective in improving knowledge about 
opioid overdose, improving attitudes toward using overdose reversal 
medications, training individuals to safely and effectively manage 
overdoses, and reducing opioid-related mortality.\433\ For these 
reasons, we are proposing to include a non-drug component to GOTP1 
based on the CY 2020 Medicare payment rate for 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) and updated to 
reflect the MEI updates that have been applied since that time. This is 
consistent with the payment methodology for naloxone and the language 
in Sec.  410.67(d)(4)(i)(E). In addition, the language at Sec.  
410.67(d)(4)(ii) currently states that the non-drug component of the 
adjustments for take-home supplies of opioid antagonist medications 
will be geographically adjusted using the geographic adjustment factor 
described in Sec.  414.26. Separately, Sec.  410.67(d)(4)(iii) states 
that the non-drug component of the adjustments for take-home supplies 
of opioid antagonist medications will be updated annually using the 
Medicare Economic Index described in Sec.  405.504. Since we are 
proposing to establish payment for Opvee[supreg] through an adjustment 
to the bundled payment, and since Opvee[supreg] is also considered an 
opioid antagonist medication, we are also proposing to update the non-
drug component for the adjustment of GOTP1 annually based on the GAF 
and MEI.
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    \432\ https://www.fda.gov/media/140360/download#.
    \433\ Razaghizad, A., Windle, S. B., Filion, K. B., Gore, G., 
Kudrina, I., Paraskevopoulos, E., Kimmelman, J., Martel, M. O., & 
Eisenberg, M. J. (2021). ``The effect of overdose education and 
naloxone distribution: An umbrella review of systematic reviews.'' 
American Journal of Public Health, 111(8), e1-e12. https://doi.org/10.2105/AJPH.2021.306306.
---------------------------------------------------------------------------

    Furthermore, consistent with our established criteria for opioid 
antagonist medications at Sec.  410.67(d)(4)(i)(E), we are also 
proposing to limit payment for Opvee[supreg] to one add-on code (GOTP1) 
every 30 days. However, we believe that access to Opvee[supreg] should 
not be limited when it is medically reasonable and necessary as part of 
the treatment for OUD and known or suspected opioid overdose. 
Therefore, similar to flexibilities established for frequency limits 
for naloxone, we are proposing to allow exceptions to this limit in the 
case where the beneficiary overdoses and uses the initial supply of 
nalmefene dispensed by the OTP to the extent that it is medically 
reasonable and necessary to furnish additional nalmefene. We note that 
section 1862(a)(1)(A) of the Act requires that for payment to be made 
for most Part A and Part B services furnished to Medicare 
beneficiaries, those services must be reasonable and necessary for the 
diagnosis or treatment of illness or injury or to improve the 
malfunctioning of a malformed body member. If an additional supply of 
Opvee[supreg] is needed within 30 days of the original supply being 
provided, we propose that OTPs must document in the medical record the 
reason for the exception. Moreover, section 1834(w)(1) of the Act, 
added by section 2005(c) of the SUPPORT Act, requires the Secretary to 
ensure, as determined appropriate by the Secretary, that no duplicative 
payments are made under Medicare Part B or Part D for items and 
services furnished by an OTP. Similar to naloxone, we recognize that 
nalmefene may also be appropriately available to beneficiaries through 
other Medicare benefits, including under Medicare Part D. At Sec.  
410.67(d)(5), we define duplicative payment to involve circumstances 
when medications are delivered, administered or dispensed to a 
beneficiary are paid as part of the OTP bundled payment, and where the 
delivery, administration or dispensing of the same medication (that is, 
same drug, dosage and formulation) is also separately paid under 
Medicare Part B or Part D for the same beneficiary on the same date of 
service. Consistent with Sec.  410.67(d)(5), we propose that CMS recoup 
duplicative payments made to an OTP for Opvee[supreg]. CMS expects that 
if the OTP provides reasonable and necessary medications for an OUD as 
part of an episode of care, the OTP will take measures to ensure that 
there is no claim for payment for these drugs other

[[Page 61833]]

than as part of the OTP bundled payments. Thus, Opvee[supreg] billed by 
an OTP as an add-on to the bundled payment should not be reported to or 
paid under a Medicare Part D plan.
    We welcome comments related to this proposal to establish an 
adjustment to the bundled payment for Opvee[supreg] [(GOTP1: Take-home 
supply of nasal nalmefene hydrochloride; one carton of two, 2.7 mg per 
0.1 mL nasal sprays (provision of the services by a Medicare-enrolled 
Opioid Treatment Program); (List separately in addition to each primary 
code)], as well as comments related to applicable requirements and 
criteria for billing this code.
b. Coding and Payment for New Injectable Buprenorphine Product 
Brixadi[supreg]
    Another medication for the treatment of OUD for which the Secretary 
may establish payment is buprenorphine, which is a partial opioid 
agonist that is FDA approved to treat OUD. Buprenorphine is a schedule 
III substance, meaning it has low to moderate potential for physical 
dependence.\434\ When taken as prescribed, it can diminish the effects 
of opioid withdrawal symptoms and cravings.\435\ In the CY 2020 PFS 
final rule (84 FR 62630 through 62677 and 84 FR 62919 through 62926), 
we established a weekly bundled payment under the Medicare OTP benefit 
for injectable buprenorphine (HCPCS G2069: Medication assisted 
treatment, buprenorphine (injectable); weekly bundle including 
dispensing and/or administration, substance use counseling, individual 
and group therapy, and toxicology testing if performed (provision of 
the services by a Medicare-enrolled Opioid Treatment Program)). CMS 
also established payment for other formulations of buprenorphine, 
including weekly bundles for oral buprenorphine (G0268), buprenorphine 
implants (G2070 through G2072), and take-home supplies of oral 
buprenorphine (G2079), as well as other medications like methadone and 
naltrexone. At Sec.  410.67(d)(2), we codified that the bundled payment 
for episodes of care in which a medication is provided will consist of 
a payment for a drug component, reflecting payment for the applicable 
FDA-approved opioid agonist or antagonist medication in the patient's 
treatment plan, and a non-drug component, reflecting payment for all 
other OUD treatment services reflected in the patient's treatment plan 
(including dispensing/administration of the medication, if applicable). 
The payments for the drug component and non-drug component are added 
together to create the bundled payment amount. In the CY 2020 PFS final 
rule, CMS finalized a payment methodology for the drug component 
related to implantable and injectable medications at 42 CFR 
410.67(d)(2)(i)(A), which applied to the bundled payment for injectable 
buprenorphine (G2069).
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    \434\ https://www.dea.gov/drug-information/drug-scheduling.
    \435\ National Academies of Sciences, Engineering, and Medicine. 
(2019). ``The effectiveness of medication-based treatment for opioid 
use disorder.'' In M. Mancher & A. I. Leshner (Eds.), Medications 
for Opioid Use Disorder Save Lives. National Academies Press (U.S.). 
https://www.ncbi.nlm.nih.gov/books/NBK541393/.
---------------------------------------------------------------------------

    For implantable and injectable medications paid under the OTP 
benefit, the payment is determined using the methodology set forth in 
section 1847A of the Act, except that the payment amount must be 100 
percent of the ASP, if ASP is used; and the payment must be 100 percent 
of the WAC, if WAC is used. We also stated in the CY 2020 PFS final 
rule that the typical maintenance dose to calculate the drug component 
for payment under the OTP benefit, as dosing for some, but not all, of 
the drugs varies considerably (84 FR 62650). As part of determining a 
payment rate for the proposed bundles for OUD treatment services, a 
dosage of the applicable medication must be selected to calculate the 
costs of the drug component of the bundle. In the CY 2020 PFS final 
rule, we finalized using a 100 mg monthly dose for the extended-release 
buprenorphine injection to use as the typical or average maintenance 
dose to calculate the drug component of the bundle for injectable 
buprenorphine (G2069). At the time of ratesetting for the CY 2020 PFS 
rule, the only injectable extended-release buprenorphine drug available 
and approved by the FDA under section 505 of the FFDCA for the 
treatment of OUD was Sublocade[supreg]; \436\ and, the drug component 
for the bundle was based on a crosswalk to its respective HCPCS codes 
Q9991 (Buprenorphine XR 100 mg or less) and Q9992 (Buprenorphine XR 
over 100 mg) using the methodology set forth in section 1874A of the 
Act, except that the payment amount was 100-percent of the ASP. In the 
CY 2020 PFS final rule, we noted that the HCPCS codes for extended-
release buprenorphine injection had the same payment rate, thus we did 
not believe it was necessary to establish a second typical maintenance 
dose to calculate the payment rate for the drug. For the non-drug 
component of the weekly bundle for injectable buprenorphine (G2069), we 
finalized that in addition to services for substance use counseling, 
individual and group therapy, and toxicology testing, we would include 
the Medicare non-facility rate for administration of an injection in 
our determination of the payment rate based on CPT code 96372 
(Therapeutic, prophylactic, or diagnostic injection (specify substance 
or drug); subcutaneous or intramuscular).
---------------------------------------------------------------------------

    \436\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
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    In May of 2023, the FDA approved a new drug application (NDA) under 
section 505(b)(2) of the FFDCA for another extended-release 
buprenorphine injection (Brixadi[supreg]) for subcutaneous use to treat 
moderate to severe OUD.\437\ Clinical data suggest that Brixadi[supreg] 
likely contributes to high rates of treatment retention, reductions in 
opioid withdrawal and cravings, and fewer levels of illicit opioid 
use.\438\ Brixadi[supreg] is available in two formulations, a weekly 
injection (containing 50 mg of buprenorphine per mL) that can be used 
in patients who have started treatment with a single dose of a 
transmucosal buprenorphine product or who are already being treated 
with buprenorphine-containing products, and a monthly injection 
(containing 356 mg of buprenorphine per mL) for patients already being 
treated with buprenorphine. The weekly and monthly formulations of the 
drug are available at varying doses, including lower doses that may be 
appropriate for those who do not tolerate higher doses of extended-
release buprenorphine that are currently available.\439\ The weekly 
doses are 8 mg, 16 mg, 24 mg, and 32 mg, and should be administered in 
7-day intervals; and the monthly doses are 64 mg, 96 mg, and 128 mg, 
and should be administered in 28-day intervals.\440\
---------------------------------------------------------------------------

    \437\ https://www.fda.gov/news-events/press-announcements/fda-approves-new-buprenorphine-treatment-option-opioid-use-disorder.
    \438\ Frost, M., Bailey, G. L., Lintzeris, N., Strang, J., 
Dunlop, A., Nunes, E. V., Jansen, J. B., Frey, L. C., Weber, B., 
Haber, P., Oosman, S., Kim, S., & Tiberg, F. (2019). 
``Long[hyphen]term safety of a weekly and monthly subcutaneous 
buprenorphine depot in the treatment of adult out[hyphen]patients 
with opioid use disorder.'' Addiction, 114(8), 1416-1426. https://doi.org/10.1111/add.14636.
    \439\ https://www.fda.gov/news-events/press-announcements/fda-approves-new-buprenorphine-treatment-option-opioid-use-disorder.
    \440\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2023/210136Orig1s000lbl.pdf.
---------------------------------------------------------------------------

    Buprenorphine is associated with decreasing the risk for overdose, 
opioid-related mortality, and all-cause mortality.\441\ Data also shows 
that

[[Page 61834]]

buprenorphine helps retain individuals in treatment, lowers illicit 
opioid use, and reduces drug-related behaviors that increase the risk 
for HIV transmission.\442\ In particular, long-acting (for example, 
extended-release) injectable forms of buprenorphine have been shown to 
promote adherence to treatment while reducing the need for daily 
dosing, and to enhance patient-reported outcomes through improvements 
in quality of life, accessibility, social relationships, participation 
in employment, more flexible personal and professional schedules, and 
other treatment satisfaction measures.\443\ Finally, a large percentage 
of Medicare beneficiaries with an OUD continue to face challenges in 
accessing medication, especially enrollees who are older, female, and 
who identify as racial/ethnic minorities.\444\ The most common reasons 
for not receiving SUD treatment include financial barriers in 
affordability and coverage.\445\ Establishing coverage and payment for 
a new medication to treat OUD may provide more MOUD treatment options, 
reduce financial barriers to accessing medication, and aid health 
equity efforts among Medicare beneficiaries. Accordingly, for these 
reasons and because sections 1861(s)(2), 1861(jjj)(1)(A), and 
1833(a)(1) of the Act provide that the Secretary is to provide coverage 
and payment for OUD treatment services including opioid agonist and 
antagonist medications that are FDA approved for use in the treatment 
of OUD, we are proposing to establish payment for the weekly and 
monthly formulations for this new FDA-approved injectable buprenorphine 
product, Brixadi[supreg], which we believe would further efforts to 
address the opioid crisis and expand access to evidence-based treatment 
for OUD.
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    \441\ Larochelle, M. R., Bernson, D., Land, T., Stopka, T. J., 
Wang, N., Xuan, Z., Bagley, S. M., Liebschutz, J. M., & Walley, A. 
Y. (2018). ``Medication for opioid use disorder after nonfatal 
opioid overdose and association with mortality: A cohort study.'' 
Annals of Internal Medicine, 169(3), 137. https://doi.org/10.7326/M17-3107; Wakeman, S. E., Larochelle, M. R., Ameli, O., Chaisson, C. 
E., McPheeters, J. T., Crown, W. H., Azocar, F., & Sanghavi, D. M. 
(2020). ``Comparative effectiveness of different treatment pathways 
for opioid use disorder.'' JAMA Network Open, 3(2), e1920622. 
https://doi.org/10.1001/jamanetworkopen.2019.20622.
    \442\ Shulman, M., Wai, J. M., & Nunes, E. V. (2019). 
Buprenorphine treatment for opioid use disorder: An overview. CNS 
Drugs, 33(6), 567-580. https://doi.org/10.1007/s40263-019-00637-z; 
Thomas, C. P., Fullerton, C. A., Kim, M., Montejano, L., Lyman, D. 
R., Dougherty, R. H., Daniels, A. S., Ghose, S. S., & Delphin-
Rittmon, M. E. (2014). Medication-assisted treatment with 
buprenorphine: Assessing the evidence. Psychiatric Services 
(Washington, DC), 65(2), 158-170. https://doi.org/10.1176/appi.ps.201300256; Gowing, L., Farrell, M. F., Bornemann, R., 
Sullivan, L. E., & Ali, R. (2011). Oral substitution treatment of 
injecting opioid users for prevention of HIV infection. The Cochrane 
Database of Systematic Reviews, 8, CD004145. https://doi.org/10.1002/14651858.CD004145.pub4.
    \443\ Maremmani, I., Dematteis, M., Gorzelanczyk, E. J., 
Mugelli, A., Walcher, S., & Torrens, M. (2023). Long-acting 
buprenorphine formulations as a new strategy for the treatment of 
opioid use disorder. Journal of Clinical Medicine, 12(17), 5575. 
https://doi.org/10.3390/jcm12175575; Farrell, M., Shahbazi, J., 
Byrne, M., Grebely, J., Lintzeris, N., Chambers, M., Larance, B., 
Ali, R., Nielsen, S., Dunlop, A., Dore, G. J., McDonough, M., 
Montebello, M., Nicholas, T., Weiss, R., Rodgers, C., Cook, J., & 
Degenhardt, L. (2022). Outcomes of a single-arm implementation trial 
of extended-release subcutaneous buprenorphine depot injections in 
people with opioid dependence. International Journal of Drug Policy, 
100, 103492. https://doi.org/10.1016/j.drugpo.2021.103492; 
Lintzeris, N., Dunlop, A. J., Haber, P. S., Lubman, D. I., Graham, 
R., Hutchinson, S., Arunogiri, S., Hayes, V., Hjelmstr[ouml]m, P., 
Svedberg, A., Peterson, S., & Tiberg, F. (2021). Patient-reported 
outcomes of treatment of opioid dependence with weekly and monthly 
subcutaneous depot vs daily sublingual buprenorphine: A randomized 
clinical trial. JAMA Network Open, 4(5), e219041. https://doi.org/10.1001/jamanetworkopen.2021.9041; Martin, E., Maher, H., McKeon, 
G., Patterson, S., Blake, J., & Chen, K. Y. (2022). Long-acting 
injectable buprenorphine for opioid use disorder: A systematic 
review of impact of use on social determinants of health. Journal of 
Substance Abuse Treatment, 139, 108776. https://doi.org/10.1016/j.jsat.2022.108776.
    \444\ https://oig.hhs.gov/oei/reports/OEI-02-23-00250.pdf.
    \445\ Parish, W. J., Mark, T. L., Weber, E. M., & Steinberg, 
D.G. (2022). Substance use disorders among Medicare beneficiaries: 
Prevalence, mental and physical comorbidities, and treatment 
barriers. American Journal of Preventive Medicine, 63(2), 225-232. 
https://doi.org/10.1016/j.amepre.2022.01.021.
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    We are proposing to establish two different payments, one for each 
of the weekly and monthly injectable formulations of Brixadi[supreg]. 
To establish payment for the weekly and monthly formulations of 
Brixadi[supreg], we are proposing to use the existing payment 
methodology for implantable and injectable medications codified at 
Sec.  410.67(d)(2)(i)(A). This regulation specifies that payment is 
determined using the methodology set forth in section 1847A of the Act, 
except that the payment amount must be 100 percent of the ASP, if ASP 
is used; and the payment must be 100 percent of the WAC, if WAC is 
used.
    Payment limits \446\ for most drugs and biologicals separately 
payable under Medicare Part B are determined using the methodology in 
section 1847A of the Act, and in many cases, payment is based on the 
ASP plus a statutorily mandated 6 percent add-on. Most drugs payable 
under Part B are paid under the ``incident to'' benefit under section 
1861(s)(2) of the Act, which includes drugs and biologicals not usually 
self-administered by the patient. The ASP payment limit determined 
under section 1847A of the Act reflects a volume-weighted ASP for all 
national drug codes (NDCs) that are assigned to a HCPCS code. The ASP 
is calculated quarterly using manufacturer-submitted data on sales to 
all purchasers (with limited exceptions as articulated in section 
1847A(c)(2) of the Act, such as for sales at nominal charge and sales 
exempt from best price) with manufacturers' rebates, discounts, and 
price concessions reflected in the manufacturer's determination of ASP.
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    \446\ In general, CMS establishes a single, national payment 
limit to Medicare Administrative Contractors (MACs) for payment of 
some Part B-covered drugs and biologicals whose payment is 
determined based on the methodology described in section 1847A of 
the Act. CMS provides an ASP pricing file to MACs, which is updated 
quarterly. https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
---------------------------------------------------------------------------

    Paragraphs (4)(A) and (6) of sections 1847A(b) of the Act require 
that the Medicare Part B payment limit for a single-source drug or 
biological be determined using all of the NDCs assigned to it. Section 
1847A(b)(5) of the Act further states that the payment limit shall be 
determined without regard to any special packaging, labeling, or 
identifiers on the dosage form or product or package. In 2007, CMS 
issued a program instruction,\447\ as permitted under section 
1847A(c)(5)(C) of the Act, stating that the payment limit for a single 
source drug or biological will be based on the pricing information for 
products produced or distributed under the applicable FDA approval 
(such as a New Drug Application (NDA) or Biologics License Application 
(BLA)). Therefore, all versions of a single source drug or biological 
product (or NDCs) marketed under the same FDA approval number (for 
example, NDA or BLA, including supplements) are considered the same 
drug or biological for purposes of payments made under section 1847A of 
the Act and are crosswalked to the same billing and payment code.
---------------------------------------------------------------------------

    \447\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf.
---------------------------------------------------------------------------

    We continue to believe that use of ASP provides a transparent and 
public benchmark for manufacturers' pricing as it reflects the 
manufacturers' actual sales prices to all purchasers (with limited 
exceptions) and is the only pricing methodology that includes off 
invoice rebates and discounts as described in section 1847A(c)(3) of 
the Act. Additionally, since many other injectable drugs are paid for 
under Medicare part B through the ASP payment methodology in 1847A, we 
presume that this methodology is appropriate for pricing 
Brixadi[supreg]. We also propose to limit the payment amount to 100-
percent of ASP without a 6-percent add-on percentage since, as we have 
previously noted, it is our

[[Page 61835]]

understanding that many OTPs purchase directly from drug manufacturers, 
thereby limiting the markup from distribution channels.
    As we stated in our discussion above, we use the typical or average 
maintenance dose of a drug to determine the drug costs for each of the 
bundles. In the CY 2020 PFS final rule, we noted that there are often 
variations in the dosage and frequency of administration of 
medications, but that ``payment based on the typical dose means that, 
across the Medicare beneficiaries served by the OTP, the payment amount 
should be reasonable and represent the average costs incurred in 
furnishing the drug component of the OUD treatment services.'' (84 FR 
62650). Therefore, in the CY 2020 PFS final rule, we finalized using 
the typical maintenance dose to establish the drug costs for each of 
the bundles as our approach to addressing variable dosing of 
medications. (84 FR 62650).
    In the CY 2020 PFS final rule, we finalized a 100 mg monthly dose 
for the extended-release buprenorphine injection as the typical 
maintenance dose, which we used to calculate the drug component of the 
weekly bundle for injectable buprenorphine (G2069). At the time, we did 
not establish a second typical maintenance dose because both HCPCS 
codes for the extended release buprenorphine injection, that is, 
Sublocade[supreg] [Q9991 (Buprenorphine XR 100 mg or less) and Q9992 
(Buprenorphine XR over 100 mg)] had the same payment limit because, as 
explained above in this section, all NDCs marketed under the same FDA 
approval number are considered the same drug or biological for purposes 
of payments made under section 1847A of the Act and are crosswalked to 
the same billing and payment code. The weekly and monthly formulations 
of Brixadi[supreg] are described by HCPCS codes J0577 (Injection, 
buprenorphine extended release (brixadi), less than or equal to 7 days 
of therapy) and J0578 (Injection, buprenorphine extended release 
(brixadi), greater than 7 days and up to 28 days of therapy). In the 
same manner as Sublocade[supreg], and as explained in the coding 
announcement for HCPCS codes J0577 and J0578,\448\ because all versions 
of a single source drug or biological product (or NDCs) marketed under 
the same FDA approval number are considered the same drug or biological 
for purposes of payments made under section 1847A of the Act, the 
payment limits for both J0577 and J0578 are calculated using all the 
NDCs marketed under the applicable FDA approval. However, since the 
dose descriptions for these codes are based on days of therapy (and not 
a measurement of the amount of drug, like per 1 mg, as is the case with 
Sublocade[supreg]), the payment limits for the two codes are different; 
in the April 2024 ASP pricing file, the payment limit for J0577 is 
$404.086 and the payment limit for J0578 is $1,616.346. Therefore, we 
do not believe it is appropriate to bundle the weekly and monthly 
formulations into a single bundled payment since, unlike the drug 
Sublocade[supreg], the Brixadi[supreg] formulations have different 
payment limits, and pricing them under the same bundle would not 
adequately represent the average costs incurred in furnishing these 
different formulations in an OTP setting. Additionally, creating a 
single bundled payment rate that does not reflect the type and cost of 
the drug used could result in access issues for beneficiaries, 
especially in the event that the bundled payment amount for one drug 
significantly drops and unintentionally incentivizes treatment towards 
a drug with a higher bundled payment amount.
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    \448\ https://www.cms.gov/files/document/2023-hcpcs-application-summary-quarter-4-2023-drugs-and-biologicals-updated-03/04/2024.pdf.
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    In establishing the two different payments for the weekly and 
monthly injectable buprenorphine formulations of Brixadi[supreg], 
first, we propose to crosswalk the monthly formulation of 
Brixadi[supreg] (J0578: Injection, buprenorphine extended release 
(brixadi), greater than 7 days and up to 28 days of therapy) to the 
drug component of our existing bundled payment for injectable 
buprenorphine described by HCPCS code G2069 (Medication assisted 
treatment, buprenorphine (injectable); weekly bundle including 
dispensing and/or administration, substance use counseling, individual 
and group therapy, and toxicology testing if performed (provision of 
the services by a Medicare-enrolled Opioid Treatment Program). We 
propose to average the payment limits of Sublocade[supreg] and monthly 
Brixadi[supreg] by adding their two payment limits together and 
dividing the sum by two, in order to update the payment for the drug 
component of HCPCS code G2069. We believe including the average of the 
payment limits of Sublocade[supreg] and Brixadi[supreg] in the drug 
component of G2069 rather than the sum of their respective individual 
payment limits is appropriate because we do not expect that a 
beneficiary would receive two different types of buprenorphine monthly 
medication injections simultaneously from an OTP (for example, both 
Sublocade[supreg] and Brixadi[supreg] during the same episode of care 
and date of service). We believe that averaging the price of the two 
types of buprenorphine monthly medication injections would be further 
be appropriate because the individual payment limits for each of the 
drug codes (Q9991, Q9992, and J0578) would both be informed by ASP data 
and comparable as they would be priced by the same ASP payment 
methodology (ASP+0). We also note that bundling the monthly formulation 
of Brixadi[supreg] into the existing HCPCS code (G2069) for injectable 
buprenorphine would be appropriate and no more administratively complex 
for OTPs since G2069 is already billed on a monthly basis; 
Sublocade[supreg], which is already reflected in the drug component of 
G2069 is administered on a monthly basis to beneficiaries as would be 
the monthly formulation of Brixadi[supreg], so OTPs could continue to 
bill G2069 once each month when either monthly Brixadi[supreg] or 
Sublocade[supreg] is administered, as appropriate.\449\
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    \449\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2018/209819s001lbl.pdf.
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    Additionally, the average typical dose of G2069 is 100mg of 
buprenorphine administered monthly, as finalized in the CY 2020 PFS 
final rule (84 FR 62651). The monthly formulations of Brixadi[supreg] 
can range from 64 mg, to 96 mg, to 128 mg. The median of these 
different doses for the monthly formulation of Brixadi[supreg] (96 mg) 
would approximate the average typical dose of the current injectable 
buprenorphine bundle (100 mg). We note that the different monthly doses 
of Brixadi[supreg] are assigned to the same HCPCS code J0578 
(Injection, buprenorphine extended release (brixadi), greater than 7 
days and up to 28 days of therapy) and have the same payment limit 
regardless of the monthly dose (64 mg, 96 mg, or 128 mg), so selecting 
a typical dose of monthly Brixadi[supreg] to potentially adjust the 
drug component of G2069 would not meaningfully change the payment rate. 
Therefore, we are not proposing to establish an average typical dose 
different than 100 mg for injectable buprenorphine administered on a 
monthly basis for purposes of calculating the drug component under the 
OTP benefit, though we seek comment on whether this average typical 
dose (100 mg) is close to the dose for the monthly formulation of 
Brixadi[supreg] that patients receive on average.
    In all, we believe that bundling the monthly formulation of 
Brixadi[supreg] into

[[Page 61836]]

our current injectable buprenorphine coding under the OTP benefit would 
be appropriate for several reasons, including: the costs for furnishing 
these drugs, as shown by similar ASP payment limits for monthly 
Brixadi[supreg] (J0578) and the two HCPCS codes for Sublocade[supreg] 
(Q9991 and Q9992) ($1,616.346 and $1,874.902, respectively, are 
comparable as reflected in the April 2024 ASP file); the average 
maintenance dosage for Sublocade[supreg] (100 mg) is comparable to the 
median monthly dosage for Brixadi[supreg] (96 mg) and; both drugs have 
similar frequencies and costs of administration (on a monthly basis) 
with a fee paid to the OTP for one administration of an injection once 
a month. We believe that our proposed payment methodology would be 
consistent with section 1834(w)(2) of the Act, which allows the 
Secretary to implement bundled payments for OUD treatment services with 
considerations to the type of medication provided and the frequency of 
the services, and thus permit multiple bundles that represent 
injectable buprenorphine (proposed GOTP2 and G2069) and the frequency 
with which injectable buprenorphine is administered (weekly versus 
monthly). We propose to still calculate the non-drug component of HCPCS 
code G2069 consistent with the methodology we use to calculate the non-
drug component, which is specified at Sec.  410.67(d)(2)(ii). We are 
proposing to change the code descriptor for HCPCS code G2069 to take 
out references to a ``weekly bundle'' to make it clear that the code is 
to be billed on a monthly basis. Specifically, we would revise the code 
descriptor to state the following: HCPCS code G2069 (Medication 
assisted treatment, buprenorphine (injectable) administered on a 
monthly basis; bundle including dispensing and/or administration, 
substance use counseling, individual and group therapy, and toxicology 
testing if performed (provision of the services by a Medicare-enrolled 
Opioid Treatment Program)). Lastly, consistent with current guidance in 
Chapter 39 of the Medicare Claims Processing Manual, we would still 
expect that HCPCS code G2069 ``would be billed for the week during 
which the injection was administered and that HCPCS code G2074, which 
describes a bundle not including the drug, would be billed during any 
subsequent weeks that at least one non-drug service is furnished until 
the injection is administered again, at which time HCPCS code G2069 
would be billed again for that week.'' \450\
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    \450\ https://www.cms.gov/files/document/chapter-39-opioid-treatment-programs-otps.pdf.
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    For the weekly formulation of Brixadi[supreg], we propose to 
calculate a new bundled payment described by GOTP2 (Medication assisted 
treatment, buprenorphine (injectable) administered on a weekly basis; 
weekly bundle including dispensing and/or administration, substance use 
counseling, individual and group therapy, and toxicology testing if 
performed (provision of the services by a Medicare-enrolled Opioid 
Treatment Program). For the drug component of HCPCS code GOTP2, we 
propose to base the payment on a crosswalk to the weekly 
Brixadi[supreg] formulation described by HCPCS code J0577 (Injection, 
buprenorphine extended release (brixadi), less than or equal to 7 days 
of therapy), which would also be based on the payment methodology 
specified at Sec.  410.67(d)(2)(i)(A) for implantable and injectable 
medications, consistent with the existing monthly injectable 
buprenorphine bundle. We believe that establishing a separate weekly 
bundled payment reflecting the weekly formulation of Brixadi[supreg] 
would more appropriately pay for the subset of beneficiaries who 
receive less than a monthly dosage of injectable buprenorphine on 
average, or who choose to discontinue treatment for the drug before the 
end of the month. Additionally, establishing a separate weekly bundled 
payment would contribute to stabilizing the payment of the drug 
component for the monthly bundle of injectable buprenorphine (G2069) 
since the ASP payment limit for weekly Brixadi[supreg] costs less than 
the payment for the drug component of G2069 ($404.086 April 2024 ASP 
payment limit versus $1,780.167 for the CY 2024 payment rate of the 
drug component of G2069) and may decrease payment after the weekly 
Brixadi payment limit is averaged into the drug component of 
G2069[supreg]. Establishing a separate weekly bundled payment is also 
more appropriate because weekly Brixadi[supreg] requires more frequent 
administration costs than monthly injectable buprenorphine (weekly 
Brixadi[supreg] must be injected at least once every 7 days compared to 
once a month for Sublocade[supreg] and monthly Brixadi[supreg]). Thus, 
a different bundle for weekly Brixadi[supreg] may more closely reflect 
the costs incurred by OTPs. Furthermore, as noted above in this 
section, different weekly doses are assigned to the same HCPCS code 
J0577 (Injection, buprenorphine extended release (brixadi), less than 
or equal to 7 days of therapy) and have the same payment limit 
regardless of the weekly dose. Therefore, we do not believe it is 
appropriate to propose an average typical dose for the weekly 
formulation of Brixadi[supreg] for purposes of calculating the drug 
component of GOTP2 under the OTP benefit.
    Second, we propose to also establish payment for the non-drug 
component of GOTP2 consistent with the methodology utilized for the 
monthly bundle of injectable buprenorphine (G2069). Specifically, we 
would continue to pay for substance use counseling, individual and 
group therapy, and toxicology testing that are included in the non-drug 
components for each of the bundled payments reflecting an episode of 
care, but we would include the Medicare non-facility rate for 
administration of an injection in our determination of the non-drug 
component payment rate based on CPT code 96372 (Therapeutic, 
prophylactic, or diagnostic injection (specify substance or drug); 
subcutaneous or intramuscular). Consistent with the payment amounts for 
the non-drug component of other bundled payments for an episode of 
care, we also propose to continue to update the value of this non-drug 
component for GOTP2 by the GAF as described in Sec.  410.67(d)(4)(ii), 
and by the MEI as described in Sec.  410.67(d)(4)(iii).
    We welcome comments on these proposals to establish payment for the 
weekly and monthly formulations of the new injectable buprenorphine 
drug, Brixadi[supreg].
5. Clarification To Require an Opioid Use Disorder Diagnosis on Claims 
for OUD Treatment Services
    Section 1861(s)(2)(HH) of the Act, as amended by section 2005 of 
the SUPPORT Act, implemented Medicare coverage for ``opioid use 
disorder treatment services.'' Section 1861(jjj)(1) of the Act 
describes opioid use disorder treatment services as items and services 
that are furnished by an opioid treatment program for the treatment of 
opioid use disorder. Section 1834 of the Act specifies payments to OTPs 
for providing opioid use disorder treatment services. We interpreted 
these statutory provisions to mean that services paid to OTPs under 
Medicare Part B must be for the treatment of opioid use disorder. 
Consequently, at Sec.  410.67(a) we reflect that those statutory 
provisions provide for coverage and payment to OTPs for OUD treatment 
services, which we define at Sec.  410.67(b).
    In August of 2023, an Office of Inspector General (OIG) report (A-
09-

[[Page 61837]]

22-03005) found that Medicare made over $1.3 million in payments to 70 
OTPs for OUD treatment services that were claimed without an OUD 
diagnosis.\451\ Of the claims paid without an OUD diagnosis code, 39 
percent were for alcohol dependence, uncomplicated (F1020), 7 percent 
were for cocaine dependence, uncomplicated (F1420), and 5 percent were 
for generalized anxiety disorder (F411). As a result of these findings, 
OIG recommended that CMS ``develop billing requirements for OTPs to 
include OUD diagnosis codes on claims for OUD treatment services to 
indicate that enrollees have OUD diagnoses and consider working with 
MACs to implement a system edit to ensure that OTP payments are made 
for enrollees only when OUD diagnosis codes are included on claims.'' 
OIG also stated that ``requiring OTPs to include OUD diagnosis codes on 
claims could be a way for CMS to monitor whether OTPs furnished OUD 
treatment services to enrollees who had an OUD.'' In our response to 
the OIG report, we raised that the lack of an OUD diagnosis code on a 
claim is not conclusive evidence of an improper claim because an OUD 
diagnosis code is not required for payment when an OTP submits a claim 
for OUD treatment services. However, we agreed to explore ways to 
educate providers about including an OUD diagnosis on claims.
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    \451\ https://oig.hhs.gov/oas/reports/region9/92203005.asp.
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    We continue to monitor claims paid by Medicare to OTPs for 
furnishing OUD treatment services, including for potential fraud and 
abuse. In analyzing our claims data at the beginning of CY 2024, we 
found data indicating that the majority of claims paid to OTPs have an 
OUD diagnosis code appended, meaning that only a small number of OTPs 
do not append an OUD diagnosis code to claims. However, we do intend to 
ensure that payments made to OTPs are in alignment with statutory 
requirements, which is that payments made must be for services 
furnished for the treatment of an OUD.
    Therefore, we are clarifying that all claims submitted to Medicare, 
on Form CMS-1450 for institutional providers, and on Form CMS-1500 for 
professional providers, or the electronic equivalents, under the OTP 
benefit must include an OUD diagnosis. These diagnosis codes must apply 
to HCPCS G-codes representing both the bundled payments (G2067 through 
G2075) and add-on codes to the bundled payments (G2076-G2080, G2215-
G2216, G1028, and G0137). Applicable diagnosis codes for an OUD that 
must be submitted on claims include ICD-10-CM codes in the F11 range 
for ``disorders related or resulting from abuse or misuse of opioids.'' 
\452\ CMS plans to issue additional guidance on appending these 
diagnosis codes to claims. We believe clarifying these billing 
requirements is consistent with CMS's strategic pillars to be a 
responsible steward of public funds,\453\ and that these requirements 
are consistent with statutory provisions under sections 1861(s)(2)(HH), 
1861(jjj)(1), and 1834 of the Act.
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    \452\ https://www.icd10data.com/ICD10CM/Codes/F01-F99/F10-F19/F11-.
    \453\ https://www.cms.gov/about-cms/what-we-do/cms-strategic-plan.
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G. Medicare Shared Savings Program

1. Executive Summary and Background
a. Purpose
    Eligible groups of providers and suppliers, including physicians, 
hospitals, and other healthcare providers, may participate in the 
Medicare Shared Savings Program (Shared Savings Program) by forming or 
joining an accountable care organization (ACO) and in so doing agree to 
become accountable for the total cost and quality of care provided 
under Traditional Medicare to an assigned population of Medicare fee-
for-service (FFS) beneficiaries. Under the Shared Savings Program, 
providers and suppliers that participate in an ACO continue to receive 
Traditional Medicare FFS payments under Parts A and B, and the ACO may 
be eligible to receive a shared savings payment if it meets specified 
quality and savings requirements, and in some instances may be required 
to share in losses if it increases health care spending.
    As of January 1, 2024, the Shared Savings Program has 480 ACOs with 
over 634,000 health care providers and organizations providing care to 
over 10.8 million assigned beneficiaries, making it the largest value-
based care program in the country.454 455 The policy changes 
to the Shared Savings Program finalized in the CY 2023 PFS final rule 
(87 FR 69777 through 69979) and CY 2024 PFS final rule (88 FR 79093 
through 79232) are expected to grow participation in the program and 
increase the number of beneficiaries assigned to ACOs by up to four 
million in the next 10 years (that is, between 2024-2034).\456\ These 
policies are expected to drive growth in participation, particularly in 
rural and underserved areas, promote equity, and advance alignment 
across accountable care initiatives, and are central to achieving CMS' 
goal of having 100 percent of people with Traditional Medicare in a 
care relationship with accountability for quality and total cost of 
care by 2030.\457\ Of note, 19 newly formed ACOs in the Shared Savings 
Program are participating in a new, permanent payment option beginning 
in 2024 that is enabling these ACOs to receive more than $20 million in 
advance investment payments (AIPs) for caring for underserved 
communities.\458\ ACOs are now delivering care to people with 
Traditional Medicare in 9,032 Federally Qualified Health Centers, Rural 
Health Clinics, and critical access hospitals, an increase of 27 
percent from 2023.\459\
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    \454\ Refer to CMS, Shared Savings Program Fast Facts--As of 
January 1, 2024, available at https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
    \455\ See CMS Press Release, ``Participation Continues to Grow 
in CMS' Accountable Care Organization Initiatives in 2024'', January 
29, 2024, available at https://www.cms.gov/newsroom/press-releases/participation-continues-grow-cms-accountable-care-organization-initiatives-2024.
    \456\ Refer to 87 FR 69889. See also, CMS Press Release, ``CMS 
Announces Increase in 2023 in Organizations and Beneficiaries 
Benefiting from Coordinated Care in Accountable Care Relationship'', 
January 17, 2023, available at https://www.cms.gov/newsroom/press-releases/cms-announces-increase-2023-organizations-and-beneficiaries-benefiting-coordinated-care-accountable.
    \457\ For a description of CMS' strategic vision and objectives, 
see Seshamani M, Fowler E, Brooks-LaSure C. ``Building On The CMS 
Strategic Vision: Working Together For A Stronger Medicare''. Health 
Affairs. January 11, 2022. Available at https://www.healthaffairs.org/content/forefront/building-cms-strategic-vision-working-together-stronger-medicare. See also, CMS, Innovation 
Center Strategy Refresh, available at https://innovation.cms.gov/strategic-direction-whitepaper (Innovation Center Strategic 
Objective 1: Drive Accountable Care, pages 13-17).
    \458\ Refer to CMS Press Release, ``Participation Continues to 
Grow in CMS' Accountable Care Organization Initiatives in 2024'', 
January 29, 2024, available at https://www.cms.gov/newsroom/press-releases/participation-continues-grow-cms-accountable-care-organization-initiatives-2024.
    \459\ Ibid.
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    Section III.G. of this proposed rule addresses changes to the 
Shared Savings Program regulations to further advance Medicare's value-
based care strategy of growth, alignment, and equity and includes 
changes to allow for timely improvements to program policies and 
operations.
    We are proposing modifications to the Shared Savings Program to 
require ACOs, beginning in performance year 2025 and subsequent 
performance years, to report the APM Performance Pathway (APP) Plus 
quality measure set proposed in section III.G.4. of this proposed rule. 
The APP Plus quality measure set would incrementally grow to comprise 
of eleven measures, consisting of the six measures in the existing APP 
quality measure set and five newly proposed

[[Page 61838]]

measures from the Adult Universal Foundation measure set that would be 
incrementally incorporated into the APP Plus quality measure set over 
performance years 2025 through 2028. We are also proposing to focus the 
collection types available to Shared Savings Program ACOs for reporting 
the APP Plus quality measure set to eCQMs and Medicare CQMs. In 
adopting the APP Plus quality measure set, we are also proposing 
several changes to the methodology for calculating the MIPS Quality 
performance category score for Shared Savings Program ACOs reporting 
the APP Plus quality measure set. These include proposing that Shared 
Savings Program ACOs that report the APP Plus quality measure set and 
MIPS eligible clinicians, groups, and APM Entities that choose to 
report the APP Plus quality measure set, will be required to report on 
all measures in the APP Plus quality measure set, as applicable; 
establishing a Complex Organization Adjustment for Virtual Groups and 
APM Entities, including Shared Savings Program ACOs, when reporting 
eCQMs; and scoring Medicare CQMs using flat benchmarks in their first 2 
performance periods in MIPS. Additionally, we are proposing to extend 
the eCQM reporting incentive for meeting the Shared Savings Program 
quality performance standard to performance year 2025 and subsequent 
performance years. Collectively, these proposals aim to align the 
quality measures that Shared Savings Program ACOs would be required to 
report with the quality measures under the Adult Universal Foundation 
measure set incrementally beginning in performance year 2025 and 
prioritize the eCQM collection type as the gold standard collection 
type that underlies CMS' Digital Quality Measurement Strategic Roadmap 
while using Medicare CQMs as the transition step on our building block 
approach for ACOs' progress to adopt digital quality measurement.
    We propose to establish a new ``prepaid shared savings'' option to 
assist eligible ACOs with a history of earning shared savings. Eligible 
ACOs that apply and are approved to receive prepaid shared savings will 
receive advances of earned shared savings that they can use to make 
investments that would aid beneficiaries, such as investments in direct 
beneficiary services and investments to improve care coordination 
through staffing or healthcare infrastructure. At least 50 percent of 
prepaid shared savings would be reserved to be spent on direct 
beneficiary services not otherwise payable in Traditional Medicare, 
such as meals, dental, vision, hearing, and Part B cost-sharing 
support. Additionally, up to 50 percent of the prepaid shared savings 
can be spent on staffing and infrastructure. Further, we propose 
refinements to advance investment payment policies to allow ACOs 
receiving advance investment payments to voluntarily terminate from the 
payment option while remaining in the Shared Savings Program, and to 
specify that if CMS terminates an ACO's participation agreement, the 
ACO must repay any outstanding advance investment payments it received.
    We propose modifications to the Shared Savings Program's financial 
methodology to encourage ACO participation in the Shared Savings 
Program by removing barriers for ACOs serving underserved communities, 
and by providing greater specificity and clarification on how CMS would 
perform certain financial calculations in the Shared Savings Program. 
We would ensure the benchmarking methodology includes sufficient 
incentive for ACOs serving underserved communities \460\ to enter and 
remain in the program through the application of a proposed health 
equity benchmark adjustment. We propose to specify a calculation 
methodology to account for the impact of improper payments in 
recalculating expenditures and payment amounts used in Shared Savings 
Program financial calculations, upon reopening a payment determination 
pursuant to Sec.  425.315(a). We propose to establish a methodology for 
excluding payment amounts for HCPCS and CPT codes exhibiting 
significant, anomalous, and highly suspect billing activity during CY 
2024 or subsequent calendar years that warrant adjustment. We also 
propose modifications to provide clarity on the methodology for capping 
the ACO's risk score growth and regional risk score growth. 
Additionally, building off of a comment solicitation in CY 2024 PFS 
rulemaking, through a new request for information in this proposed 
rule, we are seeking comments on financial arrangements that could 
allow for higher risk and potential reward under a revised ENHANCED 
track within the Shared Savings Program, including the designs of and 
trade-offs between financial model features.
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    \460\ As described in the CMS Framework for Health Equity and 
consistent with Executive Order 13985 on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government 
(86 FR 7009), the term ``underserved communities'' refers to 
populations sharing a particular characteristic, including 
geographic communities that have been systematically denied a full 
opportunity to participate in aspects of economic, social, and civic 
life, as exemplified in the definition of ``equity.''
---------------------------------------------------------------------------

    We are proposing changes in connection with Shared Savings Program 
eligibility requirements and application procedures. To better align 
program policies with our goal of increasing the number of 
beneficiaries in an accountable care relationship with a health care 
provider, we propose to sunset the requirement that CMS terminates the 
participation agreement if the ACO's population is not at least 5,000 
by the end of the performance year specified by CMS in its request for 
a Corrective Action Plan (CAP) while continuing to require ACOs to meet 
the minimum threshold of 5,000 assigned beneficiaries to begin a new 
agreement. We are proposing to update provisions of the Shared Savings 
Program regulations on application procedures to reflect the latest 
approach Antitrust Agencies (the Department of Justice and the Federal 
Trade Commission \461\) use to evaluate ACOs and enforce the antitrust 
laws. We are proposing changes to the Shared Savings Program 
beneficiary assignment methodology, to revise the definition of primary 
care services to align with payment policy proposals described 
elsewhere in this proposed rule, and to broaden the existing exception 
to the program's voluntary alignment policy to allow for beneficiaries 
to be assigned to entities participating in certain Innovation Center 
ACO models.
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    \461\ Refer to Withdrawn Final Policy Statement, ``Statement of 
Antitrust Enforcement Policy Regarding Accountable Care 
Organizations Participating in the Medicare Shared Savings 
Program,'' available at https://www.justice.gov/sites/default/files/atr/legacy/2011/10/20/276458.pdf. See also, FTC Press Release, 
``Federal Trade Commission Withdraws Health Care Enforcement Policy 
Statements'', July 14, 2023, available at https://www.ftc.gov/news-events/news/press-releases/2023/07/federal-trade-commission-withdraws-health-care-enforcement-policy-statements.
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    We propose modifications to the beneficiary information 
notification requirements under Sec.  425.312(a)(2)(v)(A) to reduce 
administrative burden on ACOs while maintaining beneficiary 
protections. First, we propose to modify the requirements for the 
timing of the follow-up communication to a beneficiary who has received 
the standardized written notice under Sec.  425.312(a)(2)(iii) or (iv). 
Under the proposed approach, an ACO would be required to provide the 
follow-up communication within 180 days from the date the standardized 
written notice was provided, as opposed to no later than the earlier of 
the beneficiary's next primary care service visit or 180 days

[[Page 61839]]

from the date the standardized written notice was provided. In 
addition, we propose to modify Sec.  425.312(a)(2)(iii) to require ACOs 
under preliminary prospective assignment with retrospective 
reconciliation to provide the standardized written notification to a 
subset of the Medicare FFS beneficiary population that is more likely 
to be assigned to the ACO, when compared to the population of 
beneficiaries who must receive the written notification under current 
Sec.  425.312(a)(2)(iii). If finalized, this proposal would reduce the 
burden on ACOs and confusion for beneficiaries resulting from the 
current requirement under which ACOs are required to send this 
notification to a greater number of beneficiaries who may not 
ultimately be assigned to the ACO.
b. Statutory and Regulatory Background on the Shared Savings Program
    On March 23, 2010, the Patient Protection and Affordable Care Act 
(Pub. L. 111-148) was enacted, followed by enactment of the Health Care 
and Education Reconciliation Act of 2010 (Pub. L. 111-152) on March 30, 
2010, which amended certain provisions of the Patient Protection and 
Affordable Care Act (hereinafter collectively referred to as ``the 
Affordable Care Act''). Section 3022 of the Affordable Care Act amended 
Title XVIII of the Act (42 U.S.C. 1395 et seq.) by adding section 1899 
of the Act to establish the Medicare Shared Savings Program to 
facilitate coordination and cooperation among healthcare providers to 
improve the quality of care for Medicare FFS beneficiaries and reduce 
the rate of growth in expenditures under Medicare Parts A and B. (See 
42 U.S.C. 1395jjj.)
    Section 1899 of the Act has been amended through subsequent 
legislation. The requirements for assignment of Medicare FFS 
beneficiaries to ACOs participating under the program were amended by 
the 21st Century Cures Act (the CURES Act) (Pub. L. 114-255). The 
Bipartisan Budget Act of 2018 (Pub. L. 115-123), further amended 
section 1899 of the Act to provide for the following: expanded use of 
telehealth services by physicians or practitioners participating in an 
applicable ACO to furnish services to prospectively assigned 
beneficiaries; greater flexibility in the assignment of Medicare FFS 
beneficiaries to ACOs by allowing ACOs in tracks under retrospective 
beneficiary assignment a choice of prospective assignment for the 
agreement period; permitting Medicare FFS beneficiaries to voluntarily 
identify an ACO professional as their primary care provider and 
requiring that such beneficiaries be notified of the ability to make 
and change such identification, and mandating that any such voluntary 
identification will supersede claims-based assignment; and allowing 
ACOs under certain two-sided models to establish CMS-approved 
beneficiary incentive programs.
    The Shared Savings Program regulations are codified at 42 CFR part 
425. The final rule establishing the Shared Savings Program appeared in 
the November 2, 2011 Federal Register (Medicare Program; Medicare 
Shared Savings Program: Accountable Care Organizations; final rule (76 
FR 67802) (hereinafter referred to as the ``November 2011 final 
rule'')). A subsequent major update to the program rules appeared in 
the June 9, 2015 Federal Register (Medicare Program; Medicare Shared 
Savings Program: Accountable Care Organizations; final rule (80 FR 
32692) (hereinafter referred to as the ``June 2015 final rule'')). The 
final rule entitled ``Medicare Program; Medicare Shared Savings 
Program; Accountable Care Organizations--Revised Benchmark Rebasing 
Methodology, Facilitating Transition to Performance-Based Risk, and 
Administrative Finality of Financial Calculations,'' which addressed 
changes related to the program's financial benchmark methodology, 
appeared in the June 10, 2016 Federal Register (81 FR 37950) 
(hereinafter referred to as the ``June 2016 final rule''). A final 
rule, ``Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2019; 
Medicare Shared Savings Program Requirements; Quality Payment Program; 
Medicaid Promoting Interoperability Program; Quality Payment Program--
Extreme and Uncontrollable Circumstance Policy for the 2019 MIPS 
Payment Year; Provisions From the Medicare Shared Savings Program--
Accountable Care Organizations--Pathways to Success; and Expanding the 
Use of Telehealth Services for the Treatment of Opioid Use Disorder 
Under the Substance Use-Disorder Prevention That Promotes Opioid 
Recovery and Treatment (SUPPORT) for Patients and Communities Act'', 
appeared in the November 23, 2018 Federal Register (83 FR 59452) 
(hereinafter referred to as the ``November 2018 final rule'' or the 
``CY 2019 PFS final rule''). In the November 2018 final rule, we 
finalized a voluntary 6-month extension for existing ACOs whose 
participation agreements would otherwise expire on December 31, 2018; 
allowed beneficiaries greater flexibility in designating their primary 
care provider and in the use of that designation for purposes of 
assigning the beneficiary to an ACO if the clinician they align with is 
participating in an ACO; revised the definition of primary care 
services used in beneficiary assignment; provided relief for ACOs and 
their clinicians impacted by extreme and uncontrollable circumstances 
in performance year 2018 and subsequent years; established a new 
Certified Electronic Health Record Technology (CEHRT) use threshold 
requirement; and reduced the Shared Savings Program quality measure set 
from 31 to 23 measures (83 FR 59940 through 59990 and 59707 through 
59715).
    A final rule redesigning the Shared Savings Program appeared in the 
December 31, 2018 Federal Register (Medicare Program: Medicare Shared 
Savings Program; Accountable Care Organizations--Pathways to Success 
and Uncontrollable Circumstances Policies for Performance Year 2017; 
final rule (83 FR 67816) (hereinafter referred to as the ``December 
2018 final rule'')). In the December 2018 final rule, we finalized a 
number of policies for the Shared Savings Program, including a redesign 
of the participation options available under the program to encourage 
ACOs to transition to two-sided models; new tools to support 
coordination of care across settings and strengthen beneficiary 
engagement; and revisions to ensure rigorous benchmarking.
    In the interim final rule with comment period (IFC) entitled 
``Medicare and Medicaid Programs; Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency,'' which was effective 
on the March 31, 2020 date of display and appeared in the April 6, 2020 
Federal Register (85 FR 19230), we removed the restriction that 
prevented the application of the Shared Savings Program extreme and 
uncontrollable circumstances policy for disasters that occur during the 
quality reporting period if the reporting period is extended to offer 
relief under the Shared Savings Program to all ACOs that may be unable 
to completely and accurately report quality data for 2019 due to the 
PHE for COVID-19 (85 FR 19267 and 19268).
    In the IFC entitled ``Medicare and Medicaid Programs; Basic Health 
Program, and Exchanges; Additional Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency and Delay of Certain 
Reporting Requirements for the Skilled Nursing Facility Quality 
Reporting Program,'' which was effective on May

[[Page 61840]]

8, 2020, and appeared in the May 8, 2020 Federal Register (85 FR 27573 
through 27587) (hereinafter referred to as the ``May 8, 2020 COVID-19 
IFC''), we modified Shared Savings Program policies to: (1) allow ACOs 
whose agreement periods expired on December 31, 2020, the option to 
extend their existing agreement period by 1-year, and allow ACOs in the 
BASIC track's glide path the option to elect to maintain their current 
level of participation for performance year 2021; (2) adjust program 
calculations to remove payment amounts for episodes of care for 
treatment of COVID-19; and (3) expand the definition of primary care 
services for purposes of determining beneficiary assignment to include 
telehealth codes for virtual check-ins, e-visits, and telephonic 
communication. We also clarified the applicability of the program's 
extreme and uncontrollable circumstances policy to mitigate shared 
losses for the period of the PHE for COVID-19 starting in January 2020.
    We have also made use of the annual CY PFS rules to address quality 
reporting for the Shared Savings Program and certain other issues. For 
summaries of certain policies finalized in prior PFS rules, refer to 
the CY 2020 PFS proposed rule (84 FR 40705), the CY 2021 PFS final rule 
(85 FR 84717), the CY 2022 PFS final rule (86 FR 65253 and 65254), the 
CY 2023 PFS final rule (87 FR 69779 and 69780), and the CY 2024 PFS 
final rule (88 FR 79094 and 79095). In the CY 2024 PFS final rule (88 
FR 79093 through 79232), we finalized changes to Shared Savings Program 
policies, including to: continue to move ACOs toward digital 
measurement of quality by revising the quality performance standard and 
reporting requirements under the APP within the Quality Payment Program 
(QPP); add a third step to the step-wise beneficiary assignment 
methodology under which we use an expanded period of time to identify 
whether a beneficiary has met the requirement for having received a 
primary care service from a physician who is an ACO professional in the 
ACO to allow additional beneficiaries to be eligible for assignment, as 
well as related changes to how we identify assignable beneficiaries 
used in certain Shared Savings Program calculations; update the 
definition of primary care services used for purposes of beneficiary 
assignment to remain consistent with billing and coding guidelines; 
refine the financial benchmarking methodology for ACOs in agreement 
periods beginning on January 1, 2024, and in subsequent years to (1) 
cap the risk score growth in an ACO's regional service area when 
calculating regional trends used to update the historical benchmark at 
the time of financial reconciliation for symmetry with the cap on ACO 
risk score growth, (2) apply the same CMS-HCC risk adjustment 
methodology applicable to the calendar year corresponding to the 
performance year in calculating risk scores for Medicare FFS 
beneficiaries for each benchmark year, (3) further mitigate the impact 
of the negative regional adjustment on the benchmark to encourage 
participation by ACOs caring for medically complex, high-cost 
beneficiaries, and (4) specify the circumstances in which CMS would 
recalculate the prior savings adjustment for changes in values used in 
benchmark calculations due to compliance action taken to address 
avoidance of at-risk beneficiaries, or as a result of the issuance of a 
revised initial determination of financial performance for a previous 
performance year following a reopening of ACO shared savings and shared 
losses calculations; refine our policies for the newly established 
advance investment payments (AIP); make updates to other programmatic 
areas including the program's eligibility requirements; and make timely 
technical changes to the regulations for clarity and consistency. 
Further, we also summarized comments received in response to a comment 
solicitation on potential future developments to Shared Savings Program 
policies, including incorporating a track with higher risk and 
potential reward than the ENHANCED track.
    Policies applicable to Shared Savings Program ACOs for purposes of 
quality reporting for other programs have also continued to evolve 
based on changes in the statute. For instance, the Medicare Access and 
CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) established 
the Quality Payment Program. In the CY 2017 Quality Payment Program 
final rule with comment period (81 FR 77008), we established 
regulations for the MIPS and Advanced APMs and related policies 
applicable to eligible clinicians who participate in APMs, including 
the Shared Savings Program. We have also made updates to policies under 
the Quality Payment Program through the annual CY PFS rules.
c. Summary of Shared Savings Program Proposals
    In sections III.G.2. through III.G.8. of this proposed rule, we 
propose modifications to the Shared Savings Program's policies, and 
describe comment solicitations. As a general summary, we are proposing 
the following changes to Shared Savings Program policies to:
     Update Shared Savings Program eligibility requirements and 
application procedures, including the following (section III.G.2 of 
this proposed rule):
    ++ Update compliance obligations for the requirement that ACOs 
maintain at least 5,000 assigned beneficiaries by the end of the 
performance year specified by CMS in its request for a CAP (section 
III.G.2.b of this proposed rule).
    ++ Revise the requirement that newly formed ACOs must agree to 
allow CMS to share a copy of their application with the Antitrust 
Agencies (section III.G.2.c of this proposed rule).
     Revise the policies for determining beneficiary 
assignment, including the following (section III.G.3 of this proposed 
rule):
    ++ Update the definition of primary care services used in 
beneficiary assignment at Sec.  425.400(c) (section III.G.3.a of this 
proposed rule).
    ++ Revise the Shared Savings Program regulations to broaden a 
limited exception to the program's voluntary alignment policy and allow 
a voluntarily aligned Shared Savings Program beneficiary to be claims-
based assigned to an entity participating in a disease- or condition-
specific CMS Innovation Center model when that model uses claims-based 
assignment that is based on primary care and/or other services and the 
Secretary has determined that a waiver is necessary solely for purposes 
of testing the model, in order for beneficiaries with certain diseases 
or conditions to benefit from the focused attention and care 
coordination related to the disease or condition that an entity 
participating in such a model can offer (section III.G.3.b of this 
proposed rule).
     Revise the quality reporting and the quality performance 
standard requirements, including the following (section III.G.4. of 
this proposed rule):
    ++ Propose to require Shared Savings Program ACOs to report the APP 
Plus quality measure set (section III.G.4.b.(2)(a) of this proposed 
rule).
    ++ Propose to focus the collection types available to Shared 
Savings Program ACOs for reporting the APP Plus quality measure set to 
eCQMs and Medicare CQMs (section III.G.4.b.(2)(b) of this proposed 
rule).
    ++ Propose that Shared Savings Program ACOs that report the APP 
Plus quality measure set and MIPS eligible clinicians, groups, and APM 
Entities that choose to report the APP Plus quality measure set, will 
be required to report on all measures in the APP Plus

[[Page 61841]]

quality measure set, as applicable (section III.G.4.c.(2)(a) of this 
proposed rule).
    ++ Propose to establish a Complex Organization Adjustment for 
Virtual Groups and APM Entities, including Shared Savings Program ACOs, 
when reporting eCQMs (section III.G.4.c.(2)(b) of this proposed rule).
    ++ Propose to score Medicare CQMs using flat benchmarks in their 
first two performance periods in MIPS (section III.G.4.c.(2)(c) of this 
proposed rule).
    ++ Propose to extend the eCQM reporting incentive for meeting the 
Shared Savings Program quality performance standard to performance year 
2025 and subsequent performance years (section III.G.4.d of this 
proposed rule).
     Allow eligible ACOs to receive prepaid shared savings 
(section III.G.5 of this proposed rule).
     Refine AIP policies, including the following (section 
III.G.6 of this proposed rule):
    ++ Allow ACOs receiving advance investment payments to voluntarily 
terminate from the payment option while remaining in the Shared Savings 
Program (section III.G.6.a of this proposed rule).
    ++ Codify a policy for recouping advance investment payments from 
ACOs whose participation agreements are terminated by CMS (section 
III.G.6.b of this proposed rule).
     Revise the policies on the Shared Savings Program's 
financial methodology, including the following (section III.G.7 of this 
proposed rule):
    ++ Apply a health equity benchmark adjustment (HEBA) which would 
adjust upward an ACO's historical benchmark, based on the number of 
beneficiaries they serve who are dually eligible or enrolled in the 
Medicare Part D Low-Income Subsidy (LIS). This would encourage and 
sustain participation by ACOs serving underserved populations that do 
not benefit from existing benchmark adjustments for regional efficiency 
or from generating prior savings (section III.G.7.b of this proposed 
rule).
    ++ Establish a calculation methodology to account for the impact of 
improper payments in recalculating expenditures and payment amounts 
used in Shared Savings Program financial calculations upon reopening a 
payment determination pursuant to Sec.  425.315(a) (section III.G.7.c 
of this proposed rule).
    ++ Establish an approach to identify significant, anomalous, and 
highly suspect (SAHS) billing activity occurring in CY 2024 or 
subsequent calendar years, and specify approaches to mitigating the 
impact of the SAHS billing activity on Shared Savings Program financial 
calculations in CY 2024 or subsequent calendar years. Under the 
proposed approach we would exclude payment amounts from expenditure and 
revenue calculations for the relevant calendar year for which the SAHS 
billing activity is identified, as well as from historical benchmarks 
used to reconcile the ACO for a performance year corresponding to the 
calendar year for which the SAHS billing activity is identified 
(section III.G.7.d of this proposed rule).
    ++ Seek comment on establishing a higher risk/reward option than 
the current ENHANCED track (section III.G.7.e of this proposed rule).
    ++ Propose technical changes, for consistency and clarity in 
provisions of the Shared Savings Program regulations on financial 
calculations, to align and clarify the language used to describe 
weights applied to the growth in ACO and regional risk scores for each 
Medicare enrollment type, as part of the calculation for capping ACO 
and regional risk score growth, respectively. The weight for a given 
enrollment type would be equal to the product of the ACO's historical 
benchmark expenditures after the application any adjustment applied 
under Sec.  425.652(a)(8) of the regulations (that is, the regional 
adjustment, prior savings adjustment or proposed HEBA (if finalized), 
or no adjustment) for that enrollment type and the ACO's performance 
year assigned beneficiary person years for that enrollment type 
(section III.G.7.f of this proposed rule).
     Modify beneficiary notification requirements, including 
the following (section III.G.8 of this proposed rule):
    ++ ACOs must provide the follow-up beneficiary communication no 
later than 180 days after the date that the ACO provided the 
standardized written notice to the beneficiary (section III.G.8.a of 
this proposed rule).
    ++ For ACOs that select preliminary prospective assignment with 
retrospective reconciliation, limit the distribution of the 
standardized written beneficiary information notification to 
beneficiaries who are more likely to be assigned to the ACO, when 
compared to the beneficiaries who must receive the written notification 
under current regulations (section III.G.8.b of this proposed rule).
    Taken together, the Shared Savings Program proposals in this 
proposed rule are anticipated to improve ACOs' incentives to join the 
program and continue participating in future years and earn shared 
savings. The proposals are projected to reduce program spending by $260 
million in total over the 10-year period 2025 through 2034. These 
changes are anticipated to support the goals outlined in the CY 2023 
PFS final rule (87 FR 69777 through 69978) and CY 2024 PFS final rule 
(88 FR 79093 through 79232) for growing the program, with a particular 
focus on including underserved communities.
    Certain policies, including both existing policies and the proposed 
new policies described in this proposed rule, rely upon the authority 
granted in section 1899(i)(3) of the Act to use other payment models 
that the Secretary determines will improve the quality and efficiency 
of items and services furnished under the Medicare program, and that do 
not result in program expenditures greater than those that would result 
under the statutory payment model. The following proposals require the 
use of our authority under section 1899(i) of the Act: the proposal to 
allow eligible ACOs to receive prepaid shared savings; the proposal to 
use a calculation methodology to account for the impact of improper 
payments in recalculating expenditures and payment amounts for certain 
Shared Savings Program financial calculations, upon reopening an ACO's 
payment determination and issuing a revised initial determination 
pursuant to Sec.  425.315(a); the proposal to use a methodology for 
certain Shared Savings Program financial calculations to mitigate the 
impact of SAHS billing activity occurring in CY 2024 or subsequent 
calendar years; and the proposed technical changes to the provision 
describing how we calculate the weights applied when capping growth in 
regional risk scores as part of the regional component of the three-way 
blended benchmark update factor. As described in the Regulatory Impact 
Analysis in section VII. and elsewhere in this proposed rule, these 
proposed changes to our payment methodology are expected to improve the 
quality and efficiency of care and are not expected to result in a 
situation in which the payment methodology under the Shared Savings 
Program, including all policies adopted under the authority of section 
1899(i) of the Act, results in more spending under the program than 
would have resulted under the statutory payment methodology in section 
1899(d) of the Act. We will continue to reexamine this projection in 
the future to ensure that the requirement under section 1899(i)(3)(B) 
of the Act that an alternative payment model not result in additional 
program expenditures continues to be satisfied. In the event

[[Page 61842]]

that we later determine that the payment model that includes policies 
established under section 1899(i)(3) of the Act no longer meets this 
requirement, we would undertake additional notice and comment 
rulemaking to make adjustments to the payment model to assure continued 
compliance with the statutory requirements.
2. Eligibility Requirements and Application Procedures
a. Overview
    We are proposing two modifications to the Shared Savings Program 
eligibility and application procedures that will be implemented for 
performance years beginning on or after January 1, 2025. Specifically, 
we propose the following, which are discussed in more detail in 
sections (b) and (c) below:
     Sunset the requirement after January 1, 2025, at Sec.  
425.110(b)(2) that CMS terminates the participation agreement and the 
ACO is not eligible to share in savings for that performance year if 
the ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a CAP and
     Revise the antitrust language in the application 
procedures at Sec. Sec.  425.202(a)(3) and 425.224(a)(3) for the Shared 
Savings Program.
b. Monitoring Compliance With the Requirement That ACOs Maintain at 
Least 5,000 Assigned Beneficiaries
    Section 1899(b)(2)(D) of the Act requires participating ACOs to 
include primary care ACO professionals that are sufficient for the 
number of Medicare FFS beneficiaries assigned to the ACO and that at a 
minimum, the ACO shall have at least 5,000 such beneficiaries assigned 
to it. In the November 2011 final rule (76 FR 67808), in alignment with 
the statutory requirement at section 1899(b)(2)(D) of the Act, CMS 
established that, at a minimum, an ACO shall have at least 5,000 such 
beneficiaries assigned to it to be eligible to participate in the 
Shared Savings Program under Sec.  425.110. We described the importance 
of maintaining at least 5,000 assigned beneficiaries with respect to 
both eligibility of the ACO to participate in the program and the 
statistical stability for purposes of calculating per capita 
expenditures and assessing financial and quality performance. We noted, 
however, that we understood circumstances may change during the 
agreement period, and that an ACO's assigned population may vary 
accordingly.
    To enforce program requirements under Sec.  425.110, while still 
recognizing that variations may occur for an ACO's assigned population, 
CMS generally issues a warning notice and request the ACO submit a 
Corrective Action Plan (CAP) should the ACO's assigned population fall 
below 5,000 beneficiaries. Few ACOs have had a beneficiary population 
that fell below 5,000. Between calendar year 2020 and 2023, based on 
the program's compliance monitoring review, 24 ACOs have been below 
this assignment threshold at the start of one or more performance years 
within an agreement period, which led CMS to issue compliance actions. 
Approximately 55 percent of these ACOs opted to voluntarily terminate 
ahead of the CAP deadline imposed by CMS, while approximately 40 
percent were able to increase their beneficiary assignment over the 
threshold and remain in the program. Given additional time, more ACOs 
likely would be able to increase their beneficiary assignment, keeping 
more beneficiaries in accountable care relationships, and maintain 
their participation in the Shared Savings Program.
    Separately, we had established a policy in the December 2018 final 
rule (83 FR 67925) providing for an ACO to select the Minimum Savings 
Rate (MSR)/Minimum Loss Rate (MLR) that CMS would use when performing 
shared savings and shared losses calculations for the ACO. As we have 
previously discussed, the MSR/MLR protects against an ACO earning 
shared savings or being liable for shared losses when the change in 
expenditures represents normal, or random, variation rather than an 
actual change in performance (see, for example, 83 FR 67923 through 
67926).
    In the December 2018 final rule (83 FR 67925 through 67929), we 
revised Sec.  425.110(b) to provide for the use of a variable MSR/MLR 
when performing shared savings and shared losses calculations if an 
ACO's assigned beneficiary population fell below 5,000 for the 
performance year regardless of whether the ACO had previously selected 
a fixed or variable MSR/MLR. This policy protects the statistical 
stability of the program's expenditure calculations. As an ACO's 
assigned beneficiary population decreases, variability in the 
population's expenditures increases. We thus expressed concern that the 
reduction in the size of the ACO's assigned beneficiary population 
would cause shared savings payments made to the ACO to not reflect true 
cost savings, but normal expenditure fluctuations (83 FR 67926). The 
use of a variable MSR/MLR thus made it more difficult for an ACO under 
performance-based risk that falls below the 5,000-beneficiary threshold 
to earn shared savings or be responsible for shared losses to ensure 
that the savings or losses reflected the ACO's actual performance and 
not merely statistical noise. This policy provided additional 
protection to the Medicare Trust Funds and greater protection for ACOs 
against owing shared losses.
    As described above, an ACO's failure to maintain at least 5,000 
assigned beneficiaries may result in compliance actions, up to and 
including termination of the ACO from the Shared Savings Program. When 
originally developed, this program policy was intended in part to 
protect both CMS and the ACO from variability in the expenditure 
calculations caused by a small assigned beneficiary population. With 
the MSR and MLR adjustments finalized in the December 2018 final rule, 
we developed protections against issues with the benchmark calculation 
for ACOs with fewer assigned beneficiaries, which provide adequate 
protection against variability in the short term. The MSR and MLR 
sliding scale varies based on the number of beneficiaries assigned to 
the ACO from 1 up to 60,000. Currently, this adjustment to the MSR/MLR 
protects both CMS and the ACO from inappropriate over or underpayments, 
reducing the financial risk of allowing ACOs to continue to participate 
in the Shared Savings Program if they experience a reduction in 
assigned beneficiaries.
    In light of the effectiveness of the variable MSR/MLR policy 
described above, we are proposing to sunset the requirement at Sec.  
425.110(b)(2) that CMS will terminate an ACO's participation agreement 
and determine that an ACO is not eligible to share in savings for that 
performance year if an ACO's assigned population is not at least 5,000 
by the end of the performance year specified by CMS in its request for 
a CAP. Specifically, we propose to revise Sec.  425.110(b)(2) to limit 
its application to performance years starting before January 1, 2025. 
Thus, for performance years beginning on or after January 1, 2025, if 
the ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a CAP, CMS will 
not be required to terminate the participation agreement.
    This proposal would not modify the requirement at Sec.  425.110(a), 
which implements the statutory requirement at section 1899(b)(2)(D) of 
the Act that ACOs have 5,000 beneficiaries at critical points in CMS's 
determination of the

[[Page 61843]]

ACO's eligibility to participate in the Shared Savings Program, 
including: at the time of application in order to be eligible for the 
Shared Savings Program, and at any point when an ACO elects to renew 
its participation in the program. As discussed in the November 2011 
final rule (76 FR 67808), CMS has found ``[a] minimum threshold is 
important with respect to both the eligibility of the ACO to 
participate in the program and to the statistical stability for 
purposes of calculating per capita expenditures and assessing quality 
performance''. A 5,000 beneficiary minimum, paired with a variable MSR/
MLR, enables ACOs to have their work of improving beneficiary care best 
reflected in their financial performance and shared savings results. 
Additionally, we would retain Sec.  425.110(b), which states that an 
ACO may be subject to actions under Sec. Sec.  425.216 and 425.218 if 
its assigned population falls below 5,000 at any time during the 
performance year. This proposed approach provides CMS with additional 
flexibility in the compliance actions that we take in working with ACOs 
to help them return to the 5,000 beneficiary threshold.
    The proposed modification aligns with CMS's broader goals to expand 
the number of beneficiaries in accountable care relationships. We 
anticipate this flexibility will provide ACOs with additional time and 
opportunities to recruit additional providers and suppliers to increase 
their assigned beneficiary population rather than being required to 
exit the Shared Savings Program due to their beneficiary attribution. 
We seek comment on this proposal. If finalized, this proposed change 
would be effective beginning on January 1, 2025.
c. Update Antitrust Language
    Section 425.202(a)(3) requires that ACOs that are newly formed 
after March 23, 2010, agree to allow CMS to share a copy of their 
application with the Antitrust Agencies (the Federal Trade Commission 
(FTC) and the Department of Justice (DOJ), as defined in the Statement 
of Antitrust Enforcement Policy Regarding Accountable Care 
Organizations Participating in the Medicare Shared Savings Program). 
This policy has been in effect since the enactment of the November 2011 
final rule (76 FR 67822). We stated at the time that this policy was in 
the public interest to harmonize the eligibility criteria for ACOs that 
wished to participate in the Shared Savings Program with similar 
antitrust criteria on clinical integration, because competition among 
ACOs was expected to have significant benefits for Medicare 
beneficiaries.
    In 2023, both the DOJ and the FTC withdrew the outdated Antitrust 
Enforcement Policy Statement because the policy no longer served its 
intended purpose of providing useful guidance to market 
participants.\462\ Instead, both Antitrust Agencies have stated that 
they will continue to vigorously enforce the antitrust laws in the 
health care markets by evaluating mergers and conduct that harm 
competition on a case-by-case basis.
---------------------------------------------------------------------------

    \462\ U.S. Department of Justice, Press Release, Justice 
Department Withdraws Outdated Enforcement Policy Statements (Feb. 3, 
2023), available at https://www.justice.gov/opa/pr/justice-department-withdraws-outdated-enforcement-policy-statements; Federal 
Trade Commission, Press Release, Federal Trade Commission Withdraws 
Health Care Enforcement Policy Statements (July 14, 2023), available 
at https://www.ftc.gov/news-events/news/press-releases/2023/07/federal-trade-commission-withdraws-health-care-enforcement-policy-statements.
---------------------------------------------------------------------------

    As a result, we propose to modify the Shared Savings Program 
eligibility requirements that will be implemented on January 1, 2025, 
by removing the reference to the Antitrust Enforcement Policy Statement 
in Sec.  425.202(a)(3), and also in Sec.  425.224(a)(3). This proposal 
aligns the Shared Savings Program with the Antitrust Agencies' 
decisions to withdraw the Antitrust Enforcement Policy Statement. We 
propose to edit Sec.  425.202(a)(3) to state, ``An ACO that seeks to 
participate in the Shared Savings Program must agree that CMS can share 
a copy of their application with the Antitrust Agencies.'' Similarly, 
we propose to edit Sec.  425.224(a)(3) to state, ``An ACO that seeks to 
enter a new participation agreement under the Shared Savings Program 
must agree that CMS can share a copy of its application with the 
Antitrust Agencies.'' We also plan to remove guidance from the Shared 
Savings Program website detailing how an ACO could calculate their 
share of services in each applicable Primary Service Area (PSA), as 
described in the Antitrust Policy Statement, as this is no longer 
useful to ACOs.
    As we stated in 76 FR 67822, we intend to coordinate closely with 
the Antitrust Agencies throughout the application process and the 
operation of the Shared Savings Program to ensure there are no 
detrimental impacts to competition. CMS will share application and 
participation information including aggregate claims data regarding 
allowed charges and fee-for-service payments for all ACOs accepted in 
the Shared Savings Program, with the Antitrust Agencies needed to 
further any investigations or support their enforcement of the 
antitrust laws.
    We seek comment on this proposal. If finalized, this proposed 
change would be effective beginning on January 1, 2025.
3. Beneficiary Assignment Methodology
a. Proposed Revisions to the Definition of Primary Care Services
(1) Background
    Section 1899(c)(1) of the Act, as amended by the CURES Act and the 
Bipartisan Budget Act of 2018, provides that for performance years 
beginning on or after January 1, 2019, the Secretary shall assign 
beneficiaries to an ACO based on their utilization of primary care 
services provided by a physician who is an ACO professional and all 
services furnished by Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs). However, the statute does not specify 
a list of services considered to be primary care services for purposes 
of beneficiary assignment.
    In the November 2011 final rule (76 FR 67853), we established the 
initial list of services, identified by Current Procedural Terminology 
(CPT) and Healthcare Common Procedure Coding System (HCPCS) codes, that 
we considered to be primary care services. In that final rule, we 
indicated that we intended to monitor CPT and HCPCS codes and would 
consider making changes to the definition of primary care services to 
add or delete codes used to identify primary care services if there 
were sufficient evidence that revisions were warranted. We have updated 
the list of primary care service codes in subsequent rulemaking (refer 
to 80 FR 32746 through 32748; 80 FR 71270 through 71273; 82 FR 53212 
and 53213; 83 FR 59964 through 59968; 85 FR 27582 through 27586; 85 FR 
84747 through 84756; 85 FR 84785 through 84793; 86 FR 65273 through 
65279; 87 FR 69821 through 69825; 88 FR 79163 through 79174) to reflect 
additions or modifications to the codes that have been recognized for 
payment under the PFS and to incorporate other changes to the 
definition of primary care services for purposes of the Shared Savings 
Program. For the performance year beginning on January 1, 2024, and 
subsequent performance years, we defined primary care services for 
purposes of assigning beneficiaries to ACOs under Sec.  425.402 in 
Sec.  425.400(c)(1)(viii).
(2) Proposed Revisions
    Based on feedback from ACOs and our further review of the HCPCS and 
CPT codes that are currently recognized

[[Page 61844]]

for payment under the PFS or that we are proposing to recognize for 
payment starting in CY 2025, we believe it would be appropriate to 
amend the definition of primary care services used in the Shared 
Savings Program assignment methodology to include certain additional 
codes for the performance year starting on January 1, 2025, and 
subsequent performance years, in order to remain consistent with 
billing and coding under the PFS.
    We propose to specify a revised definition of primary care services 
used for assignment in a new provision of the Shared Savings Program 
regulations at Sec.  425.400(c)(1)(ix) to include the list of HCPCS and 
CPT codes specified in Sec.  425.400(c)(1)(viii), as well as the 
following additions: (1) Safety Planning Interventions (HCPCS code 
GSPI1) when the base code is also a primary care service code, if 
finalized under Medicare FFS payment policy; (2) Post-Discharge 
Telephonic Follow-up Contacts Intervention (HCPCS code GFCI1), if 
finalized under Medicare FFS payment policy; (3) Virtual Check-in 
Service (CPT code 9X091), if finalized under Medicare FFS payment 
policy; (4) Advanced Primary Care Management Services (HCPCS GPCM1, 
GPCM2, and GPCM3), if finalized under Medicare FFS payment policy; (5) 
Cardiovascular Risk Assessment and Risk Management Services (HCPCS 
codes GCDRA and GCDRM), if finalized under Medicare FFS payment policy; 
(6) Interprofessional Consultation Services (CPT codes 99446, 99447, 
99448, 99449, 99451, 99452); (7) Direct Care Caregiver Training 
Services (HCPCS codes GCTD1, GCTD2 and GCTD3), if finalized under 
Medicare FFS payment policy; and (8) Individual Behavior Management/
Modification Caregiver Training Services (HCPCS codes GCTB1 and GCTB2), 
if finalized under Medicare FFS payment policy.
    We propose that the new provision at Sec.  425.400(c)(1)(ix) would 
be applicable for use in determining beneficiary assignment for the 
performance year starting on January 1, 2025, and subsequent 
performance years.
    The following provides additional information about the CPT and 
HCPCS codes that we are proposing to add to the definition of primary 
care services used for purposes of beneficiary assignment:
     Safety Planning Interventions (SPI) (HCPCS code 
GSPI1 (Safety planning interventions, including assisting the patient 
in the identification of the following personalized elements of a 
safety plan: recognizing warning signs of an impending suicidal crisis; 
employing internal coping strategies; utilizing social contacts and 
social settings as a means of distraction from suicidal thoughts; 
utilizing family members, significant others, caregivers, and/or 
friends to help resolve the crisis; contacting mental health 
professionals or agencies; and making the environment safe; (List 
separately in addition to an E/M visit or psychotherapy)): In section 
II.I of this proposed rule, we are proposing under the PFS to create an 
add-on G-code that would be billed along with an E/M visit or 
psychotherapy visit when safety planning interventions are personally 
performed by the billing practitioner in a variety of settings. Safety 
planning interventions involve a person working with a clinician to 
develop a personalized list of coping strategies and sources of support 
that the person could use in the event of experiencing thoughts of harm 
to themselves or others. This is not a suicide risk assessment, but 
rather, an intervention provided to people determined to have elevated 
risk. Safety planning interventions have also been used to reduce the 
risk of suicide. The basic components of a safety plan include the 
following: (1) recognizing warning signs of an impending suicidal 
crisis or actions that increase the risk of overdose; (2) employing 
internal coping strategies; (3) utilizing social contacts and social 
settings as a means of distraction from suicidal thoughts and/or taking 
steps to reduce the risk of suicide; (4) utilizing family members or 
friends to help resolve the crisis; (5) contacting mental health 
professionals, crisis services, or agencies; and (6) making the 
environment safe, including restricting access to lethal means, if 
applicable.
    Refer to section II.I of this proposed rule for detailed, technical 
discussion regarding the proposed description, payment, and utilization 
of this HCPCS code.
    In the CY 2019 PFS final rule (83 FR 59965 through 59966), we 
finalized the addition of prolonged evaluation and management or 
psychotherapy service(s) beyond the typical service time of the primary 
procedure (CPT codes 99354 and 99355) to the definition of primary care 
services used for purposes of assignment because these two codes are 
``add-on codes'' that describe additional resource components of a 
broader service furnished in the office or other outpatient setting 
that are not accounted for in the valuation of the base codes. For the 
same reason, we believe it would be appropriate to also include HCPCS 
code GSPI1, if finalized under Medicare FFS policy since GSPI1 is being 
proposed as an add-on service to an E/M or psychotherapy visit. 
Evaluation and management visits are included in the definition of 
primary care services used for purposes of assignment and so we believe 
it would be appropriate to also include GSPI1, when billed with an E/M 
visit, in the definition of primary care services used for purposes of 
assignment to assign beneficiaries more accurately to ACOs 
participating in the Shared Savings Program. We further believe the 
services billed under this code reflect the types of services we expect 
primary care providers to provide in order to improve continuity of 
care. Including Safety Planning Intervention services in the definition 
of primary care services used for purposes of assignment would also 
align with the CMS Behavioral Health Strategy, the mission of which is 
to ensure that high-quality behavioral health services and supports are 
accessible to Medicare beneficiaries.
    We note that, as proposed, HCPCS code GSPI1 could also be billed 
with psychotherapy services, which are not considered for purposes of 
beneficiary assignment under Sec.  [thinsp]425.400(c). Therefore, we 
propose to include the allowed charges for HCPCS code GSPI1, for 
purposes of assigning beneficiaries to ACOs, only when billed with a 
service which is also included in the definition of primary care 
services.
     Post-Discharge Telephonic Follow-up Contacts Intervention 
(FCI) (HCPCS code GFCI1: Post discharge telephonic follow-up contacts 
performed in conjunction with a discharge from the emergency department 
for behavioral health or other crisis encounter, per calendar month). 
In section II.I of this proposed rule, we describe FCI as a specific 
protocol of services for individuals with suicide risk involving a 
series of telephone contacts between a provider and person in the weeks 
and sometimes months following discharge from the emergency department 
and other relevant care settings, that occurs when the person is in the 
community and is designed to reduce the risk of subsequent adverse 
outcomes. FCI calls are typically 10-20 minutes in duration and aim to 
encourage use of the Safety Plan (as needed in a crisis) and updating 
it to optimize effectiveness, expressing psychosocial support, and 
helping to facilitate engagement in any indicated follow-up care and 
services. We are proposing to create a monthly billing code to describe 
the specific protocols involved in furnishing post-discharge telephonic 
follow-up contacts that are performed in conjunction with a discharge 
from the emergency department for a crisis encounter, as a

[[Page 61845]]

bundled service describing four calls in a month, each lasting between 
10-20 minutes. We are proposing to price this service based on a direct 
crosswalk to CPT code 99426 (Principal care management; first 30 
minutes of clinical staff time directed by a physician or other 
qualified healthcare professional) because we believe the work would be 
similar in nature and intensity.
    Refer to section II.I. of this proposed rule for detailed, 
technical discussion regarding the proposed description, payment, and 
utilization of this HCPCS code.
    These services are similar to TCM services (CPT codes 99495 and 
99496), which are included in the definition of primary care services 
used for purposes of assignment under Sec.  425.400(c), in that these 
services help eligible people transition back to a community setting 
after a stay at certain facility types like TCM. Similar to the 
rationale described December 2014 proposed rule (79 FR 72792) and later 
finalized in the June 2015 final rule (80 FR 32746 through 32748) where 
we finalized the inclusion of TCM services in the definition of primary 
care services used for purposes of assignment, providing separate 
payment for the work of community physicians and practitioners in 
treating a patient following discharge from a hospital or nursing 
facility would ensure better continuity of care for these patients and 
help reduce avoidable readmissions. Therefore, we believe that FCI 
services should also be included in the definition of primary care 
services used for beneficiary assignment since FCI services are 
designed to assist in the transition from the emergency department into 
the community. We believe the services billed under this code reflect 
the types of services we expect primary care providers to provide in 
order to improve care coordination and care management. Thus, we 
believe that FCI services should also be included.
    Further, in determining the recommended pricing for HCPCS code 
GFCI1, we recommend pricing this service based on a direct crosswalk to 
Principal Care Management (PCM) service (CPT code 99426) because we 
believe the work would be similar in nature, as well as time and 
intensity. In the CY 2021 PFS final rule (85 FR 84749), we finalized 
the inclusion of HCPCS codes G2064 and G2065 in the definition of 
primary care services used for purposes of assignment since we expect 
that most services billed under these codes will be billed by 
specialists who are focused on managing patients with a single complex 
chronic condition requiring substantial care management. These HCPCS 
codes were replaced by CPT codes 99424, 99425, 99426, and 99427 in the 
CY 2022 PFS final rule (86 FR 65275). PCM services (CPT codes 99424, 
99425, 99426, and 99427 and HCPCS codes G2064 and G2065) are included 
in the definition of primary care services used for purposes of 
assignment and since FCI services are similar in nature, time, and 
intensity to PCM services, we believe it would be appropriate to 
include these services in the definition of primary care services used 
for purposes of assignment. Including FCI services in the definition of 
primary care services used for purposes of assignment would also align 
with the CMS Behavioral Health Strategy as the FCI services are 
designed to support beneficiaries with follow-up care related to 
suicide risk.
     Virtual Check-in Service (CPT code 9X091):
    ++ CPT code 9X091 (Brief communication technology-based service 
(e.g., virtual check-in) by a physician or other qualified health care 
professional who can report evaluation and management services, 
provided to an established patient, not originating from a related 
evaluation and management service provided within the previous 7 days 
nor leading to an evaluation and management service or procedure within 
the next 24 hours or soonest available appointment, 5-10 minutes of 
medical discussion).
    The CPT Editorial Panel established a new CPT code 9X091 describing 
a brief virtual check-in encounter that is intended to evaluate the 
need for a more extensive visit. The code descriptor for CPT code 9X091 
mirrors that of existing HCPCS code G2012 (Brief communication 
technology-based service, e.g., virtual check-in, by a physician or 
other qualified health care professional who can report evaluation and 
management services, provided to an established patient, not 
originating from a related E/M service provided within the previous 7 
days nor leading to an E/M service or procedure within the next 24 
hours or soonest available appointment; 5-10 minutes of medical 
discussion) and, per the CPT Editorial Panel materials, is intended to 
replace that code. HCPCS code G2012 is included in the Shared Savings 
Program definition of primary care services used for purposes of 
assignment.
    In section II.E of this proposed rule, we are proposing separate 
payment for CPT code 9X091. Because the code description for CPT code 
9X091 mirrors HCPCS code G2012 and because, per CPT Editorial Panel 
materials, is intended to replace HCPCS code G2012, we are proposing to 
make CPT code 9X091 separately payable under Medicare. We note we are 
proposing to delete HCPCS code G2012 for purposes of Medicare PFS 
payment policy, however, HCPCS code G2012 will continue to be included 
in the definition of primary care services used for purposes of 
assignment, consistent with how deleted CPT and HCPCS codes have been 
handled historically and to allow for consistency with calculating 
historical benchmarks.
    We propose that we would include CPT code 9X091 in the definition 
of primary care services used for purposes of assignment as the code 
description of brief communication technology-based service mirrors the 
description of HCPCS code G2012, which is included in the definition of 
primary care services used for purposes of assignment since these 
services are furnished to established patients by physicians or 
qualified health care professionals that can report E/M services in 
lieu of an in person primary care visit (85 FR 84753). Since CPT code 
9X091 is a direct replacement of HCPCS code G2012, 9X091 would be 
included in the definition of primary care services used for purposes 
of assignment, under proposed Sec.  425.400(c)(1)(ix)(C). In the CY 
2022 Physician Fee Schedule file rule (86 FR 65277 through 65279), we 
finalized a policy wherein we would incorporate into the definition of 
primary care services a permanent CPT code when it directly replaces 
another CPT code or a temporary HCPCS code (for example, a G-code) that 
is already included in the definition of primary care services for 
purposes of determining beneficiary assignment under the Shared Savings 
Program. Additionally, CPT code 9X091, per the CPT Editorial Panel 
materials, is intended to be reported instead of HCPCS code G2012, 
which is already included in the definition of primary care services 
used for purposes of assignment. We further believe the services billed 
under this code reflect the types of services we expect primary care 
providers to provide in order to improve care coordination and care 
management.
    We explained that this approach would help to ensure the 
appropriate identification of primary care services used in the Shared 
Savings Program's assignment methodology by allowing for the immediate 
inclusion of replacement CPT codes in the determination of beneficiary 
assignment and lead to continuity in the assignment of beneficiaries 
receiving those services based on current coding. This continuity would 
improve predictability for ACOs, while also increasing the

[[Page 61846]]

consistency of care coordination for their assigned beneficiaries. We 
further finalized that such replacement codes would be incorporated 
into the definition of the primary care services for purposes of 
determining beneficiary assignment for the performance year, when the 
assignment window for a benchmark or performance year (as defined in 
Sec.  [thinsp]425.20) includes any day on or after the effective date 
of the replacement code for payment purposes under FFS Medicare. CPT 
code 9X091 has an effective date of January 1, 2025.
     Advanced Primary Care Management (HCPCS codes GPCM1, 
GPCM2, and GPCM3);
    (1) HCPCS code GPCM1: (Advanced primary care management services 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar month, with the following elements, as 
appropriate:
     Consent;
    ++ Inform the patient regarding availability of the service; that 
only one practitioner can furnish and be paid for the service during a 
calendar month; of the right to stop the services at any time 
(effective at the end of the calendar month); and that cost sharing may 
apply.
    ++ Document in patient's medical record that consent was obtained.
     Initiation during a qualifying visit for new patients or 
patients not seen within 3 years;
     Provide 24/7 access for urgent needs to care team/
practitioners, including providing patients/caregivers with a way to 
contact health care professionals in the practice to discuss urgent 
needs regardless of the time of day or day of week;
     Continuity of care with a designated member of the care 
team with whom the patient is able to schedule successive routine 
appointments;
     Deliver care in alternative ways to traditional office 
visits to best meet the patient's needs, such as home visits, and/or 
expanded hours;
     Overall comprehensive care management;
    ++ Systematic needs assessment (medical and psychosocial).
    ++ System-based approaches to ensure receipt of preventive 
services.
    ++ Medication reconciliation, management and oversight of self-
management.
     Development, implementation, revision, and maintenance of 
an electronic patient-centered comprehensive care plan;
    ++ Care plan is available timely within and outside the billing 
practice as appropriate to individuals involved in the beneficiary's 
care, can be routinely accessed and updated by care team/practitioner, 
and copy of care plan to patient/caregiver.
     Coordination of care transitions between and among health 
care providers and settings, including referrals to other clinicians 
and follow-up after an emergency department visit and discharges from 
hospitals, skilled nursing facilities or other health care facilities 
as applicable;
    ++ Ensure timely exchange of electronic health information with 
other practitioners and providers to support continuity of care.
    ++ Ensure timely follow-up communication (direct contact, 
telephone, electronic) with the patient and/or caregiver after an 
emergency department visit and discharges from hospitals, skilled 
nursing facilities, or other health care facilities, within 7 calendar 
days of discharge, as clinically indicated.
     Ongoing communication and coordinating receipt of needed 
services from practitioners, home- and community-based service 
providers, community-based social service providers, hospitals, and 
skilled nursing facilities (or other health care facilities), and 
document communication regarding the patient's psychosocial strengths 
and needs, functional deficits, goals, preferences, and desired 
outcomes, including cultural and linguistic factors, in the patient's 
medical record;
     Enhanced opportunities for the beneficiary and any 
caregiver to communicate with the care team/practitioner regarding the 
beneficiary's care through the use of asynchronous non-face-to-face 
consultation methods other than telephone, such as secure messaging, 
email, internet, or patient portal, and other communication-technology 
based services, including remote evaluation of pre-recorded patient 
information and interprofessional telephone/internet/EHR referral 
service(s), to maintain ongoing communication with patients, as 
appropriate;
    ++ Ensure access to patient-initiated digital communications that 
require a clinical decision, such as virtual check-ins and digital 
online assessment and management and E/M visits (or e-visits).
     Analyze patient population data to identify gaps in care 
and offer additional interventions, as appropriate;
     Risk stratify the practice population based on defined 
diagnoses, claims, or other electronic data to identify and target 
services to patients;
     Be assessed through performance measurement of primary 
care quality, total cost of care, and meaningful use of Certified EHR 
Technology.
    (2) HCPCS code GPCM2 (Advanced primary care management services for 
a patient with multiple (two or more) chronic conditions expected to 
last at least 12 months, or until the death of the patient, which place 
the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, provided by clinical staff and 
directed by a physician or other qualified health care professional who 
is responsible for all primary care and serves as the continuing focal 
point for all needed health care services, per calendar month, with the 
elements included in GPCM1, as appropriate), and
    (3) HCPCS code GPCM3 (Advanced primary care management services for 
a patient who is a Qualified Medicare Beneficiary with multiple (two or 
more) chronic conditions expected to last at least 12 months, or until 
the death of the patient, which place the patient at significant risk 
of death, acute exacerbation/decompensation, or functional decline, 
provided by clinical staff and directed by a physician or other 
qualified health care professional who is responsible for all primary 
care and serves as the continuing focal point for all needed health 
care services, per calendar month, with the elements included in GPCM1, 
as appropriate).
    In section II.G. of this proposed rule, we are proposing to 
establish coding and make payment under the PFS for a newly defined set 
of APCM services as described and defined by three HCPCS codes (GPCM1, 
GPCM2, and GPCM3) to recognize the resource costs associated with 
furnishing services using an ``advanced primary care approach'' 
supported by a team-based care structure under the PFS. Delivery of 
care using an advanced primary care model involves restructuring of the 
primary care team, which includes the billing practitioner and the 
auxiliary personnel under their general supervision, within practices. 
This restructuring creates several advantages for patients, and 
provides more broad accessibility and alternative methods for patients 
to communicate with their care team/practitioner about their care 
outside of in-person visits (for example, virtual, asynchronous 
interactions, such as online chat), which can lead to more timely and 
efficient identification of, and responses to, health care needs (for 
example, practitioners can route patients to the optimal clinician and

[[Page 61847]]

setting--to a synchronous visit, an asynchronous chat, or a direct 
referral to the optimal site of care). Practitioners using an advanced 
primary care delivery model can more easily collaborate across clinical 
disciplines through remote interprofessional consultations with 
specialists, as well as standardize condition management into evidence-
based clinical workflows, which allow for closed-loop follow-up and 
more real-time management for patients with acute or evolving complex 
issues, partner on complex decisions, and personalize their patients' 
care plans.
    Specifically, we are proposing to adopt specific coding and payment 
policies for APCM services for use by practitioners who are providing 
services under this specific model of advanced primary care, when the 
practitioner is the continuing focal point for all needed health care 
services and responsible for all primary care services.
    Providing care using an advanced primary care delivery model 
involves resource costs associated with maintaining certain practice 
capabilities and continuous readiness and monitoring activities to 
support a team-based approach to care, where significant resources are 
used on virtual, asynchronous patient interactions, collaboration 
across clinical disciplines, and real-time management of patients with 
acute and complex concerns that are not fully recognized or paid for by 
the existing care management codes. As the delivery of primary care has 
evolved to embrace advanced primary care more fully, we believe that it 
is prudent to now adopt specific coding and payment policies to better 
recognize the resources involved in care management under an advanced 
primary care delivery model.
    We are seeking to ensure that the APCM codes would fully and 
appropriately capture the care management and CTBS services that are 
characteristic of the changes in medical practice toward advanced 
primary care, as demonstrated in select CMS Innovation Center models. 
As we do for CCM and PCM services, we propose to require for APCM 
services that the practitioner provide an initiating visit and obtain 
beneficiary consent (see section II.G.2.c.(1) and II.G.2.c.(2) of this 
proposed rule). We are proposing to incorporate as elements of APCM 
services ``Management of Care Transitions'' and ``Enhanced 
Communications Opportunities.'' For the ``Management of Care 
Transitions'' APCM service element, we are proposing to specify timely 
follow-up during care transitions (see section II.G.2.c.(6) of this 
proposed rule). For the ``Enhanced Communications Opportunities'' APCM 
service element, we are proposing to incorporate digital access through 
CTBS services, such as virtual check-ins and remote evaluation of 
images, to maintain ongoing communication with the patient (see section 
II.G.2.c.(8) of this proposed rule). We are also proposing to specify 
for APCM services the practice-level characteristics and capabilities 
that we believe to be inherent to, and necessarily present when a 
practitioner is providing covered services using, the ``advanced 
primary care'' model. Included in the service descriptors for GPCM1, 
GPCM2, and GPCM3 are proposed practice-level capabilities that reflect 
care delivery using an advanced primary care model that focused around 
24/7 access and continuity of care (see section II.G.2.c.(3) of this 
proposed rule), patient population-level management (see section 
II.G.2.c.(9) of this proposed rule), and performance measurement (see 
section II.G.2.c.(10) of this proposed rule). We believe these practice 
capabilities are indicative of, and necessary to, care delivery using 
the advanced primary care model.
    Refer to section II.G. of this proposed rule for detailed, 
technical discussion regarding the proposed description, payment and 
utilization of these HCPCS codes as well as information about 
requirements for billing providers participating in ACOs.
    As described in section II.G., HCPCS codes GPCM1 through GPCM3 
would describe APCM services furnished per calendar month, following 
the initial qualifying visit (see section II.G.2.c.(1) for more on the 
initiating visit). Physicians and NPPs, including nurse practitioners 
(NPs), physician assistants (PAs), certified nurse midwives (CNMs) and 
clinical nurse specialists (CNSs), could bill for APCM services. As we 
describe in more detail in section II.G.2.c., within the code 
descriptors for GPCM1, GPCM2, and GPCM3, we are including the elements 
of the scope of service for APCM as well as the capabilities and 
requirements that we believe to be inherent to care delivery by the 
practitioner using an advanced primary care model, and necessary to 
fully furnish and, therefore, bill for APCM services.
    We are proposing that the practitioner who bills for APCM services 
must intend to be responsible for the patient's primary care and serve 
as the continuing focal point for all needed health care services. We 
anticipate that most practitioners furnishing APCM services would be 
managing all the patient's health care services over the month and have 
either already been providing ongoing care for the patient or have the 
intention of being responsible for the patient's primary care and 
serving as the continuing focal point for all of the patient's health 
care services. As detailed in sections II.G.2.b. through II.G.2.d., 
this proposed coding and payment will incorporate elements of several 
specific, existing care management and communication technology-based 
services (CTBS) into a bundle of services, that reflects the essential 
elements of the delivery of advanced primary care, for payment under 
the PFS starting in 2025.
    These new codes are designed to bundle the individual utilization 
of codes that are already included in the definition of primary care 
services used for purposes of assignment, specifically CCM (CPT codes 
99437, 99487, 99489, 99490, 99491, and 99439 and HCPCS codes G0506 and 
G2058), PCM (CPT codes 99424, 99425, 99426, and 99427 and HCPCS codes 
G2064 and G2065), TCM (CPT codes 99495 and 99496), remote evaluation of 
patient videos/images (HCPCS code G2010), and virtual check-in and e-
visits (HCPCS codes G2012 and G2252). These new codes also bundle IPC 
(CPT Codes 99446, 99447, 99448, 99449, 99451, 99452), which we are 
proposing to include in the definition of primary care services used 
for purposes of assignment in this section of the rule. Further, as 
proposed, this new APCM bundle represents a broader application of 
advanced primary care and incorporates elements included in care 
management and CTBS services. We believe the services billed under 
these codes reflect the types of services we expect primary care 
providers to provide in order to improve care coordination and care 
management and so it would be appropriate to include HCPCS codes GPCM1, 
GPCM2, and GPCM3 in the definition of primary care services used for 
purposes of assignment since these HCPCS codes bundle services 
furnished under CPT and HCPCS codes already included in the definition 
of primary care services used for purposes of assignment.
    As described in section II.G, we anticipate that these codes would 
mostly be used by primary care specialties, such as general medicine, 
geriatric medicine, family medicine, internal medicine, and pediatrics, 
or in some instances, certain specialists functioning as primary care 
practitioners--for example, an OB/GYN or a cardiologist. Since primary 
care specialties, such as general medicine, geriatric medicine, family 
medicine, internal medicine, and pediatrics are primary care physicians 
(as defined in

[[Page 61848]]

Sec.  425.20) and OB/GYN or a cardiologist are two of the specialty 
designations (as described in Sec.  425.402(c)) used for purposes of 
assignment we believe it would be appropriate to include HCPCS codes 
GPCM1, GPCM2, and GPCM3 in the definition of primary care services used 
for purposes of assignment. Inclusion of these APCM services in the 
definition of primary care services used for purposes of assignment 
would also strengthen and invest in primary care in alignment with the 
goals of the U.S. Department of Health and Human Services (HHS) 
Initiative to Strengthen Primary Care.\463\ We also believe that 
updating the definition of primary care services used for purposes of 
assignment to include the APCM bundle would increase the accuracy of 
assignment based on the provision of primary care.
---------------------------------------------------------------------------

    \463\ Refer to: U.S. Department of Health and Human Services. 
(2023). HHS is Taking Action to Strengthen Primary Care. https://www.hhs.gov/sites/default/files/primary-care-issue-brief.pdf.
---------------------------------------------------------------------------

     Cardiovascular Risk Assessment and Risk Management--
    ++ Cardiovascular Disease Risk Assessment HCPCS code GCDRA 
(Administration of a standardized, evidence-based Atherosclerotic 
Cardiovascular Disease (ASCVD) Risk Assessment for patients with ASCVD 
risk factors on the same date as an E/M visit, 5-15 minutes, not more 
often than every 12 months): As described in section II.G. of this 
proposed rule, we are proposing a new stand-alone HCPCS code, GCDRA, to 
identify and value the work involved in administering an ASCVD risk 
assessment when medically reasonable and necessary in relation to an E/
M visit. Atherosclerotic Cardiovascular Disease (ASCVD) Risk Assessment 
refers to a review of the individual's demographic factors, modifiable 
risk factors for CVD, and risk enhancers for CVD.
    We are proposing that the ASCVD risk assessment must be furnished 
by the practitioner on the same date they furnish an E/M visit, as the 
ASCVD risk assessment would be reasonable and necessary when used to 
inform the patient's diagnosis, and treatment plan established during 
the visit. ASCVD risk assessment is reasonable and necessary for a 
patient who has at least one predisposing condition to cardiovascular 
disease that may put them at increased risk for future ASCVD diagnosis.
    ++ Atherosclerotic Cardiovascular Disease Prevention Risk 
Management Services HCPCS code GCDRM (Atherosclerotic Cardiovascular 
Disease (ASCVD) risk management services with the following required 
elements: patient is without a current diagnosis of ASCVD, but is 
determined to be at medium or high risk for CVD (15 percent 
in the next 10 years) as previously determined by the ASCVD risk 
assessment; ASCVD-Specific care plan established, implemented, revised, 
or monitored that addresses risk factors and risk enhancers and must 
incorporate shared decision-making between the practitioner and the 
patient; clinical staff time directed by physician or other qualified 
health care professional; per calendar month). As described in section 
II.G of this proposed rule, over the past several years, we have worked 
to develop payment mechanisms under the PFS to improve the accuracy of 
valuation and payment for the services furnished by physicians and 
other healthcare professionals, especially in the context of evolving 
changes in medical practice using evidence-based models of care, such 
as the Million Hearts[supreg] model. We are proposing to establish a G-
code, GCDRM, for ASCVD risk management services which refers to the 
development, implementation, and monitoring of individualized care 
plans for reducing cardiovascular risk, including shared decision-
making and the use of the ``ABCS'' of cardiovascular risk reduction, as 
well as counseling and monitoring to improve diet and exercise.
    We believe that ASCVD risk management services include continuous 
care and coordination to reduce or eliminate further elevation of ASCVD 
risk over time, and potentially prevent the development of future 
cardiovascular disease diagnoses or first-time heart attacks or 
strokes. Physicians and Non-Physician Practitioners (NPPs) who can 
furnish E/M services could bill for ASCVD risk management services. We 
anticipate that ASCVD risk management services would ordinarily be 
provided by clinical staff incident to the professional services of the 
billing practitioner in accordance with our regulation at Sec.  410.26. 
We are proposing that ASCVD risk management services would be 
considered a ``designated care management service'' under Sec.  
410.26(b)(5) and, as such, could be provided by auxiliary personnel 
under the general supervision of the billing practitioner.
    Refer to section II.G of this proposed rule for detailed, technical 
discussion regarding the proposed description, payment and utilization 
of HCPCS codes GCDRA and GCDRM.
    Because HCPCS codes GCDRA and GCDRM are proposed to be care 
management services similar to CCM (CPT codes 99437, 99439, 99487, 
99489, 99490, and 99491) which are included in the Shared Savings 
Program definition of primary care services used for purposes of 
assignment, we believe it would be consistent and appropriate to 
include GCDRA and GCDRM in the definition of primary care services used 
for purposes of assignment. In earlier rulemaking, we finalized the 
inclusion of CCM CPT codes 99487, 99489, 99490, and 99491 (codes for 
chronic care management) in the definition of primary care services for 
the Shared Savings Program. Refer to the June 2015 final rule (80 FR 
32746 through 32748), CY 2018 PFS final rule (82 FR 53212 through 
53213), and CY 2021 PFS final rule (85 FR 84749 through 84750 and 
84754). ``Complex'' CCM services (CPT codes 99487 and 99489) and ``non-
complex'' CCM services (CPT codes 99490 and 99491) share a common set 
of service elements, including the following: (1) Initiating visit, (2) 
structured recording of patient information using certified electronic 
health record technology (EHR), (3) 24/7 access to physicians or other 
qualified health care professionals or clinical staff and continuity of 
care, (4) comprehensive care management including systematic assessment 
of the patient's medical, functional, and psychosocial needs, (5) 
comprehensive care plan including a comprehensive care plan for all 
health issues with particular focus on the chronic conditions being 
managed, and (6) management of care transitions.
    Elements of care management services include: (1) an initial visit, 
which can be an E/M service, Annual Wellness Visit (AWV) or initial 
preventive physical exam (IPPE or ``Welcome to Medicare''); (2) 
continuity of care with a designated practitioner; (3) comprehensive 
care management; (4) comprehensive care plan; (5) management of care 
transitions; and (6) care coordination. In the November 2011 final rule 
(76 FR 67852 through 67853), we finalized the inclusion of E/M 
services, the AWV, and the IPPE since those services aligns the 
definition of primary care services with the definition in section 5501 
of the Affordable Care Act. Because care management, E/M services, the 
AWV, and the IPPE are all included in the definition of primary care 
services used for purposes of assignment, we believe GCDRA and GCDRM 
reflect the types of services we expect primary care providers to 
provide in order to improve care coordination and care management. 
Additionally, GCDRA and GCDRM are care and risk management services 
that

[[Page 61849]]

include elements of continuous and coordinated care, which the Shared 
Savings Program is intended to promote.
     Interprofessional Consultation (IPC) (CPT codes 99446, 
99447, 99448, 99449, 99451, 99452): In the CY 2019 PFS final rule (83 
FR 59489), CMS finalized six codes:
    ++ 99446 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 5-10 minutes of 
medical consultative discussion and review);
    ++ 99447 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 11-20 minutes of 
medical consultative discussion and review);
    ++ 99448 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 21-30 minutes of 
medical consultative discussion and review);
    ++ 99449 (Interprofessional telephone/internet assessment and 
management service provided by a consultative physician including a 
verbal and written report to the patient's treating/requesting 
physician or other qualified health care professional; 31 minutes or 
more of medical consultative discussion and review);
    ++ 99451 (Interprofessional telephone/internet/electronic health 
record assessment and management service provided by a consultative 
physician including a written report to the patient's treating/
requesting physician or other qualified health care professional, 5 or 
more minutes of medical consultative time); and
    ++ 99452 (Interprofessional telephone/internet/electronic health 
record referral service(s) provided by a treating/requesting physician 
or qualified health care professional, 30 minutes).
    These CPT codes describe assessment and management services 
conducted through telephone, internet, or electronic health record 
consultations furnished when a patient's treating physician or other 
qualified healthcare professional requests the opinion and/or treatment 
advice of a consulting physician or qualified healthcare professional 
with specific specialty expertise to assist with the diagnosis and/or 
management of the patient's problem without the need for the patient's 
face-to-face, in-person contact with the consulting physician or 
qualified healthcare professional. We believe that payment for these 
interprofessional consultations performed via communications technology 
such as telephone or internet is consistent with our ongoing efforts to 
recognize and reflect medical practice trends in primary care and 
patient-centered care management within the PFS. Accordingly, because 
these CPT codes 99446, 99447, 99448, 99449, 99451, and 99452 recognize 
and reflect medical practice trends in primary care and patient-
centered care, we believe they should be included in the definition of 
primary care services used for purposes of assignment.
    Beginning in the CY 2012 PFS proposed rule (76 FR 42793), we 
recognized the changing focus in medical practice toward managing 
patients' chronic conditions, many of which particularly challenge the 
Medicare population, including heart disease, diabetes, respiratory 
disease, breast cancer, allergies, Alzheimer's disease, and factors 
associated with obesity. Current E/M coding does not adequately reflect 
the changes that have occurred in medical practice, and the activities 
and resource costs associated with the treatment of these complex 
patients in the primary care setting In the years since 2012, we have 
acknowledged the shift in medical practice away from an episodic 
treatment-based approach to one that involves comprehensive patient-
centered care management, and have taken steps through rulemaking to 
better reflect that approach in payment under the PFS. In the CY 2013 
PFS final rule (77 FR 68979), we established new codes to pay 
separately for TCM services. Next, in the CY 2015 PFS final rule (79 FR 
67715), we finalized new coding and separate payment beginning in CY 
2015 for CCM services provided by clinical staff. In the CY 2017 PFS 
final rule (81 FR 80225), we established separate payment for complex 
CCM services, an add-on code to the visit during which CCM is initiated 
to reflect the work of the billing practitioner in assessing the 
beneficiary and establishing the CCM care plan and established separate 
payment for Behavioral Health Integration (BHI) services (81 FR 80226 
through 80227). As part of this shift in medical practice, and with the 
proliferation of team-based approaches to care that are often 
facilitated by electronic medical record technology, we believe that 
making separate payment for interprofessional consultations undertaken 
for the benefit of treating a patient would contribute to payment 
accuracy for primary care and care management services. Refer to the CY 
2019 PFS Final rule (83 FR 59489) for detailed, technical discussion 
regarding the description, payment and utilization of these CPT codes.
    Since the services associated with CPT codes 99446, 99447, 99448, 
99449, 99451, and 99452 include TCM, CCM, and BHI services, which are 
included in our definition of primary care services and are included in 
the proposed APCM bundle that we propose to be included in the 
definition of primary care services used for purposes of assignment, we 
believe that the services associated with CPT codes 99446, 99447, 
99448, 99449, 99451, and 99452 should be included in the definition of 
primary care services for purposes of assignment. We additionally 
believe the services billed under this code reflect the types of 
services we expect primary care providers to provide in order to 
improve care coordination and care management. These IPC services were 
also designed to reimburse for comprehensive patient-centered care 
management and primary care, which the Shared Savings Program is 
intended to promote.
     Direct Care Caregiver Training Services (HCPCS codes 
GCTD1, GCTD2, and GCTD3): GCTD1 (Caregiver training in direct care 
strategies and techniques to support care for patients with an ongoing 
condition or illness and to reduce complications (including, but not 
limited to, techniques to prevent decubitus ulcer formation, wound 
dressing changes, and infection control) (without the patient present), 
face-to-face; initial 30 minutes)), GCTD2 (Caregiver training in direct 
care strategies and techniques to support care for patients with an 
ongoing condition or illness and to reduce complications (including, 
but not limited to, techniques to prevent decubitus ulcer formation, 
wound dressing changes, and infection control) (without the patient 
present), face-to-face; each additional 15 minutes (List separately in 
addition to code for primary service) (Use GCTD2 in conjunction with 
GCTD1)), and GCTD3 (Group caregiver training in direct care strategies 
and techniques to support care for patients with an ongoing condition 
or illness and to reduce complications including, but not limited to, 
techniques to prevent decubitus ulcer formation, wound dressing 
changes, and infection control) (without the patient present), face-to-
face with multiple sets

[[Page 61850]]

of caregivers). In section II.E. of this proposed rule, we are 
proposing to establish new coding and payment for caregiver training 
services (CTS) for direct care services and supports. The topics of 
training could include, but would not be limited to, techniques to 
prevent decubitus ulcer formation, wound dressing changes, and 
infection control. Refer to section II.E. of this proposed rule for 
detailed, technical discussion regarding the proposed description, 
payment, and utilization of this HCPCS code.
    Unlike other caregiver training codes that are currently paid under 
the PFS, the caregiver training codes for direct care services and 
support focus on specific clinical skills aimed at the caregiver 
effectuating hands-on treatment, reducing complications, and monitoring 
the patient. Like other codes describing caregiver training services, 
these proposed new codes would reflect the training furnished to a 
caregiver, in tandem with the diagnostic and treatment services 
furnished directly to the patient, in strategies and specific 
activities to assist the patient to carry out the treatment plan. We 
believe that CTS may be reasonable and necessary when they are integral 
to a patient's overall treatment and furnished after the treatment plan 
is established. The CTS themselves need to be congruent with the 
treatment plan and designed to effectuate the desired patient outcomes. 
Direct care training for caregivers of Medicare beneficiaries should be 
directly relevant to the person-centered treatment plan for the patient 
in order for the services to be considered reasonable and necessary 
under the Medicare program. We believe that since CTS may be integral 
to a patient's overall treatment and furnished after the treatment plan 
is established, these services should be included in the definition of 
primary care services for purposes of beneficiary assignment in support 
of the Shared Savings Program's goal to promote coordinated, high 
quality care to an ACO's assigned beneficiaries. In the CY 2024 PFS 
final rule (88 FR 79168 through 79169), we finalized the inclusion of 
other caregiver training services (CPT codes 96202, 96203, 97550, 
97551, and 97552) in the definition of primary care services used for 
purposes of assignment in the Shared Savings Program. These new 
caregiver training services codes (HCPCS GCTD1, GCTD2, and GCTD3) are 
similar to the caregiver training services currently included in the 
Shared Savings Program definition of primary care services in that 
these codes allow treating practitioners to report the training 
furnished to a caregiver, in tandem with the diagnostic and treatment 
services furnished directly to the patient, in strategies and specific 
activities to assist the patient to carry out the treatment plan. We 
also believe the services billed under these codes reflect the types of 
services we expect primary care providers to provide in order to 
improve care coordination and care management.
     Individual Behavior Management/Modification Caregiver 
Training Services (HCPCS codes GCTB1 and GCTB2): GCTB1 (Caregiver 
training in behavior management/modification for caregiver(s) of a 
patient with a mental or physical health diagnosis, administered by 
physician or other qualified health care professional (without the 
patient present), face-to-face; initial 30 minutes) and GCTB2 
(Caregiver training in behavior management/modification for 
caregiver(s) of a patient with a mental or physical health diagnosis, 
administered by physician or other qualified health care professional 
(without the patient present), face-to-face; each additional 15 minutes 
(List separately in addition to code for primary service) (Use GCTB2 in 
conjunction with GCTB1)). In section II.E of this proposed rule, we are 
proposing to establish new coding and payment for caregiver behavior 
management and modification training that could be furnished to the 
caregiver(s) of an individual patient. Behavior management/modification 
training for caregivers of Medicare beneficiaries should be directly 
relevant to the person-centered treatment plan for the patient in order 
for the services to be considered reasonable and necessary under the 
Medicare program. Each training activity should be clearly identified 
and documented in the treatment plan. All other policies and procedures 
surrounding CPT 96202 and 96203 will also apply to these services (88 
FR 78914-78920). Refer to section II.E. of this proposed rule for 
detailed, technical discussion regarding the proposed description, 
payment and utilization of this HCPCS code.
    We believe that, since CTS may be reasonable and necessary when 
they are integral to a patient's overall treatment and furnished after 
the treatment plan is established especially in the case of medical 
treatment scenarios where assistance by the caregiver receiving the CTS 
is necessary to ensure a successful treatment outcome for the patient, 
(for example when the patient cannot follow through with the treatment 
plan for themselves), these services should be included in the 
definition of primary care services for purposes of beneficiary 
assignment in support of the Shared Savings Program's goal to promote 
coordinated, high quality care to an ACO's assigned beneficiaries. In 
the CY 2024 PFS final rule (88 FR 79168 through 79169), we finalized 
the inclusion of other caregiver training services (CPT codes 96202, 
96203, 97550, 97551, and 97552) in the definition of primary care 
services used for purposes of assignment in the Shared Savings Program. 
These new caregiver training services codes (HCPCS codes GCTD1, GCTD2, 
GCTD3, GCTB1, and GCTB2) are similar to the caregiver training services 
currently included in the Shared Savings Program definition of primary 
care services in that these codes allow treating practitioners to 
report the training furnished to a caregiver, in tandem with the 
diagnostic and treatment services furnished directly to the patient, in 
strategies and specific activities to assist the patient to carry out 
the treatment plan, which is integral to care coordination. We also 
believe the services billed under these codes reflect the types of 
services we expect primary care providers to provide in order to 
improve care coordination and care management.
    As part of this revised definition of primary care services used 
for assigning beneficiaries under Sec.  425.402, we propose to 
incorporate a provision in Sec.  425.400(c)(1)(ix)(C), specifying that 
the primary care service codes for purposes of assigning beneficiaries 
include a CPT code identified by CMS that directly replaces a CPT code 
specified in Sec.  425.400(c)(1)(ix)(A) or a HCPCS code specified in 
Sec.  425.400(c)(1)(ix)(B), when the assignment window or expanded 
assignment window (as defined in Sec.  425.20) for a benchmark or 
performance year includes any day on or after the effective date of the 
replacement code for payment purposes under FFS Medicare.
    We seek comment on these proposed changes to the definition of 
primary care services used for assigning beneficiaries under Sec.  
425.400(c)(1)(ix) to Shared Savings Program ACOs for the performance 
year starting on January 1, 2025, and subsequent performance years. We 
also welcome comments on any other existing HCPCS or CPT codes and new 
HCPCS or CPT codes proposed elsewhere in this proposed rule that we 
should consider adding to the definition of primary care services for 
purposes of assignment in future rulemaking.

[[Page 61851]]

b. Proposed Revisions to Criteria for ACO Models To Waive Shared 
Savings Program Statutory Requirements Giving Precedence for Assignment 
Based on Beneficiary Voluntary Alignment
(1) Background
    Section 50331 of the Bipartisan Budget Act of 2018 amended section 
1899(c) of the Act to add a new paragraph (2)(B) that requires the 
Secretary, for performance year 2018 and each subsequent performance 
year, to permit a Medicare FFS beneficiary to voluntarily identify an 
ACO professional as the primary care provider of the beneficiary for 
purposes of assigning such beneficiary to an ACO. A voluntary 
identification by a Medicare FFS beneficiary under this provision 
supersedes any claims-based assignment. In earlier rulemaking (81 FR 
80501 through 80510 and 83 FR 59959 through 59964) CMS finalized 
modifications to the Shared Savings Program regulations at Sec.  
425.402(e) to implement the statutory requirements governing voluntary 
alignment.
    In the November 2018 final rule (83 FR 59959 through 59964), we 
finalized changes to the beneficiary voluntary alignment policies 
(refer to Sec.  425.402(e)) to revise the requirements previously 
established for the voluntary alignment process. We explained that it 
could be appropriate, in limited circumstances, to align a beneficiary 
to an entity participating in certain specialty and disease-specific 
CMS Innovation Center models to test a new system of payment and 
service delivery that CMS believes would lead to better health outcomes 
for Medicare beneficiaries while lowering costs to Medicare Parts A and 
B. Additionally, we explained that it could be difficult for the CMS 
Innovation Center to conduct a viable test of a specialty or disease-
specific model, if we were to require that beneficiaries who have 
previously designated an ACO professional as their primary clinician 
remain assigned to the Shared Savings Program ACO under all 
circumstances. We applied this exception for the Comprehensive ESRD 
Care (CEC) model, which assigned beneficiaries to entities 
participating in the model through the beneficiaries' first treatment 
at a participating dialysis facility.
    Currently, under Sec.  425.402(e)(2)(ii)(D), we would not assign a 
beneficiary who has voluntarily identified a Shared Savings Program ACO 
professional to a Shared Savings Program ACO when the beneficiary is 
also eligible for claims-based assignment to an entity participating in 
a model tested or expanded under section 1115A of the Act under which 
claims-based assignment is based solely on claims for services other 
than primary care services and for which there has been a determination 
by the Secretary that a waiver under section 1115A(d)(1) of the Act of 
the requirement in section 1899(c)(2)(B) of the Act is necessary solely 
for purposes of testing the model.
(2) Proposed Revisions
    Since finalization of this limited exception to the Shared Savings 
Program's voluntary alignment policy, disease-specific CMS Innovation 
Center models have been developed that use claims for both primary care 
services and services other than primary care in determining claims-
based assignment to entities participating in these models. We believe 
it would be appropriate to propose to broaden this limited exception 
and allow a voluntarily aligned Shared Savings Program beneficiary to 
be claims-based assigned to an entity participating in a disease- or 
condition-specific CMS Innovation Center model when that model uses 
claims-based assignment that is based on primary care and/or other 
services. Disease- or condition-specific CMS Innovation Center models 
are designed to support condition management, coordination, and 
services for patients that have a specific disease or condition that 
often requires coordination of care across specialties and settings. 
For example, the CMS Innovation Center has tested disease- and 
condition-based episode payment models, such as those focused on 
oncology and kidney disease.\464\ Doing so would help beneficiaries 
with certain diseases or conditions benefit from the focused attention 
and care coordination related to the disease or condition that an 
entity participating in such a model could provide. We would identify 
models for which the exception would apply in our Shared Savings and 
Losses and Assignment Methodology and Quality Performance 
Specifications document, which is located on the Shared Savings Program 
website, https://www.cms.gov/medicare/payment/fee-for-service-providers/shared-savings-program-ssp-acos. This proposed expanded 
exception would be applicable to beneficiaries assigned to entities 
participating in CMS Innovation Center models under which assignment is 
based solely on (1) claims for primary care and/or other services 
related to treatment of one or more specific diseases or conditions 
targeted by the model, or (2) claims for services other than primary 
care services, when the Secretary has determined that a waiver is 
necessary solely for purposes of testing the model.
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    \464\ Refer to Innovation Models website: https://www.cms.gov/priorities/innovation/models#views=models&cat=disease-specific%20&%20episode-based%20models.
---------------------------------------------------------------------------

    An example of a CMS Innovation Center model whose assigned 
beneficiaries may be impacted by the proposed expanded exception is the 
Kidney Care Choices (KCC) model,\465\ which is designed to help health 
care providers reduce the cost and improve the quality of care for 
patients with late-stage chronic kidney disease and ESRD. The KCC model 
builds on the previous CEC model \466\ by adding strong financial 
incentives for health care providers to manage the care for Medicare 
beneficiaries with chronic kidney disease (CKD) stage 4 and ESRD, to 
delay the onset of dialysis and to incentivize kidney transplantation. 
Under the CEC model, the CMS Innovation Center worked with groups of 
health care providers, dialysis facilities, and other suppliers 
involved in the care of ESRD beneficiaries to improve the coordination 
and quality of care that these individuals received. We determined that 
an ESRD beneficiary, who was otherwise eligible for assignment to an 
entity participating in the CEC model, could benefit from the focused 
attention on and increased care coordination for their ESRD available 
under the CEC model. As described above, we created a narrow exception 
to the general policy that a beneficiary who had voluntarily aligned to 
a Shared Savings Program ACO professional would supersede their 
alignment to a CMS Innovation Center model. Specifically, we did not 
assign a beneficiary to the ACO when the beneficiary was also eligible 
for alignment to an entity participating in the CEC model.
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    \465\ Refer to https://www.cms.gov/priorities/innovation/innovation-models/kidney-care-choices-kcc-model.
    \466\ Refer to https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-esrd-care.
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    KCC is more complex than CEC and is designed to capture multiple 
care relationships and uses a mix of E/M codes for alignment of 
beneficiaries with CKD and managing clinician Monthly Capitation 
Payments for aligning ESRD beneficiaries. The existing exception is not 
applicable to KCC in part because claims for primary care and other 
services related to the treatment of one or more specific diseases or 
conditions targeted by the model (chronic kidney disease (CKD) stage 4 
and ESRD) are considered as part of the model's beneficiary alignment

[[Page 61852]]

methodology, which takes into consideration where a beneficiary 
receives the majority of their kidney care as well as the beneficiary's 
diagnosis of CKD stages 4 or ESRD receiving maintenance dialysis. KCC's 
alignment methodology could align beneficiaries receiving primary care 
services that are also considered for Shared Savings Program assignment 
if furnished and billed under one of the HCPCS/CPT codes included in 
Sec.  425.400(c) by ACO professionals who are primary care physicians, 
physicians with one of the primary specialty designations in Sec.  
425.402(c), NPs, PAs, and/or CNSs. We note that outpatient/office E/M 
services are included in Sec.  425.400(c) and that nephrology is one of 
the primary specialty designations under Sec.  425.402(c) so we 
anticipate that, if this proposal is finalized, most, if not all, 
beneficiaries who voluntarily align to a physician that participates in 
a Shared Savings Program ACO and meet the KCC alignment criteria would 
be claims-based align to the KCC model, assuming there is a 
determination by the Secretary that waiver of the requirement in 
section 1899(c)(2)(B) of the Act is necessary solely for purposes of 
testing the model.
    We propose expanding upon current Shared Savings Program 
regulations to broaden the existing exception to the program's 
voluntary alignment policy, which would allow the exception to apply to 
beneficiaries assigned to entities in a CMS Innovation Center model 
under which claims-based assignment is based solely on (1) claims for 
primary care and/or other services related to treatment of one or more 
specific diseases or conditions targeted by the model, or (2) claims 
for services other than primary care services, and for which there has 
been a determination by the Secretary that waiver of the requirement in 
section 1899(c)(2)(B) of the Act is necessary for purposes of testing 
the model. Under the proposed revisions, if a beneficiary voluntarily 
aligns to a Shared Savings Program ACO under Sec.  425.402(e), we would 
not assign the beneficiary to that Shared Savings Program ACO when the 
beneficiary is also eligible for claims-based assignment to an entity 
participating in a model tested or expanded under section 1115A of the 
Act under which claims-based assignment is based solely on (1) claims 
for primary care and/or other services related to treatment of one or 
more specific diseases or conditions targeted by the model or (2) 
claims for services other than primary care service, and for which 
there has been a determination by the Secretary that waiver of the 
requirement in section 1899(c)(2)(B) of the Act is necessary for 
purposes of testing the model. We would not supersede voluntary 
alignment for CMS Innovation Center models that are not designed to 
target a specific disease or condition, such as ACO REACH. While ACO 
REACH contains design features for organizations serving high needs 
beneficiaries, it is designed more broadly, and not for beneficiaries 
with a specific disease or condition. Such models do not target a 
specific disease or condition. Therefore, a beneficiary's claims-based 
assignment to an entity participating in such a model would not 
supersede their voluntary alignment to a Shared Savings Program ACO 
under our proposal.
    For example, under the KCC model, alignment is based on where a 
beneficiary receives the majority of their nephrology services and/or 
dialysis management services. Claims for those kidney care services 
could include claims for services that, under the Shared Savings 
Program's claims-based assignment policies, would lead a beneficiary to 
be assigned to a Shared Savings Program ACO. Since under the KCC model, 
claims-based assignment is based solely on claims for primary care and/
or other services (kidney care services) related to the treatment of 
one or more specific diseases or conditions targeted by the model 
(chronic kidney disease (CKD) stage 4 and ESRD), our proposed exception 
would apply and a beneficiary who voluntarily aligned to a Shared 
Savings Program ACO and who received kidney care services from an 
entity participating in the KCC model would nonetheless be claims-based 
assigned to the KCC model, if there is a determination by the Secretary 
that waiver of the requirement in section 1899(c)(2)(B) of the Act is 
necessary solely for purposes of testing the KCC model. This proposed 
expansion of the voluntary alignment exception would support assignment 
of beneficiaries to entities participating in CMS Innovation Center 
models, which would reduce barriers for the CMS Innovation Center to 
conduct viable tests of disease-or condition-specific models and 
thereby improve access to high-quality, value-based specialty care, 
such as that provided by an entity participating in a model focused on 
diabetes care or care provided by specific specialists, such as 
cardiologists or gastroenterologists.
    This proposal would also support CMS's goals of improving patient 
care, lowering costs, and better aligning payment systems to promote 
patient-centered practices through accountable and value-based care. We 
believe that specific subpopulations of Medicare beneficiaries who are 
otherwise eligible for assignment to an entity participating in a 
disease or condition-specific CMS Innovation Center model, but who may 
not be captured by Sec.  425.402(e)(2)(ii)(D) because their models 
consider primary care services for purposes of assignment, could 
benefit from the focused attention and increased care coordination 
offered by an entity participating in a disease or condition-specific 
model. Application of this exception would require a determination from 
the Secretary to waive the voluntary alignment provision.
    Under this proposal, if a beneficiary designated an ACO 
professional participating in a Shared Savings Program ACO as the 
physician or practitioner they consider responsible for coordinating 
their overall care (that is, their primary clinician), but the 
beneficiary is also eligible for assignment to an entity participating 
in a model tested or expanded under section 1115A of the Act under 
which claims-based assignment is based solely on (1) claims for primary 
care and/or other services related to treatment of one or more specific 
diseases or conditions targeted by the model, or (2) claims for 
services other than primary care services, and for which there has been 
a determination that a waiver of the requirement in section 
1899(c)(2)(B) of the Act is necessary solely for purposes of testing 
the model, the CMS Innovation Center or its designee would notify the 
beneficiary of their assignment to an entity participating in the 
model. Additionally, although such a beneficiary may still voluntarily 
identify an ACO professional participating in a Shared Savings Program 
ACO as their primary clinician and seek care from any clinician, the 
beneficiary would not be assigned to a Shared Savings Program ACO even 
if the designated primary clinician is an ACO professional in a Shared 
Savings Program ACO.
    For PY 2024, there are approximately 152,000 beneficiaries with a 
primary clinician selection who is a Shared Savings Program ACO 
professional as defined at Sec.  425.20, and approximately 83,000 are 
voluntarily aligned to a Shared Savings Program ACO after meeting all 
the assignment eligibility criteria as described at Sec.  425.401(a). 
Overall, this represents an exceedingly small share of the overall 
Shared Savings Program assigned beneficiary population, currently 10.8 
million \467\

[[Page 61853]]

beneficiaries. Additionally, simulating our proposed Sec.  
425.402(e)(2)(ii)(D) using PY 2024 data, less than 1 percent (703) of 
beneficiaries who are voluntarily aligned to a Shared Savings Program 
ACO would instead be claims-based assigned to an entity participating 
in a CMS Innovation Center model.
---------------------------------------------------------------------------

    \467\ Refer to https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
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    The benefit of allowing beneficiaries who voluntarily align to a 
Shared Savings Program ACO to be claims-based assigned to an entity 
participating in a CMS Innovation Center tailored to the needs of their 
specific disease or condition far outweighs any cost to the Shared 
Savings Program. The impact of assigning these beneficiaries to a CMS 
Innovation Center model notwithstanding their voluntary designation 
would be minimal because so few beneficiaries would be impacted by this 
proposed expansion of the exception (for PY 2024, less than 1 percent 
of all beneficiaries who voluntarily align to a Shared Savings Program 
ACO). As explained earlier in this section, this proposal would enable 
us to better test CMS Innovation Center models and ultimately improve 
health outcomes for Medicare beneficiaries with the specific diseases 
and conditions targeted by CMS Innovation Center models. We also 
recognize the importance of continuing to allow beneficiaries to 
voluntarily identify an ACO professional as their primary clinician for 
purposes of assignment to a Shared Savings Program ACO, and we 
reiterate that, based on PY 2024 data, this proposal would impact very 
few beneficiaries who voluntarily align to Shared Savings Program ACOs 
(less than .01 percent of all such beneficiaries). Beneficiaries who 
voluntarily align to a Shared Savings Program ACO but are, pursuant to 
our proposal, ultimately claims-based assigned to an entity 
participating in a CMS Innovation Center model would be notified of 
this in accordance with the CMS Innovation Center model's participation 
agreement. We propose to apply these modifications to our policies 
under the Shared Savings Program regarding voluntary alignment 
beginning for performance year 2025, and subsequent performance years. 
We propose to incorporate these new requirements into new regulations 
at Sec.  425.402(e)(2)(iii). We solicit comments on this proposal.
    Accordingly, since the new proposed provisions Sec.  
425.402(e)(2)(iii) will supersede the existing provisions at Sec.  
425.402(e)(2)(ii) for performance year 2025 and subsequent performance 
years, we propose to revise the introductory text at Sec.  
425.402(e)(2)(ii) to designate that provision's applicability for 
performance years starting on January 1, 2019, through 2024.
4. Quality Performance Standard & Other Reporting Requirements
a. Background
    Section 1899(b)(3)(C) of the Act states that the Secretary shall 
establish quality performance standards to assess the quality of care 
furnished by ACOs and seek to improve the quality of care furnished by 
ACOs over time by specifying higher standards, new measures, or both 
for purposes of assessing such quality of care. As we stated in the 
November 2011 final rule establishing the Shared Savings Program (76 FR 
67872), our principal goal in selecting quality measures for ACOs has 
been to identify measures of success in the delivery of high-quality 
health care at the individual and population levels. In the November 
2011 final rule, we established a quality measure set spanning four 
domains: patient experience of care and wherever practicable, caregiver 
experience of care, care coordination/patient safety, preventative 
health, and at-risk population (76 FR 67872 through 67891). We have 
subsequently updated the measures that comprise the quality performance 
measure set for the Shared Savings Program through rulemaking in the CY 
2015, 2016, 2017, 2019, 2023, and 2024 PFS final rules (79 FR 67907 
through 67921, 80 FR 71263 through 71268, 81 FR 80484 through 80489, 83 
FR 59708 through 59715, 87 FR 69860 through 69863, and 88 FR 79112 
through 79114, respectively).
b. Proposal to Require Shared Savings Program ACOs to Report the 
Alternative Payment Model (APM) Performance Pathway (APP) Plus Quality 
Measure Set
(1) Background
    In the CY 2021 PFS final rule, we finalized modifications to the 
Shared Savings Program quality reporting requirements and quality 
performance standard for performance year 2021 and subsequent 
performance years (85 FR 84720 through 84743). For performance year 
2021 and subsequent years, ACOs are required to report quality data via 
the APP codified at Sec.  414.1367. Pursuant to policies finalized 
under the CY 2022 and CY 2023 PFS (86 FR 65685; 87 FR 69858), to meet 
the quality performance standard under the Shared Savings Program 
through performance year 2024, ACOs must report the ten CMS Web 
Interface measures or the three electronic clinical quality measures 
(eCQMs)/Merit-based Incentive Payment System (MIPS) clinical quality 
measures (CQMs), and administer the Consumer Assessment of Healthcare 
Providers and Systems (CAHPS) for MIPS survey. In performance year 2025 
and subsequent performance years, ACOs must report the three eCQMs/MIPS 
CQMs and administer the CAHPS for MIPS survey. In the CY 2024 PFS final 
rule, we established the Medicare Clinical Quality Measures for 
Accountable Care Organizations Participating in the Medicare Shared 
Savings Program (Medicare CQMs) as a new collection type for Shared 
Savings Program ACOs reporting on the Medicare CQMs within the APP 
quality measure set for performance year 2024 and subsequent 
performance years (88 FR 79107). Shared Savings Program ACOs have the 
option to report on Medicare CQMs, which are reported on an ACO's 
eligible Medicare fee-for-service beneficiaries, instead of the ACO's 
all payer/all patient population. Medicare CQMs are aligned with MIPS 
standards for data completeness, measure benchmarking, and scoring (88 
FR 79099 and 88 FR 79108). In the CY 2024 PFS final rule, we stated 
that Medicare CQMs would serve as a transition collection type to help 
some ACOs build the infrastructure, skills, knowledge, and expertise 
necessary to report all payer/all patient eCQMs/MIPS CQMs and support 
ACOs in the transition to digital quality measure reporting (88 FR 
79097 through 79098).
    Since the CY 2021 PFS final rule was issued, ACOs and other 
interested parties have continued to express concerns about requiring 
ACOs to report all payer/all patient eCQMs/MIPS CQMs due to the cost of 
purchasing and implementing a system wide infrastructure to aggregate 
data from multiple ACO participant taxpayer identification numbers 
(TINs) and varying electronic health record (EHR) systems (86 FR 
65257). In the CY 2022 PFS final rule, commenters supported our 
acknowledgement of the complexity of the transition to all payer/all 
patient eCQMs/MIPS CQMs (86 FR 65259). In public comments on the CY 
2023 PFS proposed rule, some commenters expressed multiple concerns 
regarding the requirement to report all payer/all patient eCQMs/MIPS 
CQMs beginning in performance year 2025, such as issues related to 
meeting all payer data requirements, data completeness requirements, 
data aggregation and deduplication issues, and interoperability issues 
among different EHRs (87 FR 69837).
    ACOs face continued difficulties in aggregating data on the three 
all payer/all patient eCQMs/MIPS CQMs that are

[[Page 61854]]

part of the existing APP quality measure set. The Shared Savings 
Program continues to receive feedback from ACOs and other stakeholders 
about the difficulties with reporting on the three all payer/all 
patient eCQMs/MIPS CQMs and meeting data management requirements given 
their muti-practice/multi EHR structure. Additionally, we continue to 
receive feedback on the challenges of aggregating data due to the 
health information technology (IT) infrastructure in use by ACOs and 
the current state of interoperability. Building on our goal to provide 
technical support to ACOs and help ACOs build the skills necessary to 
aggregate and match patient data to report all payer/all patient eCQMs/
MIPS CQMs, in December 2022, we hosted a webinar to support ACOs in the 
transition to reporting all payer/all patient eCQMs/MIPS CQMs and 
released a guidance document on the topic. Resources from the 
``Reporting MIPS CQMs and eCQMs in the APM Performance Pathway'' 
webinar are available at https://youtu.be/LDrpoGnnRQs. The guidance 
document, entitled ``Medicare Shared Savings Program: Reporting MIPS 
CQMs and eCQMs in the Alternative Payment Model Performance Pathway 
(APP)'' is available in the Quality Payment Program Resource Library at 
https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2179/APP%20Guidance%20Document%20for%20ACOs.pdf. Over the past 2 years, we 
have learned that there are complexities and hurdles concerning ACOs 
adopting the all payer/all patient collection types; as a result, the 
widespread adoption of the all payer/all patient collection types 
require further time and support. For example, our internal data 
indicate that in performance year 2021, 12 out of 475 ACOs reported 
eCQMs/MIPS CQMs under the APP, while 37 out of 482 ACOs reported eCQMs/
MIPS CQMs in performance year 2022.\468\ Submission data for 
performance year 2023 indicate that 73 out of 456 ACOs reported eCQMs/
MIPS CQMs under the APP. Further, we have come to understand that 
additional maturation processes are needed to support large, complex 
organizations like ACOs that participate in the Shared Savings Program 
to fully and equitably participate in the all payer/all patient 
collection types.
---------------------------------------------------------------------------

    \468\ Counts based on internal analysis of ACOs' quality 
reporting in performance years 2021 and 2022.
---------------------------------------------------------------------------

    CMS' goal, as stated in the CY 2024 PFS final rule, is to support 
ACOs in the adoption of all payer/all patient measures (88 FR 79098). 
In that rule, we described our intention to monitor the reporting of 
quality data utilizing the Medicare CQM collection type, which would 
include assessing if any Medicare CQMs qualify as topped out as 
described at Sec.  414.1380(b)(1)(iv) (88 FR 79098). We also noted 
that, ``[s]eparately, we may specify higher standards, new measures, or 
both--up to and including proposing to sunset the Medicare CQM 
collection type in future rulemaking--to ensure that Medicare CQMs 
conform to the intent of section 1899(b)(3)(C) of the Act and the 
priorities established in the CMS National Quality Strategy'' (88 FR 
79098).
    Under the goals of the CMS National Quality Strategy to improve the 
quality and safety of healthcare for everyone, CMS is implementing a 
building-block approach and aligning the measures used to establish the 
Shared Savings Program quality performance standard with the Universal 
Foundation of quality measures and streamlining quality measures across 
CMS quality programs for measuring primary care clinician performance 
in the adult and pediatric populations.\469\ In the CY 2024 PFS 
proposed rule, we stated that ``we intend to propose future policies 
aligning the APP measure set for Shared Savings Program ACOs with the 
quality measures under the `Universal Foundation' beginning in 
performance year 2025'' (88 FR 52423). A few commenters were supportive 
of aligning the APP quality measure set with the Universal Foundation 
measures, while other commenters were opposed. Several commenters urged 
CMS to first test measures before making them required and scored 
measures for ACOs. Commenters were concerned about balancing the 
alignment of the Universal Foundation measures with efforts to reduce 
administrative burden, potential growth in the number of measures ACOs 
would have to report, and implementing multiple major changes to the 
APP quality measure set in performance year 2025. In the CY 2024 PFS 
final rule, we stated that we will take the comments under 
consideration in future rulemaking, as we evaluate the impact of 
aligning the APP quality measure set with the Universal Foundation 
measures (88 FR 79114).
---------------------------------------------------------------------------

    \469\ Centers for Medicare & Medicaid Services (2024). CMS 
National Quality Strategy. Accessed June 24, 2024. https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
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(2) Proposed Revisions
(a) Proposal To Require Shared Savings Program ACOs To Report the APP 
Plus Quality Measure Set
    To further advance Medicare's overall value-based care strategy and 
maintain alignment within and across CMS' quality programs, in section 
IV.A.4.c.(2) of this proposed rule, we are proposing to create the APP 
Plus quality measure set to align with the Adult Universal Foundation 
measures. Out of the ten Adult Universal Foundation measures, five of 
the measures are already in the APP quality measure set for performance 
year 2025 under policies finalized in the CY 2024 PFS final rule (88 FR 
79112 through 79113). There is one measure--Clinician and Clinician 
Group Risk-standardized Hospital Admission Rates for Patients with 
Multiple Chronic Conditions (Measure # 484)--in the APP quality measure 
set that is not an Adult Universal Foundation measure, resulting in a 
total of six measures that are in the APP quality measure set.
    Under the proposed approach, the APP Plus quality measure set would 
incrementally grow to comprise of eleven measures, consisting of the 
six measures in the existing APP quality measure set and five newly 
proposed measures from the Adult Universal Foundation measure set that 
would be incrementally incorporated into the APP Plus quality measure 
set over performance years 2025 through 2028. The proposed new measures 
and the timeline for incorporating the measures into the APP Plus 
quality measure set are described in section IV.A.4.c.(3) of this 
proposed rule and below. The proposal in section IV.A.4.c.(2) is to 
make the APP Plus quality measure set an optional measure set for APP 
reporters. For performance year 2025 and subsequent performance years, 
we are proposing to require Shared Savings Program ACOs to report the 
APP Plus quality measure set as proposed in section III.G.4.b.(2)(a) of 
this proposed rule. Consequently, the APP quality measure set would no 
longer be available for reporting by Shared Savings Program ACOs 
beginning in performance year 2025. Our proposal would align the 
quality measures that Shared Savings Program ACOs would be required to 
report with the quality measures under the Adult Universal Foundation 
measure set incrementally beginning in performance year 2025.
    Creating alignment with the Adult Universal Foundation would better 
align the quality measures reported by Shared Savings Program ACOs with 
the Medicaid Core Sets and the Marketplace

[[Page 61855]]

Quality Rating System, which have previously adopted the quality 
measures in the Universal Foundation.\470\ As discussed in section 
IV.A.4.c.(2) of this proposed rule, alignment of quality measures 
across CMS programs allows practitioners to better focus their quality 
efforts, reduce administrative burden, and drive digital transformation 
and stratification of a focused quality measure set to assess impact on 
disparities.\471\ Our proposed alignment with the Adult Universal 
Foundation would also better align the quality measures reported by 
Shared Savings Program ACOs with the Value in Primary Care MIPS Value 
Pathway (MVP), which contains the same Universal Foundation measures. 
This may create a smoother transition for clinicians from MIPS to the 
Shared Savings Program. Alignment would allow clinicians to leverage 
their familiarity and experience with the Adult Universal Foundation 
quality measures among primary care clinicians participating in this 
MVP as they transition to reporting the APP Plus quality measure set in 
the Shared Savings Program. Experience and familiarity with the same 
quality measures, redesigned care processes, and quality improvement 
activities that are commonplace in ACOs would streamline the pathway 
for clinicians to join ACOs in the future and is consistent with our 
goal to have all beneficiaries in an accountable care relationship by 
2030.
---------------------------------------------------------------------------

    \470\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher L. Aligning Quality Measures across CMS--The Universal 
Foundation. New England Journal of Medicine, February 1, 2023, 
available at https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
    \471\ Jacobs D, et al., Update On The Medicare Value-Based Care 
Strategy: Alignment, Growth, Equity. Health Affairs Forefront (March 
14, 2024), available at https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
---------------------------------------------------------------------------

    Section 1899(b)(3)(C) of the Act requires CMS to seek to improve 
the quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both for purposes of assessing such quality 
of care. In the November 2011 final rule, we finalized 33 quality 
measures for use in establishing the quality performance standard 
measure set for ACOs: including 22 measures that were actively reported 
by ACOs via the Group Practice Reporting Option (GPRO) Web Interface 
(76 FR 67889). As we stated in the November 2011 final rule 
establishing the Shared Savings Program, our principal goal in 
selecting quality measures for ACOs has been to identify measures of 
success in the delivery of high-quality health care at the individual 
and population levels, with a focus on outcomes (76 FR 67872). As we 
sought to improve the quality of care furnished by ACOs over time, we 
have subsequently updated this measure set through rulemaking in the CY 
2015, 2016, 2017, 2019, and 2023 PFS final rules (79 FR 67907 through 
67921, 80 FR 71263 through 71268, 81 FR 80484 through 80489, 83 FR 
59707 through 59715, and 87 FR 69860 through 69763, respectively). We 
have also sometimes increased the number of measures reported by ACOs 
through rulemaking. For example, in the CY 2016 PFS final rule, we 
increased the Shared Savings Program quality measure set from 33 total 
measures to 34 total measures (80 FR 71265). In the CY 2016 PFS final 
rule, we noted that since the November 2011 Shared Savings Program 
final rule, we have continued to review the quality measures used for 
the Shared Savings Program to ensure that they are up to date with 
current clinical practice and aligned with other CMS quality reporting 
programs (80 FR 71264). Also, through rulemaking, we sometimes reduced 
the number of measures reported by ACOs. For example, in the CY 2019 
PFS final rule, we finalized policies which reduced the Shared Savings 
Program quality performance measure set to 23 measures in PY 2019 (83 
FR 59715). In developing our proposals in the CY 2019 PFS final rule, 
we stated that we considered the agency's efforts to streamline quality 
measures, reduce regulatory burden, and promote innovation as part of 
broader CMS initiatives (83 FR 59711). In the CY 2021 PFS final rule, 
we again reduced the total number of measures that ACOs must report (85 
FR 84733). Specifically, through the adoption of the APP quality 
measure set, we reduced the total number of measures from 23 to either 
6 or 13 measures (depending on the ACO's chosen reporting option) for 
PY 2021 (85 FR 84723).
    Our proposal to adopt the APP Plus quality measure set for ACOs 
that participate in the Shared Savings Program would increase the 
number of measures reported by ACOs that currently report the eCQM/MIPS 
CQM measure set from three measures in performance year 2024 to five 
measures in performance year 2025. For ACOs that reported the CMS Web 
Interface measures, our proposal to adopt the APP Plus quality measure 
set would decrease the number of measures reported from ten measures in 
performance year 2024 to eight measures in performance year 2025. While 
we acknowledge that the increase in the number of measures for ACOs 
that currently report the eCQM/MIPS CQM measure set may be an increased 
burden for those ACOs, we are using a phased-in approach to expand the 
APP Plus quality measure set between performance years 2025 and 2028, 
which should help to minimize the impact of increased burden associated 
with reporting additional measures. The option for ACOs to report 
Medicare CQMs, which are MIPS CQMs that are reported on an ACO's fee-
for-service population, may also alleviate the reporting burden for 
ACOs that report Medicare CQMs by focusing an ACO's patient matching 
and data aggregation efforts only on an ACO's eligible Medicare fee-
for-service population. Additionally, we believe that the benefits of 
scoring an increased number of measures may offset the increased burden 
that some ACOs may face in adopting the additional measures. For 
example, as the number of measures in the measure set increases, the 
individual weight of each measure on the ACO's quality performance 
score decreases. Each measure in a six-measure set would account for 
roughly 16.67 percent of an ACO's MIPS Quality performance category 
score while each measure in an eight-measure set would account for 12.5 
percent of an ACO's MIPS Quality performance category score. The 
scoring of more measures, in concert with the scoring policies proposed 
in sections IV.A.4.f.(1)(b)(iii) and IV.A.4.f.(1)(c)(i) of this 
proposed rule, may result in improved quality performance scores for 
the ACOs as each individual measure carries less weight.
    The proposed APP Plus quality measure sets for Shared Savings 
Program ACOs for performance year 2025, performance years 2026 and 
2027, and performance year 2028 and subsequent performance years are 
displayed in Tables 34, 35, and 36, respectively. Under our proposal, 
there would be eight measures (five eCQMs/Medicare CQMs, two 
administrative claims measures, and the CAHPS for MIPS Survey measure) 
in the APP Plus quality measure set for Shared Savings Program ACOs in 
performance year 2025 (Table 34), nine measures (six eCQMs/Medicare 
CQMs, two administrative claims measures, and the CAHPS for MIPS Survey 
measure) in performance years 2026 and 2027 (Table 35), and eleven 
measures (eight eCQMs/Medicare CQMs, two administrative claims 
measures, and the CAHPS for MIPS Survey measure) in performance years 
2028 and subsequent performance years (Table 36). We intend to update

[[Page 61856]]

the APP Plus quality measure set as new measures are added to or 
removed from the Adult Universal Foundation measure set in the future.
(b) Proposed Collection Types Available for Shared Savings Program ACOs 
Reporting the APP Plus Quality Measure Set
    We are proposing to streamline the collection types available for 
Shared Savings Program ACOs reporting the APP Plus quality measure set 
to the eCQM and Medicare CQM collection types for performance year 2025 
and subsequent performance years. We believe that our proposal to 
establish the APP Plus quality measure set to align with the Adult 
Universal Foundation measure set should also aim to prioritize the eCQM 
collection type--the gold standard collection type that underlies the 
Digital Quality Measurement (dQM) Strategic Roadmap (available at 
https://ecqi.healthit.gov/sites/default/files/CMSdQMStrategicRoadmap_032822.pdf)--and use Medicare CQMs as the 
transition step on our building-block approach for ACOs' progress to 
adopt digital quality measurement. We are also seeking to reduce 
reporting burden on ACOs by using a phased-in approach to expand the 
APP Plus quality measure set between performance years 2025 and 2028. 
We will also continue to provide the Medicare CQM reporting option as 
ACOs increase their experience and overcome their challenges with 
reporting all payer/all patient measures. As discussed more fully 
below, we are proposing not to include the MIPS CQM collection type for 
Shared Savings Program ACOs reporting the APP Plus quality measure set 
to focus ACOs' efforts on the implementation of the APP Plus quality 
measure set, while continuing to encourage the adoption of eCQMs. We 
believe that our proposed approach would recognize the investments ACOs 
have made to report eCQMs and their benefits (that is, more efficient 
data collection, real time provider feedback, and less burden through 
the use of digital data) and allow ACOs that have invested in eCQMs to 
continue on that track and align with long term goals of digital 
quality measurement.\472\
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    \472\ Centers for Medicare & Medicaid Services (2023). 
Electronic Clinical Quality Measure Basics (eCQM 101). Accessed June 
24, 2024. https://ecqi.healthit.gov/sites/default/files/eCQM-Basics-508.pdf.
---------------------------------------------------------------------------

    Since Medicare CQMs are MIPS CQMs that are reported on an ACO's 
eligible Medicare fee-for-service population, ACOs that have invested 
in the infrastructure to report MIPS CQMs would be able to report 
Medicare CQMs on a subset of their all payer/all patient population. 
Furthermore, as noted in the CY 2024 PFS final rule, Medicare CQMs 
address ACO concerns related to the difficulty of matching and 
aggregating patient data across multiple EHR systems (88 FR 79106). 
Medicare CQMs also provide a transition path and alternative for ACOs 
that have difficulty reporting patient data by limiting the 
beneficiaries for which an ACO must match and aggregate data to only 
the ACO's eligible Medicare fee-for-service beneficiaries, instead of 
their all payer/all patient population (88 FR 79106). As a logical next 
step in the reporting of digital quality measures, this population is 
larger than the sample currently used in the CMS Web Interface, but not 
as large as the all payer/all patient population that must be reported 
for an eCQM or MIPS CQM (88 FR 79106).
    We aim to fully transition to digital quality measurement in CMS 
quality reporting and value-based purchasing programs, and we are 
working to convert current eCQMs to the Fast Healthcare 
Interoperability Resources (FHIR) standard (86 FR 65379). Including 
eCQMs as a collection type for Shared Savings Program ACOs reporting 
the APP Plus quality measure set aligns with our goal to transition to 
digital quality measurement including the alignment and development of 
FHIR standards and tools for eCQM reporting in the dQM Strategic 
Roadmap. There are numerous benefits to using eCQMs, including their 
use of electronic standards that reduce the burden of manual extraction 
and reporting for measured entities, their use of clinical data to 
assess the outcomes of treatment by measured entities, and their 
fostering of access to real-time data for point of care quality 
improvement and decision support.\473\ Furthermore, eCQMs align with 
the Meaningful Measures Framework 2.0 goal of improving quality 
reporting efficiency by transitioning to digital quality measures.\474\ 
A recent study noted the resource intensity of quality reporting, 
underscoring the high cost of claims-based measures relative to others 
and recommended that policy makers shift to electronic metrics to 
``optimize resources spent in the overall pursuit of higher quality.'' 
\475\ For these reasons, and to continue encouraging ACOs on their 
progress to adopt digital quality measurement, we are not modifying the 
availability of eCQMs as a collection type for ACOs that reported the 
APP quality measure set by including eCQMs as a collection type in the 
APP Plus quality measure set in performance year 2025 and subsequent 
performance years. In section III.G.7.e. of this proposed rule, we seek 
comment on a higher risk, higher reward track for Shared Savings 
Program ACOs participating in the ENHANCED track. In this request for 
information, we seek comment on questions relevant to our long-term 
goals of supporting ACOs in their transition to reporting all payer/all 
patient quality measures: How should a revised ENHANCED track with 
higher risk and potential reward also require additional accountability 
for quality? Should ACOs in this revised track be required to report 
all payer/all patient quality measures?
---------------------------------------------------------------------------

    \473\ eCQI Resource Center (2024). Get Started with eCQMs. 
https://ecqi.healthit.gov/ecqms.
    \474\ Centers for Medicare & Medicaid Services (2024). 
Meaningful Measures 2.0: Moving to Measure Prioritization and 
Modernization. https://www.cms.gov/medicare/quality/meaningful-measures-initiative/meaningful-measures-20.
    \475\ Saraswathula, A., et al., The Volume and Cost of Quality 
Metric Reporting. JAMA (June 6, 2023), available at https://jamanetwork.com/journals/jama/fullarticle/2805705.
---------------------------------------------------------------------------

    In the CY 2024 PFS final rule, we stated that ``Medicare CQMs are 
intended to serve as a transition to all payer/all patient reporting 
and not as a permanent collection type. We acknowledge that ACOs are at 
different stages of readiness to adopt all payer/all patient measures, 
and we intend for Medicare CQMs to be available to ACOs during their 
transition to all payer/all patient reporting.'' (88 FR 79106). In the 
CY 2024 PFS final rule, we also stated that ``[w]e expect that the 
sunsetting of the Medicare CQM collection type may be paced with the 
uptake of FHIR Application Programming Interface (API) technology, but 
this will be assessed on industry readiness and CMS requirements'' (88 
FR 79106). Specifically, we anticipate that the increased use of FHIR 
API technology will facilitate ACOs' reporting of eCQMs and thus 
increase their uptake of them. Future advancements in FHIR API 
technology and its uptake among Shared Savings Program ACOs may 
accelerate our future plans to sunset Medicare CQMs. As discussed 
earlier in this section, we are proposing to streamline the collection 
types available for Shared Savings Program ACOs reporting the APP Plus 
quality measure set to the eCQM and Medicare CQM collection types for 
performance year 2025 and subsequent performance years and use Medicare 
CQMs as the transition step on our building-block approach for ACOs' 
progress to adopt digital quality measurement. As we continue to 
support ACOs in fully and equitably participating in all payer/all 
patient

[[Page 61857]]

collection types with our proposed creation of the APP Plus quality 
measure set, our commitment to monitor ACOs' reporting of quality data 
using Medicare CQMs and to assess their appropriateness as a collection 
type remains the same.
    As we stated in the CY 2024 PFS final rule, ACOs that include or 
are composed solely of FQHCs or RHCs must report quality data on behalf 
of the FQHCs or RHCs that participate in the ACO. To clarify, while 
FQHCs and RHCs that provide services that are billed exclusively under 
FQHC or RHC payment methodologies are exempt from reporting traditional 
MIPS, FQHCs and RHCs that participate in APMs, such as the Shared 
Savings Program, are considered APM Entity groups as described at Sec.  
414.1370 (88 FR 79099). If our proposal is finalized, FQHCs and RHCs 
that participate in Shared Savings Program ACOs would have to report 
the APP Plus quality measure set through their ACO for performance year 
2025 and subsequent performance years.
    We seek comment on all of the proposals described in this section.
(3) Proposed Changes to Regulation Text
    As discussed in section III.G.4.b.(2)(a) of this proposed rule, for 
performance year 2025 and subsequent performance years, we are 
proposing to require Shared Savings Program ACOs to report the APP Plus 
quality measure set as proposed in section IV.A.4.c.(3) of this 
proposed rule. The APP Plus quality measure set would comprise of 
eleven measures, consisting of six measures from the APP quality 
measure set and five newly proposed measures from the Adult Universal 
Foundation measure set that would be incrementally incorporated into 
the APP Plus quality measure set over performance years 2025 through 
2028. We are also proposing to focus the collection types available to 
Shared Savings Program ACOs for reporting the APP Plus quality measure 
set to eCQMs and Medicare CQMs. We refer readers to sections IV.A.4.c, 
IV.A.4.e.(1)(b)(i), IV.A.4.f.(1)(b)(iii), and IV.A.4.f.(1)(c)(i). of 
this proposed rule for changes to the regulation text at 42 CFR part 
414. We are proposing conforming changes to the regulation text at 42 
CFR part 425 as described below in this section. We seek comment on our 
proposed regulation text changes.
     We are proposing to sunset the requirement that ACOs must 
submit quality data via the APP to satisfactorily report on behalf of 
the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program, and to revise Sec.  425.508(b) to indicate that the 
requirement will be applicable for performance years beginning in 2021-
2024. We are also proposing to replace the phrase ``Alternative Payment 
Model Performance Pathway (APP)'' with the phrase ``APM Performance 
Pathway (APP)'' to conform with the phrase used at Sec.  414.1367.
     We are adding a new paragraph (c) at Sec.  425.508 to 
establish that, for performance years beginning on or after January 1, 
2025, ACOs must submit quality data via the APM Performance Pathway 
(APP) on the quality measures contained in the APP Plus quality measure 
set established under Sec.  414.1367 to satisfactorily report on behalf 
of the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program.
     We are proposing to revise the section heading at Sec.  
425.510 to ``Application of the APM Performance Pathway (APP) quality 
measure set or the APP Plus quality measure set (as applicable) to 
Shared Savings Program ACOs for performance years beginning on or after 
January 1, 2021.''
     We are proposing to sunset the requirement that ACOs must 
report quality data on the APP quality measure set according to the 
method of submission established by CMS and to revise Sec.  425.510(b). 
We are adding a new paragraph (b)(1) at Sec.  425.510 to indicate that 
the requirement will be applicable for performance years beginning in 
2021-2024.
     We are adding a new paragraph (b)(2) at Sec.  425.510 to 
establish that, for performance years beginning on or after January 1, 
2025, ACOs must report quality data on the APP Plus quality measure set 
established under Sec.  414.1367, according to the submission method 
established by CMS.
     We are revising Sec.  425.512(a)(2)(iii) to establish 
that, for performance year 2025 and subsequent performance years, an 
ACO in the first performance year of the ACO's first agreement period 
under the Shared Savings Program will meet the quality performance 
standard if the ACO reports the APP Plus quality measure set and meets 
the data completeness requirement on all eCQMs/Medicare CQMs, and the 
CAHPS for MIPS survey (except as specified in Sec.  
414.1380(b)(1)(vii)(B)), and receives a MIPS Quality performance 
category score for the applicable performance year.
     We are revising the introductory paragraph (a)(5)(i) to 
Sec.  425.512 to read as follows: ``Except as specified in paragraphs 
(a)(2) and (7) of this section, CMS designates the quality performance 
standard as:''.
     We are revising the introductory paragraph (a)(5)(i)(A) to 
read as follows: ``For performance year 2024, the ACO reporting quality 
data on the APP quality measure set established under Sec.  414.1367 of 
this subchapter, according to the method of submission established by 
CMS and -''.
     We are revising the introductory paragraph (a)(5)(i)(B) to 
read as follows: ``For performance year 2025 and subsequent performance 
years, the ACO reporting quality data on the APP Plus quality measure 
set established under Sec.  414.1367 of this subchapter, according to 
the method of submission established by CMS and -''.
     We are adding a new paragraph (a)(5)(ii)(A) to Sec.  
425.512 to indicate that an ACO will meet the alternative quality 
performance standard for performance year 2024 if the ACO reports 
quality data on the APP quality measure set established under Sec.  
414.1367 according to the method of submission established by CMS and 
achieves a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP quality measure set.
     We are adding a new paragraph (a)(5)(ii)(B) to Sec.  
425.512 to establish that an ACO will meet the alternative quality 
performance standard for performance year 2025 and subsequent years if 
the ACO reports the quality data on the APP Plus quality measure set 
established under Sec.  414.1367 according to the method of submission 
established by CMS and achieves a quality performance score equivalent 
to or higher than the 10th percentile of the performance benchmark on 
at least one of the four outcome measures in the APP Plus quality 
measure set.
     We are revising Sec.  425.512(a)(5)(iii)(B) to indicate 
that for performance year 2025 and subsequent performance years, an ACO 
will not meet the quality performance standard or the alternative 
quality performance standard if the ACO does not report any of the 
eCQMs/Medicare CQMs in the APP Plus quality measure set and does not 
administer a CAHPS for MIPS survey (except as specified in Sec.  
414.1380(b)(1)(vii)(B)).
     We are revising Sec.  425.512(a)(7) introductory text and 
(a)(7)(i) and adding new paragraphs (a)(7)(i)(A) and (B) to indicate 
for performance year 2024, CMS will use the higher of the ACO's health 
equity adjusted Quality performance category score or the equivalent of 
the 40th percentile MIPS

[[Page 61858]]

Quality performance category score when an ACO reports all of the 
required measures, meeting the data completeness requirement for each 
measure in the APP quality measure set and receiving a MIPS Quality 
performance category score and the ACO meets either of the following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A).
    ++ At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have 
a benchmark as described at Sec.  414.1380(b)(1)(i)(A).
     We are revising Sec.  425.512(a)(7)(ii) and adding new 
paragraphs (a)(7)(ii)(A) and (B) to indicate for performance year 2025 
and subsequent performance years, an ACO will receive the higher of the 
ACO's health equity adjusted quality performance category score or the 
equivalent of the 40th percentile MIPS Quality performance category 
score when an ACO reports all of the required measures in the APP Plus 
quality measure set, meeting the data completeness requirement for each 
measure in the APP Plus quality measure set, and receiving a MIPS 
Quality performance category score, and the ACO meets either of the 
following:
    ++ The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A).
    ++ At least one of the eCQMs/Medicare CQMs does not have a 
benchmark as described at Sec.  414.1380(b)(1)(i)(A).
     We are revising Sec.  425.512(b)(1) and (2) and (b)(4)(i) 
by removing the phrase ``APP measure set'' and replacing with the 
phrase ``APP quality measure set'' to align naming conventions for the 
two quality measure sets within the APP: the APP quality measure set 
and the APP Plus quality measure set.
     We are revising Sec.  425.512(b)(1) to update a renumbered 
cross reference.
     We are revising the heading for Sec.  425.512(b)(2) by 
removing the phrase ``and subsequent performance years.''
     We are renumbering the current paragraph (b)(3) of Sec.  
425.512 to paragraph (b)(4) and revising the cross references therein 
to reflect this renumbering.
     We are adding a new paragraph (b)(3) to Sec.  425.512 to 
establish for performance year 2025 and subsequent performance years 
that for an ACO that reports all of the eCQMs/Medicare CQMs in the APP 
Plus quality measure set, meeting the data completeness requirement for 
all of the eCQMs/Medicare CQMs, and administers the CAHPS for MIPS 
survey (except as specified in Sec.  414.1380(b)(1)(vii)(B)), CMS 
calculates the ACO's health equity adjusted quality performance score 
as the sum of the ACO's MIPS Quality performance category score for all 
measures in the APP Plus quality measure set and the ACO's health 
equity adjustment bonus points. The sum of these values may not exceed 
100 percent.
     We are renumbering the current paragraph (b)(4) of Sec.  
425.512 to paragraph (b)(5) and revising the cross references therein 
to reflect this renumbering.
     We are revising renumbered Sec.  415.512(b)(5)(iv) to add 
reference to new paragraph (c)(3)(iv).
     We are revising Sec.  425.512(c)(3) introductory text by 
removing the phrase ``via the APP'' and adding in its place the phrase 
``on the APP quality measure set or APP Plus quality measure set (as 
applicable)''.
     We are revising Sec.  425.512(c)(3)(iii) by removing the 
phrase ``and subsequent performance years'' after ``For performance 
year 2024''.
     We are adding new paragraph (c)(3)(iv) to Sec.  425.512 to 
establish for performance year 2025 and subsequent performance years, 
if CMS determines the ACO meets the requirements of the Extreme and 
Uncontrollable Circumstances policy and the ACO reports the APP Plus 
quality measure set, meets the data completeness requirement, and 
receives a MIPS Quality performance category score, CMS will calculate 
the ACO's quality score as the higher of the ACO's health equity 
adjusted quality performance score or the equivalent of the 40th 
percentile MIPS Quality performance category score across all MIPS 
Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year.
c. Proposed Changes to the Methodology for Calculating the MIPS Quality 
Performance Category Score for Shared Savings Program ACOs Reporting 
the APP Plus Quality Measure Set
(1) Background
    Consistent with the authority to establish the quality reporting 
and other reporting requirements for the Medicare Shared Savings 
Program set forth in section 1899(b)(3) of the Act and the statutory 
requirements for the Quality Payment Program set forth in section 
1848(q) and (r) of the Act for MIPS and section 1833(z) of the Act for 
Advanced APMs, since the Shared Savings Program's alignment with the 
APP in performance year 2021, MIPS eligible clinicians identified on 
the Participation List or Affiliated Practitioner List of an APM Entity 
participating in a MIPS APM--including ACOs that participate in the 
Medicare Shared Savings Program--that report data via the APP have been 
scored according to the APP scoring methodology described at Sec.  
414.1367. The MIPS Quality performance category score is calculated 
according to the APP scoring methodology at Sec.  414.1367(c)(1) (85 FR 
84864). Under the waiver authority at section 1115A(d)(1) of the Act 
for CMS Innovation Center APMs and at section 1899(f) of the Act for 
the Medicare Shared Savings Program, the Cost performance category 
weight is zero percent as described at Sec.  414.1367(c)(2) (85 FR 
84864) for MIPS eligible clinicians that report via the APP. As noted 
in section 1848(q)(5)(C)(ii) of the Act, a MIPS eligible clinician in 
an APM for a performance period automatically earns a minimum score of 
one half of the highest potential score for the MIPS Improvement 
activities category for their participation in an APM for the 
performance period. These baseline scores are automatically applied to 
the MIPS Improvement activities performance category score for MIPS 
eligible clinician in an APM--including ACOs that participate in the 
Medicare Shared Savings Program--that report via the APP as described 
at Sec.  414.1367(c)(3) (85 FR 84865). The Promoting Interoperability 
performance category under the APP is reported and calculated in the 
same manner described at Sec.  414.1375 (85 FR 84865).
    As described in the CY 2021 PFS final rule, we waived the 
requirement to weight each MIPS performance category as described in 
section 1848(q)(5)(E) of the Act using the waiver authority in section 
1899(f) of the Act for Medicare Shared Savings Program for MIPS 
eligible clinicians that report via the APP--including ACOs that 
participate in the Medicare Shared Savings Program (85 FR 84865). The 
performance category weights used to calculate the final score for a 
MIPS eligible clinician who is scored through the APP at Sec.  
414.1367(d)(1) are:
     Quality: 50 percent.
     Cost: 0 percent.
     Improvement Activities: 20 percent.
     Promoting Interoperability: 30 percent.
    Additionally, in the CY 2021 PFS final rule, we also stated that 
under the authority provided in section 1848(q)(5)(F) of the Act, it 
may become necessary to reweight one or more performance categories (85 
FR 84866).

[[Page 61859]]

As described at Sec.  414.1367(d)(2), if CMS determines, in accordance 
with Sec.  414.1380(c)(2), that a different scoring weight should be 
assigned to the Quality or Promoting Interoperability performance 
category, CMS will redistribute the performance category weights as 
follows:
     If CMS reweights the Quality performance category to 0 
percent: Promoting Interoperability performance category is reweighted 
to 75 percent, and Improvement activities performance category is 
reweighted to 25 percent.
     If CMS reweights the Promoting Interoperability 
performance category to 0 percent: Quality performance category is 
reweighted to 75 percent, and Improvement activities performance 
category is reweighted to 25 percent.
    Lastly, as codified at Sec.  414.1367(e), final scoring for APM 
participants reporting to MIPS through the APP--including ACOs that 
participate in the Medicare Shared Savings Program--would follow the 
same methodology as established for MIPS generally at Sec.  414.1380 
(85 FR 84866).
    In performance year 2024, ACOs are scored on either the three 
eCQMs/MIPS CQMs/Medicare CQMs or the ten CMS Web Interface measures, 
the CAHPS for MIPS survey, and two administrative claims-based 
measures. Under this methodology, an ACO's MIPS Quality performance 
category score is calculated according to MIPS scoring rules for the 
Quality performance category established at Sec.  414.1380(b)(1) with 
exceptions for (1) measures that do not have a benchmark or do not meet 
the case minimum requirement and (2) measures that are identified as 
topped out. Specifically, each submitted measure that does not have a 
benchmark or does not meet the case minimum requirement is excluded 
from an ACO's total measure achievement points (numerator) and total 
available measure achievement points (denominator). Additionally, any 
measure that is identified as topped out is not subject to the scoring 
cap described at Sec.  414.1380(b)(1)(iv). Under current APP scoring 
rules, each required measure of the APP quality measure set that is not 
submitted by an ACO via the APP receives zero measure achievement 
points.
(2) Proposed Revisions
(a) Proposal To Establish the Data Submission Criteria for the APP Plus 
Quality Measure Set
    As discussed in section IV.A.4.e.(1)(b)(i) of this proposed rule, 
for the APP Plus quality measure set, we are proposing that Shared 
Savings Program ACOs that report the APP Plus quality measure set and 
MIPS eligible clinicians, groups, and APM Entities that choose to 
report the APP Plus quality measure set, will be required to report on 
all measures in the APP Plus quality measure set, as applicable. 
Specifically, in Sec.  414.1335(b), we are proposing to establish the 
data submission criteria for the APP Plus quality measure set, which 
would require the reporting of all measures within the APP Plus quality 
measure set, except for administrative claims-based quality 
measures.\476\
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    \476\ As described at Sec.  414.1325(a)(2)(i), there are no data 
submission requirements for administrative claims-based quality 
measures as performance on such measures is calculated by CMS using 
administrative claims data, which includes claims submitted with 
dates of service during the applicable performance period that are 
processed no later than 60 days following the close of the 
applicable performance period.
---------------------------------------------------------------------------

    The MIPS Quality performance category score is calculated according 
to the APP scoring methodology at Sec.  414.1367(c)(1) (85 FR 84864 
through 85 FR 84865). As such, an ACO's MIPS Quality performance 
category score is calculated according to MIPS scoring rules for the 
Quality performance category established at Sec.  414.1380(b)(1) with 
exceptions for (1) measures that do not have a benchmark or do not meet 
the case minimum requirement and (2) measures that are identified as 
topped out. Consistent with our proposal described above, under Sec.  
414.1380(b)(1), for performance year 2025 and subsequent performance 
years, ACOs would be scored on all required measures in the APP Plus 
quality measure set.
    We are proposing that the policies related to MIPS performance 
category scoring in the APP at Sec.  414.1367(c) would apply to Shared 
Savings Program ACOs that report the APP Plus quality measure set for 
the purpose of meeting the Shared Savings Program's quality performance 
standard.\477\ Specifically, we are proposing that the APP scoring 
policies at Sec.  414.1367(c)(1) for the calculation of the ACO's MIPS 
Quality performance category, Sec.  414.1367(c)(2) for the calculation 
of an ACO's MIPS Cost performance category, Sec.  414.1367(c)(3) for 
the calculation of an ACO's MIPS Improvement activities performance 
category, and Sec.  414.1367(c)(4) for the calculation of an ACO's MIPS 
Promoting Interoperability performance category would apply to ACOs 
that report the APP Plus quality measure set in performance year 2025 
and subsequent performance years. Additionally, we are proposing that 
Sec.  414.1367(d) for the performance category weights and Sec.  
414.1367(e) for the calculation of the final score would apply to 
Shared Savings Program ACOs that report the APP Plus quality measure 
set in performance year 2025 and subsequent performance years.
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    \477\ This discussion describes standards under the APP, which 
are applicable to APM Entities. We refer throughout to ACOs in lieu 
of APM Entities as we are discussing the application of APP 
standards to ACOs participating in the Shared Savings Program, and 
thus ACOs are the sole relevant type of APM Entity.
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    If our proposals are finalized, then in performance year 2025, ACOs 
would be scored on the required eight measures in the APP Plus quality 
measure set: five eCQMs/Medicare CQMs, the CAHPS for MIPS survey, and 
two administrative claims-based measures. In performance years 2026 and 
2027, ACOs would be scored on the required nine measures: six eCQMs/
Medicare CQMs, the CAHPS for MIPS survey, and two administrative 
claims-based measures. In performance year 2028 and subsequent 
performance years, ACOs would be scored on the required eleven 
measures: eight eCQMs/Medicare CQMs, the CAHPS for MIPS survey, and two 
administrative claims-based measures. We refer readers to Tables 34, 
35, and 36 in Section III.G.4.f of this proposed rule for additional 
detail on the required measures in each performance year.
    We refer readers to section IV.A.4.e.(1)(b)(i) of this proposed 
rule for a discussion of our proposal to establish the data submission 
criteria for the APP Plus quality measure set, specifically the 
proposal to require the reporting of all measures within the APP Plus 
quality measure set.
(b) Proposal To Establish a Complex Organization Adjustment for Virtual 
Groups and APM Entities
    To account for the organizational complexities faced by Virtual 
Groups and APM Entities, including Shared Savings Program ACOs, when 
reporting eCQMs, in section IV.A.4.f.(1)(b)(iii) of this proposed rule, 
we are proposing to establish a Complex Organization Adjustment 
beginning in the CY 2025 performance period/2027 MIPS payment year. A 
Virtual Group and an APM Entity would receive one measure achievement 
point for each submitted eCQM that meets the case minimum requirement 
at Sec.  414.1380(b)(1)(iii) and the data completeness requirement at 
Sec.  414.1340. Each reported eCQM may not score more than 10 measure 
achievement points and the total achievement points (numerator) may not 
exceed the total available measure achievement points (denominator) for 
the quality performance category. The Complex Organization Adjustment 
for a Virtual Group or APM Entity may not

[[Page 61860]]

exceed 10 percent of the total available measure achievement points in 
the quality performance category. The adjustment would be added for 
each measure submitted at the individual measure level.
    Since Shared Savings Program ACOs are APM Entities, this proposal 
would be applicable to Shared Savings Program ACOs reporting the APP 
Plus quality measure set beginning in performance year 2025. We refer 
readers to section IV.A.4.f.(1)(b)(iii) of this proposed rule for 
discussion of our proposal to establish the Complex Organization 
Adjustment for Virtual Groups and APM Entities.
    As the Adult Universal Foundation measures are phased into the APP 
Plus quality measure set, ACOs that participate in the Shared Savings 
Program would be required to report on a larger measure set relative to 
other eCQM reporters. Under our proposal as described in section 
III.G.4.f of this proposed rule, the APP Plus quality measure set for 
Shared Savings Program ACOs would include eight measures (five eCQMs/
Medicare CQMs, two administrative claims measures, and the CAHPS for 
MIPS Survey measure) in performance year 2025 (Table 34); nine measures 
(six eCQMs/Medicare CQMs, two administrative claims measures, and the 
CAHPS for MIPS Survey measure) in performance years 2026 and 2027 
(Table 35); and eleven measures (eight eCQMs/Medicare CQMs, two 
administrative claims measures, and the CAHPS for MIPS Survey measure) 
in performance years 2028 and subsequent performance years (Table 36).
(c) Proposal To Score Shared Savings Program ACOs Reporting Medicare 
CQMs Using Flat Benchmarks
    In the CY 2024 PFS final rule, we finalized our proposal to 
establish new benchmarks for scoring ACOs on the Medicare CQMs under 
MIPS in alignment with MIPS benchmarking policies (88 FR 79110). As 
historical Medicare CQM data would not be available, we finalized that 
for performance years 2024 and 2025, we will score Medicare CQMs using 
performance period benchmarks. We also finalized that, for performance 
year 2026 and subsequent performance years, when baseline period data 
are available to establish historical benchmarks in a manner that is 
consistent with the MIPS benchmarking policies at Sec.  
414.1380(b)(1)(ii), we will score Medicare CQMs using historical 
benchmarks.
    A few commenters noted in our proposal in the CY 2024 PFS proposed 
rule (88 FR 79109-79110) their concern about ACOs being compared only 
to other ACOs that report Medicare CQMs since the Medicare CQMs would 
be available only to Shared Savings Program ACOs. One commenter stated 
their preference to have their quality performance compared to all 
other participants on these measures, while another commenter stated 
that CMS should stop measuring ACOs against each other and instead 
measure ACOs on a national standard so that all ACOs can pass and do 
not lose out on savings due to arbitrary quality decile cut points. In 
our response to these comments, we stated that given that benchmarks 
are specific to each collection type and that we proposed to establish 
Medicare CQMs as a new collection type for only Shared Savings Program 
ACOs, only ACO data will be available to benchmark Medicare CQMs. 
Additionally, the health equity adjustment would be applicable to 
Medicare CQMs for purposes of determining shared savings payments/
losses. The application of the health equity adjustment would help 
improve performance when ACOs deliver high quality care to underserved 
patient populations. For these reasons, it is appropriate to establish 
benchmarks for Medicare CQMs that are consistent with MIPS benchmarking 
policies. ACOs that prefer to be compared to clinicians at large may do 
so by reporting eCQMs or MIPS CQMs, for which CMS calculates a 
benchmark using data reported by MIPS eligible clinicians reporting 
under the chosen collection type.
    In performance year 2022, ACOs had a higher average performance on 
quality measures they were required to report in order to share in 
savings compared to other similarly sized clinician groups not in the 
Shared Savings Program.\478\ This includes statistically significant 
higher performance for quality measures related to diabetes and blood 
pressure control; breast cancer and colorectal cancer screening; 
tobacco screening and smoking cessation; and depression screening and 
follow-up.\479\ In shifting to Medicare CQMs, ACO performance would be 
benchmarked against other ACOs only reporting Medicare CQMs. Since ACOs 
are high performers relative to comparably sized MIPS groups, 
benchmarking Medicare CQMs using only ACO data would lower some ACOs' 
MIPS measure achievement points on those measures. In other words, 
high-performing ACOs could earn lower measure achievement points 
relative to comparable MIPS groups because the Medicare CQM 
benchmarking pool is comprised of higher-than-average performance data-
in effect, creating a ``tournament approach'' to scoring Medicare CQMs 
wherein ACOs must compete with other ACOs to earn measure achievement 
points. This could be particularly disadvantageous for ACOs that serve 
a high proportion of underserved populations because, while ACOs that 
report eCQMs and/or Medicare CQMs and serve a high proportion of 
underserved populations are eligible for health equity adjustment 
points, ACOs must score in the top or middle thirds of ACO measure 
performers to earn health equity adjustment points.
---------------------------------------------------------------------------

    \478\ Centers for Medicare & Medicaid Services (2023). Medicare 
Shared Savings Program Saves Medicare More Than $1.8 Billion in 2022 
and Continues to Deliver High-quality Care. [Press release]. https://www.cms.gov/newsroom/press-releases/medicare-shared-savings-program-saves-medicare-more-18-billion-2022-and-continues-deliver-high.
    \479\ Id.
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    As described in section III.G.4.b.(2)(b) of this proposed rule, for 
performance year 2025 and subsequent performance years, we are 
proposing to streamline the collection types available for Shared 
Savings Program ACOs reporting the APP Plus quality measure set to the 
eCQM and Medicare CQM collection types. Therefore, as discussed in 
section IV.A.4.f.(1)(c)(i) of this proposed rule, we are proposing to 
add Sec.  414.1380(b)(1)(ii)(F) to state that beginning in the CY 2025 
performance period/2027 MIPS payment year, measures of the Medicare CQM 
collection type would be scored using flat benchmarks for their first 
two performance periods in MIPS. Our proposal in section 
IV.A.4.f.(1)(c)(i) of this proposed rule would expand the use of flat 
benchmarks to Medicare CQMs in their first two performance periods in 
MIPS. The use of flat benchmarks would allow ACOs with high scores to 
earn maximum or near maximum achievement points while allowing room for 
quality improvement and rewarding that improvement in subsequent years. 
Use of flat benchmarks also helps to ensure that ACOs with high quality 
performance on a measure are not penalized as low performers. As 
discussed in section IV.A.4.f.(1)(c)(i) of this proposed rule, we are 
proposing to add Sec.  414.1380(b)(1)(ii)(F) to incorporate this 
proposal. The use of historical benchmarks, when data are available, is 
consistent with MIPS benchmarking policies at Sec.  414.1380(b)(1)(ii), 
allow ACOs to know benchmarks prior to start of the performance year, 
and create opportunities for improvement.
    Table 30 lists the Medicare CQMs in the APP Plus quality measure 
set that would be eligible for flat benchmarks in

[[Page 61861]]

performance year 2025 through performance year 2029 under our proposal.
[GRAPHIC] [TIFF OMITTED] TP31JY24.058

    A quality performance benchmark is the performance rate an ACO must 
achieve to earn the corresponding quality points for each measure. Flat 
benchmarks assign a performance rate range to each decile. In flat 
benchmarks for non-inverse measures, any performance rate at or above 
90 percent would be in the top decile; any performance rate between 80 
percent and 89.99 percent would be in the second highest decile, and so 
on. For inverse measures, this would be reversed--any performance rate 
at or below 10 percent would be in the top decile; any performance rate 
between 10.01 percent and 20 percent would be in the second highest 
decile, and so on. The number of measure achievement points received 
for each measure is determined based on the applicable benchmark decile 
category and the percentile distribution.
    For non-inverse measures, better quality performance is indicated 
by a higher performance rate. For example, Quality #: 001 Controlling 
High Blood Pressure is a non-inverse measure that measures the 
percentage of patients 18-85 years of age who had a diagnosis of 
hypertension and whose blood pressure was adequately controlled (<140/
90 mmHg) during the measurement period. Better quality performance on 
this measure is demonstrated by having a higher percentage of patients 
whose blood pressure was adequately controlled. Table 31 lists the flat 
benchmarks for a non-inverse Medicare CQM under our proposal described 
in section IV.A.4.f.(1)(c)(i) of this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP31JY24.059

    For example, if an ACO reports a non-inverse Medicare CQM in its 
first two performance periods in MIPS in performance year 2025 and 
earns a performance rate of 55.25 percent, then the ACO would score in 
the 6th decile on that measure.
    For inverse measures, better quality performance is indicated by a 
lower performance rate. This is reflected in flat benchmark such that 
lower quality performance rates are found in higher deciles. For 
example, Quality #: 001 Diabetes: Hemoglobin A1c (HbA1c) Poor Control 
is an inverse quality measure that measures the percentage of patients 
18-75 years of age with diabetes who had hemoglobin A1c >9.0 percent 
during the measurement period. Better quality performance on this 
measure is demonstrated by having a lower percentage of patients whose 
HbA1c was >9.0 percent. Table 32 lists the flat benchmarks for an 
inverse Medicare CQM under our proposal described in section 
IV.A.4.f.(1)(c)(i) of this proposed rule.

[[Page 61862]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.060

    For example, if an ACO reports an inverse Medicare CQM in its first 
two performance periods in MIPS in performance year 2025 and earns a 
performance rate of 12.25 percent, then the ACO would score in the 9th 
decile on that measure. In performance year 2025, Quality #: 001 
Diabetes: Hemoglobin A1c (HbA1c) Poor Control is the only inverse 
Medicare CQM measure.
    There are scoring scenarios in which ACOs would earn higher measure 
achievement points under flat benchmarks compared to those they would 
earn under performance period benchmarks. Most notable are scenarios in 
which ACOs have a tight distribution of performance rates on a measure. 
For example, a non-inverse measure for which a performance rate of 
90.00 percent is in the 8th decile. In this example, an ACO that 
reported a performance rate of 90.00 percent would be scored in the 8th 
decile when the hypothetical performance period benchmark is applied. 
Using the flat benchmarks described in Table 31 of this proposed rule, 
an ACO that reported a performance rate of 90.00 percent would be 
scored in the 10th decile, resulting in greater measure achievement 
points than under the hypothetical performance period benchmarks 
described in this example. For more details on the calculation of 
measure achievement points, we refer readers to the ``APM Performance 
Pathway (APP) Toolkit'' which is updated for each performance year and 
posted in the QPP Resource Library.
    We seek comment on our proposal to score ACOs reporting Medicare 
CQMs using flat benchmarks in performance year 2025 and subsequent 
performance years.
(3) Proposed Changes to Regulation Text
    As discussed in sections III.G.4.c.(2)(a), III.G.4.c.(2)(b), and 
III.G.4.c.(2)(c) of this proposed rule, we are proposing to establish 
scoring rules to calculate the MIPS Quality performance category score 
for ACOs reporting the APP Plus quality measure set for performance 
year 2025 and subsequent performance years. We believe that these 
proposed scoring rules would incentivize the reporting of eCQMs in the 
APP Plus quality measure set while continuing to support ACOs that 
report Medicare CQMs as they build the infrastructure, skills, 
knowledge, and expertise necessary to aggregate patient data to report 
digital quality measures. We refer readers to sections 
IV.A.4.e.(1)(b)(i), IV.A.4.f.(1)(b)(iii), and IV.A.4.f.(1)(c)(i) of 
this proposed rule for changes to the regulation text at 42 CFR part 
414.
d. Proposal To Extend the eCQM Reporting Incentive for Meeting the 
Shared Savings Program Quality Performance Standard
(1) Background
    In the CY 2023 PFS final rule, we extended the incentive for 
reporting eCQMs/MIPS CQMs through performance year 2024 to align with 
the timeline for sunsetting of the CMS Web Interface reporting option 
and to allow ACOs an additional year to gauge their performance on the 
eCQMs/MIPS CQMs before full reporting of the measures are required 
beginning in performance year 2025 (87 FR 69836 through 69838). We 
originally adopted this incentive in the CY 2022 PFS final rule to 
encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in 
performance years 2022 and 2023 (86 FR 65269). We finalized an update 
to the incentive for performance year 2024 such that:
     If an ACO reports the three eCQMs/MIPS CQMs, meets the 
data completeness requirement at Sec.  414.1340 and the case minimum 
requirement at Sec.  414.1380 for all three eCQMs/MIPS CQMs, and:
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP measure set and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining five measures in the APP measure set, the 
ACO will meet the quality performance standard used to determine 
eligibility for shared savings and to avoid maximum shared losses, if 
applicable.
    We received a few comments on our proposal in the CY 2023 PFS 
proposed rule to extend the incentive for reporting eCQMs/MIPS CQMs 
through performance year 2024 suggesting that we extend the incentive 
beyond 2024 to facilitate the national shift towards eCQMs. In our 
response in the CY 2023 PFS final rule (87 FR 69836), we stated that 
``We are not extending the incentive beyond performance year 2024 at 
this time because this policy is intended to align with the timeline 
for sunsetting of the CMS Web Interface reporting option at the end of 
performance year 2024. We will continue to monitor the impact of this 
policy as we gain more experience with ACOs reporting eCQMs/MIPS CQMs 
and may revisit the policy in future rulemaking.''
(2) Proposed Revisions
    We are committed to continuing to support ACOs in the transition to 
all payer/all patient eCQMs and digital quality measurement reporting. 
As described in section III.G.4.b.(2)(a) of this proposed rule, for 
performance year 2025 and subsequent performance years, we are 
proposing to require Shared Savings Program ACOs to report the APP Plus 
quality measure set as

[[Page 61863]]

proposed in section IV.A.4.c.(3) of this proposed rule. The APP Plus 
quality measure set would incrementally grow to comprise of eleven 
measures, consisting of six measures from the APP quality measure set 
and five newly proposed measures from the Adult Universal Foundation 
measure set that would be incrementally incorporated into the APP Plus 
quality measure set over performance years 2025 through 2028. We are 
also proposing to focus the collection types available to Shared 
Savings Program ACOs for reporting the APP Plus quality measure set to 
all payer/all patient eCQMs and Medicare CQMs (while not adding the 
MIPS CQM as an available collection type for Shared Savings Program 
ACOs under the APP Plus quality measure set).
    The Shared Savings Program continues to hear from ACOs and other 
stakeholders about the challenges with reporting on all payer/all 
patient measures and meeting data management requirements given their 
muti-practice/multi EHR structure, the challenges to aggregate data 
with the health IT infrastructure in use by ACOs and current state of 
interoperability. Shared Savings Program quality reporting data over 
the past two performance years indicate that ACOs have been slow to 
report eCQMs. In performance year 2021, 5 of 475 ACOs reported eCQMs 
under the APP. In performance year 2022, among ACOs that reported 
quality data under the APP, 24 out of 482 reported eCQMs with 7 of 
these ACOs reporting a combination of eCQMs and MIPS CQMs.\480\ We 
encourage ACOs, especially those ACOs serving large, underserved 
populations, to leverage interoperability and digital data more fully 
and to more quickly transition to eCQMs. As such, we are proposing to 
extend the eCQM reporting incentive to performance year 2025 and 
subsequent performance years to support ACOs in meeting the Shared 
Savings Program quality performance standard for sharing in savings at 
the maximum rate under its track.
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    \480\ Counts based on internal analysis of ACOs' quality 
reporting in performance year 2022 and 2021.
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    Specifically, we are proposing that for performance year 2025 and 
subsequent performance years, an ACO will meet the quality performance 
standard used to determine eligibility for maximum shared savings and 
to avoid maximum shared losses, if applicable:
     If the ACO reports all of the eCQMs in the APP Plus 
quality measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 for all eCQMs, and;
     Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set, and;
     Achieves a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining measures in the APP Plus quality measure 
set.
    The eCQM reporting incentive would apply only to those ACOs that 
report all of the eCQMs in the APP Plus quality measure set applicable 
for a performance year and meet the data completeness requirement for 
all of the eCQMs. The reporting incentive would not apply to ACOs that 
report a combination of eCQMs/Medicare CQMs or report only Medicare 
CQMs. We will further assess the need for the eCQM reporting incentive 
in the future as ACOs continue the transition to adopting eCQMs and may 
make refinements as needed in future rulemaking. The proposed APP Plus 
quality measure set for Shared Savings Program ACOs for performance 
year 2025, performance years 2026 and 2027, and performance year 2028 
and subsequent performance years are displayed in Tables 34, 35, and 
36, respectively. We included the measure type in these tables for each 
measure in the APP Plus quality measure set to provide ACOs with a list 
of the outcome measures for purposes of qualifying for the eCQM 
reporting incentive.
(3) Proposed Changes to Regulation Text
    We are proposing to add paragraphs (a)(5)(i)(B)(1) and (2) to Sec.  
425.512 to incorporate our proposal to extend the eCQM reporting 
incentive to performance year 2025 and subsequent performance years 
into the regulation text.
    We seek comment on our proposal to extend the eCQM reporting 
incentive to performance year 2025 and subsequent performance years.
e. Summary of Proposals
    In Table 33 of this proposed rule, we summarize the proposed 
changes to the regulation at Sec.  425.512(a)(5) to reflect the changes 
we are proposing to the quality reporting requirements and quality 
performance standard for performance year 2025 and subsequent 
performance years.
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f. Proposed APP Plus Quality Measure Set
(1) Background
    The APP quality measure set for performance year 2024 and 
subsequent performance years was finalized in the CY 2024 PFS final 
rule (88 FR 79112 through 79114). In that final rule, for performance 
year 2024 and subsequent performance years, we also finalized the 
addition to the APP quality measure set of the Medicare CQM collection 
type for Diabetes: Hemoglobin A1c (HbA1c) Poor Control (Quality #: 
001), Preventive Care and Screening: Screening for Depression and 
Follow-up Plan (Quality #: 134), and Controlling High Blood Pressure 
(Quality #: 236).
(2) Proposed Revisions
    As described in section III.G.4.b.(2)(a) of this proposed rule, for 
performance year 2025 and subsequent performance years, we are 
proposing to require Shared Savings Program ACOs to report the APP Plus 
quality measure set as proposed in section IV.A.4.c.(3) of this 
proposed rule. The APP Plus quality measure set would comprise of 
eleven measures, consisting of six measures from the APP quality 
measure set and five newly proposed measures from the Adult Universal 
Foundation measure set that would be incrementally incorporated into 
the APP Plus quality measure set over performance years 2025 through 
2028. We are also proposing to focus the collection types available to 
Shared Savings Program ACOs for reporting the APP Plus quality measure 
set to all payer/all patient eCQMs and Medicare CQMs.
    The proposed APP Plus quality measure set for Shared Savings 
Program ACOs for performance year 2025, performance years 2026 and 
2027, and performance year 2028 and subsequent performance years are 
displayed in Tables 34, 35, and 36, respectively. In these tables, we 
also included the measure type for each measure in the APP Plus quality 
measure set to provide ACOs with a list of the outcome measures for 
purposes of qualifying for

[[Page 61866]]

the eCQM reporting incentive, as described in section III.G.4.d. of 
this proposed rule. This information is also relevant to the 
alternative quality performance standard under which ACOs that fail to 
meet the quality performance standard to qualify for the maximum 
sharing rate, but that achieve a quality performance score equivalent 
to or higher than the 10th percentile of the performance benchmark on 
at least one of the four outcome measures in the APP Plus quality 
measure set, may be eligible to share in savings on a sliding scale, as 
discussed in the current Sec.  425.512(a)(4)(ii).
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g. Survey Modes for the Administration of the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS Survey Request for 
Information
    We seek public comment on the potential expansion of the survey 
modes of the CAHPS for MIPS Survey from a mail-phone protocol to a web-
mail-phone protocol. During the 2023 CAHPS for MIPS Web Mode Field 
Test,\481\ adding the web-based survey mode to the current mail-phone 
protocol of CAHPS for MIPS survey administration resulted in an 
increased response rate. Additional information on the CAHPS for MIPS 
Survey Request for Information is available in section IV.A.4.e.(1)(e) 
of this proposed rule.
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    \481\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2893/2023_CAHPS_for_MIPS_WebMode_Field_Test.pdf.
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5. Providing the Option of Prepaid Shared Savings
a. Background
    In the CY 2023 PFS final rule (87 FR 69782 through 69805), CMS 
finalized a new payment option for eligible Shared Savings Program ACOs 
entering agreement periods beginning on or after January 1, 2024, to 
receive advance shared savings payments. This payment option is 
referred to as advance investment payment (AIP) and the payments 
themselves are referred to as advance investment payments.
    These payments are intended to improve the quality and efficiency 
of items and services furnished to Medicare beneficiaries by reducing 
the barriers to participation in the Shared Savings Program by 
supporting investments in increased staffing, healthcare 
infrastructure, and the provision of accountable care for underserved 
beneficiaries. Accordingly, advance investment payments must be spent 
on one of the following categories: increased staffing, healthcare 
infrastructure, and the provision of accountable care for underserved 
beneficiaries, which may include addressing social determinants of 
health (42 CFR 425.630(e)(1)).
    Advance investment payments are only available to ACOs newly 
entering the Shared Savings Program in their first agreement period 
(Sec.  425.630(b)(1)). Many commentors on the CY 2023 PFS final rule 
(87 FR 69782 through 69805) suggested that CMS should expand access to 
advance investment payments by expanding the eligibility criteria to 
include currently participating ACOs as well as high revenue ACOs. 
While we do not believe that it is appropriate to expand the 
eligibility criteria for advance investment payments at this time, as 
CMS still needs time to assess the impact of the new payment option, 
there is persuasive evidence that investment in staffing, healthcare 
infrastructure, and accountable care for underserved beneficiaries 
could be valuable for all ACOs, not just those that are new to the 
program. Investment in care coordination for beneficiaries reduces 
costs and improve the quality of care received.482 483 484 
Investment in health information technology can be leveraged to empower 
individuals, address patients' full range of health needs, promote 
healthy behaviors, and facilitate better health outcomes for 
individuals, families, and communities.\485\ Additionally, there is 
evidence that investment in services not currently covered by Medicare 
may improve beneficiary health and reduce avoidable health care 
utilization costs over time, including coverage of dental 
486 487 488 hearing 489 490 and vision \491\ 
care.
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    \482\ Breckenridge ED, Kite B, Wells R, Sunbury TM. Population 
Health Management. Effect of Patient Care Coordination on Hospital 
Encounters and Related Costs. September 26, 2019. Available at 
https://doi.org/10.1089/pop.2018.0176.
    \483\ Elliott MN, Adams JL, Klein DJ, et al. Journal of General 
Internal Medicine. Patient-Reported Care Coordination is Associated 
with Better Performance on Clinical Care Measures. September 20, 
2021. Available at https://link.springer.com/article/10.1007/s11606-021-07122-8.
    \484\ Figueroa JF, Feyman Y, Zhou X, et al. Hospital-level care 
coordination strategies associated with better patient experience. 
BMJ Quality & Safety. April 4, 2018. Available at https://qualitysafety.bmj.com/content/27/10/844.
    \485\ The Office of the National Coordinator for Health 
Information Technology. 2020-2025 Federal Health IT Strategic Plan. 
Available at https://www.healthit.gov/sites/default/files/page/2020-10/Federal%20Health%20IT%20Strategic%20Plan_2020_2025.pdf.
    \486\ Schenkein HA, Loos BG. Inflammatory mechanisms linking 
periodontal diseases to cardiovascular diseases. Journal of Clinical 
Periodontology. April 30, 2013. Available at https://doi.org/10.1111/jcpe.12060.
    \487\ Teeuw WJ, Gerdes VE, Loos BG. Effect of periodontal 
treatment on glycemic control of diabetic patients: a systematic 
review and meta-analysis. Diabetes Care. February 2010. Available at 
https://pubmed.ncbi.nlm.nih.gov/20103557/.
    \488\ Allareddy V, Rampa S, Lee MK, Allareddy V, Nalliah RP. 
Hospital-based emergency department visits involving dental 
conditions: Profile and predictors of poor outcomes and resource 
utilization. The Journal of the American Dental Association. 
November 19, 2014. Available at https://doi.org/10.14219/jada.2014.7.
    \489\ Choi JS, Adams ME, Crimmins EM, Lin FR, Ailshire JA. 
Association between hearing aid use and mortality in adults with 
hearing loss in the USA: a mortality follow-up study of a cross-
sectional cohort. The Lancet Healthy Longevity. January 3, 2024. 
Available at https://doi.org/10.1016/S2666-7568(23)00232-5.
    \490\ Reed NS, Altan A, Deal JA, et al. Trends in Health Care 
Costs and Utilization Associated with Untreated Hearing Loss Over 10 
Years. JAMA Otolaryngology--Head and Neck Surgery. November 8, 2018. 
Available at https://jamanetwork.com/journals/jamaotolaryngology/fullarticle/2714049.
    \491\ Lipton BJ, Decker SL. The effect of health insurance 
coverage on medical care utilization and health outcomes: Evidence 
from Medicaid adult vision benefits. Journal of Health Economics. 
November 11, 2015. Available at https://doi.org/10.1016/j.jhealeco.2015.10.006.
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    Furthermore, we have come to understand that, for beneficiaries, 
the benefits of receiving services from providers associated with 
ACOs--such as improvements in quality and coordinated care--may not be 
immediately apparent. By encouraging ACOs to invest in new services 
that beneficiaries otherwise would not receive, like hearing, vision 
and dental services, the benefits of receiving care from providers who 
are part of an ACO would become more tangible. This would encourage 
beneficiaries to receive care from providers participating in an ACO 
and may ultimately result in improved quality and efficiency of care 
for beneficiaries.
    For ACOs that are currently participating in the Shared Savings 
Program and that reinvest their earned shared savings payments in 
activities that reduce costs and improve quality of care, it could be 
more valuable to gain access to those shared savings payments early in 
and/or throughout each performance year, instead of waiting months 
after the end of each performance year when any earned shared savings 
payments are distributed. Currently, CMS completes the financial 
reconciliation calculations for each ACO during the summer after the 
end of each performance year, which allows time for claims runout

[[Page 61870]]

and other necessary data to become available. CMS compares the updated 
historical benchmark to an ACO's assigned beneficiaries' per capita 
expenditures during the performance year to determine whether the ACO 
may share in savings or losses, if owed. CMS then notifies the ACO in 
writing regarding whether the ACO qualifies for a shared savings 
payment, and if so, the amount of the payment due. These payments are 
generally distributed to ACOs in the early fall following the end of 
each performance year. This is the sole payment CMS makes to an ACO in 
the Shared Savings Program and generally an ACO's sole source of 
revenue. Distributing prepaid shared savings during a performance year 
would allow ACOs to invest these payments in additional services for 
assigned beneficiaries, staffing, and healthcare infrastructure earlier 
and reap the benefits from that investment earlier.
    The CMS Innovation Center tested a number of strategies for 
providing more experienced ACOs with advances of funding during each 
performance year. One of the innovations was the infrastructure 
payments available in the Next Generation ACO model, a CMS Innovation 
Center model that was intended for more experienced ACOs.\492\ Most 
Next Generation ACOs (82 percent) that participated in the Next 
Generation ACO model in 2018 had prior experience as Medicare ACOs 
before starting in the model, and the majority (56 percent) previously 
participated in the Shared Savings Program.\493\ ACOs selecting the 
infrastructure payment option received $6 per assigned beneficiary per 
month to support ACO Activities, which was later recouped during 
financial settlement following each performance year. The model defined 
ACO Activities as activities related to promoting accountability for 
the quality, cost, and overall care for the population of beneficiaries 
assigned to the Next Generation ACO, including managing, and 
coordinating care; encouraging investment in healthcare infrastructure 
and redesigned care processes for high quality and efficient service 
delivery; or carrying out any other obligation or duty of the ACO under 
the terms of the Next Generation ACO model. Examples of these 
activities included, but were not limited to, providing direct patient 
care in a manner that reduces costs and improves quality; promoting 
evidence-based medicine and patient engagement; reporting on quality 
and cost measures; coordinating care, such as through the use of 
telehealth, remote patient monitoring, and other enabling technologies; 
establishing and improving clinical and administrative systems for the 
ACO; meeting the quality performance standards; evaluating health 
needs; communicating clinical knowledge and evidence-based medicine; 
and developing standards for beneficiary access and communication, 
including beneficiary access to medical records. In interviews 
performed as part of the CMS Innovation Center's evaluation of the 
model, Next Generation ACO leaders described using these funds to 
support upfront operating costs and healthcare infrastructure and 
clinical process enhancements such as new staff, health information 
technology, data analytic capacity, population health management, or 
care coordination.\494\
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    \492\ Refer to ``Next Generation ACO Model'' available at 
https://www.cms.gov/priorities/innovation/innovation-models/next-generation-aco-model.
    \493\ NORC at the University of Chicago. Next Generation 
Accountable Care Organization Model Third Evaluation Report. 
September 2020. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/nextgenaco-thirdevalrpt-fullreport.
    \494\ NORC at the University of Chicago. Evaluation of the Next 
Generation Accountable Care Organization (NGACO) Model--Final 
Report. January 2024. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2024/nextgenaco-sixthevalrpt.
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    Despite these ACOs' prior experience as Medicare ACOs and the 
meaningful investments many had made in their own healthcare 
infrastructure and providers, they still found value in access to 
funding during the performance year. Almost all Next Generation ACOs 
used the funds to develop workflows informed by data analytics and 
clinical staff input. Most Next Generation ACOs also reported using the 
funds to support care management, such as acquiring tools and 
developing healthcare infrastructure to support care coordination. 
Leaders from many Next Generation ACOs described how the payments 
facilitated new processes for seamless patient care handoffs between 
health care providers, enabled the creation of better workflows for 
scheduling follow-up visits, and supported provision of screenings and 
assessments. Data from a clinician survey suggested that the payments 
were likely helpful in improving the delivery or coordination of care, 
with 63 percent of providers agreeing that additional resources to 
support practice changes made their day-to-day work easier.\495\ 
Separately, the ACO Investment Model (AIM), a model run by the CMS 
Innovation Center which informed development of the advance investment 
payments, gave participating ACOs upfront and quarterly funding to 
spend on ACO start-up costs. These ACOs primarily invested in staffing 
and healthcare infrastructure including care management, ACO 
administration, health IT and data analysis,\496\ and these ACOs 
generated an estimated net aggregate reduction in spending by Medicare 
of $381.5 million after accounting for Medicare's payment of AIM funds 
and participating ACOs' earned shared savings.\497\
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    \495\ NORC at the University of Chicago. Next Generation 
Accountable Care Organization (NGACO) Model Evaluation Third 
Evaluation Report. 2020. Available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/nextgenaco-thirdevalrpt-fullreport.
    \496\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model, AIM Implementation and Impacts over 
Two Performance Years (September 2019), page 55. Available at 
https://www.cms.gov/priorities/innovation/aim-second-annrpt.pdf.
    \497\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model, Final Report (September 2020), page 
39. Available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
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    Section 1899(i)(3) of the Act authorizes the Secretary to use other 
payment models instead of the one-sided model described in section 
1899(d) of the Act so long as the Secretary determines that the other 
payment model will improve the quality and efficiency of items and 
services furnished to Medicare beneficiaries without additional program 
expenditures. We are interested in building on experience from the Next 
Generation ACO model, and we agree, in part, with comments on the CY 
2023 PFS final rule that encouraged CMS to expand AIP to additional 
ACOs. While we do not believe it is appropriate to expand the 
eligibility criteria for AIPs at this time as explained earlier in this 
section, we agree with commenters that additional ACOs could benefit 
from expanded access to performance year funding that encourages 
investment in staffing, healthcare infrastructure, and additional 
services for beneficiaries. Prepaid shared savings would be required to 
be spent at least partially on direct beneficiary services, improving 
the quality of care beneficiaries receive.
    Consequently, under the authority provided to the Secretary by 
section 1899(i)(3) of the Act, we are proposing to provide prepaid 
shared savings to certain ACOs that meet the eligibility criteria 
described in section III.G.5.b of this proposed rule. Such payments 
would be made pursuant to the standards we propose to establish in new 
Sec.  425.640. This new payment

[[Page 61871]]

option would provide prepaid shared savings to ACOs with a history of 
earning shared savings while participating in the Shared Savings 
Program. These payments would be distributed on a quarterly basis and 
would be recouped from shared savings CMS determines the ACO to have 
earned during the annual financial reconciliation cycle. Prepaid shared 
savings would be the advance payment of shared savings that are 
expected to be earned by the ACO and are covered under the Shared 
Savings Distribution Waiver (76 FR 66726). If the ACO does not earn 
sufficient shared savings to offset the advanced payment of shared 
savings during the applicable performance year, CMS may withhold or 
terminate the ACO's prepaid shared savings under proposed Sec.  
425.640(h)(1)(iii).
    We have determined that the other payment model CMS has adopted 
under section 1899(i)(3) of the Act would continue to improve the 
quality and efficiency of care should this proposal be finalized. 
Section 1899(i)(3)(A) of the Act requires CMS determine that the other 
payment model will improve the quality and efficiency of items 
furnished under the Medicare program. Based on the evidence for direct 
beneficiary services noted above, our experience administering the 
Shared Savings Program, and the CMS Innovation Center's experience with 
the ACO Investment Model and infrastructure payments in the Next 
Generation ACO model, we have determined that allowing ACOs access to 
funding earlier than currently available, in the form of prepaid shared 
savings, would allow ACOs to more rapidly achieve the benefits of 
investing in staffing, healthcare infrastructure, and direct 
beneficiary services. Improvement in these areas would improve the 
quality and efficiency of beneficiary care therefore meeting the 
standard of section 1899(i)(3)(A) of the Act. As we explained earlier 
in this section, ACOs have expenditures throughout the PY, particularly 
when implementing care coordination and beneficiary management 
strategies, and having access to their shared savings early can help 
ensure the ACO has adequate funding to perform these services 
throughout the year.
    Section 1899(i)(3)(B) of the Act requires CMS to determine that 
prepaid shared savings, when implemented in combination with existing 
modifications made to the Shared Savings Program payment model 
specified in section 1899(d) of the Act, will not result in additional 
program expenditures. The addition of prepaid shared savings meets this 
standard in part because the eligibility criteria for prepaid shared 
savings have been selected to only permit ACOs that CMS estimates are 
most likely to earn shared savings to receive payments. Additionally, 
any payments the ACO receives under this proposal must be repaid to 
CMS, and CMS would be protected by the ACOs' repayment mechanisms in 
the event that an ACO does not earn shared savings or cannot otherwise 
repay the amount owed to CMS. Based on this design, we estimate that 
there would be no additional program expenditures stemming from the 
implementation of prepaid shared savings under this proposal. Please 
review section VII of this proposed rule for a more complete discussion 
of the financial impact of the Shared Savings Program payment model, 
including the findings necessary to demonstrate compliance with section 
1899(i)(3)(B) of the Act.
    We intend to periodically reassess whether a payment model 
established under section 1899(i)(3) of the Act, including the payment 
of prepaid shared savings, continues to improve the quality and 
efficiency of items and services furnished to Medicare beneficiaries 
without resulting in additional program expenditures. If we determine 
that the payment model no longer satisfies the requirements of section 
1899(i)(3) of the Act (for example if the payment model results in net 
program costs), we would undertake additional notice and comment 
rulemaking to adjust our payment methodology to assure continued 
compliance with the statutory requirements.
b. Eligibility
    To ensure that prepaid shared savings are provided only to ACOs 
that are well-positioned to use prepaid shared savings to improve the 
quality and efficiency of care to their assigned beneficiaries while 
minimizing the risk of an ACO being unable to repay prepaid shared 
savings, we propose to limit the availability of prepaid shared savings 
to those ACOs that have a track record of success in the Shared Savings 
Program. This approach is also consistent with our compliance with 
section 1899(i)(3)(B) of the Act as such ACOs are most likely to be 
able to repay the upfront funding through earned shared savings.
    We propose to establish the eligibility criteria for prepaid shared 
savings in Sec.  425.640(b). CMS must determine that an ACO meets all 
of the following criteria for the ACO to be eligible to receive prepaid 
shared savings during an agreement period:
     The ACO is a renewing ACO as defined under Sec.  425.20 
entering an agreement period beginning on January 1, 2026, or in 
subsequent years.
     The ACO must have received a shared savings payment for 
the most recent performance year that:
    (A) Occurred prior to the agreement period for which the ACO has 
applied to receive prepaid shared savings; and
    (B) CMS has conducted financial reconciliation.
     The ACO must have a positive prior savings adjustment as 
calculated per Sec.  425.658 at application disposition for the 
agreement period in which they would receive prepaid shared savings.
     The ACO does not have any outstanding shared losses or 
advance investment payments that have not yet been repaid to CMS after 
reconciliation for the most recent performance year for which CMS 
completed financial reconciliation.
     If the ACO received prepaid shared savings in the current 
agreement period or a prior agreement period, the ACO must have fully 
repaid the amount of prepaid shared savings received through the most 
recent performance year for which CMS has completed financial 
reconciliation.
     The ACO is participating in Levels C-E of the BASIC track 
or the ENHANCED track during the agreement period in which they would 
receive prepaid shared savings.
     The ACO has in place an adequate repayment mechanism in 
accordance with Sec.  425.204(f) that can be used to recoup outstanding 
prepaid shared savings.
     During the agreement period immediately preceding the 
agreement period in which the ACO would receive prepaid shared savings, 
the ACO:
    (A) Met the quality performance standard as specified under Sec.  
425.512; and
    (B) Has not been determined by CMS to have avoided at-risk 
beneficiaries as specified under Sec.  425.316(b)(2).
    These eligibility criteria have been selected to allow only ACOs 
with a record of meeting the quality performance standard, not avoiding 
at risk beneficiaries, and recent success in earning shared savings to 
receive prepaid shared savings. This is for the protection of both CMS 
and the ACOs, as CMS does not want to overestimate an ACO's ability to 
earn future shared savings and burden an ACO with debt that they would 
not be able to repay. Our experience administering the Shared Savings 
Program leads us to determine that ACOs with prior success in the 
program--that is, ACOs with a record of meeting the quality

[[Page 61872]]

performance standard, not avoiding at risk beneficiaries, and recent 
success in earning shared savings--are well positioned to identify 
beneficiary needs and invest prepaid shared savings to improve 
beneficiary care and are therefore most likely to benefit from prepaid 
shared savings. These ACOs would also be reasonably confident they will 
be able to repay CMS through their earned shared savings and would 
therefore be comfortable spending the funding they receive. 
Accordingly, CMS would only permit ACOs that are currently 
participating in the Shared Savings Program, that have earned shared 
savings in the most recent performance year for which financial 
reconciliation has been completed, and that have a positive prior 
savings adjustment at application disposition to receive prepaid shared 
savings, as they have the history of success that provides CMS with a 
more reasoned expectation that they will earn shared savings in the 
future. New ACOs would not be eligible for prepaid shared savings, as 
they do not have a recent performance history we can use to estimate 
future performance. Many new ACOs are eligible to receive advance 
investment payments, which are not available to ACOs currently 
participating in the Shared Savings Program. Advance investment 
payments are more tailored to the needs of a new ACO as there is more 
flexibility in the use of funding and advance investment payments do 
not need to be repaid in the event that the ACO does not earn shared 
savings.
    Additionally, ACOs that did not meet the quality performance 
standard as specified under Sec.  425.512 or were subject to a pre-
termination action from CMS after determining an ACO avoided at-risk 
beneficiaries as specified under Sec.  425.316(b)(2) in the agreement 
period preceding the agreement period in which they would receive 
prepaid shared savings would be prohibited from participating in the 
prepaid shared savings payment option, as these compliance issues can 
prevent an ACO from earning shared savings that would be used to repay 
the prepaid shared savings.
    CMS also proposes to limit participation in the prepaid shared 
savings payment option to ACOs that have fully repaid all shared losses 
they may owe and any advance investment payments they may have received 
in a prior agreement period, and to ACOs that participate in a two-
sided risk track (Levels C-E of the BASIC track or the ENHANCED track), 
as these tracks require a repayment mechanism in accordance with Sec.  
425.204(f), which could be used to recoup prepaid shared savings. CMS 
also proposes these criteria in part to limit participation to ACOs 
that are most likely to be able to repay any prepaid shared savings 
they receive. Similarly, if the ACO received prepaid shared savings in 
a current or previous agreement period, they must have fully repaid the 
amount of prepaid shared savings received though the most recent 
performance year for which CMS has completed financial reconciliation 
before they would be able to renew their participation in prepaid 
shared savings for another agreement period. For example, if an ACO is 
in the fifth year of its 5-year agreement period during which they have 
been receiving prepaid shared savings and is in the process of renewing 
for a new agreement period, CMS would ensure they have fully repaid the 
prepaid shared savings received from the first four performance years 
of their current agreement period through earned shared savings before 
they are approved to receive prepaid shared savings in a new agreement 
period. As CMS intends to provide prepaid shared savings to ACOs if 
they improve and maintain performance and continue to see success in 
the program on an annual basis, ACOs that are not initially eligible 
would have the option to participate in the prepaid shared savings 
payment option in future years if they demonstrate a more recent 
history of success in the program and meet the other eligibility 
criteria. These criteria also provide an additional incentive for ACOs 
to improve their performance in the program. CMS would also continue to 
review the eligibility criteria over time and may expand eligibility in 
future years if we determine that doing so is in the interests of the 
Shared Savings Program, participating ACOs, and their beneficiaries, 
and all requirements under section 1899(i)(3) of the Act are satisfied. 
Additionally, to standardize timelines for payment, spending, and 
recoupment of prepaid shared savings, ACOs would only be eligible for 
prepaid shared savings if they renew or early renew to begin a new 
agreement period. The proposed policies for the calculation, spending 
and recoupment of prepaid shared savings allow for up to five years for 
ACOs to receive, spend and repay the funding through earned shared 
savings. We propose to create a new paragraph in Sec.  425.100(e) to 
establish that an ACO may receive prepaid shared savings if it meets 
the criteria under Sec.  425.640(b). We propose in Sec.  425.640(b) to 
specify the eligibility criteria for an ACO to receive prepaid shared 
savings. We seek comments on these proposals.
c. Application Procedure & Contents
    We propose to establish the process for an ACO to apply for prepaid 
shared savings in Sec.  425.640(c). Specifically, we propose that an 
ACO must submit to CMS supplemental application information sufficient 
for CMS to determine whether the ACO is eligible to receive prepaid 
shared savings. The application cycle for prepaid shared savings would 
be conducted as part of, and in conjunction with, the Shared Savings 
Program application process under Sec.  425.202, with instructions and 
timelines published on the Shared Savings Program website. We propose 
the initial application cycle to apply for prepaid shared savings would 
be for a January 1, 2026, start date. We intend to provide further 
information regarding the process, including the application contents 
and specific requirements such as the deadline for submitting 
applications and all supplemental application information that would be 
required, through subregulatory guidance. The prepaid shared savings 
application procedure would also include a process by which CMS 
provides an applicant with feedback and an opportunity to clarify or 
revise their application.
    CMS would provide preliminary information to the applicant ACO 
about its eligibility to receive prepaid shared savings during the 
Phase 1 application cycle requests for information, and a final 
determination about its eligibility to receive prepaid shared savings 
at the time of final application dispositions. For example, for ACOs 
applying in 2025 for an agreement period beginning in 2026, we would 
provide preliminary information identifying whether an ACO is likely to 
earn shared savings in the 2024 performance year and have a positive 
prior savings adjustment as calculated per Sec.  425.658 at application 
disposition.
    We propose at Sec.  425.640(d)(1) that an ACO would be required to 
submit a spend plan as part of its application for prepaid shared 
savings. We propose that the plan must describe how the ACO would spend 
the prepaid shared savings during the first performance year of the 
agreement period during which the ACO would receive prepaid shared 
savings, including the breakdown of how the funding would be spent 
consistent with the allowable uses as described in section III.G.5.d of 
this proposed rule and information about: (1) direct beneficiary 
services that would be provided to ACO beneficiaries; and (2) 
investments that would be made in the ACO with prepaid shared savings. 
ACOs must also

[[Page 61873]]

include their communication strategy for informing both CMS and any 
impacted beneficiaries if the ACO will no longer be providing any 
direct beneficiary services (as described in section III.G.5.d of this 
proposed rule) that had previously been provided by the ACO using 
prepaid shared savings. This communication strategy must include when 
and how the ACO intends to notify CMS and the impacted beneficiaries as 
well as any available alternatives for impacted beneficiaries to access 
similar services. ACOs would be able to limit the distribution of 
direct beneficiary services to subgroups of assigned beneficiaries 
including those with specific medical conditions or specific 
socioeconomic needs. ACOs would be required to attest that they will 
not discriminate on the basis of race, color, religion, sex, national 
origin, disability, or age with respect to their use of prepaid shared 
savings. ACOs would have flexibility to alter their use of prepaid 
shared savings from their submitted spend plans during each performance 
year but would be required to ensure than any changes to proposed 
spending aligns with the restrictions on spending discussed in section 
III.G.5.d of this proposed rule. CMS would review mid-year changes of 
the use of prepaid shared savings at the end of each performance year. 
CMS would also be able to review an ACO's spend plan at any time and 
require the ACO to modify its spend plan to comply with the 
requirements of Sec.  425.640(d) and (i).
    As discussed in greater detail in section III.G.5.h of this 
proposed rule, we would reserve the right to withhold or terminate an 
ACO's ability to receive the prepaid shared savings if it is not in 
compliance with the requirements of the Shared Savings Program codified 
in part 425 of our regulations, pursuant to proposed Sec.  
425.640(h)(1)(i). In addition, by certifying their application under 
Sec.  425.202(a)(2), the ACO certifies that the information contained 
in the application, including information related to the intended use 
of prepaid shared savings, is accurate, complete, and truthful.
    We propose at Sec.  425.640(d) that we would review the information 
submitted in the ACO's prepaid shared savings application to determine 
whether an ACO meets the criteria for prepaid shared savings and would 
approve or deny the application accordingly. We would review the ACO's 
Shared Savings Program renewal application simultaneously with the 
prepaid shared savings application.
    As discussed in section III.G.5.g of this proposed rule, we are 
also proposing to update our public reporting requirements under Sec.  
425.308 by adding new paragraph (b)(10) to require an ACO to publicly 
report its spend plan. We propose to require that the ACO post on its 
dedicated public reporting web page: (1) the total amount of prepaid 
shared savings received from CMS for each performance year; (2) the 
ACO's spend plan; and (3) an itemization of how the prepaid shared 
savings were actually spent during each performance year, including 
expenditure categories, the dollar amounts spent on the various 
categories, information about which groups of beneficiaries received 
direct beneficiary services that were purchased with prepaid shared 
savings and investments that were made in the ACO with prepaid shared 
savings, how these direct beneficiary services were provided to 
beneficiaries and how the direct beneficiary services and investments 
supported the care of beneficiaries, any changes to the spend plan as 
submitted under Sec.  425.640(d)(2) (if applicable), and such other 
information as may be specified by CMS. Additionally, we are proposing 
that the ACO would be required to report the same information to CMS 
under Sec.  425.640(i) to facilitate efficient monitoring. This would 
help ensure that CMS efficiently obtains information in a consistent 
manner from all ACOs receiving prepaid shared savings and thereby 
support CMS's monitoring and analysis of the use of prepaid shared 
savings. CMS will also make this data publicly available through a 
public use file. Further, we expect to use the submitted data as the 
template that ACOs can use to populate their public reporting web page 
early in each performance year to minimize administrative burden for 
ACOs. We also intend to use the information submitted to CMS to 
generate a public use file that can be used to quickly review the use 
of prepaid shared savings across all participating ACOs.
    We propose to add Sec.  425.640(c) and (d) to establish standards 
for the contents of an application to be determined eligible for 
prepaid shared savings as well as the procedures for filing such an 
application. We seek comments on these proposals.
d. Allowable and Prohibited Uses of Prepaid Shared Savings
    We propose in Sec.  425.640(e) to specify how an ACO may use 
prepaid shared savings. Similar to advance investment payments, prepaid 
shared savings are intended to improve quality and efficiency of items 
and services furnished to Medicare beneficiaries. We recognize that 
there are many ways to do this, and that the most effective ways would 
vary by ACO. Our proposal intends to provide ACOs with flexibility to 
use payments consistent with broad allowable uses. However, as prepaid 
shared savings are only available to ACOs that are currently 
successfully participating in the Shared Savings Program, we intend to 
place restrictions on the amount of total annual prepaid shared savings 
that can be spent on each category of spending. Financially successful 
ACOs are likely to have already made significant investments in 
staffing and healthcare infrastructure, as they are necessary for the 
functioning of an ACO, and we intend to encourage ACOs receiving 
prepaid shared savings to invest in direct beneficiary services that 
are not already offered by the ACO. Direct beneficiary services like 
vision, hearing and dental, and other services that have a reasonable 
expectation of improving or maintaining the health or overall function 
of ACO beneficiaries, have the potential to further improve beneficiary 
outcomes, reduce costs, and improve beneficiary engagement and 
willingness to receive care from a provider affiliated with an ACO. 
However, staffing and healthcare infrastructure are still important 
expenses that can have positive impacts on healthcare costs, ACO 
efficiency, the quality of beneficiary care, regardless of an ACO's 
experience in the Shared Savings Program. Accordingly, we also intend 
to allow ACOs to use some of their prepaid shared savings to invest in 
these areas. For each performance year, ACOs would be permitted to use 
up to 50 percent of their estimated annual prepaid shared savings on 
staffing and healthcare infrastructure and up to 100 percent of their 
estimated annual prepaid shared savings on direct beneficiary services. 
ACOs must use a minimum of 50 percent of their prepaid shared savings 
on direct beneficiary services.
    We note that an ACO may use prepaid shared savings for staffing, 
healthcare infrastructure and direct beneficiary services in a manner 
that complies with the beneficiary incentives provision at Sec.  
425.304(a), (b), and newly proposed (d) as discussed in section 
III.G.5.i of this proposed rule, and all other applicable laws and 
regulations. Permitted uses for ``staffing and healthcare 
infrastructure'' include but are not limited to the following:
     Staffing. Examples could include, but are not limited to, 
hiring physicians, physicians' assistants, nurse practitioners, 
clinical nurse specialists, nutrition professionals, case managers, 
licensed clinical social workers, community health workers, patient

[[Page 61874]]

navigators, health equity officers, psychiatrists, clinical 
psychologists, therapists, mental health counselors, licensed 
professional counselors, substance use counselors, peer support 
specialists, and other behavioral health clinicians, or staff 
education.
     Healthcare Infrastructure: Examples could include, but are 
not limited to, investments in or improvements to existing case or 
practice management systems, clinical data registries, electronic 
quality reporting, health information exchange participation, certified 
electronic health record technology (CEHRT), health IT to support 
behavioral health or dental services, IT-enabled screening tools, 
closed-loop referral tools, audiovisual interpreter technology, or 
practice physical accessibility improvements. Investments can be made 
for individual ACO providers/suppliers (as defined in Sec.  425.20) or 
ACO wide.
     Direct beneficiary services include in-kind items or 
services provided to an ACO beneficiary that are not otherwise covered 
by Traditional Medicare but have a reasonable expectation of improving 
or maintaining the health or overall function of ACO beneficiaries. 
Direct beneficiary services can also include cost sharing support 
including the reduction of beneficiary copay or deductibles for 
Traditional Medicare beneficiaries. In advance of the application 
deadline for agreement periods beginning on January 1, 2026, we intend 
to release sub regulatory guidance with more specific information about 
permitted uses of funding for direct beneficiary services. Permitted 
uses for direct beneficiary services could include, but are not limited 
to the following: beneficiary meals, nutrition support, tenancy support 
and sustaining services, housing assistance, utility support, caregiver 
support services, services to address social isolation, home visits, 
transportation services, home or environmental modifications like air 
conditioners, bathroom safety devices, personal emergency response 
systems or medical alert systems, and vision, hearing or dental care 
directly provided by ACO providers/suppliers (as defined in Sec.  
425.20) or covered under a health insurance plan purchased by the ACO 
on behalf of the beneficiary. While some of these services are covered 
in some form by Traditional Medicare, prepaid shared savings funding 
reserved for direct beneficiary services would only be permitted to be 
used for those services if the version of the service offered by the 
ACO is not currently covered by Traditional Medicare and there is a 
reasonable expectation that those services will improve or maintain the 
health or overall function of ACO beneficiaries. For example, some 
types of home visits are covered by Traditional Medicare, but an ACO 
would be able to extend the number of home visits offered to 
beneficiaries beyond the number covered by Traditional Medicare with 
prepaid shared savings. Direct beneficiary services would also include 
cost-sharing support, including the reduction of beneficiary copay or 
deductibles for Traditional Medicare beneficiaries for Part B primary 
care services. ACOs would be able to provide cost-sharing support for 
primary care services (as defined in Sec.  425.20) with respect to 
which coinsurance applies under Part B.
    As discussed in section III.G.5.i of this proposed rule, if this 
rulemaking is finalized, CMS expects to make a determination that the 
anti-kickback statute safe harbor for CMS-sponsored model patient 
incentives (Sec.  1001.952(ii)(2)) is available to protect direct 
beneficiary services that are made in compliance with this policy and 
the conditions for use of the antikickback statute safe harbor set out 
at Sec.  1001.952(ii)(2). As noted earlier in this preamble, ACOs that 
wish to provide direct beneficiary services beneficiaries through 
prepaid shared savings will need to submit a spend plan with 
information including the groups of beneficiaries they intend to 
provide with direct beneficiary services, how the direct beneficiary 
services will be provided to beneficiaries and how such services 
support the care of beneficiaries, and attest that they will not 
discriminate on the basis of race, color, religion, sex, national 
origin, disability, or age with respect to how they propose to spend 
prepaid shared savings. As proposed, ACOs will also be required to 
report their actual use of prepaid shared savings after the end of each 
performance year, including which groups of beneficiaries received 
direct beneficiary services, how such services were provided to 
beneficiaries, and how these services supported the care of 
beneficiaries.
    Many direct beneficiary services may be provided by staff working 
for an ACO or its participating providers or suppliers. If a staff 
member is hired or directed to provide these services, ACOs may use 
dollars designated for direct beneficiary services to cover the 
percentage of their salary that aligns with the percentage of time the 
staff member spends providing direct beneficiary services that are not 
otherwise covered by Traditional Medicare. This funding may also be 
used to contract with a community-based organization (CBO) or other 
external entity to pay their staff to provide direct beneficiary 
services. Additionally, ACOs should take care to ensure that a direct 
beneficiary service that is provided to a beneficiary does not impact 
other Federal, state, or local means-tested benefits a beneficiary is 
already receiving and should provide beneficiaries with any necessary 
documentation regarding their receipt of the direct beneficiary 
service. If CMS finalizes this proposal, we would include additional 
information in our sub regulatory guidance regarding the approved uses 
for direct beneficiary services and potential impacts on beneficiary 
eligibility for other Federal means tested programs.
    We propose in Sec.  425.640(e)(2) that an ACO may not use prepaid 
shared savings for any expense other than those allowed under paragraph 
(e)(1). Prohibited uses of prepaid shared savings would include 
management company or parent company profit, performance bonuses, 
provision of medical services covered by Traditional Medicare, cash or 
cash equivalent payments to patients, and items or activities unrelated 
to the management and operations of an ACO or care of beneficiaries. 
Similar to advance investment payments, prepaid shared savings are 
intended to help an ACO put care processes in place to directly care 
for the unique needs of the ACO's beneficiary population, it is not 
intended to solely increase profits or to be spent on items unrelated 
to the management and operations of the ACO or the beneficiaries it 
serves. Additionally, we propose that an ACO participating in Levels C-
E of the BASIC track or the ENHANCED track may not use any prepaid 
shared savings to pay back any shared losses that it would have 
incurred as specified in a written notice from CMS under Sec.  
425.605(e)(2) or Sec.  425.610(h)(2), respectively.
    To the extent that an ACO is addressing unmet social needs, 
including food insecurity and transportation problems, through direct 
beneficiary services, we encourage ACOs to coordinate with a community-
based organization to provide these services. As explained in the CY 
2023 PFS proposed rule (87 FR 46102), where we refer to CBO, we mean 
public or private not-for-profit entities that provide specific 
services to the community or targeted populations in the community to 
address the health and social needs of those populations. They may 
include community-action agencies, housing agencies, area agencies on 
aging, or other non-profits that apply for grants to perform social

[[Page 61875]]

services. They may receive grants from other agencies in the U.S. 
Department of Health and Human Services, including Federal grants 
administered by the Center for Disease Control and Prevention (CDC), 
Administration for Children and Families (ACF), Administration for 
Community Living (ACL), or other Federal or State funded grants to 
provide social services.
    Generally, such organizations know the populations they serve and 
their communities and may have the infrastructure or systems in place 
to help coordinate supportive services that address social determinants 
of health or serve as a source from which ACOs can receive information 
regarding community needs. Since CBOs have developed such an expertise, 
we believe it would be impactful for ACOs in the delivery of high-
quality direct beneficiary services to contract with CBOs in the 
provision of these services. CMS further encourages ACOs to work with 
community care hubs, which are community-focused entities supporting a 
network of CBOs that provide services addressing health-related social 
needs and centralize administrative functions and operational 
infrastructure. Working directly with a community care hub can help 
connect the ACO with multiple smaller CBOs in the provision of direct 
beneficiary services. If an ACO works with a CBO to provide these types 
of services and this is reflected in its plan to address the needs of 
its population, we would consider them to be in compliance with the 
requirement at Sec.  425.112(b)(2)(iii)(A), which requires an ACO to, 
in its plan to address the needs of its population, describe how it 
intends to partner with community stakeholders to improve the health of 
its population.
    We also propose in Sec.  425.640(f)(6) to allow ACOs receiving 
prepaid shared savings to request a smaller quarterly payment amount 
from CMS. For example, if an ACO is eligible for a maximum quarterly 
prepaid shared savings amount of one million dollars, we would estimate 
their annual prepaid shared savings to be four million dollars. This 
allows the ACO to spend up to two million dollars on staffing and 
healthcare infrastructure and up to their full $4 million payment 
amount on direct beneficiary services. However, the ACO may request a 
lower quarterly payment of $500,000 that results in the ACO only 
receiving two million dollars over the full performance year. This 
would also reduce the amount the ACO can spend on staffing and 
healthcare infrastructure as an ACO may not spend more than 50 percent 
of the prepaid shared savings they receive on staffing and healthcare 
infrastructure. In the event that CMS stops or reduces an ACOs 
quarterly payments during the performance year below the quarterly 
payment amount previously requested by the ACO, the reduction does not 
impact the total maximum amount they are permitted to spend on each 
category of allowable uses identified at the start of each year, as it 
would not be appropriate to subject ACOs to mid-year spend plan changes 
when they may have entered into contracting or other arrangements with 
staff or suppliers which could impact continuity of care. We would 
monitor how ACOs are spending these funds and, as necessary, revisit 
these guidelines in future rulemaking if changes are required.
    We seek comment on these proposals.
e. Calculation of Prepaid Shared Savings
    As noted in section III.G.5.a of this proposed rule, we have 
determined that prepaid shared savings would not result in additional 
program expenditures. While ACOs would be required to repay the prepaid 
shared savings they receive through earned shared savings, it is also 
important for CMS to avoid paying ACOs an amount of prepaid shared 
savings that they are unlikely to be able to repay through earned 
shared savings. While prepaid shared savings would be helpful in 
providing successful ACOs with additional cash flow that would 
encourage their investment in activities that could potentially reduce 
ACOs' costs and improve the quality of care that ACOs provide to their 
beneficiaries, overpaying ACOs might result in a level of outstanding 
debt for some ACOs that could disrupt their operations and potentially 
their participation in the Shared Savings Program as well as generate 
unnecessary financial risk for CMS. Our proposed policies on the 
calculation and distribution of the prepaid shared savings payments are 
intended to balance the benefit for the ACOs of receiving funding 
earlier with the risk of overpayment both for CMS and the ACO, while 
helping to ensure that prepaid shared savings do not result in 
additional program expenditures.
    We are proposing a new Sec.  425.640(f) to provide an ACO that CMS 
determines meets the eligibility criteria described in section 
III.G.5.b of this proposed rule with a prepaid shared savings payment 
for each quarter of an agreement period that they are determined to be 
eligible for prepaid shared savings equal to the maximum quarterly 
payment amount calculated pursuant to the methodology outlined in Sec.  
425.640(f)(2) (as further explained elsewhere in this section), the ACO 
elects to receive a lesser amount as described in Sec.  425.640(f)(6) 
(as further explained in section III.G.5.d. of this proposed rule) or 
the payment is withheld or terminated pursuant to Sec.  425.640(h). If 
an ACO's quarterly payment is withheld or terminated (as further 
explained in section III.G.5.f.(2) of this proposed rule), we would not 
provide ACOs with additional or catch-up payments if quarterly payments 
of prepaid shared savings are later resumed. We propose that under new 
Sec.  [thinsp]425.640(f), CMS would notify in writing each ACO of its 
determination of the amount of prepaid shared savings. The notice would 
inform the ACO of its right to request reconsideration review in 
accordance with the procedures specified in subpart I of our 
regulations. If CMS does not make any prepaid shared savings payment, 
the notice would specify the reason(s) why and inform the ACO of its 
right to request reconsideration review in accordance with the 
standards specified in subpart I of our regulations. Thus, prior to 
each quarterly payment, we propose to provide the ACO with the notice 
described above in the form of a report that shows our calculation of 
the ACO's quarterly prepaid shared savings amount. We propose to 
coincide the timing of these notices with the timing of existing report 
packages sent to ACOs for informational purposes, in December (after 
initial assignment prior to a given performance year), May (after 
quarter 1 assignment for a given performance year), and August (after 
quarter 2 assignment for a given performance year). Accordingly, notice 
regarding the first and second quarterly payments that an eligible ACO 
would receive in a given performance year would be provided in December 
of the immediately preceding year. Subsequent notices regarding the 
third and fourth quarterly payments that an eligible ACO would receive 
in a given performance year would then be provided in May and August, 
respectively, of that performance year.
    We are also proposing a new Sec.  425.640(f)(2) to specify the 
calculation of an ACO's maximum quarterly prepaid shared savings 
payment. To calculate this payment, we propose calculating a prepaid 
shared savings multiplier, adjusting it by several factors explained 
later in this section, and then multiplying one-fourth of the adjusted 
multiplier by an ACO's assigned beneficiary person years. We propose to 
calculate the prepaid shared savings multiplier as the simple average 
of per capita savings or losses generated by the ACO during the two 
most recent performance years that have been

[[Page 61876]]

financially reconciled at the time of the ACO's renewal application 
disposition, which constitute benchmark year (BY) 1 and BY2 of the 
agreement period in which the ACO may receive prepaid shared savings 
(``current agreement period,'' hereafter). That is, we would exclude 
BY3 from the calculation of an ACO's average per capita savings or 
losses because the performance year that constitutes BY3 of the ACO's 
current agreement period would not have been financially reconciled at 
the time of the ACO's application disposition. Accordingly, the per 
capita savings for each performance year would be determined as the 
quotient of the ACO's total updated benchmark expenditures minus total 
performance year expenditures divided by performance year assigned 
beneficiary person years. For purposes of calculating the simple 
average of per capita savings or losses generated by the ACO during the 
two most recent performance years that have been financially 
reconciled, we would use all savings generated during each of the 2 
performance years in the prepaid shared savings multiplier, not just 
savings that met or exceeded the ACO's minimum savings rate (MSR) for 
that prior performance year.
    Under new Sec.  425.640(f)(2)(iii), we propose to apply a proration 
factor to the prepaid shared savings multiplier to account for 
situations where an ACO's assigned beneficiary population is larger in 
BY1 and BY2 when calculated using the ACO's certified ACO participant 
list and assignment methodology for a given performance year within the 
current agreement period, as compared to the ACO's assigned beneficiary 
population when the ACO was reconciled for the performance years that 
constitute BY1 and BY2 of the current agreement period. Mathematically, 
to apply this proration factor we would calculate the ratio between: 
(1) the ACO's average assigned beneficiary person years for the 2 
performance years that constitute BY1 and BY2 for the ACO's current 
agreement period (regardless of whether these performance years 
occurred over one or multiple prior agreement periods, which would 
occur if the ACO early renews immediately before the current agreement 
period) and (2) the average assigned beneficiary person years in BY1 
and BY2 for the ACO's current agreement period calculated using the 
ACO's certified ACO participant list and assignment methodology for a 
given performance year within the current agreement period. Increases 
in the size of the ACO's assigned beneficiary population during the 
current agreement period would therefore result in a ratio less than 1, 
while decreases in the assigned beneficiary population would result in 
a ratio greater than 1. This ratio would be capped at 1 to avoid 
increasing the adjusted prepaid shared savings multiplier if the 
average number of beneficiaries assigned to the ACO across the 2 
benchmark years of its current agreement period is lower than the 
average number of beneficiaries assigned during the 2 performance years 
that constitute BY1 and BY2. Prorating for growth in assignment would 
ensure that the prepaid shared savings amount does not exceed the 
amount of cumulative savings generated by the ACO during the 
performance years that constitute BY1 and BY2 for its current agreement 
period.
    It is necessary to calculate a proration factor at the start of the 
ACO's current agreement period to account for several possible 
circumstances in which the ACO's assigned beneficiary population may be 
different in BY1 and BY2 when calculated using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period, as compared to the ACO's 
assigned beneficiary population when the ACO was reconciled for the 
performance years that constitute BY1 and BY2 of the current agreement 
period. Specifically, changes in the size of the ACO's assigned 
beneficiary population at the start of the ACO's current agreement 
period could be due to the addition and removal of ACO participants or 
ACO providers/suppliers in accordance with Sec.  425.118(b), a change 
to the ACO's beneficiary assignment methodology selection under Sec.  
425.226(a)(1), or changes to the beneficiary assignment methodology 
specified in 42 CFR part 425, subpart E.
    Additionally, these circumstances could potentially arise after the 
start of the ACO's current agreement period. In turn, changes in the 
size of the ACO's assigned beneficiary population could potentially 
occur throughout the course of the current agreement period. Therefore, 
we propose in new Sec.  425.640(f)(3)(ii) that for the second and each 
subsequent performance year during the term of the current agreement 
period, we would redetermine this proration factor.
    In addition to pro-rating the prepaid shared savings multiplier, we 
also propose to adjust it in two ways. First, under new Sec.  
425.640(f)(2)(iv), we would apply a sharing rate scaling factor of \1/
2\ (or 50 percent). This sharing rate scaling factor would be similar 
to the scaling factor we apply under Sec.  425.658(c)(1)(i) when 
calculating the prior savings adjustment, applicable to agreement 
periods beginning on or after January 1, 2024, as finalized in the CY 
2023 final rule (refer to 87 FR 69899 through 69915). As with the prior 
savings adjustment calculation, it is important to consider a measure 
of the sharing rate used in determining the shared savings payment the 
ACO earned in the applicable performance years under the agreement 
period immediately before it would receive prepaid shared savings. 
Consistent with the prior savings adjustment scaling factor, 50 percent 
represents an appropriate multiplier in this context because it 
represents a middle ground between the maximum sharing rate of 75 
percent under the ENHANCED track and the lower sharing rates available 
under the BASIC track.
    Second, under new Sec.  425.640(f)(2)(v)(A), we would apply a 
financial risk scaling factor equal to \2/3\. The purpose of the 
financial risk scaling factor would be to mitigate financial risk to 
the Medicare Trust Funds and to ACOs by reducing the possibility that 
an ACO's prepaid shared savings payments exceed the ACO's actual earned 
shared savings. The rationale for a financial risk scaling factor of 
this magnitude is that it enables us to account for a scenario in which 
an ACO earned zero per capita savings in the performance year that 
constitutes BY3 of the current agreement period, which is necessarily 
excluded from the calculation of an ACO's average per capita savings or 
losses for purposes of the prepaid shared savings multiplier because, 
as mentioned previously, the performance year that constitutes BY3 of 
the ACO's current agreement period would not have been financially 
reconciled at the time of the ACO's application disposition. Thus, by 
multiplying an ACO's average per capita savings or losses across BY1 
and BY2 by a financial risk scaling factor equal to \2/3\, we are 
imposing a downward reduction on the prepaid shared savings multiplier 
by assuming that it would have been possible, in principle, for an ACO 
to have not earned any per capita savings in the performance year that 
constitutes BY3 of the current agreement period. By doing so, we are 
reducing the probability of distributing excessive prepaid shared 
savings. As discussed previously, it is important to avoid distribution 
of excessive prepaid shared savings because doing so could result in 
several undesirable outcomes, such as ACOs accruing debt to CMS that 
they are unable to repay, which could disruption the ACOs' operations 
and participation in the Shared Savings Program.
    Consistent with calculations of the prior savings adjustment (refer 
to

[[Page 61877]]

Sec.  425.658), the positive regional adjustment (refer to Sec.  
425.656), and the proposed health equity benchmark adjustment (refer to 
section III.G.7.b of this proposed rule), we propose under new Sec.  
425.640(f)(2)(v)(B), to cap the pro-rated, adjusted prepaid shared 
savings multiplier at 5 percent of national per capita FFS expenditures 
for Parts A and B services in order to ensure that the amount of 
prepaid shared savings that an ACO receives does not exceed an amount 
that the ACO is able to repay through earned shared savings. 
Specifically, we propose to calculate the cap as 5 percent of national 
per capita FFS expenditures for Parts A and B services in BY2 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY2. Consequently, under new Sec.  425.640(f)(2)(v), 
the pro-rated, adjusted, and capped prepaid shared savings multiplier 
that would ultimately be used to calculate a given maximum quarterly 
prepaid shared savings payment would be equal to the lesser of (A) the 
pro-rated, adjusted prepaid shared savings multiplier or (B) 5 percent 
of national per capita FFS expenditures for Parts A and B services in 
BY2 for assignable beneficiaries.
    To calculate a given maximum quarterly prepaid shared savings 
payment, we propose under new Sec.  425.640(f)(4), to multiply one-
fourth of the pro-rated, adjusted, and capped prepaid shared savings 
multiplier (to account for four quarterly payments) by the ACO's 
assigned beneficiary person years for the latest available assignment 
list for a given performance year within the current agreement period. 
Varying the maximum quarterly payment to reflect the latest available 
assigned beneficiary person years is similar to how we calculate the 
AIP quarterly payment calculation (refer to Sec.  425.630(f), CY 2023 
PFS final rule (87 FR 69797)), for which we use the latest available 
assignment list to calculate the quarterly advance investment payment 
amount. We propose to use the latest available beneficiary assigned 
person years for the maximum quarterly prepaid shared savings payment 
because an ACO's assigned beneficiary person years change over the 
course of a performance year and over the course of an agreement 
period. Because later assignment lists more closely reflect the final 
assignment list that would be used for calculating shared savings and 
losses for a given performance year within the current agreement 
period, later assignment lists are more likely than earlier assignment 
lists to facilitate calculation of quarterly prepaid shared savings 
payment amounts that closely align with the earned shared savings or 
losses that an ACO actually generates in the contemporaneous 
performance year. Using the latest available assigned beneficiary 
person years mitigates a financial risk that an ACO experiencing 
declining person years over the course of a performance year could 
receive excessive prepaid shared savings. As mentioned previously, 
overpaying prepaid shared savings could result in ACOs accruing a level 
of debt to CMS that they are unable to repay through earned shared 
savings which could, in turn, disrupt ACOs' operations and 
participation in the Shared Savings Program.
    We propose to use assigned beneficiary person year values that CMS 
provides to ACOs in annual and quarterly informational reports. For 
ACOs under preliminary prospective assignment with retrospective 
reconciliation, Medicare assigns beneficiaries in a preliminary manner 
at the beginning of a performance year based on the most recent data 
available (Sec.  425.400(a)(2)(i)). Assignment is updated quarterly 
based on the most recent 12 or 24 months of data, as applicable, under 
the methodology described in Sec. Sec.  425.402 and 425.404 (Sec.  
425.400(a)(2)(ii)). ACOs under preliminary prospective assignment with 
retrospective reconciliation receive an assigned beneficiary person 
years value based on the most recent 12 or 24 months of data, as 
applicable, in annual and quarterly informational reports. For ACOs 
under prospective assignment, Medicare FFS beneficiaries are 
prospectively assigned to an ACO at the beginning of each benchmark or 
performance year based on the beneficiary's use of primary care 
services in the most recent 12 or 24 months, as applicable, for which 
data are available, using the assignment methodology described in 
Sec. Sec.  425.402 and 425.404 (Sec.  425.400(a)(3)(i)). Each quarter, 
CMS excludes any prospectively assigned beneficiaries that meet the 
exclusion criteria under Sec.  425.401(b). ACOs under prospective 
assignment receive a year-to-date assigned beneficiary person years 
value with each quarterly report package. For ACOs under prospective 
assignment, we would annualize the quarterly year-to-date assigned 
beneficiary person years values for use in the maximum quarterly 
prepaid shared savings payment calculation. For example, a year-to-date 
person years value of 1,500 with quarter 1 informational reports would 
be annualized by multiplying 1,500 by 4. A year-to-date person years 
value of 3,000 with quarter 2 information reports would be annualized 
by multiplying 3,000 by 2.
    We further propose to account for circumstances when an ACO was not 
reconciled for the performance year that constitutes BY1 in the 
calculation of average per capita prior savings and the proration 
factor. For instance, ACOs that renew their agreement periods early or 
are re-entering may not be reconciled for one or more of the years 
preceding the start of their current agreement period depending upon 
the timing of the expiration or termination of their prior agreement 
period and the start of their current agreement period. We propose 
under new Sec.  425.640(f)(2)(i), that if an ACO was not reconciled 
during one of the 2 performance years that constitute BY1 or BY2 of its 
current agreement period, the ACO would receive zero savings or losses 
for the BY corresponding to the performance year that was not 
financially reconciled in the calculation of the prepaid shared savings 
multiplier. CMS has no way to determine whether the ACO would have 
generated savings or losses during a performance year for which it was 
not reconciled. We believe this is appropriate because it enables us to 
obtain a more conservative prediction of the ACO's financial 
performance for a given performance year within the current agreement 
period than we would be able to obtain if we were to exclude the BY 
corresponding to the performance year that was not financially 
reconciled from the calculation of the prepaid shared savings 
multiplier. Excluding this year entirely from the calculation of 
average per capita prior savings would unduly increase the weight on 
the other year included in the prepaid shared savings multiplier 
calculation. This would be problematic in a case where the ACO's 
financial performance in the BY corresponding to the performance year 
that was financially reconciled is atypically high because it would 
upwardly bias the prediction of the ACO's financial performance for a 
given performance year within the current agreement period. Thus, by 
imputing zero savings or losses for a BY corresponding to a performance 
year that was not financially reconciled in the calculation of the 
prepaid shared savings multiplier, we are reducing the probability of 
overpredicting the financial performance of the ACO for a given 
performance year within the current agreement period and, in turn, the 
probability of distributing excessive prepaid shared savings. As 
mentioned previously, excessive distribution of

[[Page 61878]]

prepaid shared savings could result in several undesirable outcomes, 
such as ACOs accruing debt to CMS that they are unable to repay, which 
could disrupt the ACOs' operations and participation in the Shared 
Savings Program.
    In contrast, we determined that it would also be appropriate to 
exclude a year for which the ACO was not reconciled when calculating 
the proration factor. The purpose of the proration factor is to account 
for situations where an ACO's assigned beneficiary population 
calculated at financial reconciliation for the 2 performance years that 
constitute BY1 and BY2 of the ACO's current agreement period 
(numerator) is smaller than the ACO's assigned beneficiary population 
identified for those same years using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period (denominator). If an ACO was 
not reconciled for one of the 2 performance years that constitute BY1 
and BY2 of the current agreement period, it would naturally have zero 
assigned beneficiary person years determined at financial 
reconciliation for such year, which would factor into the numerator of 
the proration factor if such year was considered. However, the ACO 
would have positive beneficiary counts in the 2 performance years that 
constitute BY1 and BY2 of the current agreement period generated using 
the ACO's certified ACO participant list and assignment methodology for 
a given performance year within the current agreement period, which 
would factor into the denominator of the proration factor if such year 
was considered. Thus, if the numerator and the denominator were both 
calculated as averages over 2 years, incorporating a year for which the 
ACO was not reconciled in the calculation of the proration factor would 
artificially decrease the proration factor and lead to a smaller pro-
rated average per capita prior savings for the ACO. Alternatively, if 
the numerator were calculated in a manner that excludes a performance 
year for which the ACO was not reconciled (that is, calculated in a 
manner that includes only the year for which the ACO was reconciled 
from among the 2 performance years that constitute BY1 and BY2 of the 
current agreement period) and the denominator was calculated as an 
average that included both of the 2 performance years that constitute 
BY1 and BY2 of the current agreement period, then the direction of the 
impact on the proration factor would depend on whether the number of 
assigned beneficiaries calculated using an ACO's current certified ACO 
participant list and assignment methodology in the benchmark year for 
which the ACO was not reconciled exceeds the number of assigned 
beneficiaries in the other benchmark year, and by how much. Therefore, 
we see no compelling reason to include a performance year immediately 
preceding the start of an ACO's current agreement period for which the 
ACO was not reconciled in the numerator or the denominator of the 
proration factor. Excluding such a year would ensure that the proration 
factor compares average person years determined for prior performance 
years at financial reconciliation (numerator) to average person years 
for those performance years determined using the ACO's current 
certified ACO participant list and assignment methodology (denominator) 
across a consistent set of years preceding the start of the ACO's 
current agreement period.
    We also propose to account for certain circumstances where there 
could be changes to the values used in calculating the prepaid shared 
savings multiplier as a result of issuance of a revised initial 
determination of financial performance under Sec.  425.315.
    To account for these situations and for the need to recalculate the 
proration factor as described elsewhere in this section, we propose to 
specify in new Sec.  425.640(f)(3) when CMS would recalculate the 
prepaid shared savings multiplier during the current agreement period. 
For the first performance year in the current agreement period, the 
ACO's prepaid shared savings multiplier would be recalculated for 
changes in per capita shared savings or losses for the performance 
years that constitute BY1 or BY2 and that are used in the calculation 
of the prepaid shared savings multiplier as a result of issuance of a 
revised initial determination under Sec.  425.315. For the second and 
each subsequent performance year during the term of the current 
agreement period, the ACO's prepaid shared savings multiplier would be 
recalculated due to redetermining the proration factor for the addition 
and removal of ACO participants or ACO providers/suppliers in 
accordance with Sec.  425.118(b), for a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), for a 
change to the beneficiary assignment methodology specified in subpart E 
of this part, and for changes in per capita shared savings or losses 
for the performance years that constitute BY1 or BY2 and that are used 
in the calculation of the prepaid shared savings multiplier as a result 
of issuance of a revised initial determination under Sec.  425.315.
    The specific computations involved in arriving at the maximum 
prepaid shared savings payment amount for a given ACO in a given 
quarter are described below.
     Step 1: Calculate a prepaid shared savings multiplier as 
the average per capita savings across the performance years that 
constitute BY1 and BY2 of the ACO's current agreement period. First, 
calculate the total per capita savings amount for each applicable 
performance year by subtracting assigned beneficiary expenditures from 
total benchmark expenditures and divide the difference by assigned 
beneficiary person years. Then, sum the resulting quotients and divide 
by 2. The per capita savings or losses would be set to zero for a 
performance year if the ACO was not reconciled for the performance 
year.
     Step 2: Apply a proration factor to the prepaid shared 
savings multiplier calculated in Step 1. The proration factor is equal 
to the ratio of the ACO's average assigned beneficiary person years for 
the 2 performance years that constitute BY1 and BY2 for the ACO's 
current agreement period (regardless of whether these performance years 
occurred over one or multiple prior agreement periods) and the ACO's 
average assigned beneficiary person years in BY1 and BY2 for the ACO's 
current agreement period calculated using the ACO's certified ACO 
participant list and assignment methodology for a given performance 
year within the current agreement period, capped at one. If the ACO was 
not reconciled for the performance year that constitutes BY1, the 
person years from that year (or years) would be excluded from the 
averages in the numerator and the denominator of this ratio. This ratio 
would be redetermined for each performance year during the agreement 
period in the event of any changes to the number of average person 
years in the benchmark years as a result of changes to the ACO's 
certified ACO participant list, a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), or changes 
to the beneficiary assignment methodology specified in 42 CFR part 425, 
subpart E.
     Step 3: Adjust the pro-rated prepaid shared savings 
multiplier calculated in Step 2. First, apply a shared savings scaling 
factor by multiplying the pro-rated prepaid shared savings multiplier 
by 0.50. Then, multiply the resulting value by \2/3\ to apply a 
financial risk scaling factor.
     Step 4: Cap the pro-rated, adjusted prepaid shared savings 
multiplier at 5

[[Page 61879]]

percent of national per capita FFS expenditures for Parts A and B 
services in BY2 for assignable beneficiaries identified for the 12-
month calendar year corresponding to BY2.
     Step 5: Multiply one-fourth of the pro-rated, adjusted, 
and capped prepaid shared savings multiplier by the assigned 
beneficiary person years derived from the ACO's latest available 
assignment list. The resulting product would serve as the ACO's total 
maximum prepaid shared savings payment for the applicable quarter. As 
discussed previously, an ACO's latest available assignment list is 
updated quarterly. For ACOs under preliminary prospective assignment 
with retrospective reconciliation, assignment is updated quarterly 
based on the most recent 12 or 24 months of data, as applicable, under 
the methodology described in Sec. Sec.  425.402 and 425.404 (Sec.  
425.400(a)(2)(ii)). For ACOs under prospective assignment, assignment 
is updated quarterly to exclude any prospectively assigned 
beneficiaries that meet the exclusion criteria under Sec.  425.401(b) 
(Sec.  425.401(b)). Thus, consistent with the methodology that we apply 
in the case of advance investment payments, quarterly variations in an 
ACO's assignment list would translate to variations in the maximum 
quarterly total prepaid shared savings payments that an ACO may receive 
in any given quarter, in order to help ensure that the payments 
accurately reflect the attributes of the ACO's assigned beneficiary 
population throughout the current agreement period.
    Table 37 presents a hypothetical example to demonstrate how the 
prepaid shared savings calculation would work in practice.
BILLING CODE P

[[Page 61880]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.066

BILLING CODE C
    The ACO's maximum quarterly prepaid shared savings payments would 
set a ceiling on the amount of quarterly prepaid shared savings that an 
ACO could receive from CMS for each quarter. ACOs will be able to 
request to receive an amount of funding under this maximum amount. 
Prior to each performance year, ACOs would notify CMS of the amount of 
prepaid shared savings they want to receive in the first quarter under 
the maximum quarterly prepaid shared savings amount and the first 
quarterly payment will be used to determine the total amount of prepaid 
shared savings the ACO will use to budget for that performance year. We 
are proposing in new Sec.  425.640(f)(5) that for the purposes of 
determining the amount of prepaid shared savings permitted to be 
allocated to the uses specified in Sec.  425.640(e), the estimated 
annual prepaid shared savings amount can be calculated by multiplying 
the first quarterly payment amount the ACO would receive in each 
performance year by four. This allows the ACO to calculate the total 
amount of funding they are permitted to spend on each allowable use at 
the start of each performance year. If an ACO's maximum quarterly 
payments decrease over the performance year and result in the ACO 
receiving less than the estimated annual prepaid shared savings amount, 
the ACO would not be subject to compliance actions solely because it 
spent more than 50 percent of the actual annual amount of prepaid 
shared savings it received during that PY on staffing and healthcare 
infrastructure, as long as it did not spend more than 50 percent of the 
originally estimated annual prepaid

[[Page 61881]]

shared savings amount on staffing and healthcare infrastructure. For 
example, if an ACO is eligible for a maximum quarterly prepaid shared 
savings payment of $300,000 for quarter 1 of a performance year, but 
only wishes to receive $250,000 for quarter 1 of a performance year, 
their estimated annual prepaid shared savings amount would be 
$1,000,000. This allows the ACO to spend up to $500,000 on staffing and 
healthcare infrastructure, or up to the full amount of $1,000,000 on 
direct beneficiary services. If an ACO has a reduction in assigned 
beneficiaries and is only eligible for a maximum quarterly prepaid 
shared savings payment of $200,000 for quarters 2, 3 and 4, this 
results in an actual total of $850,000 in received prepaid shared 
savings for the performance year. However, the ACO would still be 
permitted to spend up to $500,000 on staffing and healthcare 
infrastructure in that performance year, as that is 50 percent of the 
original estimated amount and we do not want to change budget maximums 
retroactively for an ACO.
f. Duration, Frequency and Withholding or Termination of Prepaid Shared 
Savings Payments
(1) Duration and Frequency
    CMS anticipates that the vast majority of ACOs receiving prepaid 
shared savings would fully repay the amount they receive of prepaid 
shared savings from their earned shared savings on an annual basis. 
This would allow CMS to distribute prepaid shared savings to ACOs 
continually, throughout an agreement period in which the ACO is deemed 
eligible to participate, without withholding prepaid shared savings 
pursuant to Sec.  425.640(h). We are proposing at Sec.  425.640(f)(1) 
that ACOs would receive quarterly prepaid shared savings payments for 
the entirety of the ACO's agreement period unless withheld or 
terminated pursuant to Sec.  425.640(h). However, we are also proposing 
at Sec.  425.640(h)(3) that if CMS withholds or terminates a quarterly 
payment pursuant to paragraph (h), the ACO would not receive additional 
or catch-up payments if quarterly prepaid shared savings payments are 
later resumed. As discussed later in this section, prepaid shared 
savings payments would generally be withheld from ACOs when CMS has 
information that the ACO may not generate sufficient earned shared 
savings to repay the prepaid shared savings in current or future 
performance years or has other Shared Savings Program compliance 
issues. Once prepaid shared savings payments are withheld, if an ACO 
earns shared savings in a future year, then prepaid shared savings can 
resume at the time of the next scheduled quarterly payment, but catch-
up payments would not be provided. This protects CMS from distributing 
payments that the ACOs may not be able to repay and the ACOs from 
accumulating more debt than they can repay through earned shared 
savings. An ACO would be notified if CMS is willing to resume prepaid 
shared savings payments, and would have the ability to elect to resume 
payments as well as select the payment amount they would like to 
receive under the maximum quarterly payment, if desired.
(2) Withholding and Termination
    In order to ensure orderly administration of the Shared Savings 
Program, including protection of the Medicare Trust Funds, we intend to 
monitor the performance of ACOs receiving prepaid shared savings and 
propose that we may withhold or terminate quarterly prepaid shared 
savings payments under a variety of specified circumstances. Many of 
the circumstances under which we propose that CMS may withhold to 
terminate the payments directly relate to circumstances under which CMS 
would be concerned that the ACO has not or will not meet the standards 
for the use prepaid shared savings, such as an ACO's failure to comply 
with the requirements of proposed Sec.  425.640. Other circumstances 
would address situations where it becomes apparent that the ACO's is 
likely to lack the ability to repay prepaid shared savings to CMS. For 
example, we propose that CMS may withhold or terminate the payments if 
CMS predicts that the ACO will not generate sufficient earned shared 
savings to repay the prepaid shared savings in future performance years 
or has other Shared Savings Program compliance issues. These 
predictions would be based on a rolling 12-month window of beneficiary 
claims data or year-to-date beneficiary claims data, depending on 
whether an ACO selects prospective Assignment or preliminary 
prospective assignment with retrospective reconciliation. We propose 
that CMS may also withhold quarterly payments if an ACO fails to earn 
enough shared savings in a performance year to fully repay the prepaid 
shared savings the ACO received during that performance year, in order 
to avoid the ACO accruing debt they would be unable to repay. As noted 
earlier in this section, an ACO would be notified if CMS determines the 
ACO is sufficiently likely to earn additional shared savings such that 
CMS could resume prepaid shared savings payments, in which case the ACO 
would have the ability to elect to resume payments and select the 
payment amount they would like to receive. Additionally, while unspent 
funds received for a performance year must be reallocated in the spend 
plan for the ACO's next performance year as noted in Sec.  
425.640(e)(3), if an ACO fails to spend a majority of the prepaid 
shared savings they receive in a performance year, CMS may withhold 
future quarterly payments until the ACO spends the funding they have 
already received and reports this spending to CMS through an updated 
spend plan. An ACO may also request that CMS withhold their future 
quarterly payments until the ACO is ready for payments to resume. ACOs 
that elect to have CMS withhold their prepaid shared savings payments 
would have the ability to later elect to resume payments as well as 
select the payment amount they would like to receive. If an ACO has 
unspent funding at the end of their agreement period, that funding must 
be repaid to CMS pursuant to proposed Sec.  425.640(e)(3).
    Accordingly, we propose at Sec.  425.640(h)(1) that CMS may 
withhold or terminate prepaid shared savings during an agreement period 
if:
     The ACO fails to comply with any of the prepaid shared 
savings requirements of Sec.  425.640;
     The ACO meets any of the grounds for ACO termination set 
forth in Sec.  425.218(b); \498\
---------------------------------------------------------------------------

    \498\ Under Sec. Sec.  425.216 and 425.218, CMS can terminate an 
ACO's participation agreement or take pre-termination actions (such 
as requesting a corrective action plan) if CMS determines that an 
ACO is not in compliance with the requirements of Part 425 of our 
regulations.
---------------------------------------------------------------------------

     The ACO fails to earn sufficient shared savings from a 
performance year to repay the prepaid shared savings they received 
during that performance year;
     CMS determines that the ACO is not expected to earn shared 
savings in a performance year during the agreement period in which the 
ACO received prepaid shared savings, based on a rolling 12-month window 
of beneficiary claims data or year-to-date beneficiary claims data;
     The ACO falls below 5,000 assigned beneficiaries;
     The ACO fails to spend the majority of prepaid shared 
savings they receive in a performance year; or
     The ACO requests that CMS withhold a future quarterly 
payment
    Additionally, we propose at Sec.  425.640(h)(2) that CMS must 
terminate an ACO's prepaid shared savings during an agreement period 
if:

[[Page 61882]]

     The ACO fails to maintain an adequate repayment mechanism 
in accordance with Sec.  425.204(f); or
     The ACO fails to meet the quality performance standard as 
specified under Sec.  425.512 or is subject to a pre-termination action 
after CMS determined the ACO avoided at-risk beneficiaries as specified 
under Sec.  425.316(b)(2).
    We further propose under Sec.  425.640(h)(4) that CMS may 
immediately terminate an ACO's prepaid shared savings under Sec.  
425.640(h)(1) and (2) without taking any of the pre-termination actions 
set forth in Sec.  425.216.
    In general, if an ACO is complying with the Shared Savings Program 
and prepaid shared savings requirements but is not achieving, or is not 
predicted to achieve, success in earning shared savings, CMS may 
withhold payments while the ACO works to improve their financial 
performance. For example, if an ACO is eligible to receive quarterly 
prepaid shared savings payments in an agreement period beginning in 
2026 but does not earn shared savings during 2025 reconciliation that 
occurs in mid-2026, the ACO's quarterly payments would be withheld 
until the ACO earns shared savings in a future performance year 
reconciliation. Similar to our rationale for the eligibility 
requirement described at Sec.  425.640(b)(2), we believe that recent 
past performance in earning shared savings provides information on the 
ACO's potential to earn future shared savings, and we would not 
distribute prepaid shared savings to ACOs that have not earned 
sufficient shared savings in their most recent reconciled performance 
year to repay the prepaid shared savings they received during that 
performance year.
    Additionally, if CMS, through its financial monitoring of ACOs, 
predicts that an ACO would not earn shared savings in its current 
performance year, quarterly prepaid shared savings may be withheld 
until the ACO generates earned shared savings in the future. We expect 
that immediate termination of prepaid shared savings during an 
agreement period, without a possibility of resumption of payments 
during that agreement period, would be invoked only in cases of serious 
noncompliance with the requirements of Sec.  425.640, including 
deliberately spending prepaid shared savings on a prohibited use, or 
when the ACO's actions or inaction poses a risk of harm to 
beneficiaries or negatively affects their access to care. We seek 
comment on these proposals.
g. Monitoring ACO Eligibility for and Use of Prepaid Shared Savings
    To provide CMS with a clear indication of how ACOs intend to spend 
prepaid shared savings, help provide adequate protection to the 
Medicare Trust Funds, and prevent funds from being misdirected or 
appropriated for activities that do not fall within the parameters set 
forth within proposed Sec.  425.640(e), we propose in Sec.  
425.316(f)(1) to monitor ACOs receiving prepaid shared savings for 
compliance with Sec.  425.640(e) and to determine whether it would be 
appropriate to withhold or terminate an ACO's prepaid shared savings 
under Sec.  425.640(h)(1) and (h)(2). For the first performance year of 
the current agreement period, we would monitor the ACO's use of prepaid 
shared savings by comparing the anticipated spending as set forth in 
the spend plan submitted with an ACO's application against the actual 
spending as reported by the ACO, including any expenditures not 
identified in the spend plan. ACOs would be required to submit a 
revised spend plan with updated anticipated spending annually, as well 
as annually report their actual expenditures to CMS and on their public 
reporting web page as noted in Sec. Sec.  425.308(b)(10) and 
425.640(i), and we would similarly monitor the ACO's use of prepaid 
shared savings during the current agreement period using the updated 
spend plan and those reports. The reported annual spending must include 
any expenditures of prepaid shared savings on items not identified in 
the spend plan. In the event that an ACO uses prepaid shared savings 
for uses not permitted by Sec.  425.640(e), CMS would require them to 
reallocate the funding to a permitted use and may take compliance 
action as specified in Sec. Sec.  425.216, 425.218 or withhold or 
terminate payments as specified in proposed Sec.  425.640(h)(1).
    Similar to the policy for advance investment payments (Sec.  
425.630), we additionally believe that transparency of information in 
the healthcare sector facilitates more informed patient choice and 
offers incentives and feedback that help improve the quality and lower 
the cost of care and improve oversight with respect to program 
integrity. As CMS has discussed in previous final rules, improved 
transparency supports a number of program requirements. In particular, 
increased transparency is consistent with and supports the requirement 
under section 1899(b)(2)(A) of the Act for an ACO to be willing to 
``become accountable for the quality, cost, and overall care'' of the 
Medicare beneficiaries assigned to it. Therefore, we believe it is 
desirable and consistent with section 1899(b)(2)(A) of the Act for 
several aspects of an ACO's use of prepaid shared savings to be 
available to the public. Making this information available would 
provide both Medicare beneficiaries and the general public with insight 
into the use of prepaid shared savings by an ACO.
    Accordingly, we are proposing to modify Sec.  425.308 to require 
that an ACO publicly report information annually regarding prepaid 
shared savings on its public reporting web page. Specifically, under 
proposed new Sec.  425.308(b)(10), we are proposing that, for each 
performance year, an ACO would be required to report (in a standardized 
format specified by CMS) its spend plan for each performance year, the 
total amount of prepaid shared savings received, and an itemization of 
how any prepaid shared savings were actually spent during each year, 
including expenditure categories, the dollar amounts spent on the 
various categories, information about which beneficiaries received 
direct beneficiary services that were purchased with prepaid shared 
savings and investments that were made in the ACO with prepaid shared 
savings, any changes to the spend plan as submitted under Sec.  
425.640(d)(1), and such other information as may be specified by CMS. 
We propose that this itemization would include expenditures not 
identified or anticipated in the ACO's submitted spend plan, and any 
amounts remaining unspent. We are also proposing at Sec.  425.640(i) 
that ACOs also be required to report this information directly to CMS.
    Under this proposal, if CMS determined that an ACO used prepaid 
shared savings for a prohibited use under proposed Sec.  425.640(e)(2), 
allocated over 50 percent of their annual maximum prepaid shared 
savings on staffing and healthcare infrastructure as proposed at Sec.  
425.640(e)(1)(i), or failed to spend at least 50 percent of the annual 
maximum prepaid shared savings on direct beneficiary services, CMS 
would require the ACO to reallocate the funding in compliance with 
Sec.  425.640(e) and submit an updated spend plan demonstrating the 
reallocation by a deadline specified by CMS and may withhold or 
terminate the ACO's receipt of prepaid shared savings under proposed 
Sec.  425.640(h)(1). CMS could also take compliance action as specified 
in Sec. Sec.  425.216 and 425.218. If an ACO fails to reallocate 
prepaid shared savings it received by a deadline specified by CMS, the 
ACO must repay all prepaid shared savings it received and may be 
subject to compliance action

[[Page 61883]]

as specified in Sec. Sec.  425.216 and 425.218. CMS would provide 
written notification to the ACO of the amount due and the ACO must pay 
such amount no later than 90 days after the receipt of such 
notification.
    Additionally, we note that under existing Sec.  425.314, ACOs would 
be required to retain and provide CMS with access to adequate books, 
contracts, records, and other evidence to ensure that CMS has the 
information necessary to conduct appropriate monitoring and oversight 
of ACOs' use of prepaid shared savings (for example, invoices, 
receipts, and other supporting documentation of prepaid shared savings 
disbursements). To protect the Shared Savings Program and the Medicare 
Trust Funds, we would reserve the right under Sec. Sec.  425.314 and 
425.316(a) to audit and monitor ACO compliance with Shared Savings 
Program requirements, including with respect to prepaid shared savings. 
We would conduct audits as necessary to monitor and assess an ACO's use 
of prepaid shared savings and compliance with program requirements 
related to such payments. We seek comment on these proposals.
h. Recoupment of Prepaid Shared Savings
    CMS anticipates that a vast majority of ACOs receiving prepaid 
shared savings would fully repay the amount they receive prepaid shared 
savings from their earned shared savings on an annual basis. However, 
as prepaid shared savings are an advance of the shared savings payments 
an ACO is expected to earn, we propose to recoup prepaid shared savings 
from ACOs that are unable to fully repay prepaid shared savings through 
their earned shared savings. This approach will also help ensure that 
prepaid shared savings would not result in additional expenditures for 
the Shared Savings Program, as required by section 1899(i)(3)(B) of the 
Act.
    We are proposing to add a new Sec.  425.640(g)(1) to recoup prepaid 
shared savings from earned shared savings, as defined in Sec.  425.20, 
in each performance year. If there are insufficient shared savings to 
recoup the prepaid shared savings made to an ACO for a performance 
year, we would hold paying future prepaid shared savings payments and 
carry forward the remaining balance owed to subsequent performance 
year(s) in which the ACO achieves shared savings.
    Under new Sec.  425.640(g)(2), we propose that in circumstances 
where the amount of shared savings earned by the ACO is revised upward 
by CMS for any reason, we would reduce the redetermined amount of 
shared savings by the amount of prepaid shared savings made to the ACO 
as of the date of the redetermination. If the amount of shared savings 
earned by the ACO is revised downward by CMS for any reason, we propose 
that the ACO would not receive a refund of any portion of the prepaid 
shared savings previously recouped or otherwise repaid, and any prepaid 
shared savings that are now outstanding due to the revision in earned 
shared savings must be repaid to CMS upon request.
    We propose under Sec.  425.640(g)(3) that if an ACO has an 
outstanding balance of prepaid shared savings after the calculation of 
shared savings or losses for the final performance year of an agreement 
period in which an ACO receives prepaid shared savings, the ACO must 
repay any outstanding amount of prepaid shared savings it received in 
full upon request from CMS. CMS would provide written notification to 
the ACO of the amount due and the ACO must pay such amount no later 
than 90 days after the receipt of notification. If an ACO fails to 
repay any outstanding amount of prepaid shared savings within 90 days 
of the notification, CMS would recoup that amount from the ACO's 
repayment mechanism established under Sec.  425.204(f).
    For example, if an ACO received $300,000 in prepaid shared savings 
payments and earned shared savings of $500,000 for the first 
performance year, we would recoup $300,000 in prepaid shared savings 
payments and make $200,000 in reconciliation shared savings payments to 
the ACO. Alternatively, if an ACO received $300,000 in prepaid shared 
savings and earned shared savings of $200,000 for the first performance 
year, we would recoup only $200,000 in prepaid shared savings payment 
and not make a reconciliation shared savings payment to the ACO. The 
ACO would have future prepaid shared savings payments placed on hold, 
and the outstanding balance of $100,000 would be carried forward, to be 
recouped in a future performance year in which the ACO achieves shared 
savings. Under a third scenario, if the ACO does not earn sufficient 
shared savings in all 5 performance years of its agreement period, CMS 
would recoup the outstanding balance directly from the ACO under new 
Sec.  425.640(g)(3). If the ACO fails to repay the funding to CMS, we 
would recoup the outstanding balance from the ACO's repayment 
mechanism.
    Under the new Sec.  425.640(g)(4), we propose that if an ACO or CMS 
terminates its participation agreement during the agreement period in 
which it received prepaid shared savings, the ACO must repay all 
outstanding prepaid shared savings received in full. In such a case, 
CMS would provide written notification to the ACO of the amount due and 
the ACO must pay such amount no later than 90 days after the receipt of 
notification. If an ACO fails to repay any outstanding amount of 
prepaid shared savings within 90 days of the notification, CMS would 
recoup that amount from the ACO's repayment mechanism established under 
Sec.  425.204(f). We also propose edits to Sec.  425.204(f) replacing 
the phrase ``shared losses'' with ``shared losses and any prepaid 
shared savings'' in several paragraphs to clarify that CMS would be 
able to recoup outstanding prepaid shared savings from an ACO's 
repayment mechanism. If the ACO terminates its participation agreement 
early in order to renew under a new participation agreement, CMS may 
also recover the amount owed by reducing the amount of any future 
shared savings the ACO may be eligible to receive.
    In the event the ACO enters into proceedings relating to 
bankruptcy, whether voluntary or involuntary, we are proposing under 
Sec.  425.630(g)(5) that the ACO must provide written notice of the 
bankruptcy to CMS and to the U.S. Attorney's Office in the district 
where the bankruptcy was filed, unless final payment for the agreement 
period has been made by either CMS or the administrative or judicial 
review proceedings relating to any payments under the Shared Savings 
Program have been fully and finally resolved. The notice of bankruptcy 
must be sent by certified mail no later than 5 days after the petition 
has been filed and must contain a copy of the filed bankruptcy petition 
(including its docket number). The notice to CMS must be addressed to 
the CMS Office of Financial Management at 7500 Security Boulevard, 
Mailstop C3-01-24, Baltimore, MD 21244, or such other address as may be 
specified on the CMS website for purposes of receiving such notices.
i. OIG Safe Harbor Authority
    CMS expects to make a determination, if this rulemaking is 
finalized, that the anti-kickback statute safe harbor for CMS-sponsored 
model patient incentives (Sec.  1001.952(ii)(2)) is available to 
protect patient incentives that may be permitted under the final rule, 
if issued. Specifically, we expect to determine that the CMS-sponsored 
models safe harbor would be available to protect direct beneficiary 
services provided to

[[Page 61884]]

beneficiaries through the prepaid shared savings payment option.
    We propose to add a new paragraph (d) to Sec.  425.304 that notes 
that CMS has determined that the Federal anti-kickback statute safe 
harbor for CMS-sponsored model patient incentives (42 CFR 
1001.952(ii)(2)) is available to protect remuneration furnished in the 
prepaid shared savings program option of the Shared Savings Program in 
the form of direct beneficiary services that meets all safe harbor 
requirements set forth in Sec.  1001.952(ii)(2).
    We are seeking comment on all aspects of our proposals.
6. Advance Investment Payment Policies
a. Proposal To Allow ACOs Receiving Advance Investment Payments to 
Voluntarily Terminate Payments While Continuing Participation in the 
Shared Savings Program
    Beginning January 1, 2024, CMS implemented a new payment option in 
the Shared Savings Program, advance investment payments (AIP), and 
codified AIP requirements at Sec.  425.630. In the CY 2023 PFS final 
rule (87 FR 69803 through FR 69805), we discussed policies for 
termination of advance investment payments from ACOs whose 
participation agreements are terminated for noncompliance with certain 
requirements and finalized a recoupment policy in which all advance 
investment payments must be repaid to CMS within 90 days from the date 
CMS provided the ACO whose participation agreement was terminated with 
written notice of the amount due. These regulations are codified at 
Sec.  425.630(g) and (h).
    Currently, there are no regulations that account for an ACO that 
seeks to voluntarily terminate receipt of advance investment payments 
from CMS, but that wishes to remain in the Shared Savings Program for 
the rest of their agreement period. While we expect advance investment 
payment terminations to be an uncommon occurrence, since advance 
investment payments are a voluntary payment option, ACOs should be able 
to decline further participation. To accommodate voluntary terminations 
of advance investment payments for ACOs that wish to continue 
participating in the Shared Savings Program, CMS proposes to modify 
program regulations at Sec.  425.630(g) and (h). CMS proposes to allow 
ACOs who wish to voluntarily terminate receipt of advance investment 
payments to do so and remain in the Shared Savings Program. An ACO may 
have justified business reasons for terminating receipt of advance 
investment payments (such as an ACO's desire to enter a CMS Innovation 
Center model whose eligibility criteria exclude ACOs that receive AIP). 
CMS wishes to amend its termination policies to account for such a 
scenario. It is the best interest of the Medicare Trust Funds and the 
Shared Savings Program to allow continued program participation by ACOs 
that terminate receipt of advance investment payments, especially among 
ACOs and ACO participants in, or that serve, underserved communities. 
Therefore, CMS proposes new regulations effective January 1, 2025, to 
allow ACOs to voluntarily terminate receipt of advance investment 
payments while remaining in the Shared Savings Program. Under this 
proposal, CMS would develop an advance investment payment voluntary 
termination notification process to allow ACOs to voluntarily terminate 
receipt of these payments. If this proposal is finalized, CMS would 
issue guidance regarding this process to participating Shared Savings 
Program ACOs shortly after publication of the CY 2025 PFS final rule.
    We propose to update Sec.  425.630(g) to state that if an ACO opts 
to voluntarily terminate from the advance investment payment option, 
they would be required to return any outstanding advance investment 
payments to CMS. Upon an ACO notifying CMS that it wants to terminate 
from the advance investment payment option, CMS would then provide a 
written notification to the ACO of the total amount of recoupment due. 
CMS would then require the ACO to repay the amount due no later than 90 
days after the receipt of such notification. This aligns with how CMS 
recoups advance investment payments from ACOs whose advance investment 
payments are involuntarily terminated due to failure to comply with 
advance investment payment eligibility requirements under Sec.  
425.316(e)(3) and with the repayment requirements under Sec.  
425.630(g)(4), if an ACO chooses to terminate from the Shared Savings 
Program.
    ACOs that terminate from the advance investment payment option 
would no longer be monitored for their appropriate use of advance 
investment payments once the payments are repaid to CMS. As such, ACOs 
that terminate would no longer be subject to annual reporting 
requirements for their spend plans once the payments are repaid to CMS. 
This proposal would allow an ACO additional flexibility to determine 
its best payment and participation options, making it easier for an ACO 
receiving advance investment payments to continue their participation 
in the Shared Savings Program long-term. As noted in the CY 2023 PFS 
final rule (87 FR 69784), advance investment payments were designed to 
assist ACOs that face difficulty funding the start-up costs for forming 
ACOs, caring for beneficiaries in underserved communities, and 
achieving long term success in the Shared Savings Program. Allowing 
these ACOs more flexibility would have the effect of supporting 
continued Shared Savings Program participation among these ACOs, 
including those serving rural and underserved populations.
    CMS proposes to update Sec.  425.630(g)(5) to state that if an ACO 
notifies CMS that it no longer wants to participate in the advance 
investment payment option but does want to continue its participation 
in the Shared Savings Program, the ACO must repay all outstanding 
advance investment payments it received. CMS would provide written 
notice to the ACO of the amount due and the ACO must pay such amount no 
later than 90 days after the receipt of such notification.
    Additionally, CMS proposes conforming revisions to Sec.  425.630(h) 
to clarify that ACOs can voluntarily terminate from the advance 
investment payment option. Specifically, CMS proposes to add a 
paragraph (h)(1)(iv) to read ``Voluntarily terminates payments of 
advance investment payments but continues its participation in the 
Shared Savings Program.'' CMS also proposed conforming revisions to 
Sec.  425.630(h)(1)(ii) and (iii). We seek comment on these proposals. 
If finalized, the proposed changes would be effective beginning January 
1, 2025.
b. Proposal To Recoup Advance Investment Payments When CMS Terminates 
the Participation Agreement of an ACO
    Under current advance investment payment recoupment regulations, 
there is no clear pathway for CMS to recoup outstanding advance 
investment payments if CMS terminates an ACO's participation agreement 
in accordance with Sec.  425.218(b). To address this and reduce the 
risk to the Trust Fund, CMS proposes to add new Sec.  425.630(g)(6) to 
require ACOs to repay any outstanding advance investment payments in 
the event that CMS terminates the ACO's Shared Savings Program 
participation agreement.
    Upon the termination of their Shared Savings Program participation 
agreement, the ACO's advance investment payments would cease 
immediately under Sec.  425.630(h)(1)(ii). CMS would provide the ACO 
with

[[Page 61885]]

written notification of the total amount due for the full recoupment of 
advance investment payments, and the ACO must pay such amount within 90 
days after the receipt of such notification. This approach aligns with 
how CMS recoups advance investment payments for ACOs under Sec.  
425.630(g)(4) if an ACO receiving advance investment payments chooses 
to voluntarily terminate from the Shared Savings Program. This proposal 
protects CMS from not being able to recoup outstanding advance 
investment payments in the event CMS terminates an ACO's participation 
agreement in accordance with Sec.  425.218(b).
    Specifically, CMS proposes to add Sec.  425.630(g)(6) to state that 
if CMS terminates the participation agreement of an ACO that has an 
outstanding balance of advance investment payments owed to CMS, the ACO 
must repay any outstanding advance investment payments it received. CMS 
would provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
such notification. If an ACO fails to fully repay the advance 
investment payments they received, CMS would carry forward any 
remaining balance owed to subsequent performance year(s) in which the 
ACO achieves shared savings, including in any performance year(s) in a 
subsequent agreement period.
    We also propose conforming edits to Sec.  425.630(g)(3) to remove 
the phrase ``paragraph (g)(4) of this section'' and adding in its place 
the phrase ``paragraphs (g)(4) through (g)(6) of this section.'' This 
would allow CMS to recoup more than the amount of shared savings earned 
by an ACO in a particular performance year in the event that an ACO or 
CMS terminates an ACO from the advance investment payment option or the 
Shared Savings Program as a whole. This proposal also would require CMS 
to renumber regulations at Sec.  425.630(g). Therefore, we propose a 
conforming change to redesignate Sec.  425.630(g)(5) as Sec.  
425.630(g)(7). We seek comment on these proposals. If finalized, these 
proposals would be effective beginning January 1, 2025.
7. Financial Methodology
a. Overview
    In this section of this proposed rule, we are proposing 
modifications to the financial methodologies used under the Shared 
Savings Program. The modifications we propose would encourage 
participation in the program by removing barriers for ACOs serving 
underserved communities \499\ as well as provide greater specificity 
and clarity on how CMS would perform certain financial calculations in 
the Shared Savings Program. Specifically, we are proposing to create a 
health equity benchmark adjustment, to potentially provide an upward 
adjustment to an ACO's historical benchmark based on the proportion of 
beneficiaries they serve who are dually eligible or enrolled in the 
Medicare Part D low-income subsidy (LIS). We are also proposing to 
establish a calculation methodology to account for the impact of 
improper payments in recalculating expenditures and payment amounts 
used in Shared Savings Program financial calculations, upon reopening a 
payment determination pursuant to Sec.  425.315(a). We are proposing to 
establish an approach to identify significant, anomalous, and highly 
suspect (``SAHS'') billing activity in CY 2024 or subsequent calendar 
years. We are proposing to specify how we would exclude payment amounts 
from expenditure and revenue calculations for the relevant calendar 
year for which the SAHS billing activity is identified as well as from 
historical benchmarks used to reconcile the ACO for a performance year 
corresponding to the calendar year for which the SAHS billing activity 
was identified to mitigate the impact of SAHS billing activity. We seek 
comment on a financial model that would allow for higher risk and 
potential reward than currently available under the ENHANCED track 
while still meeting the requirements for use of our authority under 
section 1899(i)(3) of the Act, among other considerations for the 
financial model design. We are also proposing certain modifications for 
clarity and consistency in provisions of the Shared Savings Program 
regulations on calculation of the ACO risk score growth cap in risk 
adjusting the benchmark each performance year and the regional risk 
score growth cap in calculating the regional component of the three-way 
blended benchmark update factor.
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    \499\ As described in the CMS Framework for Health Equity and 
consistent with Executive Order 13985 on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government 
(86 FR 7009), the term ``underserved communities'' refers to 
populations sharing a particular characteristic, including 
geographic communities that have been systematically denied a full 
opportunity to participate in aspects of economic, social, and civic 
life, as exemplified in the definition of ``equity.''
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b. Health Equity Benchmark Adjustment
(1) Background
(a) Summary of Statutory and Regulatory Background on Adjusting the 
Historical Benchmark
    Section 1899(d)(1)(B)(ii) of the Act addresses how ACO benchmarks 
are to be established, updated, and reset at the start of each 
agreement period under the Shared Savings Program. This provision 
specifies that the Secretary shall estimate a benchmark for each 
agreement period for each ACO using the most recent available 3 years 
of per beneficiary expenditures for Parts A and B services for Medicare 
FFS beneficiaries assigned to the ACO. The benchmark shall be reset at 
the start of each agreement period. Section 1899(d)(1)(B)(ii) of the 
Act also provides the Secretary with discretion to adjust the 
historical benchmark by ``such other factors as the Secretary 
determines appropriate.'' Pursuant to this authority, over time we have 
adopted a variety of methods to adjust the historical benchmark to meet 
certain policy goals.
    Benchmarking policies applicable to all ACOs in agreement periods 
beginning on January 1, 2024, and in subsequent years, are specified in 
Sec.  425.652. We refer readers to discussions of the benchmark 
calculations in earlier rulemaking for details on the development of 
the current policies (see November 2011 final rule, 76 FR 67909 through 
67927; June 2015 final rule, 80 FR 32785 through 32796; June 2016 final 
rule, 81 FR 37953 through 37991; December 2018 final rule, 83 FR 68005 
through 68030; CY 2023 PFS final rule, 87 FR 69875 through 69928; and 
CY 2024 PFS final rule, 88 FR 79174 through 79208).
    In the CY 2023 PFS final rule, we adopted policies to modify the 
regional adjustment under Sec.  425.656 (refer to 87 FR 69915 through 
69923) and to reinstate a prior savings adjustment under Sec.  425.658 
(refer to 87 FR 69898 through 69915). The modifications to the regional 
adjustment are designed to limit the impact of negative regional 
adjustments on ACO historical benchmarks and further incentivize 
program participation among ACOs serving high-cost beneficiaries. In 
the CY 2024 PFS final rule (refer to 88 FR 79185 through 79196), we 
modified the regional adjustment policy further to prevent any ACO from 
receiving an adjustment that would cause its benchmark to be lower than 
it would have been in the absence of a regional adjustment. The prior 
savings adjustment policy was developed such that a renewing or re-
entering ACO may

[[Page 61886]]

be eligible to receive an adjustment to its benchmark to account for 
savings generated in performance years that correspond to the benchmark 
years of its new agreement period. In the CY 2024 PFS final rule (refer 
to 88 FR 79196 through 79200), we modified the prior savings adjustment 
policy further to account for the following: a change in savings earned 
by the ACO in a benchmark year due to compliance action taken to 
address avoidance of at-risk beneficiaries or a change in the amount of 
savings or losses for a benchmark year as a result of a reopening of a 
prior determination of ACO shared savings or shared losses and the 
issuance of a revised initial determination under Sec.  425.315.
(b) Methodology for Determining the Applicability of a Regional 
Adjustment or Prior Savings Adjustment to the ACO's Historical 
Benchmark, for Agreement Periods Beginning on or After January 1, 2024
    Under the benchmarking methodology for agreement periods beginning 
on January 1, 2024, and in subsequent years, CMS calculates two 
adjustments to the historical benchmark, a regional adjustment (refer 
to Sec.  425.656) and a prior savings adjustment (refer to Sec.  
425.658). We determine which adjustment is applied to the benchmark, 
either the regional adjustment, prior savings adjustment, or no 
adjustment (refer to Sec.  425.652(a)(8) and (c)).
    Under the current methodology, the adjustment that will apply in 
the establishment of benchmarks for ACOs entering an agreement period 
beginning on January 1, 2024, and in subsequent years, is calculated as 
follows:
     Step 1: Calculate capped regional adjustment expressed as 
a single dollar value as specified in Sec.  425.656. CMS calculates the 
regional adjustment to the historical benchmark based on the ACO's 
regional service area expenditures, making separate calculations for 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    ++ Under Sec.  425.656(c)(3), CMS caps the per capita dollar amount 
for each Medicare enrollment type at a dollar amount equal to a 
percentage of national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service (FFS) program in 
BY3 for assignable beneficiaries in that enrollment type identified for 
the 12-month calendar year corresponding to BY3 using data from the CMS 
Office of the Actuary.
    -- Under Sec.  425.656(c)(3)(i), for positive adjustments, the per 
capita dollar amount for a Medicare enrollment type is capped at 5 
percent of the national per capita expenditure amount for the 
enrollment type for BY3.
    -- Under Sec.  425.656(c)(3)(ii), for negative adjustments, the per 
capita dollar amount for a Medicare enrollment type is capped at 
negative 1.5 percent of the national per capita expenditure amount for 
the enrollment type for BY3.
    ++ Under Sec.  425.656(d)(1), CMS expresses the regional adjustment 
as a single value by taking a person year \500\ weighted average of the 
Medicare enrollment type-specific regional adjustment values.
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    \500\ To calculate person years: We sum the number of Shared 
Savings Program-eligible months (beneficiaries are only assigned a 
monthly enrollment status for months in which they are alive on 1st 
of the month, enrolled in both Parts A and B, and not enrolled in a 
Medicare Group Health Plan for the month) for each assigned 
beneficiary for each Medicare enrollment type; we then divide this 
number by 12 (the number of months in a calendar year). Refer to the 
Medicare Shared Savings Program, Shared Savings and Losses and 
Assignment Methodology Specifications (version #11, January 2023), 
available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 (Section 3.1 Calculating ACO-
Assigned Beneficiary Expenditures).
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     Step 2: For eligible ACOs, calculate the capped prior 
savings adjustment as specified in Sec.  425.658. Under Sec.  
425.658(c)(1), CMS calculates an adjustment to the historical benchmark 
to account for savings generated in the 3 years prior to the start of 
the ACO's current agreement period for renewing or re-entering ACOs 
that were reconciled for one or more performance years in the Shared 
Savings Program during this period.
     Step 3: Determine the final adjustment to the benchmark, 
as specified in Sec.  425.652(a)(8). Compare the regional adjustment in 
accordance with Sec.  425.656 and the prior savings adjustment in 
accordance with Sec.  425.658.
    ++ Under Sec.  425.652(a)(8)(ii), if an ACO is not eligible to 
receive a prior savings adjustment under Sec.  425.658(b)(3)(i), and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is positive, the ACO will receive an adjustment to 
its benchmark equal to the positive regional adjustment amount. The 
adjustment will be calculated as described in Sec.  425.656(c) and 
applied separately to the following populations of beneficiaries: ESRD, 
disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and 
aged/non-dual eligible Medicare and Medicaid beneficiaries. Under Sec.  
425.652(a)(8)(iii), if an ACO is not eligible to receive a prior 
savings adjustment under Sec.  425.658(b)(3)(i), and the regional 
adjustment, expressed as a single value as described in Sec.  
425.656(d), is negative or zero, the ACO will not receive an adjustment 
to its benchmark.
    ++ Under Sec.  425.652(a)(8)(iv), if an ACO is eligible to receive 
a prior savings adjustment and the regional adjustment, expressed as a 
single value as described in Sec.  425.656(d), is positive, the ACO 
will receive an adjustment to its benchmark equal to the higher of the 
following:
    -- Under Sec.  425.652(a)(8)(iv)(A), the positive regional 
adjustment amount. The adjustment will be calculated as described in 
Sec.  425.656(c) and applied separately to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    -- Under Sec.  425.652(a)(8)(iv)(B), the prior savings adjustment. 
The adjustment will be calculated as described in Sec.  425.658(c) and 
applied as a flat dollar amount to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    ++ Under Sec.  425.652(a)(8)(v), if an ACO is eligible to receive a 
prior savings adjustment and the regional adjustment, expressed as a 
single value as described in Sec.  425.656(d), is negative or zero, the 
ACO will receive an adjustment to its benchmark equal to the prior 
savings adjustment. The adjustment will be calculated as described in 
Sec.  425.658(c) and applied as a flat dollar amount to the following 
populations of beneficiaries: ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, and aged/non-dual eligible 
Medicare and Medicaid beneficiaries.
(c) Background on Incorporating Health Equity Data Within the Shared 
Savings Program
    Development of a health equity benchmark adjustment builds upon 
Shared Savings Program policies finalized in the CY 2023 and CY 2024 
PFS final rules to advance health equity, including the establishment 
of the health equity adjustment to an ACO's MIPS quality performance 
category score (applicable to all ACOs beginning with performance year 
2023) (87 FR

[[Page 61887]]

69838 through 69857 and 88 FR 79114 through 79117); the availability of 
advance investment payments to eligible new, low revenue ACOs entering 
a new agreement period beginning on January 1, 2024, and in subsequent 
years (87 FR 69782 through 69805 and 88 FR 79208 through 79216); as 
well as changes to the benchmarking methodology aimed to facilitate 
participation by ACOs serving medically complex or underserved 
beneficiaries (87 FR 69915 through 69924 and 88 FR 79185 through 
79195).
    Further, in a Request for Information in the CY 2023 PFS final rule 
(87 FR 69977 through 69979), we discussed addressing health equity 
through benchmarking and summarized related comments. In the CY 2023 
PFS final rule (87 FR 69978), we explained our interest in considering 
how direct modification of benchmarks to account for existing 
inequities in care can be used to advance health equity. The vast 
majority of commenters expressed support for exploring methodologies to 
address health equity via benchmarking changes. Specifically, many of 
these commenters noted that benchmark adjustments could be an effective 
tool to redirect resources to ACOs serving underserved communities. 
Multiple commenters commented specifically on the health equity 
benchmark adjustment approach utilized by the ACO Realizing Equity, 
Access, and Community Health (REACH) Model. Several of these commenters 
expressed support for using a similar methodology in implementing a 
health equity benchmark adjustment in the Shared Savings Program. In 
response, we stated that we will consider these comments in the 
development of policies for future rulemaking. Based on our experience 
with adjustments under the current benchmarking methodology, our 
experience establishing policies to advance health equity in the Shared 
Savings Program, and the support received for addressing health equity 
through benchmarking in response to the Request for Information, we 
have determined that it would be timely to implement a health equity 
benchmark adjustment (HEBA) into the Shared Savings Program's 
benchmarking methodology. Implementing a HEBA would ensure benchmarks 
continue to serve as a reasonable baseline when ACOs serve high 
proportions of beneficiaries who are members of underserved communities 
and incentivize ACOs to provide coordinated care to beneficiaries who 
are members of underserved communities.
    A health equity benchmark adjustment is likely to encourage more 
participation in the Shared Savings Program by ACOs that serve 
beneficiaries who are members of rural and underserved communities by 
allowing them to participate with potentially higher benchmarks. That, 
in turn, would increase the likelihood that they could earn shared 
savings and increase the amount of those shared savings payments and 
reduce the financial barriers to forming ACOs that providers who serve 
underserved communities face. Benchmarks based on historically observed 
spending could be set too low if they are based on the spending of a 
population of underserved communities. An ACO serving such communities 
could be harmed financially if they are successful at improving access 
to high-value care during the performance period. Additionally, the 
Congressional Budget Office (CBO) recently reported high start-up costs 
for providers in rural and underserved communities as a barrier to 
forming ACOs.\501\ These providers may want to participate in ACOs but 
are disincentivized due to steep start-up costs.
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    \501\ Congressional Budget Office (CBO), ``Medicare Accountable 
Care Organizations: Past Performance and Future Directions,'' April 
2024, available at https://www.cbo.gov/system/files/2024-04/59879-Medicare-ACOs.pdf.
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    A health equity benchmark adjustment would also encourage currently 
participating ACOs to attract more beneficiaries who are members of 
underserved communities and remain in the Shared Savings Program. 
Direct increases to benchmarks for ACOs serving higher proportions of 
beneficiaries who are members of underserved communities would grant 
additional financial resources to health care providers accountable for 
the care of these populations and may work to offset historical 
patterns of underspending that influence benchmark calculations.
    The ACO REACH Model incorporates a HEBA to test a way to address 
historical health inequities within CMS ACO initiatives, with the 
intent of incentivizing ACOs to seek out and form relationships with 
beneficiaries who are members of underserved communities. The 
adjustment is intended to mitigate the disincentive for ACOs to serve 
underserved communities by accounting for historically suppressed 
spending levels for these populations. It is a critical step towards 
enabling ACOs to serve underserved communities in a manner that 
reflects their health needs.\502\ Likewise, the Shared Savings Program 
aims to design a health equity benchmark adjustment that achieves those 
same goals while aligning the program's benchmarking policies and 
health equity initiatives. The HEBA proposal is informed by CMS' 
initial experience with the ACO REACH Model, which includes a HEBA, 
that has been associated with increased participation in ACOs by safety 
net providers.\503\ Increasing access to providers participating in 
ACOs in rural and other underserved areas remains a priority for CMS to 
help address inequities in ACO participation and grow accountable care.
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    \502\ Centers for Medicare & Medicaid Services, ``ACO Realizing 
Equity, Access, and Community Health (REACH) Model Finance-Focused 
Frequently Asked Questions'' (Version 1, April 2022), available at 
https://www.cms.gov/priorities/innovation/media/document/aco-reach-finfaqs.
    \503\ See Rawal P, Seyoum S, Fowler E. ``Advancing Health Equity 
Through Value-Based Care: CMS Innovation Center Update'', Health 
Affairs Forefront, June 4, 2024. DOI: 10.1377/
forefront.20240603.385559. Available at https://www.healthaffairs.org/content/forefront/advancing-health-equity-through-value-based-care-cms-innovation-center-update.
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(2) Proposed Revisions
    Relying on our authority under section 1899(d)(1)(B)(ii) of the 
Act, we are proposing a HEBA applicable to ACOs in agreement periods 
beginning on January 1, 2025, and in subsequent years. The proposed 
HEBA would offer a third method of upwardly adjusting an ACO's 
historical benchmark, in addition to the existing regional adjustment 
and prior savings adjustment. This upward adjustment to the historical 
benchmark is designed to benefit ACOs serving larger proportions of 
beneficiaries from underserved communities and receiving lower regional 
adjustments (Sec.  425.656) or lower prior savings adjustments (Sec.  
425.658) or receiving neither adjustment. Under proposed Sec.  
425.652(a)(8)(ii), an ACO would receive the highest of the positive 
adjustments for which it is eligible, either the regional adjustment, 
prior savings adjustment, or health equity benchmark adjustment. If an 
ACO is not eligible to receive a prior savings adjustment or a HEBA, 
and the regional adjustment, expressed as a single value, is negative 
or zero, then the ACO would not receive an adjustment to its benchmark.
    By increasing the likelihood that an ACO would earn shared savings 
and by potentially increasing the amount of shared savings earned, the 
HEBA is meant to provide a greater financial incentive for ACOs to 
serve more beneficiaries from underserved

[[Page 61888]]

communities and to encourage ACOs already serving higher proportions of 
beneficiaries from underserved communities to enter and remain in the 
Shared Savings Program. Practices that serve large proportions of 
beneficiaries who are members of underserved communities that may 
otherwise see financial risk in joining the program may be incentivized 
to form an ACO and join the program with a health equity benchmark 
adjustment policy in place. In addition, currently participating ACOs 
that may otherwise see risk in attracting additional beneficiaries from 
underserved communities to their ACOs may be incentivized to do so with 
a health equity benchmark adjustment policy in place. We note that, if 
finalized, the proposed prepaid shared savings option (see section 
III.G.5 of this proposed rule) would operate synergistically with the 
proposed HEBA, in that ACOs that have been successful in earning shared 
savings while serving larger proportions of beneficiaries from 
underserved communities would in subsequent years have additional 
capabilities through prepaid shared savings to address the unmet 
health-related social needs of the beneficiaries they serve and may 
have higher benchmarks due to the HEBA.
    We propose to calculate the HEBA as the multiplicative product of 
the HEBA scaler and the proportion of the ACO's assigned beneficiaries 
who are enrolled in the Medicare Part D LIS or dually eligible for 
Medicare and Medicaid. We propose to calculate the HEBA scaler as a 
measure of the difference between the following two per-capita dollar 
values:
     5 percent of national per capita expenditures for Parts A 
and B services under the original Medicare FFS program in BY3 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY3 using data from the CMS Office of the Actuary, 
expressed as a single value by taking a person year weighted average of 
the Medicare enrollment type-specific values: ESRD, disabled, aged/
dually eligible for Medicare and Medicaid, and aged/non-dually eligible 
for Medicare and Medicaid, and
     the higher of the regional adjustment expressed as a 
single value, the prior savings adjustment, or no adjustment, in the 
case where the regional adjustment is negative and the ACO is not 
eligible for the prior savings adjustment.
    This approach would ensure that the value of the HEBA itself cannot 
exceed 5 percent of national assignable per capita expenditures 
expressed as a single value using the ACO's BY3 enrollment proportions, 
similar to the cap applied to the regional adjustment under Sec.  
425.656(c)(3) and the cap applied to the prior savings adjustment under 
Sec.  425.658(c)(1)(ii).
    For this proposed health equity benchmark adjustment, we propose to 
identify beneficiaries from underserved communities as those who are 
enrolled in the Medicare Part D LIS or dually eligible for Medicare and 
Medicaid. Furthermore, we propose to determine the proportion of the 
ACO's assigned beneficiaries who are enrolled in the Medicare Part D 
LIS or dually eligible for Medicare and Medicaid using the ACO's 
performance year assigned population. Because a higher proportion of 
assigned beneficiaries who are enrolled in Medicare Part D LIS or 
dually eligible would result in a higher HEBA, using the performance 
year assigned population is expected to incentivize ACOs to provide 
coordinated care to beneficiaries who are members of underserved 
communities while accounting for changes in the ACO's population over 
the agreement period.
    We propose to provide ACOs with a preliminary calculation of the 
HEBA near the start of their agreement period when final historical 
benchmarks are determined, using the ACO's BY3 assigned population in 
this preliminary calculation of the proportion of the ACO's assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or dually 
eligible for Medicare and Medicaid. We would then update the 
calculation when the ACO's historical benchmark is updated at the time 
of financial reconciliation for the performance year to reflect the 
ACO's performance year-assigned population in the calculation of the 
proportion of the ACO's assigned beneficiaries who are enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid.
    We propose that ACOs with a proportion of assigned beneficiaries 
who are enrolled in the Medicare Part D LIS or dually eligible for 
Medicare and Medicaid of less than 20 percent would be ineligible for a 
HEBA.\504\ We believe that imposing this threshold of 20 percent would 
reinforce that the HEBA is intended for ACOs serving higher proportions 
of beneficiaries who are members of underserved communities. Based on 
data from 2022, the average proportion of ACO-assigned beneficiaries 
enrolled in the Medicare Part D LIS or dually eligible for Medicare and 
Medicaid was roughly 15 percent. Thus, ACOs meeting the threshold of 20 
percent are serving a larger-than-average proportion of beneficiaries 
from underserved communities. Absent such a threshold, an ACO with a 
lower than average regional adjustment or prior savings adjustment (and 
therefore a larger HEBA scaler) that is providing care for relatively 
few beneficiaries from underserved communities may receive a sizable 
HEBA, which would reward the ACO despite it not serving a significant 
proportion of beneficiaries from underserved communities. This would 
not support the purpose of the HEBA, which is to provide a greater 
financial incentive for ACOs to serve more beneficiaries from 
communities and encourage practices already serving higher proportions 
of beneficiaries from underserved communities to enter and/or remain in 
the Shared Savings Program.
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    \504\ The health equity adjustment to an ACO's MIPS quality 
performance category score (87 FR 69838 through 69857 and 88 FR 
79114 through 79117) has established a similar 20 percent threshold. 
ACOs with an underserved multiplier of less than 20 percent are not 
eligible to receive a health equity adjustment (Sec.  425.512(b)).
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    Under this proposed approach, simulation analysis based on 456 ACOs 
using historical benchmark data from 2023 indicates that 20 ACOs would 
receive a HEBA greater than either the prior savings adjustment or 
regional adjustment. With the HEBA applied, the average increase to 
historical benchmarks among these 20 ACOs would be $230 per capita, 
which corresponds to an increase of 1.57 percent to their historical 
benchmarks on average.
    Tables 38 through 40 present hypothetical examples to demonstrate 
how the HEBA would work in practice.
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    We propose to implement the changes described in this section 
through revisions to Sec.  425.652 and the addition of Sec.  425.662. 
Specifically, within Sec.  425.652, which sets forth the methodology 
for establishing, adjusting, and updating the benchmark for agreement 
periods beginning on January 1, 2024, and in subsequent years, we 
propose revisions to Sec.  25.652(a)(8). As proposed, this revised 
provision would describe how we would determine and apply the 
adjustment to an ACO's benchmark, if any, based on a comparison of the 
ACO's regional adjustment expressed as a single value, prior savings 
adjustment, and the proposed health equity benchmark adjustment. 
Furthermore, we propose to amend Sec.  425.652 by redesignating 
paragraphs (a)(9)(v) and (vi) as paragraphs (a)(9)(vi) and (vii), 
respectively, and to specify in a new paragraph (a)(9)(v) the 
adjustments made to the health equity benchmark adjustment for the 
first performance year during the term of the agreement period and in 
the second and each subsequent performance year during the term of the 
ACO's agreement period, if applicable. We also propose conforming 
changes in newly redesignated Sec.  425.652(a)(9)(vi), specifying that 
CMS redetermines the adjustment to benchmark in accordance with Sec.  
425.652(a)(8), to list the HEBA along with the regional adjustment and 
prior savings adjustment. In the proposed new section of the regulation 
at Sec.  425.662 we describe the calculation of the HEBA. We also 
propose to make conforming changes to Sec.  425.658(d), which describes 
the applicability of the prior savings adjustment, to include 
consideration of the HEBA in addition to the regional adjustment, in 
determining the adjustment (if any) that would be applied to the ACO's 
benchmark. We seek comment on these proposals.
    In combination with the proportion of ACO-assigned beneficiaries 
who are enrolled in the Medicare Part D LIS or are dually eligible for 
Medicare and Medicaid, we are seeking comment on the use of the Area 
Deprivation Index (ADI) to identify beneficiaries from underserved 
communities for purposes of determining eligibility for and the amount 
of any health equity benchmark adjustment. For example, similar to how 
the ADI is used in the underserved multiplier as part of the 
calculation of the health equity adjustment to an ACO's MIPS Quality 
performance category score (87 FR 69838 through 69857 and 88 FR 79114 
through 79117), we are considering taking the higher of either the 
proportion of the ACO's assigned beneficiaries residing in a census 
block group with an ADI national percentile rank of at least 85 or the 
proportion of the ACO's assigned beneficiaries who are enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid to 
determine eligibility for and the amount of any health equity benchmark 
adjustment. CMS will explore how best to incorporate geographic 
parameters into Shared Savings Program benchmark adjustments, informed 
by the current use of the ADI in other health equity

[[Page 61892]]

provisions of the Shared Savings Program. CMS will also consider 
learnings from the Innovation Center's ACO REACH Model, which is 
testing the use of the ADI as a component of the model's HEBA. By 
considering the ADI in addition to the proportion of ACO-assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or are dually 
eligible for Medicare and Medicaid, the HEBA would more closely align 
with existing Shared Savings Program policies to advance health equity, 
such as the health equity adjustment to an ACO's MIPS Quality 
performance category score (87 FR 69838 through 69857 and 88 FR 79114 
through 79117) and the calculation of the amount of quarterly advance 
investment payments made available to eligible new, low revenue ACOs 
(87 FR 69782 through 69805 and 88 FR 79208 through 79216).
    Additionally, recent analyses have found that the ADI weights 2 
variables (median home value and median income) higher relative to the 
weights associated with the other 15 variables in the index, which may 
have limited contributions in determining the ADI. In many indexes, 
variables are standardized to the same range for ease of comparison, 
prior to incorporation into the index. The ADI does not standardize its 
variables; median home value and median income are measured on their 
local area dollar-value scales, which are larger than the scales on 
which the other variables are measured. Some researchers have reported 
that, without standardization, the ADI overemphasizes the 2 variables 
(median home value and median income), a finding that may underscore 
the importance of using standardized values.505 506 507 We 
seek comment on considering the ADI for purposes of determining 
eligibility for and the amount of any health equity benchmark 
adjustment, and related factors including the calculation of the ADI.
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    \505\ See Hannan, EL, et al. The Neighborhood Atlas Area 
Deprivation Index For Measuring Socioeconomic Status: An 
Overemphasis On Home Value. Health Affairs, vol. 42, no. 5 (May 
2023): 702-709. Available at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2022.01406.
    \506\ See Rehkopf, DH, and Phillips, RL, Jr. The Neighborhood 
Atlas Area Deprivation Index And Recommendations For Area-Based 
Deprivation Measures. Health Affairs, vol. 42, no. 5 (May 2023): 
710-711. Available at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2023.00282.
    \507\ See Petterson, S. Deciphering the Neighborhood Atlas Area 
Deprivation Index: the consequences of not standardizing. Health 
Affairs Scholar, volume 1, issue no. 5 (November 2023), qxad063; 
Available at https://academic.oup.com/healthaffairsscholar/article/1/5/qxad063/7342005.
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c. Reopening ACO Payment Determinations
(1) Background
(a) Statutory Background on Shared Savings Program Financial 
Calculations
    Section 1899(d)(1)(B)(ii) of the Act provides for the calculation 
and update of ACO benchmarks under the Shared Savings Program. This 
provision specifies that the Secretary shall estimate a benchmark for 
each agreement period for each ACO using the most recent available 3 
years of per beneficiary expenditures for Parts A and B services for 
Medicare FFS beneficiaries assigned to the ACO. Such benchmark shall be 
adjusted for beneficiary characteristics and such other factors as the 
Secretary determines appropriate and updated by the projected absolute 
amount of growth in national per capita expenditures for Parts A and B 
services under the original Medicare FFS program, as estimated by the 
Secretary. Further, an ACO's benchmark must be reset at the start of 
each agreement period. Section 1899(d)(1)(B)(i) of the Act specifies 
that, in each year of the agreement period, an ACO is eligible to 
receive payment for shared savings only if the estimated average per 
capita Medicare expenditures under the ACO for Medicare FFS 
beneficiaries for Parts A and B services, adjusted for beneficiary 
characteristics, is at least the percent specified by the Secretary 
below the applicable benchmark under section 1899(d)(1)(B)(ii) of the 
Act.
    Section 1899(i)(3) of the Act authorizes the Secretary to use other 
payment models, if the Secretary determines it is appropriate, and if 
the Secretary determines that doing so would improve the quality and 
efficiency of items and services furnished under Title XVIII and the 
alternative methodology would result in program expenditures equal to 
or lower than those that would result under the statutory payment 
model. As discussed in earlier rulemaking, we have used the authority 
under section 1899(i)(3) of the Act to adopt alternative policies to 
the provisions of section 1899(d)(1)(B) of the Act for updating the 
historical benchmark \508\ and calculating performance year 
expenditures,\509\ among other factors.\510\ We have also used our 
authority under section 1899(i)(3) of the Act to establish the Shared 
Savings Program's two-sided payment models,\511\ and to mitigate shared 
losses owed by ACOs affected by extreme and uncontrollable 
circumstances during PY 2017 and subsequent performance years.\512\
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    \508\ Such as using only assignable beneficiaries instead of all 
Medicare FFS beneficiaries in calculating the benchmark update based 
on national FFS expenditures (81 FR 37985 through 37989), 
calculating the benchmark update using factors based on regional FFS 
expenditures (81 FR 37977 through 37981), calculating the benchmark 
update using a blend of national and regional expenditure growth 
rates (83 FR 68027 through 68030), removing payment amounts for 
episodes of care for treatment of COVID-19 from expenditures used to 
calculate the benchmark update (85 FR 27577 through 27582), and 
calculating the benchmark update using an Accountable Care 
Prospective Trend/national-regional three-way blended update factor 
(87 FR 69881 through 69898).
    \509\ Such as excluding indirect medical education and 
disproportionate share hospital payments from ACO performance year 
expenditures (76 FR 67920 through 67922), determining shared savings 
and shared losses for the 6-month performance years (or performance 
period) in 2019 using expenditures for the entire CY 2019 and then 
pro-rating these amounts to reflect the shorter performance year or 
performance period (83 FR 59949 through 59951, 83 FR 67950 through 
67956), removing payment amounts for episodes of care for treatment 
of COVID-19 from performance year expenditures (85 FR 27577 through 
27582), and the exclusion of the supplemental payment for IHS/Tribal 
hospitals and Puerto Rico hospitals from performance year 
expenditures (87 FR 69954 through 69956).
    \510\ Such as allowing for advance investment payments (87 FR 
69782 through 69805), and expansion of the criteria for certain low 
revenue ACOs participating in the BASIC track to qualify for shared 
savings in the event the ACO does not meet the MSR as required under 
section 1899(d)(1)(B)(i) of the Act (87 FR 69946 through 69952).
    \511\ See earlier rulemaking establishing two-sided models: 
Track 2 (76 FR 67904 through 67909), Track 3 (subsequently renamed 
the ENHANCED track) (80 FR 32771 and 32772), and the BASIC track (83 
FR 67834 through 67841). We also used our authority under section 
1899(i)(3) of the Act to remove payment amounts for episodes of care 
for treatment of COVID-19 from ACO participants' Medicare FFS 
revenue used to determine the loss sharing limit in the two-sided 
models of the BASIC track (85 FR 27577 through 27582).
    \512\ See earlier rulemaking establishing policies for 
mitigating shared losses owed by ACOs affected by extreme and 
uncontrollable circumstances (82 FR 60916 and 60917, 83 FR 59974 
through 59977).
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(b) Background on Shared Savings Program Reopening Policy and Financial 
Calculation Methodology
    Under Sec.  425.315(a)(1), if CMS determines that the amount of 
shared savings due to the ACO or the amount of shared losses owed by 
the ACO has been calculated in error CMS may reopen the initial 
determination or a final agency determination under subpart I and issue 
a revised initial determination: (i) at any time in the case of fraud 
or similar fault as defined in Sec.  405.902; \513\ or (ii) not later 
than 4 years after the date of the notification to

[[Page 61893]]

the ACO of the initial determination of savings or losses for the 
relevant performance year, for good cause.
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    \513\ As defined in Sec.  405.902, ``similar fault'' means to 
obtain, retain, convert, seek, or receive Medicare funds to which a 
person knows or should reasonably be expected to know that he or she 
or another for whose benefit Medicare funds are obtained, retained, 
converted, sought, or received is not legally entitled. This 
includes, but is not limited to, a failure to demonstrate that he or 
she filed a proper claim as defined in 42 CFR part 411.
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    In accordance with Sec.  425.315(a)(2), good cause may be 
established when (i) there is new and material evidence that was not 
available or known at the time of the payment determination and may 
result in a different conclusion, or (ii) the evidence that was 
considered in making the payment determination clearly shows on its 
face that an obvious error was made at the time of the payment 
determination. Section 425.315(a)(3) specifies that a change of legal 
interpretation or policy by CMS in a regulation, CMS ruling or CMS 
general instruction, whether made in response to judicial precedent or 
otherwise, is not a basis for reopening a payment determination under 
the Shared Savings Program regulations. CMS has sole discretion to 
determine whether good cause exists for reopening a payment 
determination (Sec.  425.315(a)(4)).
    We first adopted a reopening policy in the November 2011 final 
rule, where we finalized at Sec.  425.314(a)(4) a provision reserving 
the right for CMS to reopen the initial determination and issue a 
revised initial determination, if as a result of any inspection, 
evaluation, or audit, it is determined that the amount of shared 
savings due to the ACO or amount of shared losses owed by the ACO has 
been calculated in error (see 76 FR 67957 through 67958, and 67982). In 
the June 2016 final rule, we revised the Shared Savings Program 
regulations, including to remove the provision in Sec.  425.314(a)(4), 
and further specify the reopening policy in a new section of the 
regulation at Sec.  425.315 (81 FR 37997 through 38002, and 38013 
through 38014). We subsequently revised Sec.  425.315 to apply the 
policies on reopening determinations to payment determinations for a 6-
month performance year or 6-month performance period during CY 2019 
(refer to the November 2018 final rule, 83 FR 59958 and 60092, and the 
December 2018 final rule, 83 FR 67955 through 67967), and to ACOs 
participating in the BASIC track (refer to the December 2018 final 
rule, 83 FR 67842 and 68068). In the CY 2023 PFS final rule, we 
clarified the circumstances in which CMS would exercise discretion to 
reopen the initial determination of an ACO's financial performance for 
good cause to correct errors in the determination of MIPS Quality 
performance category scores that affect the determination of whether an 
ACO is eligible for shared savings, the amount of shared savings due to 
the ACO, or the amount of shared losses owed by the ACO (see 87 FR 
69868 through 69869).
    Most recently, in the CY 2024 PFS final rule, we finalized an 
approach to recalculating the prior savings adjustment for changes in 
values used in benchmark calculations due to compliance action taken to 
address avoidance of at-risk beneficiaries, or as a result of the 
issuance of a revised initial determination of financial performance 
for a previous performance year following a reopening of ACO shared 
savings and shared losses calculations (88 FR 79195 through 79200). In 
the CY 2024 PFS final rule, we also discussed a proposed timing cutoff 
such that changes to savings or losses for a benchmark year that were 
finalized after notification to the ACO of the initial determination of 
shared savings or shared losses for a given performance year would be 
reflected in the adjusted benchmark applied to any subsequent 
performance year during the relevant agreement period but would not be 
retroactively applied to completed performance years in the agreement 
period (88 FR 79198 through 79200). We stated that we believed it would 
be appropriate to consider new information that could impact the prior 
savings adjustment up to the point at which an ACO receives its initial 
determination. However, we also noted that we would continue to 
consider the complexities surrounding reopening initial determinations 
for multiple prior performance years throughout the program's 
benchmarking and financial reconciliation methodologies and may address 
this issue in future rulemaking (88 FR 79199). We refer readers to 
these discussions in past rulemaking for additional details.
    In our earlier rulemaking, we did not discuss the specific 
methodology that would be employed for recalculating an ACO's shared 
savings or shared losses in the event of a reopening in order to issue 
a revised initial determination. As additional background, in the 
following discussion, we summarize the general approach to 
identification and use of payment amounts from Medicare FFS Parts A and 
B FFS claims and certain other payment amounts in Shared Savings 
Program calculations.
    Under the Shared Savings Program, providers and suppliers continue 
to bill for services furnished to Medicare beneficiaries and receive 
FFS payments under traditional Medicare. CMS uses payment amounts for 
Parts A and B FFS claims for calculating benchmark and performance year 
expenditures and determining benchmark update factors as specified in 
the Shared Savings Program regulations in subpart G. These operations 
typically require the determination of expenditures for Parts A and B 
services under the original Medicare FFS program for a specified 
population of Medicare FFS beneficiaries or the Medicare Parts A and B 
FFS revenue of ACO participants. The Medicare FFS beneficiary 
population for which expenditures are determined may differ depending 
on the specific program operation being performed and may reflect 
expenditures for the ACO's assigned beneficiaries, assignable 
beneficiaries, or all Medicare FFS beneficiaries. The applicable 
Medicare FFS beneficiary population is specified in the regulations 
governing each program operation.
    In calculating expenditures for Medicare FFS beneficiaries used in 
Shared Savings Program calculations, CMS uses payment amounts included 
on Parts A and B FFS claims with dates of service in the relevant 
benchmark or performance year, allowing for a 3-month claims run out, 
as follows: claim payment amounts identified for inpatient, Skilled 
Nursing Facility (SNF), outpatient, Home Health Agency (HHA), and 
hospice claims at any provider; and line item payment amounts 
identified for carrier (including physician/supplier Part B) and 
Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) 
claims. For both Parts A and B claims, CMS excludes payments on denied 
claims or line items from the calculation, for claims or line items 
with dates of service within the relevant benchmark year or performance 
year, processed before the end of the 3-month claims run out period. In 
calculating expenditure amounts for Medicare FFS beneficiaries under 
the Shared Savings Program, CMS makes certain adjustments,\514\ which 
if applicable, exclude indirect medical education (IME) and 
disproportionate share hospital (DSH) payments, and the supplemental 
payment for IHS/Tribal hospitals and Puerto Rico hospitals, and take 
into consideration individually beneficiary identifiable final payments 
made under a demonstration, pilot or time limited program. We also 
account for certain population-based payments or other similarly 
structured payments made under other Medicare shared savings 
initiatives, specifically the Pioneer ACO Model, Next Generation ACO 
Model, Vermont All-Payer ACO Model, and ACO REACH Model (as

[[Page 61894]]

applicable). Population-based payments are a per-beneficiary per month 
payment amount intended to replace some or all of the FFS payments with 
prospective monthly payment.\515\
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    \514\ The Shared Savings Program's financial models and 
benchmarking policies, among other program policies, have changed 
over time as described in earlier rulemaking (refer to section 
III.G.1.b. of this proposed rule), and as outlined in the provisions 
of subpart G.
    \515\ See for example, Medicare Shared Savings Program, Shared 
Savings and Losses, Assignment and Quality Performance Standard 
Methodology Specifications (Version 11, January 2023), available at 
https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 (refer to Section 3.1 Calculating ACO-Assigned 
Beneficiary Expenditures).
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    The Shared Savings Program's existing financial methodology does 
not fully account for actions taken to protect the integrity of the 
Medicare program, or address the impact of improper payments, including 
improper payments resulting from fraud or similar fault on program 
calculations. For instance, demanded overpayment determinations 
resulting in adjusted claim or line item payment amounts after the 3-
month claims run out period, or aggregate amounts that are not linked 
to specific claims or line items, are not accounted for in Shared 
Savings Program expenditure calculations. Additionally, under the 
existing financial methodology for the Shared Savings Program, we lack 
a means to account for improper payment amounts identified in a 
settlement agreement between a provider or supplier and the Government 
or a court's judgment, including pursuant to conduct by individuals or 
entities performing functions or services related to an ACO's 
activities. Under the proposed approach described in section 
III.G.7.c.(2).(c) of this proposed rule, the term ``improper payment'' 
for purposes of the Shared Savings Program would include an amount 
associated with a demanded overpayment determination and certain 
amounts identified in a settlement agreement or judgment that have the 
potential to impact program financial calculations. Since January 2023, 
we have evaluated several cases where such improper payments may have 
impacted one or more reconciled performance years for an ACO under the 
Shared Savings Program, including cases where ACOs reported concerns 
about alleged fraud or similar fault to CMS. It is thus timely and 
appropriate to undertake notice and comment rulemaking to establish a 
calculation methodology to account for the impact of improper payments 
in recalculating expenditures and payment amounts used in Shared 
Savings Program financial calculations, upon reopening a payment 
determination pursuant to Sec.  425.315(a); to describe factors that we 
may consider in exercising our discretion to reopen an ACO's payment 
determination under which we apply the proposed methodology to 
recalculate the ACO's financial performance; and to propose to 
establish a process by which an ACO could request a reopening of an 
initial determination of shared savings or shared losses. Our 
experience reviewing several cases supported the development of our 
proposed revisions to Shared Savings Program policies.
(2) Proposed Revisions
    This section of this proposed rule includes a proposed change to 
the provision specifying CMS' discretion to reopen payment 
determinations under Sec.  425.315(a)(4) (as described in section 
III.G.7.c.(2).(a) of this proposed rule). We discuss and seek comment 
on the circumstances in which we would exercise our discretion to 
reopen a payment determination and issue a revised initial 
determination to account for the impact of identified improper payments 
on Shared Savings Program calculations (as described in section 
III.G.7.c.(2).(b) of this proposed rule). We propose modifications to 
the Shared Savings Program regulations to specify a calculation 
methodology to account for the impact of identified improper payments 
in recalculating expenditures and payment amounts used in Shared 
Savings Program financial calculations, upon reopening a payment 
determination pursuant to Sec.  425.315(a) (as described in section 
III.G.7.c.(2).(c) of this proposed rule). We also propose certain 
adjustments to Shared Savings Program benchmark calculations to account 
for the impact of identified improper payments, in the event a 
performance year for which we issue a revised initial determination 
becomes a benchmark year of an ACO's current agreement period, and when 
CMS has not yet issued an initial determination for a performance year 
of the ACO's current agreement period (as described in section 
III.G.7.c.(2).(d) of this proposed rule). Lastly, we propose a process 
for ACOs to request that CMS reopen a payment determination (as 
described in section III.G.7.c.(2).(e) of this proposed rule), and 
briefly discuss the role of ACOs in preventing and reporting Medicare 
fraud (as described in section III.G.7.c.(2).(f) of this proposed 
rule). Our specific proposals are discussed in detail in the following 
sections.
    We propose that the policy changes discussed in this section of 
this proposed rule would be effective January 1, 2025, unless specified 
otherwise. Should the proposed policies be finalized, the policies 
would apply to reopening requests made on or after January 1, 2025. As 
described in section III.G.7.c.(2).(e) of this proposed rule, we 
propose to establish a process by which an ACO may request a reopening 
review. If finalized, we anticipate continuing to evaluate previously 
received reopening requests for performance years for which initial 
determinations were issued prior to January 1, 2025, consistent with 
the timeframes specified under Sec.  425.315(a)(1). We anticipate 
consistently applying the recalculation methodology to account for the 
impact of improper payments, described in section III.G.7.c.(2).(c) of 
this proposed rule, if finalized, in recalculating expenditures and 
payment amounts used in Shared Savings Program financial calculations, 
upon reopening a payment determination pursuant to Sec.  425.315(a).
(a) Proposed Change to Provision Specifying CMS' Discretion To Reopen 
Payment Determinations
    In earlier rulemaking we explained that CMS would have discretion 
to reopen a payment determination for fraud or similar fault, or good 
cause, as reflected in the provisions in Sec.  425.315(a)(1) and (4). 
The latter provision expressly provides that CMS has sole discretion to 
determine whether good cause exists for reopening a payment 
determination. In the June 2016 final rule, in restating the discussion 
of the proposal from the February 2016 proposed rule, we explained that 
CMS would have discretion to reopen a payment determination at any time 
in the case of fraud or ``similar fault,'' as defined in Sec.  405.902 
(81 FR 37998).
    We continue to believe that it is important to maintain CMS' sole 
discretion in determining whether to reopen a payment determination. We 
also believe it is important to preserve CMS' flexibility in 
determining whether reopening is warranted to address the impact of 
fraud or similar fault on Shared Savings Program calculations, in 
particular given the potential for various actions to be taken by CMS, 
law enforcement agencies and courts in response to fraud or similar 
fault. Thus, we are proposing revisions to Sec.  425.315(a)(4) to make 
clear CMS' discretion to determine whether to reopen a payment 
determination applies in the case of fraud or similar fault, as well as 
to determining whether good cause exists to reopen a payment 
determination.

[[Page 61895]]

(b) Considerations for Reopening a Payment Determination To Account for 
Improper Payments
    In the discussion that follows we describe factors CMS may consider 
to inform our decision of whether to reopen an initial determination of 
an ACO's financial performance pursuant to Sec.  425.315(a)(1)(i) or 
(ii) to account for the impact of improper payments that affect the 
determination of whether an ACO is eligible for shared savings or 
liable for shared losses, and the amount of shared savings due to the 
ACO or the amount of shared losses owed by the ACO. We welcome comments 
on these considerations. We also anticipate revisiting these 
considerations as we gain experience with processing ACO reopening 
requests as described in section III.G.7.c.(2).(e) of this proposed 
rule, reopening payment determinations and applying the calculation 
methodology described in section III.G.7.c.(2).(c) of this proposed 
rule and applying the benchmark adjustment described in section 
III.G.7.c.(2).(d) of this proposed rule. If appropriate, we may revisit 
these considerations for exercising our discretion to reopen payment 
determinations in future notice and comment rulemaking.
    As an initial matter, the Shared Savings Program would need to 
identify improper payments that have the potential to impact program 
financial calculations. The Shared Savings Program depends on input 
from the CMS Center for Program Integrity (CPI) and law enforcement 
agencies (including the Department of Justice) to identify and quantify 
improper payments potentially impacting expenditures used in program 
calculations that are not otherwise accounted for in Shared Savings 
Program expenditure calculations as described in this section of this 
proposed rule. This could include: (1) certain demanded overpayment 
determinations, such as demanded overpayment amounts that result in 
adjusted claim or line item payment amounts associated with dates of 
service during a performance year or benchmark year, where the 
adjustment occurs after the 3-month claims run out period, and demanded 
extrapolated overpayment amounts which are aggregate amounts that are 
not linked to specific claims or line items and are not currently 
accounted for in Shared Savings Program expenditures; \516\ and (2) 
improper payments resulting from conduct by individuals or entities 
performing functions or services related to an ACO's activities as 
identified in certain settlement agreements or judgments. Refer to 
section III.G.7.c.(2).(c) of this proposed rule for discussion of 
considerations for identifying these amounts. Further, as discussed in 
greater detail in section III.G.7.c.(2).(e) of this proposed rule, ACOs 
can play an important role in identifying for CMS improper payments 
that may impact Shared Savings Program calculations. ACO reopening 
requests submitted to CMS may be another means by which the Shared 
Savings Program becomes aware of improper payments impacting ACO 
financial calculations; however, CMS would retain discretion over 
whether to reopen payment determinations after reviewing information 
provided in such requests.
---------------------------------------------------------------------------

    \516\ For additional information on overpayment procedures and 
overpayment estimation, see, for example, Medicare Program Integrity 
Manual, Chapter 8--Administrative Actions and Sanctions and 
Statistical Sampling for Overpayment Estimation, available at 
https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c08.pdf.
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    Second, we anticipate needing to perform an initial analysis of 
whether the improper payments would warrant reopening the ACO's payment 
determination. This analysis may include a number of factors, such as 
whether the improper payments meet the requirements for reopening for 
fraud or similar fault in accordance with Sec.  425.315(a)(1)(i), or 
for good cause in accordance with Sec.  425.315(a)(1)(ii) and (a)(2). A 
variety of circumstances could lead CMS, law enforcement agencies or 
courts to determine whether good cause exists or whether fraud or 
similar fault has occurred. The timelines associated with the related 
investigations, and the potential for various actions to be taken in 
response, can make it challenging to identify a one-size-fits-all 
approach to addressing the impact of improper payments on Shared 
Savings Program calculations. We note that once we are notified of 
potential improper payments impacting Shared Savings Program 
calculations, it may take months or years to determine the actual 
amount of any improper payments impacting an ACO's payment 
determination, particularly if we are awaiting the conclusion of 
program integrity and law enforcement investigations, among other 
possible determinations about the related conduct of providers or 
suppliers. Additionally, administrative action and judicial action 
leading to the identification of improper payments may be subject to 
appeal, and ultimately the amount of the improper payments may be 
redetermined or otherwise amended.\517\ It would further protract the 
timeline for considering use of improper payments in recalculating ACO 
financial performance results to await the outcome of any appeal of an 
improper payment.
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    \517\ For instance, a provider receiving an initial demand 
letter for an overpayment may appeal the overpayment by requesting a 
redetermination, among other actions. See for example, CMS, MLN Fact 
Sheet, ``Medicare Overpayments'' (MLN006379 October 2023), available 
at https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/overpaymentbrochure508-09.pdf. The 
Medicare Parts A and B appeals process includes multiple levels of 
appeal. See for example, CMS, MLN Booklet, ``Medicare Parts A & B 
Appeals Process'' (MLN006562 November 2023), available at https://www.cms.gov/files/document/mln006562-medicare-parts-b-appeals-process.pdf.
---------------------------------------------------------------------------

    Since there could be a variety of reasons for which CMS seeks to 
recoup an overpayment amount from a provider or supplier, there are 
many possible circumstances that could warrant reopening under Sec.  
425.315. As an example, we may consider a combination of factors in 
evaluating whether demanded overpayment determinations would be the 
basis for reopening for fraud or similar fault under Sec.  
425.315(a)(1)(i).\518\ For instance, we may consider whether there is 
``reliable evidence'' (as defined according to Sec.  405.902, which 
means evidence that is relevant, credible, and material) of similar 
fault to warrant reopening a Shared Savings Program payment 
determination.\519\ For purposes of the Shared Savings Program's 
reopening policy, we may find there is reliable evidence of similar 
fault when a demanded overpayment determination was issued to a 
provider or supplier for which CMS has revoked or deactivated their 
Medicare billing privileges, or for which there is a closed law 
enforcement investigation, among other possible factors. Although 
demanded overpayment determinations are subject to appeal, we believe 
use of these amounts in reopening and recalculating an ACO's financial 
performance under

[[Page 61896]]

the Shared Savings Program would allow us to more timely address the 
impact of improper payments on Shared Savings Program calculations, 
rather than waiting to consider the outcome of any possible appeal of 
the amounts (as discussed in section III.G.7.c.(2).(c) of this proposed 
rule).
---------------------------------------------------------------------------

    \518\ While this example presumes reopening for fraud or similar 
fault, there may be additional considerations and complexities 
around reopening for good cause.
    \519\ This approach may continue to maintain a degree of 
alignment between reopening policies under the Shared Savings 
Program and other Medicare policies. In the February 2016 proposed 
rule, in which we proposed amending the Shared Savings Program's 
reopening policy, we referred to the longstanding policy in the 
Medicare program that a determination may be reopened at any time if 
it was procured by fraud or similar fault, and as an example 
referred to 42 CFR 405.980(b)(3) (see 81 FR 5855). In accordance 
with Sec.  405.980(b)(3), a contractor may reopen an initial 
determination or redetermination on its own motion at any time if 
there exists reliable evidence as defined in Sec.  405.902 that the 
initial determination was procured by fraud or similar fault as 
defined in Sec.  405.902.
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    As part of our initial analysis to evaluate whether to reopen an 
ACO's initial determination, we may also consider the significance of 
the improper payments to an ACO's financial calculations by estimating 
the financial impact of improper payments on an ACO's payment 
determination. If we estimate that the improper payments have impacted 
the dollar amount of earned shared savings, or the amount of shared 
losses that the ACO owes or has paid to CMS, we anticipate reopening an 
ACO's payment determination. When determining whether to reopen an 
ACO's payment determination, we anticipate considering a combination of 
factors including:
     The dollar value of improper payments and the number of 
claims or line items impacted (if applicable).
     How any related impact on performance year expenditures 
may compare to the impact on the ACO's updated historical benchmark 
(which could include considering the impact on benchmark year 
expenditures and factors used to establish, adjust and update the 
benchmark). In particular, we may consider whether comparing 
performance year expenditures to the updated benchmark expenditures 
used in financial reconciliation, once adjusted to account for the 
estimated impact of the improper payments, would result in a 
significant change in the amount of shared savings paid to or shared 
losses owed by the ACO. For purposes of this analysis we may consider 
the following:
    ++ The MSR/MLR applicable to the ACO for the relevant performance 
year.
    ++ Whether the ACO met or exceeded the applicable MSR/MLR with the 
initial determination.
    ++ Whether accounting for improper payments would cause a change in 
the ACO's financial performance compared to its performance under the 
initial determination, including:
    -- Causing an ACO to meet or exceed its MSR/MLR when it did not do 
so under its initial determination, or no longer meet or exceed the 
relevant threshold when it did so under its initial determination.
    -- Causing an ACO that shared savings or owed losses under the 
initial determination to share in either a higher or lower amount of 
savings or losses (respectively).
    -- Causing an ACO to continue to generate savings or losses less 
than the MSR/MLR threshold, as it did under its initial determination, 
and therefore the ACO would remain ineligible for shared savings, 
except in cases where certain low revenue ACOs participating in the 
BASIC track may qualify for a shared savings payment in accordance with 
Sec.  425.605(h), and would not be held liable for shared losses.
    We note that the existing reopening authority at Sec.  425.315 and 
the proposed financial methodology to address improper payments in such 
a reopening are not intended to address particular instances of low-
value improper payments which, in an individual case may be to the 
benefit of either the ACO or CMS and in the aggregate are likely have a 
de minimis net effect on program expenditures in the long run.\520\ CMS 
would be highly unlikely to reopen in such cases under Sec.  425.315. 
We believe that considering the significance of the potential impact of 
the improper payments on the ACO's payment determination, in deciding 
whether to reopen the payment determination, is a key component of 
striking a balance between improving the accuracy of the calculations 
and ACOs' and CMS' interest in administrative finality of payment 
determinations. We discuss related concerns and considerations 
elsewhere in this section of this proposed rule. Therefore, we would 
seek to reopen an ACO's payment determination only in cases where the 
impact of improper payments warrants disrupting the initial 
determination.
---------------------------------------------------------------------------

    \520\ See, for example, 81 FR 38000 and 38001.
---------------------------------------------------------------------------

    Consider, for example, that in our initial determination we found 
that an ACO generated savings below its minimum savings rate (MSR) and, 
therefore, did not qualify for a shared savings payment according to 
the policies for determining the ACO's eligibility for shared savings 
applicable to its agreement period under the Shared Savings 
Program.\521\ If, based on an initial analysis, we estimate that the 
ACO's savings, though higher once adjusted to remove improper payments 
from performance year expenditure calculations, would still fall below 
the minimum savings rate, it would not be necessary to reopen an ACO's 
payment determination because the ACO would still not qualify for a 
shared savings payment. Under such circumstances, we would not reopen 
the initial determination or proceed with the recalculations described 
in section III.G.7.c.(2).(c) of this proposed rule. We anticipate that 
this particular type of situation could occur in cases where the 
improper payments at issue are relatively small and the differential 
between an ACO's generated shared savings and minimum savings rate as 
calculated in the initial determination is relatively large such that 
recalculating the amounts would not produce a different outcome to the 
payment determination.
---------------------------------------------------------------------------

    \521\ This example assumes a one-sided model ACO with an MSR 
based on the number of beneficiaries assigned to the ACO, or a two-
sided model ACO with an MSR/MLR greater than zero.
---------------------------------------------------------------------------

    It is also possible that improper payments would have no impact on 
Shared Savings Program financial calculations as they may consist of 
claims or payment amounts that were not used in reaching the initial 
determination of the ACO's financial performance. For instance, if a 
demanded overpayment determination was for a payment amount on a claim 
with a HCPCS or CPT code identified as having significant, anomalous, 
and highly suspect billing activity, and therefore the payment amount 
was excluded from certain financial calculations used in determining 
the ACO's financial performance under the proposed adjustment discussed 
in section III.G.7.d of this proposed rule, we would not include this 
amount as part of a reopening for the same performance year. As another 
example, if the demanded overpayment determination was for a claim or 
line item that was initially paid after the end of the 3-month claims 
run out period, we would not take into account through the reopening 
process a payment amount that was not included in Shared Savings 
Program calculations to begin with. We anticipate improper payments 
identified in these circumstances would not merit reopening the ACO's 
initial determination.
    A number of steps would follow after CMS has decided to reopen the 
initial determination. We would recalculate the ACO's financial 
performance for a performance year by applying the methodology as 
described in section III.G.7.c.(2).(c) of this proposed rule. With this 
recalculation we would determine the amount of shared savings payment 
the ACO may be eligible to receive or the amount of shared losses the 
ACO may owe for the performance year after accounting for the impact of 
the improper payments. We would issue a revised initial determination 
to the ACO with the recalculated payment determination for the 
performance year. We would notify the ACO of savings and losses in 
accordance with Sec.  425.604(f), Sec.  425.605(e), Sec.  425.606(h), 
Sec.  425.609(e), or Sec.  425.610(h) (as applicable). Depending on the 
outcome

[[Page 61897]]

of the recalculation as specified in the revised initial determination, 
we would engage in payment activities and recoupment activities, as 
needed. As explained in earlier rulemaking, we anticipate considering 
ways to minimize program disruptions for ACOs that could result from 
one or more reopenings (see for example, 81 FR 38001 through 38002; see 
also, 87 FR 69868 through 69872). CMS may require considerable time 
after deciding to reopen an initial determination before it can 
complete the process described above for a variety of reasons. For 
example, additional time may be necessary for CMS or other agencies to 
ascertain the precise amount of improper payments that affected the 
initial determination.
    In reopening a payment determination, we note that improper 
payments may impact either performance year expenditures, the ACO's 
updated historical benchmark used in determining the ACO's financial 
performance (including calculation of benchmark expenditures and 
factors used to establish, adjust and update the ACO's historical 
benchmark), or both. The recalculation of the ACO's financial 
performance may have varying effects on the ACO's payment determination 
for the performance year. In some scenarios, the recalculation may 
change the determination of whether the ACO earned shared savings or 
owes shared losses, or may change the amount of any shared savings 
earned or shared losses owed. It is also possible that we may observe 
there is no impact on the amount of shared savings earned or amount of 
shared losses owed by the ACO, once we have performed the recalculation 
of the ACO's financial performance.
    Under the Shared Savings Program's benchmarking methodology, there 
are potential interactions between performance of an ACO under the 
program for a performance year during an agreement period and resetting 
the ACO's benchmark for a subsequent agreement period. Specifically, an 
ACO's performance year may correspond to a benchmark year of its 
subsequent agreement period, such that improper payments impacting 
expenditures for Medicare FFS beneficiaries used to determine 
performance year expenditures may similarly impact expenditures for the 
same period used to establish the ACO's historical benchmark. For 
instance, for ACOs that have participated in the Shared Savings Program 
over multiple agreement periods, improper payments may impact the 
amount of a prior savings adjustment to the historical benchmark (if 
applicable).\522\ We discussed the complexity around some related 
interactions in CY 2024 PFS rulemaking, in regard to recalculating the 
prior savings adjustment, as described in section III.G.7.c.(1).(b) of 
this proposed rule (see 88 FR 79198 through 79200). We note that 
reopenings at any time for fraud or similar fault could extend to any 
prior performance year of the Shared Savings Program. Since Shared 
Savings Program policies have changed over time, in performing the 
recalculation we would apply the relevant financial model and 
benchmarking policy for the ACO for that performance year, in 
accordance with the applicable provisions of subpart G.
---------------------------------------------------------------------------

    \522\ Refer to Sec.  425.658 specifying calculation of the prior 
savings adjustment applicable to ACOs in agreement periods beginning 
on January 1, 2024, and in subsequent years. Refer to Sec.  
425.603(b)(2) specifying an additional adjustment is made to the 
historical benchmark to account for the average per capita amount of 
savings generated during the ACO's previous agreement period, 
implemented for renewing ACOs entering a second agreement period in 
2016. See the discussion in the CY 2023 PFS final rule, in which we 
finalized the prior savings adjustment applicable for agreement 
periods beginning on January 1, 2024, and in subsequent years, and 
provided background on, and a description of, the prior savings 
adjustment that applied to certain ACOs in an earlier agreement 
period (87 FR 69898 through 69915).
---------------------------------------------------------------------------

    Third, we are considering limiting the instances in which we reopen 
an initial determination to account for improper payments, pursuant to 
Sec.  425.315(a), to strike a balance between improving the accuracy of 
the calculations and ACOs' and CMS' interest in administrative finality 
of payment determinations. In rulemaking for the Shared Savings Program 
during 2016, we considered factors for balancing the need to reopen and 
correct Shared Savings Program payment determinations with the need for 
administrative finality, which has implications for both ACOs and CMS 
(81 FR 5853 through 5858, and 81 FR 37997 through 38002). Some of these 
factors were discussed more generally, in the February 2016 proposed 
rule, with respect to our consideration of options for further 
developing our reopening policy (see, for example, 81 FR 5854 and 
5855). We explained that an approach of correcting even very minor 
errors might result in significant operational burdens for ACOs and 
CMS, including multiple financial reconciliation re-runs and off-cycle 
payment/recoupment activities that could have the potential for 
significant and unintended operational consequences, and could 
jeopardize the certainty of performance results for both ACOs and CMS. 
We explained our concern that a relatively broad scope and extended 
timeframe for reopening could introduce financial uncertainty that 
could limit an ACO's ability to invest in additional improvements to 
increase quality and efficiency of care. This uncertainty could also 
limit an ACO's ability to get a clean opinion from its financial 
auditors and/or to obtain funds from lenders or investors.
    We remain especially concerned about the potential for financial 
uncertainty resulting from a broad scope and extended timeframe for 
reopening for ACOs and CMS, particularly if correcting minor errors 
resulting from improper payments. We are concerned that reopening 
payment determinations for minor issues impacting calculations for one 
or several performance years of an ACO's earlier agreement period could 
in turn disrupt the administrative finality of calculations for 
multiple performances years, in one or more subsequent agreement 
period, if the impacted year(s) become benchmark year(s) used in 
resetting the ACO's historical benchmark. We also note that since an 
ACO's performance can vary from year to year (in terms of whether the 
ACO generates savings or losses and is eligible for shared savings or 
owes shared losses), it is possible for there to be a mixed effect 
across reopening payment determinations for multiple performance years. 
If the recalculation of financial performance identifies relatively 
small changes in the amount of shared savings or shared losses, it 
could be possible for these changes to balance out over a span of 
multiple performance years. This raises further questions about the 
utility of reopening payment determinations versus maintaining 
administrative finality of initial determinations.
    A relatively straight-forward case would be to reopen a single 
performance year that we identify as having been impacted by improper 
payments. When a performance year for which we issue a revised initial 
determination becomes a benchmark year of an ACO's subsequent agreement 
period, whether we reopen an ACO's payment determination to account for 
the impact of improper payments in Shared Savings Program calculations 
would differ depending on whether or not we have issued an initial 
determination for a performance year of the ACO's subsequent agreement 
period. If the subsequent agreement period is the ACO's current 
agreement period, and CMS has not yet issued an initial determination 
for a performance year within the current agreement period, we would 
account for the impact of improper payments on future financial 
calculations pursuant to the proposed

[[Page 61898]]

benchmark adjustment specified in modifications to Sec. Sec.  
425.601(a)(9) and 425.652(a)(9). See section III.G.7.c.(2).(d) of this 
proposed rule for a discussion of our proposals related to modifying 
these provisions.
    CMS' decision to reopen an initial determination for a performance 
year is independent of a determination by CMS to reopen an initial 
determination for any other performance year, including in cases where 
multiple performance years are impacted by the same improper payments, 
whether within the ACO's current agreement period, or a past agreement 
period. In these circumstances, we would need to potentially consider 
reopening initial determinations for multiple performance years, which 
may span multiple agreement periods, in cases where an ACO has 
continued its participation in the Shared Savings Program over time. 
Therefore, we are considering applying a combination of the following 
factors in determining whether to reopen an initial determination: (1) 
consideration of the timing of reopening and recalculating the payment 
determination for a performance year, and the timing of financial 
reconciliation for one or more performance year of a subsequent 
agreement period that includes the affected period as a benchmark year, 
and (2) consideration of whether the improper payments result from 
conduct of individuals or entities performing functions or services 
related to the ACO's activities.
    Regarding the timing for reopening, we may consider whether a 
performance year that is being reopened corresponds to a benchmark year 
of an ACO's subsequent agreement period. We may consider whether we 
have completed financial reconciliation for a subsequent performance 
year, using a benchmark that is impacted by the same improper payments 
that were accounted for in reopening a payment determination for a 
performance year corresponding to a benchmark year.
    We expect ACOs continuing their participation over multiple 
agreement periods in the Shared Savings Program have a heightened 
interest in administrative finality of payment determinations, which 
would provide greater financial certainty to the continued operation of 
ACOs and progress towards meeting the program's goals. In such cases, 
we believe (1) reopening payment determinations for a performance year 
to account for the impact of improper payments remains important to 
improving the accuracy of the Shared Savings Program's calculations, 
and (2) maintaining the administrative finality of subsequent payment 
determinations, if the same improper payments impact a benchmark year 
of an ACO's subsequent agreement period, could provide ACOs greater 
financial certainty with respect to their participation which may 
outweigh the benefits of reopening the calculations. Maintaining 
administrative finality of the payment determinations for these 
subsequent performance years may be warranted in cases where the 
improper payments are not a result of the conduct of individuals or 
entities within the ACO. On the other hand, in cases where improper 
payments impacting Shared Savings Program calculations results from 
conduct by individuals or entities within the ACO, CMS' interest in 
addressing program integrity concerns would warrant reopening all 
affected payment determinations. In these cases, if left unaddressed, 
ACOs, ACO participants and ACO providers/suppliers, among others, may 
have incentives to continue to engage in conduct, which could include 
fraud or similar fault, in a way that could improve the ACO's 
performance under the Shared Savings Program.
    Although not expressly stated in Sec.  425.315, we note that 
improper payments that are the basis of a reopening may result from the 
conduct of individuals or entities including but not limited to: (1) 
conduct of an ACO, ACO participant, ACO provider/supplier, ACO 
professional, or other individuals or entities performing functions or 
services related to the ACO's activities; or (2) conduct of a provider 
or supplier, or other individuals or entities outside the ACO. For 
purposes of the discussion within this section of this proposed rule, 
we refer to the former as improper payments originating ``inside the 
ACO'', and the latter as improper payments originating ``outside the 
ACO''.
    To follow is a brief summary of the approach we are considering for 
differentiating between cases where improper payments originate inside 
the ACO versus outside the ACO. If we identify a single performance 
year for which we have issued an initial determination that has been 
impacted by improper payments, we would seek to reopen the payment 
determination if the improper payments originated either inside the ACO 
or outside the ACO.
    When a performance year for which we issue a revised initial 
determination becomes a benchmark year of an ACO's subsequent agreement 
period, we would consider whether to reopen each initial determination 
for a subsequent performance year that is impacted. We are considering 
taking the following approach as one means to operate reopenings in an 
equitable and manageable manner:
     In cases where improper payments originated outside the 
ACO: Generally, we would not seek to reopen payment determinations for 
any performance year of the ACO's subsequent agreement period in order 
to mitigate the extent to which we disrupt the administrative finality 
of payment determinations for ACOs when the improper payments impacting 
Shared Savings Program calculations originate outside the ACO. However, 
we may consider reopening the initial determination for the performance 
year upon the ACO's request for a reopening if the improper payments 
are anticipated to result in significant adjustment to the ACO's 
initial determination upon recalculation.
     In cases where improper payments originated inside the 
ACO: As a means to address our program integrity concerns, we would 
reopen the payment determination for any performance year of the ACO's 
subsequent agreement period issued prior to the revised initial 
determination for the performance year corresponding to the benchmark 
year impacted by improper payments originating inside the ACO, if the 
improper payments are anticipated to result in significant adjustment 
to the ACO's initial determination upon recalculation. We believe this 
approach would guard against circumstances where an ACO may benefit 
from improper payments remaining in its benchmark calculations that 
result from conduct by individuals or entities performing functions or 
services related to the ACO's activities.
    We seek comment on the factors we have described in this section of 
this proposed rule, that may inform our decision of whether to reopen 
an initial determination of an ACO's financial performance to account 
for the impact of improper payments. In particular, we seek comment on 
the approach we outlined for conducting initial analysis of whether the 
improper payments would warrant reopening the ACO's payment 
determination. We also seek comment on approaches to, and 
considerations in connection with, balancing the need for accuracy in 
payment calculations with the need for administrative finality in 
payment determinations.
(c) Methodology for Recalculating Expenditures To Account for Improper 
Payments
    We propose to establish a financial calculation methodology that 
may be used to account for the impact of

[[Page 61899]]

improper payments on Shared Savings Program financial calculations, 
upon reopening a payment determination pursuant to Sec.  425.315(a). We 
propose to add to subpart G a new section of the Shared Savings Program 
regulation at Sec.  425.674 specifying provisions on accounting for the 
impact of improper payments on Shared Savings Program financial 
calculations.
    As a general rule, we propose to specify in paragraph (a) of Sec.  
425.674, that upon the reopening of an initial determination pursuant 
to Sec.  425.315(a)(4), CMS will use the methodology set forth in Sec.  
425.674 to account for the impact of improper payments when: (1) 
determining savings or losses for the relevant performance year in 
accordance with Sec.  425.315 in order to issue a revised initial 
determination, and (2) adjusting the benchmark by recalculating 
benchmark year expenditures in the event that we recalculate a payment 
determination and issue a revised initial determination for the 
corresponding performance year in a prior agreement period (as 
discussed in section III.G.7.c.(2).(d) of this proposed rule).
    We propose to specify in paragraph (b) of Sec.  425.674 that for 
the purpose of the Shared Savings Program, ``improper payment'' 
includes: (1) an amount associated with a demanded overpayment 
determination, and (2) an amount identified in a settlement agreement 
or judgment, pursuant to conduct of individuals or entities performing 
functions or services related to an ACO's activities, less any 
penalties or damages.
    We propose to establish a methodology under Sec.  425.674 under 
which we would adjust Medicare Parts A and B FFS expenditure values 
used in certain Shared Savings Program financial calculations to 
account for a per capita amount of improper payments for an identified 
population used in calculating performance year or benchmark year 
expenditures, and in calculating county-level FFS expenditures used in 
factors based on regional expenditures.
    We propose to specify under Sec.  425.674 a generalized approach to 
calculating the per capita amounts of improper payments that accounts 
for the fact that improper payments may be associated with specific 
claims or line items, or may be aggregate amounts. A number of factors 
informed our consideration of this approach. For one, we considered the 
need to establish a calculation methodology to account for demanded 
overpayment determinations that result in adjustments to payment 
amounts associated with claims and line items used in Shared Savings 
Program calculations, such as the denial of claims or line items that 
occur after the 3-month claims run out period, or in an aggregate 
amount, such as based on extrapolated overpayment demands that do not 
result in adjustments to claim or line item payment amounts. Medicare 
Parts A and B FFS claim adjustments for overpayments would be reflected 
in current Shared Savings Program expenditure calculations if processed 
before the end of the 3-month claims run out period but are not 
included in calculations if processed after the 3-month claims run out 
period. Regarding the latter, the amounts of the claims adjusted 
overpayments can be identified for Medicare FFS beneficiaries, and can 
be aggregated across a population of Medicare FFS beneficiaries that is 
the basis for certain Shared Savings Program calculations. 
Additionally, aggregate amounts of demanded overpayment determinations, 
such as extrapolated overpayment demands, may be used to identify the 
amount of improper payments for a large set of claims for a particular 
provider or supplier and a certain time period, since error rates are 
extrapolated and applied to a universe of claims rather than individual 
claims. In these cases, an aggregate amount of a demanded overpayment 
determination is attributable to a provider or supplier and would have 
to be further prorated to determine its relevance to a particular 
population of Medicare FFS beneficiaries that is the basis for certain 
Shared Savings Program calculations.
    Second, we considered the need for the calculation methodology to 
account for improper payments resulting from conduct by an ACO, ACO 
participant, ACO provider/supplier, ACO professional, or other 
individuals or entities performing functions or services related to the 
ACO's activities identified in certain settlements, or judgments. With 
respect to the Shared Savings Program calculations, we anticipate that 
a key focus would be on improper payments pursuant to conduct of 
individuals or entities performing functions or services related to an 
ACO's activities as identified in certain False Claims Act (31 U.S.C. 
3729 et seq.) settlement agreements, or judgments. In considering the 
amount of improper payments that are relevant to Shared Savings Program 
calculations, we would exclude the amount of any penalties or damages 
included in the settlement or judgment. In addition, we may seek to 
attribute an aggregate improper payment amount to a provider or 
supplier that is specified within a settlement agreement, or judgment, 
across a population of Medicare FFS beneficiaries that is the basis for 
the applicable Shared Savings Program calculation.
    Further, we anticipate there may be circumstances that warrant 
adjustment to payment amounts used in Shared Savings Program 
calculations, at the claims level, instead of or in addition to 
accounting for the amount of demanded overpayment determinations or an 
aggregate amount in a settlement agreement or judgment. For instance, 
in analyzing improper payments impacting Shared Savings Program 
calculations, we may conclude that a provider's or supplier's billings 
for a particular HCPCS or CPT code for a population of Medicare FFS 
beneficiaries resulted in inaccuracies in payment amounts used in 
Shared Savings Program calculations. We propose that we may address 
these circumstances by decreasing or entirely removing the value of 
HCPCS or CPT code payment amounts for certain claims or line items used 
in Shared Savings Program calculations, in reopening and recalculating 
the ACO's payment determination. We anticipate using all information 
available to us from an investigation, settlement agreement, or 
judgment to determine the correct payment amount or level of billing. 
This could include considering the nature of the remedy in the case and 
how any related amount would be applied in the proposed methodology to 
account for improper payments impacting Shared Savings Program 
financial calculations. In particular, we would consider if it would be 
a more precise adjustment to Shared Savings Program financial 
calculations to adjust the claim or line item payment amounts, instead 
of or in addition to accounting for the amount of demanded overpayment 
determinations or an aggregate amount in a settlement agreement or 
judgment (if applicable). For instance, in cases where an 
investigation, settlement agreement, or judgement has determined 
inaccurate use of a higher paying code \523\ that is reflected in 
payment amounts used in Shared Savings Program calculations, we may 
identify use of a code with lower reimbursement within a HCPCS or CPT 
code category that would result

[[Page 61900]]

in a more precise adjustment to the ACO's payment determination.
---------------------------------------------------------------------------

    \523\ See, for example, CMS, Medicare Claims Processing Manual 
Chapter 23--Fee Schedule Administration and Coding Requirements, 
section 20.9.5 ``Adjustments'', available at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c23.pdf 
(explaining that if the wrong, higher paying code is paid on the 
first of multiple claims submitted, A/B MACs processing Medicare 
Part B claims pay the subsequent claim(s) and initiate recovery 
action on the previously paid claim(s)).
---------------------------------------------------------------------------

    We propose to specify in paragraphs (c) and (d) of Sec.  425.674 
the general approach for adjusting Medicare Parts A and B FFS 
expenditures for improper payments, according to the following steps:
     Step 1--Identify calculation for adjustment: Identify each 
Shared Savings Program expenditure calculation for a performance year 
or benchmark year, as calculated according to the standard methodology 
described in subpart G and expressed as a per capita dollar amount, 
that would be adjusted for the impact of improper payments (as proposed 
in Sec.  425.674(c)(1)).
     Step 2--Determine the relevant population for adjustment: 
Determine each specific population of Medicare FFS beneficiaries used 
to calculate the expenditure amount identified in Step 1, expressed as 
person years (as proposed in Sec.  425.674(c)(2)). The populations 
relevant for a specific expenditure calculation may include:
    ++ The population of beneficiaries assigned to the ACO for 
calculating the ACO's performance year or benchmark year expenditures.
    ++ The population of assignable beneficiaries in each county in the 
ACO's regional service area for calculating county-level expenditures.
    ++ The national population of assignable beneficiaries for 
calculating national assignable expenditures.
    ++ The national population of Medicare FFS beneficiaries for 
calculating national expenditures.
     Step 3--Determine per capita amount of improper payments 
attributable to the relevant population: Determine the per capita 
amount of improper payments for the performance year or benchmark year 
included in the per capita Medicare Parts A and B FFS expenditure 
amount for a population identified in Step 2 (as proposed in Sec.  
425.674(c)(3)). We may use one or more of the following approaches to 
determine the per capita amount of improper payments, for all providers 
or suppliers with improper payments, that would be used to adjust the 
expenditure calculations identified in Step 1 (as proposed in Sec.  
425.674(d)):
    ++ Step 3(i): Calculate aggregate improper payments attributable to 
a population identified in Step 2 for each provider or supplier that 
had improper payments.
    --For improper payments associated with specific claims, we would 
do the following:
    (A) For improper payments to a provider or supplier that correspond 
to payment amounts on claims or line items that were used in a Shared 
Savings Program calculation identified in Step 1, and subsequently 
adjusted after the 3-month claims run out period, we would sum the 
improper payment amounts across all such claims or line items with 
dates of service during the period used to calculate performance year 
or benchmark year expenditures, for a population identified in Step 2.
    To allow for this approach, we propose to adjust Shared Savings 
Program expenditure calculations to reflect adjustments occurring after 
the original 3-month claims run out period for claim or line item 
payment amounts associated with improper payments. We would not capture 
payments or payment adjustments occurring outside the original 3-month 
claims run out period for claims or line items unrelated to improper 
payments.
    (B) In the event that CMS determines it is necessary to account for 
the impact of improper payments on Shared Savings Program financial 
calculations by adjusting the payment amounts for a specific HCPCS or 
CPT code billed by the provider or supplier for the population 
identified in Step 2, we would do the following: identify the 
applicable claims or line items with dates of service during the period 
used to calculate performance year or benchmark year expenditures 
processed before the end of the applicable 3-month claims run out 
period, and sum the claim or line item payment amounts on the claims or 
line items identified; and if applicable, multiply the resulting sum by 
a scaling factor to compute the payment differential between the HCPCS 
or CPT code that was improperly billed and a CMS-identified alternate 
code. We would apply a scaling factor in cases where it is determined 
that the provider or supplier did not bill the correct code for a 
particular service. In cases where we determine it is appropriate to 
remove payments for the billed HCPCS or CPT code in their entirety, we 
would not apply a scaling factor.
    --For aggregate improper payment amounts that are not linked to 
specific claims or line items, we would calculate the amount 
attributable to the population identified in Step 2 by applying a 
proration factor to the aggregate improper payment amount identified 
for that provider or supplier. We would calculate the proration factor 
as follows:
    (A) The denominator of the proration factor would be total Medicare 
Parts A and B claim or line item payment amounts to the provider or 
supplier for all FFS beneficiaries on claims of specified claim types 
for the time period associated with the aggregate improper payment 
amount identified for the provider or supplier that were made before 
the end of the applicable 3-month claims run out period.
    (B) The numerator of the proration factor would be the portion of 
the total from the denominator that CMS determines is attributable to 
the population identified in Step 2 with dates of service during the 
period used to calculate expenditures for the applicable performance 
year or benchmark year.
    Under this proposed approach, if an aggregate amount of improper 
payment is associated with claims activity that spans multiple calendar 
years, we would account for this in the proration factor by expanding 
the time period used to compute payments for the denominator to include 
the relevant years. For example, if the aggregate amount of improper 
payments was associated with claims activity in 2021 and 2022, we would 
include in the denominator payments on claims or line items with dates 
of service in 2021 (made before the end of March 2022) and on claims or 
line items with dates of service in 2022 (made before the end of March 
2023). If we were adjusting PY 2022 expenditures for an ACO's assigned 
population, the numerator of the proration factor would be the portion 
of the denominator that is attributable to the ACO's assigned 
population during CY 2022.
    ++ Step 3(ii): Sum the amounts calculated under Step 3(i) 
attributable to the population identified in Step 2 across providers or 
suppliers that had identified improper payments.
    ++ Step 3(iii): Take the lesser of the following two values:
    --The sum from Step 3(ii); or
    --Total Medicare Parts A and B claim or line item payment amounts 
to all providers or suppliers that had improper payments for the 
population identified in Step 2 on claims of specified claim types with 
dates of service within the performance year or benchmark year made 
before the end of the applicable 3-month claims run out period.
    The purpose of taking the lesser of two values in this step is to 
ensure that the improper payment amount that we attribute to a given 
population cannot be greater than the total amount of payments for the 
providers or suppliers at issue that was included in the original 
expenditure calculation for that population.
    ++ Step 3(iv): Express the lesser-of-amount from Step 3(iii) as a 
per capita value by dividing by the total

[[Page 61901]]

beneficiary person years in the population identified in Step 2 for the 
applicable performance year or the benchmark year.
     Step 4--Subtract per capita improper payment amount from 
original expenditures: From the expenditure calculation identified in 
Step 1 for the population identified in Step 2, subtract the per capita 
amount calculated in Step 3(iv) for each of the following populations 
of beneficiaries: ESRD, disabled, aged/dual eligible Medicare and 
Medicaid beneficiaries, and aged/non-dual eligible Medicare and 
Medicaid beneficiaries (as proposed in Sec.  425.674(c)(4)).
     Step 5--Determine adjusted regional expenditures: If 
applicable, we would do the following to adjust regional expenditures 
for improper payments (as proposed in Sec.  425.674(c)(5)):
    ++ Step 5(i): Adjust county-level FFS expenditures determined in 
Step 4, for each county in the ACO's regional service area, for 
severity and case mix of assignable beneficiaries in the county using 
prospective HCC risk scores. This calculation would be for each of the 
following populations of beneficiaries based on Medicare enrollment 
type: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries. We note that under this approach CMS would not adjust 
the risk scores used to calculate risk adjusted county-level FFS 
expenditures.
    ++ Step 5(ii): Weight the risk-adjusted county-level FFS 
expenditures determined in Step 5(i) according to the ACO's proportion 
of assigned beneficiaries in the county, determined in accordance with 
Sec.  425.601(d)(1), Sec.  425.603(f)(1), or Sec.  425.654(b)(1), as 
applicable, for each of the populations of beneficiaries by Medicare 
enrollment type.
    ++ Step 5(iii): Aggregate the values determined in Step 5(ii) for 
each of the populations of beneficiaries (by Medicare enrollment type) 
across all counties within the ACO's regional service area.
    To illustrate how the proposed calculation methodology would be 
applied, we can consider the following hypothetical example in which 
CMS confirmed that two suppliers, NPI 1 and NPI 2, received improper 
payments from Medicare during calendar year 2022. Specifically, CMS 
identified $8 million in demanded overpayment determinations for NPI 1 
which resulted in CMS adjusting payment amounts after the 3-month 
claims run out period for PY 2022 on claims or line items with dates of 
service during the performance year, and CMS identified an aggregate 
extrapolated overpayment demand amount of $30 million for NPI 2. Assume 
that in this example, CMS determines that reopening the ACO's PY 2022 
initial determination is warranted, and CMS recalculates that ACO's 
financial performance using the proposed methodology to account for 
improper payments. To recalculate the ACO's financial performance for 
PY 2022, we would identify three separate expenditure calculations that 
need to be recalculated to determine the impact on an ACO's earned 
performance payment or owed shared losses: (1) PY 2022 expenditures for 
the ACO's assigned beneficiaries; (2) PY 2022 expenditures for 
assignable beneficiaries in the ACO's regional service area; and (3) PY 
2022 expenditures for national assignable beneficiaries. For this 
example, in Table 41 we outline the steps and calculations for 
recalculating expenditures for beneficiaries assigned to the ACO for PY 
2022. In Table 42 we outline how PY 2022 expenditures for assignable 
beneficiaries in the ACO's regional service area and PY 2022 
expenditures for national assignable beneficiaries, recalculated to 
account for improper payments, would be incorporated into the blended 
national-regional benchmark update factor. In Table 43 we outline how 
an ACO's financial performance may be recalculated after accounting for 
improper payments in PY 2022 expenditures for the ACO's assigned 
beneficiaries, and using the recalculated blended national-regional 
benchmark update factor.
BILLING CODE P

[[Page 61902]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.070

BILLING CODE C
    In Step 1, we identify expenditures for the ACO's assigned 
beneficiaries in PY 2022 as the calculation to be recalculated. In Step 
2, we identify the ACO's assigned beneficiaries in PY 2022 as the 
population relevant for this expenditure calculation. In Step 3, we 
determine the per capita amount of improper payments that is 
attributable to the ACO's assigned beneficiaries. For NPI 1, we 
identify that $200,000 of the NPI's total aggregate improper payments 
were on claims for the ACO's assigned beneficiaries (row [D]). Because 
improper payments for NPI 2 were identified at the NPI level and thus 
are not tied to individual claims, we need to apply a proration factor 
to calculate the share of the total aggregate improper payments, $30 
million (row [E]), that is attributable to the ACO's assigned 
beneficiaries. We calculate this proration factor as the total Medicare 
Parts A and B claim or line item payment amounts made to NPI 2 for the 
ACO's assigned beneficiaries for PY 2022 ($4.8 million, row [F]), 
divided by the total Medicare Parts A and B claim or line item payment 
amounts made to NPI 2 for all Medicare FFS beneficiaries ($80 million, 
row [G]); this results in a proration factor of 0.06 (row [H]), which 
when applied to NPI 2's total aggregate improper payments results in 
$1.8 million in aggregate improper payments attributable to the ACO's 
assigned beneficiaries (row [I]). Summing across NPI 1 and NPI 2, we 
calculate $2 million in total aggregate improper payments attributable 
to the ACO's assigned beneficiaries for PY 2022 (row

[[Page 61903]]

[J]). We then compare this sum (row [J]) with total Medicare Parts A 
and B claim or line item payment amounts to the two suppliers for the 
ACO's assigned beneficiaries for PY 2022 (row [K]) and take the lesser 
of the two values (row [L]). We then express this lesser-of value in 
per capita terms by dividing by the ACO's total assigned beneficiary 
person years for PY 2022, 20,000, arriving at a $100 per capita 
improper payment amount attributable to the ACO's assigned 
beneficiaries (row [M]). Finally, in Step 4, we subtract the $100 per 
capita improper payment amount from the original PY 2022 per capita 
expenditure amount for the ACO's assigned beneficiaries used to make 
the initial payment determination, conducting this adjustment by 
enrollment type (row [N]).
    We note that subtracting the same per capita improper payment 
amount ($100 in this example) from the expenditure calculation for each 
enrollment type population implicitly assumes that improper payments 
attributable to the overall population are distributed in proportion to 
the four enrollment types (ESRD, disabled, aged/dual eligible, aged/
non-dual eligible). For example, if the aged/non-dual eligible 
population represents 82 percent of an ACO's overall assigned 
population for the performance year, we are assuming that 82 percent of 
improper payments attributable to the ACO's entire assigned population 
are associated with aged/non-dual eligible beneficiaries. We believe 
that this is a reasonable assumption as we expect that, in most cases, 
improper payments are unlikely to be associated with a particular 
enrollment type as defined by the Shared Savings Program and used in 
program financial calculations.\524\ This also allows for a standard 
approach across the potential variety of reopening scenarios, lending 
greater transparency and simplicity to the proposed methodology.
---------------------------------------------------------------------------

    \524\ For criteria used to identify the four Medicare enrollment 
types, refer to the Medicare Shared Savings Program, Shared Savings 
and Losses, Assignment and Quality Performance Standard Methodology 
Specifications (version #11, January 2023), available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-2 
(Appendix E: Identifying Medicare Enrollment Type).
---------------------------------------------------------------------------

    We would follow the same overall methodology to account for the 
impact of improper payments in recalculating PY 2022 expenditures for 
assignable beneficiaries in the ACO's regional service area and for 
national assignable beneficiaries. These amounts are calculated for the 
following populations of beneficiaries, by Medicare enrollment type: 
ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, 
and aged/non-dual eligible Medicare and Medicaid beneficiaries. We 
would then use these adjusted expenditure calculations as new inputs 
along with other original calculations that were not adjusted for the 
impact of improper payments (such as the ACO's historical benchmark for 
PY 2022) to recalculate the ACO's financial performance for PY 2022, 
following the standard financial methodology described in Sec.  425.605 
(for ACOs participating in the BASIC track) or Sec.  425.610 (for ACOs 
participating in the ENHANCED track), as applicable.
    In Table 42, we expand upon the hypothetical example described in 
Table 41 and summarize how we would calculate national and regional 
update factors following the methodology specified in Sec.  
425.652(b)(2) but using the adjusted regional and national expenditures 
for the performance year for each enrollment type in place of the 
original values. Because benchmark update factors are calculated by 
enrollment type under the standard financial methodology, they would 
also be recalculated by enrollment type when using the adjusted 
national and regional expenditures. However, for brevity, we describe 
only the recalculation of the update factors for the aged/non-dual 
eligible population in Table 42.
    In this continued hypothetical example, we used the proposed 
methodology to account for the impact of improper payments in 
recalculating national and regional per capita expenditures in the 
performance year, resulting in adjusted expenditures of $11,609 (row 
[A]) and $11,210 (row [C]), respectively. Dividing these PY values by 
the original BY3 national and regional per capita expenditures 
($10,977, row [A], and $10,900, row [C], respectively), we recalculate 
the national update factor (1.058, row [B]) and regional update factor 
(1.028, row [D]). In this example, there is a $1 difference between the 
original and recalculated national per capita expenditure amount. The 
resulting value for the recalculated national update factor, shown 
rounded to the third decimal place, remains the same as the original 
value, but there would be a difference in the values if additional 
precision was shown. We then blend these adjusted update factors using 
the original national and regional weights (0.250, row [E], and 0.750, 
row [F], respectively). As shown in row [G], accounting for improper 
payments in PY 2022 causes the blended benchmark update factor to 
decrease from 1.042 to 1.036.
[GRAPHIC] [TIFF OMITTED] TP31JY24.071

    Table 43 summarizes how recalculated blended update factor to 
account for improper payments, based on adjusted national and regional 
expenditures for PY 2022, would be used with other original 
calculations

[[Page 61904]]

and adjusted PY expenditures for ACO assigned beneficiaries to 
recalculate the ACO's financial performance for PY 2022. Applying the 
blended update factor (row [B]) to the original historical benchmark 
values by enrollment type (row [A]), we recalculate the updated 
benchmark values by enrollment type (row [C]) that account for improper 
payments occurring in PY 2022. The adjusted updated benchmark values 
(row [C]) and adjusted PY expenditures for ACO assigned beneficiaries 
by enrollment type (row [D]), also described in Table 41, are 
multiplied by original PY assigned beneficiary proportions by 
enrollment type (row [E]), and summed across enrollment types to 
recalculate the per capita updated benchmark (row [F]) and per capita 
ACO PY assigned beneficiary expenditures (row [G]). We then express 
these per capita quantities as the total updated benchmark amount (row 
[I]) and the total ACO PY assigned beneficiary expenditures amount (row 
[J]) by multiplying the per capita dollar amount by the ACO's total 
assigned beneficiary person years for PY 2022 (row [H]). The 
recalculated total updated benchmark (row [I]) can then be used to 
recalculate the minimum savings rate/minimum loss rate dollar threshold 
(row [L]). We subtract the recalculated total ACO PY assigned 
beneficiary expenditures (row [J]) from the recalculated total updated 
benchmark (row [I]) to determine if the ACO has gross savings or gross 
losses. Under this example, the recalculation indicates the ACO has 
total gross savings (row [K]). Finally, because the recalculated total 
gross savings (row [K]) is greater than the recalculated minimum 
savings rate dollar threshold, we recalculate the ACO's shared savings 
(row [N]) by multiplying the total gross savings (row [K]) by the 
original sharing rate (row [M]).
    The result of these calculations is an adjusted shared savings 
amount of $17,355,000 (before accounting for sequestration), compared 
to an original amount of $16,950,000. Thus, while adjustments for 
improper payments reduced the ACO's PY assigned beneficiary 
expenditures by $2 million, the impact on the ACO's recalculated shared 
savings is only $405,000 due to the impact of improper payments on the 
expenditures for assignable beneficiaries that factor into the ACO's 
recalculated updated benchmark for PY 2022.
BILLING CODE P

[[Page 61905]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.072

BILLING CODE C
    Under the proposed financial methodology, accounting for the impact 
of improper payments on expenditures could increase or decrease an 
ACO's amount of shared savings or shared losses. As demonstrated in the 
hypothetical example, the direction of changes to an ACO's shared 
savings or shared losses would depend on the differential impact of 
improper payments on the ACO's assigned beneficiary expenditures 
compared to the impact on expenditures for assignable beneficiaries 
used to determine the national and regional updates to the ACO's 
benchmark. In this example, the reduction in ACO PY assigned 
beneficiary expenditures due to the adjustment for improper payments 
was larger than the reduction to the updated benchmark stemming from 
adjustments to PY national and regional expenditures, ultimately

[[Page 61906]]

causing the ACO to see an increase in both gross savings and shared 
savings. Other ACOs for which the reduction in ACO PY assigned 
beneficiary expenditures is greater than the reduction to the updated 
benchmark, may switch from earning no shared savings to earning shared 
savings or may see a reduction in shared losses owed. However, if 
accounting for improper payments results in relatively larger 
reductions to the expenditures for assignable beneficiaries in the 
ACO's regional service area or in the national assignable population, 
and relatively smaller reductions to the ACO's PY assigned beneficiary 
expenditures, the ACO might observe a reduction in shared savings or 
increase in shared losses, or potentially cause the ACO to switch from 
earning shared savings to not earning any shared savings or to owing 
shared losses.
    As we propose in section III.G.7.c.(2).(d) of this proposed rule, 
if the reopened PY becomes a BY for a subsequent agreement period, CMS 
would adjust the historical benchmark to be used for any PY in that 
subsequent agreement period that has not yet been reconciled. 
Accounting for improper payments as it affects the ACO's benchmark 
could then result in changes to the ACO's shared savings or shared 
losses for a future performance year that differ in direction compared 
to the change in shared savings or shared losses observed with the 
initial reopening that affected PY expenditures. That is, following the 
example from Table 43, accounting for improper payments occurring in 
calendar year 2022 might result in the ACO earning greater shared 
savings (or smaller shared losses) for PY 2022 (because the reduction 
in ACO PY assigned beneficiary expenditures outweighs the reduction in 
national and regional expenditures used to update the benchmark), but 
may result in smaller shared savings (or greater shared losses) for 
future performance years for which CY 2022 becomes a benchmark year 
(because the adjustment for improper payments in BY 2022 causes a 
reduction in the overall benchmark with no corresponding reduction to 
ACO PY expenditures).
    As we described in section III.G.7.c.(2).(b) of this proposed rule, 
administrative action and judicial action leading to the identification 
of improper payments may be subject to appeal, and ultimately the 
amount of the improper payments may be redetermined or otherwise 
amended. We acknowledge the potential inaccuracy in using amounts of 
improper payments that may be reversed, in whole or in part, in 
recalculating an ACO's financial performance. However, waiting for each 
possible appeal to be raised and resolved with respect to improper 
payments could delay our ability to reach a determination of whether to 
reopen an ACO's payment determination, identify the amounts of improper 
payments to be used in the recalculation, or both. We considered 
whether to account for the possibility that the improper payment 
amounts would be appealed, and the amount redetermined, as part the 
proposed methodology, but are not proposing a related approach at this 
time. For instance, we considered whether to apply an adjustment factor 
as part of the methodology, that would reduce the amount of improper 
payments by a percentage, to account for the rate at which the amounts 
could change, and to base this rate on statistics gathered on the 
outcomes of Medicare Parts A and B administrative appeals processes. 
Given that the proposed approach, if finalized, would be the initial 
use of improper payment amounts in Shared Savings Program calculation, 
we note our intent to monitor for the impact of appeals on the amounts 
of improper payments that may be used in reopenings under the Shared 
Savings Program. We may revisit our approach in future notice and 
comment rulemaking, after we gain additional experience with using 
improper payment amounts in Shared Savings Program calculations.
    We propose to use our authority under section 1899(d)(1)(B)(ii) of 
the Act to calculate benchmark year expenditures using the proposed 
methodology to account for the impact of improper payments. This 
provision authorizes the Secretary to adjust the benchmark for 
beneficiary characteristics and ``such other factors as the Secretary 
determines appropriate''. When reopening an initial determination for a 
performance year pursuant to Sec.  425.315, we consider it appropriate 
to account for the impact of improper payments on expenditures used to 
establish the ACO's historical benchmark, consistent with our proposal.
    We propose to use our authority under section 1899(i)(3) of the Act 
to use the proposed methodology to account for the impact of improper 
payments in calculating performance year expenditures and calculating 
the historical benchmark update factors. CMS may only adopt an 
alternative payment methodology pursuant to section 1899(i)(3) of the 
Act if we determine that the alternative payment methodology will 
improve the quality and efficiency of items and services furnished to 
Medicare beneficiaries, without resulting in additional program 
expenditures.
    The proposed adjustments would remove improper payments from the 
performance year expenditures and factors used to calculate updated 
historical benchmarks, among other financial calculations, that 
resulted in inaccuracies in an ACO's payment determination, including 
the amount of shared savings CMS paid an ACO or the amount of shared 
losses owed to CMS by an ACO participating under a two-sided model. 
These policies improve the accuracy of financial calculations by which 
ACOs are held accountable for the cost and quality of care for their 
assigned beneficiary populations.
    Addressing the impact of improper payments on ACO payment 
determinations could serve as a mechanism to bolster program integrity. 
ACO accountability for the total cost of care can deter fraud, waste, 
and abuse that is otherwise under the control of ACO participants. 
Additionally, ACOs have unique insight into Medicare Part A, B, and D 
claims data for their assigned beneficiary populations from monthly 
claim and claim line level data ACOs receive from CMS for care 
coordination and quality improvement. This vantage point makes ACOs 
uniquely situated to observe trends in expenditures and utilization 
patterns, including by providers and suppliers that are not 
participating in the ACO. Further establishing policies to specify the 
approach to excluding improper payments from Shared Savings Program 
calculations could encourage ACOs to report to CMS and the Department 
of Health and Human Services Office of Inspector General (HHS-OIG) 
potential fraud and abuse within the Medicare program. Addressing 
improper payments in the Medicare program would protect the accuracy, 
fairness, and integrity of Shared Savings Program financial 
calculations, and lead to greater beneficiary protections, and 
protection of the Trust Funds.
    Accounting for the impact of improper payments in financial 
calculations promotes continued integrity and fairness of Shared 
Savings Program payment determinations and may in turn bolster ACO 
participation in the Shared Savings Program. Policies that improve the 
accuracy of the payment calculations could provide greater certainty to 
organizations considering entering or continuing their participation in 
the Shared Savings Program and thereby lead to more robust and 
sustained participation by ACOs in the Shared Savings Program.

[[Page 61907]]

This, in turn, means that these organizations would continue working 
towards meeting the Shared Savings Program's goals of lowering growth 
in Medicare FFS expenditures and improving the quality of care 
furnished to Medicare beneficiaries.
    As described in the Regulatory Impact Analysis (section VII. of 
this proposed rule), we believe accounting for the impact of improper 
payments on performance year expenditures and factors used to calculate 
updated historical benchmarks would not result in an increase in 
spending beyond the expenditures that would otherwise occur under the 
statutory payment methodology in section 1899(d) of the Act. As we also 
discuss elsewhere in this section of this proposed rule, across an 
ACO's reconciliations where improper payments impact performance year 
or BY expenditures, the overall net impact of using the proposed 
methodology on the ACO's aggregate shared savings or shared losses 
across those reconciliations could be positive or negative and would 
depend on the circumstances of a given reopening scenario.
    We will continue to reexamine this projection in the future to 
ensure that the requirement under section 1899(i)(3)(B) of the Act that 
an alternative payment model not result in additional program 
expenditures continues to be satisfied. In the event that we later 
determine that the payment model established under section 1899(i)(3) 
of the Act no longer meets this requirement, we would undertake 
additional notice and comment rulemaking to make adjustments to the 
payment model to assure continued compliance with the statutory 
requirements.
(d) Adjusting Historical Benchmarks To Account for the Impact of 
Improper Payments
    CMS adjusts an ACO's historical benchmark annually, during the term 
of the ACO's agreement period, to account for certain changes, as 
specified in the Shared Savings Program regulations. The related 
adjustment is specified under Sec.  425.601(a)(9), for the benchmarking 
methodology applicable to agreement periods beginning on or after July 
1, 2019, and before January 1, 2024, and under Sec.  425.652(a)(9), for 
the benchmarking methodology applicable to agreement periods beginning 
on January 1, 2024, and in subsequent years. As finalized with the CY 
2024 PFS final rule (88 FR 79195 through 79200), Sec.  425.652(a)(9) 
introductory text was amended to specify, among other changes, that for 
each performance year during the term of the agreement period, the 
ACO's benchmark is adjusted for changes in values used in benchmark 
calculations as a result of issuance of a revised initial determination 
under Sec.  425.315 (among other factors). Similar language is not 
currently included in Sec.  425.601(a)(9) introductory text.
    We propose to use our authority under section 1899(d)(1)(B)(ii) of 
the Act to adjust the benchmark to account for the impact of improper 
payments, in the event CMS recalculates a payment determination and 
issues a revised initial determination for a performance year in a 
prior agreement period that corresponds to a benchmark year of the 
ACO's current agreement period. We propose to adjust an ACO's 
historical benchmark for use in reaching an initial determination of 
financial performance for a performance year, in cases where an ACO has 
a benchmark year that corresponds to a performance year for which we 
issued a revised initial determination. In such a case, we would apply 
the same methodology to recalculate the ACO's BY expenditures as used 
in recalculating the expenditures for the corresponding performance 
year, as part of a reopening. Under this proposed approach, we would be 
able to improve the accuracy of the benchmark year calculations used in 
reaching an initial determination for a performance year, by addressing 
the impact of previously identified improper payments on the 
expenditure calculations. Such an adjustment to the benchmark 
expenditures would appropriately calculate the ACO's historical 
benchmark that might otherwise be under- or over-stated due to improper 
payments.
    Expanding upon the example illustrated in Table 43, if we have 
issued a revised initial determination for PY 2022 in December 2025, 
for an ACO that renewed to continue its participation under a new 
agreement period beginning on January 1, 2025, our proposed policy 
would enable us to use the same methodology for calculating BY 2022 
expenditures for PY 2025, in reaching the initial determination for PY 
2025.
    We propose to amend Sec. Sec.  425.601(a)(9) and 425.652(a)(9) to 
specify this proposed adjustment to the historical benchmark. We 
propose to revise Sec.  425.601(a)(9) introductory text to further 
specify that for the second and each subsequent performance year during 
the term of the agreement period, the ACO's benchmark would be adjusted 
for changes in values used in benchmark calculations as a result of 
issuance of a revised initial determination under Sec.  425.315. We 
also propose to add a new paragraph (a)(9)(iii) to Sec.  425.601 and to 
add a new paragraph (a)(9)(viii) to Sec.  425.652, each specifying that 
we would recalculate benchmark year expenditures to account for the 
impact of improper payments, for the benchmark year corresponding to a 
performance year for which CMS issued a revised initial determination 
under Sec.  425.315. In recalculating expenditures for the benchmark 
year, CMS would apply the same calculation methodology applied in 
recalculating expenditures for the corresponding performance year, in 
accordance with the proposed new section of the regulation at Sec.  
425.674.
(e) ACO Reopening Requests
    The following discussion of requesting and conducting a reopening 
pertains to reopening a payment determination for good cause or for 
fraud or similar fault, unless specified otherwise.
    We propose to establish a process at Sec.  425.315(b) by which an 
ACO may request a reopening of an initial determination, or a final 
agency determination under subpart I, of shared savings or shared 
losses. Although an ACO's submission of a reopening request is 
optional, we propose to require that the ACO's request be in a form and 
manner specified by CMS. Further, we propose that the timing of the 
ACO's reopening request must be consistent with the timeframes 
specified in Sec.  425.315(a)(1)(i) and (ii), respectively, either (i) 
at any time in the case of fraud or similar fault, or (ii) not later 
than 4 years after the date of the notification to the ACO of the 
initial determination of savings or losses for the relevant performance 
year for good cause. We anticipate providing additional information on 
the reopening request process for ACOs through guidance, including the 
form and manner in which CMS must receive a reopening request.
    CMS will need to receive sufficient, detailed information from ACOs 
to evaluate an ACO's reopening request. For instance, in the case of a 
reopening request in connection with improper payments, or fraud or 
similar fault potentially impacting the ACO's financial calculations, 
receiving detailed information about the issue, including the following 
information, would aid in our analysis of the ACO's request:
     ACO identifier(s) (also referred to as ``ACO ID'') and 
Legal Business Name(s).
     Identity of the provider or supplier for which there may 
be improper payment(s), or that may be suspected of fraud or similar 
fault, including name,

[[Page 61908]]

NPI or Provider Transaction Access Number (PTAN), TIN, or other 
identifier.
     Time period during which potentially impacted claims were 
submitted or improper conduct occurred.
     Short description of the improper payment, alleged fraud 
or similar fault, and how it was identified, including information such 
as any specific claim type codes and HCPCS or CPT codes.
     Evidence of financial impact on the ACO's shared savings 
or shared losses calculation, such as any analysis supporting the 
calculation of financial impact to the ACO and a list of beneficiaries 
assigned to the ACO for whom claims were submitted by the provider or 
supplier suspected of fraud or similar fault, or for which expenditures 
may be impacted by improper payments.
    As we describe elsewhere in this section of this proposed rule, a 
recalculation of shared savings and shared losses to account for 
improper payments could result in a variety of outcomes. An ACO should 
weigh these potential outcomes when considering whether to submit a 
reopening request.
    We acknowledge that the proposed process for requesting a 
reopening, whether for good cause or for fraud or similar fault, would 
represent a new process. Therefore, we seek comments and suggestions on 
the form and manner in which CMS should receive these requests. We also 
seek comment on approaches to ensuring that ACOs submit reopening 
requests with sufficient information to allow CMS to identify and 
evaluate the impact on Shared Savings Program financial performance.
    The following steps illustrate how we may conduct review of an 
ACO's request to reopen a payment determination to account for the 
impact of improper payments:
     Upon receiving an ACO's reopening request, CMS would 
evaluate this request, and ask the requesting ACO to provide 
supplemental information if needed.
     We would work with CPI and law enforcement agencies to 
identify, validate and quantify improper payments potentially impacting 
expenditures used in program calculations. We note that identification 
of improper payments may be contingent on the conclusion of an 
investigation that is underway.
     We may conduct initial analysis to consider the basis for 
reopening the ACO's payment determination under Sec.  425.315(a), and 
the significance of the improper payments to an ACO's financial 
calculations under the Shared Savings Program (as described in section 
III.G.7.c.(2).(b) of this proposed rule):
    ++ If we find that the potential improper payment does not meet 
CMS' standards for reopening the payment determination, we anticipate 
notifying the ACO of our decision.
    ++ If we reach a determination to reopen the ACO's payment 
determination for a performance year:
    --We would recalculate expenditures to account for improper 
payments using the methodology proposed in section III.G.7.c.(2).(c) of 
this proposed rule, recalculate the ACO's shared savings and shared 
losses, issue a revised initial determination, and engage in payment 
activities and recoupment activities, as needed.
    --During the recalculation period CMS would also identify whether 
the relevant performance year is also serving as a benchmark year for 
the ACO's current agreement period and prepare to adjust the ACO's 
benchmark year expenditures to account for the revised initial 
determination (once issued), as discussed in section III.G.7.c.(2).(d) 
of this proposed rule.
    In the event that improper payments identified in analyzing an 
ACO's reopening request have the potential to impact the payment 
determinations of one or more other ACOs, we anticipate only 
determining whether to reopen the payment determination for an ACO that 
submitted the reopening request. More generally, we may initiate 
analysis of the impact of improper payments on Shared Savings Program 
financial calculations, and potentially reopen the payment 
determination for one or more ACOs absent an ACO's request for 
reopening. For instance, in learning of improper payments that may 
potentially impact Shared Savings Program calculations for multiple 
ACOs, including through the reopening request process, we may seek to 
reopen payment determinations where improper payments are anticipated 
to result in significant adjustments to ACOs' initial determinations 
upon recalculation. We also anticipate initiating analysis of the 
impact of improper payments on an ACO's payment determination upon 
learning of improper payments originating inside the ACO that may 
potentially impact Shared Savings Program calculations, and may reopen 
the ACO's payment determination, as needed, to address program 
integrity concerns.
    We anticipate that our review and analysis of reopening requests 
could occur over a protracted period of time during which we may be 
able to provide little additional information to the ACO until we have 
reached our decision. We would aim to conduct a reopening such that the 
timing of any issuance of a revised initial determination aligns with 
the timeframe for when CMS typically completes annual performance year 
financial reconciliation and payment and recoupment. However, because 
investigations into improper payments, including considering whether 
there is reliable evidence of fraud or similar fault, may involve 
varying degrees of complexity and scale, and because the application of 
our proposed methodology for calculating expenditures relies on 
information that may result from such investigations, among other 
sources of information, CMS may not always be able to conduct a 
reopening within a specific timeframe after an ACO submits a reopening 
request. As reflected in the discussions within this section of this 
proposed rule, the process for analyzing an ACO's reopening request, 
reaching a decision on whether to reopen the initial determination, 
recalculating the ACO's payment determination, and issuing a revised 
initial determination, may occur over a period of months or potentially 
years, and may have impacts on future agreement periods. In cases where 
CMS and law enforcement officials may have investigations underway, CMS 
must refrain from providing details to ACOs, and other individuals or 
entities, of pending actions to protect the integrity of those 
investigations. Therefore, we may be limited in the information we can 
communicate to an ACO about our consideration of the ACO's reopening 
request.
    We seek comment on the aforementioned considerations for how we 
could conduct review of an ACO's request to reopen a payment 
determination to account for the impact of improper payments. More 
generally, as we gain additional experience with ACOs' submission of 
reopening requests, including the volume of the requests, and nature of 
the requests, we may revisit the reopening request process, as needed, 
in future notice and comment rulemaking.
(f) Preventing and Reporting Medicare Fraud
    ACOs can help prevent fraud and abuse within the Medicare program 
or in other Federal health care programs. Program integrity 
requirements for the Shared Savings Program include the requirement 
under Sec.  425.300 that the ACO must have a compliance plan. Among 
other required elements, an ACO's compliance plan must include a method 
for employees or contractors of

[[Page 61909]]

the ACO, ACO participants, ACO providers/suppliers, and other 
individuals or entities performing functions or services related to ACO 
activities to anonymously report suspected problems related to the ACO 
to the compliance officer (Sec.  425.300(a)(3)). ACOs' compliance plans 
must also include a requirement for the ACO to report probable 
violations of law to an appropriate law enforcement agency (Sec.  
425.300(a)(5)). (Refer to the November 2011 final rule, 76 FR 67951 and 
67952.)
    ACOs are encouraged to report potential fraud or abuse by 
submitting a complaint to the CMS Center for Program Integrity (CPI), 
Fraud Investigations Group (FIG), Division of Provider Investigations 
(DPI) at [email protected]. ACOs can also report potential fraud 
or abuse by submitting a complaint to the HHS-OIG website, https://oig.hhs.gov/fraud/report-fraud/, HHS-OIG hotline at 1-800-HHS-TIPS (1-
800-447-8477), TTY at 1-800-377-4950, by fax at 1-800-223-8164, or by 
mailing to: Office of Inspector General ATTN: OIG HOTLINE OPERATIONS 
P.O. Box 23489 Washington, DC 20026. ACOs suspecting healthcare fraud, 
waste, or abuse are encouraged to visit the CMS Center for Program 
Integrity's web page on Reporting Fraud, at https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity/reporting-fraud 
for more information. More generally, anyone suspecting healthcare 
fraud, waste or abuse is encouraged to report it to CMS or HHS-OIG.
    In the absence of a reopening request submitted by an ACO in the 
form and manner specified by CMS, as discussed in section 
III.G.7.c.(2).(e) of this proposed rule, the reporting of potential 
fraud or abuse to CPI or HHS-OIG does not itself constitute a reopening 
request under the Shared Savings Program.
    We seek comment on the proposals, and considerations, described in 
this section of this proposed rule, including: considerations for 
reopening a payment determination to account for improper payments; the 
proposed changes to the regulations to specify (1) CMS' discretion to 
reopen payment determinations, (2) a calculation methodology to account 
for the impact of improper payments in recalculating expenditures and 
payment amounts used in Shared Savings Program financial calculations 
upon reopening a payment determination pursuant to Sec.  425.315, (3) 
an adjustment to the historical benchmark to account for the impact of 
improper payments, and (4) a process for ACOs to request reopening of a 
payment determination. We also welcome comments on considerations in 
connection with ACOs' potential role in preventing and reporting 
Medicare fraud.
d. Mitigating the Impact of Significant, Anomalous, and Highly Suspect 
Billing Activity on Shared Savings Program Financial Calculations in 
Calendar Year 2024 or Subsequent Calendar Years
(1) Background
(a) Statutory Background on Shared Savings Program Financial 
Calculations
    Section 1899 of the Social Security Act (the Act) (42 U.S.C. 
1395jjj), as added by section 3022 of the Patient Protection and 
Affordable Care Act (Pub. L. 111-148, enacted March 23, 2010), 
establishes the general requirements for payments to participating ACOs 
in the Shared Savings Program. Specifically, section 1899(d)(1)(A) of 
the Act provides that providers of services and suppliers participating 
in an ACO will continue to receive payment under the original Medicare 
fee-for-service program under Medicare Parts A and B in the same manner 
as they would otherwise be made. However, section 1899(d)(1)(A) of the 
Act also provides for an ACO to receive payment for shared savings 
provided that the ACO meets both the quality performance standards 
established by the Secretary and demonstrates that it has achieved 
savings against a benchmark of expected average per capita Medicare FFS 
expenditures. Additionally, section 1899(i) of the Act authorizes the 
Secretary to use other payment models in place of the one-sided model 
described in section 1899(d) of the Act. This provision authorizes the 
Secretary to select a partial capitation model or any other payment 
model that the Secretary determines will improve the quality and 
efficiency of items and services furnished to Medicare beneficiaries 
without additional program expenditures. We have used our authority 
under section 1899(i)(3) of the Act to establish the Shared Savings 
Program's two-sided payment model (see for example, 80 FR 32771 and 
32772, and 83 FR 67834 through 67841) and to mitigate shared losses 
owed by ACOs affected by extreme and uncontrollable circumstances 
during PY 2017 and subsequent performance years (82 FR 60916 and 60917, 
83 FR 59974 through 59977), among other uses of this authority 
described elsewhere in this proposed rule.
    Section 1899(d)(1)(B)(i) of the Act specifies that, in each year of 
the agreement period, an ACO is eligible to receive payment for shared 
savings only if the estimated average per capita Medicare expenditures 
under the ACO for Medicare FFS beneficiaries for Parts A and B 
services, adjusted for beneficiary characteristics, is at least the 
percent specified by the Secretary below the applicable benchmark under 
section 1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the 
Act addresses how ACO benchmarks are to be established and updated 
under the Shared Savings Program. This provision specifies that the 
Secretary shall estimate a benchmark for each agreement period for each 
ACO using the most recent available 3 years of per beneficiary 
expenditures for Parts A and B services for Medicare FFS beneficiaries 
assigned to the ACO. This benchmark shall be adjusted for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate and updated by the projected absolute amount of growth in 
national per capita expenditures for Parts A and B services under the 
original Medicare FFS program, as estimated by the Secretary.
    In past rulemaking, we have used our authority under sections 
1899(d)(1)(B)(ii) and 1899(i)(3) of the Act to establish adjustments to 
the benchmark and program expenditure calculations, respectively, to 
exclude certain Medicare Parts A and B payments. In the November 2011 
final rule (76 FR 67920 through 67922), we adopted an alternate payment 
methodology that excluded Indirect Medical Education (IME) and 
Disproportionate Share Hospital (DSH) payments from ACO benchmark and 
performance year expenditures due to concerns that the inclusion of 
these amounts would incentivize ACOs to avoid referring patients to the 
types of providers that receive these payments. In the CY 2023 PFS 
final rule (87 FR 69954 through 69956), we excluded new supplemental 
payments to Indian Health Service/Tribal hospitals and hospitals 
located in Puerto Rico consistent with our longstanding policy to 
exclude IME, DSH and uncompensated care payments from ACOs' assigned 
and assignable beneficiary expenditure calculations. In the May 8, 2020 
COVID-19 IFC (85 FR 27577 through 27582), we established a methodology 
to adjust Shared Savings Program financial calculations to account for 
the COVID-19 Public Health Emergency. Specifically, we established a 
methodology that would exclude all Medicare Parts A and B FFS payment 
amounts for a beneficiary's episode of care for treatment of COVID-19 
to

[[Page 61910]]

prevent distortion to, among other calculations, an ACO's benchmark and 
program expenditure calculations.
(b) Background on Significant, Anomalous, and Highly Suspect Billing 
Activity
    Recently, ACOs and other interested parties have raised concerns 
about an increase in billing to Medicare for selected intermittent 
urinary catheter supplies on Durable Medical Equipment, Prosthetics, 
Orthotics & Supplies (DMEPOS) claims in CY 2023, alleging that the 
increase in payments represents fraudulent activity (the ``alleged 
conduct''). The observed DMEPOS billing volume for intermittent urinary 
catheters in CY 2023 represents significant, anomalous, and highly 
suspect (SAHS) billing activity.\525\
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    \525\ SAHS billing activity may appear in claims for items and 
services rendered to beneficiaries assigned to an ACO as well as for 
beneficiaries who are not assigned to an ACO. Such activity may be 
caused by providers and suppliers who participate in an ACO and who 
do not participate in an ACO. This discussion is primarily focused 
on SAHS billing activity performed by providers and suppliers that 
do not participate in ACOs billing items and services for 
beneficiaries who are assigned to ACOs or who are in the assignable 
population used in national and regional factors used in Shared 
Savings Program calculations.
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    Generally, a level of billing for a given HCPCS or CPT code is 
considered SAHS billing activity when a given HCPCS or CPT code 
exhibits a level of billing that represents a significant claims 
increase either in the volume or dollars (for example, dollar volume 
significantly above prior year, or claims volume beyond expectations) 
with national or regional impact (for example, not only impacting one 
or few ACOs) and represents a deviation from historical utilization 
trends that is unexpected and is not clearly attributable to reasonably 
explained changes in policy or the supply or demand for covered items 
or services. The billing level is significant and represents billing 
activity that would cause significantly inaccurate and inequitable 
payments and repayment obligations in the Shared Savings Program if not 
addressed.
    Current Shared Savings Program regulations, codified at 42 CFR part 
425, do not provide a basis for CMS to adjust program expenditure or 
revenue calculations to remove the impact of SAHS billing activity such 
as that arising from the alleged conduct in advance of issuing an 
initial determination. As discussed in section III.G.7.c of this 
proposed rule, CMS may reopen an initial determination or a final 
agency determination and issue a revised initial determination at any 
time in the case of fraud or similar fault, and not later than 4 years 
after the date of the notification to the ACO of the initial 
determination of savings or losses for the relevant performance year 
for good cause (Sec.  425.315). This does not allow for CMS to address 
SAHS billing activity, which must be addressed prior to conducting 
financial reconciliation, which is an initial determination, to prevent 
significant inequity and inaccurate payment determinations.
    We are concerned that such SAHS billing activity, should it occur 
in CY 2024 or later, would inflate Medicare Parts A and B payment 
amounts and affect Shared Savings Program calculations, including:
     Performance year reconciliation calculations, including 
expenditures for each ACO's assigned beneficiaries for the calendar 
year that has SAHS billing activity, the national-regional blended 
update factor used to update the benchmark for ACOs beginning an 
agreement period before January 1, 2024 (refer to Sec.  425.601(b)), 
the three-way blended update factor used to update the benchmark for 
ACOs beginning an agreement period on January 1, 2024 and in subsequent 
years (refer to Sec.  425.652(b)), and factors based on ACO participant 
revenue to determine the loss recoupment limits for ACOs participating 
under two-sided models of the BASIC track (Levels C, D, E) (refer to 
Sec.  425.605(d)).
     Historical benchmark calculations for establishing the 
benchmark for ACOs beginning new agreement periods on January 1, 2025, 
or in subsequent years with a benchmark year that has SAHS billing 
activity (refer to Sec.  425.652(a)).
     Factors used in the application cycle for ACOs applying to 
enter a new agreement period beginning two years after the SAHS billing 
activity occurred, and the change request cycle for ACOs continuing 
their participation in the program, including data used to determine an 
ACO's eligibility for Advance Investment Payments under Sec.  
425.630(b) or for the CMS Innovation Center's new ACO Primary Care Flex 
Model (ACO PC Flex Model) based on ACO revenue status (high revenue or 
low revenue), and to determine repayment mechanism amounts for ACOs 
entering, or continuing in, two-sided models (refer to Sec.  
425.204(f)).
    The accuracy of the Shared Savings Program's determination of an 
ACO's financial performance (through a process referred to as financial 
reconciliation) in terms of the ACO's eligibility for and amount of a 
shared savings payment or liability for shared losses, depends on the 
accuracy of claims data. Absent CMS action, SAHS billing activity would 
affect performance year financial reconciliation program-wide rather 
than being limited to ACOs that have assigned beneficiaries directly 
impacted by the issue. For instance:
     An ACO with assigned beneficiaries impacted by the SAHS 
billing activity will see an increase in performance year expenditures, 
reducing the ACO's shared savings or increasing the amount of shared 
losses owed by the ACO. The impact on the ACO's performance may be 
partially mitigated if the SAHS billing activity also increases the 
ACO's regional service area expenditures and the national expenditures 
used to calculate the two-way national-regional blended benchmark 
update factor.
     An ACO with assigned beneficiary expenditures and regional 
service area expenditures with little or no impact from the SAHS 
billing activity will receive a relatively higher benchmark update 
under the national-regional blended update factors used in performance 
year reconciliation, and therefore, may appear to perform better as a 
result of the national impact of the SAHS billing activity, resulting 
in higher earned performance payments or lower or no losses for the 
ACO.
    Unaddressed, SAHS billing activity in a given calendar year can 
distort the historical benchmarks for an ACO in an agreement period 
that have the calendar year as a benchmark year and the accuracy of any 
future financial reconciliation performed against those benchmarks. 
Similarly, inaccurate revenue and expenditure calculations based on 
data from a calendar year affected by SAHS billing activity may affect 
an ACO's revenue status and the amount of funds an ACO in a two-sided 
model must secure as a repayment mechanism, one of the program's 
important safeguards for protecting the Medicare Trust Funds. Absent 
CMS action, SAHS billing activity likely would significantly impact 
shared savings and losses calculations for the performance year 
affected by SAHS billing activity, and for future performance years 
that have benchmark years affected by SAHS billing activity. Under 
these circumstances, some ACOs would likely experience adverse impacts 
(for example, lower or no shared savings or higher shared losses) while 
other ACOs would experience windfall gains (for example, higher shared 
savings or lower or no shared losses).
    Failing to address SAHS billing activity would jeopardize the 
integrity of the Shared Savings Program. There are 480 ACOs in the 
Shared Savings Program with over 608,000 health care providers who care 
for 10.8 million

[[Page 61911]]

assigned FFS beneficiaries.\526\ In PY 2022, the most recent year for 
which data is available, savings achieved by ACOs relative to 
benchmarks amounted to $4.3 billion, of which ACOs received shared 
savings payments totaling $2.5 billion, and Medicare retained $1.8 
billion in savings.\527\ ACOs are held accountable for 100 percent of 
total Medicare Parts A and B expenditures for their assigned 
beneficiary populations (with limited exceptions). This incentivizes 
ACOs to generate savings for the Medicare program as they have the 
opportunity to share in those savings if certain requirements are met. 
It also discourages the ACO from generating unnecessary expenditures 
for Medicare as they may be required to repay those amounts to CMS. 
Accountable care arrangements such as this cannot function if the ACO 
may be held responsible for all SAHS billing activity that is outside 
of their control. Holding an ACO accountable for substantial losses due 
to SAHS billing activity is not only inequitable but will dramatically 
increase the level of risk associated with participation, making the 
Shared Savings Program unattractive.
---------------------------------------------------------------------------

    \526\ Refer to CMS, Shared Savings Program Fast Facts--As of 
January 1, 2024, available at https://www.cms.gov/files/document/2024-shared-savings-program-fast-facts.pdf.
    \527\ Refer to CMS, Shared Savings Program Performance Year 
Financial and Quality Results, 2022, available at https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results/data.
---------------------------------------------------------------------------

    In a separate proposed rule entitled ``Medicare Program: Mitigating 
the Impact of Significant, Anomalous, and Highly Suspect Billing 
Activity on Medicare Shared Savings Program Financial Calculations in 
Calendar Year 2023'' (89 FR 55168, July 3, 2024) (referred to herein as 
the SAHS billing activity proposed rule), we have proposed an approach 
to address the SAHS billing activity identified for CY 2023 to protect 
the accuracy, fairness, and integrity of Shared Savings Program 
financial calculations. Specifically, we have proposed to exclude 
payment amounts for two HCPCS codes (A4352 (Intermittent urinary 
catheter; Coude (curved) tip, with or without coating (Teflon, 
silicone, silicone elastomeric, or hydrophilic, etc.), each) and A4353 
(Intermittent urinary catheter, with insertion supplies)) on DMEPOS 
claims submitted by any supplier from expenditure and revenue 
calculations used for: assessing performance year (PY) 2023 financial 
performance of Shared Savings Program ACOs, establishing benchmarks for 
ACOs starting agreement periods in 2024, 2025, and 2026, and 
calculating factors used to determine revenue status and repayment 
mechanism amounts in the application and change request cycle for ACOs 
applying to enter a new agreement period beginning on January 1, 2025, 
or continue their participation in the program in PY 2025, 
respectively. There will be a 30-day public comment period on the SAHS 
billing activity proposed rule so as to minimize the negative impact on 
ACOs of a delay in the issuance of PY 2023 initial financial 
determinations and disbursement of performance payments, as well as to 
other program milestones, necessitated by the calculation of amounts 
under the financial methodology proposed in the SAHS billing activity 
proposed rule.
(2) Proposed Revisions
    It is important to establish a policy that would allow CMS to 
proactively make similar adjustments for future calendar years, should 
new SAHS billing activity be identified. In general, we anticipate that 
billing activity that meets the high bar to be considered significant, 
anomalous, and highly suspect billing activity will be a rare 
occurrence. This is evidenced by the program's history. The SAHS 
billing activity surrounding selected catheter codes in 2023 is the 
first occasion we have had in the program's 12-year history to consider 
this issue. We propose that we would notify ACOs and ACO applicants of 
our determinations to remove any codes and the aggregate per capita 
dollar amount of the codes removed as part of the annual financial 
reconciliation process. While we anticipate future occurrences of the 
scope and magnitude observed for urinary catheters in CY 2023 to be 
rare, having a permanent policy in place would:
     Allow CMS to move quickly to make adjustments to financial 
calculations without having to engage in additional rulemaking, 
ensuring timely issuance of initial determinations of savings and 
losses and disbursement of earned performance payments;
     Provide ACOs with greater certainty that they will not be 
held accountable for SAHS billing activity that is out of their 
control, promote integrity and fairness and ensure accuracy of program 
calculations;
     Limit requests to reopen initial determinations, thus 
reducing burden for ACOs and CMS.
    In this proposed rule we are therefore proposing an approach by 
which we would adjust Shared Savings Program calculations to mitigate 
the impacts of SAHS billing activity occurring in CY 2024 or subsequent 
calendar years.
(a) Identifying Significant, Anomalous, and Highly Suspect Billing 
Activity
    We propose that CMS would have the sole discretion to identify 
cases of SAHS billing activity for a particular calendar year that 
would warrant the adjustment of Shared Savings Program financial 
calculations. We anticipate routinely examining billing trends 
identified by CMS and other relevant information that had been raised 
through complaints by ACOs or other interested parties to the HHS-OIG 
or to the CMS CPI. We would seek to identify and monitor any codes that 
would potentially trigger the adjustment policy by meeting the high bar 
for removal under the criteria used to determine SAHS billing activity. 
Shortly after the start of a calendar year CMS would make a final 
determination as to which codes, if any, warrant adjustments for the 
previous calendar year. For example, in early CY 2026 CMS would make a 
final determination of whether any codes met the high bar for removal 
under the criteria used to determine SAHS billing activity in CY 2025, 
allowing time for the adjustments to be incorporated in forthcoming 
calculations.
    CMS must retain sole discretion to identify cases of SAHS billing 
activity because we cannot anticipate what SAHS billing activity we may 
encounter in the future that may warrant adjustments to the program's 
financial calculations. We are also concerned about balancing 
adjustments for billing activity that rises to the level of SAHS versus 
removing payment amounts associated with billing activity due to 
inefficiencies that are within the ACO's control. Depending on the 
frequency of the use of this authority and the occurrence of SAHS 
billing activity, and thus the experience we develop in this area, we 
would consider proposing to codify criteria to identify SAHS billing 
activity in the future through additional rulemaking. Nonetheless, we 
believe that CMS should retain sole discretion to determine whether 
SAHS billing activity occurred on a case-by-case basis at this time.
    We anticipate considering multiple criteria in determining whether 
SAHS billing activity warrants removal of the corresponding billing 
codes from Shared Savings Program financial calculations. These 
criteria include:
     The observed increase in claims for a HCPCS or CPT code 
year-to-year meets the definition of significant, anomalous, and highly 
suspect billing activity, as defined elsewhere in this section of this 
proposed rule;

[[Page 61912]]

     The observed billing activity has national or regional 
impact or significance, such as:
    ++ Involves a Medicare provider or supplier, a beneficiary 
population and/or states with claims activity that that significantly 
impacts national or regional expenditure values or trends;
    ++ Warrants adjustment (all or partial) to national Medicare 
expenditure trend calculations used in payment (for example, United 
States Per Capita Cost) and/or Federal budget forecast calculations;
    ++ Warrants removal from national and regional growth rates used to 
update ACO historical benchmarks;
     If no action is taken there would be an imbalance between 
ACO performance year and historical benchmark year expenditures;
     Use of payment amounts associated with the SAHS billing 
activity could result in payment inaccuracies that produce 
significantly inaccurate and inequitable payment determinations in the 
Shared Savings Program (including the amount of shared savings or 
shared losses), due to factors beyond the control of ACOs; and
     The claims in question may be disproportionately 
represented by Medicare providers or suppliers whose Medicare 
enrollment status has been revoked.
    We anticipate utilizing this authority only in rare and extreme 
cases where a number of the criteria are satisfied. We anticipate we 
would consider the extent to which the billing activity meets each 
criterion when developing a holistic assessment of the billing 
activity's impact on the Shared Savings Program.
    The extent of the geographic impact of the SAHS billing activity in 
question is relevant given that the proposed policy would entail 
adjustments program-wide. One consideration for determining whether the 
billing activity has national or regional significance would be if the 
pattern warrants an adjustment to or special assumption for calculating 
official Medicare expenditure trends (such as the United States Per 
Capita Cost (USPCC) or Federal budget forecasts) due to the activity's 
significant, anomalous, and highly suspect nature. For example, the 
2024 Medicare Trustees Report noted a significant increase in suspected 
fraudulent spending on certain intermittent catheters in 2023.\528\ The 
DME projections in the report include the assumption that this 
suspected fraud will be addressed during 2024.\529\ Billing activity in 
the Medicare FFS program at a scale warranting a special assumption for 
calculating the USPCC or Federal budget forecasts has per se national 
or regional significance, and thus would likely rise to the high bar of 
warranting adjustment to Shared Savings Program expenditure and revenue 
calculations.
---------------------------------------------------------------------------

    \528\ The Boards of Trustees, Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, ``2024 Annual 
Report of the Boards of Trustees of the Federal Hospital Insurance 
and Federal Supplementary Medical Insurance Trust Funds'', p. 136, 
available at https://www.cms.gov/oact/tr/2024.
    \529\ Ibid.
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    We would seek to assess whether the billing activity creates an 
imbalance between ACO performance year and historical benchmark year 
expenditures. This assessment could involve considering whether the 
increase in billing activity was at such scale that it causes the 
difference between performance year and benchmark year expenditures for 
an ACO's assigned beneficiary population for the claim type affected by 
the billing activity (for example, DMEPOS) to be substantially larger 
than differences for other claim types.
    We would also consider whether the billing activity, and any 
inaccurate or inequitable payment determinations that could result from 
using the related payment amounts, was outside of Shared Savings 
Program ACOs' ability to reasonably control. Most commonly, this would 
entail examining whether the Medicare providers or suppliers billing 
the codes in question are ACO providers or suppliers. Generally, we 
would be more likely to apply the proposed policy if the SAHS billing 
activity were outside of the ACO's control as the program may otherwise 
lack a means to control the growth of such amounts.
    Finally, we would consider whether billing activity were 
disproportionately represented by Medicare providers or suppliers whose 
Medicare enrollment status has been revoked. Such a circumstance would 
provide further evidence that the billing activity surrounding these 
codes was highly suspect. We seek comment on the processes and criteria 
described.
(b) Adjustments to Shared Savings Program Calculations
    In the event that CMS identifies one or more HCPCS or CPT codes 
with SAHS billing activity in CY 2024 or a subsequent calendar year 
that warrant adjustment, we propose to exclude all Medicare Parts A and 
B payment amounts associated with the identified codes on specified 
claim types submitted by any provider or supplier from expenditure and 
revenue calculations for the relevant calendar year for which the SAHS 
billing activity is identified. For example, if CMS identifies one or 
more codes with SAHS billing activity in CY 2025 that warrant 
adjustment, we would exclude payments for those codes for both 
calculations where CY 2025 is the performance year and in calculations 
where CY 2025 is a benchmark year for ACOs in agreement periods 
beginning in 2026, 2027, and 2028.
    We propose that we would also adjust the 3 most recent years prior 
to the start of the ACO's agreement period used in establishing the 
historical benchmark that is used to reconcile the ACO for a 
performance year corresponding to the calendar year for which the SAHS 
billing activity was identified. In the example where CMS identified 
SAHS billing activity for 2025, we would adjust benchmark expenditures 
(ACO, national, and regional) for 2019, 2020, and 2021, for an ACO that 
began an agreement period in 2022 (for which PY 2025 is the fourth 
performance year in its agreement period) and would adjust benchmark 
expenditures (ACO, national, and regional) for 2022, 2023, and 2024 for 
an ACO that began its agreement period in 2025 (for which PY 2025 is 
the first performance year in its agreement period). Note that in 
computing benchmark expenditures for 2023 for this second ACO, because 
2023 is a benchmark year, CMS would also exclude payments for the 
catheter claims with SAHS billing activity in 2023, as proposed in the 
SAHS billing activity proposed rule, if finalized.
    Our proposal to adjust an ACO's historical benchmark to exclude 
Medicare Parts A and B FFS payment amounts associated with the HCPCS or 
CPT codes displaying SAHS billing activity during a performance year 
would achieve greater consistency between the benchmark period and the 
performance year, given that we are excluding all payments on specified 
claim types for the selected codes from performance year calculations, 
including payments that would have been made in the absence of any SAHS 
billing activity. This helps to ensure a balance between the benchmark 
and the performance year such that an ACO is not unfairly benefitting 
from a benchmark that includes certain expenditures that are excluded 
from the performance year. Under our proposal, we would identify any 
codes warranting adjustment at the start of the next calendar year and 
our operational schedule would accommodate the additional calculations 
required. Therefore, we anticipate we would be able to compute adjusted 
historical

[[Page 61913]]

benchmarks for the affected reconciliation with minimal, if any, delays 
to the typical timeline for issuing initial determinations.
    We propose that we would provide the historical benchmark that has 
been adjusted to exclude payment amounts for HCPSC or CPT codes 
associated with SAHS billing activity occurring in the performance year 
being reconciled to ACOs as part of their financial reconciliation 
settlement package for the performance year, as opposed to providing a 
separate new historical benchmark report in advance of settlement. This 
approach is consistent with what we have done for rare past occasions 
where we computed revised benchmarks immediately prior to 
reconciliation to correct for late-breaking data issues. Consistent 
with existing operational practice, in calculating these adjusted 
benchmarks, we would recompute ACO expenditures using beneficiary 
assignment data that was generated during the performance year being 
reconciled for all ACOs. For example, if computing adjusted historical 
benchmarks for PY 2025 to exclude claim payments for codes with SAHS 
billing activity during the performance year, we would use beneficiary 
assignment data generated during CY 2025. Although the benchmark year 
assignment data generated during the performance year being reconciled 
would be based on the same ACO participant list, assignment methodology 
selection under Sec.  425.226(a)(1), and assignment methodology under 
subpart E of Part 425 of the regulations as used in calculating the 
ACO's most recent prior benchmark, other factors, such as more recent 
Medicare beneficiary eligibility data along with the ACOs included in 
the claims-based assignment competition, could differ and impact an 
ACO's assigned population. We considered whether to provide ACOs with 
their adjusted benchmark at the time we announce our determination of 
SAHS billing activity for a given calendar year (anticipated to occur 
near the start of the next calendar year), however we concluded this 
would delay other important program milestones, such as the issuance of 
preliminary and adjusted historical benchmarks for the new performance 
year.
    When the calendar year with SAHS billing activity becomes a 
benchmark year, we are proposing adjustments to calculations for the 
calendar year itself, and not for other years in the benchmark period, 
or the performance years that will be reconciled against those 
benchmarks. Thus, in the example where we identified codes with SAHS 
billing activity in CY 2025, in establishing or resetting the benchmark 
for an ACO entering an agreement period in 2026, we would exclude 
payments for the relevant codes identified for CY 2025 from BY 2025 
calculations and, if our proposed policy in the SAHS billing activity 
proposed rule is finalized, would remove payments for the specified 
catheter codes from BY 2023 calculations. We would not exclude the 
catheter codes identified as having SAHS billing activity in BY 2023 or 
the codes identified for CY 2025 from either BY 2024 calculations or 
calculations for PY 2026 or any subsequent performance years in the 
same agreement period.\530\
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    \530\ This assumes these same codes were not identified as 
having SAHS billing activity in CY 2024 or CY 2026 or later years.
---------------------------------------------------------------------------

    Specifically, we are proposing to adjust the following Shared 
Savings Program calculations, as applicable, to exclude all Medicare 
Parts A and B payment amounts associated with a HCPCS or CPT code on 
claims for the specified claim types displaying SAHS billing activity:
     Calculation of Medicare Parts A and B FFS expenditures for 
an ACO's assigned beneficiaries for all purposes including the 
following: Establishing, adjusting, updating, and resetting the ACO's 
historical benchmark and determining performance year expenditures.
     Calculation of FFS expenditures for assignable 
beneficiaries as used in determining county-level FFS expenditures and 
national Medicare FFS expenditures, including the following 
calculations:
    ++ Determining average county FFS expenditures based on 
expenditures for the assignable population of beneficiaries in each 
county in the ACO's regional service area according to Sec. Sec.  
425.601(c) and 425.654(a) for purposes of calculating the ACO's 
regional FFS expenditures.
    ++ Determining the 99th percentile of national Medicare FFS 
expenditures for assignable beneficiaries for purposes of the 
following:
    -- Truncating assigned beneficiary expenditures used in calculating 
benchmark expenditures under Sec. Sec.  425.601(a)(4) and 
425.652(a)(4), and performance year expenditures under Sec. Sec.  
425.605(a)(3) and 425.610(a)(4).
    -- Truncating expenditures for assignable beneficiaries in each 
county for purposes of determining county FFS expenditures according to 
Sec. Sec.  425.601(c)(3) and 425.654(a)(3).
    -- Truncating expenditures for assignable beneficiaries for 
purposes of determining truncated national per capita FFS expenditures 
for purposes of calculating the Accountable Care Prospective Trend 
(ACPT) according to Sec.  425.660(b)(3).
    ++ Determining truncated national per capita expenditures FFS per 
capita expenditures for assignable beneficiaries for purposes of 
calculating the ACPT according to Sec.  425.660(b)(3).
    ++ Determining national per capita expenditures for Parts A and B 
services under the original Medicare FFS program for assignable 
beneficiaries for purposes of capping the regional adjustment to the 
ACO's historical benchmark according to Sec. Sec.  425.601(a)(8)(ii)(C) 
and 425.656(c)(3), capping the prior savings adjustment according to 
Sec.  425.658(c)(1)(ii), capping the prepaid shared savings multiplier 
according to Sec.  425.640(f)(2)(v), and calculating the proposed HEBA 
scaler according to Sec.  425.662(b)(2).
    ++ Determining national growth rates that are used as part of the 
blended growth rates used to trend forward BY1 and BY2 expenditures to 
BY3 according to Sec. Sec.  425.601(a)(5)(ii) and 425.652(a)(5)(ii) and 
as part of the blended growth rates used to update the benchmark 
according to Sec. Sec.  425.601(b)(2) and 425.652(b)(2)(i).
     Calculation of Medicare Parts A and B FFS revenue of ACO 
participants for purposes of calculating the ACO's loss recoupment 
limit under the BASIC track as specified in Sec.  425.605(d).
     Calculation of total Medicare Parts A and B FFS revenue of 
ACO participants and total Medicare Parts A and B FFS expenditures for 
the ACO's assigned beneficiaries for purposes of identifying whether an 
ACO is a high revenue ACO or low revenue ACO, as defined under Sec.  
425.20, determining an ACO's eligibility to receive advance investment 
payments according to Sec.  425.630, and determining whether an a ACO 
qualifies for a shared savings payment under Sec.  425.605(h).
     Calculation or recalculation of the amount of the ACO's 
repayment mechanism arrangement according to Sec.  425.204(f)(4).
    This approach would recognize that SAHS billing activity has the 
potential to impact an ACO's savings and loss determination for both 
the performance year when the SAHS billing activity occurred and future 
performance years for which the affected year is a benchmark year. 
Making adjustments when the affected period represents a performance 
year or benchmark year is consistent with our approach for the 
exclusion of payment amounts for episodes of care for treatment of 
COVID-19 that we established in the

[[Page 61914]]

May 8, 2020 COVID-19 IFC (85 FR 27577 through 27581).
    The listed calculations reflect the same set of calculations that 
CMS adjusts for a beneficiary's episode of care for treatment of COVID-
19, specified at Sec.  425.611(c), as amended by the CY 2021 PFS final 
rule (85 FR 85044), the CY 2023 PFS final rule (87 FR 70241), and the 
CY 2024 PFS final rule (88 FR 79548), with a few exceptions. First, 
Sec.  425.611(c) includes certain provisions that are not relevant for 
the proposed policy.\531\ Second, the proposed policy includes 
calculations related to truncated national per capita expenditures used 
in determining the ACPT as described in Sec.  425.660(b)(3) that are 
not included in Sec.  425.611(c),\532\ as well as references to other 
new or proposed calculations that do not rely on expenditures from a 
period of time overlapping the Public Health Emergency for COVID-19 for 
the United States which was in effect from January 27, 2020, through 
May 11, 2023 (capping the proposed prepaid shared savings multiplier 
(Sec.  425.640(f)(2)(v)), calculating the proposed HEBA scaler (Sec.  
425.662(b)(2)), and determining whether an ACO that does not meet its 
minimum savings requirement qualifies for a shared savings payment 
(Sec.  425.605(h)). We propose to adjust calculations used for the ACPT 
to mitigate the impact of any SAHS billing activity identified for CY 
2024 or subsequent calendar years. Specifically, in projecting growth 
rates at the start of an agreement period according to Sec.  425.660, 
we would make an adjustment to the growth rates to mitigate the impact 
that any known SAHS billing activity have on spending growth 
projections.
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    \531\ This includes provisions under Sec. Sec.  425.600, 
425.602, 425.603, 425.604, and 425.606 which are not relevant for 
the proposed policy because they are not applicable to PY 2024 or 
later performance years or for agreement periods where CY 2024 or 
later years are benchmark years. These provisions are relevant for 
the COVID-19 episode exclusion policy under Sec.  425.611 because 
they are applicable to performance or benchmark years that overlap 
with the COVID-19 PHE.
    \532\ When establishing the ACPT in the CY 2023 PFS final rule, 
we noted that the first ACPT release would be published in 2024 for 
agreement periods beginning on January 1, 2024, and would provide a 
projected annualized growth rate (or rates) relative to the 2023 
benchmark year (BY3). We noted further that to the extent that 
Medicare projections made at that time (2024) anticipated lingering 
effects from the COVID-19 pandemic then they would be reflected in 
the ACPT (see 87 FR 69894) and we opted not to amend Sec.  425.611 
to include adjustments of ACPT-related calculations. However, it is 
appropriate to propose making adjustments to ACPT-related 
calculations in this proposed rule.
---------------------------------------------------------------------------

    We believe it is unlikely that fixed growth rates projected at the 
start of agreement periods beginning in earlier years may also need 
mitigation from a code displaying SAHS billing activity. For example, 
if CMS identifies a HCPCS or CPT code displaying SAHS billing activity 
in CY 2025, the projected growth rate from 2023 to 2025--which will be 
used to update the historical benchmark for PY 2025 financial 
reconciliation for ACOs that began an agreement period on January 1, 
2024--would likely have assumed typical billing patterns for the code 
in CY 2025. Additionally, the projected growth rate from BY 2024 to PY 
2025--which will be used to update the historical benchmark for PY 2025 
financial reconciliation for ACOs that began an agreement period on 
January 1, 2025--would likely also have assumed typical billing 
patterns for the code in CY 2025 given the projections were finalized 
early in CY 2025.
    However, if we determine a bias exists due to differences between 
adjustments to the projected growth rates for the ACPT and other Shared 
Savings Program calculations, we could rely on our current policy under 
Sec.  425.652(b)(4)(ii) to reduce the weight of the ACPT in the three-
way blend. We propose that we would use our discretion to reduce the 
weight of the ACPT rather than recalculate the growth rates that had 
been projected at the start of agreement periods starting in earlier 
years, as we believe it is important to maintain the policy that the 
projected growth rates remain fixed for the ACO's agreement period. In 
the CY 2023 PFS final rule (refer to 87 FR 69886 through 69898) we 
finalized our proposal to establish the ACPT at the outset of an 
agreement period, based on one or more annualized growth rates. We 
explained that we will not adjust the ACPT due to external factors such 
as geographic price changes, efficiency discounts, or other 
retrospective updates occurring during the performance years throughout 
the agreement period. In response to commenters concern that CMS might 
adjust the ACPT downward during the agreement period, we stated that we 
will not adjust the ACPT projections over the course of the agreement 
period (87 FR 69897). However, we acknowledged that a variety of 
circumstances could cause actual expenditure trends to significantly 
deviate from projections. If unforeseen circumstances occur during an 
ACO's agreement period we retained flexibility to reduce the impact of 
the prospectively determined ACPT portion of the three-way blend when 
necessary to mitigate unforeseen circumstances. We explained that we 
anticipate determining, on an ad hoc basis, whether an unforeseen 
circumstance warrants adjustment of the weight placed on the ACPT 
component of the three-way blend by considering whether it has a 
material impact across the entire Shared Savings Program. If we 
determine that expenditure growth has differed significantly from 
projections made at the start of the agreement period due to unforeseen 
circumstances, such as an economic recession, pandemic, or other 
factors, a reduction in the weight placed on the ACPT may be 
considered.
    To summarize, we propose that when projecting growth rates used for 
the ACPT at the beginning of an agreement period, we would make an 
adjustment to mitigate the impact of any known SAHS billing activity on 
spending growth projections. Additionally, in accordance with Sec.  
425.660(a), CMS would not adjust the ACPT projections over the course 
of the agreement period to account for SAHS billing activity later 
identified. Rather, CMS may use its discretion to reduce the weight of 
the ACPT in the three-way blend in accordance with Sec.  
425.652(b)(4)(ii) if CMS determines that the SAHS billing activity 
represents an unforeseen circumstance that warrants a reduction to the 
weight.
    The direction and magnitude of the impact of the proposed 
adjustments may vary by ACO. However, by making these adjustments, we 
would be helping to ensure that no ACOs are held accountable, and 
financially penalized for SAHS billing activity that was outside their 
direct control while also protecting the Trust Funds from other ACOs 
potentially receiving windfall gains.
    For this proposal, we rely on our authority under section 
1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the Act 
authorizes the Secretary to adjust the benchmark for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate. Here, we are proposing to adjust the benchmark in order to 
remove payments for HCPCS or CPT codes identified as exhibiting SAHS 
billing activity in CY 2024 or subsequent calendar years from the 
determination of benchmark expenditures when the calendar year serves 
as a benchmark year or from the determination of benchmark expenditures 
that will be used to reconcile the calendar year when it serves as a 
performance year.
    We propose to use our authority under section 1899(i)(3) of the Act 
to remove payment amounts for HCPCS or CPT codes identified as 
exhibiting SAHS billing activity in CY 2024 or subsequent calendar 
years from the following calculations: (1) performance

[[Page 61915]]

year expenditures; (2) updates to the historical benchmark; and (3) ACO 
participants' Medicare FFS revenue used for multiple purposes across 
the Shared Savings Program, including determinations of loss sharing 
limits in the two-sided models of the BASIC track,\533\ determinations 
of eligibility for advance investment payments,\534\ and expanded 
criteria for certain low revenue ACOs participating in the BASIC track 
to qualify for shared savings in the event the ACO does not meet the 
minimum savings rate.\535\ Section 1899(i)(3) of the Act requires that 
we determine that the alternative payment methodology adopted under 
that provision would improve the quality and efficiency of items and 
services furnished to Medicare beneficiaries, without resulting in 
additional program expenditures. The adjustments we are proposing 
herein, which would remove payment amounts for codes with identified 
SAHS billing activity from the specified Shared Savings Program 
calculations as proposed in Sec.  425.672(c) and (e), would capture and 
remove from program calculations expenditures that are outside of an 
ACO's control, but that could significantly affect the ACO's 
performance under the program. In particular, failing to remove these 
payments would likely create highly variable savings and loss results 
for individual ACOs that happen to have over-representation or under-
representation of SAHS billing activity for the selected codes among 
their assigned beneficiary populations.
---------------------------------------------------------------------------

    \533\ Refer to Sec.  425.605(d)(1)(iii)(D), (d)(1)(iv)(D), and 
(d)(1)(v)(D) for BASIC track Levels C, D and E, respectively.
    \534\ Refer to Sec.  425.630(b).
    \535\ Refer to Sec.  425.605(h).
---------------------------------------------------------------------------

    As described in the Regulatory Impact Analysis (section VII. of 
this proposed rule), excluding payment amounts for the selected codes 
from the specified calculations are not expected to result in an 
increase in spending beyond the expenditures that would otherwise occur 
under the statutory payment methodology in section 1899(d) of the Act. 
Further, these adjustments to our calculations to remove payment 
amounts for these codes would promote continued integrity and fairness 
and improve the accuracy of Shared Savings Program financial 
calculations. As a result, we expect these policies would support ACOs 
continued participation in the Shared Savings Program and the program's 
goals of lowering growth in Medicare FFS expenditures and improving the 
quality of care furnished to Medicare beneficiaries.
    Based on these considerations, and as specified in the Regulatory 
Impact Analysis (section VII. of this proposed rule), we have 
determined that adjusting certain Shared Savings Program calculations 
to remove payment amounts for selected codes, in the event we determine 
SAHS billing activity occurs in CY 2024 or subsequent calendar years, 
from the calculation of performance year expenditures, updates to the 
historical benchmark, and ACO participants' Medicare FFS revenue used 
for multiple purposes across the Shared Savings Program, meets the 
requirements for use of our authority under section 1899(i)(3) of the 
Act when incorporated into the existing other payment model we have 
established pursuant to that section.
    The changes that we are proposing in this section of this proposed 
rule would apply to address the impact of SAHS billing activity 
identified in CY 2024 or subsequent calendar years, and thus would 
apply to ACOs currently participating in PY 2024. Therefore, if 
finalized, these changes to policies applicable for PY 2024 would 
constitute retroactive rulemaking. Section 1871(e)(1)(A)(ii) of the Act 
permits a substantive change in regulations, manual instructions, 
interpretive rules, statements of policy, or guidelines of general 
applicability under Title XVIII of the Act to be applied retroactively 
to items and services furnished before the effective date of the change 
if the failure to apply the change retroactively would be contrary to 
the public interest.
    Failing to apply the proposed changes retroactively to PY 2024 
would be contrary to the public interest because it would unfairly 
punish Shared Savings Program ACOs by forcing them to unexpectedly 
assume a substantial magnitude of financial risk for costs outside of 
their control and not previously contemplated in the Shared Savings 
Program, undermining both the sustainability of the Shared Savings 
Program and the public's faith in CMS as a fair partner, in the event 
we determine SAHS billing activity impacts CY 2024. We did not fully 
contemplate the potential for SAHS billing activity outside of an ACO's 
control when the Shared Savings Program was established.\536\ For this 
reason, the Shared Savings Program financial methodology and the 
procedures we have utilized in the past did not provide a means to 
adequately account for instances of SAHS billing activity outside of an 
ACO's control, and thereby the related financial risk is assumed 
entirely by ACOs. We view this outcome as particularly inequitable to 
ACOs because they have no direct means of controlling such costs. 
Unlike Medicare Advantage organizations, ACOs are not responsible for 
processing claims for their assigned beneficiaries and otherwise have 
no means of causing the denial of such claims. CMS thus cannot 
reasonably have expected ACOs to have intended to assume responsibility 
for all instances of SAHS billing activity outside of an ACO's control 
when they joined the Shared Savings Program. For these reasons, it 
would be contrary to the public interest for CMS to fail to apply a 
policy mitigating this issue retroactively.
---------------------------------------------------------------------------

    \536\ See, for example, 76 FR 67948 through 67950. Such 
approaches were more focused on policies to support monitoring of 
ACO performance and ensuring program integrity.
---------------------------------------------------------------------------

    We did not foresee the acute need to address SAHS billing activity 
impacting CY 2023, and the need for the related policy proposal for 
addressing SAHS billing activity in CY 2024 or subsequent calendar 
years, with sufficient time in advance of the start of PY 2024 to 
undertake notice and comment rulemaking earlier, and to avoid 
retroactive rulemaking. More specifically, we were only able to 
determine that the increase in billing on HCPCS codes A4352 and A4353 
in CY 2023 represented SAHS billing activity after the calendar year 
ended. To identify that the billing activity in CY 2023 was 
significant, anomalous, and highly suspect, CMS reviewed actual billing 
levels after the calendar year closed and services furnished in CY 2023 
had occurred and the billing level could then be compared to billing 
levels observed in prior calendar years.
    We seek comment on our proposal to apply the policy retroactively 
to PY 2024, including whether failing to apply the policy retroactively 
would be contrary to the public interest and how it would affect ACOs 
and their ability to participate in the Shared Savings Program.
    We are proposing a new Sec.  425.672 to describe adjustments CMS 
could make to Shared Savings Program calculations to mitigate the 
impact of SAHS billing activity for CY 2024 or subsequent calendar 
years. We propose that Sec.  425.672(b) specify that CMS, at its sole 
discretion, may determine that the billing of specified HCPCS or CPT 
codes represents SAHS billing activity in calendar year 2024 or 
subsequent calendar years that warrants adjustment to calculations made 
under this part. We propose under Sec.  425.672(c) to specify the 
Shared Savings Program calculations for which CMS would exclude all 
Medicare Parts A and B FFS payment amounts for the specified

[[Page 61916]]

claim types associated with a HCPCS or CPT code identified in Sec.  
425.672(b) when an adjustment to the calculation is appropriate in 
light of the SAHS billing activity. The calculations specified in Sec.  
425.672(c) include all potentially relevant financial calculation 
provisions, including those covering the financial benchmarking 
methodologies (including the proposed HEBA scaler at Sec.  
425.662(b)(2)) and those covering calculation of shared savings and 
losses. We propose in Sec.  425.672(d) that for calendar year 2024 or 
subsequent calendar years,\537\ CMS would adjust Shared Savings Program 
calculations for SAHS billing activity identified under Sec.  
425.672(b) for the calendar year when it is either a performance year 
or a benchmark year, as well as the 3 most recent years prior to the 
start of the ACO's agreement period used in establishing the historical 
benchmark, when such a benchmark is used to reconcile the ACO for a 
performance year adjusted for SAHS billing activity. We propose to 
specify under Sec.  425.672(e) that we would also make adjustments for 
any calendar year corresponding to BY3 in projecting per capita growth 
in Medicare Parts A and B FFS expenditures according to Sec.  
425.660(b)(1) for purposes of calculating the ACPT for agreement 
periods beginning on January 1, 2024, and in subsequent years. 
Additionally, we are proposing conforming revisions to Sec. Sec.  
425.601(a)(9) and 425.652(a)(9), as well as proposing new paragraphs at 
Sec. Sec.  425.601(a)(9)(iv) and 425.652(a)(9)(ix) to include 
adjustments for SAHS billing activity as one of the reasons that CMS 
would adjust an ACO's benchmark during the term of its agreement 
period. While we expect that the identification of SAHS billing 
activity that triggers these proposed policies will be rare, we believe 
that, if finalized, these policies will allow us to proactively ensure 
the accuracy of program calculations and provide greater certainty for 
ACOs and the Trust Funds.
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    \537\ We note that by anchoring this policy on the calendar 
year, this proposed provision differs from many other program 
regulations that are applicable for a given performance year or for 
agreement periods beginning on a given date or within a given range. 
However, we believe this approach is appropriate for this policy as 
(1) we would adjust expenditures for the affected calendar year both 
when it is a performance year and when it is a benchmark year and 
(2) it ties the policy to the period for which the SAHS billing 
activity was identified much in the way the policy for COVID-19 
episodes of care specified in Sec.  425.611 is tied to the related 
public health emergency.
---------------------------------------------------------------------------

    We seek comment on these proposals.
e. Seeking Comment on Establishing Higher Risk and Potential Reward 
Under the ENHANCED Track
(1) Background
    As described in the CY 2024 PFS final rule (88 FR 79223), CMS has 
considered a higher risk Shared Savings Program track under which the 
shared savings/loss rate would be somewhere between 80 percent and 100 
percent (that is, a rate higher than that currently offered under the 
ENHANCED track) and that builds on the experience of the Next 
Generation ACO (NGACO) and ACO REACH Models. A higher risk track would 
offer ACOs increased incentives to generate savings, which would help 
improve care delivery by promoting innovations in the delivery of high-
quality care that is more patient-centered. In other words, by 
increasing sharing rates for ACOs, ACOs will be better incentivized to 
develop innovations in the delivery of high-quality care and, 
therefore, improve the care they offer to their beneficiaries. A 
revised ENHANCED track could be implemented in accordance with section 
1899(i)(3) of the Act, provided the Secretary determines that such 
other payment model enhances the quality and efficiency of items and 
services furnished under the Medicare program and does not result in 
program expenditures greater than those that would result under the 
statutory payment model.
    In the CY 2024 PFS final rule (88 FR 79223), we summarized public 
comments received in response to our Request for Information (RFI) 
regarding a potential track within the Shared Savings Program with 
higher risk than the current ENHANCED track. For a full summary of the 
comments submitted in response to our comment solicitation, we refer 
readers to the relevant discussion in the CY 2024 PFS final rule (88 FR 
79225 through 79227). Commenters were broadly supportive of such an 
approach and referenced existing policies under the ACO REACH Model, 
and the NGACO Model. Some commenters suggested features of such a track 
that would serve to encourage more participation in the Shared Savings 
Program and help ACOs deliver more person-centered care to 
beneficiaries in Traditional Medicare. These features included 
prospective payments, full sharing rates (a sharing rate of 100 
percent, similar to the Global Risk Sharing Option in the ACO REACH 
Model) as well as a benchmark discount rate (a reduction of the 
benchmark by a predetermined percentage) to protect the Medicare Trust 
Funds.
    A higher risk sharing arrangement could incentivize participating 
ACOs to improve performance in the program as they would receive a 
greater share of any gross savings. That improved performance may, in 
turn, result in reduced healthcare costs for Medicare and more 
effective, efficient care for beneficiaries. In addition, higher risk 
sharing could incentivize ACOs to develop new care delivery strategies 
in order to improve their financial performance, such as a focus on 
specialty care integration and reduced care fragmentation. Offering a 
higher risk sharing track may also help CMS reach our goal of having 
all beneficiaries in the traditional Medicare program in a care 
relationship with a health care provider who is accountable for the 
costs and quality of their care by 2030 by encouraging currently 
participating ACOs to continue participation in the Shared Savings 
Program, as well as encourage ACOs not participating in the Shared 
Savings Program to join as a result of increased potential reward.
    A recent CBO report \538\ proposed that higher sharing rates might 
incentivize providers to decrease spending as they would stand to gain 
a larger portion of the savings generated. While in the short term this 
might diminish CMS savings, the report postulates that this would 
increase participation in the Shared Savings Program and provide a 
means for CMS to manage long-term healthcare spending growth. The 
report also highlights the necessity of striking a delicate balance: 
devising financial incentives enticing enough for ACOs to participate 
actively in the Shared Savings Program, while ensuring that such 
participation leads to savings for the Medicare program.
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    \538\ For more details, please refer to Congressional Budget 
Office (CBO), ``Medicare Accountable Care Organizations: Past 
Performance and Future Directions'', April 2024, available at 
https://www.cbo.gov/system/files/2024-04/59879-Medicare-ACOs.pdf.
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    We seek comment on a participation option that would allow for 
higher risk and reward than currently available under the ENHANCED 
track. A participation option of this type would replace the existing 
ENHANCED track in order to avoid the self-selection issues that would 
occur if a higher risk track were to be included alongside the ENHANCED 
track. If both participation options were made available to ACOs, we 
have concerns that only the highest-performing ACOs would self-select 
into the higher of the two risk tracks. While we included an RFI on the 
topic in CY 2024 PFS rulemaking, we are concerned that ACOs did not 
have enough detailed information to appropriately weigh the

[[Page 61917]]

tradeoffs associated with a higher risk/reward option than the current 
ENHANCED track, and that the additional information we have generated 
since then will allow ACOs and other interested parties to provide more 
forthright and helpful feedback. CMS is interested in public comments 
on the design of a higher risk option within the Shared Savings Program 
that could be enacted under our authority granted by section 1899(i)(3) 
of the Act and that would encourage ACOs to participate actively in the 
Shared Savings Program while ensuring that such participation leads to 
savings for the Medicare program.
(a) Current ENHANCED Track
    Currently, under the Shared Savings Program, ACOs may enter 
participation agreements under the ENHANCED track. The ENHANCED track 
is a two-sided model that represents the highest level of risk and 
potential reward currently offered under the Shared Savings Program. 
The rules governing the participation options available to ACOs and the 
progression from lower to higher risk for ACOs entering the program are 
described in Sec.  425.600 of the regulations. To qualify for a shared 
savings payment, an ACO must meet a minimum savings rate (MSR) 
requirement, meet the quality performance standard or alternative 
quality performance standard established under Sec.  425.512, and 
otherwise maintain its eligibility to participate in the Shared Savings 
Program under 42 CFR part 425, subpart B (Sec. Sec.  425.100 through 
425.118). For ACOs meeting the applicable quality performance standard 
established under Sec.  425.512(a)(2) or (a)(5)(i) (for PY 2024 and 
subsequent performance years), the final shared savings rate is equal 
to the maximum sharing rate of 75 percent, or savings at a rate of 75 
percent multiplied by the ACO's health equity adjusted quality 
performance score if the ACO meets the alternative quality performance 
standard at Sec.  425.512(a)(5)(ii). CMS computes an ACO's shared 
savings payment by applying the final sharing rate to the ACO's savings 
on a first dollar basis (meaning the final sharing rate is applied to 
the ACO's full total savings amount), with the payment subject to a cap 
that is equal to 20 percent of the updated benchmark (Sec.  
425.610(e)(2)).
    ACOs that operate under a two-sided model and have losses that meet 
or exceed a minimum loss rate (MLR) must share losses with the Medicare 
program (Sec.  425.100(c)). Once this MLR is met or exceeded, the ACO 
will share in losses at a rate determined according to the ACO's track/
level of participation, up to a loss recoupment limit (also referred to 
as the loss sharing limit) (Sec.  425.605(d); Sec.  425.610(f), (g)). 
In determining shared losses, ACOs participating in the ENHANCED track 
are subject to losses at a rate determined using a sliding scale based 
on ACO's health equity adjusted quality performance score, if the 
applicable quality performance standard established in Sec.  
425.512(a)(2) or (a)(5)(i) or the alternative quality performance 
standard at Sec.  425.512(a)(5)(ii) is met; with minimum shared loss 
rate of 40 percent and maximum of 75 percent. If the ACO fails to meet 
the applicable quality performance standard established in Sec.  
425.512 or the alternative quality performance standard, the ACO is 
subject to 1st dollar losses at a rate of 75 percent (Sec.  
425.610(f)(4)(ii)). Shared losses are subject to a cap that is equal to 
15 percent of updated benchmark (Sec.  425.610(g)).
    CMS adjusts historical benchmark expenditures by Medicare 
enrollment type by a percentage of the difference between the average 
per capita expenditure amount for the ACO's regional service area and 
the ACO's historical benchmark amount (referred to herein as the 
``regional adjustment'') (Sec.  425.652(a)(8)). The weights used in the 
regional adjustment calculation are determined in accordance withSec.  
425.656(e) and are dependent on whether the ACO has lower or higher 
spending compared to the ACO's regional service area and the agreement 
period for which the ACO is subject to the regional adjustment. The 
first time that an ACO's benchmark is adjusted based on the ACO's 
regional service area expenditures, CMS calculates the regional 
adjustment using either 35 percent of the difference between the 
average per capita amount of expenditures for the ACO's regional 
service area and the average per capita amount of the ACO's initial or 
rebased historical benchmark, if the ACO is determined to have lower 
spending than the ACO's regional service area (Sec.  425.656(e)(1)(i)); 
or 15 percent of the difference between the average per capita amount 
of expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's initial or rebased historical benchmark, if 
the ACO is determined to have higher spending than the ACO's regional 
service area (Sec.  425.656(e)(1)(ii)). The second time that an ACO's 
benchmark is adjusted based on the ACO's regional service area 
expenditures, CMS calculates the regional adjustment using either the 
50 percent of the difference between the average per capita amount of 
expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's rebased historical benchmark if the ACO is 
determined to have lower spending than the ACO's regional service area 
(Sec.  425.656(e)(2)(i)); or 25 percent of the difference between the 
average per capita amount of expenditures for the ACO's regional 
service area and the average per capita amount of the ACO's rebased 
historical benchmark if the ACO is determined to have higher spending 
than the ACO's regional service area (Sec.  425.656(e)(2)(ii)). The 
third time that an ACO's benchmark is adjusted based on the ACO's 
regional service area expenditures, CMS calculates the regional 
adjustment using the 50 percent of the difference between the average 
per capita amount of expenditures for the ACO's regional service area 
and the average per capita amount of the ACO's rebased historical 
benchmark if the ACO is determined to have lower spending than the 
ACO's regional service area (Sec.  425.656(e)(3)(i)); or the 35 percent 
of the difference between the average per capita amount of expenditures 
for the ACO's regional service area and the average per capita amount 
of the ACO's rebased historical benchmark if the ACO is determined to 
have higher spending than the ACO's regional service area (Sec.  
425.656(e)(3)(ii)). The fourth or subsequent time that an ACO's 
benchmark is adjusted based on the ACO's regional service area 
expenditures, CMS calculates the regional adjustment to the historical 
benchmark using 50 percent of the difference between the average per 
capita expenditures for the ACO's regional service area and the average 
per capita amount of the ACO's rebased historical benchmark (Sec.  
425.656(e)(4)). Among the ACOs participating in PY 2024, 78 percent of 
BASIC track ACOs (176 of 227) received a positive regional adjustment, 
whereas 95 percent (155 of 163) of ACOs in the ENHANCED track received 
a positive regional adjustment. A positive regional adjustment 
indicates that their expenditures were less than that of their regional 
service area. For ACOs receiving a positive regional adjustment, the 
average regional adjustment amount was 2.21 percent ($237) of 
historical benchmark expenditures.
    As of January 1, 2024, 43 percent (207 of 480) Shared Savings 
Program ACOs are participating under the ENHANCED track. Under Shared 
Savings Program policies, all ACOs participating in a two-sided model 
can select a symmetrical MSR and MLR which applies for the duration of 
its agreement

[[Page 61918]]

period (Sec.  425.605(b)(2); Sec.  425.610(b)(1)). Among ACOs 
participating in the ENHANCED track for PY 2024, 61 percent (126 of 
207) have selected an MSR/MLR of 0.5 percent or greater while 39 
percent (81 of 207) have selected an MSR/MLR of 0.0 percent. Among ACOs 
that participated in the ENHANCED track for PY 2022, 38 percent (55 of 
146) generated gross savings between zero and 5 percent of their 
updated benchmark expenditures, and 12 percent (17 of 146) generated 
gross savings of 10 percent or more of their benchmark expenditures.
(b) Other CMS Innovation Center Models
    In the NGACO Model, NGACOs were offered the choice between two risk 
arrangements, partial risk or full risk. Under both arrangements, the 
NGACO was responsible for 100 percent of performance year expenditures 
for services rendered to the NGACO's aligned beneficiaries. Under the 
partial risk arrangement, the NGACO could receive or owe up to 80 
percent of savings/losses, whereas under the full risk arrangement, the 
NGACO could receive or owe up to 100 percent of savings/losses. To 
mitigate the ACO's risk of large shared losses, as well as to protect 
the Medicare Trust Funds against paying out excessive shared savings, 
NGACOs were required to choose a cap on gross savings/losses. The cap, 
expressed as a percentage of the benchmark, ranged from 5 percent to 15 
percent. The risk arrangement chosen by the NGACO (80 or 100 percent) 
was applied to gross savings or losses after the application of the 
cap. In PYs 1-3, a discount was applied to the NGACO's benchmark that 
was set at a standard 3 percent, with various adjustments, that allowed 
the final discount to vary from 0.5 percent to 4.5 percent. In PYs 4-6, 
a discount of 0.5 percent was applied to the benchmark under the 
partial risk arrangement, and a discount of 1.25 was applied to the 
benchmark under the full risk arrangement. The purpose of the discount 
was to increase the likelihood that any savings achieved by the NGACOs 
participating in the model would also result in savings for the 
Medicare Program. The NGACO Model evaluation found that while NGACOs 
reduced gross Medicare Parts A and B expenditures relative to a 
comparison group of similar fee-for-service Medicare beneficiaries in 
their markets, they did not generate savings to the Medicare Trust 
Funds. ACOs that elected a risk cap greater than 5 percent and 
participated in model population-based payment mechanisms achieved 
greater declines in spending, suggesting that the combination of risk 
and payment flows is impactful. Spending reductions grew larger almost 
every year, reflecting a combination of NGACOs' improvements in 
infrastructure and clinical processes, exit by poorer-performing 
NGACOs, and the COVID-19 pandemic. While the NGACO Model reduced 
spending in Medicare Parts A and B, CMS paid back these reductions in 
the form of shared savings payments to ACOs. These results highlight 
the need to balance the tradeoff between incentivizing participation in 
higher levels of risk and reward, in alternative payment models such as 
the Shared Savings Program and ACO models tested by the Innovation 
Center, and reducing the risk of loss to the Medicare Trust Funds.
    Under the ACO REACH Model, REACH ACOs are offered the choice of 
participating under the Global or the Professional Risk Sharing 
Options. As in the NGACO Model, under both risk sharing options, the 
REACH ACO is responsible for 100 percent of performance year 
expenditures for services rendered to aligned beneficiaries. Because 
ACOs electing the Global Risk Sharing Option retain up to 100 percent 
of the savings/losses on all savings up to 25 percent of their 
benchmark, with reduced sharing rates for savings exceeding 25 percent 
of their benchmark, a discount is applied to the benchmark to ensure 
savings are also generated for CMS. For ACOs in the Global Risk Sharing 
Option, the benchmark is reduced by a fixed percentage based on the 
performance year.\539\ The discount rate for PYs 2021 and 2022 was 2 
percent, for PYs 2023 and 2024 is 3 percent, and for PYs 2025 and 2026 
will be above 3.5 percent. The benchmark for ACOs participating in the 
Professional Risk Sharing Option does not include this discount, and 
these ACOs are only eligible to retain 50 percent of savings or owe 50 
percent of any losses.
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    \539\ For more details, refer to CMS, ACO Realizing Equity, 
Access, and Community Health (REACH) Model, PY2023 Financial 
Settlement Overview, available at https://innovation.cms.gov/media/document/aco-reach-py2023-fncl-settlement (see Table 4: Schedule of 
Discounts by Risk Arrangement).
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    Preliminary evaluation results of the first 2 performance years of 
the Global and Professional Direct Contracting Model, before its 
transition to the ACO REACH Model, suggest that participating ACOs had 
mixed results in gross spending but consistent, significant increases 
in net spending relative to a comparison group of similar FFS Medicare 
beneficiaries in their markets, which included beneficiaries assigned 
to ACOs participating in the Shared Savings Program. Standard ACOs, 
comprised of organizations that generally have experience serving 
Medicare FFS beneficiaries, increased gross spending. Standard ACOs 
also reduced acute care spending and utilization but comparison 
providers had larger reductions in acute care spending and utilization. 
Increased spending among Standard ACOs was concentrated among the 
integrated delivery system/hospital system ACOs in the model. High 
Needs ACOs that serve Medicare FFS beneficiaries with complex needs, 
including dually eligible beneficiaries, decreased gross spending. High 
Needs ACOs comprised of organizations that have not traditionally 
provided services to Medicare FFS beneficiaries favorably reduced acute 
and post-acute care utilization and spending. New Entrant ACOs had 
declines in gross spending but these declines were similar to those of 
providers within their same markets. Standard and New Entrant ACOs 
showed statistically significant improvement on at least one quality 
measure. These interim evaluation results are mixed, and additional 
analyses and years of experience with the Model will inform which 
features of ACO REACH could drive continued growth and innovation in 
the Shared Savings Program and the focus of future Innovation Center 
ACO models.
(2) Considerations for Incorporating Higher Risk and Potential Reward 
Under the ENHANCED Track
    As we explained in the CY 2024 PFS final rule (88 FR 79223 through 
79225), when considering a higher risk track, CMS would need to balance 
the incentives for ACOs to transition to higher levels of risk and 
potential reward and increase ACO participation in the Shared Savings 
Program and in two-sided risk tracks, all while ensuring sufficient 
financial safeguards to protect against inappropriately large shared 
losses for ACOs coordinating and improving quality of care for high-
cost beneficiaries. Considerations must also be directed towards 
safeguarding the Medicare Trust Funds and ensuring that CMS satisfies 
any statutory requirements under section 1899(i)(3) of the Act.
    A revised ENHANCED track could be implemented in accordance with 
section 1899(i)(3) of the Act, provided the Secretary determines that 
such other payment model enhances the quality and efficiency of items 
and services furnished under the Medicare program and does not result 
in program expenditures greater than those that would result under the 
statutory

[[Page 61919]]

payment model. Increasing the sharing rate in the ENHANCED track may 
need to be accompanied by other modifications to prevent spending from 
increasing and possibly jeopardizing compliance with section 1899(i)(3) 
of the Act. One factor to consider is selective participation with 
regard to which ACOs would choose to participate in a higher risk 
track, if offered. For example, Shared Savings Program ACOs that have a 
history of high levels of earned shared savings or have received a 
favorable high regional adjustment to their benchmark may be more 
likely than other ACOs to switch to the higher risk track upon renewing 
or early renewing their participation in the program so they can 
receive additional benefit from the higher levels of potential reward 
offered in a higher risk track. This could result in increased spending 
on the part of CMS which may jeopardize compliance with section 
1899(i)(3) of the Act. If a higher risk track were to be offered in the 
Shared Savings Program in the future, CMS would consider replacing the 
existing ENHANCED track in order to prevent further selective 
participation and maintain the balance between increased participation 
and compliance with applicable statutory requirements.
    We are seeking comment on the following potential features of a 
revised ENHANCED track:
(a) Benchmark Discount Rate
    Both the NGACO Model and the Global Risk Sharing Option of the ACO 
REACH Model feature a discount rate that is applied to benchmarks. The 
discount rate serves to protect the Medicare Trust Funds by reducing 
benchmarks and thereby improves the likelihood of achieving savings for 
the Medicare program for risk tracks that can feature up to 100 percent 
shared savings rates, such as the Global Risk Sharing Option in the ACO 
REACH Model. A discount would be applied to an ACO's updated historical 
benchmark before gross savings/losses are calculated, which increases 
the likelihood of savings for CMS and the Medicare program. If an ACO 
were to participate in a potential higher risk track and potentially 
share in 100 percent of gross savings, this discount would serve as the 
primary means for CMS to capture savings from ACOs participating in 
this option, as in the absence of a discount any and all gross savings 
would go to ACOs in the form of a shared savings payment. For example, 
consider an ACO with an updated benchmark of $10,000 and mean per-
capita performance year expenditures of $9,500. Applying a discount 
rate of 1 percent to the benchmark would reduce the ACO's benchmark to 
$9,900. Gross savings would then be calculated based on the discounted 
benchmark, and the ACO's shared saving rate would be applied to the 
savings, provided these savings met or exceeded the ACO's selected MSR.
    A discount to the benchmark could also include a guardrail policy 
similar to the guardrail implemented in the three-way blended update 
factor that was finalized in the CY 2023 PFS final rule (87 FR 69881). 
Under such an approach, if an ACO were to be liable for shared losses 
after discounting the benchmark, then gross savings or losses would be 
recalculated using a benchmark without the discount. However, if the 
ACO were to generate gross savings in excess of their MSR under the 
benchmark without the discount, they would still not be considered 
eligible to share in savings. This approach would help ensure that CMS 
shares in any savings generated by ACOs participating in a potential 
revised ENHANCED track while also not increasing downside risk for ACOs 
that may be liable for shared losses.
    We seek comment on what rate would be appropriate for a discount to 
the benchmark that would protect the Medicare Trust Funds while 
providing an adequate incentive for ACOs to participate in a potential 
revised ENHANCED track. We also seek comment on whether the model 
features described in following subsections might replace a discount to 
the benchmark while balancing financial incentives for ACOs and risk to 
CMS. Additionally, we also seek comments from interested parties, 
including ACOs, on the discount to the benchmark and what level of 
discount would be acceptable to ACOs participating in the Shared 
Savings Program, as well as what would be considered too high of a 
discount.
(b) Tapered Sharing Arrangements
    Currently in the ENHANCED track, ACOs can receive a shared savings 
payment of up to 20 percent of their updated benchmark (once the MSR is 
met or exceeded) (Sec.  425.610(e)(2)) or be liable for losses not to 
exceed 15 percent of their updated benchmark (once the MLR is met or 
exceeded) (Sec.  425.610(g)). Alternatively, CMS could set up marginal 
savings bands or risk corridors under which shared savings or losses 
rates would vary with the amount of gross savings or losses. As gross 
savings/losses increase, the ACO will retain a progressively smaller 
portion of the total savings or will be responsible for a progressively 
smaller portion of the total losses. For example, consider hypothetical 
marginal savings bands shown in Table 44. Under this arrangement, an 
ACO would share in all savings up to 10 percent of their updated 
benchmark at a rate of 100 percent. For savings between 10 to 15 
percent, the ACO would share in 60 percent of savings and CMS would 
retain the remaining 40 percent. For savings between 15 to 20 percent, 
the ACO would share in 40 percent of savings and CMS would retain the 
remaining 60 percent. In case of losses, ACOs would be responsible for 
50-100 percent of the losses, depending on the ACO's quality 
performance score.

[[Page 61920]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.073

    We seek comment on whether the hypothetical marginal shared savings 
bands shown in Table 44 represent an appropriate tapering schedule that 
would provide sufficient incentive for an ACO to participate in a 
potential revised ENHANCED track, as well as whether the tapering 
schedule should begin with lower shared savings rates and feature 
increasing rates as an ACO generates greater amounts of savings. We 
also seek comment on whether a potential tapering schedule should be 
symmetrical with respect to shared loss rates. Finally, we seek comment 
on whether marginal shared savings bands provide the right incentives 
to ACOs relative to the fixed savings rate in the current ENHANCED 
track.
(c) MSR/MLR
    We are considering the option for all ACOs under a revised ENHANCED 
track to be subject to a symmetric MSR/MLR of 0 percent. This would 
increase many ACOs' exposure to both positive savings and negative 
risk. While this approach would guarantee that any ACO generating 
savings would share in those savings (provided they meet the quality 
performance standard established under Sec.  425.512 and otherwise 
maintain their eligibility to participate in the Shared Savings 
Program), ACOs with performance year expenditures greater than their 
historical benchmark would be liable for those losses due to the 0 
percent MLR. We are seeking comment on whether a potential revised 
ENHANCED track should retain the existing symmetric MSR/MLR selection 
options that currently exist for ACOs in a two-sided risk model under 
Sec.  425.610(b)(1).
(d) Cap On Regional Adjustment Weight
    We are seeking comment on adjusting the weights used to calculate 
the regional adjustment amounts under Sec.  425.656(e) for ACOs in the 
revised ENHANCED track. This may take the form of applying a cap of 35 
percent to all the weights used to calculate regional adjustment 
amounts. This would impact any ACOs in a second or subsequent agreement 
period subject to a regional adjustment if their historical benchmark 
spending is lower than their regional service area. If the cap were to 
apply to an ACO with lower spending than their regional service area, 
then this would result in a decreased regional adjustment to that ACO's 
historical benchmark. Overall, this feature would reduce the cost to 
CMS associated with high regional adjustments by reducing an ACO's 
historical benchmark in the event that an ACO in a second or subsequent 
agreement period receives a large positive regional adjustment, which 
may decrease the need for higher benchmark discount rates or lower 
tapered shared savings rates that are less favorable to ACOs and limit 
incentives for ACOs to transition from the BASIC track to the revised 
ENHANCED track. This feature may also increase the relative impact of 
the prior savings adjustment and the health equity benchmark adjustment 
proposed in section III.G.7.b. of this proposed rule. We seek comment 
on whether further reductions to or the removal of the regional 
adjustment to the historical benchmark would be appropriate as part of 
a potential revised ENHANCED track. We also seek comment on whether 
maintaining the regional adjustment in its current state would warrant 
further changes to the revised ENHANCED track features described above, 
including, but not limited to, a discount to the benchmark or lower 
tapered shared savings rates.
(e) Payment Mechanisms
    We are seeking comments on alternative payment mechanisms the 
Innovation Center has tested and their ability to help transform care 
delivery and improve health outcomes for ACOs participating in the 
Shared Savings Program. These payment mechanisms test whether 
alternative payment flows (that is, those other than fee for service 
reimbursement) facilitate better investment in infrastructure and care 
coordination and encourage innovative downstream payment arrangements 
that can improve health outcomes for Medicare beneficiaries. The 
alternative payment mechanisms on which we seek comments are described 
below:
     Infrastructure Payments: Under these arrangements, CMS 
makes a payment to the ACO, in addition to FFS reimbursement to the 
providers and suppliers participating in the ACO, that is unrelated to 
claims. Infrastructure payments have been distributed either as a lump 
sum or per beneficiary per month payments. Infrastructure payments are 
recouped during the payment reconciliation process.
     Population-Based Payment, All-Inclusive Population-Based 
Payment, or Advance Payment Option: In this arrangement, CMS provides a 
percentage of FFS reimbursement to the ACO in the form of a monthly 
payment to support ongoing ACO activities and provide the ACO 
flexibility in the types of arrangements it enters into with provider/
suppliers. The ACO and providers with whom it has a written business 
arrangement determine percentage reductions to the base FFS payments to 
the providers interested in this payment arrangement. Providers 
participating in this option have their FFS payments reduced by the 
agreed upon percentage, which range from 1-100 percent. CMS pays the 
projected total annual amount taken out of the base FFS rates to the 
ACO in monthly payments. At the end of each performance year, the 
amount of payment paid to ACOs participating in this type of payment 
option is reconciled against the reductions actually made to claims 
payments to providers participating in these arrangements, linking the 
amount of

[[Page 61921]]

these payments directly to utilization and FFS payment.
     Capitation: The ACO REACH Model \540\ tests two capitation 
payment options--Primary Care Capitation and Total Care Capitation.
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    \540\ Refer to the ACO REACH Model Request for Applications, 
available at https://www.cms.gov/priorities/innovation/media/document/aco-reach-rfa, and the ACO REACH Model PY2024 Participant 
and Preferred Provider Management Guide, available at https://www.cms.gov/files/document/aco-reach-py24-part-pref-provider-mgmt-guide.pdf.
---------------------------------------------------------------------------

    The Primary Care Capitation Payment is the payment for primary care 
services provided to aligned REACH beneficiaries by all Participant 
Providers and those Preferred Providers who have selected Primary Care 
Capitation Payment. In Primary Care Capitation, a per beneficiary, per 
month capitated payment is provided to an ACO for its aligned 
beneficiaries for the primary care services provided by the ACO's 
Participant Providers and its Preferred Providers who have opted to 
participate in Primary Care Capitation Payment. The Primary Care 
Capitation payment amount is generally equal to seven percent of the 
estimated total cost of care for the ACO's aligned population (that is, 
the risk adjusted, trended, and regionally blended benchmark).
    The Primary Care Capitation payment includes two components, Base 
Primary Care Capitation and Enhanced Primary Care Capitation. The Base 
Primary Care Capitation amount is intended to cover primary care 
services furnished to aligned beneficiaries by Participant Providers 
and those Preferred Providers who have agreed to participate in Primary 
Care Capitation Payment that are thus subject to fee reductions under 
Primary Care Capitation Payment. The Enhanced Primary Care Capitation 
amount, which will be recouped by CMS in full during final financial 
settlement, is intended to enable ACOs to make upfront investments in 
infrastructure, technology, tools, and resources to support increased 
access to primary care, provision of care, and care coordination. The 
Primary Care Capitation Payment is expected to encourage greater 
flexibility in payment and innovative primary care service delivery as 
a means of improving the quality and cost effectiveness of care 
overall.
    In Total Care Capitation, a per-beneficiary, per month capitated 
payment is provided to an ACO for all Medicare Part A and Part B 
services provided to aligned beneficiaries by the ACO's Participant 
Providers and its Preferred Providers who have opted to participate in 
Total Care Capitation payment. The Total Care Capitation payment amount 
reflects the estimated total cost of care for the ACO's aligned 
population (that is, the risk adjusted, trended, and regionally blended 
benchmark) and is only available to ACOs participating in the Global 
risk option. Participant Providers and those Preferred Providers that 
have elected to participate in the ACO's selected capitation payment 
mechanism continue to submit claims to CMS for services provided to 
aligned beneficiaries. The CMS FFS claims processing system reduces 
claims payment amounts according to the payment reduction arrangements 
with their providers. More details on ACO REACH Model's capitation 
payment mechanisms are available here: https://www.cms.gov/files/document/aco-reach-py24-financial-ops-capitation-and-payment-mechanisms.pdf.
    Additionally, we are interested in feedback on the following 
questions related to implementation of a revised ENHANCED track with 
higher risk and potential reward, as well as comments that could inform 
changes to the Shared Savings Program and future Innovation Center ACO 
models:
    1. What would the option of a revised ENHANCED track allow an ACO 
to do that they are unable to do currently?
    2. How would higher downside risk impact an ACO's care delivery 
strategies, including advanced primary care, behavioral health, 
specialty integration, and integration with community-based 
organizations to improve health outcomes or advance health equity?
    3. How does higher downside risk impact an ACO's downstream 
provider arrangements to further advance incentives to reduce delivery 
of low value services and the total cost of care, and to increase 
savings performance?
    4. What types of organizations, including but not limited to ACOs 
and providers, are interested in a higher risk and reward option in the 
Shared Savings Program?
    5. What additional flexibilities or features (for example, benefit 
enhancements, advance payments, capitation payments, etc.) would ACOs 
in a revised ENHANCED track with higher risk and potential reward want 
CMS to offer to help them be successful in improving the quality of 
care and reducing costs?
    6. How should a revised ENHANCED track with higher risk and 
potential reward also require additional accountability for quality? 
Should ACOs in this revised track be required to report all payer/all 
patient quality measures?
    7. Should a revised ENHANCED track with higher risk and potential 
reward require ACOs with earned shared savings to share savings with 
beneficiaries or spend a flat dollar amount or a certain percentage on 
beneficiaries in the form of items or services not covered by original 
Medicare (for example, meals, dental, vision, hearing, or Part B cost-
sharing reductions)?
    8. How should CMS consider the discount, sharing rate, and risk 
corridors or marginal savings bands in the design of a higher risk 
option that can realize savings for Medicare? Are there special 
considerations that CMS should bear in mind when thinking through such 
features for different types of ACOs (for example, low revenue, high 
revenue, health system-based, safety net, etc.)?
    9. How might we improve beneficiary assignment and are there 
different considerations for different types of ACOs (for example, low 
revenue, high revenue, health system-based, safety net, etc.)?
    10. What other features should CMS consider in designing financial 
benchmarks that balance prospectivity and accuracy, and that can lead 
to savings for both ACOs and Medicare? How might administratively set 
benchmarks achieve these goals and what considerations should we bear 
in mind if we test administrative benchmarking?
    11. We are interested in ways to increase participation by 
healthcare providers and suppliers in the Shared Savings Program and 
future Innovation Center ACO models, including how an ACO model 
requiring provider participation or stronger participation incentives 
might be designed.
f. Proposed Technical Change for Consistency in Financial Calculations
(1) Background
    For the benchmarking methodology applicable to agreement periods 
beginning on January 1, 2024, and in subsequent years, we cap ACO 
prospective hierarchical condition category (HCC) risk score growth 
between BY3 and the performance year (as finalized in the CY 2023 PFS 
final rule, refer to 87 FR 69932 through 69946), as well as prospective 
HCC risk score growth in an ACO's regional service area between BY3 and 
the performance year (as finalized in the CY 2024 PFS final rule, refer 
to 88 FR 79174 through 79185). The policy to cap ACO prospective HCC 
risk score growth between BY3 and the performance year relied on our 
authority granted by section 1899(d)(1)(B)(ii) of the Act to

[[Page 61922]]

adjust the benchmark for beneficiary characteristics and such other 
factors as the Secretary determines appropriate (see 87 FR 69934). The 
policy to cap prospective HCC risk score growth in an ACO's regional 
service area between BY3 and the performance year by applying an 
adjustment factor in calculating the regional component of the three-
way blended benchmark update factor required use of our statutory 
authority under section 1899(i)(3) of the Act (see 88 FR 79182 and 
79183).
    The current regulations describe how we cap ACO prospective HCC 
risk score growth at Sec. Sec.  425.605(a)(1) and 425.610(a)(2). As 
specified, positive adjustments in prospective HCC risk scores are 
subject to a cap equal to the ACO's aggregate growth in demographic 
risk scores between BY3 and the performance year (positive or negative) 
plus 3 percentage points. The cap applies to prospective HCC risk score 
growth for any Medicare enrollment type only if the ACO's aggregate 
growth in prospective HCC risk scores between BY3 and the performance 
year across all of the Medicare enrollment type exceeds this cap. 
Growth in an ACO's risk scores by enrollment type is expressed as the 
ratio of the ACO's performance year risk score for that enrollment type 
to the ACO's BY3 risk score for that enrollment type. The aggregate 
growth in demographic and prospective HCC risk scores risk scores is 
calculated by taking a weighted average of the risk ratio for 
demographic risk scores or prospective HCC risk scores, as applicable, 
for each Medicare enrollment type using specified weights.
    The current regulations further describe how we cap prospective HCC 
risk score growth in the ACO's regional service area at Sec.  425.655. 
As specified, CMS determines aggregate growth in regional prospective 
HCC and demographic risk scores by calculating growth in prospective 
HCC and demographic risk scores between BY3 and the performance year 
for each Medicare enrollment type, where growth in an ACO's regional 
risk score by enrollment type is expressed as the ratio of the 
performance year regional risk score for a Medicare enrollment type to 
the BY3 regional risk score for that enrollment type. We then calculate 
aggregate risk score growth by taking a weighted average of the 
regional prospective HCC or demographic risk ratios, as applicable, 
across the four Medicare enrollment types, using specified weights. We 
next determine the cap on regional risk score growth (refer to Sec.  
425.655(e)),\541\ and then determine if the ACO's regional risk score 
growth is subject to a cap and apply a regional risk score growth cap 
adjustment factor for each Medicare enrollment type, as applicable 
(refer to Sec.  425.655(f)).\542\
---------------------------------------------------------------------------

    \541\ To determine the cap on regional risk score growth, we 
calculate the non-market share adjusted cap on the ACO's regional 
risk score growth as the sum of the aggregate growth in regional 
demographic risk scores and 3 percentage points, then adjust the cap 
to reflect the ACO's aggregate market share.
    \542\ If the aggregate regional prospective HCC risk score 
growth does not exceed the cap on regional risk score growth, the 
ACO's regional risk score growth is not subject to the cap. For 
these ACOs we set the risk score growth cap adjustment factor equal 
to 1 for each Medicare enrollment type. If the aggregate regional 
prospective HCC risk score growth exceeds the market share adjusted 
cap, the ACO's regional risk score growth is subject to the cap. For 
these ACOs we next determine whether the cap on regional risk score 
growth applies for each Medicare enrollment type.
---------------------------------------------------------------------------

    When describing how we will cap prospective HCC risk score growth 
in the ACO's regional service area in the CY 2024 PFS final rule, we 
included a footnote (see 88 FR 79178) that indicated that the weights 
to be used to compute aggregate risk score growth for this calculation 
are the same as the weights to be used when calculating weighted 
average ACO prospective HCC and demographic risk ratios under the risk 
adjustment methodology for capping ACO risk score growth adopted in the 
CY 2023 PFS final rule and codified in Sec. Sec.  425.605(a)(1)(ii)(C) 
and 425.610(a)(2)(ii)(C). That is, it was our intention to use the same 
weights in both the regional risk score growth cap calculation and the 
ACO risk score growth cap calculation. However, in codifying the 
methodology for the regional risk score growth cap in the new section 
of the regulations, Sec.  425.655, we inadvertently introduced a 
discrepancy.
    In Sec. Sec.  425.605(a)(1)(ii)(C) and 425.610(a)(2)(ii)(C), where 
we codified how we will calculate aggregate risk score growth used in 
determining the cap to apply to ACO prospective HCC risk score growth, 
we describe the weight applied to the growth in demographic or 
prospective HCC risk scores for each Medicare enrollment type as equal 
to the product of the historical benchmark expenditures for that 
enrollment type and the performance year person years for that 
enrollment type. In Sec.  425.655(d)(2), where we codified how we will 
calculate aggregate risk score growth used in determining the cap to 
apply to regional prospective HCC risks score growth, we describe the 
weight applied to the growth in demographic or prospective HCC risk 
scores for each Medicare enrollment type as equal to product of the 
ACO's regionally adjusted historical benchmark expenditures (emphasis 
added) for that enrollment type and the ACO's performance year assigned 
beneficiary person years for that enrollment type.
    The regulations at Sec. Sec.  425.605(a)(1)(ii)(C) and 
425.610(a)(2)(ii)(C) provide that we will use the ACO's historical 
benchmark expenditures in calculating the weights used to cap ACO risk 
score growth. By contrast, the regulations at Sec.  425.655(d)(2) 
provide that we will use an ACO's regionally adjusted historical 
expenditures in calculating the weights used in the calculation of 
regional risk score growth cap. As written, the regulations text at 
Sec.  425.655(d)(2) is inconsistent with the language used in in 
Sec. Sec.  425.605(a)(1)(ii)(C) and 425.610(a)(2)(ii)(C) despite the 
fact that we indicated in the CY 2024 PFS final rule that we would use 
the same weights in both calculations. Additionally, it is unclear how 
we would apply the calculation described at Sec.  425.655(d)(2) in 
practice. As we describe in section III.G.7.b. of this proposed rule, 
for agreement periods beginning on January 1, 2024, and in subsequent 
years, in computing an ACO's historical benchmark, CMS determines the 
per capita Parts A and B fee-for-service expenditures for beneficiaries 
that would have been assigned to the ACO in any of the 3 most recent 
years prior to the start of the agreement period using the ACO 
participant TINs identified before the start of the agreement period as 
required under Sec.  425.118(a) and the beneficiary assignment 
methodology selected by the ACO for the first performance year of the 
agreement period as required under Sec.  425.400(a)(4)(ii). An ACO's 
historical benchmark may then be subject to a regional adjustment 
(refer to Sec.  425.656), a prior savings adjustment (refer to Sec.  
425.658), or no adjustment (refer to Sec.  425.652(a)(8) and (c)). This 
methodology, based on policies finalized in the CY 2023 and CY 2024 PFS 
final rules, under which an ACO may receive a prior savings adjustment, 
a regional adjustment, and or no adjustment at all, differs from the 
methodology that was in effect for ACOs in an agreement period 
beginning on or after July 1, 2019, but before January 1, 2024, under 
which all ACO historical benchmarks incorporated a regional adjustment 
(see Sec.  425.601). Furthermore, in section III.G.7.b. of this 
proposed rule we are proposing to add a third type of adjustment that 
could be

[[Page 61923]]

applied to an ACO's historical benchmark, the health equity benchmark 
adjustment. If the health equity benchmark adjustment is finalized as 
proposed, an ACO may receive a regional adjustment, a prior savings 
adjustment, a health equity benchmark adjustment, or no adjustment to 
its historical benchmark.
(2) Proposed Revisions
    As we described in a footnote in the CY 2024 PFS final rule (see 88 
FR 79178), it was our intention at the time to use the same weights to 
calculate the cap for prospective HCC risk score growth in an ACO's 
regional service area as the weights used to calculate the cap on 
prospective HCC risk score growth for the ACO. We continue to believe 
that the same weights should apply to both calculations. However, the 
regulation text language is not currently aligned among the relevant 
provisions or with the preamble discussion and may also create 
confusion with respect to how CMS will compute the weights used in 
setting the caps on ACO and regional prospective HCC risk score growth, 
given that some ACOs will receive a regional adjustment to their 
benchmarks, some will receive a prior savings or, if finalized, a 
health equity benchmark adjustment, and some will receive no adjustment 
at all.
    To address these issues, we are proposing technical changes to the 
regulation text at Sec. Sec.  425.605(a)(1)(ii)(C), 
425.610(a)(2)(ii)(C), and 425.655(d)(2) to align the language 
describing the calculation of the weights that will be used to compute 
aggregate risk score growth across the three provisions and to clarify 
that the weight applied to the growth in ACO and regional risk scores 
for each Medicare enrollment type, respectively, would be equal to the 
product of the ACO's historical benchmark expenditures, adjusted in 
accordance with Sec.  425.652(a)(8), for that enrollment type and the 
ACO's performance year assigned beneficiary person years for that 
enrollment type. That is, we would use the ACO's historical benchmark 
expenditures that would have already been adjusted to reflect a prior 
savings adjustment, a regional adjustment, a health equity benchmark 
adjustment, if finalized, or no adjustment. Aligning the description of 
the weight calculation across the three provisions would address the 
discrepancy that exists between the current regulation text and the 
preamble discussion in the CY 2024 PFS final rule. Additionally, 
providing additional detail in the description of the weight 
calculation, namely by indicating that we will use an ACO's historical 
benchmark expenditures adjusted in accordance with Sec.  425.652(a)(8), 
clarifies how we will operationalize the calculation which we believe 
is important, especially given the proposed health equity benchmark 
adjustment, which, if finalized, would add greater complexity to this 
historical benchmark calculation.
    The technical changes that we are proposing in this section of this 
proposed rule relate to benchmark calculations for ACOs in agreement 
periods beginning on or after January 1, 2024. Although we will not 
implement the proposed methodologies for the first time until summer 
2025 when we reconcile PY 2024, these policies, if finalized, would 
constitute retroactive rulemaking because they are the standards under 
which we will score ACOs that are currently participating in agreement 
periods that began on January 1, 2024, for PY 2024. Section 
1871(e)(1)(A)(ii) of the Act permits a substantive change in 
regulations, manual instructions, interpretive rules, statements of 
policy, or guidelines of general applicability under Title XVIII of the 
Act to be applied retroactively to items and services furnished before 
the effective date of the change if the failure to apply the change 
retroactively would be contrary to the public interest. Here, we are 
proposing a technical change that would align the regulation text with 
our stated intention as described in previous rulemaking. The current 
regulation text, in combination with related discussion in the CY 2024 
PFS final rule, fails to provide sufficient clarity with regard to how 
CMS will calculate the weights used to calculate aggregate ACO or 
regional risk score growth. While the discussion in the CY 2024 PFS 
final rule indicates that the same weights should be use in both 
calculations, the related regulation text does not make this clear and, 
furthermore, could raise questions for how CMS will perform 
calculations given that not all ACO historical benchmarks will include 
a regional adjustment. Failure to apply the proposed changes to our 
regulations at Sec. Sec.  425.605(a)(1)(ii)(C), 425.610(a)(2)(ii)(C), 
and 425.655(d)(2) retroactively would be contrary to the public 
interest because it creates unintended ambiguity in the standard CMS 
will use when calculating risk score growth. Such ambiguity may make it 
difficult for ACOs and other interested parties to understand how CMS 
will perform these calculations or be interpreted to suggest that CMS 
would calculate risk score growth in a different manner, which was not 
the agency's intention.
    We seek comment on these proposals.
8. Beneficiary Notification Requirements
a. Proposal To Modify the Requirements for When ACOs Must Provide the 
Beneficiary Information Follow-Up Communication
    Under Sec.  425.312(a), ACOs are required to notify beneficiaries 
about the ACO's participation in the Shared Savings Program, the 
beneficiary's ability to decline claims data sharing, and the 
beneficiary's ability to select a provider for the purposes of 
voluntary alignment. In the CY 2023 PFS final rule (87 FR 69961), CMS 
added the beneficiary information follow up communication requirement 
under Sec.  425.312(a)(2)(v), which requires an additional follow up 
with a beneficiary who has received the beneficiary notification. In 
the CY 2023 PFS final rule (87 FR 69960 through 69963), CMS noted that 
the follow up communication promotes transparency and empowers 
beneficiaries to make an informed decision in choosing a primary care 
physician and how they share their health data. The beneficiary 
information follow-up communication affords the opportunity for 
additional direct engagement between the beneficiary and the ACO, or 
ACO participant, and provides a chance for a meaningful dialog between 
the patient and provider about the coordination of their care, the 
benefits of receiving care from an ACO provider/supplier (as defined in 
Sec.  425.20), the organizational operations of the ACO, and how data 
is used to improve care and report quality outcomes.
    Currently, under Sec.  425.312(a)(2)(v)(A), ``The follow-up 
communication must occur no later than the earlier of the beneficiary's 
next primary care service visit or 180 days from the date the 
standardized written notice was provided.'' Regulations at Sec.  
425.312(a)(2)(v)(B) require ACOs to document the beneficiary 
information follow-up communication in a system of record supported by 
the ACO and to make the information available to CMS upon request.
    Since CMS implemented the beneficiary information follow-up 
communication requirement, we have received feedback from ACOs that 
requiring the follow-up communication no later than the earlier of the 
beneficiary's next primary care service visit or 180 days from the date 
the standardized written notice was provided is difficult for ACOs to

[[Page 61924]]

operationalize as they do not always know when the beneficiary's next 
primary care service will be and in some cases it can be very soon 
after the beneficiary receives the original beneficiary notification.
    In order to address this issue and the burden it creates, CMS is 
proposing to remove the requirement that ACOs must provide this follow 
up at the beneficiary's next primary care visit. Specifically, we 
propose to modify Sec.  425.312(a)(2)(v)(A) to read ``The follow-up 
communication must occur no later than 180 days from the date the 
standardized written notice was provided.'' This would provide ACOs 
with more flexibility to implement their strategy for following up with 
beneficiaries after they receive the beneficiary notice, while still 
providing the opportunity for a meaningful dialog between a beneficiary 
and their provider. We seek comment on this proposal. If finalized, 
this proposal would be effective beginning January 1, 2025.
b. Limit the Distribution of the Beneficiary Notification to 
Beneficiaries Likely To Be Assigned for ACOs Under Preliminary 
Prospective Assignment With Retrospective Reconciliation
    ACOs that select preliminary prospective assignment with 
retrospective reconciliation are assigned beneficiaries in a 
preliminary manner and before the start of the performance year. 
Beneficiary assignment for these ACOs is then updated quarterly based 
on the most recent 12 or 24 months of data, as applicable. This 
assignment methodology is codified at Sec.  425.400(a)(2). We are 
proposing to limit the distribution of the beneficiary notification 
under Sec.  425.312(a)(2)(iii) to beneficiaries who are more likely be 
assigned to ACOs that select preliminary prospective assignment with 
retrospective reconciliation, when compared to the population of 
beneficiaries who must receive the beneficiary notification under 
current Sec.  425.312(a)(2)(iii). Please note that this is not a 
proposal to modify the Shared Savings Program's assignment methodology.
    Currently, ACOs that select preliminary prospective assignment with 
retrospective reconciliation are required to send a beneficiary notice 
to ``each fee-for-service beneficiary'' under Sec.  425.312(a)(2)(iii). 
Under Sec.  425.312(a)(2)(iii), the standardized written notice must be 
furnished to ``all fee-for-service beneficiaries prior to or at the 
first primary care service visit during the first performance year in 
which the beneficiary receives a primary care service from an ACO 
participant.'' This can result in ACOs sending notices each year to 
beneficiaries who may not ultimately be assigned to the ACO, as there 
are ``fee-for-service beneficiar[ies]'' to whom ACOs must send notices 
under Sec.  425.312(a)(2)(iii) and who are not eligible to be assigned 
to those ACOs for a variety of reasons. This policy was intended to 
ensure that all beneficiaries who receive a primary care visit from a 
ACO provider/supplier receive the beneficiary notice. However, we have 
heard feedback from ACOs that this creates confusion for the 
beneficiary and unnecessary administrative work for the ACO.
    To reduce burden on ACOs and confusion for beneficiaries, we are 
proposing to update the beneficiary notice requirement for ACOs that 
select preliminary prospective assignment with retrospective 
reconciliation to focus on beneficiaries that are likely to be assigned 
to the ACO. These beneficiaries are those who received at least one 
primary care service during the assignment window or applicable 
expanded window for assignment (as defined in Sec.  425.20) from a 
physician who is an ACO professional in the ACO and who is a primary 
care physician as defined under Sec.  425.20 or who has one of the 
primary specialty designations included in Sec.  425.402(c), a FQHC or 
RHC that is part of the ACO, or an ACO professional in the ACO whom the 
beneficiary designated as responsible for coordinating their overall 
care under Sec.  425.402(c).
    This proposal would reduce the burden of sending the beneficiary 
notice to all ``fee for service beneficiar[ies],'' including those who 
ultimately would not be eligible to be assigned to ACOs that select 
preliminary prospective assignment with retrospective reconciliation. 
Specifically, we propose to modify Sec.  425.312(a)(2)(iii) to state in 
the case of an ACO that has selected preliminary prospective assignment 
with retrospective reconciliation, the beneficiary notice must be 
provided by the ACO or ACO participant to each beneficiary who received 
at least one primary care service during the assignment window or 
applicable expanded window for assignment (as defined in Sec.  425.20) 
from a physician who is an ACO professional in the ACO and who is a 
primary care physician as defined under Sec.  425.20 or who has one of 
the primary specialty designations included in Sec.  425.402(c), a FQHC 
or RHC that is part of the ACO, or an ACO professional in the ACO whom 
the beneficiary designated as responsible for coordinating their 
overall care under Sec.  425.402(e). Each such beneficiary must receive 
a standardized written notice at least once during an agreement period 
in the form and manner specified by CMS. The standardized written 
notice must be furnished to all of these beneficiaries prior to or at 
the first primary care service visit during the first performance year 
in which the beneficiary receives a primary care service from an ACO 
participant.
    For ACOs that select prospective assignment, beneficiaries are 
prospectively assigned to the ACO at the beginning of each benchmark or 
performance year based on the beneficiary's use of primary care 
services in the most recent 12 or 24 months, as applicable, for which 
data are available, using the assignment methodology described in 
Sec. Sec.  425.402 and 425.404. See Sec.  425.400(a)(3)(i). 
Beneficiaries that are prospectively assigned to an ACO under Sec.  
425.400(a)(3)(i) remain assigned to the ACO at the end of the benchmark 
or performance year unless they meet any of the exclusion criteria 
under Sec.  425.401(b). See Sec.  425.400(a)(3)(ii). We note that ACOs 
that select prospective assignment are subject to Sec.  
425.312(a)(2)(iv). Under this regulation, ACOs that select prospective 
assignment are required to furnish the beneficiary notice to all 
prospectively assigned beneficiaries once during an agreement period. 
We seek comment on this proposal. If finalized, this proposed change 
would be effective beginning on January 1, 2025.

H. Medicare Part B Payment for Preventive Services (Sec. Sec.  410.10, 
410.57, 410.64, 410.152)

1. Part B Preventive Vaccines and Their Administration
a. Statutory Background
    Under section 1861(s)(10) of the Act, Medicare Part B covers both 
the vaccine and vaccine administration for the specified preventive 
vaccines--pneumococcal, influenza, hepatitis B and COVID-19 vaccines. 
Section 1861(s)(10)(B) of the Act specifies that the hepatitis B 
vaccine and its administration is only covered for those who are at 
high or intermediate risk of contracting hepatitis B, as defined at 
Sec.  410.63. Under sections 1833(a)(1)(B) and (b)(1) of the Act, 
respectively, there is no applicable beneficiary coinsurance, and the 
annual Part B deductible does not apply for these vaccines or the 
services to administer them. Per section 1842(o)(1)(A)(iv) of the Act, 
payment for these vaccines is based on 95 percent of the Average 
Wholesale Price (AWP) for the vaccine

[[Page 61925]]

product, except when furnished in the settings for which payment is 
based on reasonable cost, such as a hospital outpatient department 
(HOPD), rural health clinic (RHC), or federally qualified health center 
(FQHC). Some other preventive vaccines, such as the zoster vaccine for 
the prevention of shingles, are not specified for Medicare Part B 
coverage under section 1861(s)(10) of the Act and are instead covered 
under Medicare Part D.
b. Pneumococcal, Influenza and Hepatitis B Vaccine Administration
    In the CY 2022 PFS final rule (86 FR 65185), we finalized a uniform 
payment rate of $30 for the administration of a pneumococcal, influenza 
or hepatitis B vaccine covered under the Medicare Part B preventive 
vaccine benefit. We explained that since payment policies for the 
administration of the preventive vaccines described under section 
1861(s)(10) of the Act are independent of the PFS, these payment rates 
will be updated as necessary, independent of the valuation of any 
specific codes under the PFS. (Please see COVID-19 vaccine 
administration payment information in the next section.) The CY 2022 
PFS final rule (86 FR 65180 through 65182) provides a detailed 
discussion on the history of the valuation of the three Level II 
Healthcare Common Procedure Coding System (HCPCS) codes, G0008, G0009, 
and G0010, which describe the services to administer an influenza, 
pneumococcal, and hepatitis B vaccine, respectively.
    In the CY 2023 PFS final rule (87 FR 69984), we finalized a policy 
to annually update the payment amount for the administration of Part B 
preventive vaccines based upon the percentage increase in the Medicare 
Economic Index (MEI). Additionally, we finalized the use of the PFS 
Geographical Adjustment Factor (GAF) to adjust the payment amount to 
reflect cost differences for the geographic locality based upon the fee 
schedule area where the preventive vaccine is administered. These 
adjustments and updates apply to HCPCS codes G0008, G0009, G0010.
    These adjustments and updates also apply to Current Procedural 
Terminology (CPT) code 90480 (Immunization administration by 
intramuscular injection of severe acute respiratory syndrome 
coronavirus 2 (SARSCoV-2) (coronavirus disease [COVID-19]) vaccine, 
single dose) that describe the service to administer COVID-19 vaccines 
and HCPCS code M0201 (Administration of pneumococcal, influenza, 
hepatitis b, and/or covid-19 vaccine inside a patient's home; reported 
only once per individual home per date of service when such vaccine 
administration(s) are performed at the patient's home), discussed below 
in section III.H.1.c and III.H.1.d, respectively, of this proposed 
rule.
    The current payment rates for G0008, G0009, and G0010, as finalized 
in the CY 2024 PFS final rule, can be found on the CMS Vaccine Pricing 
website under the ``Seasonal Flu Vaccines'' tab, and then under the 
heading ``Locality-Adjusted Payment Rates.'' \543\ The payment rates 
for these services, with the annual update applied for CY 2025, will be 
made available at the time of publication of the CY 2025 PFS final 
rule. The current forecast of the increase in the MEI for CY 2025 is 
3.6 percent based on the 2017-based MEI. We note that the CY 2025 MEI 
increase factor for the final rule will be based on historical data 
through the 2nd quarter of 2024. Tables 45 and 46 in section III.H.1.f. 
of this proposed rule provide the CY 2025 projected payment rates for 
G0008, G0009, and G0010.
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    \543\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under the tab ``Seasonal Flu Vaccines'', and then under the header 
``Locality-Adjusted Payment Rates.''
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c. COVID-19 Vaccine Administration
    In the CY 2022 PFS final rule (86 FR 65181 and 65182), we provided 
a detailed history regarding the determinations of initial payment 
rates for the administration of COVID-19 vaccines, and an explanation 
of how the payment policy evolved to a rate of $40 per dose. For CY 
2022, we maintained the payment policy for the administration of COVID-
19 vaccines and stated that while we believe it is appropriate to 
establish a single, consistent payment rate for the administration of 
all four Part B preventive vaccines in the long term, we will pay a 
higher, $40 payment rate for administration of COVID-19 vaccines in the 
short term, while pandemic conditions persisted (86 FR 65185).
    In the CY 2023 PFS final rule (87 FR 69988 through 69993), we 
stated that due to timing distinctions between a PHE declared under 
section 319 of the Public Health Service (PHS) Act and an Emergency Use 
Authorization (EUA) declaration under section 564 of the Federal Food, 
Drug, and Cosmetic Act (FD&C Act), we reconsidered the policies 
finalized in the CY 2022 PFS final rule in light of our goal to promote 
broad and timely access to COVID-19 vaccines. We explained that our 
goal would be better served if our policies with respect to payment for 
administration of these products, as addressed in the November 6, 2020 
COVID-19 IFC (85 FR 71142) and CY 2022 PFS final rule (85 FR 18250), 
continue until the EUA declaration for drugs and biological products 
with respect to COVID-19 is terminated. Therefore, we finalized that we 
would maintain the current payment rate of $40 per dose for the 
administration of COVID-19 vaccines through the end of the calendar 
year in which the March 27, 2020 EUA declaration under section 564 of 
the FD&C Act (EUA declaration) for drugs and biological products ends. 
Effective January 1 of the year following the year in which the EUA 
declaration ends, the COVID-19 vaccine administration payment would be 
set at a rate to align with the payment rate for the administration of 
other Part B preventive vaccines, that is, approximately $30 per dose. 
As mentioned above, we also finalized that, beginning January 1, 2023, 
we would annually update the payment amount for the administration of 
all Part B preventive vaccines based upon the percentage increase in 
the MEI, and that we would use the PFS GAF to adjust the payment amount 
to reflect cost differences for the geographic locality based upon the 
fee schedule area where the vaccine is administered.
    On September 11, 2023, the Food and Drug Administration (FDA) 
announced its recommendation to shift to a monovalent severe acute 
respiratory syndrome coronavirus 2 (SARS-CoV-2) (coronavirus disease 
2019 [COVID-19]) vaccine that targets the predominant XBB lineage virus 
strain for the 2023-2024 vaccine administration season.\544\ In 
anticipation of this recommendation, in August 2023, the CPT Editorial 
Panel approved five new monovalent COVID-19 vaccine product codes for 
Pfizer and Moderna vaccines. In addition, they approved a new vaccine 
administration code (90480) for reporting the administration of any 
COVID-19 vaccine for any patient (pediatric or adult), replacing all 
previously approved specific vaccine administration codes. All 
previously approved COVID-19 vaccine product and vaccine administration 
codes were deleted from the CPT code set effective November 1, 2023, 
except for product code 91304, which represents the

[[Page 61926]]

Novavax COVID-19 vaccine product and remains active.\545\
---------------------------------------------------------------------------

    \544\ https://www.fda.gov/news-events/press-announcements/fda-takes-action-updated-mrna-covid-19-vaccines-better-protect-against-currently-circulating.
    \545\ CPT[supreg] Assistant Special Edition: August Update/
Volume 33/2023. https://www.ama-assn.org/system/files/cpt-assistant-guide-coronavirus-august-2023-updated.pdf.
---------------------------------------------------------------------------

    The current payment rate for CPT code 90480 is available on the CMS 
COVID-19 Vaccine Pricing website, under ``COVID-19 Vaccines & 
Monoclonal Antibodies''.\546\ The payment rate for this service, with 
the annual update applied for CY 2025, will be made available at the 
time of publication of the CY 2025 PFS final rule. As noted above, the 
current forecast of the increase in the MEI for CY 2025 is 3.6 percent 
based on the 2017-based MEI, however, the CY 2025 MEI increase factor 
for the final rule will be based on historical data through the 2nd 
quarter of 2024.
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    \546\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
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    Due to the uncertainty surrounding the future of the EUA 
declaration for drugs and biological products for COVID-19, Tables 45 
and 46, at the end of section III.H.1.f. of this proposed rule, reflect 
the potential alternative payment amounts for Part B preventive vaccine 
administration for CY 2025. Table 45 displays the CY 2025 Part B 
payment rates for preventive vaccine administration if the EUA 
declaration continues into CY 2025, and Table 46 displays the CY 2025 
Part B payment rates for preventive vaccine administration if the EUA 
declaration ends on or before December 31, 2024.
d. In-Home Additional Payment for Administration of Preventive Vaccines
    In the CY 2022 PFS final rule (86 FR 65187 and 65190), we provide a 
detailed discussion on the payment policy for COVID-19 vaccine 
administration in the home. In summary, providers and suppliers that 
administer a COVID-19 vaccine in the home, under certain circumstances, 
could bill Medicare for one of the existing COVID-19 vaccine 
administration CPT codes along with HCPCS code M0201 (COVID-19 vaccine 
administration inside a patient's home; reported only once per 
individual home per date of service when only COVID-19 vaccine 
administration is performed at the patient's home). For CY 2022, we 
continued to make an additional payment when a COVID-19 vaccine was 
administered in a beneficiary's home under certain circumstances and 
stated that we would make this payment until the end of the year in 
which the PHE expires.
    In the CY 2023 PFS final rule (87 FR 69984 through 69986), we 
discussed that we had received many comments and requests from 
interested parties that the in-home add-on payment be applied more 
broadly to all preventive vaccines. Commenters also expressed concerns 
that discontinuation of the in-home additional payment would negatively 
impact access to the COVID-19 vaccine for underserved homebound 
beneficiaries. Therefore, we continued the policy of making an 
additional payment when a COVID-19 vaccine is administered in a 
beneficiary's home, under the certain circumstances for the duration of 
CY 2023. We explained that we were continuing the policy of additional 
payment for at-home COVID-19 vaccinations for another year in order to 
provide us time to track utilization and trends associated with its 
use, in order to inform the Part B preventive vaccine policy on 
payments for in-home vaccine administration for CY 2024. In addition, 
for CY 2023 we updated the payment amount by the CY 2023 MEI percentage 
increase and adjusted for geographic cost differences as we do the 
payment for the preventive vaccine administration service, that is, 
based upon the fee schedule area where the COVID-19 vaccine is 
administered, by using the PFS GAF (87 FR 69986).
    In the CY 2024 PFS final rule (88 FR 79235 through 79237), we 
discussed the policy for the in-home additional payment for COVID-19 
vaccine administration under the Part B preventive vaccine benefit for 
CY 2024 and subsequent years. We maintained the payment policy for 
COVID-19 vaccine administration and extended the additional payment to 
the administration of the other three preventive vaccines included in 
the Part B preventive vaccine benefit--the pneumococcal, influenza, and 
hepatitis B vaccines. As described at Sec.  410.152(h)(3), effective 
January 1, 2024, the payment amount for the in-home administration of 
all four vaccines is identical, that is, Medicare Part B pays the same 
additional payment amount to providers and suppliers that administer a 
pneumococcal, influenza, hepatitis B, or COVID-19 vaccine in the home. 
This additional payment amount is annually updated using the percentage 
increase in the MEI and is adjusted to reflect geographic cost 
variations with the PFS GAF.
    We stated that the in-home additional payment is limited to one 
payment per home visit, even if multiple vaccines are administered 
during the same home visit. We noted that every vaccine dose that is 
furnished during a home visit still receives its own unique vaccine 
administration payment. The additional payment for in-home Part B 
vaccine administration is only made if certain circumstances are met, 
as outlined at Sec.  410.152(h)(3)(iii). Providers and suppliers that 
administer one of the Part B preventive vaccines in the home, under 
those circumstances, can bill Medicare for one of the existing Part B 
vaccine administration CPT codes along with HCPCS code M0201 
(Administration of pneumococcal, influenza, hepatitis b, and/or covid-
19 vaccine inside a patient's home; reported only once per individual 
home per date of service when such vaccine administration(s) are 
performed at the patient's home) (88 FR 79235 through 79237).
    The current payment rate for M0201 can be found on the CMS Vaccine 
Pricing website under ``COVID-19 Vaccines & Monoclonal 
Antibodies''.\547\ The M0201 payment rate with the annual update 
applied for CY 2025 will be made available at the time of publication 
of the CY 2025 PFS final rule. The current forecast of the increase in 
the MEI for CY 2025 is 3.6 percent based on the 2017-based MEI. We note 
that the CY 2025 MEI increase factor for the final rule will be based 
on historical data through the 2nd quarter of 2024. Tables 45 and 46 in 
section III.H.1.f. of this proposed rule provide the CY 2025 projected 
payment rate for M0201.
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    \547\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
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e. COVID-19 Monoclonal Antibodies and Their Administration
    In CY 2023 PFS final rule (87 FR 69987 through 69993), we discussed 
that all COVID-19 monoclonal antibody products and their administration 
are covered and paid for under the Part B preventive vaccine benefit 
through the end of year in which the Secretary terminates the EUA 
declaration for drugs and biological products with respect to COVID-19. 
In addition, we explained that, under the authority provided by section 
3713 of the CARES Act, we have established specific coding and payment 
rates for the COVID-19 vaccine, as well COVID-19 monoclonal antibodies 
and their administration, through technical direction to Medicare 
Administrative Contractors (MACs) and information posted publicly on 
the CMS website (87 FR 69987).
    In the CY 2023 PFS final rule, we also established a policy to 
continue coverage and payment for monoclonal antibodies that are used 
for pre-exposure prophylaxis (PrEP) of COVID-

[[Page 61927]]

19 under the Part B preventive vaccine benefit if they meet applicable 
coverage requirements (87 FR 69992). We explained that we will continue 
to pay for these products and their administration even after the EUA 
declaration for drugs and biological products is terminated, so long as 
after the EUA declaration is terminated, such products have market 
authorization. Additionally, we established that payments for the 
administration of monoclonal antibodies that are used for PrEP of 
COVID-19 would be adjusted for geographic cost variations using the PFS 
GAF. In the CY 2024 PFS rule (88 FR 79239 through 79240), we codified 
these policies in regulations at Sec. Sec.  410.10(l) and 410.57(c).
    In CY 2024 PFS final rule (88 FR 79239 through 79240), we noted 
that we did not finalize any payment regulations regarding monoclonal 
antibodies for PrEP of COVID-19, since at the time of the publication 
of the CY 2024 PFS final rule, there were no COVID-19 monoclonal 
antibodies approved or authorized for use against the dominant strains 
of COVID-19 in the United States. We stated that if a new monoclonal 
antibody for PrEP of COVID-19 became authorized for use, we would use 
the authority provided by section 3713 of the CARES Act, as discussed 
in the CY 2023 PFS final rule (87 FR 69987), to establish specific 
coding and payment rates for the administration of that product through 
technical direction to MACs and information posted publicly on the CMS 
website. We explained that we would subsequently propose coding and 
payment rates for the administration of that product via rulemaking.
    We also noted that, for the purposes of the in-home additional 
payment discussed above in section III.H.1.d. of this proposed rule, 
that additional payment is not applicable to the administration of 
monoclonal antibodies for PrEP of COVID-19. For monoclonal antibodies 
for PrEP of COVID-19, we set the coding and payment rates for the 
administration of COVID-19 monoclonal antibodies in the home (when 
applicable) to be higher than those in other health care settings, and 
therefore such amounts already account for the higher costs of 
administering the product in the home.
    On March 22, 2024, the FDA issued an EUA for Pemgarda (pemivibart) 
injection, for intravenous use.\548\ Pemgarda is a monoclonal antibody 
product indicated for use for pre-exposure prophylaxis to help prevent 
COVID-19 in adults and children 12 years of age and older who weigh at 
least 88 pounds (40 kg) who:
---------------------------------------------------------------------------

    \548\ https://www.fda.gov/media/177068/download?attachment.
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     Are not currently infected with SARS-CoV-2 and who have 
not been known to be exposed to someone who is infected with SARS-CoV-2 
and
     Have moderate-to-severe immune compromise because of a 
medical condition or because they receive medicines or treatments that 
suppress the immune system and they are unlikely to have an adequate 
response to COVID-19 vaccination.
    Therefore, under the authority provided by section 3713 of the 
CARES Act, we established specific coding and payment rates for the 
administration of Pemgarda through technical direction to MACs and 
information posted publicly on the CMS website. Since Pemgarda is used 
for pre-exposure prophylaxis of COVID-19, which CMS is covering under 
the Part B preventive vaccine benefit even after the EUA declaration 
for drugs and biological products is terminated (so long as such 
products still have market authorization), we plan to propose long-term 
coding and payment rates for the administration of this product in 
future rulemaking. The current payment rates for Pemgarda and its 
administration can be found on the CMS Vaccine Pricing website under 
``COVID-19 Vaccines & Monoclonal Antibodies''.\549\ These payment rates 
are also listed below in Tables 45 and 46.
---------------------------------------------------------------------------

    \549\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``COVID-19 Vaccines & Monoclonal Antibodies''.
---------------------------------------------------------------------------

    More information on our coding and payment policies for COVID-19 
monoclonal antibodies is available at https://www.cms.gov/monoclonal.
f. Summary of Payment Amounts for CY 2025
    Due to the uncertainty surrounding the future of the EUA 
declaration for drugs and biological products for COVID-19, we are 
including Tables 45 and 46, which summarize Medicare Part B the 
potential alternative preventive vaccine administration payment amounts 
at the time of the publication of this proposed rule. If the EUA 
declaration continues to be in effect on January 1, 2025, we propose 
that the payment rates in Table 45 will apply. If the EUA declaration 
is terminated before January 1, 2025, we propose that the payment rates 
in Table 45 will apply.
    For CY 2025, the proposed growth rate of the 2017-based MEI is 
estimated to be 3.6 percent, based on the IHS Global, Inc. (IGI) first 
quarter 2024 forecast with historical data through fourth quarter 2023. 
Therefore, Table 45 represents our CY 2024 payment rates for the listed 
items, multiplied by 1.036. We propose that if more recent data are 
subsequently available (for example, a more recent estimate of the MEI 
percentage increase), we would use such data, if appropriate, to 
determine the CY 2025 MEI percentage increase in the CY 2025 PFS final 
rule; we would apply that updated MEI percentage increase to the rates 
found in the Tables 45 and 46 where applicable.
BILLING CODE P

[[Page 61928]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.074

[GRAPHIC] [TIFF OMITTED] TP31JY24.075


[[Page 61929]]


BILLING CODE C
2. Revised Payment Policies for Hepatitis B Vaccine Administration
    In section III.M of this proposed rule, CMS proposes to improve 
access and utilization of hepatitis B vaccines by expanding the list of 
individuals who are at high or intermediate risk of contracting 
hepatitis B at Sec.  410.63. Specifically, CMS proposes to expand 
coverage of hepatitis B vaccinations by revising Sec.  410.63(a)(2), 
Intermediate Risk Groups, by adding a new paragraph (a)(2)(iv) to 
include individuals who have not previously received a completed 
hepatitis B vaccination series and individuals whose previous 
vaccination history is unknown. CMS believes that this proposed 
coverage change will help protect Medicare beneficiaries from acquiring 
hepatitis B infection, contribute to eliminating viral hepatitis as a 
public health threat in the United States, and is in the best interest 
of the Medicare program and its beneficiaries. Below, we discuss how 
the proposal to expand coverage may impact Part B payment policy for 
hepatitis B vaccines and administration.
a. Background
    Section 2323 of the Deficit Reduction Act of 1984 (Pub. L. 98-369) 
amended section 1861(s)(10) of the Act by adding subparagraph (B) to 
provide Medicare Part B coverage for the hepatitis B vaccine and its 
administration for those individuals who are at high or intermediate 
risk of contracting hepatitis B. The statute required the Secretary to 
determine, by regulations, criteria for identifying individuals who are 
at high or intermediate risk of contracting hepatitis B. In addition, 
section 2323 of the Deficit Reduction Act of 1984 added section 1833(k) 
of the Act, which states that the Secretary may provide, instead of the 
amount of payment otherwise provided under Part B for the hepatitis B 
vaccine and its administration, for payment of such an amount or 
amounts as reasonably reflects the general cost of efficiently 
providing such services.
    In the June 4, 1990 Federal Register, CMS issued a final rule to 
implement section 2323 of the Deficit Reduction Act of 1984 and the 
coverage provisions were codified in regulation at Sec.  410.63(a) (55 
FR 22785). In the preamble to 1990 rule, we stated that, ``[f]or 
Medicare payment purposes, the hepatitis B vaccine may be 
administered--upon the order of a doctor of medicine or osteopathy--by 
qualified staff of home health agencies, skilled nursing facilities, 
ESRD facilities, hospital outpatient departments, HMO's, persons 
recognized under the `incident to physician's services' provision of 
the law (section 1861(s)(2)(A) of the Act), as well as doctors of 
medicine and osteopathy.'' This policy is included in the Medicare 
Claims Processing Manual, Chapter 18, section 10.1.3.
    In the CY 2013 PFS final rule (77 FR 69363), CMS amended the 
regulations at Sec.  410.63(a) to include those diagnosed with diabetes 
mellitus in the list of groups at high risk of contracting hepatitis B. 
In the November 6, 2020 COVID-19 IFC (85 FR 71145), in preamble 
discussions surrounding the implementation of coverage and payment for 
the COVID-19 vaccine, we mentioned the unique coverage and payment 
requirements related the hepatitis B vaccine under Part B. We noted 
that, unlike pneumococcal, influenza and COVID-19 vaccines, hepatitis B 
vaccines require an assessment of a patient's risk of contracting 
hepatitis B. Because, hepatitis B vaccinations claims needed a 
physician's order, they could not be roster billed by mass immunizers. 
More information on the current physician's order policy for the 
administration of hepatitis B vaccines in Part B can be found in the 
Medicare Benefit Policy Manual, Chapter 15, Section 50.4.4.2.
b. Revisions to Payment Policies for Hepatitis B Vaccinations
    As discussed above, section III.M of this proposed rule revises 
Sec.  410.63(a) to provide coverage under Part B for hepatitis B 
vaccines and their administration for an expanded range of Medicare 
enrollees. We explain that Medicare coverage of hepatitis B vaccination 
is outdated in light of recent information about the risks of 
contracting hepatitis B, and that current research indicates that 
individuals who remain unvaccinated against hepatitis B are at 
intermediate risk of contracting hepatitis B virus. Under the new 
proposal, an assessment of an individual's vaccination status could now 
be made without the clinical expertise of a physician. Thus, if the 
rule is finalized, we would remove our policy in the manual that the 
administration of a Part B hepatitis B vaccine be preceded by a 
doctor's order. If the new definition at Sec.  410.63(a) is finalized 
as proposed, then a doctor's order would no longer be necessary for the 
administration of a hepatitis B vaccine under Part B.
    If the physician's order requirement is eliminated, then we would 
also change our procedures to allow mass immunizers to use the roster 
billing process to submit Medicare Part B claims for hepatitis B 
vaccines and their administration.
    Currently, instructions regarding hepatitis B vaccine 
administration under part B are contained in CMS manual guidance. If 
changes to Sec.  410.63(a) are finalized, then we would make 
corresponding changes to guidance in the Medicare Benefit Policy Manual 
and Medicare Claims Processing Manual. More information on roster 
billing is available on the CMS web page at https://www.cms.gov/roster-billing.
    We note that the current payment rates for HCPCS code G0010, 
``Administration of hepatitis b vaccine,'' as finalized in the CY 2024 
PFS final rule, can be found on the CMS Vaccine Pricing website under 
``Seasonal Flu Vaccines''.\550\ The payment rates for G0010, with the 
annual update applied for CY 2025, will be made available at the time 
of publication of the CY 2025 PFS final rule. Tables 45 and 46 in 
section III.H.1.f. of this proposed rule provide the CY 2025 projected 
payment rates for G0010. More information on other policies related to 
the administration of G0010 can be found in the section preceding this 
one (section III.H.1. of this proposed rule), and proposed revisions to 
payment policies for the administration of G0010 in RHCs and FQHCs can 
be found in the section immediately below (section III.H.2.c. of this 
proposed rule).
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    \550\ https://www.cms.gov/medicare/payment/fee-for-service-providers/part-b-drugs/average-drug-sales-price/vaccine-pricing, 
under ``Seasonal Flu Vaccines''; see links to the relevant year 
under ``Locality-Adjusted Payment Rates.''
---------------------------------------------------------------------------

c. Revisions to Payment Policies for Hepatitis B Vaccinations in Rural 
Health Clinics (RHC) and Federally Qualified Health Centers (FQHC)
    When section 2323 of the Deficit Reduction Act of 1984 added 
section 1861(s)(10)(B) to the Act to add Medicare Part B coverage for 
the hepatitis B vaccine and its administration, it limited that 
coverage to certain settings. In RHCs and FQHCs, the law specified at 
section 1833(a)(3)(A) of the Act that the vaccines mentioned at section 
1861(s)(10)(A) of the Act--namely, pneumococcal and influenza (and 
later, COVID-19) vaccines--are not included in the all-inclusive 
payment rate for an RHC or FQHC visit, but are reimbursed as a separate 
payment. Pneumococcal, influenza and COVID-19 vaccines and their 
administration are paid at 100 percent of reasonable cost when 
administered in an RHC or FQHC, in accordance with section 
1833(a)(1)(B) of the Act. By contrast, hepatitis B vaccines and the 
cost of administration

[[Page 61930]]

are included in the capitated payment for an RHC or FQHC visit. RHCs 
and FQHC visits are generally paid at 80 percent of reasonable costs, 
and thus, they are subject to coinsurance for Medicare Part B 
enrollees. The Deficit Reduction Act of 1984 also added section 1833(k) 
to the Act, which states that, for hepatitis B vaccines and their 
administration as described at section 1861(s)(10)(B), the Secretary 
may provide, instead of the amount of payment otherwise dictated in 
statute, for payment that ``reasonably reflects the general cost of 
efficiently providing such services.''
    In CY 2011 PFS final rule (75 FR 73418), we addressed the issue of 
coinsurance for hepatitis B vaccines and their administration in FQHCs. 
The CY 2011 PFS final rule, which implemented the expansion of 
preventive services in Medicare as mandated by the ACA, stated that 
effective January 1, 2011, Part B coinsurance on hepatitis B 
vaccinations was waived, as the vaccine and its administration were 
deemed ``preventive services'' per section 1861(ddd)(3)(A) of the Act 
as cross-referenced to section 1861(ww)(2) of the Act. (More 
information on preventive services is provided immediately below at 
section III.H.3. of this proposed rule). The CY 2011 PFS final rule 
codified this FQHC policy in regulation at Sec.  405.2449. In the CY 
2014 FQHC PPS final rule (79 FR 25474), at Sec.  405.2410(b), we 
codified regulations regarding coinsurance in RHCs and FQHCs which 
exempt from coinsurance ``preventive services for which Medicare pays 
100 percent under Sec.  410.152(l) of this chapter'', which explicitly 
includes the hepatitis B vaccine. In the CY 2016 PFS final rule (80 FR 
71088), we clarified that these waivers of cost-sharing (both 
coinsurance and deductible) for preventive services applied to RHCs as 
well, and we subsequently clarified in subregulatory guidance that 
these waivers apply to the administration of hepatitis B vaccines in 
RHC and FQHCs.\551\ We note that FQHC services are always exempt from 
the Part B deductible, per section 1833(b)(4) of the Act.
---------------------------------------------------------------------------

    \551\ Updates were made to Chapter 13, section 220.1 of Medicare 
Benefit Policy Manual via Change Request 9864, R2186CP, December 9, 
2016, ``Rural Health Clinic (RHC) and Federally Qualified Health 
Center (FQHC) Updates'': https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R230BP.pdf.Updates were 
also made to Chapter 9, section 60.3 of the Medicare Claims 
Processing Manual via Change Request 9397, R3434CP, December 31, 
2015, ``Reorganization of Chapter 9'': https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3434CP.pdf.
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    Even though hepatitis B vaccines and their administration are 
deemed preventive services for which coinsurance (and deductible in 
RHCs) is waived, hepatitis B vaccines are still currently paid 
differently than other Part B vaccines in RHCs and FQHCs. Due to the 
statutory differences explained above, pneumococcal, influenza and 
COVID-19 vaccines and their administration are paid at 100 of 
reasonable cost in RHCs and FQHCs--that is, they are paid separately 
from the FQHC PPS or the RHC All-Inclusive Rate (AIR) methodology--
while hepatitis B vaccines and their administration are paid as part of 
the FQHCs PPS or the RHC AIR, which means that they are paid through 
changes to the facilities' capitated rate.
    In light of the proposal to expand coverage for hepatitis B 
vaccination in section III.M. of this proposed rule, we propose to use 
the aforementioned authority at section 1833(k) of the Act to align 
payment for hepatitis B vaccinations in RHCs and FQHCs with the payment 
for pneumococcal, influenza and COVID-19 vaccinations in those 
settings. That is, we propose to pay for hepatitis B vaccines and their 
administration in RHCs and FQHCs at 100 percent of reasonable cost, 
separate from the FQHCs PPS and the RHC AIR methodology, for all 
populations identified for coverage at Sec.  410.63(a). As is the case 
for pneumococcal, influenza and COVID-19 vaccine administration, under 
this proposal, a hepatitis B vaccine administration would not be 
considered an RHC or FQHC visit. If this policy is finalized, then 
effective January 1, 2025, RHCs and FQHCs would bill for Part B 
hepatitis B vaccines in the same manner as they currently bill for 
pneumococcal, influenza and COVID-19 vaccines, that is, on their cost 
report. We note that we proposed above, in section III.B.5 of this 
proposed rule, to allow for billing and payment of all Part B 
preventive vaccines and their administration at the time of service in 
RHCs and FQHCs, with annual reconciliation on the facilities' cost 
reports. That policy, if finalized as proposed, would be effective for 
dates of service on or after July 1, 2025. Both proposals together 
support our goal of streamlining payment for all Part B vaccines across 
Part B settings of care. We believe that streamlining Part B vaccine 
and vaccine administration payments among care settings aligns with the 
stated goals of section 1833(k) of the Act, since those payment policy 
changes will allow for increased efficiency in Part B claims processing 
on both the part of the RHCs and FQHCs and on the part of CMS. We also 
believe that the increased efficiency will promote vaccine access, and 
thus health equity in general, in RHCs and FQHCs that already serve 
vulnerable populations.
    To implement this proposal regarding payment for hepatitis B 
vaccines and their administration in RHCs and FQHCs, we also propose to 
amend the regulations at Sec.  405.2466(b)(1)(iv), to add hepatitis B 
vaccines to the list of vaccines covered in RHCs and FQHCs at 100 
percent of reasonable cost. Upon the publication of the CY 2025 PFS 
final rule, if revisions to Sec.  405.2466(b)(1)(iv) are finalized as 
proposed, we would make corresponding changes to guidance in the 
Medicare Benefit Policy Manual, Chapter 13 and Medicare Claims 
Processing Manual, Chapter 9. If finalized, we also plan to facilitate 
the necessary operational systems updates needed to implement these 
changes.
d. Regulations Concerning Hepatitis B Vaccines and their Administration
    Listed below are several Medicare Part B regulations that mention 
the hepatitis B vaccine and refer to Sec.  410.63(a) for a definition 
of hepatitis B vaccine coverage. Since we are proposing to revise Sec.  
410.63(a) in section III.M. of this proposed rule, we do not believe 
additional regulation text changes are needed to conform to the 
coverage proposal, as the update to the definition at Sec.  410.63(a) 
will apply to the use of the definition in these regulations:
     Section 410.10(p).
     Section 410.57(d).
     Section 411.15(e)(3) and (k)(5).
     Section 414.707(a)(2)(iii).
     Section 414.904(e)(1).
    In addition, we note that there are no conforming regulation text 
changes needed to the payment regulations at Sec.  410.152, paragraphs 
(h) and (l)(1), to conform to the coverage proposal.
3. Payment for Drugs Covered as Additional Preventive Services (Sec.  
410.152)
a. Statutory Background
    Section 101 of the Medicare Improvements for Patients and Providers 
Act (MIPPA) of 2008 (Pub. L. 110-275) added section 1861(ddd)(1) and 
(2) of the Act to effectuate ``improvements to coverage of preventive 
services'' in the Medicare program. Under section 1861(ddd)(1) of the 
Act, Medicare Part B covers ``additional preventive services'' that 
identify medical conditions or risk factors and that the Secretary 
determines are reasonable and necessary

[[Page 61931]]

for: (A) the prevention or early detection of an illness or disability; 
(B) that are recommended with a grade of A or B by the United States 
Preventive Services Task Force; and (C) that are appropriate for 
individuals entitled to benefits under Part A or enrolled under Part B. 
Section 1861(ddd)(2) of the Act states that, in making determinations 
under section 1861(ddd)(1) of the Act, the Secretary should use the 
process for making National Coverage Determinations (NCD) in the 
Medicare program.
    Section 101 of MIPPA also added section 1833(a)(1)(W) of the Act, 
which provides requirements for payment of additional preventive 
services. Section 1833(a)(1)(W)(i) establishes requirements for payment 
of additional preventive services that are clinical diagnostic 
laboratory tests, and section 1833(a)(1)(W)(ii) establishes 
requirements for payment of all other services. Section 
1833(a)(1)(W)(ii) (as amended by section 4104 of the Affordable Care 
Act (Pub. L. 111-148) requires that the amount paid for the provision 
of all other additional preventive services is 100 percent of the 
lesser of the actual charge for the service, or the amount determined 
under a fee schedule established by the Secretary for purposes of this 
subparagraph.
    We note that ``additional preventive services'' are a subset of 
``preventive services'' under Medicare Part B, per section 1861(ddd)(3) 
and 1861(ww)(2)(O) of the Act, respectively. Section 1833(b)(1) of the 
Act states that the annual Part B deductible does not apply to 
preventive services, and section 1833(a)(1)(Y) of the Act waives 
coinsurance for preventive services that are recommended with a grade 
of A or B by the USPSTF for any indication or population. Based on all 
the above statutory authorities, there is no cost-sharing under Part B 
for additional preventive services for Medicare enrollees, that is, 
there is no applicable beneficiary coinsurance or deductible for these 
services.
    The term ``preventive services'' is defined at Sec.  410.2, and 
coverage for ``additional preventive services'' is delineated at Sec.  
410.64. At Sec.  410.152(l), we list the Part B preventive services 
that are paid at 100 percent of the Medicare payment amount, that is, 
for which zero coinsurance is charged. There, at Sec.  410.152(l)(11), 
we include ``additional preventive services identified for coverage 
through the national coverage determination (NCD) process''. At Sec.  
410.160(b), we list the Part B services that are not subject to the 
Part B annual deductible and do not count toward meeting that 
deductible, and ``additional preventive services identified for 
coverage through the national coverage determination (NCD) process'' is 
included there at Sec.  410.160(b)(13).
    The payment authority under section 1833(a)(1)(W)(ii) of the Act 
has not been utilized to date because CMS has not yet covered any 
additional preventive service that would require use of that payment 
authority. While CMS currently covers certain screenings and therapies 
as additional preventive services under the section 1861(ddd) of the 
Act, those screenings and therapies are currently paid under the 
existing PFS fee schedule for physician services. Furthermore, the 
Medicare Diabetes Prevention Program, described at section III.E of 
this proposed rule, uses the section 1833(a)(1)(W)(ii) authority to 
waive the coinsurance and deductible as described above, but its 
payment policy is based on separate authorities under the model.
    Specifically, we note that CMS has not yet covered or paid for any 
drugs or biologicals (hereinafter, referred to as drugs) under the 
benefit category of additional preventive services. This was 
highlighted when CMS released a Proposed NCD for Pre-Exposure 
Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) Infection 
Prevention on July 12, 2023. This proposed NCD announced CMS' intention 
to cover and pay for those drugs under section 1861(ddd) of the Act's 
additional preventive services authority, and a decision on the NCD is 
forthcoming. We note that CMS covers and pays for Part B vaccines, 
which are also considered preventive services under sections 
1861(ddd)(3) and 1861(ww)(2)(A) of the Act, but they have unique 
payment rates specified in statute at section 1842(o)(1)(A)(iv) of the 
Act (for more information, see above at section III.H.1.a. of this 
proposed rule).
b. Proposed Fee Schedule for Drugs Covered as Additional Preventive 
Services (DCAPS)
    As discussed above, the authority at section 1833(a)(1)(W)(ii) of 
the Act provides for payment for additional preventive services, 
including drugs. This authority differs from the authority used to pay 
drugs that are separately paid as drugs and biologicals under other 
Part B payment authorities. Specifically, payment for most drugs 
separately payable under Part B is authorized at section 1833(a)(1)(S) 
of the Act and outlined at section 1842(o)(1)(C) of the Act, and those 
payments are generally made according to the Average Sales Price (ASP) 
methodology that is described at section 1847A of the Act. In addition, 
because drugs covered as additional preventive services (hereinafter, 
DCAPS; we will use the term ``DCAPS drugs'' for the ease of the reader) 
are not described in section 1842(o)(1)(C) of the Act, provisions under 
section 1847A of the Act would not apply, including requirements for 
manufacturers to report ASP to CMS on a quarterly basis (see sections 
1847A(f) and 1927(b)(3)(A)(iii) of the Act). When manufacturers are not 
required to report the manufacturer's ASP for a drug, they may do so 
voluntarily, but the availability of voluntarily reported ASP data 
cannot be guaranteed, and the data may not reflect all available NDCs 
for the drug. However, we emphasize that DCAPS drugs that are also 
covered under Part B for non-preventive indications (that is, are also 
used for diagnosis or treatment) would be subject to ASP reporting 
requirements.
    Above, we mentioned that section 1833(a)(1)(W)(ii) of the Act 
requires that the amount paid for the provision of additional 
preventive services is 100 percent of the lesser of the actual charge 
for the service, or the amount determined under a fee schedule 
established by the Secretary for purposes of this subparagraph. For 
purposes of this policy, we refer to the amount determined under the 
fee schedule as the payment limit, which we discuss in detail below.
    We are proposing a fee schedule for DCAPS drugs that uses existing 
Part B drug pricing mechanisms, because we believe that it is 
preferable to set all drug payment limits under Part B, including those 
for DCAPS, as consistently as possible. Accordingly, we propose that 
the payment limit for a DCAPS drug be determined using the methodology 
described in section 1847A of the Act (also referred to as ASP 
methodology), or, if ASP data is not available for a particular drug, 
to use an alternative pricing mechanism, as described below. We propose 
to update the fee schedule quarterly, on the same schedule as the ASP 
pricing file, which is updated each calendar quarter.
(1) Payment Limit Based on Section 1847A of the Act
    To determine the payment limit for the applicable billing and 
payment code for a DCAPS drug under the fee schedule, we propose to 
apply ASP methodology described in section 1847A of the Act when ASP 
data is available for the drug. We believe the use of ASP data would be 
preferable for determining the payment limit for DCAPS drug billing and 
payment codes

[[Page 61932]]

for two reasons. First, this approach would determine the payment limit 
for these drugs in the same way as the payment limit is usually 
determined for other drugs that are separately payable under Part B, 
when possible. This would include the application of payment limit 
calculations for multiple source drugs, single source drugs and 
biologicals, and biosimilar biological products, as is done for 
products under section 1847A of the Act, for each applicable billing 
and payment code. Second, because section 1847A(c)(3) of the Act 
requires that calculation of the manufacturer's ASP for an NDC must 
include volume discounts, prompt pay discounts, cash discounts, free 
goods that are contingent on any purchase requirement, chargebacks, and 
rebates (other than rebates under the Medicaid drug rebate program, 
discounts under the 340B Program, and rebates under the Part B and Part 
D Medicare inflation rebate program), this would set a payment limit 
that would likely better reflect acquisition cost of the drug than list 
prices in available compendia (such as Wholesale Acquisition Cost 
(WAC)).
    We propose that CMS would determine the payment limit for DCAPS 
drugs as the amount that would result from application of ASP 
methodology in section 1847A of the Act only if ASP data for the drug 
is available for a given quarter (that is, positive manufacturer's ASP 
data is reported by the drug manufacturer, as explained in section 
III.A.2 of this proposed rule). We propose that if ASP data is 
available for a DCAPS drug, the payment limit would be the amount 
described in section 1847A(b) of the Act, which is usually 106 percent 
of ASP.
(2) Payment Limit Based on National Average Drug Acquisition Cost 
(NADAC) Pricing
    If ASP data for a DCAPS drug (as described in the previous section) 
is not available (as defined in the prior paragraph), we propose to 
determine the payment limit for the applicable billing and payment code 
using the most recently published amount for the drug in Medicaid's 
National Average Drug Acquisition Cost (NADAC) survey (OMB control 
number 0938-1041).\552\ When using NADAC data, we propose to determine 
the payment limit per billing unit, which would be an average of NADAC 
prices for all NDCs for the drug. If a drug is available in generic and 
brand formulations, we propose all NDCs will be averaged together to 
determine the payment limit.
---------------------------------------------------------------------------

    \552\ https://www.medicaid.gov/medicaid/prescription-drugs/retail-price-survey/index.html.
---------------------------------------------------------------------------

    Since the timing of ASP reporting and publishing has a two-quarter 
lag (for example, payment limits calculated using data reported from 
the first quarter of sales become effective two quarters later), we 
propose that ``most recently published'' for purposes of this policy 
means the most recently updated NADAC survey available 30 days after 
the close of the quarter for which ASP data would have been reported if 
it were available.\553\ For example, in the calculation of the payment 
limit for dates of service in the third calendar quarter, if NADAC is 
used to determine the payment limit, CMS would use the most recent 
NADAC survey update available on the 30th day after the close of the 
first calendar quarter to determine the payment limit for the third 
quarter.
---------------------------------------------------------------------------

    \553\ 42 CFR 414.804(a)(5).
---------------------------------------------------------------------------

    The NADAC survey provides a national drug pricing benchmark for 
certain drugs that is adequately comprehensive to serve as the first 
alternative pricing source in the case that ASP data is not available. 
CMS conducts surveys of retail community pharmacy prices to develop the 
NADAC pricing benchmark in the annual NADAC pricing file. The pricing 
benchmark is reflective of the prices paid by retail community 
pharmacies to acquire prescription and over-the-counter covered 
outpatient drugs. NADAC data is publicly available and it can be 
accessed at https://data.medicaid.gov/nadac.
    In the CY 2020 PFS final rule (84 FR 62655), we similarly finalized 
the use of NADAC pricing as a pricing alternative for oral drugs under 
the Part B Opioid Treatment Program (OTP) benefit when ASP data is not 
available. There, we stated that ``[s]urvey data on invoice prices 
provide the closest pricing metric to ASP that we are aware of.'' 
Because the previous statement continues to be true, it is an 
appropriate alternative in the pricing framework for DCAPS drugs when 
ASP data is not available.
(3) Payment Limit Based on the Federal Supply Schedule (FSS)
    Since NADAC pricing is only available for drugs typically dispensed 
through retail community pharmacies, there could be circumstances in 
which ASP and NADAC data are not available for DCAPS drugs. Therefore, 
if both ASP and NADAC pricing data are not available for a DCAPS drug, 
we propose to use the most recently published and listed prices for 
pharmaceutical products in the Federal Supply Schedule (FSS) to 
calculate the payment limit for the applicable billing and payment 
code. In the same manner as discussed in the previous section, we 
propose that ``most recently published'' for purposes of this policy 
means the most recently updated FSS survey available 30 days after the 
close of the quarter for which ASP data would have been reported if it 
were available.\554\ For example, in the calculation of the payment 
limit for dates of service in the third calendar quarter, if FSS is 
used to determine the payment limit, CMS would use the most recent FSS 
update available on the 30th day after the close of the first calendar 
quarter to determine the payment limit for the third quarter. When 
using the FSS, we would calculate the average price per billing unit 
(as described in the billing and payment code for the drug) for all 
NDCs listed for a drug.
---------------------------------------------------------------------------

    \554\ 42 CFR 414.804(a)(5).
---------------------------------------------------------------------------

    Drug pricing information from the Veterans Affairs' (VA's) FSS 
pharmaceutical pricing database is publicly available at the NDC level 
and published at https://www.va.gov/opal/nac/fss/pharmPrices.asp. We 
propose to use FSS data when ASP and NADAC data are not available 
because FSS data is one of the few existing options for drug pricing 
that includes a wide variety of drug formulations, including both self-
administered drugs typically dispensed through retail community 
pharmacies and drugs administered incident to a physician's service. We 
believe that using FSS data to calculate the payment limit for DCAPS 
drugs is preferable to instructing MACs to determine DCAPS drug payment 
limits according to invoice (as discussed below), because invoice-based 
pricing requires MACs to manually process claims and is therefore 
burdensome to the MACs.
(4) Invoice Pricing
    Finally, if ASP, NADAC, and FSS pricing are not available for a 
particular drug covered as an additional preventive service, then MACs 
will determine the payment for that drug according to invoice. Since 
one of the three above pricing mechanisms should be available in nearly 
all cases, we expect that invoice pricing would be necessary only in 
rare situations. Specifically, we believe that invoice pricing would 
likely only be necessary for new drugs before pricing data is 
available.
    To summarize, we propose to establish a fee schedule using the 
following pricing mechanisms to determine the payment limit for DCAPS

[[Page 61933]]

drugs under Part B, which would be updated quarterly:
    (1) If ASP data is available for the DCAPS drug, the payment limit 
would be determined based on the methodology under section 1847A(b) of 
the Act (usually 106 percent of ASP);
    (2) If ASP data is not available, the payment limit would be 
calculated using NADAC prices for the drug;
    (3) If ASP data and NADAC prices are not available, the payment 
limit would be calculated using the FSS prices for the drug; and
    (4) If ASP data, NADAC prices, and FSS prices are not available, 
payment limit would be the invoice price determined by the MAC.
    We are proposing to amend Sec.  410.152 by adding paragraph (o) to 
establish the fee schedule and the pricing methodologies used to 
determine the payment limit for DCAPS drugs under Part B. In addition, 
to highlight that coinsurance does not apply to DCAPS drugs, we propose 
to publish the payment limits for DCAPS drugs along with other 
separately payable Part B drugs on the ASP pricing file.
    We invite public comment on the proposed fee schedule for drugs 
paid as additional preventive services.
c. Payment for Supplying and Administration of Drugs Under the 
Additional Preventive Services Benefit
    As explained above, DCAPS drugs are subject to payment under 
section 1833(a)(1)(W)(ii) of the Act. Because the fee schedule 
authorized under such section has not yet been established, and since 
DCAPS drugs are not covered by Part B under the same authority as other 
separately payable Part B drugs that would provide for administration 
or supplying fees, there is no existing policy regarding payment for 
the administration of DCAPS drugs or the supplying of DCAPS drugs by 
suppliers and providers. In a similar manner to the DCAPS drug pricing 
mechanisms described above, we propose administration and supplying 
fees for DCAPS drugs that mirror existing policies under the PFS and 
Part B drug payment. We anticipate that an NCD that adds drugs to the 
additional preventive services benefit would include coverage for the 
supplying or administration of the drug, as appropriate, and those fees 
would therefore be considered payment for additional preventive 
services as well. Therefore, we are proposing payment limits for the 
supply and administration of DCAPS drugs to be included on the DCAPS 
fee schedule. As stated above, section 1833(a)(1)(W)(ii) of the Act 
requires that the amount paid for the provision of additional 
preventive services is 100 percent of the lesser of the actual charge 
for the service, or the amount determined under a fee schedule 
established by the Secretary for purposes of this subparagraph. That 
is, the amount paid for the administration or supplying of the DCAPS 
drug will be the lesser of either the actual charge for the service or 
the payment limit.
    For drugs that are supplied by a pharmacy, we propose that the fee 
schedule include a payment limit for a supplying fee that is similar to 
the supplying fee for other Part B-covered drugs dispensed from a 
pharmacy, to allow for consistency among similar payments in Part B. 
These other groups of drugs covered under Part B include 
immunosuppressives, oral anti-cancer, and oral anti-emetic drugs, and 
supplying fees for these drugs are described at 42 CFR part 414, 
subpart L (Sec. Sec.  414.1000 and 414.1001). Generally, Medicare pays 
$24 for the first prescription of one of these drugs supplied by a 
pharmacy in a 30-day period, and pays $16 for each subsequent 
prescription, after the first one, supplied in that 30-day period.\555\ 
We propose similar payment limits for supplying fees for DCAPS drugs. 
Specifically, we propose that CMS will establish payment limit of $24 
to a pharmacy for the first DCAPS prescription that the pharmacy 
supplies to a beneficiary in a 30-day period, and a payment limit of 
$16 to a pharmacy for all subsequent DCAPS prescriptions that the 
pharmacy supplies to a beneficiary in that 30-day period. We are 
proposing that the same fees would apply regardless of the number of 
days' supply that is dispensed.
---------------------------------------------------------------------------

    \555\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
---------------------------------------------------------------------------

    As discussed in section III.A.4.c of this proposed rule, we intend 
to further study the supplying fees for certain drugs paid under Part B 
(for example, immunosuppressive drugs) and are not proposing to make 
any changes to the supplying fee amounts at this time (meaning the 
current 30-day supplying fees would apply to any amount of days' 
supply). The dispensing and supplying fees under Part B (Sec.  
414.1001) have been shown to be higher than dispensing fees paid in the 
commercial market.\556\ So, until additional study is done regarding 
input costs for dispensing drugs billed to Medicare Part B and 
subsequent notice-and-comment rulemaking can be done, if appropriate, 
in response to such information, we aim to continue the current fee 
schedule for such Part B drugs regardless of the days' supply 
dispensed. Therefore, we propose to use the same approach for payment 
limits that are paid to pharmacies that supply DCAPS prescriptions.
---------------------------------------------------------------------------

    \556\ https://www.pcmanet.org/rx-research-corner/mandating-pharmacy-reimbursement-increase-spending/08/31/2021/#::text=The%20average%20dispensing%20fee%20in,the%20state's%20Medicai
d%20FFS%20rate.
---------------------------------------------------------------------------

    For drugs that are administered by a physician or a non-physician 
practitioner, we propose that the fee schedule include a payment limit 
for such administration that aligns with the administration fee for 
other drugs provided as incident to physician services, as paid 
according to the PFS. To operationalize this, we propose that CMS 
determine the payment limit for administration of a DCAPS drug provided 
incident to a physician service via a crosswalk to an existing, 
corresponding drug administration code under the PFS. Exact details on 
coding and corresponding crosswalks would be included on the published 
fee schedule once DCAPS drugs are finalized for coverage via the NCD 
process. The fee schedule would be published quarterly on the CMS 
website and implemented in the Medicare claims processing systems.
    No cost sharing would apply for the administration or supplying of 
DCAPS drugs, because we are proposing that such administration or 
supplying would be considered an additional preventive service, and as 
explained above, there is no cost-sharing for any additional preventive 
services under section 1833(a)(1)(W) of the Act. We propose to codify 
these policies at the newly added Sec.  410.152(o).
    We note that with regard to the July 12, 2023 Proposed NCD for Pre-
Exposure Prophylaxis (PrEP) for Human Immunodeficiency Virus (HIV) 
Infection Prevention, in section II.E.4.b. of this proposed rule, in 
item 37, we propose national rates for HCPCS code G0012 (Injection of 
pre-exposure prophylaxis (PrEP) drug for HIV prevention, under skin or 
into muscle) that are crosswalked from CPT code 96372 (Therapeutic, 
prophylactic, or diagnostic injection (specify substance or drug); 
subcutaneous or intramuscular). Please see that section for more 
information.
d. Payment for Drugs Covered as Additional Preventive Services in RHCs 
and FQHCs
    Above, we mentioned that section 4104 of the ACA amended payment 
for additional preventive services, to increase payment to the lesser 
of 100 percent of charges, or the amount

[[Page 61934]]

determined under a fee schedule established by the Secretary, per 
Section 1833(a)(1)(W)(ii). This change waived coinsurance for 
additional preventive services. Section 4104 of the ACA also removed 
several other barriers to access to preventive services in Medicare. 
Specifically, section 4104 of the ACA amended section 1833 of the Act 
to waive the deductible for preventive services at section 1833(b)(1) 
of the Act, and to waive coinsurance for preventive services that are 
recommended with a grade of A or B by the USPSTF for any indication or 
population by adding section 1833(a)(1)(Y) of the Act. We also 
mentioned above that ``additional preventive services'' are a subset of 
``preventive services'' under Medicare Part B, per section 1861(ddd)(3) 
and 1861(ww)(2)(O) of the Act, respectively.
    In the CY 2011 PFS final rule, we interpreted the above waivers of 
cost-sharing for preventive services to apply to FQHCs (75 FR 73417); 
we note that FQHC services were already exempt from the Part B 
deductible, per section 1833(b)(4) of the Act. The CY 2011 PFS final 
rule codified this FQHC policy in regulation at Sec.  405.2449 (75 FR 
73613), and in sub-regulatory guidance, we clarified that these waivers 
of cost-sharing for preventive services applied to RHCs as well.\557\ 
In the CY 2014 FQHC PPS final rule (79 FR 25474), at Sec.  405.2410(b), 
we codified regulations regarding coinsurance in RHCs and FQHCs, 
``[E]xcept for preventive services for which Medicare pays 100 percent 
under Sec.  [thinsp]410.152(l) of this chapter.'' In the CY 2016 PFS 
final rule (80 FR 71088), we clarified explicitly that these waivers of 
cost-sharing (that is, both coinsurance and deductible) for preventive 
services applied to RHCs.
---------------------------------------------------------------------------

    \557\ Change Request 7208, R2186CP, 03/28/2011 Waiver of 
Coinsurance and Deductible for Preventive Services in Rural Health 
Clinics (RHCs), Section 4104 of Affordable Care Act (ACA): https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r2186cp.pdf.
---------------------------------------------------------------------------

    In the previous sections of III.H.3. of this proposed rule, we 
discussed drugs covered as additional preventive services (henceforth 
``DCAPS drugs,'' for the ease of the reader). In this section, we are 
clarifying that drugs covered as additional preventive services, and 
any accompanying administration and supplying fees, are not subject to 
cost-sharing in RHCs and FQHCs. Since DCAPS drugs and the services to 
administer and supply them are all considered additional preventive 
services, as explained in the previous section, they are paid at 100 
percent of the Medicare payment amount in RHCs and FQHCs per Sec. Sec.  
405.2410 and 410.152(l) and they are paid on a claim-by-claim basis.
    In addition, we are proposing that DCAPS drugs, when administered 
and supplied in an RHC or FQHC, as well as any administration and 
supply fee for those drugs, would be paid according to the fee schedule 
payment limits described above at section III.H.3.b. of this proposed 
rule. Since regulations at Sec.  405.2460 allow the payment limitations 
set out in Part 410 to apply to payment for services provided by RHCs 
and FQHCs, we believe it is consistent with our current RHC and FQHC 
payment policies to apply the proposed DCAPS fee schedule payment 
limits, as discussed above, to those same DCAPS drugs when furnished in 
an RHC or FQHC. Those payment limits are described earlier in section 
III.H.3.b., and if finalized as proposed, they would be codified at 
Sec.  410.152(o)(1). We propose to codify this RHC/FQHC DCAPS policy in 
regulation as well, at a new Sec.  405.2464(h).
    We welcome comments on these proposals.

I. Medicare Prescription Drug Inflation Rebate Program

1. Background
a. Overview of the Medicare Prescription Drug Inflation Rebate Program
    The Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, enacted 
August 16, 2022) established new requirements under which drug 
manufacturers must pay inflation rebates if they raise their prices for 
certain Part B and Part D drugs faster than the rate of inflation. Drug 
manufacturers are required to pay rebates to Medicare if prices for 
certain Part B drugs increase faster than the rate of inflation for a 
calendar quarter beginning with the first quarter of 2023; drug 
manufacturers are required to pay rebates to Medicare if prices for 
certain Part D drugs increase faster than the rate of inflation over a 
12-month period, starting with the 12-month period that began October 
1, 2022.
    Section 11101 of the IRA amended section 1847A of the Act by adding 
a new subsection (i), which establishes a requirement for drug 
manufacturers to pay rebates into the Medicare Prescription Drug 
Account in the Federal Supplementary Medical Insurance Trust Fund for 
Part B rebatable drugs if the specified amount exceeds the inflation-
adjusted payment amount, which is calculated as set forth in section 
1847A(i)(3)(C) of the Act. The IRA also provides for an adjustment to 
the beneficiary coinsurance amount in cases where the price of a Part B 
rebatable drug increases faster than the rate of inflation such that 
the beneficiary coinsurance is calculated based on the lower inflation-
adjusted payment amount instead of the applicable payment amount. 
Section 1847A(i)(2) of the Act defines a ``Part B rebatable drug,'' in 
part, as a single source drug or biological product (as defined in 
section 1847A(c)(6)(D) of the Act), including a biosimilar biological 
product (as defined in section 1847A(c)(6)(H) of the Act), but 
excluding a qualifying biosimilar biological product (as defined in 
section 1847A(b)(8)(B)(iii) of the Act) for which payment is made under 
Part B.
    Section 11102 of the IRA added section 1860D-14B of the Act, which 
requires drug manufacturers to pay rebates into the Medicare 
Prescription Drug Account in the Federal Supplementary Medical 
Insurance Trust Fund for each 12-month applicable period, starting with 
the applicable period beginning on October 1, 2022, for Part D 
rebatable drugs if the annual manufacturer price (AnMP) of such drug 
exceeds the inflation-adjusted payment amount. Section 1860D-
14B(g)(1)(A) of the Act defines a ``Part D rebatable drug,'' in part, 
as a drug or biological described at section 1860D-14B(g)(1)(C) of the 
Act that is a ``covered Part D drug'' as that term is defined in 
section 1860D-2(e) of the Act. The definition of a Part D rebatable 
drug includes drugs approved under a new drug application under section 
505(c) of the Federal Food, Drug, and Cosmetic (FD&C) Act (that is, 
brand name drugs), generic drugs approved under section 505(j) of the 
FD&C Act that meet certain statutory criteria (that is, sole source 
generic drugs), and biologicals licensed under section 351 of the 
Public Health Service Act (PHS), including biosimilars.
    Under the IRA, certain statutory requirements vary for 
implementation of the Medicare Part B Drug Inflation Rebate Program and 
the Medicare Part D Drug Inflation Rebate Program. For example, section 
1847A(i) of the Act requires CMS to calculate Part B drug inflation 
rebates for a calendar quarter, whereas section 1860D-14B of the Act 
requires CMS to calculate Part D drug inflation rebates for each 12-
month applicable period. With respect to invoicing manufacturers for 
the rebate amount owed, under section 1847A(i)(1) of the Act, CMS must 
report rebate amounts to each manufacturer of a Part B rebatable drug 
no later than 6 months after the end of each calendar quarter, except 
that for calendar quarters beginning in 2023 and 2024, CMS has until 
September 30, 2025, to invoice manufacturer for rebates. In contrast,

[[Page 61935]]

under section 1860D-14B(a) of the Act, CMS must report rebate amounts 
to each manufacturer of a Part D rebatable drug no later than 9 months 
after the end of each applicable period, except that for the first two 
applicable periods (that is, October 1, 2022, to September 30, 2023, 
and October 1, 2023, to September 30, 2024), CMS has until December 31, 
2025, to invoice manufacturers for Part D inflation rebates. 
Additionally, there are statutory differences in the inputs used to 
calculate the rebate amounts for Part B and Part D. As a result, CMS is 
proposing to use different methodologies to calculate inflation rebates 
for Part B rebatable drugs and Part D rebatable drugs. However, CMS has 
attempted to align policies across the Medicare Part B Drug Inflation 
Rebate Program and Medicare Part D Drug Inflation Rebate Program to the 
extent possible.
b. Summary of Proposed Policies for the Medicare Prescription Drug 
Inflation Rebate Program
    CMS is proposing to codify policies established in the revised 
guidance for the Medicare Part B Drug Inflation Rebate Program and the 
Medicare Part D Drug Inflation Rebate Program \558\ (collectively 
referred to as the ``Medicare Prescription Drug Inflation Rebate 
Program'') in regulatory text. Specifically, CMS is proposing to codify 
with limited modification policies set forth in guidance for the 
Medicare Prescription Drug Inflation Rebate Program by adding new parts 
427 and 428 to title 42, chapter IV of the Code of Federal Regulations 
for Part B and Part D, respectively, and welcomes comments on these 
proposals.
---------------------------------------------------------------------------

    \558\ Medicare Part B Drug Inflation Rebate Revised Guidance: 
https://www.cms.gov/files/document/medicare-part-b-inflation-rebate-program-revised-guidance.pdf; Medicare Part D Drug Inflation Rebate 
Revised Guidance: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-revised-guidance.pdf (collectively 
referred to as the ``revised guidance''). These revised guidance 
documents, published December 14, 2023, implemented policies 
relating to the Medicare Prescription Drug Inflation Rebate Program 
for 2022, 2023, and 2024. CMS also published guidance on the use of 
the 340B modifier to report separately payable Part B drugs and 
biologicals acquired under the 340B program (Revised Part B 
Inflation Rebate Guidance: Use of the 340B Modifier, https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf).
---------------------------------------------------------------------------

    In addition, CMS is proposing new policies for the Medicare Part B 
Drug Inflation Rebate Program as follows:
     Proposed Sec.  427.201(b) provides that CMS would compare 
the payment amount in the quarterly pricing files published by CMS to 
the inflation-adjusted payment amount for a given quarter when 
determining whether the criteria for a coinsurance adjustment are met.
     Proposed Sec.  427.302(c)(3) provides that for a Part B 
rebatable drug first approved or licensed by the FDA on or before 
December 1, 2020 but with a first marketed date after December 1, 2020, 
the payment amount benchmark quarter for such drug is the third full 
calendar quarter after the drug's first marketed date. Proposed Sec.  
427.302(c)(4) further provides that for a Part B rebatable drug that 
was billed under a NOC code during the calendar quarter beginning July 
1, 2021, or the third full calendar quarter after such drug's first 
marketed date, whichever is later, the payment amount benchmark quarter 
is the third full calendar quarter after the drug is assigned a billing 
and payment code other than a NOC code.
     Proposed Sec.  427.303(b)(1)(i) provides that CMS would 
remove 340B units for professional claims with dates of service during 
2024 (in addition to 2023) submitted by Medicare suppliers that are 
listed by the Health Resources and Services Administration (HRSA) 340B 
Office of Pharmacy Affairs Information System as participating in the 
340B Program, by using National Provider Identifiers and/or Medicare 
Provider numbers to identify these suppliers and the claims submitted 
with such identifiers.
     Proposed Sec.  427.303(b)(5) provides that CMS would 
remove units of refundable single-dose container or single-use package 
drugs subject to discarded drug refunds, from the calculation of rebate 
amounts, generally in the reconciliation process.
     Proposed Sec.  427.501 describes CMS' method and process 
for reconciliation of a rebate amount for a Part B rebatable drug, 
including the circumstances that may trigger such a reconciliation.
     Proposed Sec.  427.600 establishes a civil money penalty 
process in accordance with section 1847A(i)(7) of the Act to address 
when a manufacturer of a Part B rebatable drug fails to pay the rebate 
amount in full by the payment deadline for such drug for such 
applicable calendar quarter.
     Proposed Sec.  427.10 provides that, were any provision of 
part 427 to be held invalid or unenforceable by its terms, or as 
applied to any person or circumstance, such provisions would be 
severable from part 427 and the invalidity or unenforceability would 
not affect the remainder thereof or any other part of this subchapter 
or the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances.
    CMS also is proposing new policies for the Medicare Part D Drug 
Inflation Rebate Program as follows:
     Proposed Sec.  428.202(c)(3) provides that if a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, does not have AMP data reported under section 
1927(b)(3) of the Act for any quarters during the period beginning on 
January 1, 2021 and ending on September 30, 2021, CMS would identify 
the payment amount benchmark period as the first calendar year, which 
would be no earlier than calendar year 2021, in which such drug has at 
least 1 quarter of AMP reported. Proposed Sec.  428.202(c)(4) further 
provides that for a Part D rebatable drug first approved or licensed 
after October 1, 2021 (that is, a subsequently approved drug), for 
which there are no quarters during the first calendar year beginning 
after the drug's first marketed date for which AMP has been reported 
under section 1927(b)(3), the payment amount benchmark period would be 
the first calendar year in which such drug has at least 1 quarter of 
AMP reported. CMS is also soliciting comments on alternative policies 
to address certain instances in which AMP are not reported for certain 
NDC-9s of a Part D rebatable drug.
     Proposed Sec.  428.203(b)(2) provides that, for claims 
with dates of service on or after January 1, 2026, and with respect to 
an applicable period, CMS would exclude from the total number of units 
used to calculate the total rebate amount for a Part D rebatable drug 
those units of the Part D rebatable drug for which a manufacturer 
provided a discount under the 340B Program. To determine the total 
number of such units for which a manufacturer provided a discount under 
the 340B Program, CMS would use data reflecting the total number of 
units of a Part D rebatable drug for which a discount was provided 
under the 340B Program and that were dispensed during the applicable 
period. CMS may apply adjustment(s) to these data as needed. CMS is 
also soliciting comments on alternative policies for collecting and 
using 340B data to calculate rebate amounts for Part D rebatable drugs.
     Proposed Sec.  428.401 describes CMS' method and process 
for reconciliation of a rebate amount for a Part D rebatable drug, 
including the circumstances that may trigger such a reconciliation.
     Proposed Sec.  428.500 establishes a civil money penalty 
process in accordance with section 1860D-14B(e) of the Act to address 
when a manufacturer of a Part D rebatable drug fails to pay the rebate 
amount in full by

[[Page 61936]]

the payment deadline for such drug for such applicable period.
     Proposed Sec.  428.10 provides that, were any provision of 
part 428 to be held invalid or unenforceable by its terms, or as 
applied to any person or circumstance, such provisions would be 
severable from this part and the invalidity or unenforceability would 
not affect the remainder thereof or any other part of this subchapter 
or the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances.
    Unless otherwise specified, CMS proposes that the provisions herein 
would apply, with respect to Part B rebatable drugs, for all calendar 
quarters beginning with January 1, 2023, and with respect to Part D 
rebatable drugs, for all applicable periods beginning with October 1, 
2022. The IRA directs the Secretary to calculate rebate amounts for 
Part B rebatable drugs beginning on January 1, 2023, and Part D 
rebatable drugs beginning on October 1, 2022, using pricing data from 
past periods of time, including benchmark data from periods prior to 
the statute's enactment. In some cases, the time periods during which 
prices are subject to rebates began as early as several weeks after the 
IRA was enacted. In recognition of this timing, section 1860D-14B(h) of 
the Act specifically requires CMS to use program instruction to 
implement the Medicare Part D Drug Inflation Rebate Program for 2022, 
2023, and 2024. Similarly, the existing provision at section 
1847A(c)(5)(C) of the Act, provides authority for CMS to implement the 
Medicare Part B Drug Inflation Rebate Program using program instruction 
or other guidance. In addition, sections 1847A(i)(1)(C) and 1860D-
14B(a)(3) of the Act, as added by the IRA, permit the Secretary to 
delay the issuance of Rebate Reports for certain initial calendar 
quarters and applicable periods until 2025.
    Section 1871(e)(1)(A) of the Act provides that a substantive change 
in regulations, manual instructions, interpretative rules, statements 
of policy, or guidelines of general applicability under Title XVIII of 
the Act may not apply retroactively unless the Secretary has determined 
that such retroactive application is necessary to comply with statutory 
requirements or that failure to apply such policies retroactively would 
be contrary to the public interest. To the extent any proposed 
provisions in this section III.I of this proposed rule are considered 
to apply retroactively, CMS has determined that such retroactive 
application would be both necessary to establish policies to implement 
the statutory requirements that CMS perform various calculations that 
involve pricing activities from prior periods and also consistent with 
the statutory provisions expressly allowing the agency to delay the 
issuance of rebate reports for initial applicable periods until 2025. 
In addition, such retroactive application would be in the public 
interest because it would ensure that the proposed regulations address 
the same time periods and manufacturer pricing conduct Congress sought 
to address in the IRA and would promote consistency and continuity in 
program implementation.
c. Timeline of Key Dates for the Medicare Prescription Drug Inflation 
Rebate Program
    As sections 1847A(i)(2)(C) and 1860D-14B(a)(3) of the Act allow for 
delayed reporting and invoicing of rebates amounts for applicable 
calendar quarters in 2023 and 2024 for Part B rebatable drugs and the 
first two applicable periods for Part D rebatable drugs, Figures 1 and 
2 provide example timelines for how rebates will be calculated for 
applicable calendar quarters and one applicable period in calendar year 
2025. The figures also depict how the rebate period and components of 
the rebate calculation may shift based on the marketing and approval 
dates for a rebatable drug or biological product.
BILLING CODE P
[GRAPHIC] [TIFF OMITTED] TP31JY24.076


[[Page 61937]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.077

    Table 47 describes a summary timeline for inflation rebate amount 
reports and deadlines for applicable calendar quarters in calendar year 
2025 and thereafter for Part B rebates and for the Part D rebate 
applicable period beginning on October 1, 2024, and applicable periods 
thereafter.

[[Page 61938]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.078


[[Page 61939]]


BILLING CODE C
2. Medicare Part B Drug Rebates for Single Source Drugs and Biological 
Products With Prices That Increase Faster Than the Rate of Inflation
a. Definitions (Sec.  427.20)
    In this proposed rule, CMS proposes to codify the definitions of 
terms consistent with the meanings given in section 1847A(i) of the Act 
or established in the revised Medicare Part B Drug Inflation Rebate 
Guidance, as applicable, as well as new definitions based on policies 
detailed in this proposed rule.
    At proposed Sec.  427.20, CMS is proposing that the following terms 
in section 1847A of the Act are defined:
     ``Benchmark period CPI-U''.
     ``Biosimilar biological product''.
     ``Inflation-adjusted payment amount''.
     ``Part B rebatable drug''.
     ``Payment amount benchmark quarter''.
     ``Payment amount in the payment amount benchmark 
quarter''.
     ``Rebate period CPI-U''.
     ``Single source drug or biological product''.
     ``Specified amount''.
     ``Subsequently approved drug''.
     ``Unit''.
    Further, in Sec.  427.20 of this proposed rule, CMS proposes to 
codify definitions established in the revised Medicare Part B Drug 
Inflation Rebate Guidance and new definitions based on policies 
detailed in this proposed rule for the following terms:
     ``Allowed charges''.
     ``Applicable calendar quarter''.
     ``Applicable threshold''.
     ``Average sales price (ASP)''.
     ``Billing and payment code''.
     ``Billing unit''.
     ``CPI-U''.\559\
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    \559\ These data are referenced to 1982-84=100--that is, the 
average of pricing data for the 36 months from 1982 through 1984 
serve as the basis for the index and are assigned a value of 100. 
These data are not seasonally adjusted.
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     ``FDA application''.
     ``Final action claim''.
     ``First marketed date''.
     ``Grouped billing and payment code''.
     ``Manufacturer''.
     ``National Drug Code'' (NDC).
     ``Not Otherwise Classified (NOC) code''.
b. Determination of Part B Rebatable Drugs (Sec. Sec.  427.100 Through 
427.101)
i. Definitions
    In proposed Sec.  427.100, CMS proposes to define the following 
terms applicable to proposed subpart B (Sec. Sec.  427.100 through 
427.101):
     ``EUA Declaration''.
     ``Individual who uses such a drug or biological''.
ii. Identification of Part B Rebatable Drugs
    Section 1847A(i)(2) of the Act defines a ``Part B rebatable drug,'' 
in part, as a single source drug or biological product (as defined in 
section 1847A(c)(6)(D)), including a biosimilar biological product (as 
defined in section 1847A(c)(6)(H)), but excluding a qualifying 
biosimilar biological product (as defined in section 
1847A(b)(8)(B)(iii)), for which payment is made under Part B. The 
definitions for a biosimilar biological product and a qualifying 
biosimilar biological product are codified in Sec.  414.902.
    In Sec.  427.101, CMS proposes to codify the policies established 
in section 30.1 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to identify Part B rebatable drugs by (1) identifying the 
applicable billing and payment code for each single source drug or 
biological product, including biosimilar biological products, for which 
payment is made under Part B and (2) excluding any billing and payment 
code corresponding to a drug or biological product in excluded product 
categories or that have average total allowed charges below an 
applicable threshold, to be codified in proposed Sec.  427.101(b) and 
(c), respectively.\560\
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    \560\ For more information on HCPCS codes and how they are 
applied, see ``HEALTHCARE COMMON PROCEDURE CODING SYSTEM (HCPCS) 
LEVEL II CODING PROCEDURESHCPCS'' at https://www.cms.gov/medicare/coding/medhcpcsgeninfo/downloads/2018-11-30-hcpcs-level2-coding-procedure.pdf.
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iii. Excluded Product Categories
    Section 1847A(i)(2)(A) of the Act excludes qualifying biosimilar 
biological products (as defined in section 1847A(b)(8)(B)(iii) of the 
Act) from the definition of a Part B rebatable drug. As such, in Sec.  
427.101(b)(1) CMS proposes to codify the policy established in section 
30.2 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
exclude such products from the definition of a Part B rebatable drug 
and not subject them to Part B inflation rebates.
    Section 1847A(i)(2) of the Act defines a Part B rebatable drug as a 
``single source drug or biological as defined in section 1847A(c)(6)(D) 
of the Act'' which requires that a single source drug not be a multiple 
source drug. CMS has interpreted section 1847A(c)(6)(C)(ii) of the Act 
to mean that single source drugs or biological products are treated as 
multiple source drugs if they were within the same billing and payment 
code as of October 1, 2003. Accordingly, in Sec.  427.101(b)(2), we are 
proposing to codify the existing policy established in section 30.1 of 
the revised Medicare Part B Drug Inflation Rebate Guidance to exclude 
drugs and biological products described in section 1847A(c)(6)(C)(ii) 
of the Act from the definition of a Part B rebatable drug and not 
subject them to Part B inflation rebates.
    For drugs and biological products that are billed using a HCPCS 
code that represents a NOC code, CMS has a process to determine the 
allowed payment amount for such billing and payment codes; however, 
current Medicare claims data do not allow CMS to determine the average 
total allowed charges for such drug or biological product for a year 
per individual that uses such a drug or biological product or to 
identify units billed. CMS must perform these steps to determine if a 
drug or biological product is a Part B rebatable drug. Therefore, in 
Sec.  427.101(b)(3), we are proposing to codify the policy in section 
30.1 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
exclude drugs and biological products that are billed using a billing 
and payment code that represents a NOC code drug or biological product 
or claims for such drugs and biological products when no other billing 
and payment code is applicable. CMS notes that few Part B drugs and 
biological products are billed with such codes and the quarterly 
process for updating billing and payment codes, including establishing 
new billing and payment codes, provides an existing mechanism for CMS 
to minimize the number of Part B rebatable drugs that are billed with 
such codes. As discussed in Sec. Sec.  90.2 and 90.3 in Chapter 17 of 
the Medicare Claims Processing Manual, CMS believes NOC codes are 
generally used to bill Medicare for new-to-market, FDA-approved drug 
products until a specific billing and payment code is assigned; and so, 
CMS expects that the impact of this exclusion will be limited.\561\
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    \561\ See: https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c17.pdf.
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    Consistent with section 303(h) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003, radiopharmaceutical drugs 
and biologicals are not paid under section 1847A of the Act. 
Manufacturers of radiopharmaceuticals are therefore not required to 
report ASP under section 1927(b)(3) of the Act and are not

[[Page 61940]]

otherwise required to report ASP data to CMS for separately payable 
radiopharmaceuticals. In addition, different payment methodologies 
across the outpatient setting result in data variations that could 
inappropriately trigger an inflation rebate amount due to 
methodological differences in reimbursement. Therefore, although some 
radiopharmaceuticals may appear on quarterly pricing files, in Sec.  
427.101(b)(4) CMS proposes to codify the revised Medicare Part B Drug 
Inflation Rebate Guidance policy (as described in section 30.1) that 
excludes separately payable radiopharmaceuticals for the purposes of 
identifying Part B rebatable drugs. Additionally, CMS proposes to 
codify the existing policy not to subject these units to the inflation-
adjusted beneficiary coinsurance at Sec.  427.201(c) and described 
further in the following section of this preamble.\562\
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    \562\ In this proposed rule, CMS also is proposing to clarify 
how radiopharmaceuticals are paid for in the physician's office and 
to codify these policies in regulation. Specifically, CMS proposes 
to clarify that for radiopharmaceuticals furnished in a setting 
other than the hospital outpatient department, MACs can determine 
payment limits for radiopharmaceuticals based on any methodology in 
place on or prior to November 2003.
---------------------------------------------------------------------------

    CMS aims to create a consistent coding and payment approach for the 
suite of products currently referred to as skin substitutes as stated 
in section 30.1 of revised Medicare Part B Drug Inflation Rebate 
Guidance. In the CY 2024 PFS proposed rule, CMS solicited comments on 
potential changes to payment for skin substitutes. In the CY 2024 PFS 
final rule, CMS acknowledged the comments received in response to this 
solicitation and stated that CMS would take these comments into 
consideration for future rulemaking.\563\ In Sec.  427.101(b)(5) CMS 
proposes to codify existing policy to exclude cellular- and tissue-
based products that would aid wound healing, currently referred to as 
skin substitutes, for the purposes of identifying Part B rebatable 
drugs. In addition, CMS proposes not to subject these products to the 
beneficiary coinsurance adjustment at Sec.  427.201(c).
---------------------------------------------------------------------------

    \563\ See 88 FR 78818, November 16, 2023 (https://www.federalregister.gov/public-inspection/2023-24184/medicare-and-medicaid-programs-calendar-year-2024-payment-policies-under-the-physician-fee-schedule).
---------------------------------------------------------------------------

    Section 1847A(i)(2)(A) of the Act excludes from the definition of a 
Part B rebatable drug a drug or biological if, as determined by the 
Secretary, the average total allowed charges for such drug or 
biological product under Part B for a year per individual who uses such 
a drug or biological product are less than $100. Section 1847A(i)(2)(B) 
of the Act provides that the $100 amount for 2023 will be increased for 
2024 and subsequent years by the percentage change in the CPI-U for the 
12-month period ending with June of the previous year, rounded to the 
nearest multiple of $10. Therefore, in Sec.  427.101(b)(6) CMS proposes 
to codify the policy established in revised Medicare Part B Drug 
Inflation Rebate Guidance to exclude from the definition of a Part B 
rebatable drug those drugs and biologicals for which the Part B average 
total allowed charges for a year per individual who uses such drug or 
biological is below the applicable threshold.
    Section 1847A(i)(2)(A)(ii) of the Act excludes vaccines described 
in subparagraph (A) or (B) of section 1861(s)(10) of the Act from the 
definition of a Part B rebatable drug. Such vaccines include the 
pneumococcal vaccine, the influenza vaccine, the COVID-19 vaccine; and 
the hepatitis B vaccine when furnished to an individual who is at high 
or intermediate risk of contracting hepatitis B (as determined by the 
Secretary under regulations). As such, in Sec.  427.101(b)(7), CMS 
proposes to codify the existing policy established in section 30.3 of 
the revised Medicare Part B Drug Inflation Rebate Guidance to exclude 
vaccines described in subparagraph (A) or (B) of section 1861(s)(10) of 
the Act from the definition of a Part B rebatable drug and not subject 
them to Part B inflation rebates. In addition, with respect to 
monoclonal antibodies used for treatment or post-exposure prophylaxis 
of COVID-19, which are covered and paid for under section 1861(s)(10) 
of the Act, CMS proposes to exclude these products from the definition 
of Part B rebatable drugs for applicable quarters through the end of 
the calendar year in which the EUA declaration under section 564 of the 
FD&C Act for drugs and biological products is terminated. With respect 
to monoclonal antibodies that are used for pre-exposure prophylaxis of 
COVID-19 that are covered and paid for under section 1861(s)(10) of the 
Act, CMS proposes to exclude these products from the definition of Part 
B rebatable drug for applicable calendar quarters even after the year 
in which the EUA Declaration ends, as long as these products have an 
FDA-approved application or license after the EUA Declaration is 
terminated.
    Finally, Part B drugs approved under an Abbreviated New Drug 
Application (ANDA) submitted under 505(j) of the FD&C Act do not meet 
the definition of ``single source drug or biological product,'' as 
defined under section 1847A(c)(6)(D) of the Act, and thus, are not Part 
B rebatable drugs. We propose to codify this exclusion at Sec.  
427.101(b)(8).
iv. Drugs and Biological Products With Average Total Allowed Charges 
Below the Applicable Threshold
    Pursuant to section 1847A(i)(2) of the Act, drugs and biological 
products, for which the average total allowed charges for such drug or 
biological under Part B for a year per individual who uses such drug or 
biological are below the applicable threshold, as determined by the 
Secretary, are excluded from the definition of Part B rebatable drugs. 
As explained in section 30.2 of the revised Medicare Part B Drug 
Inflation Rebate Guidance, CMS uses the term ``applicable threshold'' 
to mean $100 for all four calendar quarters in 2023. For all four 
calendar quarters in 2024, the applicable threshold will be $100 as 
increased in accordance with section 1847A(i)(2)(B) of the Act. For 
calendar quarters in 2025 and beyond, the applicable threshold will be 
equal to the unrounded applicable threshold calculated for the prior 
calendar year, increased by the percentage increase in the CPI-U for 
the 12-month period ending with June of the previous year.
    In Sec.  427.101(c), CMS is proposing to codify policies from the 
revised Medicare Part B Drug Inflation Rebate Guidance to exclude these 
drugs from the definition of a Part B rebatable drug. To do so, in 
accordance with the statute, for each applicable calendar quarter, CMS 
proposes to identify drugs and biological products with Part B average 
total allowed charges for a year per individual that uses such a drug 
or biological product below the applicable threshold.
    In Sec.  427.101(c)(1), CMS is proposing that to identify the 
average total allowed charges for a year per individual, for each Part 
B rebatable drug, CMS would:
     For single source drugs and biological products assigned 
to only one billing and payment code, sum the allowed charges from 
final action claims greater than $0 and divide the summed amount by the 
number of individuals who use such a drug or biological.
     For single source drugs and biological products assigned 
to more than one billing and payment code, sum the allowed charges from 
final action claims greater than $0 for all billing and payment codes 
and divide the summed amount by the number of individuals who use such 
a drug or biological.
    CMS may move a drug or biological product from a grouped billing 
and payment code to a unique billing and payment code in instances 
where the

[[Page 61941]]

drug is either approved through the pathway established under section 
505(b)(2) of the FD&C Act (hereinafter ``section 505(b)(2) drug 
products'') that CMS initially assigned to the same billing and payment 
code as its reference drug for a period of time, or the drug was 
previously a multiple source drug but is now a single source drug that 
was moved to its own billing and payment code. There may be instances 
where a single source drug or biological product was previously 
crosswalked to a grouped billing and payment code (other than a NOC 
code) during the full year. In such instances, CMS proposes to 
calculate the average total allowed charges per individual per year for 
the drug using allowed charges and the number of individuals who used 
the drug or biological product based on claims for the previously 
grouped billing and payment code during the year. Such instances would 
apply to section 505(b)(2) drug products, drugs that were previously 
multiple source drugs where all other drugs under the same billing and 
payment code were discontinued (applicable only if the sole remaining 
product was not approved under an ANDA), and to any other situations 
where a drug was previously in a grouped billing and payment code 
(other than a NOC code).
    Finally, there may be instances where a single source drug or 
biological product was initially billed under a grouped billing and 
payment code (other than a NOC code) and was later billed under a 
unique billing and payment code for some of the year. In such 
instances, CMS proposes to calculate the average total allowed charges 
per individual for a year by: summing the total allowed charges billed 
under the unique billing and payment code for the drug with dates of 
service on or after the Medicare effective date for this unique billing 
and payment code and identifying the individuals on those claims; 
summing the total allowed charges on claims billed under the previously 
grouped billing and payment code and identifying the individuals with 
claims prior to the unique billing and payment code's effective date; 
and then summing the total allowed charges under both billing and 
payment codes across the full year and dividing by the total number of 
individuals (de-duplicated for those individuals identified under both 
the previously grouped billing and payment code and the unique billing 
and payment code). If the average total allowed charges for a year per 
individual who uses such drug or biological product are less than the 
applicable threshold, CMS proposes to exclude the billing and payment 
code for that calendar quarter. CMS welcomes comment on the proposed 
implementation of the exclusion for drugs and biologicals with average 
total allowed charges below the applicable threshold.
    CMS proposes in Sec.  427.101(c)(2) to calculate the applicable 
threshold as follows:
     For applicable calendar quarters in 2023, the applicable 
threshold is equal to $100.
     For applicable calendar quarters in 2024, the applicable 
threshold is equal to $100 increased by the percentage increase in the 
CPI-U for the 12-month period ending with June of 2023.
     For applicable calendar quarters in each subsequent 
calendar year, the applicable threshold is equal to the unrounded 
applicable threshold calculated for the prior calendar year increased 
by the percentage increase in the CPI-U for the 12-month period ending 
with June of the previous year.
     If the resulting amount from these calculations is not a 
multiple of $10, CMS will round that amount to the nearest multiple of 
$10.\564\
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    \564\ CMS will round any amount less than $5 over a multiple of 
$10 down to that multiple of $10, and any amount $5 or more over a 
multiple of $10 up to the next multiple of $10.
---------------------------------------------------------------------------

    Accordingly, the formula to determine the applicable threshold for 
calendar quarters in 2024 is $100 multiplied by (CPI-U for June 2023 
divided by CPI-U for June 2022) (apply rounding to the nearest multiple 
of $10). To illustrate, the 2024 threshold is: 100 x (305.109/296.311) 
= 102.969178 (which rounds down to $100 after applying CMS rounding) so 
the threshold for calendar quarters in 2024 = $100.
    For the purposes of this calculation, CMS proposes that ``a year'' 
means the 4 consecutive calendar quarters beginning 6 calendar quarters 
before the applicable calendar quarter. CMS also proposes using final 
action claims from the Medicare fee-for-service claims repository to 
identify claims where separate payment was allowed for the applicable 
HCPCS code for dates of service within a year. Drugs and biological 
products that do not meet the applicable threshold are not considered 
Part B rebatable drugs. For example, for the calendar quarter beginning 
July 1, 2025, CMS would use available final action Medicare Part B 
claims with dates of service beginning January 1, 2024, and ending 
December 31, 2024, because January 1, 2024, is the beginning of the 
calendar quarter that is 6 quarters before the applicable calendar 
quarter beginning on July 1, 2025.
    In Sec.  427.101(c)(3), CMS proposes to codify the policies and 
methodological steps as described in section 30.2 of the revised 
Medicare Part B Drug Inflation Rebate Guidance for excluding drugs and 
biological products with average total allowed charges below the 
applicable threshold at the billing and payment code level. For each 
applicable calendar quarter, CMS would identify the applicable billing 
and payment codes for drugs and biological products with average total 
allowed charges for a year per individual less than the applicable 
threshold and exclude such drugs and biological products from the 
definition of Part B rebatable drug in accordance with proposed Sec.  
427.101(b)(6). When a single source drug or biological product with 
average total allowed charges below the applicable threshold is 
assigned to a unique billing and payment code, CMS would exclude the 
assigned billing and payment code for the applicable calendar quarter. 
There also may be instances where a single source drug or biological 
product is assigned to more than one billing and payment code during a 
year and the average total allowed charges for a year per individual 
that uses such drug or biological product are less than the applicable 
threshold. In such instances, CMS proposes to exclude all assigned 
billing and payment codes for such single source drug or biological 
product for that applicable calendar quarter.
c. Inflation-Adjusted Beneficiary Coinsurance Adjustment and Adjusted 
Medicare Payment for Part B Rebatable Drugs With Price Increases Faster 
Than Inflation (Sec. Sec.  427.200 Through 427.201)
    Section 1847A(i)(5) of the Act requires that for Part B rebatable 
drugs, as defined in section 1847A(i)(2)(A) of the Act, furnished on or 
after April 1, 2023, in quarters in which the payment amount described 
in section 1847A(i)(3)(A)(ii)(I) of the Act (or, in the case of 
selected drugs described under section 1192(c) of the Act, the payment 
amount described in section 1847A(b)(1)(B) of the Act), exceeds the 
inflation-adjusted payment amount determined in accordance with section 
1847A(i)(3)(C) of the Act, the coinsurance will be 20 percent of the 
inflation-adjusted payment amount for such quarter (hereafter, the 
inflation-adjusted coinsurance amount). This inflation-adjusted 
coinsurance amount is applied as a percent, as determined by the 
Secretary, to the payment amount that would otherwise apply for such 
calendar quarter in accordance with section 1847A(b)(1)(B) or (C) of 
the Act, as applicable, including in the case of a

[[Page 61942]]

selected drug. In the CY 2024 Hospital Outpatient Prospective Payment 
System (OPPS) final rule and the CY 2024 PFS final rule, CMS codified 
this inflation-adjusted coinsurance amount at Sec. Sec.  419.41(e), 
410.152(m), and 489.30(b)(6), respectively.
    Beginning with the April 2023 quarterly pricing files, the 
applicable beneficiary coinsurance percentage is shown for each HCPCS 
code in the pricing files that are posted on the CMS website. For 
example, the ASP Pricing files are posted at https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files. The applicable 
beneficiary coinsurance percentage for certain drugs and biologicals 
used predominantly in the hospital outpatient setting are listed in the 
Hospital Outpatient Prospective Payment System (OPPS) Addenda A and B, 
which can be found at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates. The 
applicable beneficiary coinsurance percentage for certain drugs and 
biologicals used predominantly in the ambulatory surgical center 
setting are listed in the ASC Addendum, which can be found at https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda. The percentage is 
expressed as two digits with three decimal places, for example, 18.760. 
If an adjusted beneficiary coinsurance does not apply, the percentage 
would show as 20.000.
    Section 11101(b) of the IRA amended section 1833(a)(1) of the Act 
by adding a new subparagraph (EE), which requires that if the payment 
amount under section 1847A(i)(3)(A)(ii)(I) of the Act or, in the case 
of a selected drug, the payment amount described in section 
1847A(b)(1)(B) of the Act, for that drug exceeds the inflation-adjusted 
payment amount for a Part B rebatable drug, the Part B payment amount 
would, subject to the Part B deductible and sequestration, equal the 
difference between the payment limit and the inflation-adjusted 
coinsurance amount. Consistent with the clarification in section 40 of 
the revised Medicare Part B Drug Inflation Rebate Guidance and with the 
application of sequestration in the context of Medicare payment and 
beneficiary coinsurance in general, we note that the calculation to 
determine the applicable beneficiary coinsurance amount would not be 
adjusted for sequestration. CMS codified the Medicare payment for Part 
B rebatable drugs in the CY 2024 PFS final rule by adding new paragraph 
(m) to Sec.  410.152.
    In this proposed rule, CMS proposes to adopt new provisions at 
Sec. Sec.  427.200 and 427.201 to codify the policies regarding the 
computation of the inflation-adjusted beneficiary coinsurance, defined 
in Sec.  427.200, for Part B rebatable drugs as required by section 
1847A(i)(5) of the Act. This proposed new provision includes references 
to the existing provisions at Sec. Sec.  410.152(m), 419.41(e), and 
489.30(b)(6). CMS further proposes at Sec.  427.201(c) that any 
category of products that is excluded from the identification of Part B 
rebatable drugs at Sec.  427.101(b) is not subject to the inflation-
adjusted beneficiary coinsurance. Examples of these excluded products 
include separately payable radiopharmaceuticals, skin substitute 
products, and qualifying biosimilar biological products.
    Additionally, CMS proposes at Sec.  427.201(b) that CMS will use 
the published payment amount in quarterly pricing 
files565 566 567 to determine if a Part B rebatable drug 
should have an adjusted beneficiary coinsurance equal to 20 percent of 
the inflation-adjusted payment amount as described in section 
1847A(i)(3)(C) for a calendar quarter. This proposed approach deviates 
from the rebate calculation approach proposed in Sec.  427.302, which 
relies on the specified amount defined at Sec.  427.20 even when the 
specified amount and the published payment amount in quarterly pricing 
files differ. The approach proposed at Sec.  427.201(b) would be used 
only to determine whether there should be a coinsurance adjustment and 
would not impact the applicability or calculation of inflation rebates. 
CMS believes this approach is consistent with the statutory language 
and appropriately reflects the differences in the statutory text of 
section 1847A(i)(5) of the Act, which sets forth the payment amount 
that is used to determine whether coinsurance should be adjusted, and 
section 1847A(i)(3)(A) of the Act, which sets forth the ``specified 
amount'' used to determine rebate amounts.
---------------------------------------------------------------------------

    \565\ See: https://www.cms.gov/medicare/payment/part-b-drugs/asp-pricing-files.
    \566\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates.
    \567\ See: https://www.cms.gov/medicare/payment/prospective-payment-systems/ambulatory-surgical-center-asc/asc-payment-rates-addenda.
---------------------------------------------------------------------------

    CMS' intent with this proposed policy is to hold beneficiaries 
harmless in situations where the payment amount is calculated 
differently from the specified amount. Though the payment amount is 
generally based on the same provisions as the specified amount, there 
may be situations where the payment amount is updated or adjusted under 
other provisions of 1847A of the Act, such as when ASP data are not 
available under section 1847A(c)(5)(B). For example, if the specified 
amount is very low due to negative ASP data and the payment amount is 
updated using other available data resulting in a payment amount that 
exceeds the inflation-adjusted payment amount, beneficiaries would not 
receive the benefit of adjusted coinsurance. There may also be 
situations where the payment amount is lower than the inflation-
adjusted payment amount, but the specified amount is higher than the 
inflation-adjusted payment amount. In such a situation, if the 
``specified amount'' was used as the comparator to determine whether 
coinsurance should be adjusted, beneficiaries would pay a coinsurance 
higher than 20 percent, because 20 percent of the inflation-adjusted 
payment amount would be higher than 20 percent of the payment amount. 
As such, we propose to codify at Sec.  427.201(b) that we will compare 
the published payment amount in the quarterly pricing files published 
by CMS to determine whether a coinsurance adjustment applies. This 
policy would provide an adjusted beneficiary coinsurance amount only 
when the payment amount for a Part B rebatable drug exceeds the 
inflation-adjusted payment amount in a given quarter.
    CMS believes this approach is valid and gives effect to the 
differing statutory language in sections 1847A(i)(3)(A), 1847A(i)(5), 
and 1833(a)(1)(EE) of the Act, which sets forth the coinsurance 
adjustment for Part B rebatable drugs. Unlike the ``specified amount'' 
in section 1847A(i)(3)(A), sections 1847A(i)(5) and 1833(a)(1)(EE) both 
refer to a ``payment amount.'' Fundamentally, a payment amount cannot 
be a negative number; if the specified amount and payment amount were 
the same amount, it would result in situations where the payment amount 
at section 1833(a)(1)(EE) was a negative number. Rather, we believe 
that the term ``payment amount'' in both sections 1847A(i)(5) and 
1833(a)(1)(EE) is most naturally read to include the amount, as updated 
and adjusted for the purposes of providing payment to providers, that 
CMS publishes as the payment amount in quarterly pricing files; and 
that section 1833(a)(1)(EE) operates to adjust the percentage of such 
payment amount. Furthermore, section 1847A(i)(5)(B) of the Act provides 
the Secretary with discretion to apply the adjusted coinsurance 
percentage to the payment amount that would otherwise apply under 
section 1847A(b)(1)(B) or (C) of the Act. Lastly, sections 
1847A(i)(8)(D) and (E) of the Act

[[Page 61943]]

preclude administrative and judicial review of the computation of the 
adjusted coinsurance and amounts paid to the provider under section 
1833(a)(1)(EE).
    In summary, we are proposing CMS will use the payment amount in 
quarterly pricing files to determine if a Part B rebatable drug should 
have an adjusted beneficiary coinsurance, the calculation to determine 
the adjusted Medicare payment (if applicable) will not be adjusted for 
sequestration, and drugs excluded from the identification of Part B 
rebatable drugs will not be subject to the inflation-adjusted 
beneficiary coinsurance. CMS invites comment on these proposals.
d. Determination of the Rebate Amount for Part B Rebatable Drugs 
(Sec. Sec.  427.300 Through 427.304)
i. Definitions
    In proposed Sec.  427.300, CMS proposes to define the following 
terms applicable to subpart D (Sec. Sec.  427.300 through 427.304):
     ``340B Program''.
     ``Refundable single-use dose container or single-use 
package drug''.
ii. Calculation of the Total Part B Rebate Amount To Be Paid by 
Manufacturers
    Section 1847A(i)(3) of the Act specifies the calculation of the 
rebate amount for a Part B rebatable drug assigned to a billing and 
payment code for an applicable calendar quarter for which a 
manufacturer must pay a rebate. CMS proposes to codify the rebate 
calculation, as established in revised Medicare Part B Drug Inflation 
Rebate Guidance, as the estimated amount is equal to the product of the 
total number of billing units determined in accordance with section 
1847A(i)(3)(B) of the Act (proposed at Sec.  427.303) and the amount 
(if any) by which the specified amount (proposed at Sec.  427.302(b)) 
exceeds the inflation-adjusted payment amount determined in accordance 
with section 1847A(i)(3)(C) of the Act (proposed at Sec.  427.302(g)) 
for the drug or biological product for an applicable calendar quarter. 
The Part B drug inflation rebate amount calculated in accordance with 
this subpart is subject to adjustment based on any reductions in 
accordance with subpart E of this part or any reconciliations in 
accordance with subpart F of the part.
    Because Part B rebatable drugs are single source drugs or 
biologicals, they typically will have one manufacturer. However, a Part 
B rebatable drug could have more than one manufacturer. For example, a 
Part B rebatable drug could be produced by one or more manufacturer(s) 
that is a repackager or relabeler. Multiple manufacturers of a 
rebatable drug also could occur in the case of one or more authorized 
generic products that are marketed under the same FDA-approval as the 
original FDA applicant. In such instances, all the NDCs for the drug 
typically are assigned to the same billing and payment code(s), and 
each manufacturer is responsible for reporting ASP data to CMS. When 
calculating the rebate owed by manufacturers for a rebatable drug that 
has more than one manufacturer, CMS proposes to codify the policy from 
section 50.13 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to multiply the total rebate amount calculated for the billing 
and payment code by the following quotient:

(Sum of the individual manufacturer's billing units sold during the 
applicable calendar quarter for all NDCs of the manufacturer assigned 
to the billing and payment code, as reported in the ASP data 
submissions) divided by (Sum of all manufacturers' total billing units 
sold during the applicable calendar quarter for all NDCs of the Part B 
rebatable drug assigned to the billing and payment code, as reported in 
the ASP data submissions)

    CMS welcomes comment on this calculation approach.
    Based on further review, CMS has observed that there are several 
instances where there are multiple manufacturers in a billing and 
payment code and the ASP data, including the number of units sold, for 
all or some manufacturers' NDCs within a billing and payment code may 
be negative, zero, or missing. To enable CMS to calculate the 
respective rebate amounts attributable to each manufacturer when the 
ASP units are negative, zero, or missing, CMS is soliciting comments on 
the new proposed policies outlined below and any other alternative 
options.
(1) Scenarios in Which All NDCs Within a Billing and Payment Code Have 
Negative, Zero, or Missing ASP Units
    If there are NDCs of multiple manufacturers in a billing and 
payment code, to determine the respective rebate amount when the 
manufacturer-reported ASP units for all NDCs are either negative, zero, 
or missing but there is a positive rebate amount calculated for the 
Part B rebatable drug, CMS proposes to: (1) apportion a $0 rebate 
amount when the reported units for all NDCs are missing for NDCs not 
marketed or sold during the applicable calendar quarter, negative, and/
or zero; and (2) equally apportion a positive rebate amount to each NDC 
with missing units when the NDCs were marketed or sold during the 
applicable calendar quarter. If the NDCs within a billing and payment 
code have a mix of negative units, zero units, missing units for NDCs 
marketed or sold during the applicable calendar quarter, or missing 
units for NDCs not marketed or sold during the applicable calendar 
quarter, CMS will apportion a $0 rebate amount to the NDCs with missing 
units that are not marketed or sold during the applicable calendar 
quarter, NDCs with negative units, and NDCs with zero units, and will 
equally apportion the positive rebate amount across all NDCs with 
missing units that are marketed or sold during the applicable quarter. 
CMS understands that this approach would treat missing units for NDCs 
not marketed or sold during the applicable calendar quarter, negative 
units, and zero units as representing zero sales, and we welcome 
comments on the extent to which this approach could potentially exclude 
from rebate liability a manufacturer of a drug that did have sales in 
that quarter (for example, if negative units represent price 
concessions). In addition, CMS welcomes comments on the extent to 
which, in a scenario with a billing and payment code with multiple 
manufacturers, a single manufacturer with missing ASP units could 
assume full rebate liability for the entire billing and payment code if 
the manufacturer's NDCs have missing units and are marketed or sold 
during the applicable calendar quarter.
    CMS also considered several alternative policies for attributing 
rebate amounts to each respective manufacturer in this scenario, 
including: (1) using the reported ASP units from the calendar quarter 
prior to the applicable calendar quarter; (2) using an average of units 
sold based on sales data for several calendar quarters prior to the 
applicable calendar quarter (for example, an average of the previous 
four calendar quarters); and (3) validation of ASP data based on review 
of AMP data in combination with one of the aforementioned alternative 
proposed policies to determine inflation rebate amounts. However, CMS 
has observed that ASP units are often negative, zero, or missing for 
several quarters in a four-quarter lookback, so including additional 
quarters may not necessarily yield additional data that could be used 
to apportion inflation rebate amounts (and could complicate the 
calculation of an average by introducing a mix of zero,

[[Page 61944]]

negative, missing, and positive units within a single NDC). In 
addition, the AMP validation of ASP sales could add another layer of 
complexity and potential bias as AMP data represent only sales to 
retail community pharmacies, and ASP data represent all sales of a 
drug. CMS welcomes comments on these alternatives.
(2) Scenarios in Which Some (But Not All) NDCs Have Negative, Zero, or 
Missing ASP Units
    When some manufacturers' NDCs within a billing and payment code 
report negative, zero, or missing ASP units, CMS proposes to: (1) treat 
any NDCs with missing units that are not marketed or sold during the 
applicable calendar quarter, negative units, or zero units as not 
having any sales for the applicable calendar quarter and apportion a $0 
rebate amount to them; (2) treat NDCs with missing units that are 
marketed or sold during the applicable calendar quarter as though they 
had the same units as that of the NDC with the lowest positive units; 
and (3) apportion rebate amounts across NDCs with missing units that 
are marketed or sold during the applicable calendar quarter and NDCs 
with positive units based on the share of ASP units sold in accordance 
with the policy outlined in section 50.13 of the revised Medicare Part 
B Drug Inflation Rebate Guidance. CMS welcomes comments on the extent 
to which, in a scenario where NDCs of multiple manufacturers are 
assigned to the same billing and payment code, a single manufacturer 
that accounts for all positive ASP units could potentially be 
responsible for the full rebate amount for the entire billing and 
payment code.
    CMS also considered proposing other alternative policies for 
attributing rebate amounts to each respective manufacturer in this 
scenario, including: (1) review of historical ASP data to identify the 
most recent calendar quarter with positive ASP units for any of the 
NDCs with negative, zero, or missing units in the applicable calendar 
quarter and allocation of financial responsibility across NDCs with 
positive ASP units in that quarter (excluding NDCs without positive 
units in that quarter); (2) using an average of units sold based on 
sales data for several calendar quarters prior to the applicable 
quarter (for example, an average of the previous four calendar 
quarters); (3) apportionment of rebates based on units at the NDC-9 
level rather than the NDC-11 level; and (4) apportionment of rebates to 
only those manufacturers within a HCPCS code that reported positive ASP 
units for the applicable calendar quarter.
    CMS elected to not propose use of a historical lookback approach 
(under options 1 and 2) since ASP units are often negative, zero, or 
missing for the most recent calendar quarter and/or over several 
quarters in a four-quarter lookback period, and so including additional 
quarters may not necessarily yield additional data that could be used 
to apportion inflation rebate amounts (and could complicate the 
calculation of an average by introducing a mix of zero, negative, 
missing, and positive units within a single NDC). CMS also understands 
that a historical lookback approach could create outliers that could 
affect the resulting allocation. When evaluating option 3, CMS observed 
that ASP units are often negative, zero, or missing for several 
calendar quarters when aggregating units sold at the NDC-9 level. 
Consequently, this approach may not necessarily yield additional data 
that could be used to apportion inflation rebate amounts and doing so 
would differ from our general policy on using NDC-11s as set forth in 
the revised guidance. Finally, CMS decided not to propose apportioning 
the full rebate amount to only those manufacturers that reported 
positive ASP units within a billing and payment code under option 4, as 
we questioned whether that policy could inadvertently disfavor 
manufacturers that reported units while benefiting manufacturers that 
did not report ASP data. We continue to evaluate these alternative 
policy approaches for apportioning rebate liability and may adopt 
changes to this proposed policy in the final rule.
    CMS reminds manufacturers of their reporting obligations under 
sections 1847A(f)(2) and 1927(b) of the Act and that failure to provide 
timely information may result in penalties as detailed in sections 
1847A(d)(4)(B) and (C) and 1927(b)(3)(C)(i) of the Act.
    CMS welcomes comments on these proposed approaches as well as 
alternative policy options on how CMS could apportion rebate amounts 
among multiple manufacturers' NDCs that reported negative, zero, and/or 
missing units for NDCs.
iii. Calculation of the Per Unit Part B Drug Rebate Amount
(1) Identification of the Specified Amount for the Applicable Calendar 
Quarter
    In the calculation of the rebate amount for a Part B rebatable 
drug, CMS is statutorily required to compare the inflation-adjusted 
payment amount to the specified amount, which is the amount set forth 
in section 1847A(i)(3)(A)(ii)(I) of the Act. Statute also requires CMS 
to impose an inflation rebate if the specified amount exceeds the 
inflation-adjusted payment amount. CMS proposes to codify at Sec.  
427.302(a) the policy established in revised Medicare Part B Drug 
Inflation Rebate Guidance to calculate the Part B per unit rebate 
amount for the applicable calendar quarter by determining the amount by 
which the specified amount exceeds the inflation-adjusted payment 
amount, after accounting for exclusions under Sec.  427.303(b). CMS 
proposes to codify the current operational steps for calculating Part B 
inflation rebates as described in section 50 of the revised Medicare 
Part B Drug Inflation Rebate Guidance.
    In Sec.  427.302(b), CMS proposes to codify the policy established 
in section 50.2 of the revised Medicare Part B Drug Inflation Rebate 
Guidance on how to calculate the specified amount for the applicable 
calendar quarter. The ``specified amount'' refers to the amount 
specified in section 1847A(i)(3)(A)(ii)(I)(aa) or (bb) of the Act, as 
applicable. In general, section 1847A(i)(3)(A)(ii)(I)(aa) and (bb) of 
the Act cross-reference provisions governing quarterly payment limits 
for single source drugs and biological products that are typically, but 
not always, reflected in the quarterly pricing files. Specifically, the 
specified amount for single source drugs and biological products is 106 
percent of the amount determined under section 1847A(b)(4) of the Act--
that is, the lesser of ASP or WAC--for the applicable calendar quarter. 
For biosimilar biological products, the specified amount is the payment 
amount under section 1847A(b)(1)(C) of the Act, which is based on 100 
percent of the ASP for the biosimilar biological product plus 6 percent 
of the lesser of ASP or WAC for the reference biological product.
    In Sec.  427.302(b)(1), CMS proposes that the first applicable 
calendar quarter for a Part B rebatable drug will be the earliest 
applicable calendar quarter that follows the payment amount benchmark 
quarter identified in Sec.  427.302(c)(1) through (6).
    Additionally, for the purposes of determining the rebate amount for 
a Part B rebatable drug, based on further consideration of data 
availability in specific circumstances, CMS proposes to clarify the 
policy established in section 50 of the revised Medicare Part B Drug 
Inflation Rebate Guidance and use the most updated price information 
reported by manufacturers, determined

[[Page 61945]]

in accordance with section 1847A(i)(3)(A)(ii)(I)(aa) or (bb) of the Act 
as applicable, as the specified amount for the applicable calendar 
quarter for each HCPCS code identified in accordance with Sec.  
427.101. That is, CMS would use the most updated price information 
reported by manufacturers to compare whether 106 percent of WAC or 106 
percent of ASP is less, and would use the lower value for the specified 
amount. In circumstances in which all NDCs in the HCPCS code have 
neither manufacturer-reported ASP nor WAC price data available for the 
applicable calendar quarter, CMS proposes to use WAC price data from 
other public sources, if available, to calculate 106 percent of WAC, 
which will serve as the specified amount. CMS proposes to adopt this 
approach regardless of whether there is a price substitution for 
Medicare's payment during the quarter or whether other policies cause 
the published payment limit to differ from the specified amount. In 
circumstances in which negative or zero manufacturer ASP data is 
reported for all NDCs for a given quarter, that negative or zero ASP 
amount would be used to compare 106 percent of WAC to 106 percent of 
ASP to determine the lower value for use as the specified amount. CMS 
believes these proposals on treatment of missing pricing data and 
treatment of pricing differences between reported prices and the 
published payment limit for a billing and payment code will further 
clarify the application of the specified amount in the calendar quarter 
are consistent with the requirements set forth in section 
1847A(i)(3)(A)(ii)(I) of the Act. CMS solicits comments on this policy.
(2) Identification of the Payment Amount Benchmark Quarter
    In Sec.  427.302(c), CMS proposes to codify policies from section 
50.3 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
identify the applicable payment amount benchmark quarter. Specifically, 
for drugs first approved or licensed by the FDA on or before December 
1, 2020, and with a first marketed date on or before December 1, 2020, 
the payment amount benchmark quarter would be the calendar quarter 
beginning July 1, 2021. For subsequently approved drugs--that is, drugs 
approved or licensed by the FDA after December 1, 2020--the payment 
amount benchmark quarter would be the third full calendar quarter after 
a drug's first marketed date. Additionally, there may be cases where a 
drug was first approved or licensed on or before December 1, 2020, but 
with a first marketed date after December 1, 2020, and the drug lacks 
ASP or WAC data to calculate the payment amount for the applicable 
calendar quarter beginning July 1, 2021. Under the policy applicable to 
drugs approved or licensed and with a first marketed date before 
December 1, 2020, such drugs would not have data to calculate the 
payment amount in the payment amount benchmark quarter. In these cases, 
CMS proposes to treat such drugs in the same manner as it would treat 
subsequently approved drugs and identify the payment amount benchmark 
quarter as the third full calendar quarter after a drug's first 
marketed date. CMS solicits comments on this policy proposal and 
specifically on our proposal to treat drugs approved or licensed on or 
before December 1, 2020, but with a first marketed date after December 
1, 2020 as subsequently approved drugs.
    For Part B rebatable drugs that were billed under a NOC code during 
the payment amount benchmark quarter, CMS stated in the revised 
Medicare Part B Drug Inflation Rebate Guidance that it would use the 
third full quarter after a drug was assigned a unique HCPCS code as the 
payment amount benchmark quarter. In this rulemaking, CMS proposes to 
determine the payment amount benchmark quarter as follows: For a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, CMS proposes 
that the payment amount benchmark quarter be the third full calendar 
quarter after the Part B rebatable drug is assigned a billing and 
payment code other than a NOC code. CMS solicits comments on these 
proposals.
    CMS continues to consider whether there is a need to identify 
additional or modified methodologies to appropriately determine the 
payment amount benchmark quarter for products with insufficient pricing 
data in the payment amount benchmark quarter or that otherwise do not 
fall squarely into the categories otherwise described in Sec.  
427.302(c) and in a manner that enables the calculation of rebate 
amounts consistent with section 1847A(i)(3) of the Act.
    CMS has determined that ASP data are the most appropriate for 
identifying (1) the day on which the drug was first marketed and (2) 
which calendar quarter is the third full calendar quarter thereafter as 
the payment amount benchmark quarter for drugs first approved or 
licensed by the FDA after December 1, 2020, or licensed on or before 
December 1, 2020, but with a first marketed date after December 1, 
2020. CMS also has determined that it is most appropriate and 
administratively feasible to identify the first marketed date as the 
date of first sale of any NDC-11 within a billing and payment code 
among all products and package sizes under the same FDA application.
    Additionally, CMS believes ASP data are accurate and reliable 
because manufacturers attest to the accuracy of their submitted data 
and have the ability to update these data quarterly. Therefore, in 
Sec.  427.302(c), CMS proposes to codify existing policy from the 
revised Medicare Part B Drug Inflation Rebate Guidance on the 
identification of the payment amount benchmark quarter for each Part B 
rebatable drug. CMS would use the earliest first marketed date of any 
NDC ever marketed under any FDA application under which any NDCs that 
have ever been assigned to the billing and payment code for that Part B 
rebatable drug as of the applicable calendar quarter have ever been 
marketed. The earliest first marketed date would apply to all NDCs 
within a billing and payment code and to all products and package sizes 
marketed under the same FDA approved application. If the original NDC 
on which the first marketed date is based is terminated, the first 
marketed date for the associated billing and payment code would remain 
the same. By defining the first marketed date for the Part B rebatable 
drug at the level of the product's FDA approval, CMS would retain the 
same first marketed date for the billing and payment code even if the 
NDCs and/or billing and payment codes used to bill for the Part B 
rebatable drug change over time. In addition, when the date of first 
sale is missing from ASP data, CMS proposes to identify the first 
marketed date from alternative public sources, such as the National 
Institutes of Health's DailyMed.
    Table 48 in this section provides an example, for illustration 
purposes only, of the application of first marketed date based on the 
earliest date of first sale of any NDC ever marketed under any NDA or 
BLA under which any NDCs that have ever been assigned to the billing 
and payment code as of the applicable calendar quarter have ever been 
marketed. In the example, NDC1 (marketed under NDA 000000) is first 
sold on January 15, 2022, and NDC2 (also marketed under NDA 000000) is 
first sold on October 15, 2023. Both NDCs are marketed under an NDA 
associated with HCPCS code X0000. The first marketed date for HCPCS 
code X0000 would be January 15, 2022,

[[Page 61946]]

because that date is the earliest date of first sale for any NDC that 
has ever been associated with an NDA or BLA within that HCPCS code as 
of the calendar quarter. If NDC2 were subsequently assigned to a new 
HCPCS code Y0000, the first marketed date for HCPCS Y0000 would 
similarly be January 15, 2022. In cases when NDCs that are marketed 
under different NDA/BLAs are assigned to the same HCPCS code, using the 
example in the table in this section, NDC3 (marketed under NDA 111111) 
was first sold on November 1, 2024, and first billed under HCPCS Y0000, 
and the first marketed date for HCPCS Y0000 would remain January 15, 
2022, as noted, given that HCPCS Y0000 includes NDC2, associated with 
NDA 000000. NDC3 was later assigned to a new HCPCS code Z0000. 
Following CMS' approach, the first marketed date for HCPCS code Z0000 
is November 1, 2024, because that is the earliest date of first sale 
for any NDC ever marketed under NDA 111111, which is the only NDA ever 
associated with Z0000 as of the calendar quarter.
[GRAPHIC] [TIFF OMITTED] TP31JY24.079

(3) Identification of Payment Amount in the Payment Amount Benchmark 
Quarter
    Section 1847A(i)(3)(C) of the Act specifies use of the ``payment 
amount for the billing and payment code for such drug in the payment 
amount benchmark quarter'' (``payment amount in the payment amount 
benchmark quarter'') in the determination of the inflation-adjusted 
payment amount. While the specified amount and the payment amount in 
the payment amount benchmark quarter are similar, the statutory 
requirements for determining these two amounts differ. The specified 
amount for a Part B rebatable drug, as set forth in section 
1847A(i)(3)(A)(ii)(I) of the Act, is based on item (aa) (for example, 
lesser of ASP+6 percent or WAC+6 percent) or (bb) (that is, 100 percent 
of the ASP for the biosimilar biological product plus 6 percent of the 
lesser of ASP or WAC for the reference biological product). The payment 
amount in the payment amount benchmark quarter under section 
1847A(i)(3)(C)(i) is based on various provisions within section 1847A 
of the Act (for example, the lesser of 106 percent ASP or WAC, WAC+3 
percent, and price substitutions). To identify the payment amount in 
the payment amount benchmark quarter for the Part B rebatable drug by 
billing and payment code, in Sec.  427.302(d), CMS proposes to codify 
the policies established in section 50.4 of the revised Medicare Part B 
Drug Inflation Rebate Guidance. CMS would use the published payment 
limit (as available) for the billing and payment code for the 
applicable payment amount benchmark quarter determined in accordance 
with section 1847A of the Act. If a published payment limit is not 
available for the applicable payment amount benchmark quarters, CMS 
would use the lower of 106 percent of manufacturer-reported ASP or 106 
percent of manufacturer-reported WAC. If neither a published payment 
limit nor manufacturer-reported ASP or WAC data are available, CMS 
would use WAC data from other public sources to calculate 106 percent 
of WAC, which, solely for the purposes of identifying the payment 
amount in the payment amount benchmark quarter, CMS would consider to 
be the payment amount for the payment amount benchmark quarter. Table 
49 and Figure 3 illustrate the specified amount and payment amount in 
the payment amount benchmark quarter.
BILLING CODE P

[[Page 61947]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.080

[GRAPHIC] [TIFF OMITTED] TP31JY24.081

BILLING CODE C
    CMS notes that there may be situations when a Part B rebatable drug 
was previously billed under a grouped billing and payment code during 
the benchmark quarter and later billed under a unique billing and 
payment code, such as certain section 505(b)(2) drug products and 
single source drugs that were previously multiple source drugs. For 
example, a multiple source drug approved under an NDA may become a 
single source drug if all other therapeutically equivalent drugs are no 
longer marketed and the now-single source NDA is later shifted into a 
separately payable code. To identify the payment amount in the payment 
amount benchmark quarter for such drugs, CMS proposes to codify policy 
established in section 50.4 of the Medicare Part B Drug Inflation 
Rebate Guidance and identify the grouped billing and payment code 
payment limit used by CMS for the payment amount in the payment amount 
benchmark quarter and use that payment limit for the benchmark quarter.
    Finally, consistent with the policy established in section 50.4 of 
the revised Medicare Part B Drug Inflation Rebate Guidance, CMS would 
not apply a sequestration reduction to the payment amount in the 
payment amount benchmark quarter as part of the methodology to 
calculate a Part B inflation rebate amount.
(4) Identification of the Benchmark Period CPI-U
    For each Part B rebatable drug by HCPCS code, the statute requires 
CMS to identify the applicable benchmark period CPI-U. In accordance 
with section 1847A(i)(3)(E) of the Act, the benchmark period CPI-U for 
drugs first approved or licensed by the FDA on or before December 1, 
2020, and with a first marketed date on or before December 1, 2020, is 
the CPI-U for January 2021, which is 261.582.\568\ CMS proposes to 
codify in Sec.  427.302(e) policies established in section 50.5 of the 
revised Medicare Part B Drug Inflation Rebate Guidance. Specifically, 
the benchmark period CPI-U for drugs first approved or licensed on or 
before December 1, 2020, with a first marketed date after December 1, 
2020, would be the CPI-U for the first month of the

[[Page 61948]]

third full calendar quarter after a drug's first marketed date. 
Additionally, CMS proposes to codify policies in revised guidance that 
the benchmark period CPI-U for subsequently approved drugs would be the 
first month of the first full calendar quarter after a drug's first 
marketed date in accordance with section 1847A(i)(4)(A) of the Act. 
Furthermore, CMS proposes to determine the benchmark period CPI-U for 
certain drugs previously billed under NOC codes as follows: For a Part 
B rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, CMS proposes 
that the benchmark period CPI-U would be first month of the third full 
calendar quarter after the drug is assigned a billing and payment code 
other than a NOC code. CMS solicits comments on these proposals.
---------------------------------------------------------------------------

    \568\ CMS retrieved the January 2021 CPI-U from bls.gov on March 
22, 2024.
---------------------------------------------------------------------------

(5) Identification of the Rebate Period CPI-U
    As specified in section 1847A(i)(3)(F) of the Act, in Sec.  
427.302(f), CMS proposes to codify the policy described in section 50.6 
of the revised Medicare Part B Drug Inflation Rebate Guidance, that the 
rebate period CPI-U means the greater of the benchmark period CPI-U 
index level and the CPI-U index level for the first month of the 
calendar quarter that is 2 calendar quarters prior to the applicable 
calendar quarter in which the Part B rebatable drug is furnished. CMS 
will retrieve the CPI-U index level information from bls.gov.
(6) Determination of the Inflation-Adjusted Payment Amount
    Section 1847A(i)(3)(C) of the Act specifies the determination of 
the inflation-adjusted payment amount. In Sec.  427.302(g), CMS 
proposes to codify the policy established in section 50.7 of revised 
Medicare Part B Drug Inflation Rebate Guidance for determining the 
inflation-adjusted payment amount in accordance with this section of 
the Act. For each applicable calendar quarter and for each Part B 
rebatable drug by billing and payment code, CMS proposes to use the 
payment amount in the payment amount benchmark quarter (per Sec.  
427.302(d)), benchmark period CPI-U (per Sec.  427.302(e)), and rebate 
period CPI-U (per Sec.  427.302(f)) to identify the inflation-adjusted 
payment amount. Specifically, CMS would calculate the inflation-
adjusted payment amount by dividing the rebate period CPI-U by the 
benchmark period CPI-U and then multiplying the quotient by the payment 
amount in the payment amount benchmark quarter.
iv. Determination of Total Number of Billing Units
    For calendar quarters starting on or after January 1, 2023, CMS 
proposes in Sec.  427.303 to codify policies established in section 
50.8 of the revised Medicare Part B Drug Inflation Rebate Guidance to 
determine the number of billing units for each Part B rebatable drug by 
HCPCS code. Section 1847A(i)(3)(B) describes the total number of 
billing units of Part B rebatable drugs that should be included in the 
rebate calculation. These billing units include the number of billing 
units for the HCPCS code of the Part B rebatable drug furnished during 
the relevant calendar quarter minus billing units of drugs with respect 
to which the manufacturer provides a discount under the 340B Program, 
billing units with respect to which the manufacturer could have paid a 
Medicaid rebate, and billing units that are packaged into the payment 
amount for an item or service and are not separately payable. CMS 
further proposes codifying policy set forth in revised Medicare Part B 
Drug Inflation Rebate Guidance in Sec.  427.303 to exclude billing 
units when a drug is no longer a Part B rebatable drug.
    After identifying Part B rebatable drugs by HCPCS code (in 
accordance with policy proposed in Sec. Sec.  427.10, 427.20, and 
427.100 through 427.101) using final action claims in the CMS Medicare 
fee-for-service claims repository, CMS proposes to codify existing 
policy in the revised Medicare Part B Drug Inflation Rebate Guidance in 
Sec.  427.303 to determine the total number of billing units for each 
HCPCS code as follows. CMS identifies claim lines for such HCPCS code 
for dates of service in the calendar quarter, excludes billing units in 
claim specified in section 1847A(i)(3)(B)(ii) of the Act, as 
applicable, and sums the number of billing units in the remaining claim 
lines for which Medicare payment was allowed and greater than zero. 
Including billing units where Medicare payment was allowed would ensure 
that billing units for which Medicare and some beneficiaries have 
financial liability would be counted in the total number of billing 
units.
    CMS proposes to codify the policy in the revised Medicare Part B 
Drug Inflation Rebate Guidance in Sec.  427.303 and will perform this 
process at least 3 months after the end of a calendar quarter to allow 
time for claims to be submitted, processed, and finalized. Subpart F of 
this proposed rule describes the proposed rebate process, including 
reports of rebate amounts, suggestion of error, and restatements. CMS 
welcomes comment on the following policies and comments on any 
additional units that should be excluded from the rebate amount 
calculation.
(1) Units of Drugs Acquired Through the 340B Program
    Section 1847A(i)(3)(B)(ii)(I) of the Act specifically excludes 
billing units of drugs for which the manufacturer provides a discount 
under the 340B Program from the billing units of drugs for which a 
manufacturer may otherwise have a Part B inflation rebate liability. 
CMS proposes codifying the policy described in section 50.8.1 of the 
revised Medicare Part B Drug Inflation Rebate Guidance in Sec.  427.303 
to remove separately payable billing units in claim lines that are 
billed with the ``JG'' or ``TB'' modifiers from identified final action 
claim lines.
    On December 20, 2022, CMS issued program guidance that requires all 
340B covered entities to include the ``JG'' or ``TB'' modifier, as 
applicable, on separately payable claim lines for drugs acquired 
through the 340B Program with dates of service beginning no later than 
January 1, 2024.\569\ CMS proposes to codify this requirement in Sec.  
427.303(b)(1)(ii). Furthermore, on November 22, 2023, in the CY 2024 
OPPS final rule (88 FR 81791 through 81792), CMS finalized a policy to 
utilize a single 340B modifier (``TB''), requiring hospitals that 
currently report the ``JG'' modifier to use the ``TB'' modifier 
beginning January 1, 2025. As described in the final rule, in CY 2024, 
these hospitals can choose to continue to use the ``JG'' modifier or 
choose to transition to the use of ``TB'' modifier during that year. On 
December 14, 2023, CMS updated the December 20, 2022 guidance titled 
``Part B Inflation Rebate Guidance: Use of the 340B Modifiers'' to 
align with the updated single modifier requirement.\570\
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    \569\ See: https://www.cms.gov/files/document/part-b-inflation-rebate-guidance340b-modifierfinal.pdf.
    \570\ See: https://www.cms.gov/files/document/revised-part-b-inflation-rebate-340b-modifier-guidance.pdf.
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    CMS proposes in Sec.  427.303(b)(1)(i) to exclude separately 
payable billing units in claim lines for professional claims with dates 
of service during 2023 from suppliers that are covered entities listed 
by the HRSA 340B Office of Pharmacy Affairs Information System as 
participating in the 340B Program. CMS will use National Provider 
Identifier numbers and/or Medicare Provider Numbers to identify these 
suppliers and the claims submitted with such identifiers. CMS proposes 
to continue this approach for professional claims

[[Page 61949]]

with dates of service during 2024. Consistent with the CMS updated 340B 
modifier guidance, CMS proposes in Sec.  427.303(b)(1)(ii) excluding 
separately payable billing units in claim lines for institutional 
providers with the ``JG'' and ``TB'' modifiers from identified final 
action claims with dates of service through December 31, 2024. CMS 
proposes to codify policies established in section 50.8.1 of the 
revised Medicare Part B Drug Inflation Rebate Guidance in Sec.  
427.303(b)(1)(iii) by excluding separately payable billing units in 
claim lines with the ``TB'' modifier from identified final action 
claims with dates of service on or after January 1, 2025. CMS is 
proposing to use these modifiers to identify and exclude billing units 
for which a discount was acquired under the 340B Program because the 
``TB'' modifier is an existing mechanism used to identify drugs 
acquired through the 340B Program and familiar to most 340B covered 
entities paid under the OPPS.
(2) Units With a Rebate Under Section 1927 of the Social Security Act
    To receive payment under Medicaid for covered outpatient drugs, 
manufacturers must participate in the Medicaid Drug Rebate Program 
(that is, have a drug rebate agreement in effect with the Secretary of 
HHS) and are required to report certain pricing and drug product 
information and pay Medicaid drug rebates for covered outpatient drugs 
furnished and paid for under the Medicaid State plan. States invoice 
manufacturers no later than 60 days after the end of each calendar 
quarter on the number of units of each dosage form and strength of each 
covered outpatient drug furnished and paid for under the State plan. 
This invoice includes units of covered outpatient drugs that are 
furnished to dually eligible beneficiaries when the claim for the drug 
is paid for by Medicare Part B and the beneficiary's cost sharing is 
covered by Medicaid. To determine unit counts for rebate calculations, 
at this time, in Sec.  427.303(b)(2), CMS proposes codifying our policy 
described in revised Medicare Part B Drug Inflation Rebate Guidance in 
section 50.8.2 to exclude billing units from claims with dates of 
service during a month within a calendar quarter when the Medicare 
beneficiary has Medicaid coverage that may provide cost-sharing 
assistance. These are Qualified Medicare Beneficiary (QMB) Plus, 
Specified Low-Income Medicare Beneficiary (SLMB) Plus, QMB-only 
beneficiaries, and other full dually eligible beneficiaries. CMS 
further proposes codifying the policy in revised guidance that billing 
units for Part B rebatable drugs furnished to Medicare beneficiaries 
with Medicaid coverage that does not include cost-sharing assistance 
(that is, SLMB Only, Qualified Disabled and Working Individuals (QDWI), 
and Qualifying Individuals (QI) beneficiaries) be included in rebate 
calculations. CMS would identify the months for which a beneficiary has 
Medicaid coverage with cost-sharing assistance using available 
information (for example the State MMA File of dually eligible 
beneficiaries) at the time the rebate amount is being calculated for a 
calendar quarter. CMS proposes codifying this policy as manufacturers 
pay rebates through the Medicaid Drug Rebate Program on units of 
covered outpatient drugs that are furnished to dually eligible 
beneficiaries when the claim for the drug is paid for by Medicare Part 
B and the beneficiary's cost sharing is covered by Medicaid.
    CMS also considered excluding all units furnished to dually 
eligible individuals but is not proposing this alternative as it would 
result in the over exclusion of units.
(3) Units That Are Packaged Into the Payment Amount for an Item or 
Service and Are Not Separately Payable
    As described earlier in this section, CMS proposes codifying our 
policy in section 50.8.3 of revised Medicare Part B Drug Inflation 
Rebate Guidance and only include claim lines with a Medicare allowed 
amount greater than zero. Because CMS proposes in Sec.  427.303(b)(3) 
identifying billing units for separately payable claim lines for Part B 
rebatable drugs only, no further action would be necessary to exclude 
billing units that are packaged into the payment amount for an item or 
service and are not separately payable, such as drugs for which payment 
is packaged under the OPPS, or the Ambulatory Surgical Center (ASC) 
payment system, or those furnished in the Federally qualified health 
centers (FQHC) or rural health clinics (RHC) setting. CMS notes that 
claim lines for drugs for which payment is bundled under the End-Stage 
Renal Disease (ESRD) prospective payment system would not have a 
Medicare allowed amount that is greater than zero and such units would 
therefore be excluded.
    In accordance with policies established in the CY 2024 OPPS/ASC 
final rule and codified in regulatory text at 88 FR 81540, CMS would 
except biosimilar biological products from the OPPS threshold packaging 
policy when their reference biological products are separately paid. 
This means that CMS would pay separately for these biosimilar 
biological products even if their per-day cost is below the threshold 
packaging policy. Because units of these biosimilar biological products 
are not packaged into the payment amount for an item or service and are 
separately payable, they would be included in the Part B inflation 
rebate calculation if they are not qualifying biosimilar biological 
products.
(4) Units When a Drug Is No Longer a Part B Rebatable Drug
    As described in section 1847A(i)(2) of the Act, multiple source 
drugs are not Part B rebatable drugs. A single source drug that is a 
Part B rebatable drug could become a multiple source drug at the start 
of or during a calendar quarter. In such cases, in Sec.  427.303(b)(4), 
CMS proposes codifying policy in section 50.8.4 of the revised Medicare 
Part B Drug Inflation Rebate Guidance to identify the first marketed 
date, as described in Sec.  427.20, of a drug product that is rated as 
therapeutically equivalent to such a drug under FDA's most recent 
publication of Approved Drug Products with Therapeutic Equivalence 
Evaluations (commonly known as the FDA Orange Book \571\) and determine 
whether the drug is no longer a Part B rebatable drug. In Sec.  
427.303(b)(4), CMS proposes to exclude billing units of such drug 
furnished on and after the first day of the calendar month in which the 
therapeutically equivalent drug was first sold or marketed during the 
applicable calendar quarter. CMS further proposes codifying policy that 
it may consult with the FDA for technical assistance in instances where 
there is ambiguity as to whether a new product is therapeutically 
equivalent. Units furnished on or after the calendar month of the first 
marketed date would be excluded from the units identified in accordance 
with Sec.  427.303(b)(4)(iii).
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    \571\ Accessible via https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book.
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(5) Operational Considerations Related to the Inclusion of Units 
Furnished to Beneficiaries Who Are Enrolled in Medicare Advantage (MA) 
Plans
    Section 1847A(i) of the Act requires the manufacturer of a Part B 
rebatable drug to pay a rebate that, generally, is calculated based on 
the total number of billing units of that drug that were furnished in a 
calendar quarter, multiplied by the excess specified amount for the 
drug over a statutorily defined inflation-adjusted payment amount. The 
inclusion in this

[[Page 61950]]

calculation of billing units of drugs that are furnished to Medicare 
beneficiaries who are enrolled in MA plans poses significant 
operational complexities. At this time, CMS is not proposing to 
establish a policy on treatment of MA units in the calculation of Part 
B inflation rebates due to operational considerations, but may 
establish policy on this issue in future rulemaking. CMS solicits 
comments on this approach.
(6) Units Subject to Discarded Drug Refunds
    In Sec.  427.303(b)(5), CMS proposes a policy addressing the 
interaction between Part B inflation rebates and billing units of 
discarded drugs. Under the Infrastructure Investment and Jobs Act of 
2021, section 90004, manufacturers are required to provide a refund to 
CMS for certain discarded amounts from separately payable single-dose 
container or single-use package drugs beginning January 1, 2023. To 
implement the discarded drugs refund provision of the Infrastructure 
Investment and Jobs Act of 2021, in the CY 2023 PFS final rule (87 FR 
69711 through 69719), CMS finalized the requirement that providers and 
suppliers use the ``JW'' claim modifier for all separately payable 
drugs with discarded amounts of drugs from a single-dose container or 
from a single-use package Part B claims that bill for drugs and 
biological products to report discarded amounts. CMS also finalized a 
requirement for providers and suppliers to use the ``JZ'' modifier on 
claims that bill for drugs from single-dose containers that are 
separately payable under Medicare Part B when there are no discarded 
amounts to attest that no amount of drug was discarded and eligible for 
payment.\572\ As of October 1, 2023, claims for drugs from single-dose 
containers that do not use the modifiers as appropriate may be returned 
until claims are properly resubmitted.
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    \572\ See 87 FR 2512, November 18, 2022 (https://www.federalregister.gov/d/2022-23873/p-2512).
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    Although section 1847A(i)(3)(B)(ii) of the Act does not require 
that billing units of discarded drugs be excluded from Part B inflation 
rebates, CMS is proposing to exclude billing units of discarded drugs 
that are subject to discarded drug refunds from Part B inflation 
rebates. CMS believes not applying Part B inflation rebates to billing 
units of discarded drugs for which a refund is owed would balance 
fairness for manufacturers that owe refunds for billing units of 
discarded drugs with the need to fulfill the requirements of section 
11101 of the IRA.
    As new policy not established in section 50.8.6 of the revised 
Medicare Part B Drug Inflation Rebate Guidance, CMS proposes to exclude 
billing units of a refundable single-dose container or single-use 
package drug as defined in Sec.  414.902 (hereinafter referred to as 
``refundable drug'') subject to discarded drug refunds, from the 
calculation of rebate amounts during the reconciliation process except 
for calendar quarters in calendar year 2023. In the CY 2024 PFS final 
rule (codified in Sec.  414.940), CMS finalized policy to send annual 
refund reports for discarded drug refunds for the 4 quarters of a 
calendar year at or around the time it sends Part B Inflation Rebate 
Reports for the first quarter of the following calendar year. 
Therefore, CMS invoices manufacturers for discarded drug refunds on an 
annual basis but CMS is required to invoice manufacturers for Part B 
inflation rebates on a quarterly basis.
    Under the timeline for processing discarded drug refunds, data to 
determine which billing units of discarded drugs are subject to 
discarded drug refunds will generally not be available until after CMS 
issues the Rebate Report to the manufacturer. Due to these data 
limitations, CMS proposes to include all discarded billing units, 
including units of a refundable drug subject to the discarded drug 
refund (as defined in Sec.  414.940), in the calculation of billing 
units for the Preliminary Rebate Report and the Rebate Report. CMS 
proposes to use data available during the reconciliation process to 
exclude billing units of discarded drugs that are subject to discarded 
drug refunds from the calculation of the rebate amount.
    For calendar quarters in calendar year 2023, CMS proposes to 
exclude billing units of a refundable drug subject to discarded drug 
refunds from the calculation of the rebate amount before CMS issues the 
Rebate Report to the manufacturer. As permitted by section 
1847A(i)(1)(C) of the Act, CMS is delaying reporting of rebate 
information required by section 1847A(i)(1)(A) for calendar quarters in 
calendar years 2023 and 2024 until no later than September 30, 2025. 
Under this timeline for calendar quarters in calendar year 2023, CMS 
will have data available regarding which billing units are subject to 
discarded drug refunds when CMS sends the Preliminary Rebate Report and 
Rebate Report in 2025 for calendar quarters in calendar year 2023 and 
can exclude these billing units from the calculation of the rebate 
amount in these reports.
    CMS solicits comments on the proposed approach to excluding billing 
units of a refundable drug subject to discarded drug refunds, from the 
calculation of Part B inflation rebate amounts during the 
reconciliation process, except for calendar quarters in calendar year 
2023.
v. Adjustments for Changes to Billing and Payment Codes
    Changes to billing and payment codes, including new code 
assignments and dose description changes, may occur.
    When a new billing and payment code is assigned for a Part B 
rebatable drug and the code dose description, which determines that 
amount of drug in each billing unit, remains the same, CMS proposes to 
codify in Sec.  427.304(b) the existing policy set forth in revised 
Medicare Part B Drug Inflation Rebate Guidance to use the benchmark 
quarter's payment amount, the payment amount benchmark quarter, and the 
benchmark quarter CPI-U of the prior billing and payment code to 
calculate the per unit Part B rebate amount. For example, a single 
source drug or biological product may be assigned a new billing and 
payment code if it was initially assigned to a billing and payment code 
with other products and then later assigned a unique billing and 
payment code. In this situation, a multiple source drug in an NDA may 
become a single source drug if all its other therapeutically equivalent 
drugs are discontinued and the now-single source NDA is later shifted 
into a separately payable code.
    When a Part B rebatable drug's code dose description changes, CMS 
proposes to codify in Sec.  427.304(a) policies established in section 
50.9 of the revised Medicare Part B Drug Inflation Rebate Guidance and 
apply a conversion factor within the rebate calculation, when 
applicable. For example, a billing and payment code dose description 
that determines the amount of drug in each billing unit could be 
changed from 10mg to 5mg. If a billing and payment code dose 
description changes from 10mg to 5mg, the payment amount in the payment 
amount benchmark quarter for such drug was $200 based on 10mg, and the 
rebate period payment amount is based on 5mg, then CMS would apply a 
conversion factor of 0.5 to the payment amount in the payment amount 
benchmark quarter (yielding $100). In this example, the conversion 
factor would be based on the ratio of the current billing unit 
description to the

[[Page 61951]]

prior billing unit description (5mg/10mg = 0.5). In addition, to ensure 
consistency in how CMS is calculating a rebate when a billing and 
payment code's dose description changes, CMS proposes to apply a 
conversion factor before applying the percentage by which the rebate 
period CPI-U for the calendar quarter exceeds the benchmark period CPI-
U to determine the inflation-adjusted payment amount.
    In situations where a new billing and payment code is assigned for 
a Part B rebatable drug and the code dose description changes, CMS 
would apply a conversion factor, as appropriate, and use the benchmark 
quarter's payment amount, the payment amount benchmark quarter, and the 
benchmark quarter CPI-U of the prior billing and payment code to 
calculate the per unit Part B rebate amount--consistent with the policy 
in revised guidance that CMS is proposing to codify in Sec.  427.304(a) 
and (b).
    To apply the provisions in section 1847A(i) of the Act 
appropriately, CMS also proposes in Sec.  427.304(c) to codify existing 
policy to maintain a crosswalk between such changes or codes.
    CMS solicits comment on these proposals.
e. Reducing the Rebate Amount for Part B Rebatable Drugs in Shortage 
and When There Is a Severe Supply Chain Disruption (Sec. Sec.  427.400 
Through 427.402)
    Section 1847A(i)(3)(G) of the Act requires the Secretary to reduce 
or waive the rebate amount owed by a manufacturer for a Part B 
rebatable drug with respect to a calendar quarter in two cases: (1) 
when a Part B rebatable drug is described as currently in shortage on a 
shortage list in effect under section 506E of the FD&C Act at any point 
during the applicable period; and (2) when CMS determines there is a 
severe supply chain disruption during the applicable quarter for a Part 
B rebatable biosimilar biological product, such as a disruption caused 
by a natural disaster or other unique or unexpected event. The statute 
does not describe how CMS should reduce or waive inflation rebates in 
each of these cases.
    To implement the statutory requirement under section 
1847A(i)(3)(G), CMS proposes to codify in subpart E of part 427 
existing policies described in sections 50.10, 50.11, and 50.12 of the 
revised Medicare Part B Drug Inflation Rebate Guidance to reduce the 
total rebate amount owed by a manufacturer in each of these cases, as 
summarized in Table 50 and discussed later in this section.
[GRAPHIC] [TIFF OMITTED] TP31JY24.082

    As proposed, the rebate amount owed would not be fully waived in 
either of the cases previously described. CMS believes the proposed 
rebate reduction policies balance providing appropriate financial 
relief for manufacturers in certain circumstances, including when there 
is a severe supply disruption resulting from exogenous circumstances 
outside of a manufacturer's control, while not incentivizing 
manufacturers to delay taking appropriate steps to resolve a drug 
shortage or severe supply chain disruption to avoid an obligation to 
pay rebates. CMS will continue to evaluate these policies and may 
update them in future years. CMS underscores that most shortages 
involve multiple source generic drugs,\573\ which are not Part B 
rebatable drugs and thus are not subject to Part B drug inflation 
rebates. CMS solicits comments on the proposed approach.
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    \573\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
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i. Definitions
    CMS proposes in Sec.  427.400 to define the following terms 
applicable to proposed subpart E (Sec. Sec.  427.400 through 427.402)--
     ``Drug shortage'' or ``shortage''.
     ``Plasma-derived product''.
    Proposed Sec.  427.400 also would codify definitions established in 
the revised Medicare Part B Drug Inflation Rebate Guidance for the 
following terms:
     ``Currently in shortage''.
     ``Natural disaster''.
     ``Other unique or unexpected event''.
     ``Severe supply chain disruption''.
ii. Reducing the Rebate Amount for Part B Rebatable Drugs Currently in 
Shortage
    In proposed Sec.  427.401, CMS proposes to codify the policy 
established in section 50.11 of the revised Medicare Part B Drug 
Inflation Rebate Guidance whereby CMS would reduce the total rebate 
amount for a Part B rebatable drug that is currently in shortage based 
on the length of time the drug is in shortage during a calendar quarter 
and decrease the amount of the reduction over time. CMS intends to use 
the shortage lists maintained by the FDA Center for Biologics 
Evaluation and Research (CBER) and Center for Drug Evaluation and 
Research (CDER) to determine whether a Part B rebatable drug is 
currently in shortage \574\ during

[[Page 61952]]

a calendar quarter. CMS will not consider an NDC-10 in the status of 
``to be discontinued,'' ``discontinued,'' or ``resolved'' to be 
``currently in shortage.'' At this time, CMS intends to provide the 
same reduction in the rebate amount for Part B rebatable drugs 
currently in shortage regardless of the cause of the shortage.
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    \574\ For the purposes of this proposed rule, CMS uses the term 
``currently in shortage'' to refer to Part B rebatable drugs that 
are in the status of ``currently in shortage'' on the CDER shortage 
list, as well as biological products listed on CBER's current 
shortages list.
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    CMS will not provide a full waiver of the rebate amount for drugs 
currently in shortage on an FDA shortage list, as providing a full 
waiver of the rebate amount could further incentivize manufacturers to 
delay taking appropriate steps that may resolve a shortage more 
expeditiously simply to maintain having the drug listed on FDA's drug 
shortage list to avoid an obligation to pay rebates for an extended 
period. Further, in a report analyzing the root causes of drug 
shortages between 2013 and 2017, FDA found that more than 60 percent of 
drug shortages were the result of manufacturing or product quality 
issues, and providing a full waiver of the rebate amount in situations 
that may be within a manufacturer's control could be perceived as 
rewarding manufacturers for poor quality management.\575\
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    \575\ See: https://www.fda.gov/media/131130/download?attachment#page=33.
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    CMS would be responsible for monitoring the status of a Part B 
rebatable drug on an FDA shortage list, and manufacturers would not 
need to submit any information to CMS to be eligible for a reduction of 
the rebate amount for a Part B rebatable drug that is currently in 
shortage.
    To calculate the reduced total rebate amount for a Part B rebatable 
drug, in Sec.  427.401(b), CMS proposes the following formula:

Reduced Total Rebate Amount = total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the calendar quarter) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the calendar quarter)

    For the purpose of this formula, for a Part B rebatable drug that 
is a plasma-derived product, in Sec.  427.401(b)(2)(i), CMS proposes an 
applicable percent reduction of 75 percent for the first 4 consecutive 
calendar quarters such Part B rebatable drug is currently in shortage, 
50 percent for the second 4 consecutive calendar quarters, and 25 
percent for each subsequent calendar quarter. For a Part B rebatable 
drug (including a biosimilar biological product) that is not a plasma-
derived product, in Sec.  427.401(b)(2)(ii), CMS proposes an applicable 
percent reduction of 25 percent for the first 4 consecutive calendar 
quarters such Part B rebatable drug is currently in shortage, 10 
percent for the second 4 consecutive calendar quarters, and 2 percent 
for each subsequent calendar quarter.
    Because drugs and biologicals on the FDA shortage lists are 
maintained at the NDC-10 level, and Part B drug inflation rebates are 
calculated at the HCPCS level, CMS proposes in Sec.  427.401(c) that if 
any NDC-10 assigned to the HCPCS code(s) is currently in shortage, CMS 
would apply the rebate reduction to all of the NDCs under the relevant 
HCPCS code(s). CMS will closely monitor market data for the Part B 
rebatable drugs for which the rebate is reduced to ensure the integrity 
of the application of the rebate reduction policy.
    CMS intends to provide a reduction in the rebate amount for as long 
as a Part B rebatable drug is currently in shortage. CMS believes the 
rebate reduction should be proportional to the time the drug is 
currently in shortage and decrease over time to balance providing 
financial relief to manufacturers experiencing a drug shortage while 
not incentivizing manufacturers to delay taking appropriate steps to 
resolve a shortage simply to maintain having the drug listed on an FDA 
shortage list to avoid an obligation to pay rebates for an extended 
period.
    To determine the percentage of time a Part B rebatable drug was 
currently in shortage during the calendar quarter, as proposed in Sec.  
427.401(b)(3), CMS would count the number of days such drug is 
currently in shortage in a calendar quarter and divide by the total 
number of days in that calendar quarter.
    In Sec.  427.401(b)(2), CMS proposes codifying the policy set forth 
in section 50.11 of the revised Medicare Part B Drug Inflation Rebate 
Guidance to apply a greater applicable percent reduction for plasma-
derived products than non-plasma derived products because the former 
rely on a variable supply of donated blood plasma that can impact 
downstream production and therefore hamper the ability to promptly 
resolve a shortage.
    When the status of a Part B rebatable drug changes from currently 
in shortage to resolved during a calendar quarter and then changes to 
currently in shortage during one or more of the subsequent three 
calendar quarters, CMS would apply the shortage reduction as if there 
was a continuous shortage beginning with the quarter in which the drug 
has re-entered a shortage and move to the percent reduction applicable 
for the second four consecutive quarters. (In this scenario, once this 
drug enters its fifth quarter of shortage from the first quarter in 
which it was listed as currently in shortage, the applicable percent 
reduction would be 50 percent for the fifth through eighth calendar 
quarters for a Part B rebatable drug that is a plasma-derived product 
and 10 percent for a Part B rebatable drug that is not a plasma-derived 
product.) When the status of a Part B rebatable drug changes from 
currently in shortage to resolved and either remains in the status of 
resolved or is removed from the list for at least 4 full consecutive 
calendar quarters and then subsequently reemerges on a shortage list, 
CMS would treat the subsequent shortage as a new shortage and would 
apply the applicable percent reduction for the first 4 consecutive 
calendar quarters.
iii. Reducing the Rebate Amount for Part B Rebatable Biosimilar 
Biological Products When There Is a Severe Supply Chain Disruption
    In Sec.  427.402 of this proposed rule, CMS proposes to codify the 
policy established in section 50.12 of the revised Medicare Part B Drug 
Inflation Rebate Guidance for rebate reductions when CMS determines 
there is a severe supply chain disruption during a calendar quarter. As 
proposed in Sec.  427.402(b)(1), CMS would provide a time-limited 
standard reduction of 75 percent in the total rebate amount for a Part 
B rebatable biosimilar biological product when CMS determines there is 
a severe supply chain disruption during the calendar quarter, such as 
that caused by a natural disaster or other unique or unexpected event. 
To receive a rebate reduction in accordance with proposed Sec.  
427.402(b)(1), the manufacturer would have to submit to CMS a rebate 
reduction request \576\ that meets the eligibility requirements in 
proposed Sec.  427.402(c). A rebate reduction request should specify 
each NDC-11 and HCPCS code to which the request applies and if CMS 
grants a manufacturer's request for an NDC-11, CMS proposes in Sec.  
427.402(b)(3) that the rebate reduction would apply to all the NDC-11s 
under the relevant HCPCS code. CMS has proposed additional

[[Page 61953]]

submission requirements for rebate reduction requests in the 
information collection request under OMB control number: 0938-NEW (CMS-
10858).
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    \576\ The rebate reduction request forms are currently going 
through the Paperwork Reduction Act approval process under the 
document identifier CMS-10858. The proposed collection was published 
for a 30-day comment period in the June 3, 2024 Federal Register (89 
FR 47563).
---------------------------------------------------------------------------

    As proposed in Sec.  427.402(c)(4), CMS would grant a reduction in 
the rebate amount owed if a manufacturer of an eligible drug submits to 
CMS a request in writing demonstrating supply chain disruption has 
occurred during the calendar quarter, (2) the severe supply chain 
disruption directly affects the manufacturer itself, a supplier of an 
ingredient or packaging, a contract manufacturer,\577\ or a method of 
shipping or distribution that the manufacturer uses in a significant 
capacity to make or distribute the Part B rebatable biosimilar 
biological product, and (3) the severe supply chain disruption was 
caused by a natural disaster or other unique or unexpected event. As 
proposed in Sec.  427.402(c)(2), for a natural disaster or other unique 
or unexpected event occurring on or after August 2, 2024, that the 
manufacturer believes caused a severe supply chain disruption, the 
manufacturer must submit the rebate reduction request within 60 
calendar days from the first day that the natural disaster or other 
unique or unexpected event occurred or began in order for CMS to 
consider a rebate reduction.
---------------------------------------------------------------------------

    \577\ A contract manufacturer is a party that performs one or 
more manufacturing operations on behalf of a manufacturer(s) of 
active pharmaceutical ingredients (APIs), drug substances, in-
process materials, finished drug products, including biological 
products, and combination products. See ``Contract Manufacturing 
Arrangements for Drugs: Quality Agreements Guidance for Industry,'' 
November 2016: https://www.fda.gov/media/86193/download.
---------------------------------------------------------------------------

    CMS believes that severe supply chain disruptions generally take 
time to resolve and for purposes of this proposed rule, CMS proposes in 
Sec.  427.402(a) to codify the policy established in section 50.12 of 
the revised Medicare Part B Drug Inflation Rebate Guidance whereby a 
determination that a severe supply chain disruption has occurred would 
be deemed to disrupt the supply chain for the quarter in which the 
event occurred and the three subsequent calendar quarters. If the 
manufacturer makes a timely request that includes all the supporting 
documentation and CMS determines, based on its review of the reduction 
request and supporting documentation, that a reduction should be 
granted, CMS would reduce the total rebate amount owed by a 
manufacturer by 75 percent for the calendar quarter in which the event 
that caused the severe supply chain disruption occurred or began, or 
the following calendar quarter if the request is submitted less than 60 
calendar days before the end of a calendar quarter, and the three 
calendar quarters thereafter.
    CMS proposes in Sec.  427.402(c)(5) that if the manufacturer 
believes a severe supply chain disruption continues into a fifth 
consecutive calendar quarter after the start of the natural disaster or 
other unique or unexpected event, the manufacturer may request a 
reduction of the rebate amount for the fifth through eighth calendar 
quarters by submitting a rebate reduction extension request to CMS 
along with any new supporting documentation. CMS has proposed 
additional submission requirements for rebate reduction extension 
requests in the information collection request under OMB control 
number: 0938-NEW (CMS-10858). As proposed in Sec.  427.402(c)(5)(ii), a 
rebate reduction extension request and any new supporting documentation 
must be submitted at least 60 calendar days before the start of the 
fifth calendar quarter in order for CMS to consider a rebate reduction 
extension.
    If the manufacturer submits a complete and timely extension 
request, and CMS determines that the information submitted warrants an 
extension of the rebate reduction, the total rebate amount would be 
reduced by 75 percent for the fifth through eighth calendar quarters 
for that manufacturer's Part B rebatable biosimilar biological product, 
in accordance with proposed Sec.  427.402(b)(2).
    Consistent with the policy established in section 50.12 of the 
revised Medicare Part B Drug Inflation Rebate Guidance, a manufacturer 
may receive only one extension of the rebate reduction per Part B 
rebatable biosimilar biological product per CMS determination of a 
severe supply chain disruption, as proposed in Sec.  427.402(c)(5). 
Said differently, the severe supply chain disruption rebate reduction 
would be limited to 8 consecutive calendar quarters total per Part B 
rebatable biosimilar biological product per CMS determination of a 
severe supply chain disruption.
    As proposed in Sec.  427.402(b)(4)(i), if the manufacturer believes 
there are multiple events causing severe supply chain disruptions 
during the same four calendar quarters for the same Part B rebatable 
biosimilar biological product and submits multiple rebate reduction 
requests for the same product, CMS will grant no more than one rebate 
reduction for that Part B rebatable biosimilar biological product for 
those 4 consecutive calendar quarters. For example, if the manufacturer 
of a Part B rebatable biosimilar biological product is granted a severe 
supply chain disruption rebate reduction request for its product due to 
a natural disaster that occurred in January 2025 and then experiences a 
second severe supply chain disruption caused by a second, distinct 
natural disaster in July 2025, CMS would not grant the second rebate 
reduction request. That is, the manufacturer would receive the 75 
percent reduction for four calendar quarters for the severe supply 
chain disruption caused by the first natural disaster but would not 
receive a reduction for the second natural disaster. However, if the 
second natural disaster exacerbated the severe supply chain disruption 
caused by the first natural disaster, the manufacturer may reflect such 
circumstances in its request for an extension of the rebate reduction 
for the fifth through eighth calendar quarters.
    As proposed in Sec.  427.402(b)(4)(ii), if CMS grants a severe 
supply chain disruption rebate reduction request for a Part B rebatable 
biosimilar biological product, and the product appears as currently in 
shortage during one of the same four calendar quarter(s) as for which 
the severe supply chain disruption reduction was granted, CMS would 
apply the 75 percent reduction to the four calendar quarters for which 
the severe supply disruption request was granted and would not grant 
any additional reduction for the shortage status during those quarters. 
For any subsequent calendar quarters that the Part B rebatable 
biosimilar biological product appears as currently in shortage, CMS 
would reduce the rebate amount in accordance with the drug shortages 
reduction proposed in Sec.  427.401, starting with the highest 
reduction (that is, 75 percent for a plasma-derived product and 25 
percent for a Part B rebatable drug that is not a plasma-derived 
product). For example, if CMS grants a severe supply chain disruption 
rebate reduction request for a Part B rebatable biosimilar biological 
product that was submitted on February 15, 2024, and that product is 
currently in shortage from December 15, 2024 until May 15, 2025, CMS 
would apply a 75 percent reduction in the total rebate amount to all 
four calendar quarters in 2024, and then would apply the shortages 
reduction as proposed in Sec.  427.401, beginning with a reduction of 
25 percent for a Part B rebatable biosimilar biological product or 75 
percent in the case of a plasma-derived product that is a Part B 
rebatable biosimilar biological product for the first two calendar 
quarters of 2025.
    As proposed in Sec.  427.402(b)(4)(iii), if a Part B rebatable 
biosimilar biological

[[Page 61954]]

product that is currently in shortage experiences a severe supply chain 
disruption, the manufacturer may submit a request for a severe supply 
chain disruption rebate reduction. If CMS grants the rebate reduction 
request, the rebate amount would be reduced by 75 percent for the 
duration of 4 consecutive calendar quarters (that is, the calendar 
quarter in which the event that caused the severe supply chain 
disruption occurred and the three calendar quarters thereafter), and 
CMS would not grant any additional reduction under Sec.  427.401 for 
the currently in shortage status during those 4 calendar quarters. If 
CMS receives the request and all supporting documentation describing 
the natural disaster or other unique or unexpected event causing the 
severe supply chain disruption less than 60 days before the end of a 
calendar quarter, CMS would apply the 75 percent rebate reduction to 
the next calendar quarter and to the three subsequent calendar quarters 
thereafter. For example, if a Part B rebatable biosimilar biological 
product that is currently in shortage in the calendar quarter beginning 
October 1, 2024, is granted a severe supply chain disruption rebate 
reduction request as a result of a natural disaster that occurs on 
October 20, 2024, CMS would apply a 75 percent reduction in the rebate 
amount for the duration of the calendar quarter in which the natural 
disaster occurred and the three subsequent calendar quarters thereafter 
(that is, October 1, 2024, to September 30, 2025). In this same 
example, if the natural disaster instead occurs on November 20, 2024, 
CMS would apply the shortages reduction proposed in Sec.  427.401 for 
the calendar quarter beginning October 1, 2024, and ending on December 
31, 2024, and then a 75 percent reduction under the severe supply chain 
disruptions policy to the next calendar quarter and the three 
subsequent calendar quarters thereafter (that is, January 1, 2025 to 
December 31, 2025).
    In proposed Sec.  427.402(c)(6), CMS proposes to review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the calendar quarter that begins on October 1, 2024. CMS will 
begin accepting rebate reduction requests and rebate reduction 
extension requests upon completion of the Paperwork Reduction Act (PRA) 
process, including for severe supply chain disruptions caused by a 
natural disaster or other unique or unexpected event that occurred on 
or after January 1, 2023, prior to completion of the PRA process. If a 
manufacturer's rebate reduction request does not meet the criteria in 
proposed Sec.  427.402(c)(4) or if the rebate reduction request is 
incomplete or untimely based on the requirements in proposed Sec.  
427.402(c), CMS would deny the request. CMS also proposes that if a 
manufacturer's rebate reduction extension request does not meet the 
criteria in proposed Sec.  427.402(c)(5), is incomplete or untimely 
based on the requirements in proposed Sec.  427.402(c)(5), or if a 
reduction under proposed Sec.  427.402(b)(1) was not provided for such 
Part B rebatable biosimilar biological product, CMS would deny the 
rebate reduction extension request. As proposed in Sec.  
427.402(c)(6)(iii), CMS' decisions to deny a request would be final and 
not be subject to an appeals process.
    As proposed at Sec.  427.402(c)(7), CMS would keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. CMS proposes that information 
provided as part of a severe supply chain disruption rebate reduction 
request that the submitter indicates is a trade secret or confidential 
commercial or financial information would be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 and/or 4 of the Freedom of Information Act (FOIA). 
In addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. CMS 
would protect confidential and proprietary information as required by 
applicable law.
f. Reports of Rebate Amounts, Reconciliation, Suggestion of Error, and 
Payments (Sec. Sec.  427.500 Through 427.505)
    Section 1847A(i)(1)(A) of the Act requires the Secretary to provide 
a report to each manufacturer of a Part B rebatable drug with the 
following information not later than 6 months after the end of an 
applicable calendar quarter: (1) the total number of billing units for 
each Part B rebatable drug; (2) the amount, if any, of the excess 
average sales price increase (the amount by which the specified amount 
exceeds the inflation-adjusted payment amount as calculated in proposed 
Sec.  427.301(g)) for an applicable calendar quarter; and (3) the 
rebate amount for the Part B rebatable drug. In compliance with section 
1847A(i)(1)(B) of the Act, manufacturers of a Part B rebatable drug 
must provide a rebate for each Part B rebatable drug no later than 30 
calendar days after the receipt of the information provided by the 
Secretary in section 1847A(i)(1)(A) of the Act.
    To fulfill this statutory requirement, CMS is proposing to provide 
a Preliminary Rebate Report followed by a Rebate Report, as described 
in proposed Sec.  427.501(b) and (c), to all manufacturers of a Part B 
rebatable drug, even if the amount due is $0; all rebate amounts would 
be subject to reconciliation as proposed in Sec.  427.501(d). As 
proposed in Sec.  427.501(d)(4), CMS does not intend to send notice to 
manufacturers for drugs that are not considered rebatable pursuant to 
proposed Sec.  427.20.
    Additionally, to address the completeness and accuracy of the 
rebate amount, CMS proposes to conduct one regular reconciliation to 
determine whether the rebate amount should be adjusted due to updated 
claims and payment data used in the calculation of such rebate amount 
(specified in proposed Sec.  427.501(b)(1)) to occur 12 months after 
the issuance of the Rebate Report. The reporting process for 
reconciliation will be the same process described for the original 
Rebate Report, with payment due for any outstanding rebate amount 30 
days after receipt of a report with a reconciled rebate amount. In 
addition to regular reconciliation, CMS proposes a process to conduct 
reconciliation of the rebate amount as needed to correct agency error 
and when CMS determines that the information used by CMS to calculate a 
rebate amount was inaccurate due to manufacturer misreporting.
    CMS believes conducting a reconciliation for the Part B Rebate 
Program is important in ensuring the accuracy of the rebate amount and 
for programmatic alignment with the Part D Rebate Program.
i. Definitions
    In proposed Sec.  427.500, CMS proposes the following term 
applicable to proposed subpart F (Sec. Sec.  427.500 through 427.505):
     ``Date of receipt''.
    For example, if CMS issues a Rebate Report through the method and 
process described in Sec.  427.504 on June 30, 2026, then July 1, 2026, 
will be the date of receipt and day one of the 30-calendar-day payment 
period.
ii. Reports of Rebate Amounts and Suggestion of Error
    Consistent with the process specified in section 60 of the revised 
Medicare Part B Drug Inflation Rebate Guidance involving preliminary 
and final reports,

[[Page 61955]]

CMS proposes to codify a multi-step process to provide a manufacturer 
as defined in Sec.  427.20 with the rebate information specified in 
section 1847A(i)(1)(A) of the Act. CMS considered the following factors 
in determining a method and process for providing the rebate 
information: meeting statutorily provided deadlines in section 1847A(i) 
of the Act (for example, dates by which to provide the rebate amount to 
the manufacturer); the operational time to acquire the relevant 
information specified in the proposed part 427; the operational time to 
calculate the rebate amount specified in subpart D of the proposed part 
427; clarity of the information provided as well as potential burden on 
manufacturers; and how to ensure accuracy of the rebate amount.
    CMS proposes at proposed Sec.  427.501 the use of an initial 
Preliminary Rebate Report and a subsequent Rebate Report, with an 
opportunity for manufacturers to identify certain mathematical errors 
(see proposed Sec.  427.503 and discussed in further detail later in 
this section) and one regular reconciliation of the rebate amount to 
account for data revisions 12 months after the Rebate Report is 
provided. CMS proposes at proposed Sec.  427.501(d)(1), to conduct a 
reconciliation 12 months after issuance of the subsequent Rebate Report 
specified in Sec.  427.501(c) to include any restatements that have 
occurred in the drug pricing data and claims billing data reported to 
CMS and used in the rebate calculation specified in subpart D of the 
part.
    CMS proposes in proposed Sec.  427.501 that the multi-step 
reporting process for providing rebate information to a manufacturer 
would include: (1) an initial report, which CMS proposes to entitle the 
``Preliminary Rebate Report'' in proposed Sec.  427.501(b) and (2) a 
second report, which CMS proposes to entitle the ``Rebate Report'' in 
proposed Sec.  427.501(c). The Rebate Report would serve as the invoice 
for the rebate amount due, if any, for each NDC that has been assigned 
to a billing and payment code for a product determined to be a Part B 
rebatable drug for the applicable calendar quarter, as specified in 
proposed Sec.  427.101. Manufacturers of Part B rebatable drugs would 
receive a Rebate Report for their rebatable drugs even if the amount 
due is $0. CMS proposes at proposed Sec.  427.501(d)(1) a regular 
reconciliation of the rebate amount to occur 12 months after issuance 
of the subsequent Rebate Report specified in proposed Sec.  427.501(c).
    As the first step in the reporting process, as proposed in proposed 
Sec.  427.501(b) and consistent with section 60 of the revised Medicare 
Part B Drug Inflation Rebate Guidance, CMS would provide the 
manufacturer of a Part B rebatable drug with the preliminary rebate 
amount through a Preliminary Rebate Report that is provided to each 
manufacturer of a Part B rebatable drug at least 1 month prior to the 
issuance of the Rebate Report specified in proposed Sec.  427.501(c) 
for an applicable calendar quarter (that is, at least 5 months after 
the end of the applicable calendar quarter). To facilitate manufacturer 
understanding of the Preliminary Rebate Report, CMS is proposing in 
proposed Sec.  427.501(b)(1) that the Preliminary Rebate Report would 
include the following information: the NDC(s) and billing and payment 
code for the Part B rebatable drug as specified in proposed Sec.  
427.20, the total number of billing units as specified in proposed 
Sec.  427.303; the payment amount in the payment amount benchmark 
quarter as specified in proposed Sec.  427.302(d); the applicable 
calendar quarter specified amount as specified in proposed Sec.  
427.302(b); the applicable benchmark period and rebate period CPI-Us as 
specified in proposed Sec.  427.302(e) and (f); the inflation-adjusted 
payment amount as specified in proposed Sec.  427.302(g); the amount, 
if any, by which the specified amount as described in proposed Sec.  
427.302(b) exceeds the inflation-adjusted payment amount as described 
in proposed Sec.  427.302(g) for the Part B rebatable drug for the 
applicable calendar quarter as determined under proposed Sec.  427.302; 
any applied reduction as described in proposed Sec. Sec.  427.401 and 
427.402; and the rebate amount due as specified in proposed Sec.  
427.301(a).
    When determining what information should be included on rebate 
reports, CMS considered the statutory requirements outlined in section 
1847A(i)(1)(A) of the Act to determine which data elements are 
necessary to review the Preliminary Rebate Report for error (described 
later in this section) and to protect proprietary information. In 
response to comments on the initial Medicare Part B Drug Inflation 
Rebate Guidance, CMS has proposed to disclose data elements as 
suggested by interested parties that are not enumerated in the statute, 
such as the applicable benchmark period and rebate period CPI-Us. CMS 
acknowledges requests from interested parties to provide additional 
data elements such as claims-level data at the NDC-11 level, that are 
not included in this proposal. CMS considered these requests in 
development of this proposed rule but does not believe it necessary to 
provide further information to fulfill its statutory obligation and 
believes that the potential benefit to manufacturers of additional data 
are outweighed by the administrative burdens additional reporting would 
impose to the agency. The elements listed above provide sufficient 
information for a manufacturer review the Preliminary Rebate Report for 
mathematical error, while protecting proprietary information, and these 
elements are operationally feasible for CMS to provide. CMS believes 
the elements listed in proposed Sec.  427.501(b)(1) satisfy these 
considerations.
    By structuring the Rebate Report process to include a Preliminary 
Rebate Report before the Rebate Report, CMS is able to provide 
manufacturers with an opportunity to review the Preliminary Rebate 
Report before the rebate amount is invoiced via the Rebate Report. 
While CMS is not required to provide a preliminary report, CMS seeks to 
facilitate manufacturer understanding of the report and believes it 
would be beneficial for manufacturers to review the report for 
mathematical errors that can be corrected before invoicing via the 
Rebate Report. Further, a Preliminary Rebate Report would provide 
additional notice to manufacturers regarding whether they may owe a 
rebate amount.
    In proposed Sec.  427.503, CMS proposes a process in which a 
manufacturer may suggest to CMS that the manufacturer believes the 
Preliminary Rebate Report includes a mathematical error within 10 
calendar days after the date of receipt of the Preliminary Rebate 
Report. For example, if the Preliminary Rebate Report is provided on 
May 31, 2026, then June 1, 2026, would be the date of receipt and, 
therefore, day one of the 10-calendar-day period to submit a Suggestion 
of Error. In this example, Suggestions of Error would be due by 11:59 
p.m. PT on June 10, 2026. CMS reviewed comments on the 10-day 
Suggestion of Error period submitted in response to the initial 
Medicare Part B Drug Inflation Rebate Guidance, many of which suggested 
that manufacturers receive at least 30 days to review the Preliminary 
Rebate Report. CMS considered a 10-day, 15-day, and 30-day Suggestion 
of Error period and believes a 10-calendar-day period (see proposed 
Sec.  427.503(c)) is sufficient after considering the volume of the 
data to be provided to manufacturers, the narrow scope of items that 
may be identified as a Suggestion of Error, and the operational time 
necessary for CMS to provide a Rebate Report within 6 months of the end 
of the applicable calendar quarter as required under

[[Page 61956]]

section 1847A(i)(1)(A) of the Act. However, CMS proposes in proposed 
Sec.  427.502(c)(1)(ii) to expand the Suggestion of Error period to 30 
calendar days for the Preliminary Rebate Report for calendar year 2023 
and calendar year 2024. This extended Suggestion of Error period will 
provide additional time and flexibility during the first invoicing 
cycle of the Part B Rebate Program.
    Section 1847A(i)(8) of the Act precludes administrative or judicial 
review on the determination of units, whether a drug is a Part B 
rebatable drug, and the calculation of the rebate amount (see proposed 
Sec.  427.503(a)(1)). Therefore, the Suggestion of Error process will 
be limited to mathematical steps involved in determining the rebate 
amount and the elements precluded from administrative or judicial 
review will not be considered in-scope for the Suggestion of Error 
process. Additionally, CMS is not providing an administrative dispute 
resolution process. CMS intends to consider all in-scope submissions 
under the Suggestion of Error process as specified in proposed Sec.  
427.503(a) (for example, suggestions regarding a mathematical error). 
CMS does not intend to review suggestions of error that are out-of-
scope or submissions for a rebatable drug with an amount due of $0.
    As the second step in the reporting process, CMS proposes in 
proposed Sec.  427.501(c) to provide the rebate amount to the 
manufacturer through the Rebate Report no later than 6 months after the 
end of the applicable calendar quarter. As proposed in Sec.  
427.501(c)(1), the Rebate Report would include the same data elements 
as the Preliminary Rebate Report (specified in Sec.  427.501(b)(1)) and 
include any recalculations based on CMS acceptance of a manufacturer's 
Suggestion of Error from proposed Sec.  427.503, or any CMS-determined 
recalculations from proposed Sec.  427.501(d)(2), if applicable. 
Manufacturers must pay the rebate amount within 30 calendar days from 
the date of receipt of the Rebate Report (see proposed Sec.  
427.505(a)). For example, if the Rebate Report is provided on June 30, 
2026, then July 1, 2026, would be the date of receipt and therefore day 
one of the 30-calendar-day payment period; payment would be due no 
later than 11:59 p.m. PT on July 30, 2026.
    In proposed Sec. Sec.  427.504 and 427.505, CMS proposes that it 
will establish a standard method and process to issue Rebate Reports 
and accept manufacturer rebate payments. This method and process may 
include an online portal administered by a CMS contractor which would 
provide manufacturers with access to their Rebate Reports, submit 
Suggestions of Error, and pay a rebate amount due. CMS intends to 
provide technical instructions separate from this rulemaking to 
manufacturers of Part B rebatable drugs regarding how to access Rebate 
Reports and how to receive notifications alerting the manufacturer when 
information is available. CMS also intends to issue reminder notices to 
manufacturers regarding the due date of rebate payments. In proposed 
Sec.  427.504(a), CMS notes that the manufacturer that may access 
Rebate Reports and make applicable rebate amount payments is the 
manufacturer responsible for paying a rebate and, as stated above, CMS 
proposes to identify the manufacturer that is responsible for paying a 
rebate using the same approach used for reporting ASP and Medicaid Drug 
Rebate Program data.
iii. Reconciliation of a Rebate Amount
    As discussed in section 60 of the revised Medicare Part B Drug 
Inflation Rebate Guidance, CMS considered options for establishing a 
standardized method and process at regular intervals to determinate any 
appropriate adjustments to the rebate amount for a Part B rebatable 
drug for an applicable calendar quarter to account for revised 
information as well as options for recalculation based on CMS 
identifying an agency error or determining manufacturer data was 
misreported. While the provisions in 1847A(i) of the Act do not 
expressly provide for reconciliation in the Medicare Part B Drug 
Inflation Rebate Program, CMS has determined that a process for 
reconciling the rebate amount for updated information is necessary and 
appropriate to promote the accuracy of the rebate amount for each drug 
for each applicable calendar quarter. CMS is proposing policies for 
reconciliation, including with respect to enforcement of payment of any 
reconciled rebate amount, consistent with both the statutory framework 
for the Part B Inflation Rebate Program and the express authority in 
sections 1102 and 1871 of the Act to adopt regulations for the proper 
administration of the Medicare Prescription Drug Inflation Rebate 
Program.
    As proposed at Sec.  427.501(d), CMS believes that it is necessary 
and appropriate for CMS to recalculate the rebate amount for an 
applicable calendar quarter at a regular interval to include updated 
information about key data elements included in the calculation of the 
rebate amount. These data elements as set forth in proposed Sec.  
427.501(d)(1)(i) include: total units; the payment amount in the 
payment amount quarter; and any applied reductions as described in 
proposed Sec. Sec.  427.401 and 427.402. Updating these calculation 
inputs at a regular reconciliation interval will result in a rebate 
amount that more fully reflects the majority of shifts in the 
underlying data following additional time for claims run-out, which 
refers to the maturation of claims in the claims processing system. 
Because the information accessed represents the claims' status in the 
claims processing system at that moment in time, additional claims run-
out may yield different information, either because more claims with 
dates of service during the applicable calendar quarter were finalized 
and added to the claims processing system or because the status of the 
existing claims changed. CMS refers to ``X months of run-out'' as the 
period between the end of the applicable calendar quarter and the date 
when CMS accesses information about the claims; for example, ``3 months 
of run-out'' means that claims data are accessed for claims with 
service dates during an applicable calendar quarter 3 months after the 
end of such applicable calendar quarter. Conducting a reconciliation of 
the rebate amount with additional claims run-out will improve the 
accuracy of the rebate amount. Additionally, reconciliation of payment 
amounts is consistent with the approach to the calculation of payment 
amounts in other CMS programs (such as the Coverage Gap Discount 
Program) that provide for a reconciliation period.
    CMS notes that the reconciliation of a rebate amount, whether the 
regular reconciliation proposed at Sec.  427.501(d)(1) or a 
discretionary reconciliation proposed at Sec.  427.501(d)(2) discussed 
further below, will not create a separately payable and distinct rebate 
amount. Rather, reconciliation updates the prior rebate amount owed to 
CMS, if any, by a manufacturer of a Part B rebatable drug so that the 
rebate amount ultimately reflects a more precise calculation of the 
rebate amount, as required by section 1847A(i) of the Act, to account 
for shifts in the underlying data following additional time for claims 
run-out after the Rebate Report is issued as well as subsequently 
identified data integrity issues. Moreover, because the reconciled 
rebate amount is an adjustment to the prior rebate amount, CMS proposes 
at Sec.  427.501(d)(1)(i)(F) for the report of a reconciled rebate 
amount to also identify the difference between the rebate amount due as 
specified on

[[Page 61957]]

the Rebate Report set forth in Sec.  427.501(c) and the reconciled 
rebate amount. CMS would only collect the net rebate amount due, if 
any, upon reconciliation, so as to prevent any duplicate payments. CMS 
also proposes to refund any overpayment made by a manufacturer, as 
determined during reconciliation, as discussed in proposed Sec.  
427.505(c).
    Additionally, as CMS suggested in section 60 of the revised 
Medicare Part B Drug Inflation Rebate Guidance, CMS considered multiple 
options for establishing a standardized method and process to occur at 
regular intervals to determine any appropriate adjustment to the rebate 
amount for a Part B rebatable drug for an applicable calendar quarter 
to account for revised information prior to adopting the proposal 
described here with for reconciliation of the Part B inflation rebate 
amount at 12 months. CMS considerations included the length of time 
needed to capture relevant changes to data inputs for recalculation, 
whether the timing should align with the reconciliation of Part D 
rebate amounts, and manufacturer burden. Specifically, CMS considered 
the average time span needed to ensure submission of the majority of 
revisions from claims run-out periods for Part B,\578\ and how such 
unit revisions compare to the Part D plan unit revisions specified in 
section 1860D-14B(b)(6) of the Act. CMS also considered the average 
time span needed to ensure the majority of Part B claims submitted 
would already be adjudicated and determined to be final action claims, 
CMS' policies related to the frequency of ASP restatements, the 
reporting timeline for refunds on discarded drug units, and reporting 
timelines for 340B claims and claims for beneficiaries dually eligible 
for Medicare and Medicaid. Without a reconciliation process, the Part B 
rebate amount would include units of discarded drugs on which 
manufacturers potentially owe a refund, thereby potentially requiring 
manufacturers to pay both a discarded drug refund and a rebate amount 
on certain units of a Part B rebatable drug due to the timing of 
revisions to discarded drug units discussed in further detail in 
section II.2.c.iv of this proposed rule.
---------------------------------------------------------------------------

    \578\ See the CCW White Paper: Medicare Claims Maturity, https://www2.ccwdata.org/documents/10280/19002256/medicare-claims-maturity.pdf.
---------------------------------------------------------------------------

    CMS believes a longer period of claims run-out (at least 12 months 
of run-out time in the proposed approach) would ensure that CMS more 
fully accounts for capturing of revised units. CMS considered that 
penalties associated with failure to submit timely and accurate ASP 
data (specified in Sec.  414.806(b)) encourage timely submission of ASP 
data with the submission timeline in accordance with Sec.  
414.804(a)(5) when considering the completeness of 12 months of claims 
run-out. While CMS considered a longer period until a revision is 
completed, such as the 36-month period provided by the Medicaid Drug 
Rebate Program (MDRP) for AMP restatements in Sec.  447.510(d)(3), CMS 
believes that a 12-month reconciliation period is appropriate for the 
Part B rebate program because of requirements to submit timely and 
accurate ASP data (specified in Sec.  414.806(b)), and it provides 
sufficient time to capture the majority of updates to the data 
specified in proposed Sec.  427.301 while closing out (except for the 
proposed circumstances in proposed Sec.  427.501(d)(2) regarding CMS' 
identification of mathematical errors or manufacturer misreporting) the 
calculation of the rebate amount for a Part B rebatable drug for an 
applicable calendar quarter within a reasonable time period after the 
Rebate Report is issued. While CMS proposes a 12- and 36-month 
reconciliation period in the Medicare Part D Drug Inflation Rebate 
Program, due largely to the 36-month restatement period provided for 
MDRP AMP restatements (specified in Sec.  447.510(d)(3)), CMS does not 
believe a second or longer restatement process is needed for Part B 
rebatable drugs because, as described previously, the ASP and claims 
run-out periods correspond with sufficient claims run-out and ASP 
restatement timing for Part B (particularly when considering penalties 
associated with failure to submit timely and accurate ASP data 
(specified in Sec.  414.806(b)).
    Further, in considering whether consistency across CMS programs is 
critical, CMS believes that consideration for the completeness of data, 
as discussed above, should be prioritized over consistency across 
program timelines. That is, when examining timelines from other CMS 
programs that collect data contributing to calculation of the rebate 
amount, CMS prioritized that, to the extent feasible, completeness and 
accuracy of the data elements contributing to the calculation of the 
rebate amount rather than prioritizing consistency among the data 
collection and reconciliation timelines themselves. Finally, CMS 
believes that a restatement of each data element included in proposed 
Sec.  427.501(d) to reconcile the rebate amount provided in the Rebate 
Report in proposed Sec.  427.501(c) and drugs acquired through the 340B 
Program as proposed in Sec.  427.303(b)(1)(i) is appropriate to capture 
an updated rebate amount and is in line with other CMS programs that 
provide for a reconciliation period, including ASP restatements (see 
Sec.  414.806). While some data points may not change, CMS would review 
the data to determine if there are any updates in the data and use the 
updated data in the reconciliation to provide a reconciled rebate 
amount to the manufacturer.
    Based on these considerations, similar to the multi-step process 
for the Rebate Report proposed in Sec.  427.501(b) and (c), in summary, 
CMS proposes a multi-step process to provide each manufacturer of a 
Part B rebatable drug with a reconciled rebate amount on a regular 
basis. At the 12 month reconciliation, CMS proposes a reconciliation 
process will include: (1) a preliminary reconciliation of the rebate 
amount, which CMS would provide to manufacturers of Part B rebatable 
drugs as proposed in Sec.  427.501(d)(1) and (2) a reconciled rebate 
amount, which CMS would provide to manufacturers of a Part B rebatable 
drug as proposed in Sec.  427.501(d)(1)(ii). CMS also proposes to apply 
the Suggestion of Error process specified in proposed Sec.  427.503 to 
the preliminary reconciliation.
    In detail, first, as specified in proposed Sec.  427.501(d)(1) and 
similar to the Preliminary Rebate Report process proposed in Sec.  
427.501(b), CMS proposes to provide the manufacturer with information 
about the preliminary reconciliation of the rebate amount at least 1 
month prior to the issuance of the reconciled rebate amount (see 
proposed Sec.  427.501(d)(1)) to each manufacturer of a Part B 
rebatable drug for an applicable calendar quarter. CMS proposes in 
Sec.  427.501(d)(1) that the preliminary reconciliation would include, 
at a minimum, the same information outlined for the Rebate Report and 
the following updated information, if applicable: updated total number 
of rebatable units as specified in proposed Sec.  427.303; the payment 
amount in the payment amount benchmark quarter, if any inputs are 
restated within the reconciliation run-out period, as specified in 
proposed Sec.  427.302(d); applicable calendar quarter specified amount 
(defined in Sec.  427.302(b)), if any inputs are restated within the 
reconciliation run-out period; the excess amount by which the specified 
amount exceeds the inflation-adjusted payment amount, if any inputs are 
restated within the reconciliation run-out period, as specified in 
Sec.  427.302; the reconciled total rebate amount calculated in 
accordance with

[[Page 61958]]

Sec.  427.301; and the difference between the total rebate amount due 
as specified on the Rebate Report set forth in proposed Sec.  
427.501(d)(1)(i)).
    In proposed Sec.  427.503(a), similar to the Suggestion of Error 
process proposed for the Preliminary Rebate Report in proposed Sec.  
427.501(a), within 10 calendar days after date of receipt of the 
information about the preliminary reconciliation of the rebate amount, 
CMS proposes that a manufacturer may suggest to CMS that the 
manufacturer believes the preliminary reconciled rebate amount contains 
a mathematical error. CMS believes a 10-calendar-day period is 
sufficient due to the same considerations of data volume, the narrow 
set of reviewable items, and the operational time period necessary for 
CMS to complete the process to publish the reconciled rebate amount. 
The preclusions in section 1847A(i)(8) of the Act on administrative and 
judicial review apply to the reconciliation process.
    Second, in detail, CMS proposes in Sec.  427.501(d) to provide the 
reconciled rebate amount to the manufacturer 12 months after the Rebate 
Report was issued for an applicable calendar quarter. As proposed in 
Sec.  427.501(d)(1)(i), the information in the report for the 
reconciled rebate amount would include the same data elements as 
provided in the information provided to the manufacturer of a Part B 
rebatable drug regarding the preliminary reconciliation of a rebate 
amount (specified in proposed Sec.  427.501(d)(1)) and include any 
recalculations based on CMS acceptance of a manufacturer's Suggestion 
of Error from proposed Sec.  427.503. A reconciliation of the rebate 
amount may result in an increase, decrease, or no change to the rebate 
amount, compared to the Rebate Report for an applicable calendar 
quarter (see proposed Sec.  427.501(d)(3)).
    Additionally, as CMS suggested in section 60 of the revised 
Medicare Part B Drug Inflation Rebate Guidance, CMS considered options 
for establishing circumstances where a recalculation of the rebate 
amount may be appropriate for an applicable calendar quarter after 
issuing the Rebate Report and/or a reconciled rebate amount based on 
CMS identifying an error or CMS determining that the information used 
by CMS to calculate a rebate amount was inaccurate due to false 
reporting or similar fault by the manufacturer (for example, 
manufacturer pricing or product data under section 1927(b)(3) of the 
Act). CMS also considered potential time limits for revisions and 
whether certain circumstances, such as instances of false reporting, 
should be exempt from such time limits.
    Based on these considerations, CMS believes that, to capture an 
accurate rebate amount and consistent with reconciliations of pricing 
data otherwise submitted to CMS that provide for revisions when 
necessary due to errors, including mathematical errors, and 
manufacturer misreporting, certain circumstances may merit a 
recalculation of the rebate amount separate from the 12-month 
reconciliation proposed in Sec.  427.501(d)(1). Specifically, CMS 
proposes in Sec.  427.501(d)(2) that CMS may recalculate a rebate 
amount, when CMS identifies either: (1) an agency error such as a 
mathematical error or an error in the information specified in a Rebate 
Report as described in proposed Sec.  427.501(c) or report of a 
reconciled rebate amount as described in proposed Sec.  427.501(d)(1) 
including reporting system or coding errors, or (2) CMS determining 
that information used to calculate the rebate amount was inaccurate due 
to manufacturer misreporting. Examples of agency errors could include 
CMS incorrectly assigning a billing or payment code or incorrectly 
calculating the billing units per package, or the mechanism that 
provides a Rebate Report to the manufacturer or the Rebate Report 
incorrectly displays a rebate amount. Examples of manufacturer 
misreporting could include instances in which the manufacturer has made 
a correction to previously submitted data as well as instances in which 
the individual or entity reporting data or information to CMS on behalf 
of the manufacturer knows or should know is inaccurate or misleading 
(for example, inaccurate ASP data as specified in Sec.  414.806). This 
does not include standard restatements to ASP or other data outside of 
the standard process of issuing the reconciled rebate amount. In 
addition to manufacturer-initiated corrections, CMS may become aware of 
manufacturer misreporting based on fact finding and conclusions of 
enforcement authorities, for example, the HHS Office of Inspector 
General, the CMS Center for Program Integrity, or the Department of 
Justice. In a situation where an error or manufacturer misreporting is 
identified prior to the 12-month reconciliation of the rebate amount 
proposed in Sec.  427.501(d)(1), CMS may choose to include a correction 
based on the circumstances proposed in Sec.  427.501(d)(2) concurrently 
with the 12-month reconciliation. When CMS reconciles data due to an 
instance of agency error or manufacturer misreporting, CMS proposes 
that the agency would limit the scope of the reconciliation to the 
specific information that is the basis for the reconciliation and not 
update or otherwise revise any other data elements in the Rebate Report 
(specified in proposed Sec.  427.501(c)) or the report of the 
reconciled rebate amount (specified in proposed Sec.  427.501(d)(1)) 
unless the correction directly impacts additional data fields. For 
example, CMS believes corrections to an ASP quarterly file may not 
change the specified amount for the applicable calendar quarter.
    In addition, because reconciling a rebate amount imposes 
substantial administrative burden on CMS to reprocess the rebate 
amount, retest the reporting system, and reissue a rebate report, CMS 
proposes in Sec.  427.501(d)(2) that it may exercise discretion not to 
initiate recalculate the rebate amount in these situations which are 
outside of the regular reconciliation process proposed in Sec.  
427.501(d)(1).
    CMS proposes that for a recalculation due to agency error, the 
error must be identified within 3 years of the date of receipt of the 
reconciled rebate amount for the applicable calendar quarter (see 
proposed Sec.  427.501(d)(2)(i)). Identification means that CMS has 
knowledge of the error; CMS does not need to have completed its 
revision of the impacted data or determined if the revision impacts the 
rebate amount within the 3-year period. CMS would timely complete these 
steps and determine, when the reconciliation does impact the rebate 
amount, whether the reconciliation must be included in a discretionary 
revision or within an upcoming reconciled rebate amount for an 
applicable calendar quarter. CMS believes that a 3-year period dating 
from the issuance of a reconciliation aligns broadly with the timeframe 
in which most manufacturers provide Part B ASP restatements.
    CMS proposes in Sec.  427.501(d)(2)(ii) that for a circumstance in 
which a manufacturer misreports data, CMS is not bound by the 3-year 
time limit for revision of the rebate amount. For example, if a 
determination is made that a manufacturer misreported ASP data, then 
CMS may recalculate the rebate amount owed for a Part B rebatable drug. 
CMS requests comments on the proposals related to manufacturer 
misreporting.
    CMS proposes in Sec.  427.505(a)(1) that upon receipt of the 
reconciled rebate amount manufacturers must pay the rebate within 30 
calendar days from the date of receipt of the reconciled rebate amount. 
A 30-day payment deadline aligns with the payment period set forth

[[Page 61959]]

in statute at section 1847A(i)(1)(B) of the Act. As specified in 
proposed Sec.  427.504, CMS would use the same method and process for 
issuing Rebate Reports and submission of payments for reports with a 
reconciled rebate amount. CMS would provide notice to manufacturers 
when a report with a reconciled rebate amount, which will include the 
information proposed in Sec.  427.501(d), is available for the 
manufacturer's Part B rebatable drugs. CMS proposes in Sec.  427.505(c) 
that if a refund is owed to a manufacturer based on a reconciled rebate 
amount, CMS would initiate the process to issue such a refund within 60 
days from the date of receipt of the reconciled rebate amount (proposed 
in Sec.  427.501(d)). CMS will issue additional information on this 
method and process through additional program communications.
iv. Rebate Report for Applicable Calendar Quarters in CY 2023 and CY 
2024
    Section 1847A(i)(1)(C) of the Act provides the CMS with the option 
to delay sending the information required by section 1847A(i)(1)(A) for 
applicable calendar quarters in calendar years 2023 and 2024 until not 
later than September 30, 2025. In Sec.  427.502, consistent with 
section 60.2 of the revised Medicare Part B Drug Inflation Rebate 
Guidance, CMS proposes consolidating the Preliminary Rebate Reports and 
Rebate Reports for CYs 2023 and 2024 into two reports: one report for 
the four applicable calendar quarters in CY 2023 and one report for the 
four applicable calendar quarters in CY 2024. This approach allows for 
12 months of claims run-out for each applicable calendar quarter in CY 
2023 and at least 3 months of claims run-out for each applicable 
calendar quarter in CY 2024. For these combined reports, CMS proposes 
in Sec.  427.502 to provide an extended 30 calendar day Suggestion of 
Error period for the Preliminary Rebate Report.
    CMS intends to send a reconciled rebate amount for the four 
applicable calendar quarters in CY 2024 9 months after the Rebate 
Report, to allow for 12 months of claims run-out for each applicable 
calendar quarter; CMS does not intend to conduct reconciliation for the 
four applicable calendar quarters in CY 2023 since the Rebate Report 
would already reflect 12 months of claims run-out (see proposed Sec.  
427.502(b)). This approach aligns claims and payment data run-out with 
the run-out used during a regular reconciliation cycle. The Suggestion 
of Error period for the report containing the reconciled rebate amount 
for applicable calendar quarters in CY 2024 would be 10 calendar days.
    This approach also minimizes the number of reports issued to 
manufacturers as a result of the delay in reporting and simplifies 
payment procedures, thereby minimizing manufacturer burden. Starting 
with the first applicable calendar quarter of CY 2025, reporting would 
begin a standard cadence and follow the procedures otherwise proposed 
in subpart F of this part 427.
    CMS proposes that manufacturers that do not pay the Medicare Part B 
inflation rebate amount owed for a Part B rebatable drug within 30 
calendar days of receiving a Rebate Report, including reports 
containing a reconciled rebate amount, may be subject to a civil money 
penalty of 125 percent of the rebate amount, as applicable, for such 
drug for the applicable calendar quarter. The civil money penalty is in 
addition to the rebate amount.
g. Enforcement of Manufacturer Payment of Rebate Amounts (Sec.  
427.600)
    Section 1847A(i)(7) of the Act gives CMS the authority to impose a 
civil money penalty equal to at least 125 percent of the rebate amount 
for each drug for each applicable calendar quarter on a manufacturer 
that fails to pay the rebate amount for each rebatable Part B drug. 
Subpart G would implement this section of the Act and establish the 
procedures for determining and collecting a civil money penalty.
    In accordance with section 1847A(i)(1)(B) and proposed Sec.  
427.505(a), manufacturers must provide to CMS a rebate amount owed 
within 30 calendar days of receipt of the Rebate Report containing the 
rebate amount due. As described in proposed Sec.  427.600(a), CMS is 
proposing that it may impose a civil money penalty when a manufacturer 
fails to pay the rebate amount in full by the payment deadlines 
proposed in Sec.  427.505(a). This means a manufacturer may be subject 
to a civil money penalty if the manufacturer fails to pay the full the 
rebate amount as invoiced in the Rebate Report or any reconciled rebate 
amount that is greater than the amount invoiced in the Rebate Report. 
More specifically, a manufacturer could be subject to a civil money 
penalty when a manufacturer fails to pay a rebate amount due by any 
payment deadline proposed in Sec.  427.505(a)(1) and (2) for: (1) a 
Rebate Report specified in proposed Sec.  427.501(c); (2) a reconciled 
rebate amount greater than the rebate amount reflected in the Rebate 
Report specified in proposed Sec.  427.501(d); or (3) a Rebate Report 
and a reconciled rebate amount greater than the amount reflected in the 
Rebate Report, if applicable, for the applicable calendar quarters in 
calendar years 2023 and 2024 as specified in proposed Sec.  427.502. As 
discussed earlier in subpart e.iii, CMS notes that the reconciled 
rebate amount is not a separately payable and distinct rebate amount. 
Rather, the reconciled rebate amount is an update to the rebate amount 
owed to CMS by a manufacturer of a Part B rebatable drug.
    Civil money penalties are a point-in-time penalty tied to the 
rebate amount due at the applicable payment deadline, which occurs 30 
days after the date of receipt of a Rebate Report. In proposed Sec.  
427.600(b), CMS proposes to establish the methodology for determining 
the amount of the civil money penalty as equal to 125 percent of the 
rebate amount for such drug for such applicable calendar quarter, and 
that this penalty would be due in addition to the rebate amount due. 
That is, a manufacturer would be responsible for paying the full rebate 
amount due in addition to any civil money penalty imposed because of 
late payment. While CMS has the statutory authority to impose a civil 
money penalty greater than 125 percent of the rebate amount in the Part 
B Rebate Program under section 1847(A)(i)(7), CMS is proposing a 
penalty amount of 125 percent of the rebate amount to align with the 
penalty amount in the Part D Inflation Rebate Program. CMS is proposing 
this approach to civil money penalties based on section 1847A(i)(1)(B) 
of the Act, which establishes a requirement by the manufacturer to 
provide CMS with a rebate not later than 30 days after receipt from CMS 
of the report on the amount of the excess average sales price increase. 
CMS believes that the ability to assess civil money penalties is 
necessary in all circumstances where a payment is due for a rebate 
amount to CMS to ensure compliance with the rebate program's 
requirements. The civil money penalty would be calculated based on the 
outstanding rebate amount due at the payment deadline, which is defined 
in proposed Sec.  427.505(a) as 30 calendar days after the date of 
receipt of a Rebate Report containing any rebate amount due; once a 
civil money penalty is assessed due to a late payment, the penalty 
would remain in effect even if the manufacturer pays the outstanding 
amount as the penalty is initiated due to a missed payment deadline. 
Because the payment deadline is clearly defined in section 
1847A(i)(1)(B) of the Act, any late payments of a rebate amount due, 
including late payment of any reconciled rebate amounts greater than 
the amount reflected in the Rebate

[[Page 61960]]

Report, would be considered a violation potentially subject to a civil 
money penalty. Any civil money penalty would be assessed before the 
next reconciliation process.
    CMS is proposing in Sec.  427.600(b)(2) that civil money penalties 
may be calculated at several points in time associated with missing a 
payment deadline for the rebate amount due reflected in the Rebate 
Report or missing a payment deadline associated with any rebate amount 
determined after a reconciliation to be greater than the amount 
invoiced in the Rebate Report. As these separate events can result in 
distinct assessments of civil money penalties, this means that CMS 
would not modify a civil money penalty from a prior missed payment 
deadline based on changes to the rebate amount due following 
reconciliation, including scenarios where the rebate amount is reduced 
following reconciliation. However, in the event that the rebate amount 
due on a Rebate Report was not paid and a civil money penalty was 
issued for violation of the payment deadline, CMS would not issue a 
second civil money penalty on a reconciled rebate amount if 
reconciliation decreased the rebate amount stated on the Rebate Report. 
CMS believes that enforcing this requirement after each payment 
deadline, regardless of what rebate amount a manufacturer may or may 
not owe at a future payment deadline, is necessary to maintain the 
integrity of the program and consistency of the implementation of the 
program. Further, CMS is proposing this approach to ensure an 
enforcement approach that is operationally feasible and applied 
consistently in all cases.
    As an example of this approach in practice, CMS presents a scenario 
where the rebate amount due on the Rebate Report is $100. Following 
reconciliation 12 months after the Rebate Report was issued, CMS 
calculates a reconciled rebate amount for the applicable calendar 
quarter of $120 (an increase of $20 from the rebate amount identified 
in the Rebate Report due to updated claims run-out and payment data). 
Under this scenario, in the event the manufacturer does not pay the 
$100 rebate amount owed within the 30-day deadline following receipt of 
the Rebate Report, a civil money penalty for $125 ($100 x 1.25) could 
be assessed against the manufacturer due to their failure to meet the 
payment deadline. If the manufacturer pays the $100 before the 
reconciliation is completed, and then timely pays the $20 due within 
the 30-day payment deadline following the reconciliation 12 months 
after the Rebate Report or does not pay the $100 before the 
reconciliation is completed but timely pays the $120 due within the 30 
day payment deadline following reconciliation 12 months after the 
Rebate Report, no further civil money penalty would be assessed.
    Alternatively, in the event the manufacturer pays the $100 rebate 
amount due within the 30-day deadline following receipt of the Rebate 
Report but fails to meet the payment deadline for the net $20 rebate 
amount due following reconciliation, a civil money penalty of $25 ($20 
x 1.25) could be assessed against the manufacturer due to their failure 
to meet the payment deadline for the updated rebate amount due 
following reconciliation. Finally, under this scenario in the event the 
manufacturer fails to meet any payment deadline throughout the full 
reconciliation cycle of this rebate amount; that is, the deadline is 
missed for the $100 amount due stated in the Rebate Report, and the $20 
net rebate amount due following reconciliation, CMS may assess a 
separate civil money penalty on the rebate amount due at each of these 
missed deadlines. In this example, violations of each of these payment 
deadlines would result in a penalty of $125 ($100 x 1.25), followed by 
a penalty of $25 ($20 x 1.25), each of which would be assessed 
following the manufacturer's failure to meet the related payment 
deadline for the outstanding rebate amount due.
    In an alternative possible scenario, consider the following. The 
rebate amount due on the Rebate Report is $100. Following 
reconciliation 12 months after the Rebate Report was issued, CMS 
calculates a reconciled rebate amount owed for the applicable period of 
$80 (a decrease of $20 from the rebate amount identified in the Rebate 
Report). In this scenario, if a manufacturer does not pay the $100 by 
the payment deadline for the rebate amount due in the Rebate Report, a 
civil money penalty for $125 ($100 x 1.25) may be assessed against the 
manufacturer due to its failure to meet the payment deadline for the 
rebate amount due identified in the Rebate Report. This civil money 
penalty is not affected if the manufacturer pays the rebate amount once 
it is past the deadline, nor is it impacted by the reconciled rebate 
amount, because at the payment deadline missed by the manufacturer, the 
manufacturer owed a rebate of $100 to CMS and that rebate amount was 
not paid timely. As noted previously, under this scenario, given that 
there is no additional rebate amount due upon reconciliation compared 
to the rebate amount stated on the Rebate Report, there would not be a 
civil money penalty assessed on the reconciled rebate amount.
    Further, note that payment of any civil money penalty does not 
obviate the requirement for the manufacturer to pay any outstanding 
rebate amount due, including any rebate amount due following a 
reconciliation. Therefore, paying a civil money penalty does not 
satisfy the obligation to pay the underlying rebate amount on which the 
civil money penalty is calculated. In addition, CMS is evaluating all 
available options to ensure manufacturers' timely compliance with their 
rebate payment obligations, including, without limitation, potential 
recovery approaches and enforcement actions. For example, CMS may refer 
manufacturers to the Department of Justice, Department of the Treasury, 
and/or the Department of Health and Human Services Office of Inspector 
General for further review and investigation.
    In proposed Sec.  427.600(c), CMS proposes that if CMS makes a 
determination to impose a civil money penalty on a manufacturer for 
violation of a payment deadline, CMS would send a written notice of the 
decision to impose a civil money penalty that includes a description of 
the basis for the determination, the basis for the penalty, the amount 
of the penalty, the date the penalty is due, the manufacturer's right 
to a hearing, and information about where to file the request for a 
hearing. To ensure a consistent approach to civil money penalties, CMS 
proposes applying existing appeal procedures for civil money penalties 
in 42 CFR 423, subpart T of this title to manufacturers appealing a 
civil money penalty imposed under the Medicare Part B Drug Inflation 
Rebate Program. CMS has utilized this appeals process many years for 
civil money penalty determinations affecting MA organizations and Part 
D sponsors. CMS therefore proposes to use this well-established process 
for civil money penalty appeals from manufacturers that do not make 
inflation rebate payments by the payment deadline. CMS also proposes in 
Sec.  427.600(e)(1) that the scope of appeals is limited to: (1) CMS 
determinations relating to whether the rebate payment was made by the 
payment deadline; and (2) the calculation of the penalty amount. 
Section 1847A(i)(8) of the Act precludes judicial review of specific 
data inputs or calculations related to the underlying Rebate Report and 
reconciliation; therefore, such data and calculations are not 
appealable through this process.

[[Page 61961]]

    Section 1847A(i)(7) of the Act states that the provisions of 
section 1128A of the Act (except subsections (a) and (b)) apply to 
civil money penalties under this subpart to the same extent that they 
apply to a civil money penalty or procedure under section 1128A(a) of 
the Act. CMS proposes to codify this requirement in proposed Sec.  
427.600(f). In alignment with the procedure outlined in section 1128A 
of the Act, CMS proposes in Sec.  427.600(d) that collection of the 
civil money penalty would follow expiration of the timeframe for 
requesting an appeal, which is 60 calendar days from the civil money 
penalty determination in cases where the manufacturer did not request 
an appeal. In cases where a manufacturer requests a hearing and the 
decision to impose the civil money penalty is upheld, CMS would 
initiate collection of the civil money penalty once the administrative 
decision is final. CMS is seeking comment on proposals related to the 
violations of payment deadlines and issuance of a civil money penalty.
    CMS proposes in Sec.  427.600(g) that in the event that a 
manufacturer declares bankruptcy, as described in title 11 of the 
United States Code, and as a result of the bankruptcy, fails to pay 
either the full rebate amount owed or the total sum of civil money 
penalties imposed, the government reserves the right to file a proof of 
claim with the bankruptcy court to recover the unpaid rebate amount 
and/or civil monetary penalties owed by the manufacturer.
h. Severability (Sec.  427.10)
    In proposed Sec.  427.10, we propose that, were any provision of 
part 427 to be held invalid or unenforceable by its terms, or as 
applied to any person or circumstance, such provisions would be 
severable from part 427 and the invalidity or unenforceability would 
not affect the remainder thereof or any other part of this subchapter 
or the application of such provision to other persons not similarly 
situated or to other, dissimilar circumstances. While the provisions in 
part 427 are intended to present a comprehensive approach to 
implementing the Medicare Part B Drug Inflation Rebate Program, we 
intend that each of them is a distinct, severable provision, as 
proposed, and would not affect similar provisions in the Medicare Part 
D Drug Inflation Rebate Program. Through this rulemaking, the Part B 
drug inflation rebate proposals are intended to operate independently 
of each other, even if each serves the same general purpose or policy 
goal. For example, CMS intends that the proposed policies related to 
reducing the rebate amount for Part B rebatable drugs currently in 
shortage and when there is a severe supply chain disruption (Sec. Sec.  
427.401 and 427.402) are distinct and severable from the proposals 
related to the determination of Part B rebatable drugs subject to 
rebates (Sec.  427.101). As another example, CMS intends that the 
proposed policy for using the payment limit for purposes of calculating 
the beneficiary coinsurance adjustment (Sec.  427.201(b)) is distinct 
and severable from the proposals to use the specified amount for 
purposes of the Part B rebate calculation (Sec.  427.301). Even where 
one provision makes reference to a second provision, the preamble and 
the regulatory text clarify the intent of the agency that the two 
provisions would be severable if one provision were to be invalidated 
in whole or in part. For example, CMS would still be able to calculate 
drugs and biological products with average total allowed charges below 
the applicable threshold as described in Sec.  427.101(c)(1), for 
exclusion from inflation rebate calculations, even if the provision to 
apply the applicable threshold at the billing and payment code level is 
deemed invalid (Sec.  427.101(c)(3)). We welcome comments on this 
severability policy.
3. Medicare Part D Drug Rebates for Drugs, Biologicals, and Sole Source 
Generic Drugs With Prices That Increase Faster Than the Rate of 
Inflation
a. Definitions (Sec.  428.20)
    In this proposed rule, CMS proposes to codify definitions of terms 
with meanings given in section 1860D-14B of the Act and established in 
the revised Medicare Part D Drug Inflation Rebate Guidance, as well as 
new definitions based on policies detailed in this proposed rule.
    At proposed Sec.  428.20, CMS is proposing that the following terms 
in section 1860D-14B of the Act are defined:
     ``Annual manufacturer price (AnMP)''.
     ``Applicable period''.
     ``Applicable period Consumer Price Index for All Urban 
Consumers (CPI-U)''.
     ``Benchmark period CPI-U''.
     ``Part D rebatable drug''.
     ``Payment amount benchmark period''.
     ``Unit''.
    Further, in Sec.  428.20 of this proposed rule, CMS proposes to 
codify definitions established in the revised Medicare Part D Drug 
Inflation Rebate Guidance and new definitions based on policies 
detailed in this proposed rule for the following terms:
     ``Applicable threshold''.
     ``Average manufacturer price (AMP)''.
     ``Benchmark period manufacturer price''.
     ``Covered Part D drug''.
     ``CPI-U''.\579\
---------------------------------------------------------------------------

    \579\ These data are referenced to 1982-84 = 100--that is, the 
average of pricing data for the 36 months from 1982 through 1984 
serve as the basis for the index and are assigned a value of 100. 
These data are not seasonally adjusted.
---------------------------------------------------------------------------

     ``First marketed date''.
     ``Inflation-adjusted payment amount''.
     ``Manufacturer''. CMS intends that manufacturer 
identification in the Medicare Prescription Drug Inflation Rebate 
Program, inclusive of communications and rebate liability, will be 
consistent with the policies and practices adopted under Sec.  447.502 
for purposes of manufacturer obligations under the Medicaid Drug Rebate 
Program. We believe this approach will provide clarity and allow for 
consistency in the agency's treatment of financial transactions, 
including in the contexts of debt collection, bankruptcy, and changes 
in ownership. We welcome feedback on this proposed approach and whether 
there are alternative approaches that may better achieve the agency's 
goals for application of rebate liability and collection of rebate 
amount, including whether additional policies and/or a Medicare 
Prescription Drug Inflation Rebate Program agreement are needed to 
clarify financial accountability for rebate amounts in situations where 
there are changes in ownership of a manufacturer or of a rebatable 
drug.
     ``National Drug Code (NDC)''.
     ``Subsequently approved drug''.
b. Determination of Part D Rebatable Drugs (Sec. Sec.  428.100 Through 
428.101)
i. Definitions
    In proposed Sec.  428.100, CMS proposes to define the following 
terms applicable to subpart B (Sec. Sec.  428.100 through 428.101):
     ``Individual who uses such a drug or biological''.
     ``Gross covered prescription drug costs''.
ii. Identification of Part D Rebatable Drugs
    Section 1860D-14B(g)(1)(A) of the Act defines a ``Part D rebatable 
drug,'' in part, as a drug or biological described at section 1860D-
14B(g)(1)(C) that is a ``covered Part D drug'' as that term is defined 
in section 1860D-2(e) of the Act. A drug or biological described in 
section 1860D-14B(g)(1)(C) means a

[[Page 61962]]

drug or biological that, as of the first day of the applicable period 
involved, is: (1) a drug approved under an NDA under section 505(c) of 
the FD&C Act (that is, a brand name drug); (2) a drug approved under an 
ANDA under section 505(j) of the FD&C Act that meets the criteria in 
section 1860D-14B(g)(1)(C)(ii) (that is, a generic drug that meets 
certain sole source criteria); or (3) a biological licensed under 
section 351 of the PHS Act (that is, a biological product, including a 
biosimilar).
    In Sec.  428.101(a), CMS proposes to identify a Part D rebatable 
drug \580\ for each applicable period by determining which covered Part 
D drugs, as defined in section 1860D-2(e) of the Act, meet the 
requirements in section 1860D-14B(g)(1)(C) of the Act (that is, are 
brand name drugs approved under an NDA, biologicals licensed under a 
biologics license application (BLA), or generic drugs approved under an 
ANDA). As noted, a Part D rebatable drug must meet the requirements in 
section 1860D-14B(g)(1)(C) of the Act as of the first day of the 
applicable period.
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    \580\ For purposes of this proposed rule, CMS uses the term 
``Part D rebatable drug'' to refer to the dosage form and strength 
with respect to such drug for which Part D drug inflation rebates 
are calculated.
---------------------------------------------------------------------------

    To evaluate whether a generic drug approved under an ANDA meets all 
the criteria in section 1860D-14B(g)(1)(C)(ii) of the Act, CMS proposes 
in Sec.  428.101(a)(3) to codify the policy established in section 30 
of the revised Medicare Part D Drug Inflation Rebate Guidance whereby 
CMS would use specified FDA resources such as the ``Approved Drug 
Products with Therapeutic Equivalence Evaluations'' (commonly known as 
the Orange Book) \581\ and NDC Directory to determine whether a generic 
drug meets the definition of a Part D rebatable drug. In Sec.  
428.101(a)(3)(i) and (ii), CMS proposes to clarify the policy 
established in revised Medicare Part D Drug Inflation Rebate Guidance 
by adding that, for purposes of Sec.  428.101, CMS considers historical 
information from NDC Directory files, such as discontinued, delisted, 
and expired listings, provided by FDA to CMS or published by FDA on its 
website to be included in the NDC Directory. As proposed in Sec.  
428.101(a)(3)(iii), to determine whether the manufacturer of the 
generic drug is a first applicant during the 180-day exclusivity 
period, or whether the manufacturer of the generic drug is a first 
approved applicant for a competitive generic drug therapy, CMS will 
refer to FDA website resources such as the Orange Book and may consult 
with FDA for technical assistance as needed. CMS will determine whether 
a generic drug that is a covered Part D drug meets the definition of a 
Part D rebatable drug based on the status of the drug on the first day 
of the applicable period.
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    \581\ FDA Orange Book: https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeuticequivalence-evaluations-orange-book.
---------------------------------------------------------------------------

    While generic drugs that do not meet the sole source criteria in 
section 1860D-14B(g)(1)(C)(ii) of the Act (that is, multiple source 
generic drugs) are excluded from the definition of a Part D rebatable 
drug, CMS understands that a generic drug may meet the definition of a 
Part D rebatable drug on the first day of an applicable period and then 
cease to meet such definition later in the applicable period if, for 
example, the FDA approves another therapeutically equivalent generic 
drug under a 505(j) ANDA and that drug is marketed during such 
applicable period.
iii. Drugs and Biologicals With Average Annual Total Cost Under Part D 
Below the Applicable Threshold
    Under section 1860D-14B(g)(1)(B) of the Act, a drug or biological 
is excluded from the definition of a Part D rebatable drug if the 
``average annual total cost'' under Part D for such period per 
individual who uses such a drug or biological product is less than $100 
per year, as determined by the Secretary using the most recent data 
available, or, if data are not available, as estimated by the 
Secretary. The statute provides that the $100 annual amount for the 
applicable period beginning October 1, 2022, is to be increased by 
percentage changes in the CPI-U for subsequent applicable periods. In 
Sec.  428.101(b), CMS proposes to codify the policy established in 
section 30.2 of the revised Medicare Part D Drug Inflation Rebate 
Guidance for determining the applicable threshold and excluding from 
the definition of a Part D rebatable drug, and thus Part D drug 
inflation rebates, drugs and biologicals for which the average annual 
total cost under Part D for such applicable period per individual who 
uses such drug or biological product is below that applicable 
threshold.
    As described in the revised Medicare Part D Drug Inflation Rebate 
Guidance, CMS intends to calculate the average annual total cost based 
on gross covered drug costs for the Part D rebatable drug at the NDC-9 
level. CMS will divide the gross covered drug costs for the drug by the 
number of unique Part D beneficiaries as described above that were 
dispensed the drug in that applicable period. For this calculation, CMS 
will use PDE data with gross covered drug costs greater than zero that 
are available for the drug with dates of service during that applicable 
period. Drugs that are determined to have average annual total costs 
under Part D of less than $100 per individual using such drug per year, 
adjusted by changes in the CPI-U, will be excluded from Part D drug 
inflation rebate calculations for the applicable period in question.
c. Determination of the Rebate Amount for Part D Rebatable Drugs 
(Sec. Sec.  428.200 Through 428.204)
i. Definitions
    In proposed Sec.  428.200, CMS proposes to define the following 
terms applicable to subpart C (Sec. Sec.  428.200 through 428.204):
     ``340B Program''.
     ``Line extension''.
     ``New formulation''.
     ``Oral solid dosage form''.
ii. Calculation of the Total Rebate Amount To Be Paid by Manufacturers
    Under section 1860D-14B(b)(1) of the Act, the Part D drug inflation 
rebate for each Part D rebatable drug and applicable period, subject to 
certain considerations, is the estimated amount that is equal to the 
product of: (1) the amount, if any, by which the annual manufacturer 
price (AnMP) for such Part D rebatable drug for the applicable period 
exceeds the inflation-adjusted payment amount for the Part D rebatable 
drug for the applicable period, and (2) the total number of units of 
the Part D rebatable drug dispensed under Part D and covered and paid 
by Part D plan sponsors during the applicable period. To calculate the 
Part D drug inflation rebate consistent with section 1860D-14B(b)(1) of 
the Act, CMS proposes in Sec.  428.201(a)(1) to codify the calculation 
methodology described in section 40 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, which provides that the total Part D drug 
inflation rebate amount is equal to the per unit Part D drug inflation 
rebate amount, as determined under proposed Sec.  428.202(a), 
multiplied by the total number of units of a Part D rebatable drug 
dispensed under Part D and covered by Part D plan sponsors, as 
determined in accordance with proposed Sec.  428.203. CMS proposes in 
Sec.  428.201(a)(2) that the total Part D drug inflation rebate amount 
for a Part D rebatable drug that is a line extension of a Part D 
rebatable drug that is an oral solid dosage form is equal to the amount 
specified in proposed Sec.  428.204. The Part D drug inflation rebate 
amount calculated in accordance with this

[[Page 61963]]

subpart is subject to adjustment based on any reductions in accordance 
with subpart D of this part or any reconciliations in accordance with 
subpart E of the part.
    In Sec.  428.201(b), CMS proposes to exclude from the calculation 
performed under subpart C drugs and biologicals that meet the 
definition of a Part D rebatable drug, but which are missing AMP data 
for the entire duration of the applicable period because, for the 
reasons specified below, there were no quarters during that period in 
which their manufacturers were required to report AMP data under 
section 1927(b)(3) of the Act. The calculations for the rebate amount 
set forth in section 1860D-14B(b) of the Act contemplate use of AMP and 
unit data reported by manufacturers under section 1927 of the Act. 
Similarly, section 1860D-14B(d) of the Act indicates CMS should use, 
for purposes of carrying out the Medicare Part D Drug Inflation Rebate 
Program, information submitted by manufacturers under section 
1927(b)(3) of the Act. Section 1927 requires manufacturers that 
participate in the Medicaid Drug Rebate Program (MDRP) to enter into 
agreements with the HHS Secretary and submit price and drug product 
information to CMS for each covered outpatient drug (COD), as defined 
in sections 1927(k)(2)-(4) of the Act and in Sec.  447.502.
    Not every drug that satisfies the definition of a Part D rebatable 
drug may be marketed by a manufacturer that has an MDRP agreement in 
effect with the Secretary during the applicable period. Similarly, 
there may be limited instances in which a drug or biological satisfies 
the definition of a Part D rebatable drug but is not a COD under the 
MDRP. As a result, information may not be reported under section 
1927(b)(3) of the Act for all Part D rebatable drugs, and thus may not 
be available to CMS for purposes of calculating Part D drug inflation 
rebates under section 1860D-14B of the Act. Said differently, in 
limited cases where a Part D rebatable drug is marketed by a 
manufacturer that does not have an obligation to report pricing and 
drug product data under section 1927(b)(3) of the Act for the reasons 
noted, the manufacturer does not currently report information needed 
for CMS to be able to calculate Part D drug inflation rebates.
    Due to this operational issue, CMS proposes in Sec.  428.201(b) to 
codify the policy established in section 30.1 of the revised Medicare 
Part D Drug Inflation Rebate Guidance whereby CMS would exclude from 
Part D drug inflation rebate calculations drugs and biologicals that 
meet the definition of a Part D rebatable drug but for which the 
manufacturer does not have an MDRP agreement in effect with the HHS 
Secretary under section 1927 of the Act at any point during the 
applicable period, or the Part D rebatable drug is one that does not 
meet the definition of a COD. This would effectively exclude from 
rebate calculations Part D rebatable drugs for which there is missing 
AMP data for the entire duration of the applicable period for the sole 
reason that there were no quarters during that period in which the 
manufacturer was required to report AMP data under section 1927(b)(3) 
of the Act. In either of these situations, a manufacturer does not have 
an obligation to report pricing and drug product data under section 
1927(b)(3) of the Act and thus the information required to calculate 
Part D drug inflation rebates for these drugs is not available to CMS. 
If a manufacturer is required to report AMP under section 1927(b)(3) of 
the Act for any part of the applicable period for a drug or biological 
that meets the definition of a Part D rebatable drug, CMS would not 
exclude such drug or biological from Part D drug inflation rebate 
calculations. We also clarify that the proposed exclusion at Sec.  
428.201(b) relates only to the calculation of the rebate amount and 
does not affect the determination of whether a drug or biological meets 
the definition of a Part D rebatable drug. When performing the 
reconciliation described at Sec.  428.401(d), CMS would reexamine 
whether the manufacturer was required to report AMP for any part of the 
applicable period for the Part D rebatable drug; if at reconciliation 
the manufacturer was required to report AMP for any part of the 
applicable period, CMS would calculate a Part D rebate amount for this 
Part D rebatable drug. CMS intends to monitor how these exclusions from 
the Part D drug inflation rebate calculation may impact manufacturer 
behavior and may revisit this exclusion in the future.
    In the initial Medicare Part D Drug Inflation Rebate Guidance, CMS 
solicited comments on the proposed approach and alternative approaches. 
CMS continues to be interested in comments on this topic and welcomes 
additional comments on this approach and alternative approaches--
specifically, how CMS should address the situations in which the 
manufacturer of a Part D rebatable drug does not have an MDRP agreement 
in effect for any part of the applicable period or when a Part D 
rebatable drug may be excluded from the definition of a COD and 
manufacturers may not be required to report pricing and drug product 
information under section 1927(b)(3) of the Act.
iii. Calculation of the Per Unit Part D Drug Rebate Amount
    To calculate the total rebate amount in accordance with proposed 
Sec.  428.201(a), CMS will first calculate the per unit Part D drug 
rebate amount as proposed in Sec.  428.202. As described in the revised 
Medicare Part D Drug Inflation Rebate Guidance and provided in proposed 
Sec.  428.202(a), CMS will calculate the per unit Part D drug inflation 
rebate amount by determining the amount by which the AnMP for a Part D 
rebatable drug exceeds the inflation-adjusted payment amount for such 
drug for the applicable period. To determine the per unit Part D 
inflation rebate amount for a Part D rebatable drug, CMS must calculate 
the AnMP for the drug, identify the payment amount benchmark period and 
calculate the benchmark period manufacturer price for the drug, 
identify the benchmark period CPI-U, and calculate the inflation-
adjusted payment amount for the drug.
(1) Calculation of the AnMP for the Applicable Period
    To determine the AnMP for a Part D rebatable drug and applicable 
period, CMS proposes in Sec.  428.202(b) to codify the policy described 
in the revised Medicare Part D Drug Inflation Rebate Guidance whereby 
CMS would use the AMP reported by a manufacturer to the Medicaid Drug 
Programs system under sections 1927(b)(3)(A)(i) and (ii) of the Act for 
each calendar quarter of the applicable period, as well as the units 
reported by a manufacturer under section 1927(b)(3)(A)(iv) of the Act 
for each month of the applicable period. The manufacturer-reported AMP 
units represent the total units of a drug sold by the manufacturer each 
month to retail community pharmacy and wholesaler purchasers as 
described under section 1927(k)(1)(A) of the Act. Manufacturers may 
include under certain circumstances non-retail community pharmacy sales 
units in the calculation of their AMPs for 5i drugs.\582\
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    \582\ 5i drugs are CODs that are inhaled, infused, instilled, 
implanted, or injected. Manufacturers are instructed to calculate 
the AMP for 5i drugs that are not generally dispensed through a 
retail community pharmacy using the methodology described at Sec.  
447.504(d) and (e). Section 447.507(b)(1) provides that a 5i drug is 
not generally dispensed through a retail community pharmacy if 70 
percent or more of the sales (based on units at the NDC-9 level) of 
the 5i drug, were to entities other than retail community pharmacies 
or wholesalers for drugs distributed to retail community pharmacies.

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[[Page 61964]]

    As specified in section 1860D-14B(b)(2) of the Act, the AnMP for a 
Part D rebatable drug for an applicable period is equal to the sum of 
the products of (1) the AMP for the Part D rebatable drug reported for 
each calendar quarter of the applicable period, and (2) the total units 
of the Part D rebatable drug reported for each of the corresponding 
calendar quarters of the applicable period divided by the total units 
of the Part D rebatable drug reported for the 4 calendar quarters in 
the applicable period. The following formula illustrates how CMS would 
calculate the AnMP for a Part D rebatable drug as proposed in Sec.  
---------------------------------------------------------------------------
428.202(b):

(AMP for calendar quarter beginning October) multiplied by (sum of 
monthly units for October calendar quarter divided by total units for 
12-month applicable period) +
(AMP for calendar quarter beginning January) multiplied by (sum of 
monthly units for January calendar quarter divided by total units for 
12-month applicable period) +
(AMP for calendar quarter beginning April) multiplied by (sum of 
monthly units for April calendar quarter divided by total units for 12-
month applicable period) +
(AMP for calendar quarter beginning July) multiplied by (sum of monthly 
units for July calendar quarter divided by total units for 12-month 
applicable period)

    In Sec.  428.202(b)(2), CMS proposes that the first applicable 
period for a Part D rebatable drug will be the earliest applicable 
period that follows the payment amount benchmark period identified in 
proposed Sec.  428.202(c)(1) through (4). For a Part D rebatable drug 
first approved or licensed on or before October 1, 2021, with a payment 
amount benchmark period identified in Sec.  428.202(c)(1), the first 
applicable period would begin on October 1, 2022 and end on September 
30, 2023. For a Part D rebatable drug first approved or licensed on or 
before October 1, 2021 with a payment amount benchmark period 
identified in Sec.  428.202(c)(3), or a subsequently approved drug with 
a payment amount benchmark period identified in Sec.  428.202(c)(2) or 
(4), the first applicable period would begin on October 1 of the year 
following the payment amount benchmark period identified in proposed 
Sec.  428.202(c)(2) through (4). As described below, CMS is soliciting 
comments on alternative policies for determining the payment amount 
benchmark period in certain instances of missing AMP. In the case of a 
Part D rebatable drug that was previously a selected drug as described 
in proposed Sec.  428.202(c)(5) for which the payment amount benchmark 
period is reset as the last calendar year of the price applicability 
period for such drug, the earliest applicable period that follows the 
reset payment amount benchmark period would begin on October 1 of the 
year following the payment amount benchmark period identified in 
proposed Sec.  428.202(c)(5). The date that CMS will use to determine 
when a drug is first approved or licensed is the FDA approval date that 
the manufacturer reports to the Medicaid Drug Programs system under 
section 1927(b)(3)(A)(v) of the Act.
(2) Identification of the Payment Amount Benchmark Period
    Consistent with section 1860D-14B(g)(3) of the Act and as described 
in sections 40.2.2 and 40.3 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, CMS proposes in Sec.  428.202(c)(1) that for 
a drug first approved or licensed by the FDA on or before October 1, 
2021, the payment amount benchmark period is the period beginning on 
January 1, 2021 and ending on September 30, 2021. For a subsequently 
approved drug, CMS proposes in Sec.  428.202(c)(2) that the payment 
amount benchmark period would be the first calendar year beginning 
after the drug's first marketed date, as specified under section 1860D-
14B(b)(5)(A) of the Act. To identify the payment amount benchmark 
period for a Part D rebatable drug, CMS would use the FDA approval date 
or the first marketed date reported under section 1927(b)(3)(A)(v) of 
the Act, as applicable.
(a) Proposal To Establish a Payment Amount Benchmark Period in Certain 
Instances of Missing AMP
    Section 1860D-14B of the Act does not expressly address how CMS 
should calculate the benchmark period manufacturer price for a Part D 
rebatable drug when a manufacturer has not reported AMP during the 
payment amount benchmark period identified by statute. For example, as 
described in the revised Medicare Part D Drug Inflation Rebate 
Guidance, while section 1860D-14B(g)(3) of the Act contemplates that 
drugs first approved or licensed by the FDA on or before October 1, 
2021, would have a payment amount benchmark period of January 1, 2021, 
through September 30, 2021, the statute does not address circumstances 
in which such drugs are not marketed until after October 1, 2021, and 
thus lack AMP from January 1, 2021, through September 30, 2021, to 
calculate the benchmark period manufacturer price. In response to 
comments, CMS stated in section 40.1.2 of the revised Medicare Part D 
Drug Inflation Rebate Guidance that Part D rebatable drugs first 
approved or licensed on or before October 1, 2021, that were not 
marketed until after that date and thus did not have AMP in the 
statutorily defined payment amount benchmark period (that is, January 
1, 2021, through September 30, 2021) would be treated in the same 
manner as subsequently approved drugs for purposes of establishing the 
payment amount benchmark period, benchmark period CPI-U, first 
applicable period, and first applicable period CPI-U. In the revised 
guidance, CMS also stated that it intended to address this policy in 
future rulemaking and would solicit comments on this policy at that 
time.
    Based on further review, CMS has observed that a number of NDC-9s 
of Part D rebatable drugs approved on or before October 1, 2021, do not 
have AMP reported in the period of January 1, 2021, through September 
30, 2021, and a number of NDC-9s of subsequently approved drugs do not 
have AMP reported in the first calendar year beginning after the drug's 
first marketed date. To enable CMS to calculate the benchmark period 
manufacturer price and inflation rebate amounts for these NDC-9s, CMS 
is proposing in Sec.  428.202(c)(3) that for a Part D rebatable drug 
first approved or licensed on or before October 1, 2021, for which 
there are no quarters during the period beginning on January 1, 2021, 
and ending on September 30, 2021, for which AMP has been reported under 
section 1927(b)(3) of the Act, CMS would identify the payment amount 
benchmark period as the first calendar year, which would be no earlier 
than calendar year 2021, in which such drug has at least 1 quarter of 
AMP reported. Said differently, to identify the payment amount 
benchmark period for the purpose of calculating the benchmark period 
manufacturer price for a Part D rebatable drug first approved or 
licensed on or before October 1, 2021, CMS would first look to the 
period from January 1, 2021, to September 30, 2021 and if no AMP was 
reported to the MDRP for that 3-quarter period, CMS would then identify 
the payment amount benchmark period as the first calendar year no 
earlier than calendar year 2021 in which such drug has at least 1 
quarter of AMP reported. Similarly, in proposed Sec.  428.202(c)(4), 
CMS proposes that for a subsequently approved drug for which there are 
no quarters during the first calendar year

[[Page 61965]]

beginning after the drug's first marketed date for which AMP has been 
reported under section 1927(b)(3), the payment amount benchmark period 
would be the first calendar year in which such drug has at least 1 
quarter of AMP reported. To identify the payment amount benchmark 
period for the purpose of calculating the benchmark period manufacturer 
price for a subsequently approved drug, CMS would look to the first 
calendar year beginning after the drug's first marketed date and if no 
AMP was reported to the MDRP for such NDC-9 for that 4-quarter period, 
CMS would then identify the payment amount benchmark period as the 
first calendar year in which such drug has at least 1 quarter of AMP 
reported. This approach (or the alternative approaches described 
below), if finalized, would replace the policy in the revised Medicare 
Part D Drug Inflation Rebate Guidance to treat Part D rebatable drugs 
first approved or licensed on or before October 1, 2021, that were not 
marketed until after that date in the same manner as subsequently 
approved drugs. As proposed in Sec.  428.202(b)(2), the first 
applicable period for such drug would begin on October 1 of the year 
following the payment amount benchmark period. This policy would apply 
to Part D rebatable drugs first approved or licensed on or before 
October 1, 2021, drugs first approved or licensed on or before October 
1, 2021, but not marketed until after that date, as well as 
subsequently approved drugs.
    As an example of how CMS would identify the payment amount 
benchmark period as proposed under Sec.  428.202(c)(3), if a Part D 
rebatable drug that was first approved or licensed by the FDA on July 
7, 2021, and has a first marketed date of September 15, 2021, does not 
have AMP reported in the period beginning January 1, 2021 and ending 
September 30, 2021, but does have AMP reported for the second calendar 
quarter of 2022, CMS would identify the payment amount benchmark period 
for such drug as calendar year 2022 (that is, January 1, 2022, through 
December 31, 2022). In this example, the benchmark period CPI-U would 
be the CPI-U for January 2022, the first applicable period would be the 
applicable period beginning October 1, 2023, and ending September 30, 
2024, and the applicable period CPI-U would be the CPI-U for October 
2023. Similarly, as an example of how CMS would identify the payment 
amount benchmark period as proposed under Sec.  428.202(c)(4), if a 
subsequently approved drug with a first marketed date of December 15, 
2021, does not have AMP reported for any quarters in calendar year 2022 
(that is, the first calendar year after the drug's first marketed date) 
but does have AMP reported for the first calendar quarter of 2023, CMS 
would identify the payment amount benchmark period as calendar year 
2023 (that is, January 1, 2023, through December 31, 2023). In this 
example, the benchmark period CPI-U would be the CPI-U for January 
2023, the first applicable period for this drug would be the applicable 
period beginning October 1, 2024, and ending September 30, 2025, and 
the applicable period CPI-U would be the CPI-U for October 2024.
    CMS is soliciting comments on this approach, as well as the 
alternatives described below.
(b) Comment Solicitation on Alternatives Considered for Calculating the 
Benchmark Period Manufacturer Price When AMP Is Missing
    CMS is aware that one reason why a manufacturer may not report AMP 
for any quarters of a payment amount benchmark period described in 
Sec.  428.202(c)(1) or (2), as applicable, is that a manufacturer may 
acquire a Part D rebatable drug from another manufacturer and, due to 
that acquisition and the use of a new labeler code, obtain a new NDC-9 
for that Part D rebatable drug. In this instance, the NDC-9 of the 
selling manufacturer and the NDC-9 of the buying manufacturer belong to 
the same dosage form and strength and therefore the same Part D 
rebatable drug. Although the buying manufacturer may not have AMP for 
the new NDC-9 to report to the Medicaid Drug Programs system for the 
Part D rebatable drug's payment amount benchmark period described in 
Sec.  428.202(c)(1) or (c)(2), the buying manufacturer is required by 
the MDRP to report for the new NDC-9 the base date AMP associated with 
the dosage form and strength to which the new NDC-9 belongs.\583\ This 
base date AMP is equal to the quarterly AMP that a manufacturer reports 
as described in Sec.  447.509(a)(7)(ii)(B). There also may be instances 
outside of the acquisition context in which a new NDC-9 for an existing 
dosage form and strength is reported to the MDRP. To prevent a 
manufacturer from resetting the payment amount benchmark period and 
therefore the benchmark period manufacturer price by obtaining a new 
NDC-9 for the Part D rebatable drug, CMS stated in section 40.2.2 of 
the revised Medicare Part D Drug Inflation Rebate Guidance that it will 
use the benchmark period manufacturer price of the earliest NDC-9 of 
the Part D rebatable drug.
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    \583\ Medicaid Drug Rebate Program Notice, Release No. 90 (April 
18, 2014). https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx-releases/mfr-releases/mfr-rel-090.pdf.
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    After further consideration of this policy and the data that are 
available to CMS in the Medicaid Drug Programs system, CMS does not 
believe that calculating the benchmark period manufacturer price using 
the three or four quarters, as applicable, of AMP reported in the 
payment amount benchmark period described in proposed Sec.  
428.202(c)(1) or (2) of the earliest NDC-9 of the Part D rebatable drug 
is operationally feasible at this time. Although the buying 
manufacturer is required by the MDRP to report for the new NDC-9 the 
base date AMP associated with the earliest NDC-9 of the dosage form and 
strength, and to report the first marketed date associated with the 
earliest NDC-9 of the dosage form and strength as the first marketed 
date for the new NDC-9,\584\ the buying manufacturer is not required to 
report which NDC-9 was used to determine the base date AMP and first 
marketed date. CMS may therefore lack the information necessary to 
identify the earliest NDC-9 of the Part D rebatable drug for purposes 
of determining the benchmark period manufacturer price to be used in 
calculating the inflation rebate amount.
---------------------------------------------------------------------------

    \584\ See 88 FR 34238, 34257 (May 26, 2023). Section 
1927(c)(2)(A)(ii)(II) of the Act expressly provides that the base 
date AMP quarter, with respect to a dosage form and strength of a 
drug, is established ``without regard to whether or not the drug has 
been sold or transferred to an entity, including a division or 
subsidiary of the manufacturer . . .'' See also the data field 
definition of market date: ``For S, I, and N drugs marketed under an 
FDA-approved application (for example, BLA, NDA, ANDA), the earliest 
date the drug was first marketed under the application number by any 
labeler.'' https://www.medicaid.gov/sites/default/files/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/recordspecficationanddefinitions.pdf.
---------------------------------------------------------------------------

    CMS understands that statutory provisions at section 1860D-14B of 
the Act require that CMS establish the payment amount benchmark period 
at the dosage form and strength level, and that resetting the payment 
amount benchmark period for a new NDC-9 of an existing Part D rebatable 
drug may not fully align with this directive. Simultaneously, and as 
described above in this section III.I.3.c.2.b, CMS understands there 
may be a gap in the AMP data available to calculate the benchmark 
period manufacturer price at the dosage form and strength level for 
certain drugs. To enable CMS to calculate the benchmark period 
manufacturer price when a new NDC-

[[Page 61966]]

9 of an existing Part D rebatable drug is reported to the MDRP and that 
NDC-9 lacks AMP data for the time period described in proposed Sec.  
428.202(c)(1) or (2), CMS is soliciting comments on alternative policy 
options that are described in more detail below.
    First, CMS is soliciting comments on a modified version of the 
policy described in section 40.1.2 of the revised Medicare Part D Drug 
Inflation Rebate Guidance. Under this modified policy, if a new NDC-9 
of an existing Part D rebatable drug is reported to the MDRP, CMS would 
calculate the benchmark period manufacturer price for such NDC-9 using 
the base date AMP reported by a manufacturer under section 1927(b)(3) 
of the Act for such Part D rebatable drug, if such base date AMP was 
reported for a calendar quarter that overlaps with the time period 
described in proposed Sec.  428.202(c)(1) or (2), as applicable for 
that Part D rebatable drug. CMS believes this modified policy would be 
operationally feasible because CMS would calculate the benchmark period 
manufacturer price using the base date AMP that is reported with the 
new NDC-9; CMS therefore would not need to identify the earliest NDC-9 
of the Part D rebatable drug. Under this policy, CMS would only use the 
base date AMP to calculate the benchmark period manufacturer price if 
the base date AMP was associated with a calendar quarter that 
overlapped with the time period described in proposed Sec.  
428.202(c)(1) or (2), as applicable for that Part D rebatable drug. If 
CMS were to adopt this alternative approach, CMS would expect to 
operationalize it through conforming changes to proposed Sec.  
428.202(c) and other applicable proposed regulatory text.
    CMS notes that, if CMS were to finalize this alternative approach, 
CMS would be unable to use this approach to calculate the benchmark 
period manufacturer price in the case of a new NDC-9 of an existing 
Part D rebatable drug with base date AMP that does not overlap with the 
time period described in proposed Sec.  428.202(c)(1) or (2). In such 
instances, CMS would either establish a future payment amount benchmark 
period using an approach similar to that described in proposed Sec.  
428.202(c)(3) and (4) or apply one of the other alternative policies 
described below.
    Another alternative CMS is considering is to require manufacturers 
of Part D rebatable drugs to submit to CMS AMP data for the time period 
identified under proposed Sec.  428.202(c)(1) or (2) in cases where the 
manufacturer did not report AMP to the MDRP under section 1927(b)(3) of 
the Act for such period but AMP data are available either for the NDC-9 
or for another NDC-9 within the same dosage form and strength. For 
example, if the quarter for which a manufacturer reports base date AMP 
for a new NDC-9 of an existing dosage form and strength does not 
overlap with the time period identified under proposed Sec.  
428.202(c)(1) or (2), but the earliest NDC-9 of the dosage form and 
strength that served as the basis for the base date AMP has AMP data 
available during any quarter of that time period, CMS would require 
manufacturers to report such AMP data. For a Part D rebatable drug with 
a payment amount benchmark period identified under proposed Sec.  
428.202(c)(1), a manufacturer would be required to submit to CMS AMP 
data for the calendar quarters in the period beginning January 1, 2021, 
and ending on September 30, 2021, to the extent such drug was first 
marketed before September 30, 2021. For a subsequently approved drug 
with a payment amount benchmark period identified under proposed Sec.  
428.202(c)(2), a manufacturer would be required to submit to CMS AMP 
data for the first calendar year beginning after the drug's first 
marketed date. CMS acknowledges the intersection between a potential 
reporting requirement under the Medicare Part D Drug Inflation Rebate 
Program for manufacturers to provide AMP data and existing AMP data 
reporting requirements for manufacturers under the MDRP. Should CMS 
pursue this option, CMS would explore using existing AMP reporting 
processes for the MDRP to operationalize any new AMP reporting 
requirement. This approach of requiring manufacturers to report such 
information would be consistent with CMS' understanding of the 
provisions of section 1860D-14B of the Act requiring CMS to establish 
the payment amount benchmark period at the dosage form and strength 
level, and with CMS' authority under sections 1102(a) and 1871(a)(1) of 
the Act to make rules and regulations as necessary for the efficient 
administration of programs, including the Medicare Part D Drug 
Inflation Rebate Program. CMS welcomes comments on the method by which 
CMS could collect such information, the timing of the potential 
collection and deadlines, and whether information reported by 
manufacturers should be taken into account for purposes of compiling 
the Rebate Reports for a Part D rebatable drug or instead only be 
included in the reconciliation processes specified in proposed Sec.  
428.401(d) and described later in this proposed rule.
    CMS is also considering an alternative policy whereby CMS would 
calculate the benchmark period manufacturer price for a new NDC-9 of an 
existing Part D rebatable drug that lacks AMP data for the time period 
described in Sec.  428.202(c)(1) or (2) using a reasonable proxy 
metric. CMS welcomes comments on potential proxy metrics CMS could use 
to calculate the benchmark period manufacturer price for a new NDC-9 of 
an existing dosage form and strength for which no AMP data are reported 
for such periods.
    These alternative policy options are intended to achieve the same 
goal as the policy described in section 40.2.2 of the revised Medicare 
Part D Drug Inflation Rebate Guidance (that is, to disincentivize a 
manufacturer from resetting its payment amount benchmark period by 
obtaining a new NDC-9 for an existing Part D rebatable drug). CMS also 
welcomes comments on the alternative policy described in the revised 
Medicare Part D Drug Inflation Rebate Guidance whereby CMS would treat 
drugs first approved or licensed on or before October 1, 2021, that 
were not marketed until after that date in the same manner as 
subsequently approved drugs for purposes of establishing the payment 
amount benchmark period, benchmark period CPI-U, first applicable 
period, and first applicable period CPI-U. CMS is soliciting comments 
on these alternatives and may adopt one or more of such alternatives in 
the final rule based on comments received. Additionally, CMS is seeking 
comments on other policies that CMS should consider to prevent 
manufacturers from inappropriately resetting the payment amount 
benchmark period by obtaining a new NDC-9 for an existing Part D 
rebatable drug.
    Under CMS' proposed policy to identify a payment amount benchmark 
period in certain instances of missing AMP as proposed in Sec.  
428.202(c)(3) and (4) and each of these alternatives considered, CMS 
would consider any restatements to the AMP data used to calculate the 
benchmark period manufacturer price during reconciliation, as specified 
in proposed Sec.  428.401(d) and described later in this proposed rule. 
Furthermore, CMS would also monitor the extent to which manufacturers 
obtain a new NDC-9 for the same Part D rebatable drug in a manner that 
could result in inappropriately resetting the payment amount benchmark 
period or otherwise affect the calculation of the benchmark period 
manufacturer price. CMS

[[Page 61967]]

reminds manufacturers of their reporting obligations under section 
1927(b) of the Act and Sec.  447.510 of this title and that failure to 
provide timely information may result in penalties as detailed in 
section 1927(b)(3)(C)(i) of the Act.
    If finalized, CMS would apply the policies described above to 
rebate calculations beginning with the applicable period that began on 
October 1, 2022. CMS has determined that, consistent with the policy 
described in section III.I.1, in order to calculate inflation rebates 
for Part D rebatable drugs that do not have AMP or other pricing data 
available under section 1927(b)(3) on which to base the benchmark 
period manufacturer price, CMS' proposed policy must apply for 
applicable periods beginning with the applicable period that began on 
October 1, 2022.
(c) Identification of the Payment Amount Benchmark Period for a Part D 
Rebatable Drug No Longer Considered To Be a Selected Drug
    In proposed Sec.  428.202(c)(5), CMS proposes to codify policies 
described in section 40.2.2 of the revised Medicare Part D Drug 
Inflation Rebate Guidance relating to the identification of the payment 
amount benchmark period for a selected drug (as defined in section 
1192(c) of the Act) with respect to a price applicability period (as 
defined in section 1191(b)(2) of the Act) in the case such Part D 
rebatable drug is no longer considered to be a selected drug. The 
Medicare Part D Drug Inflation Rebate Program applies to selected drugs 
notwithstanding the status of the drug as a selected drug. However, the 
calculation of certain components of the rebate amount formula for 
selected drugs depends upon whether the selected drug has reached the 
end of its price applicability period and is no longer considered to be 
a selected drug under section 1192(c) of the Act. Specifically, section 
1860D-14B(b)(5)(C) of the Act specifies a different payment amount 
benchmark period and benchmark period CPI-U for a Part D rebatable drug 
in the case such drug is no longer considered to be a selected drug 
under section 1192(c) of the Act, for each applicable period beginning 
after the price applicability period with respect to such drug. 
Accordingly, in such a case where a Part D rebatable drug is no longer 
a selected drug, CMS proposes in Sec.  428.202(c)(5) that the payment 
amount benchmark period will be reset as the last calendar year of such 
price applicability period for such selected drug.
(3) Calculation of the Benchmark Period Manufacturer Price
    CMS proposes in Sec.  428.202(d) that, subject to proposed Sec.  
428.202(g), to determine the benchmark period manufacturer price for a 
Part D rebatable drug, CMS would use the AMP reported by a manufacturer 
to the Medicaid Drug Programs system under sections 1927(b)(3)(A)(i) 
and (ii) of the Act for each calendar quarter of the payment amount 
benchmark period, as identified in accordance with proposed Sec.  
428.202(c), as well as the units reported by a manufacturer under 
section 1927(b)(3)(A)(iv) of the Act for each month of such payment 
amount benchmark period. For a Part D rebatable drug first approved or 
licensed on or before October 1, 2021, section 1860D-14B(b)(4) of the 
Act specifies that the benchmark period manufacturer price is the sum 
of the products of (1) the AMP for the Part D rebatable drug reported 
for each calendar quarter of the payment amount benchmark period (that 
is, January 1, 2021, through September 30, 2021), and (2) the total 
units reported for each of the corresponding calendar quarters of the 
payment amount benchmark period divided by the total units of the Part 
D rebatable drug reported for the 3 calendar quarters in the payment 
amount benchmark period. The following formula illustrates how CMS 
would calculate the benchmark period manufacturer price for a Part D 
rebatable drug with a payment amount benchmark period identified under 
proposed Sec.  428.202(c)(1), as proposed in Sec.  428.202(d)(1):

(AMP for calendar quarter beginning January 2021) multiplied by (sum of 
monthly AMP units for January 2021 calendar quarter divided by sum of 
the units reported for the 3 quarters of the payment amount benchmark 
period) +
(AMP for calendar quarter beginning April 2021) multiplied by (sum of 
monthly AMP units for April 2021 calendar quarter divided by sum of the 
units reported for the 3 quarters of the payment amount benchmark 
period) +
(AMP for calendar quarter beginning July 2021) multiplied by (sum of 
monthly AMP units for July 2021 calendar quarter divided by sum of the 
units reported for the 3 quarters of the payment amount benchmark 
period)

    For a Part D rebatable drug with a payment amount benchmark period 
identified under proposed Sec.  428.202(c)(2) through (5), the 
following formula illustrates how CMS would calculate the benchmark 
period manufacturer price for a Part D rebatable drug as proposed in 
Sec.  428.202(d)(2):

(AMP for calendar quarter beginning January) multiplied by (sum of 
monthly AMP units for January calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning April) multiplied by (sum of 
monthly AMP units for April calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period) +
(AMP for calendar quarter beginning July) multiplied by (sum of monthly 
AMP units for July calendar quarter divided by sum of the monthly units 
reported for the 4 quarters of the payment amount benchmark period) +
(AMP for calendar quarter beginning October) multiplied by (sum of 
monthly AMP units for October calendar quarter divided by sum of the 
monthly units reported for the 4 quarters of the payment amount 
benchmark period)
(4) Identification of the Benchmark Period CPI-U
    To calculate the inflation-adjusted payment amount in accordance 
with section 1860D-14B(b)(3), CMS must identify the benchmark period 
CPI-U. As described in the revised Medicare Part D Drug Inflation 
Rebate Guidance and in accordance with section 1860D-14B(g)(4), CMS 
proposes in Sec.  428.202(e)(1) that the benchmark period CPI-U for a 
Part D rebatable drug first approved or licensed by the FDA on or 
before October 1, 2021, would be the CPI-U for January 2021. For a 
subsequently approved drug, CMS proposes in Sec.  428.202(e)(2) that 
the benchmark period CPI-U would be the CPI-U for January of the first 
calendar year beginning after the drug's first marketed date, as 
required under section 1860D-14B(b)(5)(A).
    As described earlier in this proposed rule, CMS has observed that a 
number of NDC-9s of Part D rebatable drugs approved or licensed on or 
before October 1, 2021, do not have AMP reported in the period 
beginning January 1, 2021, and ending September 30, 2021, and a number 
of NDC-9s of subsequently approved drugs do not have AMP reported in 
the first calendar year following the drug's first marketed date. To 
enable CMS to calculate the benchmark period manufacturer price and 
inflation rebate amounts for these NDC-9s, CMS is proposing in

[[Page 61968]]

Sec.  428.202(c)(3) and (4) to identify the payment amount benchmark 
period for such NDC-9s as the first calendar year, which would be no 
earlier than calendar year 2021, in which such drug has at least 1 
quarter of AMP data reported. As previously discussed, CMS is 
soliciting comments on alternative methodologies to identify the 
payment amount benchmark period and calculate the benchmark period 
manufacturer price to address certain instances in which AMP has not 
been reported and, if any such alternatives are adopted, CMS may adopt 
conforming modifications to proposed Sec.  428.202(e). To identify the 
benchmark period CPI-U for an NDC-9 described in proposed Sec.  
428.202(c)(3), CMS further proposes in Sec.  428.202(e)(3) that for a 
Part D rebatable drug first approved on or before October 1, 2021, for 
which there are no quarters during the period beginning on January 1, 
2021, and ending on September 30, 2021, for which AMP has been reported 
to the MDRP, the benchmark period CPI-U would be the CPI-U for January 
of the calendar year in which such drug has at least 1 quarter of AMP 
reported. CMS proposes in Sec.  428.202(e)(4) that for a subsequently 
approved drug for which there are no quarters during the first calendar 
year beginning after the drug's first marketed date for which AMP has 
been reported to the MDRP, the benchmark period CPI-U is the CPI-U for 
January of the calendar year in which such drug has at least 1 quarter 
of AMP reported.
    As discussed previously, the Medicare Part D Drug Inflation Rebate 
Program applies to selected drugs notwithstanding the status of the 
drug as a selected drug. However, the calculation of certain components 
of the applicable rebate amount formula for selected drugs depends upon 
whether the selected drug has reached the end of its price 
applicability period and is no longer considered to be a selected drug 
under section 1192(c) of the Act. In accordance with section 1860D-
14B(b)(5)(C) of the Act, in such a case where a Part D rebatable drug 
is no longer a selected drug, CMS proposes in Sec.  428.202(e)(5) that 
the benchmark period CPI-U will be the CPI-U for January of the last 
calendar year of such price applicability period.
(5) Calculation of the Inflation-Adjusted Payment Amount
    As specified in section 1860D-14B(b)(3) of the Act and described in 
section 40.2.3 of the revised Medicare Part D Drug Inflation Rebate 
Guidance, the inflation-adjusted payment amount with respect to a Part 
D rebatable drug and applicable period is the benchmark period 
manufacturer price increased by the percentage by which the applicable 
period CPI-U exceeds the benchmark period CPI-U. CMS proposes in Sec.  
428.202(f) to calculate the inflation-adjusted payment amount for a 
Part D rebatable drug by dividing the applicable period CPI-U by the 
benchmark period CPI-U and then multiplying the quotient by the 
benchmark period manufacturer price. The following formula illustrates 
how CMS would calculate the inflation-adjusted payment amount for a 
Part D rebatable drug as proposed in Sec.  428.202(f):

(Benchmark period manufacturer price) multiplied by (applicable period 
CPI-U divided by benchmark period CPI-U)

As described earlier in this proposed rule and proposed in Sec.  
428.202(a), CMS will use the inflation-adjusted payment amount to 
calculate the per unit Part D drug inflation rebate amount by 
determining the amount by which the AnMP for a Part D rebatable drug 
exceeds the inflation-adjusted payment amount for a Part D rebatable 
drug for an applicable period.
(6) Situations in Which Manufacturers Do Not Report Units Under Section 
1927(b)(3)(A)(iv)
    Section 1860D-14B of the Act generally requires CMS to determine 
the per unit Part D drug inflation rebate amount using the monthly 
units reported by manufacturers to the Medicaid Drug Programs system 
under section 1927(b)(3)(A)(iv) of the Act. CMS understands it is 
possible that a manufacturer may not have sales or monthly units of a 
COD to report to the Medicaid Drug Programs system for a calendar 
quarter because, for example, there may be a temporary interruption in 
sales of the COD, or there may be no sales immediately after the drug 
is first approved or licensed by the FDA. CMS proposes in Sec.  
428.202(g)(1) to codify the policy described in section 40.1.2 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, whereby in 
cases where there are 1 or more quarter(s) in the payment amount 
benchmark period or applicable period for which a manufacturer has not 
reported units under section 1927(b)(3)(A)(iv) of the Act but has 
reported AMP under sections 1927(b)(3)(A)(i) and (ii) of the Act, CMS 
would calculate the benchmark period manufacturer price or AnMP, as 
applicable, using data only from quarter(s) with units. That is, 
quarter(s) in the payment amount benchmark period or applicable period 
for which a manufacturer has not reported units under section 
1927(b)(3)(A)(iv) of the Act would be excluded from the calculation. 
CMS proposes in Sec.  428.202(g)(2) to codify the policy described in 
section 40.1.2 of the revised guidance whereby if there are no quarters 
of the payment amount benchmark period or applicable period for which a 
manufacturer has reported units under section 1927(b)(3)(A)(iv) of the 
Act, but the manufacturer has reported AMP under sections 
1927(b)(3)(A)(i) and (ii) of the Act for at least 1 quarter of such 
period, CMS would use the average of the AMP over the calendar quarters 
of the payment amount benchmark period or applicable period for which 
AMP is reported to calculate the benchmark period manufacturer price or 
AnMP, respectively.
iv. Determination of the Total Number of Units Dispensed Under Part D
    In Sec.  428.203(a), CMS proposes to codify the existing policy 
established in the revised Medicare Part D Drug Inflation Rebate 
Guidance whereby CMS would determine the total number of units of each 
Part D rebatable drug dispensed under Part D and covered by Part D 
sponsors based on information reported to CMS by Part D plan sponsors 
on the Part D PDE records for the 12-month applicable period. More 
specifically, CMS would determine the total number of units from the 
Quantity Dispensed field on the PDE record for each Part D rebatable 
drug with gross covered prescription drug costs greater than zero. 
Because the PDE record does not provide the unit type used to determine 
Quantity Dispensed, CMS proposes in Sec.  428.203(a)(2) that CMS would 
crosswalk the information from the PDE record to a drug database that 
provides the unit type for an NDC, such as Medi-Span or the FDA's 
Comprehensive NDC Structured Product Labeling (SPL) Data Element (NSDE) 
file, matching on the NDC of the Part D rebatable drug. CMS understands 
that in limited instances, the unit type obtained from such drug 
databases may not match the AMP unit type reported by manufacturers to 
the Medicaid Drug Programs system, and in these cases, CMS would 
convert the total units reported on the PDE record to the AMP units 
reported to the Medicaid Drug Program system.
    CMS conducts a thorough review of PDE records, which includes the 
identification of outliers in the quantity dispensed field of PDE 
records, as part of the Part D payment reconciliation process that 
occurs between CMS and

[[Page 61969]]

plan sponsors each year.\585\ CMS intends to rely on this payment 
reconciliation process, through which Part D plan sponsors have an 
opportunity to correct PDE records flagged by CMS as containing 
potential outliers, to resolve outliers that would otherwise impact the 
Part D drug inflation rebate amount calculated under proposed Sec.  
428.201(a). Because PDE records are not updated to reflect the 
resolution of outliers identified through the Part D payment 
reconciliation process for a given calendar year until after CMS plans 
to send Rebate Reports for the applicable period (capturing data that 
include the first three quarters of that calendar year), the Rebate 
Report will not reflect the resolution of unit outliers identified 
through the Part D payment reconciliation process. However, because CMS 
intends to conduct a reconciliation of the rebate amount with 
additional PDE run-out (as proposed in Sec.  428.401(d) and described 
later in this proposed rule), the reconciled rebate amounts will 
reflect the resolution of any unit outliers corrected by Part D plan 
sponsors through the Part D payment reconciliation process. CMS does 
not intend to conduct separate outlier analysis of PDE for the purposes 
of the Medicare Part D Drug Inflation Rebate Program, but CMS did 
consider several adjustments to reduce the effect of outliers not 
resolved through the Part D payment reconciliation process, including 
removal of PDE records that were identified by CMS as having potential 
outlier quantity dispensed fields but were neither corrected nor 
verified by Part D plan sponsors, removal of the quantity dispensed 
field for certain records at or above a certain statistically derived 
threshold, and imputing quantity dispensed values for such records. CMS 
is soliciting comments on this proposed approach to rely on CMS' 
existing review of PDE records, as well as on the adjustments 
considered to reduce the effect of outliers not resolved through the 
Part D payment reconciliation process.
---------------------------------------------------------------------------

    \585\ See https://www.hhs.gov/guidance/document/pde-analysis-process-withheld-and-invoiced-outlier-pdes.
---------------------------------------------------------------------------

    As proposed in Sec.  428.203(b), CMS would remove from the total 
number of units any units of a generic drug dispensed on or after the 
date that such generic drug no longer meets the definition of a Part D 
rebatable drug, as well as units acquired through the 340B Program, as 
described in section III.I.3.c of this proposed rule. CMS invites 
comments on any additional units that should be excluded from the 
rebate amount calculation.
(1) Removal of Units When a Generic Drug Is No Longer a Part D 
Rebatable Drug
    In Sec.  428.203(b)(1), CMS proposes to codify the policy 
established in section 40.2.8 of the revised Medicare Part D Drug 
Inflation Rebate Guidance to exclude from the rebate calculation any 
units of a generic drug dispensed on or after the date that such 
generic drug no longer meets the definition of a Part D rebatable drug. 
To determine whether a generic drug that meets the definition of a Part 
D rebatable drug on the first day of an applicable period ceases to 
meet such definition later in the applicable period, CMS will use the 
most recent version of the downloadable FDA Orange Book to identify 
whether FDA has approved a 505(j) ANDA for a drug that is rated as 
therapeutically equivalent to such generic drug. If CMS determines that 
FDA has approved such a therapeutically equivalent drug under a 505(j) 
ANDA, CMS will then use the NDC Directory, including historical 
information from NDC Directory files such as discontinued, delisted, 
and expired listings provided by FDA or published on the FDA website to 
determine the marketing status of such therapeutically equivalent drug 
and to determine whether, during the applicable period, the 
therapeutically equivalent drug was marketed. Similarly, CMS will use 
the NDC Directory to identify whether the reference listed drug, or an 
authorized generic of the reference listed drug was marketed during the 
applicable period. CMS will exclude from the rebate calculation any 
units dispensed on or after the first day of the calendar month that a 
generic drug no longer meets the definition of a Part D rebatable drug. 
CMS intends to apply this unit exclusion at the month level and would 
exclude all units of a generic drug that ceases to meet the definition 
of a Part D rebatable drug beginning with the first day of the first 
month when a therapeutically equivalent drug approved under a 505(j) 
ANDA is marketed based on the marketing start date in the NDC Directory 
or when the reference listed drug, or an authorized generic of the 
reference listed drug is marketed based on the marketing start date in 
the NDC Directory. CMS proposes to apply this exclusion each calendar 
month because the Orange Book downloadable data files are updated 
monthly.
(2) Exclusion of 340B Acquired Units From Part D Rebatable Drug 
Requirements
    Section 1860D-14B(b)(1)(B) of the Act requires that beginning with 
plan year 2026, CMS shall exclude from the total number of units for a 
Part D rebatable drug, with respect to an applicable period, those 
units for which a manufacturer provides a discount under the 340B 
Program. Because this requirement starts after the first quarter of the 
applicable period that begins on October 1, 2025, the exclusion of 340B 
units would only apply for the last three quarters of this applicable 
period. That is, CMS would exclude 340B units starting on January 1, 
2026.
    Data on which units dispensed under Part D and covered by Part D 
plan sponsors were purchased under the 340B Program is unavailable 
under the data sources specified at section 1860D-14B(d) of the Act 
(that is, information submitted by manufacturers, States, and Part D 
plan sponsors), and CMS does not currently have access to this data 
through other means. CMS understands that the 340B status of a Part D 
drug is usually not known by the dispenser at the point-of-sale, and 
that 340B covered entities (hereinafter ``covered entities'') typically 
identify the 340B status of a Part D drug retrospectively. Because the 
covered entity and CMS do not exchange dispensed Part D drug 
information confirming the 340B status of a Part D rebatable drug, CMS 
is unable to identify 340B units at the claim-level at this time. For 
these reasons, CMS believes it necessary to establish an estimation 
methodology to remove 340B units from the total number of units for a 
Part D rebatable drug, as described in this section.
(a) Estimation Methodology To Remove 340B Units From Rebate 
Calculations
    To fulfill the statutory requirement to remove 340B units from 
rebate calculations beginning on January 1, 2026, CMS is proposing in 
Sec.  428.203(b)(2) a new policy to remove units from the total number 
of units dispensed of a Part D rebatable drug for each applicable 
period based on a calculated percentage that reflects the portion of 
340B purchasing relative to total sales. CMS proposes the percentage 
(hereinafter, ``estimation percentage'') to equal the total number of 
units purchased by covered entities under the 340B Program for an NDC-
9, divided by the total units sold of that NDC-9. An example 
calculation for a Part D rebatable drug for a given applicable period 
is shown below for illustrative purposes:


[[Page 61970]]


Total number of units dispensed under Part D determined under Sec.  
428.203(a), minus the units determined under Sec.  428.203(b)(1): 1,000
Estimation percentage:
Total number of units purchased by covered entities under the 340B 
Program: 5,000
Total units sold: 50,000
5,000 divided by 50,000 = 10 percent
340B units excluded under Sec.  428.204(b)(2): 10 percent multiplied by 
1,000 = 100

    The proposed estimation policy is consistent with CMS' authority 
under section 1860D-14B(b)(1)(B) of the Act and sections 1102(a) and 
1871(a)(1) of the Act, the latter of which provide the authority to 
make rules and regulations as necessary for the efficient 
administration of programs, including the Medicare Part D Drug 
Inflation Rebate Program. Because the statutory requirement to remove 
340B units from rebate calculations does not begin until January 1, 
2026, for the applicable year that begins on October 1, 2025, CMS 
proposes to apply the estimation percentage only to those units 
associated with claims with dates of service in the last three quarters 
of the applicable period (that is, January 1, 2026, through September 
30, 2026).
    To identify the numerator of the estimation percentage (that is, 
the total number of units purchased under the 340B Program for an NDC-
9), CMS proposes to use data from HRSA's Prime Vendor Program (PVP). 
Certain supply chain entities report 340B unit data to the PVP at the 
NDC-11 level, and based on the data received, CMS would aggregate these 
data at the NDC-9 level \586\ to identify the total number of 340B 
units of a Part D rebatable drug that covered entities purchased in a 
given time period. CMS proposes to work with HRSA to obtain the 
necessary data from the PVP. CMS understands that there are limitations 
of using the PVP data, including that some covered entities may choose 
not to participate in the PVP, and CMS would not have access to 340B 
purchases reported by supply chain entities for this share of covered 
entities. Further, certain 340B purchases may not be reported to the 
PVP if those purchases were made through alternative distribution 
models such as a covered entity purchasing directly from a 
manufacturer, certain specialty distribution channel purchases, or 
drugs that receive a 340B rebate under the Ryan White HIV/AIDS 
Program's AIDS Drug Assistance Program. CMS is soliciting comments on 
what other data sources may be available to calculate the numerator of 
the estimation percentage. CMS is also soliciting comments on how it 
could account for potential underreporting of 340B units if data are 
not available on certain 340B purchases, such as those described above, 
that may not be reported to the PVP.
---------------------------------------------------------------------------

    \586\ NDC-9 and NDC-11 numbers are identical except for two 
numbers in NDC-11s that indicate package size. Because of this, NDC-
11 is more granular than NDC-9, and multiple NDC-11 numbers can 
aggregate under a single NDC-9 number.
---------------------------------------------------------------------------

    To identify the denominator of the estimation percentage (that is, 
the total units sold of an NDC-9), CMS proposes to use existing 
manufacturer reporting under the Medicaid Drug Rebate Program (MDRP) of 
unit sales. Specifically, CMS proposes to use the total number of units 
that are used to calculate the monthly AMP and which manufacturers are 
required to report to CMS for each covered outpatient drug (COD) in 
accordance with section 1927(b)(3)(A)(iv) of the Act. CMS believes that 
using these unit data to calculate an estimation percentage is 
consistent with the use of these same data to calculate the AnMP in 
proposed Sec.  428.202(b) and the benchmark period manufacturer price 
in proposed Sec.  428.202(d).
    CMS recognizes the importance of ensuring that the numerator and 
denominator of the proposed estimation percentage reflect the same time 
period of sales for units dispensed in the same settings. CMS 
acknowledges that the proposed data source for the numerator (PVP data) 
reflects purchases by covered entities that dispense or administer 
340B-eligible drugs in retail community pharmacies and in outpatient 
settings. The proposed data source for the denominator (unit sales used 
to calculate AMP) represents, in accordance with the definition of AMP 
at section 1927(k)(1) of the Act, (1) manufacturer sales to wholesalers 
for drugs distributed to retail community pharmacies, and (2) 
manufacturer sales to retail community pharmacies that purchase drugs 
directly from the manufacturer. Therefore, the numerator of the 
proposed estimation percentage represents 340B units dispensed in 
multiple settings, whereas the denominator represents units typically 
dispensed only in the retail community pharmacy setting. CMS welcomes 
evidence demonstrating how 340B dispensing rates differ between the 
retail community pharmacy setting versus multiple settings and may 
consider adjusting the estimation percentage to reflect variation 
between the percentage of 340B units dispensed in multiple settings 
(that is, retail community pharmacies and outpatient settings) and the 
percentage of 340B units dispensed in only the retail community 
pharmacy setting. The proposed regulatory text at Sec.  428.203(b)(2) 
would be subject to any such adjustment factor that may be adopted.
    CMS also recognizes that the proposed estimation percentage 
represents the total number of 340B units dispensed as a proportion of 
total units dispensed, irrespective of insurance/payor type. CMS is 
soliciting comments on whether the agency should further adjust the 
percentage of 340B units dispensed to the general population to 
estimate the percentage of 340B units dispensed to Part D beneficiaries 
for claims with dates of service on or after January 1, 2026, including 
comments on how the percentage of 340B units dispensed to the general 
population compares with the percentage of 340B units dispensed to Part 
D beneficiaries. CMS welcomes evidence that demonstrates how these 
percentages differ. CMS will consider this information in developing 
its final policies and may consider adjusting the estimation percentage 
to reflect variation between the percentage of 340B units dispensed to 
Part D beneficiaries and the percentage of 340B units dispensed to the 
general population. The proposed regulatory text at Sec.  428.203(b)(2) 
would be subject to any such adjustment factor that may be adopted. CMS 
is also soliciting comments on whether there are other circumstances 
for which CMS should apply an adjustment factor to the estimation 
percentage.
    CMS considered using alternative data sources to calculate the 
estimation percentage. To identify the total number of units purchased 
under the 340B Program to use in the numerator of the estimation 
percentage, CMS considered requiring other entities throughout the 
pharmaceutical supply chain, including manufacturers, to report these 
data to CMS. An advantage of this approach is that manufacturers could 
provide data directly on total 340B units sold; in other words, this 
data would capture the limited 340B sales that the PVP data does not 
capture. A disadvantage of this approach is that not all manufacturers 
of Part D rebatable drugs may have existing mechanisms for tracking 
340B sales for Medicare Part D, which could necessitate that new 
tracking and reporting mechanisms be created. At this time, CMS is not 
proposing this alternative because CMS would prefer to rely on data 
that are already reported to the PVP, as using these data would help to 
minimize reporting burdens and may

[[Page 61971]]

result in cleaner and more accurate data due to the quality checks 
performed on the PVP data for purposes of compliance with the 340B 
Program. For example, audit and price integrity checks are performed on 
the PVP data to ensure the distributors submit and code the data 
correctly.
    To identify the total units sold to use in the denominator of the 
estimation percentage, CMS similarly considered establishing a new 
requirement for other entities throughout the pharmaceutical supply 
chain, including manufacturers, to report these data to CMS. An 
advantage of this approach is that the denominator would represent 
sales that are ultimately dispensed in retail community pharmacy 
settings and in outpatient settings (whereas, as mentioned previously, 
unit reporting under the MDRP represents units typically dispensed only 
in the retail community pharmacy setting). A disadvantage of this 
approach is that it could necessitate that new tracking and reporting 
mechanisms be created. At this time, CMS is not proposing this 
alternative as CMS believes that relying upon existing manufacturer 
reporting of unit sales reported with AMP under the MDRP would be 
preferable to a new reporting option and would help minimize reporting 
burden. Further, the use of unit sales reported with AMP may provide 
cleaner and more accurate data than establishing a new manufacturer 
reporting requirement since manufacturers must certify their AMP 
reporting, in accordance with Sec.  447.510(e), and are subject to 
civil money penalties for false or inaccurate reporting, in accordance 
with section 1927(b)(3)(B) of the Act. CMS also considered using data 
on unit sales available in a nationally representative and commercially 
available database but one disadvantage of this option would be that 
CMS would be unable to audit the quality of data available through such 
a database.
(b) Comment Solicitation on a Medicare Part D Claims Data Repository
    In the initial Medicare Part D Drug Inflation Rebate Guidance, CMS 
solicited comments on the best mechanism to identify 340B units 
dispensed under Part D.\587\ CMS discussed requiring the dispensing 
entity to include a 340B claims indicator on the Part D drug claim to 
be included in PDE records. Many commenters disagreed that the PDE 
record was the most accurate way to identify 340B discounts for Part D 
drugs. A few commenters highlighted the operational challenges, 
administrative burden, and potential for increased dispensing fees and 
reimbursement issues with both point-of-sale modifiers and 
retrospective 340B identifiers. In addition, a wide array of interested 
parties recommended that CMS create a mechanism through which covered 
entities would retrospectively submit data to CMS identifying 340B 
claims dispensed under Part D. Interested parties urged that this 
mechanism allow covered entities to submit these data directly to CMS, 
rather than through claims that dispensers submit via Part D plan 
sponsors.
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    \587\ See: https://www.cms.gov/files/document/medicare-part-d-inflation-rebate-program-initial-guidance.pdf.
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    In response to this feedback from interested parties, CMS is 
soliciting comments on establishing a Medicare Part D claims data 
repository (hereinafter, ``repository'') in a future year of the 
Medicare Part D Drug Inflation Rebate Program to comply with the 
requirement under section 1860D-14B(1)(B) of the Act that CMS shall 
exclude from the total number of units for a Part D rebatable drug 
those units for which a manufacturer provides a discount under the 340B 
Program. This approach would require that covered entities submit 
certain data elements from 340B-identified Part D claims to the 
repository. CMS solicits comments on such a requirement later in this 
section.
    As described later in this section, a repository could receive data 
elements submitted by covered entities from 340B-identified claims for 
all drugs covered under Medicare Part D billed to Medicare. As 
requested by interested parties in comments on the initial Medicare 
Part D Drug Inflation Rebate Guidance, the repository could allow 
covered entities to submit these data directly to CMS (or a 
contractor), rather than through claims that dispensers submit to Part 
D plan sponsors. CMS could consider all data elements received by the 
repository to be associated with 340B-identified claims; that is, the 
repository would not further verify the 340B status of a claim but 
rather would serve solely to store these data. Under this process, CMS 
could require an attestation from covered entities that the data 
elements from all claims submitted to the repository are from verified 
340B claims. CMS is exploring approaches to confirming completeness and 
accuracy of the submission, and CMS is soliciting comments on methods 
to review and ensure the accuracy of reported data. CMS could then 
match the stored data elements to PDE records for each Part D rebatable 
drug dispensed during the applicable period. Units associated with PDE 
records that match to data elements stored in the repository could be 
considered those for which the manufacturer provides a discount under 
the 340B Program and therefore removed from the total number of units 
used to calculate the total rebate amount.
(c) Comment Solicitation on Requiring Covered Entities To Submit 340B 
Claims Data to the Repository
    CMS is soliciting comments on using its authority under section 
1860D-14B(b)(1)(B) of the Act, as well as its authorities under 
sections 1102(a) and 1871(a)(1) of the Act, to require covered entities 
to enroll in a repository and submit certain data elements from 340B-
identified claims for all covered Part D drugs billed to Medicare to 
this repository. CMS understands covered entities typically contract 
with 340B third-party administrators (340B TPAs) to determine 340B 
eligibility of claims using data submitted by covered entities and 
their contract pharmacies.\588\ CMS welcomes comments on whether or 
how, to the extent a covered entity uses a 340B TPA, CMS could require 
or encourage TPAs to submit certain data elements to the repository on 
behalf of that covered entity.
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    \588\ Covered entities may elect to dispense 340B drugs to 
patients through contract pharmacy services, an arrangement in which 
the covered entity enters a contract with the pharmacy to provide 
pharmacy services.
---------------------------------------------------------------------------

    Requiring covered entities to submit data elements from 340B-
identified Part D claims to the repository could allow CMS to receive 
data directly from the entities that participate in the 340B Program to 
identify 340B units to exclude from Part D drug inflation rebate 
calculations without intermediary entities needing to develop processes 
to capture these data and relay it to CMS. CMS is considering requiring 
covered entities to submit the following data elements from Part D 
claims for covered Part D drugs that are purchased under the 340B 
Program and dispensed to Medicare Part D beneficiaries: (1) Date of 
Service (that is, the date the prescription was filled by the 
pharmacy); (2) Prescription or Service Reference Number; (3) Fill 
Number (that is, the code indicating whether the prescription is an 
original or a refill; if a refill, the code indicates the refill 
number); and (4) Dispensing Pharmacy NPI. CMS believes that these would 
be the minimum data elements required to match claims and remove 340B 
units from Part D drug inflation rebate calculations. CMS is soliciting

[[Page 61972]]

comments from interested parties on this list of data elements and 
whether these data elements would be accessible to covered entities to 
submit to CMS.
(d) Comment Solicitation on Timing Requirements for Potential 
Submissions to a Medicare Part D Claims Data Repository
    CMS is soliciting comments on requiring covered entities to submit 
the fields specified by CMS to the repository within 3 months of the 
end of a given calendar quarter. For example, for claims with dates of 
service between October 1, 2027, through December 31, 2027, covered 
entities would be required to submit data elements from 340B-identified 
claims to CMS no later than March 31, 2028. The 340B units identified 
from these quarterly submissions could be removed from the total number 
of units and total rebate amount specified in the Preliminary Rebate 
Report and Rebate Report detailed in proposed Sec.  428.401(b) and (c), 
respectively.
    In accordance with the proposed regulation at Sec.  428.401(d) to 
reconcile the rebate amount in the case of revised information, 
including a reconciliation of the total number of units detailed at 
proposed Sec.  428.401, CMS is soliciting comments on providing covered 
entities with additional time to submit data to reflect a revision to 
the 340B determination of claims with dates of service throughout an 
applicable period. A revision could come in one of two forms: (1) 
resubmission of data for a claim that the covered entity previously 
submitted to a repository in error or with errors in the requested data 
fields, or (2) new submission of data for a claim that the covered 
entity had previously determined was not purchased under the 340B 
Program, but later identified was purchased under such program. For the 
first type of revision, CMS is soliciting comments on requiring that 
the covered entity resubmit the data from such claim using a field to 
indicate that such data should be removed from the repository's dataset 
of 340B-identified claims; if applicable, the covered entity could 
resubmit the claim with the correct information. CMS is soliciting 
comments on the process and timing for covered entities to submit this 
revised data to the repository after the end of the applicable period. 
Updates to the total number of units and total rebate amount based on 
this revised information from covered entities would be reflected in 
the reconciliation process detailed at proposed Sec.  428.401(d).
    CMS is soliciting comments from interested parties on the 
feasibility of the proposed quarterly reporting timeline for covered 
entities to submit data elements from Part D 340B claims, as well as 
the additional time to submit data to reflect a revision to the 340B 
determination of claims.
(e) Alternative Policy Considered: 340B Claims Identifier
    As described in section 40.2.7 of the initial Medicare Part D Drug 
Inflation Rebate Guidance, CMS considered requiring that a 340B 
indicator be included on the PDE record at the time of dispense to 
identify drugs purchased under the 340B Program that were dispensed 
under Medicare Part D. As described in the ``Summary of Public Comments 
on the Initial Medicare Part D Drug Inflation Rebates Memorandum and 
CMS' Responses'' in the revised Medicare Part D Drug Inflation Rebate 
Guidance, many commenters--including covered entities, pharmacies, Part 
D plan sponsors, and pharmacy benefit managers--disagreed that the PDE 
record would be the most accurate way to identify 340B discounts for 
Part D drugs. A few commenters highlighted the operational challenges, 
administrative burden, and potential for increased dispensing fees and 
reimbursement issues with 340B claim identifiers. After further 
consideration of comments received in response to the initial guidance 
and of the process through which a claim is determined to have 340B 
status, CMS is no longer pursuing this policy at this time but may 
consider it in future rulemaking.
v. Treatment of New Formulations of Part D Rebatable Drugs
    Section 1860D-14B(b)(5)(B)(i) of the Act requires CMS to determine 
a formula for the rebate amount and the inflation-adjusted payment 
amount for a Part D rebatable drug that is a line extension of a Part D 
rebatable drug that is an oral solid dosage form for an applicable 
period that is consistent with the formula applied under section 
1927(c)(2)(C) of the Act for determining a rebate obligation for a 
rebate period under such section. Section 1927(c)(2)(C) of the Act 
provides for an alternative rebate calculation for line extension drugs 
under the MDRP, and CMS issued guidance on how this calculation is 
performed for these purposes.\589\
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    \589\ See: https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/unit-rebate-calculation/unit-rebate-amount-calculation-for-line-extension-drugs-with-example/index.html.
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    Section 1860D-14B(b)(5)(B)(ii) of the Act further states that for a 
Part D rebatable drug, the term line extension means, ``a new 
formulation of the drug, such as extended release formulation, but does 
not include an abuse-deterrent formulation of the drug (as determined 
by the Secretary), regardless of whether such abuse-deterrent 
formulation is an extended release formulation.'' This language is 
identical to the definition of ``line extension'' in section 
1927(c)(2)(C) of the Act. Regulatory definitions of ``line extension'' 
and ``new formulation'' for the MDRP were adopted through rulemaking 
\590\ and can be found at Sec.  447.502. In alignment with CMS' policy 
in section 40.4 of the revised Medicare Part D Drug Inflation Rebate 
Guidance, CMS proposes in Sec.  428.200 to adopt the definitions of 
``line extension'' and ``new formulation'' at Sec.  447.502 of this 
title for the purposes of identifying new formulations of Part D 
rebatable drugs.
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    \590\ See: 85 FR 87000, 87101 (December 31, 2020).
---------------------------------------------------------------------------

    In proposed Sec.  428.204, CMS would determine the total rebate 
amount to be paid by manufacturers by taking the greater of (1) the 
total rebate amount calculated in proposed Sec.  428.201(a) for the 
applicable period for the Part D rebatable drug that is a line 
extension, or (2) the alternative total rebate amount. This proposal is 
a modification to policy established in revised Medicare Part D Drug 
Inflation Rebate Guidance. While the revised guidance stated that CMS 
would compare the per unit rebate amount to the alternative per unit 
rebate amount, as proposed in Sec.  428.204, CMS would compare the 
total rebate amount calculated in proposed Sec.  428.201(a) to the 
alternative total rebate amount, which CMS believes is consistent with 
the existing regulations for new formulations at Sec.  447.509(a)(4). 
CMS further proposes in Sec.  428.204 to codify the policy described in 
section 40.4 of the revised guidance to calculate the alternative 
inflation rebate amount for a Part D rebatable drug that is a line 
extension consistent with the formula applied under section 
1927(c)(2)(C) of the Act. That is, CMS would determine an inflation 
rebate amount ratio for the initial drug identified by the manufacturer 
in accordance with Sec.  447.509(a)(4)(i)(B) by dividing the inflation 
rebate amount for that initial drug for the applicable period by the 
AnMP for that initial drug for the applicable period, as calculated 
under proposed Sec.  428.202(b).
    To identify the initial drug for the line extension, CMS would use 
information from the Medicaid Drug Program system and identify line 
extensions based on manufacturer reporting of drugs as line extensions 
and related pricing and product data in that system. CMS notes

[[Page 61973]]

that Medicaid rebates are calculated quarterly, and a different initial 
drug may be identified in different quarters by the manufacturer for a 
particular line extension drug. Part D drug inflation rebates are 
calculated based on a 12-month applicable period, meaning there may be 
instances where a Part D rebatable line extension drug has multiple 
potential initial drugs during the applicable period that could be used 
for the alternative inflation rebate amount calculation. In such 
situations, for consistency, CMS will use the initial drug identified 
by the manufacturer in the last quarter of the Part D inflation rebate 
applicable period to identify the initial drug for the line extension 
drug alternative inflation rebate calculation. If an initial drug was 
not identified in the last quarter for a drug that is a line extension, 
CMS will use the initial drug identified for a quarter most recently in 
that applicable period to identify the initial drug for the line 
extension drug alternative inflation rebate calculation.
d. Reducing the Rebate Amount for Part D Rebatable Drugs in Shortage 
and When There Is a Severe Supply Chain Disruption or Likely Shortage 
(Sec. Sec.  428.300 Through 428.303)
    Section 1860D-14B(b)(1)(C) of the Act requires the Secretary to 
reduce or waive the rebate amount owed by a manufacturer for a Part D 
rebatable drug with respect to an applicable period in three distinct 
cases: (1) when a Part D rebatable drug is described as currently in 
shortage on a shortage list in effect under section 506E of the FD&C 
Act at any point during the applicable period; (2) when CMS determines 
there is a severe supply chain disruption during the applicable period 
for a generic Part D rebatable drug or biosimilar, such as a disruption 
caused by a natural disaster or other unique or unexpected event; and 
(3) when CMS determines that without such a reduction or waiver, a 
generic Part D rebatable drug is likely to be described as in shortage 
on such shortage list during a subsequent applicable period. The 
statute does not describe how CMS should reduce or waive inflation 
rebates.
    To implement the statutory requirement under section 1860D-
14B(b)(1)(C), CMS proposes to codify in subpart D of part 428 existing 
policies described in sections 40.5, 40.5.1, 40.5.2, and 40.5.3 of the 
revised Medicare Part D Drug Inflation Rebate Guidance to reduce the 
total rebate amount owed by a manufacturer in each of these three 
cases, as summarized in Table 51 and discussed later in this section.
[GRAPHIC] [TIFF OMITTED] TP31JY24.083

    As proposed, CMS would not fully waive the rebate amount owed in 
any case. CMS believes the proposed rebate reduction policies balance 
providing appropriate financial relief for manufacturers in certain 
circumstances, including when there is a severe supply disruption 
resulting from exogenous circumstances outside of a manufacturer's 
control, while not incentivizing manufacturers to delay taking 
appropriate steps to resolve a drug shortage or severe supply chain 
disruption, or maintain a situation in which a generic would be at risk 
of shortage to avoid an obligation to pay rebates. CMS will continue to 
evaluate these policies and may update them in future years. CMS 
underscores that most shortages involve multiple source generic 
drugs,\591\ which are not Part D rebatable drugs and thus are not 
subject to Part D drug inflation rebates. CMS solicits comments on the 
proposed approach.
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    \591\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
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i. Definitions
    CMS proposes in Sec.  428.300 to define the following terms 
applicable to subpart D (Sec. Sec.  428.300 through 428.303):
     ``Biosimilar''.
     ``Drug shortage'' or ``shortage''.
     ``Generic Part D rebatable drug''.
     ``Likely to be in shortage''.
     ``Plasma-derived product''.
    Proposed Sec.  428.300 also would codify definitions established in 
the revised Medicare Part D Drug Inflation Rebate Guidance for the 
following terms:
     ``Currently in shortage''.
     ``Natural disaster''.
     ``Other unique or unexpected event''.
     ``Severe supply chain disruption''.
ii. Reducing the Rebate Amount for Part D Rebatable Drugs Currently in 
Shortage
    In proposed Sec.  428.301, CMS proposes to codify the policy 
established in section 40.5.1 of the revised Medicare Part D Drug 
Inflation Rebate Guidance

[[Page 61974]]

whereby CMS would reduce the total rebate amount for a Part D rebatable 
drug that is currently in shortage based on the length of time the drug 
is in shortage during an applicable period and decrease the amount of 
the reduction over time. CMS intends to use the shortage lists 
maintained by the FDA Center for Biologics Evaluation and Research 
(CBER) and Center for Drug Evaluation and Research (CDER) to determine 
whether a Part D rebatable drug is currently in shortage \592\ during 
an applicable period. CMS will not consider an NDC-10 in the status of 
``to be discontinued,'' ``discontinued,'' or ``resolved'' to be 
``currently in shortage.'' At this time, CMS intends to provide the 
same reduction in the rebate amount for Part D rebatable drugs 
currently in shortage regardless of the cause of the shortage.
---------------------------------------------------------------------------

    \592\ For the purposes of this proposed rule, CMS uses the term 
``currently in shortage'' to refer to Part D rebatable drugs that 
are in the status of ``currently in shortage'' on the CDER shortage 
list, as well as biological products listed on CBER's current 
shortages list.
---------------------------------------------------------------------------

    CMS will not provide a full waiver of the rebate amount for drugs 
currently in shortage on an FDA shortage list, as providing a full 
waiver of the rebate amount could further incentivize manufacturers to 
delay taking appropriate steps that may resolve a shortage more 
expeditiously simply to maintain having the drug listed on FDA's drug 
shortage list to avoid an obligation to pay rebates for an extended 
period. Further, in a report analyzing the root causes of drug 
shortages between 2013 and 2017, FDA found that more than 60 percent of 
drug shortages were the result of manufacturing or product quality 
issues, and providing a full waiver of the rebate amount in situations 
that may be within a manufacturer's control could be perceived as 
rewarding manufacturers for poor quality management.\593\
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    \593\ See: https://www.fda.gov/media/131130/download?attachment#page=33.
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    CMS would be responsible for monitoring the status of a Part D 
rebatable drug on an FDA shortage list, and manufacturers would not 
need to submit any information to CMS to be eligible for a reduction of 
the rebate amount for a Part D rebatable drug that is currently in 
shortage.
    To calculate the reduced total rebate amount for a Part D rebatable 
drug, in Sec.  428.301(b)(1), CMS proposes the following formula:

Reduced Total Rebate Amount = the total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the applicable period) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the applicable period)

    For the purpose of this formula, for a Part D rebatable drug that 
is a generic drug or a plasma-derived product, in Sec.  
428.301(b)(2)(i), CMS proposes an applicable percent reduction of 75 
percent for the first applicable period such Part D rebatable drug is 
currently in shortage, 50 percent for the second applicable period, and 
25 percent for each subsequent applicable period. For a Part D 
rebatable drug (including a biosimilar) that is not a generic drug or a 
plasma-derived product, in Sec.  428.301(b)(2)(ii), CMS proposes an 
applicable percent reduction of 25 percent for the first applicable 
period such Part D rebatable drug is currently in shortage, 10 percent 
for the second applicable period, and 2 percent for each subsequent 
applicable period.
    Because drugs and biologicals on the FDA shortage lists are 
maintained at the NDC-10 level, and Part D drug inflation rebates are 
calculated at the NDC-9 level, CMS proposes in Sec.  428.301(c) that if 
any NDC-10 for a Part D rebatable drug is currently in shortage, CMS 
would apply the rebate reduction to the entire Part D rebatable drug at 
the NDC-9 level. CMS will closely monitor market data for the Part D 
rebatable drugs for which the rebate is reduced to ensure the integrity 
of the application of the rebate reduction policy.
    CMS intends to provide a reduction in the rebate amount for as long 
as a Part D rebatable drug is currently in shortage. CMS believes the 
rebate reduction should be proportional to the time the drug is 
currently in shortage and decrease over time to balance providing 
financial relief to manufacturers experiencing a drug shortage while 
not incentivizing manufacturers to delay taking appropriate steps to 
resolve a shortage simply to maintain having the drug listed on an FDA 
shortage list to avoid an obligation to pay rebates for an extended 
period.
    To determine the percentage of time a Part D rebatable drug was 
currently in shortage during the applicable period, as proposed in 
Sec.  428.301(b)(3), CMS would count the number of days such drug is 
currently in shortage in an applicable period and divide by the total 
number of days in that applicable period.
    In proposed Sec.  428.301(b)(2), CMS proposes codifying the policy 
set forth in section 40.5.1 of the revised Medicare Part D Drug 
Inflation Rebate Guidance to apply a greater applicable percent 
reduction for generic Part D rebatable drugs, which, by definition, are 
sole source generic drugs, compared to brand-name drugs and 
biologicals, including biosimilars. CMS understands that generic drugs 
are often low-margin products whose prices are tied to the marginal 
cost of production and thus are vulnerable to potential market exit and 
shortage when input costs increase. CMS notes that the Medicare Part D 
Drug Inflation Rebate Program does not apply to multiple source generic 
drugs, which are the generic drugs most likely to be in shortage.\594\ 
CMS proposes also applying a greater applicable percent reduction for 
plasma-derived products than non-plasma derived products because the 
former rely on a variable supply of donated blood plasma that can 
impact downstream production and therefore hamper the ability to 
promptly resolve a shortage.
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    \594\ See: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/drug-shortages-in-the-us2023.
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    When the status of a Part D rebatable drug changes from currently 
in shortage to ``resolved'' and either remains in the status of 
``resolved'' or is removed from the list, and then reemerges on the 
list in the status of currently in shortage in the next applicable 
period, CMS would apply the shortage reduction as if there was a 
continuous shortage and move to the applicable percent reduction for 
the second applicable period. (In this scenario, the applicable percent 
reduction would be 50 percent for the second applicable period for a 
generic Part D rebatable drug or plasma-derived product and 10 percent 
for a Part D rebatable drug that is not a generic drug or plasma-
derived product.) When the status of a Part D rebatable drug changes 
from currently in shortage to ``resolved'' and either remains in the 
status of ``resolved'' or is removed from the list for at least one 
applicable period, and then subsequently reemerges on a shortage list, 
the subsequent shortage would be treated as a new shortage. In such 
case, the applicable percent reduction for the first applicable period 
in which the drug reemerges on the shortage list would be 75 percent 
for a generic Part D rebatable drug or plasma-derived product and 50 
percent for a Part D rebatable drug that is not a generic or plasma-
derived product.

[[Page 61975]]

iii. Reducing the Rebate Amount for Generic Part D Rebatable Drugs and 
Biosimilars When There Is a Severe Supply Chain Disruption
    In Sec.  428.302 of this proposed rule, CMS proposes to codify 
existing policy established in section 40.5.2 of the revised Medicare 
Part D Drug Inflation Rebate Guidance for rebate reductions when CMS 
determines there is a severe supply chain disruption during an 
applicable period. As proposed in Sec.  428.302(b)(1), CMS would 
provide a time-limited standard reduction of 75 percent in the total 
rebate amount for a generic Part D rebatable drug or biosimilar when 
CMS determines there is a severe supply chain disruption during the 
applicable period, such as that caused by a natural disaster or other 
unique or unexpected event. To receive a rebate reduction in accordance 
with proposed Sec.  428.302(b)(1), the manufacturer would have to 
submit to CMS a rebate reduction request \595\ that meets the 
eligibility requirements proposed in Sec.  428.302(c). A rebate 
reduction request should specify each NDC-11 to which the request 
applies, and if CMS grants a manufacturer's severe supply chain 
disruption rebate reduction request for an NDC-11, CMS proposes in 
Sec.  428.302(b)(3) that the rebate reduction would apply to the entire 
generic Part D rebatable drug or biosimilar at the NDC-9 level. CMS has 
proposed additional submission requirements for rebate reduction 
requests in the information collection request under OMB control 
number: 0938-NEW (CMS-10858).
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    \595\ The rebate reduction request forms are currently going 
through the Paperwork Reduction Act approval process under the 
document identifier CMS-10858. The proposed collection was published 
for a 30-day comment period in the June 3, 2024 Federal Register (89 
FR 47563).
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    As proposed in Sec.  428.302(c)(4), CMS would grant a reduction in 
the rebate amount owed if a manufacturer of an eligible drug submits to 
CMS a request in writing demonstrating that (1) a severe supply chain 
disruption has occurred during the applicable period, (2) the severe 
supply chain disruption directly affects the manufacturer itself, a 
supplier of an ingredient or packaging, a contract manufacturer,\596\ 
or a method of shipping or distribution that the manufacturer uses in a 
significant capacity to make or distribute the generic Part D rebatable 
drug or biosimilar, and (3) the severe supply chain disruption was 
caused by a natural disaster or other unique or unexpected event. CMS 
will begin accepting rebate reduction requests and rebate reduction 
extension requests upon completion of the Paperwork Reduction Act (PRA) 
process, including for severe supply chain disruptions caused by a 
natural disaster or other unique or unexpected event that occurred on 
or after October 1, 2022, but before to completion of the PRA process. 
As proposed in Sec.  428.302(c)(2), for a natural disaster or other 
unique or unexpected event occurring on or after August 2, 2024, that 
the manufacturer believes caused a severe supply chain disruption, the 
manufacturer must submit the rebate reduction request within 60 
calendar days from the first day that the natural disaster or other 
unique or unexpected event occurred or began in order for CMS to 
consider a rebate reduction.
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    \596\ A contract manufacturer is a party that performs one or 
more manufacturing operations on behalf of a manufacturer(s) of 
active pharmaceutical ingredients (APIs), drug substances, in-
process materials, finished drug products, including biological 
products, and combination products. See ``Contract Manufacturing 
Arrangements for Drugs: Quality Agreements Guidance for Industry,'' 
November 2016: https://www.fda.gov/media/86193/download.
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    If the manufacturer makes a timely request that includes all the 
supporting documentation, and CMS determines, based on its review of 
the reduction request and supporting documentation, that a reduction 
should be granted, CMS would reduce the total rebate amount owed by a 
manufacturer by 75 percent for the manufacturer's generic Part D 
rebatable drug or biosimilar for the applicable period in which the 
event that caused the severe supply chain disruption occurred or began 
or, the following applicable period if the request is submitted less 
than 60 calendar days before the end of an applicable period. CMS 
acknowledges that the 60-day advance submission requirement may pose a 
challenge to timing of the rebate reduction when the severe supply 
chain disruption-causing event occurs late in one applicable period, 
and the request is not submitted until the next applicable period. In 
such circumstances, CMS would apply a rebate reduction to an applicable 
period based on the timing of the natural disaster or other unique or 
unexpected event causing a severe supply chain disruption and the 
timing of the submission of the request and may adjust the timing of 
the application of the rebate reduction as appropriate to meet the 
invoicing deadlines specified in statute and subpart E of proposed part 
428.
    CMS proposes in Sec.  428.302(c)(5) that if a manufacturer believes 
severe supply chain disruption continues into a second, consecutive 
applicable period after the start of the natural disaster or other 
unique or unexpected event, the manufacturer may request a reduction of 
the total rebate amount for that second applicable period by submitting 
a rebate reduction extension request to CMS, along with any new 
supporting documentation. CMS has proposed additional submission 
requirements for rebate reduction extension requests in the information 
collection request under OMB control number: 0938-NEW (CMS-10858). As 
proposed in Sec.  428.302(c)(5)(ii), a rebate reduction extension 
request and any new supporting documentation must be submitted at least 
60 calendar days before the start of that second applicable period in 
order for CMS to consider a rebate reduction extension, except for when 
the initial request is made less than 60 calendar days before the end 
of an applicable period such that the initial rebate reduction applied 
to the next applicable period rather than the applicable period in 
which the event that caused the severe supply chain disruption occurred 
or began. In these cases, the rebate reduction extension request must 
be submitted at least 60 calendar days prior to the end of the 
applicable period in which the initial reduction applied.
    If the manufacturer submits a complete and timely extension 
request, and CMS determines that the information submitted warrants an 
extension of the rebate reduction, the total rebate amount would be 
reduced by 75 percent for a second consecutive applicable period for 
that manufacturer's generic Part D rebatable drug or biosimilar in 
accordance with proposed Sec.  428.302(b)(2).
    Consistent with the policy established in section 40.5.2 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, a manufacturer 
may receive only one extension of the rebate reduction per generic Part 
D rebatable drug or biosimilar per CMS determination of a severe supply 
chain disruption, as proposed in Sec.  428.302(c)(5). Said differently, 
CMS would limit the severe supply chain disruption rebate reduction to 
two consecutive applicable periods total per generic Part D rebatable 
drug or biosimilar per CMS determination of a severe supply chain 
disruption.
    As proposed in Sec.  428.302(b)(4)(i), if the manufacturer believes 
there are multiple events causing severe supply chain disruptions 
during the same applicable period for the same generic Part D rebatable 
drug or biosimilar and submits multiple rebate reduction requests for 
the same generic drug or biosimilar, CMS will grant no more than one 
rebate reduction for that generic drug or biosimilar for the applicable

[[Page 61976]]

period. For example, if the manufacturer of a generic Part D rebatable 
drug or biosimilar is granted a severe supply chain disruption rebate 
reduction request for its product due to a natural disaster that 
occurred in January 2025 and then experiences a second severe supply 
chain disruption caused by a second, distinct natural disaster in July 
2025, CMS would not grant the second rebate reduction request. That is, 
the manufacturer would receive the 75 percent reduction for one 
applicable period for the severe supply chain disruption caused by the 
first natural disaster but would not receive a rebate reduction for the 
second natural disaster. However, if the second natural disaster 
exacerbated the severe supply chain disruption caused by the first 
natural disaster, the manufacturer may reflect such circumstances in 
its request for an extension of the rebate reduction for a second 
applicable period.
    As proposed in Sec.  428.302(b)(4)(ii), if CMS grants a severe 
supply chain disruption rebate reduction request for a generic Part D 
rebatable drug or biosimilar, and the drug or biosimilar appears as 
currently in shortage during the same applicable period as the one for 
which the severe supply chain disruption reduction request was granted, 
CMS would apply the 75 percent reduction to the entire applicable 
period for which the severe supply disruption request was granted and 
would not grant any additional reduction for the shortage status during 
that applicable period. For any subsequent applicable periods that the 
generic Part D rebatable drug or biosimilar appears as currently in 
shortage, CMS would reduce the total rebate amount in accordance with 
the drug shortages reduction proposed in Sec.  428.301, starting with 
the highest reduction (that is, 75 percent for a generic Part D 
rebatable drug or plasma-derived product and 25 percent for a Part D 
rebatable drug that is not a generic drug or plasma-derived product). 
For example, if CMS grants a severe supply chain disruption rebate 
reduction request for a generic Part D rebatable drug or biosimilar 
that was submitted on November 15, 2024, and that generic Part D 
rebatable drug or biosimilar is currently in shortage from September 
15, 2025, until May 15, 2026, CMS would apply a 75 percent reduction in 
the total rebate amount for the duration of the applicable period for 
which the severe supply chain disruption rebate reduction request was 
granted (that is, October 1, 2024, to September 30, 2025), and then 
would apply the shortages reduction as proposed in Sec.  428.301, 
beginning with a reduction of 25 percent for a biosimilar or 75 percent 
for a generic Part D rebatable drug or plasma-derived product that is a 
biosimilar for the applicable period beginning October 1, 2025.
    As proposed in Sec.  428.302(b)(4)(iii), if a generic Part D 
rebatable drug or biosimilar that is currently in shortage experiences 
a severe supply chain disruption, the manufacturer may submit a severe 
supply chain disruption rebate reduction request. If CMS grants the 
rebate reduction request, the rebate amount would be reduced by 75 
percent for the applicable period, and CMS would not grant any 
additional reduction under proposed Sec.  428.301 for the currently in 
shortage status during that applicable period. For example, if a 
generic Part D rebatable drug or biosimilar that is currently in 
shortage in the applicable period beginning October 1, 2024 is granted 
a severe supply chain disruption rebate reduction request as a result 
of a natural disaster that occurs on April 5, 2025, CMS would apply a 
75 percent reduction in the rebate amount for the duration of the 
applicable period in which the natural disaster occurred (that is, 
October 1, 2024, to September 30, 2025). In this same example, if the 
natural disaster instead occurs on September 5, 2025, CMS would apply 
the shortages reduction proposed in Sec.  428.301 for the duration of 
the applicable period beginning October 1, 2024 (that is, October 1, 
2024, to September 30, 2025), and then a 75 percent reduction under the 
severe supply chain disruption policy to the next applicable period 
beginning October 1, 2025 (that is, October 1, 2025, to September 30, 
2026).
    In Sec.  428.302(c)(6), CMS proposes to review rebate reduction 
requests and rebate reduction extension requests within 60 calendar 
days of receipt of all documentation, if feasible, beginning with the 
applicable period that begins on October 1, 2024. If a manufacturer's 
rebate reduction request does not meet the criteria in proposed Sec.  
428.302(c)(4) or if the rebate reduction request is incomplete or 
untimely based on the requirements in proposed Sec.  428.302(c), CMS 
would deny the request. CMS also proposes that if a manufacturer's 
rebate reduction extension request does not meet the criteria in 
proposed Sec.  428.302(c)(5), is incomplete or untimely based on the 
requirements in proposed Sec.  428.302(c)(5), or if a reduction under 
proposed Sec.  428.302(b)(1) was not provided for such generic Part D 
rebatable drug or biosimilar, CMS would deny the rebate reduction 
extension request. As proposed in Sec.  428.302(c)(6)(iii), CMS' 
decisions to deny a request would be final and not be subject to an 
appeals process.
    As proposed at Sec.  428.302(c)(7), CMS would keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. CMS proposes that information 
provided as part of a severe supply chain disruption rebate reduction 
request that the submitter indicates is a trade secret or confidential 
commercial or financial information would be protected from disclosure 
if CMS determines the information meets the requirements set forth 
under Exemptions 3 or 4 of the Freedom of Information Act (FOIA). In 
addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. CMS 
would protect confidential and proprietary information as required by 
applicable law.
iv. Reducing the Rebate Amount for Generic Part D Rebatable Drugs 
Likely To Be in Shortage
    In Sec.  428.303 of this proposed rule, CMS proposes to codify 
existing policy established in section 40.5.3 of the revised Medicare 
Part D Drug Inflation Rebate Guidance for rebate reductions when a 
generic Part D rebatable drug is likely to be in shortage, as defined 
in proposed Sec.  428.300. As proposed in Sec.  428.303(b)(1), CMS 
would provide a time-limited standard reduction of 75 percent in the 
total rebate amount for a generic Part D rebatable drug when CMS 
determines that the generic Part D rebatable drug is likely to be in 
shortage. To receive a rebate reduction in accordance with proposed 
Sec.  428.303(b)(1), the manufacturer would have to submit to CMS a 
rebate reduction request \597\ that meets the eligibility requirements 
proposed in Sec.  428.303(c). A rebate reduction request should specify 
each NDC-11 to which the request applies and if CMS grants a 
manufacturer's likely to be in shortage rebate reduction request for an 
NDC-11, CMS proposes in Sec.  428.303(b)(3) that the rebate reduction 
would apply to the entire generic Part D rebatable drug at the NDC-9 
level. CMS has proposed

[[Page 61977]]

additional submission requirements for rebate reduction requests in the 
information collection request under OMB control number: 0938-NEW (CMS-
10858).
---------------------------------------------------------------------------

    \597\ The rebate reduction request forms are currently going 
through the Paperwork Reduction Act approval process under the 
document identifier CMS-10858. The proposed collection was published 
for a 30-day comment period in the June 3, 2024 Federal Register (89 
FR 47563).
---------------------------------------------------------------------------

    As proposed in Sec.  428.303(c)(4), CMS would grant a reduction in 
the rebate amount owed if a manufacturer of an eligible drug submits to 
CMS a request in writing demonstrating that (1) the generic Part D 
rebatable drug is likely to be in shortage, (2) the manufacturer is 
taking actions to avoid the potential drug shortage, and (3) the 
reduction of the rebate amount would reduce the likelihood of the drug 
appearing on an FDA shortage list. As proposed in Sec.  428.303(c)(2), 
a manufacturer must submit the rebate reduction request before the 
start of the next applicable period in which the manufacturer believes 
the generic Part D rebatable drug is likely to be in shortage in order 
for CMS to consider a rebate reduction.
    If the manufacturer makes a timely request that includes all the 
supporting documentation, and CMS determines, based on its review of 
the reduction request and supporting documentation, that a reduction 
should be granted, CMS would reduce the total rebate amount owed by a 
manufacturer by 75 percent for the manufacturer's generic Part D 
rebatable drug for the applicable period in which the request was 
submitted or the following applicable period, depending on the timing 
of the submission of the request.
    CMS proposes in Sec.  428.303(c)(5) that if a manufacturer believes 
the potential drug shortage continues for a second, consecutive 
applicable period, the manufacturer may request a reduction of the 
total rebate amount for that second applicable period by submitting a 
rebate reduction extension request to CMS, along with any new 
supporting documentation. CMS has proposed additional submission 
requirements for rebate reduction extension requests in the information 
collection request under OMB control number: 0938-NEW (CMS-10858). As 
proposed in Sec.  428.303(c)(5)(ii), a rebate reduction extension 
request and any new supporting documentation must be submitted at least 
60 calendar days before the start of the second applicable period in 
which the manufacturer believes the generic Part D rebatable drug is 
likely to be in shortage in order for CMS to consider a rebate 
reduction extension.
    If the manufacturer submits a complete and timely extension 
request, and CMS determines that the information submitted warrants an 
extension of the rebate reduction, the total rebate amount would be 
reduced by 75 percent for a second consecutive applicable period for 
that manufacturer's generic Part D rebatable drug in accordance with 
proposed Sec.  428.303(b)(2).
    Consistent with the policies established in section 40.5.3 of the 
revised Medicare Part D Drug Inflation Rebate Guidance, a manufacturer 
may receive only one extension of the rebate reduction per generic Part 
D rebatable drug per CMS determination of likelihood of shortage, as 
proposed in Sec.  428.303(c)(5). Said differently, CMS would limit the 
likely to be in shortage rebate reduction to two consecutive applicable 
periods total per generic Part D rebatable drug per CMS determination 
of likelihood of shortage.
    As proposed in Sec.  428.303(b)(4), if CMS grants a rebate 
reduction request for a generic Part D rebatable drug that is likely to 
be in shortage, and the drug appears as currently in shortage during 
the same applicable period as the one for which the likely to be in 
shortage reduction request was granted, CMS would apply the 75 percent 
reduction to the entire applicable period for which the likely to be in 
shortage request was granted and would not grant any additional 
reduction for the shortage status during that applicable period. For 
any subsequent applicable periods that the generic Part D rebatable 
drug appears as currently in shortage, CMS would reduce the total 
rebate amount in accordance with the drug shortages reduction proposed 
in Sec.  428.301, starting with the highest reduction (that is, 75 
percent for a generic Part D rebatable drug). For example, if CMS 
grants a likely to be in shortage rebate reduction request for a 
generic Part D rebatable drug that was submitted on August 15, 2024, 
and that generic Part D rebatable drug is currently in shortage from 
September 15, 2025, until May 15, 2026, CMS would apply a 75 percent 
reduction in the total rebate amount for the duration of the applicable 
period for which the likely to be in shortage rebate reduction request 
was granted (that is, October 1, 2024, to September 30, 2025), and then 
would apply the shortages reduction as proposed in Sec.  428.301, 
beginning with a reduction of 75 percent for a generic Part D rebatable 
drug for the applicable period beginning October 1, 2025.
    If the manufacturer of a generic Part D rebatable drug that is 
currently in shortage believes such generic drug is likely to continue 
to be in shortage in the next applicable period, the manufacturer may 
submit a likely to be in shortage rebate reduction request to CMS. If 
the request meets the criteria described in proposed in Sec.  
428.303(c)(4), CMS would reduce the total rebate amount owed by a 
manufacturer by 75 percent for the manufacturer's generic Part D 
rebatable drug. Consistent with the evaluation criteria proposed in 
Sec.  428.303(c)(4), CMS does not intend to consider a generic Part D 
rebatable drug as likely to be in shortage based solely upon the drug 
being currently in shortage. However, if the manufacturer believes 
there are circumstances that may exacerbate the current shortage such 
that without the reduction the generic Part D rebatable drug is likely 
to be in shortage in the next applicable period, the manufacturer may 
reflect such circumstances in its rebate reduction request. For 
example, if a generic Part D rebatable drug is currently in shortage 
during the applicable period beginning October 1, 2023 because the 
manufacturer had trouble meeting demand for the drug and then in August 
2024, the manufacturer faces difficulties securing the API for such 
drug and believes this may worsen the shortage situation and result in 
the generic Part D rebatable drug being currently in shortage in the 
next applicable period, the manufacturer may submit a likely to be in 
shortage rebate reduction request to CMS providing information on the 
severity of the likely shortage. CMS welcomes comments on this 
approach. In Sec.  428.303(c)(6), CMS proposes to review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable period that begins on October 1, 2024. If a 
manufacturer's rebate reduction request does not meet the criteria in 
proposed Sec.  428.303(c)(4) or if the rebate reduction request is 
incomplete or untimely based on the requirements in proposed Sec.  
428.303(c), CMS would deny the request. CMS also proposes that if a 
manufacturer's rebate reduction extension request does not meet the 
criteria in proposed Sec.  428.303(c)(5), is incomplete or untimely 
based on the requirements in proposed Sec.  428.303(c)(5), or if a 
reduction under proposed Sec.  428.303(b)(1) was not provided for such 
generic Part D rebatable drug, CMS would deny the rebate reduction 
extension request. As proposed in Sec.  428.303(c)(6)(iii), CMS' 
decisions to deny a request would be final and not be subject to an 
appeals process.
    As proposed at Sec.  428.303(c)(7), CMS would keep confidential, to 
the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. CMS proposes that information 
provided as part of a likely

[[Page 61978]]

to be in shortage rebate reduction request that the submitter indicates 
is a trade secret or confidential commercial or financial information 
would be protected from disclosure if CMS determines the information 
meets the requirements set forth under Exemptions 3 or 4 of FOIA. In 
addition to the protections under the FOIA for trade secrets and 
commercial or financial information obtained from a person that is 
privileged or confidential, the Trade Secrets Act at 18 U.S.C. 1905 
requires executive branch employees to protect such information. CMS 
would protect confidential and proprietary information as required by 
applicable law.
e. Reports of Rebate Amounts, Reconciliation, Suggestion of Error, and 
Payments (Sec. Sec.  428.400 Through 428.405)
    Section 1860D-14B(a)(1) of the Act requires the Secretary to report 
to each manufacturer of a Part D rebatable drug the following 
information not later than 9 months after the end of the applicable 
period: (1) the amount, if any, of the excess AnMP increase described 
in section 1860D-14B(b)(1)(A)(ii) for each Part D rebatable drug and 
(2) the rebate amount for each Part D rebatable drug. In compliance 
with section 1860D-14B(a)(2) of the Act, the manufacturer of a Part D 
rebatable drug must provide a rebate for each Part D rebatable drug no 
later than 30 calendar days after the receipt of the information 
provided by the Secretary in section 1860D-14B(a)(1) of the Act.
    To fulfill this statutory requirement, CMS proposes to send a 
Preliminary Rebate Report followed by a Rebate Report, as described in 
proposed Sec.  428.401(b) and (c), to all manufacturers of a Part D 
rebatable drug, even if the amount due is $0; all rebate amounts would 
be subject to reconciliation as proposed in Sec.  428.401(d). As 
proposed in Sec.  428.401(b), CMS does not intend to send notice to 
manufacturers for drugs that are not considered rebatable pursuant to 
proposed Sec.  428.20.
    Additionally, section 1860D-14B(b)(6) states that CMS shall provide 
a method and process under which CMS adjusts the calculation of the 
rebate amount for a Part D rebatable drug for an applicable period if 
CMS determines such an adjustment is necessary based on revisions to 
the number of units of a rebatable covered Part D drug dispensed 
submitted by a PDP sponsor of a prescription drug plan or an MA 
organization offering an MA-PD plan. The statute also specifies that 
CMS must reconcile any underpayments in the rebate amount paid by the 
manufacturer of the applicable Part D rebatable drug due to such an 
adjustment and underpayments must be paid no later than 30 days from 
the date of receipt of information from CMS about the adjustment. To 
fulfill this statutory obligation and to address the completeness and 
accuracy of the rebate amount, CMS proposes to conduct regular 
reconciliations at two points in time to determine whether the rebate 
amount must be adjusted due to updated claims and payment data used in 
the calculation of such rebate amount (specified in proposed Sec.  
428.401(d)(1)): (1) 12 months after the issuance of the Rebate Report, 
and (2) 36 months after the issuance of the Rebate Report. The 
reporting process for each reconciliation will be the same process 
described for the original Rebate Report, with payment due for any 
outstanding rebate amount 30 days after receipt of a report with a 
reconciled rebate amount. In addition to regular reconciliations, CMS 
proposes a process to conduct reconciliations of the rebate amount as 
needed to correct agency error and when CMS determines that the 
information used by CMS to calculate a rebate amount was inaccurate due 
to manufacturer misreporting.
i. Definitions
    In proposed Sec.  428.400, CMS proposes to define the following 
term applicable to subpart E (Sec. Sec.  428.400 through 428.405):
     ``Date of receipt''.
    For example, if CMS issues a Rebate Report through the method and 
process described in proposed Sec.  428.404 on June 30, 2026, then July 
1, 2026, will be the date of receipt and day one of the 30-calendar-day 
payment period.
ii. Reports of Rebate Amounts and Suggestion of Error
    Consistent with the process specified in section 50 of the revised 
Medicare Part D Drug Inflation Rebate Guidance involving preliminary 
and final reports, CMS proposes to codify a multi-step process to 
provide a manufacturer as defined in proposed Sec.  428.20 with the 
rebate information specified under section 1860D-14B(a) of the Act. CMS 
considered the following factors in determining a method and process 
for providing the rebate information: meeting statutorily provided 
deadlines in section 1860D-14B(a) of the Act (for example, dates by 
which to provide the rebate amount owed to the manufacturer); the 
operational time to acquire the relevant information specified in 
proposed part 428; the operational time to calculate the rebate amount 
specified in subparts B and C of proposed part 428; clarity of the 
information provided as well as potential burden on manufacturers; and 
how to ensure the accuracy of the rebate amount.
    CMS proposes at proposed Sec.  428.401 the use of an initial 
Preliminary Rebate Report and a subsequent Rebate Report, with an 
opportunity for manufacturers to identify certain mathematical errors 
(see proposed Sec.  428.403 and discussed in further detail later in 
this section) and two regular reconciliations of the rebate amount to 
account for updates to claims and payment data at 12 months and 36 
months after the Rebate Report is issued as described in proposed Sec.  
428.401(d).
    CMS proposes in proposed Sec.  428.401 that the multi-step 
reporting process for providing rebate information to a manufacturer 
would include: (1) an initial report, which CMS proposes to entitle the 
``Preliminary Rebate Report'' in proposed Sec.  428.401(b) and (2) a 
second report, which CMS proposes to entitle the ``Rebate Report'' in 
proposed Sec.  428.401(c). The Rebate Report would serve as the invoice 
for the rebate amount due, if any, for each product determined to be a 
Part D rebatable drug for the applicable period, as specified in 
proposed Sec.  428.101. Manufacturers of Part D rebatable drugs would 
receive a Rebate Report for their rebatable drugs even if the amount 
due is $0. CMS proposes at proposed Sec.  428.401(d)(1) two regular 
reconciliations of the rebate amount to occur 12 months and 36 months 
after issuance of the subsequent Rebate Report specified in proposed 
Sec.  428.401(c), which would include any restatements that have 
occurred in the drug pricing data and claims billing data reported to 
CMS and used in the rebate calculation specified in subpart C of this 
part.
    As the first step in the reporting process, as proposed in proposed 
Sec.  428.401(b) and consistent with section 50 of the revised Medicare 
Part D Drug Inflation Rebate Guidance, CMS would provide each 
manufacturer of a Part D rebatable drug with the preliminary rebate 
amount through a Preliminary Rebate Report at least 1 month prior to 
the issuance of the Rebate Report specified in proposed Sec.  
428.401(c) for an applicable period (that is, approximately 8 months 
after the end of the applicable period unless otherwise specified). To 
facilitate manufacturer understanding of the Preliminary Rebate Report, 
CMS is proposing in proposed Sec.  428.401(b)(1) that the Preliminary 
Rebate Report would include the following information: the NDC(s) for 
the Part D rebatable drug as defined under proposed Sec.  428.20; the 
total

[[Page 61979]]

number of units for the Part D rebatable drug for the applicable period 
as determined under proposed Sec.  428.203 (which would remove units 
when a generic drug is no longer a Part D rebatable drug in proposed 
Sec.  428.203(b)(1) and would exclude units acquired through the 340B 
Program in proposed Sec.  428.203(b)(2)); the benchmark period 
manufacturer price as described in proposed Sec.  428.202(d); the AnMP 
for the Part D rebatable drug for the applicable period as determined 
in proposed Sec.  428.202(b); the applicable benchmark period and 
applicable period CPI-Us as identified in proposed Sec. Sec.  
428.202(e) and 428.20; the inflation-adjusted payment amount as 
specified in proposed Sec.  428.202(f); the amount, if any, of the 
excess AnMP for the Part D rebatable drug for the applicable period as 
determined under proposed Sec.  428.202(a); any applied reductions as 
described in proposed Sec. Sec.  428.301, 428.302, and 428.303; and the 
rebate amount due as specified in proposed Sec.  428.201(a). As 
proposed under proposed Sec.  428.204, in cases where a Part D 
rebatable drug is a line extension, CMS proposes to include the same 
elements described above in the Preliminary Rebate Report as well as: 
the NDC for the initial drug; the inflation rebate amount ratio for the 
initial drug; and the alternative rebate amount (see proposed Sec.  
428.401(b)(2)).
    When determining what information should be included on rebate 
reports, CMS considered the statutory requirements outlined in section 
1860D-14B(a)(1) of the Act to determine which data elements are 
necessary to review the Preliminary Rebate Report for error (described 
later in this section) and to protect proprietary information. In 
response to comments on the initial Medicare Part D Drug Inflation 
Rebate Guidance, CMS has proposed to disclose data elements as 
suggested by interested parties that are not enumerated in the statute, 
such as NDCs for Part D rebatable drugs and the applicable period CPI-
U. CMS acknowledges requests from interested parties to provide 
additional data elements including claims-level data such as days' 
supply, fill number, and prescription ID number on rebate reports that 
are not included in this proposal. CMS considered these requests in 
development of this proposed rule but does not believe it necessary to 
provide this further information to fulfill its statutory obligation 
and believes that the potential benefit to manufacturers of additional 
data are outweighed by the administrative burdens additional reporting 
would impose to the agency. The elements listed above provide 
sufficient information for a manufacturer to review the Preliminary 
Rebate Report for mathematical error, while protecting proprietary 
information, and these elements are operationally feasible for CMS to 
provide. In proposed Sec.  428.203(b)(2)(i)(A) and (B), CMS would 
exclude 340B units beginning with January 1, 2026, which is the second 
calendar quarter in the applicable period starting October 1, 2025, and 
beyond (as discussed in further detail in section III.I.3.f of this 
proposed rule). This exclusion applies to all Preliminary Rebate 
Reports, Rebate Reports, and reconciliations of a rebate amount that 
include the applicable period starting with October 1, 2025, and beyond 
with claims for service dates on or after January 1, 2026. As such, 
340B units would not be excluded from the Rebate Reports for the 
applicable periods beginning October 1, 2022, October 1, 2023, and 
October 1, 2024, as discussed in proposed Sec.  428.402.
    By structuring the Rebate Report process to include a Preliminary 
Rebate Report before the Rebate Report, CMS is able to provide 
manufacturers with an opportunity to review the Preliminary Rebate 
Report before the rebate amount is invoiced via the Rebate Report. 
While CMS is not required to provide a preliminary report, CMS seeks to 
facilitate manufacturer understanding of the Rebate Report and believes 
it would be beneficial for manufacturers to review the report for 
mathematical errors that could be corrected before invoicing via the 
Rebate Report. Further, a Preliminary Rebate Report would provide 
additional notice to manufacturers regarding whether they may owe a 
rebate amount.
    In proposed Sec.  428.403, CMS proposes a process in which a 
manufacturer may suggest to CMS that the manufacturer believes the 
Preliminary Rebate Report includes a mathematical error within 10 
calendar days after the date of receipt of the Preliminary Rebate 
Report. For example, if the Preliminary Rebate Report is provided on 
May 31, 2026, then June 1, 2026, would be the date of receipt and, 
therefore, day one of the 10-calendar-day period to submit a Suggestion 
of Error; the Suggestion of Error would be due at 11:59 p.m. PT on June 
10, 2026, in this example. CMS reviewed comments on the 10-day 
Suggestion of Error period submitted in response to the initial 
Medicare Part D Drug Inflation Rebate Guidance, many of which suggested 
that manufacturers receive at least 30 days to review the Preliminary 
Rebate Report. CMS considered a 10-day, 15-day, and 30-day Suggestion 
of Error period and believes a 10-calendar-day period as (see proposed 
Sec.  428.403(c)) is sufficient after considering the volume of the 
data to be provided to manufacturers, the narrow scope of items that 
may be identified as a Suggestion of Error, and the operational time 
necessary for CMS to provide a Rebate Report within 9 months of the end 
of the applicable period as required under section 1860D-14B(a)(1) of 
the Act. However, CMS proposes in Sec.  428.402(c)(1)(i) to expand the 
Suggestion of Error period to 30 calendar days for the Preliminary 
Rebate Reports for the first two applicable periods (beginning October 
1, 2022, and October 1, 2023). This extended Suggestion of Error period 
will provide additional time and flexibility during the first invoicing 
cycle of the Medicare Part D Drug Inflation Rebate Program.
    Section 1860D-14B(f) of the Act precludes administrative or 
judicial review on the determination of units, whether a drug is a Part 
D rebatable drug, and the calculation of the rebate amount (see 
proposed Sec.  428.403(a)(1)). Therefore, the Suggestion of Error 
process will be limited to mathematical steps involved in determining 
the rebate amount and the elements precluded from administrative or 
judicial review will not be considered in-scope for the Suggestion of 
Error process. Additionally, CMS is not providing an administrative 
dispute resolution process. CMS intends to consider all in-scope 
submissions under the Suggestion of Error process (for example, 
suggestions regarding a mathematical error) as described in proposed 
Sec.  428.403(a). CMS does not intend to review suggestions of error 
that are out-of-scope or submissions for a rebatable drug with an 
amount due of $0.
    As the second step in the reporting process, CMS proposes in 
proposed Sec.  428.401(c) to provide the rebate amount to the 
manufacturer through the Rebate Report no later than 9 months after the 
end of the applicable period. As proposed in proposedSec.  
428.401(c)(1), the Rebate Report would include the same data elements 
as the Preliminary Rebate Report (specified in proposed Sec.  
428.401(b)(1)) and include any recalculations based on CMS acceptance 
of a manufacturer's Suggestion of Error from proposed Sec.  428.403, or 
any CMS-determined recalculations from proposed Sec.  428.401(d)(2), if 
applicable. Manufacturers must pay the rebate amount within 30 calendar 
days from the date of receipt of the Rebate Report (see proposed Sec.  
428.405(a)). For

[[Page 61980]]

example, if the Rebate Report is provided on June 30, 2026, then July 
1, 2026, would be the date of receipt and therefore day one of the 30-
calendar-day payment period; payment would be due no later than 11:59 
p.m. PT on July 30, 2026.
    In proposed Sec. Sec.  428.404 and 428.405, CMS proposes that it 
will establish a standard method and process to issue Rebate Reports 
and accept manufacturer rebate payments. This method and process may 
include an online portal administered by a CMS contractor which would 
provide manufacturers with access to their Rebate Report, the ability 
to submit a Suggestions of Error, and pay a rebate amount due. CMS 
intends to provide technical instructions separate from this rulemaking 
to manufacturers of Part D rebatable drugs regarding how to access 
Rebate Reports and how to receive notifications alerting the 
manufacturer when information is available. CMS also intends to issue 
reminder notices to manufacturers regarding the due date of rebate 
payments. In proposed Sec.  428.404(a), CMS notes that the manufacturer 
that may access Rebate Reports and make applicable rebate amount 
payments is the manufacturer responsible for paying a rebate, and as 
stated above, CMS proposes to identify the manufacturer that is 
responsible for paying a rebate using the same approach used for 
reporting AMP data.
iii. Reconciliation of a Rebate Amount
    As discussed in section 50 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, CMS considered options consistent with 
section 1860D-14B(b)(6) of the Act to establish a method and process to 
determine adjustment to the rebate amount in the case of a Part D plan 
sponsor submitting revisions to the number of units of a part D 
rebatable drug. As is also discussed in section 50, CMS considered 
options for establishing a standardized method and process at regular 
intervals to determinate any appropriate adjustments to the rebate 
amount for a Part D rebatable drug for an applicable period to account 
for additional revised information as well as options for recalculation 
based on CMS identifying an agency error or determining manufacturer 
data was misreported. CMS is proposing policies for reconciliation, 
including with respect to enforcement of payment of any reconciled 
rebate amount, consistent with both the statutory framework for the 
Part D Drug Inflation Rebate Program and the express authority in 
sections 1102 and 1871 of the Act to adopt regulations for the proper 
administration of the Medicare Prescription Drug Inflation Rebate 
Program.
    As proposed at Sec.  428.401(d), CMS believes that it is necessary 
and appropriate for CMS to recalculate the rebate amount for an 
applicable period at regular intervals to include updated information 
about key data elements included in the calculation of the rebate 
amount, not limited to those data described in section 1860D-14B(b)(6) 
of the Act. These data elements as set forth in proposed Sec.  
428.401(d)(1)(i) include: total units; the benchmark period 
manufacturer price; the payment amount in the payment amount benchmark 
period; the AnMP; and updated data on line extension calculations. 
Updating these calculation inputs at regular reconciliation intervals 
will result in a rebate amount that more fully reflects the majority of 
shifts in the underlying data following additional time for claims run-
out, which refers to the maturation of PDE records in CMS' internal PDE 
database. Because the information extracted represents the PDE records' 
status in CMS' internal PDE database at that moment in time, additional 
run-out may yield different information, either because more PDE 
records with dispensing dates during the applicable period were 
finalized and added to the database or because the status of the 
existing PDE records changed. CMS refers to ``X months of run-out'' as 
the period between the end of the applicable period and the date when 
CMS accesses information about the PDE records; for example, ``3 months 
of run-out'' means that PDE records are accessed for PDE records with 
dispensing dates during an applicable period 3 months after the end of 
such applicable period. Conducting a reconciliation of the rebate 
amount with additional claims run-out will improve the accuracy of the 
rebate amount. Additionally, reconciliation of payment amounts is 
consistent with the approach to the calculation of the payment amounts 
in other CMS programs (such as the Coverage Gap Discount Program) that 
provide for a reconciliation period.
    CMS notes that the reconciliation of a rebate amount, whether 
during a reconciliation proposed at Sec.  428.401(d)(1) or a 
discretionary reconciliation proposed at Sec.  428.401(d)(2) discussed 
further below, will not create a separately payable and distinct rebate 
amount. Rather, reconciliation updates the prior rebate amount owed to 
CMS, if any, by a manufacturer of a Part D rebatable drug so that the 
rebate amount ultimately reflects a more precise calculation of the 
rebate amount, as required by section 1860D-14B(a)(1) of the Act, to 
account for shifts in the underlying data following additional time for 
claims run-out after the Rebate Report is issued as well as 
subsequently identified data integrity issues. Moreover, because the 
reconciled rebate amount is an adjustment of the prior rebate amount, 
CMS proposes at Sec.  428.405(a)(1) for a report of a reconciled rebate 
amount to also identify the difference between the rebate amount due as 
specified on the Rebate Report set forth in proposed Sec.  428.401(c) 
and the reconciled rebate amount. CMS would only collect the net rebate 
amount due, if any, upon reconciliation, so as to prevent any duplicate 
payments. CMS also proposes to refund any overpayment made by a 
manufacturer, as determined during reconciliation, as discussed in 
proposed Sec.  428.405(b).
    Additionally, as CMS suggested in section 50 of the revised 
Medicare Part D Drug Inflation Rebate Guidance, CMS considered multiple 
options for establishing a standardized method and process to occur at 
regular intervals to determine an appropriate adjustment to the rebate 
amount for a Part D rebatable drug for an applicable period to account 
for revised information prior to adopting the proposal described here 
with two proposed regular reconciliations of the Part D inflation 
rebate amount. CMS considerations included the length of time needed to 
capture relevant changes to data inputs for recalculation, whether the 
timing should align with the reconciliation of Part B rebate amounts, 
and manufacturer burden. Specifically, CMS considered the average time 
span needed to ensure submission of the majority of Part D plan unit 
revisions specified in section 1860D-14B(b)(6) of the Act, and the 
average time span needed for the submission of the majority of 
manufacturer restatements of AMP data. CMS also considered the 36-month 
period provided by MDRP for AMP restatements as described in Sec.  
447.510(d)(3) of this title and whether consistency among program 
reconciliation timelines is beneficial. CMS believes a longer period of 
claims run-out (at least 12 and 36 months of run-out time in the 
proposed approach) would ensure that CMS more fully accounts for 
capturing of revised units. Further, the first reconciliation would be 
performed to include at least 13 months of claims run-out for the 
applicable period and would be issued 12 months after the Rebate Report 
for the same applicable period. The second reconciliation would include 
37 months of claims run-out for the applicable period and would be 
issued 36 months

[[Page 61981]]

after the Rebate Report for the same applicable period. The first 
reconciliation, issued 12 months after the Rebate Report, would provide 
sufficient time to capture the majority of updates to the data 
specified in proposed Sec.  428.401(b)(1). The second reconciliation, 
to be issued 36 months after the Rebate Report, is sufficient to 
capture the remainder of the run-out for MDRP AMP restatements (that do 
not require CMS review in Sec.  447.510) while also closing out the 
calculation of the rebate amount for a Part D rebatable drug for an 
applicable period within a reasonable time period after the Rebate 
Report is issued (except for the circumstances in proposed Sec.  
428.401(d)(2) regarding CMS' identification of mathematical errors or 
manufacturer misreporting).
    Further, in considering whether consistency across CMS programs is 
critical, CMS believes that consideration for the completeness of data, 
as discussed above, should be prioritized over consistency across 
program timelines. That is, when examining timelines from other CMS 
programs that collect data contributing to calculation of the rebate 
amount, CMS prioritized that, to the extent feasible, completeness and 
accuracy of the data elements contributing to the calculation of the 
rebate amount rather than prioritizing consistency among the data 
collection and reconciliation timelines themselves. Finally, CMS 
believes that solely updating total units without updating other 
elements of the rebate calculation would lead to an inaccurate rebate 
amount, and therefore proposes to update additional calculation inputs 
as described in proposed Sec.  428.401(d)(1)(i)(A) through (F). CMS 
believes that a restatement of each data element included in proposed 
Sec.  428.401(d)(1) to reconcile the rebate amount provided in the 
Rebate Report in proposed Sec.  428.401(c) is appropriate to capture an 
updated rebate amount and is in line with other CMS programs that 
provide for a reconciliation period. While some data points may not 
change, CMS would review the data to determine if there are any updates 
in the data and use the updated data in the reconciliation to provide a 
reconciled rebate amount to the manufacturer.
    Based on these considerations, similar to the multi-step process 
for the Rebate Report proposed in Sec.  428.401(b) and (c), CMS 
proposes a multi-step process to provide each manufacturer of a Part D 
rebatable drug with a reconciled rebate amount on a regular basis. At 
both the 12 month reconciliation point and the 36 month reconciliation 
point, CMS proposes a reconciliation process that will include: (1) a 
preliminary reconciliation of the rebate amount, which CMS would 
provide to manufacturers of Part D rebatable drugs as proposed in Sec.  
428.401(d)(1)(i) and (d)(2) a reconciled rebate amount, which CMS would 
provide to manufacturers of a Part D rebatable drug as proposed in 
Sec.  428.401(d)(1)(ii). CMS also proposes to apply the Suggestion of 
Error process specified in proposed Sec.  428.403 to each preliminary 
reconciliation.
    In detail, first, as specified in proposed Sec.  428.401(d) and 
similar to the Preliminary Rebate Report process proposed in Sec.  
428.401(b), for each reconciliation CMS proposes to provide the 
manufacturer with information about the preliminary reconciliation of 
the rebate amount at least 1 month prior to the issuance of the 
reconciled rebate amount (see proposed Sec.  428.401(d)) to each 
manufacturer of a Part D rebatable drug for an applicable period. CMS 
proposes in Sec.  428.401(d)(1) that the preliminary reconciliation 
would include, at a minimum, the same information outlined for the 
Rebate Report and the following updated information, if applicable: 
updated total number of rebatable units, including updates submitted by 
a PDP or MA-PD plan sponsor and updates to 340B units (as applicable to 
the dates of service and applicable periods specified in proposed Sec.  
428.203(b)(2)(i)(A) and (B)), or units otherwise excluded as specified 
in proposed Sec.  428.203(b); the benchmark period manufacturer price 
if any inputs are restated within the reconciliation run-out period as 
specified in proposed Sec.  428.202(d); the AnMP if any inputs are 
restated within the reconciliation run-out period as specified in 
proposed Sec.  428.202(b); the excess amount by which the AnMP exceeds 
the inflation-adjusted payment amount for the applicable period as 
specified in proposed Sec.  428.202(a), using the most recent AMP (if 
any inputs are restated within the reconciliation run-out period); 
updated data on line extension calculations, including the initial drug 
identified in accordance with Sec.  447.509(a)(4)(iii)(B), the 
inflation rebate amount ratio, and the alternative total rebate amount 
as set forth in proposed Sec.  428.204 if any inputs are restated 
within the reconciliation run-out period; the reconciled rebate amount 
as set forth in proposed Sec.  428.201(a); and the difference between 
the total rebate amount due as specified on the Rebate Report set forth 
in proposed Sec.  428.201(a) and the reconciled rebate amount as set 
forth in proposed Sec.  428.201(a). CMS also notes that changes to 
status of 5i drugs (defined at Sec.  447.507) are captured through AMP 
restatements.
    In proposed Sec.  428.403(a), similar to the Suggestion of Error 
process proposed for the Preliminary Rebate Report in proposed Sec.  
428.401(b), within 10 calendar days after date of receipt of the 
information about the preliminary reconciliation of the rebate amount, 
CMS proposes that a manufacturer may suggest to CMS that the 
manufacturer believes the preliminary reconciliation of the rebate 
amount contains a mathematical error. CMS believes a 10-calendar-day 
period is sufficient due to the same considerations of data volume, the 
narrow set of in-scope items for review, and the operational time 
necessary for CMS to publish the reconciled rebate amount. The 
preclusions in section 1860D-14B(f) of the Act on administrative and 
judicial review apply to the reconciliation process.
    Second, in detail, CMS proposes in Sec.  428.401(d)(1)(ii) to 
provide a reconciled rebate amount to the manufacturer within 12 months 
and 36 months after the Rebate Report was issued for each applicable 
period. As proposed in Sec.  428.401(d)(1)(ii), the information in the 
report for a reconciled rebate amount would include the same data 
elements as provided in the information provided to the manufacturer of 
a Part D rebatable drug regarding the preliminary reconciliation of a 
rebate amount (specified in proposed Sec.  428.401(d)(1)(i)) and would 
include any recalculations based on CMS acceptance of a manufacturer's 
Suggestion of Error from proposed Sec.  428.403. A reconciliation of 
the rebate amount may result in an increase, decrease, or no change to 
the rebate amount, compared to the Rebate Report for an applicable 
period or a previous reconciliation in the case of reconciliation 
conducted 36 months after issuance of the Rebate Report (see proposed 
Sec.  428.401(d)(3)).
    Additionally, as suggested in section 50 the revised Medicare Part 
D Drug Inflation Rebate Guidance, CMS considered options for 
establishing circumstances where a recalculation of the rebate amount 
may be appropriate for an applicable period after issuing the Rebate 
Report and/or a reconciled rebate amount based on CMS identifying an 
error or CMS determining that the information used by CMS to calculate 
a rebate amount was inaccurate due to false reporting or similar fault 
by the manufacturer. CMS also considered potential time limits for 
revisions and whether certain circumstances, such as instances of false 
reporting, should be exempt from such time limits.

[[Page 61982]]

    Based on these considerations, CMS believes that, to capture an 
accurate rebate amount and consistent with reconciliations of pricing 
data submitted to CMS that provide for revisions when necessary due to 
errors, including mathematical errors, and manufacturer misreporting, 
certain circumstances merit reconciliation of the rebate amount 
separate from the 12-month and 36-month reconciliations proposed at 
Sec.  428.401(d)(1). Specifically, CMS proposes in Sec.  428.401(d)(2) 
that CMS may reconcile a rebate amount of an issued Rebate Report when 
CMS identifies either: (1) an agency error such as a mathematical error 
or an error in the information specified in a Rebate Report as 
described in proposed Sec.  428.401(c) or report of a reconciled rebate 
amount as described in proposed Sec.  428.401(d), including reporting 
system or coding errors; or (2) CMS determines that information used to 
calculate the rebate amount was inaccurate due to manufacturer 
misreporting. Examples of agency errors could include CMS incorrectly 
calculating the billing units per Part D rebatable drug or the 
mechanism that provides a Rebate Report to the manufacturer or the 
Rebate Report incorrectly displays a rebate amount. Examples of 
manufacturer misreporting could include instances in which the 
manufacturer has made a correction to previously submitted data as well 
as instances in which the reporting individual or entity reporting data 
or information to CMS on behalf of the manufacturer knows or should 
know is inaccurate or misleading (for example, inaccurate manufacturer 
pricing or product data under section 1927(b)(3) of the Act). This does 
not include standard restatements to AMP or other data outside of the 
standard process of issuing the reconciled rebate amount. In addition 
to manufacturer-initiated corrections, CMS may become aware of 
manufacturer misreporting based on fact finding and conclusions of 
enforcement authorities, for example, the HHS Office of Inspector 
General, the CMS Center for Program Integrity, or the Department of 
Justice. In a situation where an error or manufacturer misreporting is 
identified prior to the 12- or 36-month reconciliation of the rebate 
amount proposed in Sec.  428.401(d)(1), CMS may choose to include a 
correction based on the circumstances proposed in Sec.  428.401(d)(2) 
concurrently with the 12- or 36-month reconciliation. When CMS 
reconciles data due to an instance of agency error or manufacturer 
misreporting, CMS proposes that the agency would limit the scope of the 
reconciliation to the specific information that is the basis for the 
reconciliation and not update or otherwise revise any other data 
elements in the Rebate Report (specified in proposed Sec.  428.401(c)) 
or the report of the reconciled rebate amount (specified in proposed 
Sec.  428.401(d)) unless the correction directly impacts additional 
data fields. For example, corrections to an AMP file may not change the 
AnMP for the applicable period.
    In addition, because reconciling a rebate amount imposes 
substantial administrative burden on CMS to reprocess the rebate 
amount, retest the reporting system, and reissue a Rebate Report, CMS 
proposes in Sec.  428.401(d)(2) that it may exercise discretion not to 
initiate recalculation of the rebate amount in these situations which 
are outside of the regular reconciliation process proposed in Sec.  
428.401(d)(1).
    CMS proposes that for a recalculation due to an agency error, the 
error must be identified within 5 years of the date of receipt of the 
Rebate Report for the applicable period (see proposed Sec.  
428.401(d)(2)(i)). Identification means that CMS has knowledge of the 
error; CMS does not need to have completed its revision of the impacted 
data or determined if the revision impacts the rebate amount within the 
5-year period. CMS would timely complete these steps and determine, 
when reconciliation does impact the rebate amount, whether the 
reconciliation must be included in a discretionary revision or within 
an upcoming reconciled rebate amount for the applicable period. CMS 
proposes 5 years for Part D (as opposed to the 3-year limit proposed 
for Part B) to account for the additional time of the second 
reconciliation for Part D rebatable drugs to be conducted at 36-months 
proposed in Sec.  428.401(d)(1). CMS believes that a 5-year period 
dating from the issuance of the Rebate Report allows for sufficient 
time to include AMP restatements in the MDRP while also placing a 
reasonable time limit on potential discretionary reconciliations, after 
which a manufacturer of a Part D rebatable drug would not receive 
additional Rebate Reports for the applicable period.
    CMS proposes in Sec.  428.401(d)(2)(ii) that for a circumstance in 
which a manufacturer misreports data, CMS is not bound by the 5-year 
time limit for revision of the rebate amount. For example, if a 
determination is made that a manufacturer misreported AMP data, which 
affected the calculation of the AnMP, then CMS may recalculate the 
rebate amount owed for a Part D rebatable drug. CMS requests comments 
on the proposals related to manufacturer misreporting.
    CMS proposes in Sec.  428.405(a)(1) that upon receipt of a 
reconciled rebate amount, manufacturers must pay that reconciled rebate 
amount within 30 calendar days from the date of receipt of the 
reconciled rebate amount. A 30-day payment deadline aligns with the 
payment period set forth in statute at section 1860D-14B(b)(6) of the 
Act. As specified in proposed Sec.  428.404, CMS would use the same 
method and process for issuing Rebate Reports and submission of 
payments for reports with a reconciled rebate amount. CMS would provide 
notice to manufacturers for reports with a reconciled rebate amount. 
CMS proposes in Sec.  428.405(b) that if a refund is owed to a 
manufacturer based on a reconciled rebate amount, CMS would initiate 
the process to issue such refund within 60 days from the date of 
receipt of the reconciled rebate amount (proposed in Sec.  428.401(d)). 
CMS will issue additional information on this method and process 
through additional program communications.
iv. Rebate Reports for the Applicable Periods Beginning October 1, 
2022, and October 1, 2023
    Section 1860D-14B(a)(3) of the Act provides the CMS with the option 
to delay sending the information required by section 1860D-14B(a)(1) 
for the applicable periods beginning October 1, 2022, and October 1, 
2023, until not later than December 31, 2025. In Sec.  428.402, 
consistent with section 50.2 of the revised Medicare Part D Drug 
Inflation Rebate Guidance, CMS proposes to issue a Preliminary Rebate 
Report for each applicable period followed by issuance of the Rebate 
Report for each applicable period no later than December 31, 2025. For 
these reports, CMS proposes in Sec.  428.402 to provide an extended 30 
calendar day Suggestion of Error period for these Preliminary Rebate 
Reports.
    Because this approach provides for 13 months of claims run-out for 
the Rebate Report for the applicable period beginning October 1, 2022, 
CMS intends to conduct a single reconciliation 21 months after issuance 
of the Rebate Report for this applicable period (see proposed Sec.  
428.402(c)(1)(ii)). As specified in Sec.  428.402(c)(2)(ii), for the 
applicable period beginning October 1, 2023, the rebate amount would be 
reconciled twice, in alignment with the reconciliation process 
discussed previously. The first reconciliation would occur 9 months 
after issuance of the Rebate Report to include 13 months of claims run-
out and payment data; the second reconciliation would occur 24

[[Page 61983]]

months after the first reconciliation and would include 37 months of 
claims run-out and payment data. This approach aligns claims and 
payment data run-out with the run-out used during a regular invoicing 
cycle. The Suggestion of Error period would be 10 calendar days for the 
reconciliations of the rebate amount for the applicable periods 
beginning October 1, 2022, and the applicable period beginning October 
1, 2023.
    This approach also minimizes the number of reports issued to 
manufacturers as a result of the delay in reporting and simplifies 
payment procedures, thereby minimizing manufacturer burden. Starting 
with the applicable period beginning October 1, 2024, reporting would 
begin a standard cadence and follow the procedures otherwise proposed 
in subpart E of this part 428.
    CMS proposes that manufacturers that do not pay the Medicare Part D 
drug inflation rebate amount owed for a Part D rebatable drug within 30 
calendar days of receiving a Rebate Report, including reports 
containing a reconciled rebate amount, may be subject to a civil money 
penalty of 125 percent of the rebate amount, as applicable, for such 
drug for the applicable periods. The civil money penalty is in addition 
to the rebate amount.
f. Enforcement of Manufacturer Payment of Rebate Amounts (Sec.  
428.500)
    Section 1860D-14B(e) of the Act gives CMS the authority to impose a 
civil money penalty equal to 125 percent of the rebate amount for each 
drug for each applicable period on a manufacturer that fails to pay the 
rebate amount, for each dosage form and strength for each rebatable 
drug. Subpart F would implement this section of the Act and establish 
the procedures for determining and collecting a civil money penalty.
    In accordance with sections 1860D-14B(a)(2) and 1860D-14B(b) of the 
Act and proposed Sec.  428.405(a), manufacturers must provide to CMS a 
rebate amount owed within 30 calendar days of receipt of the rebate 
amount due. As described in proposed Sec.  428.500(a), CMS is proposing 
it may impose a civil money penalty when a manufacturer fails to pay 
the rebate amount in full by the payment deadlines in proposed Sec.  
428.405(a). This means a manufacturer may be subject to a civil money 
penalty if the manufacturer fails to pay the full rebate amount as 
invoiced in the Rebate Report or any reconciled rebate amount that is 
greater than the amount invoiced in the Rebate Report. More 
specifically, a manufacturer could be subject to a civil money penalty 
when a manufacturer fails to pay a rebate amount due by any payment 
deadline proposed in Sec.  428.405(a)(1), for: (1) a Rebate Report 
specified in proposed Sec.  428.401(c); (2) a reconciled rebate amount 
greater than the amount reflected in the Rebate Report specified in 
proposed Sec.  428.401(d); or (3) a Rebate Report and a reconciled 
rebate amount greater than the amount reflected in the Rebate Report, 
if applicable, for the applicable periods beginning October 1, 2022, 
and October 1, 2023 specified in proposed Sec.  428.402. As discussed 
earlier in section III.I.3.e, CMS notes that the reconciled or 
corrected rebate amount is not a separately payable and distinct rebate 
amount. Rather, the reconciled rebate amount is an update to the rebate 
amount owed to CMS by a manufacturer of a Part D rebatable drug.
    Civil money penalties are a point-in-time penalty tied to the 
rebate amount due at the applicable payment deadline, which occurs 30 
days after the date of receipt of a Rebate Report. In proposed Sec.  
428.500(b), CMS proposes to establish the methodology for determining 
the amount of the civil money penalty as equal to 125 percent of the 
rebate amount for such drug for such applicable period, and that this 
penalty would be due in addition to the rebate amount due. That is, a 
manufacturer would be responsible for paying the full rebate amount due 
in addition to any civil money penalty imposed because of late payment. 
CMS is proposing this approach to civil money penalties based on 
section 1860D-14B(a)(2) of the Act, which establishes a requirement by 
the manufacturer to provide CMS with a rebate not later than 30 days 
after receipt from CMS of the report on the amount of the excess annual 
manufacturer price increase. CMS believes that the ability to assess 
civil money penalties is necessary in all circumstances where a payment 
is due for a rebate amount to CMS to ensure compliance with the rebate 
program's requirements. The civil money penalty would be calculated 
based on the outstanding rebate amount due at the payment deadline, 
which is defined in proposed Sec.  428.405(a)(1) as 30 calendar days 
after the date of receipt of a Rebate Report containing any rebate 
amount due; once a civil money penalty is assessed due to a late 
payment, the penalty would remain in effect even if the manufacturer 
pays the outstanding rebate amount as the penalty is initiated due to a 
missed payment deadline. Because the payment deadline is clearly 
defined in section 1860D-14B(a)(2) of the Act, any late payments of a 
rebate amount due, including late payment of any reconciled rebate 
amounts greater than the amount reflected in the Rebate Report, would 
be considered a violation potentially subject to a civil money penalty. 
Any civil money penalty would be assessed before the next 12- or 36-
month reconciliation.
    CMS is proposing in Sec.  428.500(b) that civil money penalties may 
be calculated at several points in time associated with missing a 
payment deadline for the rebate amount due reflected in the Rebate 
Report or missing a payment deadline associated with any rebate amount 
determined after a reconciliation to be greater than the amount 
invoiced in the Rebate Report. As these separate events can result in 
distinct assessments of civil money penalties, this means that CMS 
would not modify a civil money penalty from a prior missed payment 
deadline based on changes to the rebate amount due following 
reconciliation, including scenarios where the rebate amount is reduced 
following reconciliation. However, in the event that the rebate amount 
due on a Rebate Report was not paid and a civil money penalty was 
issued for violation of the payment deadline, CMS would not issue a 
second civil money penalty on a reconciled rebate amount if 
reconciliation decreased the rebate amount stated on the Rebate Report. 
CMS believes that enforcing this requirement after each payment 
deadline, regardless of what rebate amount a manufacturer may or may 
not owe at a future payment deadline, is necessary to maintain the 
integrity of the program and consistency of the implementation of the 
program. Further, CMS is proposing this approach to ensure an 
enforcement approach that is operationally feasible and applied 
consistently in all cases.
    For examples of how this approach to civil money penalties will 
work in practice, see section III.I.2.g of this preamble. CMS is 
proposing that civil money penalties will function in the same way for 
both the Part B and Part D rebate programs. Given that the Part D 
rebate program has two proposed regular reconciliations, payment would 
be due no later than 30 days after issuance of a report of a reconciled 
rebate amount for each reconciliation under Part D.
    Further, note that payment of any civil money penalty does not 
obviate the requirement for the manufacturer to pay any outstanding 
rebate amount due, including any rebate amount due following a 
reconciliation. Therefore, paying a civil money penalty does not 
satisfy the obligation to pay the underlying rebate amount on which the

[[Page 61984]]

civil money penalty is calculated. In addition, CMS is evaluating all 
available options to ensure manufacturers' timely compliance with their 
rebate payment obligations, including, without limitation, potential 
recovery approaches and enforcement actions. For example, CMS may refer 
manufacturers to the Department of Justice, Department of the Treasury, 
and/or the Department of Health and Human Services Office of Inspector 
General for further review and investigation.
    In proposed Sec.  428.500(c), CMS proposes that if CMS makes a 
determination to impose a civil money penalty on a manufacturer for 
violation of a payment deadline, CMS would send a written notice of the 
decision to impose a civil money penalty that includes a description of 
the basis for the determination, the basis for the penalty, the amount 
of the penalty, the date the penalty is due, the manufacturer's right 
to a hearing, and information about where to file the request for a 
hearing. To ensure a consistent approach to civil money penalties, CMS 
proposes applying existing appeal procedures for civil money penalties 
in 42 CFR 423, subpart T of this title to manufacturers appealing a 
civil money penalty imposed under the Medicare Part D Drug Inflation 
Rebate Program. CMS has utilized this appeals process for many years 
for civil money penalty determinations affecting MA organizations and 
Part D sponsors. CMS therefore proposes to use this well-established 
process for civil money penalty appeals from manufacturers that do not 
make inflation rebate payments by the payment deadline. CMS also 
proposes in Sec.  428.500(e)(1) that the scope of appeals is limited 
to: (1) CMS determinations relating to whether the rebate payment was 
made by the payment deadline; and (2) the calculation of the penalty 
amount. Section 1860D-14B(f) of the Act precludes judicial review of 
specific data inputs or calculations related to the underlying Rebate 
Report and reconciliation; therefore, such data and calculations are 
not appealable through this process.
    Section 1860D-14B(e) of the Act states that the provisions of 
section 1128A of the Act (except subsections (a) and (b)) apply to 
civil money penalties under this subpart to the same extent that they 
apply to a civil money penalty or procedure under section 1128A(a) of 
the Act. CMS proposes to codify this requirement in proposed Sec.  
428.500(f). In alignment with the procedure outlined in section 1128A 
of the Act, CMS proposes in Sec.  428.500(d) that collection of the 
civil money penalty would follow expiration of the timeframe for 
requesting an appeal, which is 60 calendar days from the civil money 
penalty determination in cases where the manufacturer did not request 
an appeal. In cases where a manufacturer requests a hearing and the 
decision to impose the civil money penalty is upheld, CMS would 
initiate collection of the civil money penalty once the administrative 
decision is final. CMS is seeking comment on proposals related to the 
violations of payment deadlines and issuance of a civil money penalty.
    CMS proposes in Sec.  428.500(g) that in the event that a 
manufacturer declares bankruptcy, as described in title 11 of the 
United States Code, and as a result of the bankruptcy, fails to pay 
either the full rebate amount owed or the total sum of civil monetary 
penalties imposed, the government reserves the right to file a proof of 
claim with the bankruptcy court to recover the unpaid rebate amount 
and/or civil monetary penalties owed by the manufacturer.
g. Severability (Sec.  428.10)
    Proposed Sec.  428.10 provides that, were any provision of part 428 
to be held invalid or unenforceable by its terms, or as applied to any 
person or circumstance, such provisions would be severable from this 
part and the invalidity or unenforceability would not affect the 
remainder thereof or any other part of this subchapter or the 
application of such provision to other persons not similarly situated 
or to other, dissimilar circumstances. While the provisions in part 428 
are intended to present a comprehensive approach to implementing the 
Medicare Part D Drug Inflation Rebate Program, we intend that each of 
them is a distinct, severable provision, as proposed, and would not 
affect similar provisions in the Medicare Part B Drug Inflation Rebate 
Program. Through this rulemaking, the Part D drug inflation rebate 
proposals are intended to operate independently of each other, even if 
each serves the same general purpose or policy goal. For example, CMS 
intends that the policies CMS is proposing related to exclusion of 
units acquired through the 340B Program (proposed Sec.  428.203(b)(2)) 
are distinct and severable from the proposals related to Determination 
of Part D Rebatable Drugs (proposed Sec. Sec.  428.100 and 428.101). 
Even where one provision makes reference to a second provision, the 
preamble and the regulatory text clarify the intent of the agency that 
the two provisions would be severable if one provision were to be 
invalidated in whole or in part. For example, CMS would still be able 
to calculate a Part D drug inflation rebate even if the provision to 
identify the payment amount benchmark period for a Part D rebatable 
drug as the first calendar year in which such drug has at least 1 
quarter of AMP in certain instances of missing AMP is deemed invalid 
(proposed Sec.  428.202(c)(3) and (4)). CMS welcomes comments on this 
severability policy.

J. Request for Information: Building Upon the MIPS Value Pathways 
(MVPs) Framework To Improve Ambulatory Specialty Care

    This request for information seeks input from the public regarding 
the design of a future ambulatory specialty model. Responses to this 
request for information may be used to inform potential future 
rulemaking and other policy development.
1. Background
    Medicare beneficiaries' care is becoming more fragmented as they 
are increasingly seeing (1) more specialists and (2) specialists more 
often, while the number of visits with their primary care clinician 
remains relatively constant.598 599 A primary care team must 
now coordinate with more specialists than ever before \600\ to achieve 
continuity in beneficiary care. Medicare beneficiaries with chronic 
conditions, in particular, are at high risk of excess emergency 
department visits due to fragmented care.\601\
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    \598\ Barnett ML, Bitton A, Souza J, Landon BE. Trends in 
Outpatient Care for Medicare Beneficiaries and Implications for 
Primary Care, 2000 to 2019 [published correction appears in Ann 
Intern Med. 2022 Oct;175(10): 1492]. Ann Intern Med. 2021;174(12): 
1658-1665. doi: 10.7326/M21-1523.
    \599\ Timmins L, Urato C, Kern LM, Ghosh A, Rich E. Primary Care 
Redesign and Care Fragmentation Among Medicare Beneficiaries. The 
American Journal of Managed Care, March 2022, Volume 28, Issue 3.
    \600\ Center for Medicare and Medicaid Services. The CMS 
Innovation Center's Strategy to Support Person-centered, Value-based 
Specialty Care. November 7, 2022. https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care.
    \601\ Kern, LM, Seirup, JK. Fragmented Ambulatory Care and 
Subsequent Healthcare Utilization Among Medicare Beneficiaries. The 
American Journal of Managed Care. 2018;24(9):e278-e284.
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    In 2021, the Innovation Center announced a strategic refresh with a 
vision for a health care system that achieves equitable outcomes 
through high-quality, affordable, person centered-care. This includes a 
bold goal of having 100 percent of Medicare fee-for-service (FFS) 
beneficiaries and the vast majority of Medicaid beneficiaries in an 
accountable care relationship by

[[Page 61985]]

2030.\602\ To expand accountable care among specialists and to drive 
more person-centered care thereby improving the quality, clinical 
outcomes, and affordability of healthcare for beneficiaries, the 
Innovation Center has created a comprehensive specialty strategy to 
test models and innovations. This strategy includes: (1) enhancing 
transparency of specialist data and performance measures; (2) 
maintaining momentum established by episode payment models by extending 
the Bundled Payments for Care Improvement Advanced (BPCI Advanced) 
Model, launching a new model focusing on beneficiaries with cancer, and 
testing a new mandatory acute episode payment model; (3) creating 
financial incentives to improve coordination and collaboration between 
primary care and specialty care in both advanced primary care models 
and in condition-based models; and (4) creating additional financial 
incentives for specialists to affiliate with population-based models 
and move to value-based care.603 604
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    \602\ Centers for Medicare and Medicaid Services. Driving Health 
System Transformation--A Strategy for the CMS Innovation Center's 
Second Decade. October 2021. https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper.
    \603\ Center for Medicare and Medicaid Services. The CMS 
Innovation Center's Strategy to Support Person-centered, Value-based 
Specialty Care. November 7, 2022. https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care.
    \604\ ``The CMS Innovation Center's Strategy to Support Person-
Centered, Value-Based Specialty Care: 2024 Update.'' Health Affairs 
Forefront, April 2, 2024. DOI: 10.1377/forefront.20240328.868596.
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    As part of this strategy, we are considering a model design that 
would increase the engagement of specialists in value-based payment and 
encourage specialty care provider engagement with primary care 
providers and beneficiaries. Specifically, we are currently exploring 
developing a model for specialists in ambulatory settings that would 
leverage the Merit-based Incentive Payment System (MIPS) Value 
Pathways, or MVP, framework. As currently envisioned, participants 
under this model would not receive a MIPS payment adjustment. Instead, 
a model participant would receive a payment adjustment based on (1) a 
set of clinically relevant MVP measures that they are required to 
report and (2) comparing the participant's final score against a 
limited pool of clinicians (other model participants of their same 
specialty type and clinical profile, who are also required to report on 
those same clinically relevant MVP measures). Currently, under MIPS, 
performance and the subsequent payment adjustment are based on a range 
of measures voluntarily reported by clinicians, who receive a final 
score based on the submitted measures. A clinician's performance is 
assessed against a pool of all clinicians, regardless of specialty type 
or the services they provide. We expect that a more targeted approach 
where clinicians are evaluated (1) on a set of relevant performance 
measures they are required to report, and (2) among clinicians 
furnishing similar sets of services, would produce scores and 
subsequent payment adjustments that are more reflective of clinician 
performance. A more targeted approach to measurement would also offer 
more insight into how clinical decisions and processes, such as care 
coordination, affect patient outcomes. We believe this insight is 
necessary to support and incentivize accountable care, increasing 
beneficiary access to coordinated specialty care. Furthermore, equipped 
with more specialty-relevant performance information, we expect 
clinicians would be more likely to invest resources in pursuit of 
better outcomes, reducing the incidence of poor outcomes arising from 
care fragmentation, ultimately resulting in better care for patients.
    MVPs are a reporting option under MIPS, which is one of the two 
primary ways a clinician may participate in the CMS Quality Payment 
Program. The Quality Payment Program, which commenced on January 1, 
2017, was established pursuant to the Medicare Access and CHIP 
Reauthorization Act of 2015 (Pub. L. 114-10, April 16, 2015). The 
Quality Payment Program rewards the delivery of high-quality patient 
care through two avenues: Advanced Alternative Payment Models (Advanced 
APMs) and MIPS for eligible clinicians or groups under the Physician 
Fee Schedule (81 FR 77008). CMS assesses performance on measures and 
activities in four performance categories to determine each MIPS 
eligible clinician's performance under MIPS: quality; cost; clinical 
practice improvement activities; and Promoting Interoperability (42 CFR 
414.1330, 414.1350, 414.1355, and 414.1375).
    In response to concerns made by interested parties that MIPS 
requirements are confusing, burdensome, and that it is difficult to 
choose measures from the several hundred MIPS and QCDR quality measures 
that are meaningful to their practices and have a direct benefit to 
patients, CMS developed the MVP reporting option to create a simplified 
MIPS clinician experience, improve value, reduce burden, and better 
inform patient choice in selecting clinicians (86 FR 65376). MVPs 
provide MIPS eligible clinicians with a more cohesive subset of 
measures and activities related to a specific specialty or condition 
(86 FR 65420 through 65427). MVPs are developed in coordination with 
interested parties through an established process in which clinician 
and patient perspectives are incorporated (85 FR 84850). The use of 
MVPs can create more meaningful performance data, reduce complexity of 
the MIPS program for clinicians, and lower the burden on participating 
clinicians. MIPS eligible clinicians have been able to report on MVPs 
beginning with the CY 2023 MIPS performance period.
    Like MIPS eligible clinicians participating in traditional MIPS, 
those who report MVPs receive an adjustment to their Medicare Part B 
fee-for-service payments 2 years after the corresponding MIPS 
performance period based on a total score calculated from reported 
measures and activities across the 4 MIPS performance categories (see 
Sec. Sec.  414.1365, 414.1405(e), and 414.1305). MVPs are designed to 
cover a range of medical conditions, care settings, and clinician 
types, including primary care providers and specialists. For the 2024 
performance year, 16 MVPs are reportable, allowing for a range of 
specialties to report a streamlined set of measures most applicable to 
services they provide (88 FR 79978 through 80047). For information on 
the MVPs reportable for the 2024 performance period we refer readers to 
sections IV.A.4 and Appendix 3 of this proposed rule.
    Currently, 5 MVPs have quality measures including patient-reported 
outcome measures and chronic condition episode-based cost measures, 
which could be the foundation for assessing the value of care provided 
to chronic care patients. We believe coordination between primary and 
specialty care is particularly critical to the ongoing management of 
chronic conditions with beneficiaries not only for reasons of quality 
and cost, but also in understanding beneficiary goals, expectations, 
and experiences with care.
    CMS conducts ongoing MVP development through engagement with 
interested parties with the long-term goal of sunsetting traditional 
MIPS reporting and making MVP reporting mandatory for MIPS eligible 
clinicians in the future (86 FR 65395 and 87 FR 70040). For more 
information on the long-term goal of sunsetting traditional MIPS 
reporting, see section IV.A.3.b. of this proposed rule. For more 
information on CY 2025 MVP reporting option proposals under the MIPS

[[Page 61986]]

program, see section IV.A.4 of this proposed rule.
    Using the MVP framework as the foundation for a model has many 
benefits. First, the MVP framework advances value-based care by 
narrowing the available measure set based upon clinician specialty, 
medical condition, or patient population, which allows for meaningful 
comparisons to be made across providers and relevant feedback to be 
available to participants on their performance, strengthening the 
foundation for accountability in specialty care. The MVPs provide a 
framework for reporting a cohesive set of measures and activities 
focused on the clinician's performance in rendering care for their 
specialty or clinical condition.
    Second, the payment methodology for the model built on MVPs could 
address concerns interested parties have raised about the MIPS program. 
For instance, CMS has heard from interested parties that the current 
range of Medicare Part B payment adjustments resulting from MIPS 
participation may be insufficient to encourage meaningful specialty 
care transformation that results in increased integration between 
primary and specialty care. The model could test ways to enhance 
existing incentives, allowing for more specific comparisons to be made 
between clinicians of the same type who are providing similar services 
to patients.
    Third, such a model could reach a broad range of clinicians of 
various specialty types that have limited opportunity to participate in 
Advanced APMs. There are 16 MVPs for the 2024 performance year spanning 
numerous specialties, and CMS is proposing additional MVPs for the 2025 
performance year with the goal of creating MVPs that would be relevant 
to the practices of 80 percent of MIPS eligible clinicians. Using an 
existing framework that is agnostic to specialty type, as opposed to 
creating multiple unique models that are each narrowly defined by a 
condition or specialty, would allow the Innovation Center to take a 
more inclusive and unified approach to increasing specialist engagement 
in value-based payment.
    While CMS continues to develop more MVPs for additional health 
conditions and specialties, an ambulatory specialty model leveraging 
the MVP framework could focus on a subset of published MVPs in the 
initial years of implementation, with the goal of increasing the number 
of MVPs, and thus the range of health conditions or specialty areas, 
included in the model over time. Using specific MVPs as the basis for a 
model would, in part, require that selected MVPs cover a sufficient 
volume of clinicians, address chronic conditions with high Medicare 
expenditures, align with existing Innovation Center models (for 
example, the Making Care Primary model), and present an opportunity to 
strengthen the integration between specialty care and primary care.
    We are soliciting comments on several parameters of a potential 
model, including considering mandatory participation of relevant 
specialty care providers to overcome challenges such as selection bias 
and participant attrition, and to ensure the model is reaching a 
representative group of providers and beneficiaries to facilitate 
scaling of the model test. If CMS were to propose a mandatory specialty 
model, it would be done via notice and comment rulemaking. We expect 
this ambulatory specialty model would be implemented no earlier than 
2026, ensuring participants have sufficient time to prepare for the 
model.
2. Solicitation of Public Comments
    The Innovation Center is releasing this request for information 
(RFI) to gather feedback on testing a new model design to improve 
clinical outcomes and reduce or maintain Medicare spending. We request 
feedback on the design of a future ambulatory specialty model, 
specifically on the following--
     Participant definition;
     MVP performance assessment;
     Payment methodology;
     Care delivery and incentives for partnerships with 
accountable care entities and integration with primary care;
     Health information technology and data sharing;
     Health equity; and
     Multi-payer alignment.
    Whenever possible, respondents are requested to draw their 
responses from objective, empirical, and actionable evidence and to 
cite this evidence within their responses.
a. Participant Definition
    A key component of this potential model is to define the Medicare 
Part B clinicians that could participate in the model. Participants in 
an ambulatory specialty model using the MVP framework could be limited 
to MIPS eligible clinicians (see Sec.  414.1305) with specific 
ambulatory-based specialties for a specific clinical focus area(s). The 
model design must also consider whether and how clinicians 
participating in other APMs and Advanced APMs (see Sec. Sec.  414.1305 
and 414.1415) would participate in the model.
    To select participants, an ambulatory specialty model would need to 
determine which clinicians are specialists and sub-specialists 
practicing in the specified clinical areas prioritized in the model. 
This process may be complex as a single specialty often comprises 
several sub-specialties, all of which have specific clinical areas of 
expertise and practice. For example, the specialty of cardiology has 
subspecialties, including general cardiology, interventional 
cardiology, electrophysiology, among others; and interventional 
cardiologists treat a wide range of acute and chronic cardiovascular 
conditions and may receive advanced training in the endovascular 
treatment of specific conditions, including coronary artery disease and 
peripheral artery disease. The MVP framework could provide a natural 
starting point to identifying participants within a given specialty or 
sub-specialty. Each MVP provides measures and activities for a range of 
specialties and sub-specialties in a clinical area or health topic, 
allowing for specialties and sub-specialists to select an applicable 
MVP and report the measures and activities most relevant to them.
    MVP currently policies do not require specialists to report 
specific MVPs but encourage individuals or groups that are MIPS 
eligible clinicians to elect to be an MVP Participant and report an MVP 
that is clinically relevant to them. Beginning with the CY 2026 
performance period, an MVP Participant is assessed on an MVP in 
accordance with Sec.  414.1365 as an individual MIPS eligible 
clinician,\605\ a single specialty group,\606\ subgroup,\607\ or APM 
entity \608\ (see Sec.  414.1305, ``MVP

[[Page 61987]]

participant''). CMS has encouraged MIPS eligible clinicians that are 
multispecialty groups to participate in subgroup reporting to allow the 
group to report measures more relevant to each of the group's 
constituent specialties. Multispecialty groups that choose to report an 
MVP will be required to form subgroups for that purpose beginning in 
the CY 2026 performance period (Sec.  414.1305, ``MVP participant'').
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    \605\ A MIPS eligible clinician who is an individual and elects 
to report 1 MVP relevant to the clinician's clinical practice 
area(s).
    \606\ A single specialty group that is a MIPS eligible clinician 
and reports 1 MVP. Single specialty group means a group that 
consists of one specialty type as determined by CMS using Medicare 
Part B claims (see Sec.  [thinsp]414.1305). A groups means a single 
TIN with two or more clinicians (including at least one MIPS 
eligible clinician), as identified by their individual NPI, who have 
reassigned their billing rights to the TIN (Id.).
    \607\ Subgroups means a subset of a group which contains at 
least one MIPS eligible clinicians and is identified by a 
combination of the group TIN, subgroup identifier, and each eligible 
clinician's NPIs (see Sec.  [thinsp]414.1305). Each subgroup 
consists of 2 or more clinicians from a group that is a MIPS 
eligible clinician. Multiple subgroups can form from a single group, 
which may be either a single specialty group or a multispecialty 
group. Each subgroup reports 1 MVP. An individual eligible clinician 
(as represented by a TIN-NPI combination) may register for no more 
than one subgroup within a group's TIN. (see Sec.  
[thinsp]414.1318(a)(3)).
    \608\ An APM entity is a participant in an APM or other payer 
arrangement through a direct agreement with CMS, other payer, or 
through Federal or State law or regulation. An APM Entity can report 
and be scored on multiple MVPs that are of clinical interest or 
relevance (see Sec.  414.1305).
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    Within an ambulatory specialty model, identification of a given 
specialty or sub-specialty--including whether an individual would be 
selected to participate in the model at an individual, group, or 
subgroup level based on TIN and NPI combinations--would need to rely on 
data sources to which CMS already has access. Further, approaches to 
participant identification would need to appropriately identify non-
physician clinician types (for example, physician assistants or nurse 
practitioners) that may practice within a specific specialty or sub-
specialty or both but may not be categorized as practicing within a 
specific specialty within existing data systems.
    As multispecialty groups reporting MVPs in the 2026 MIPS 
performance period must divide into subgroups, CMS finalized a process 
by which it will determine whether a MIPS eligible clinician that is a 
group practice is a single specialty group or multispecialty group. CMS 
finalized that it will use Medicare Part B claims data to determine a 
group's specialty type based on the strong alignment between the 
Medicare Provider Enrollment, Chain, and Ownership System (PECOS) and 
Medicare Part B claims data sources, and historical use of claims data 
to identify a clinician or practice's specialty (87 FR 70038 through 
70040).
    Given the different circumstances and challenges faced by 
clinicians working in specific contexts, an ambulatory specialty model 
could consider additional characteristics of clinicians or practices in 
addition to the identification of participants based on specialty or 
sub-specialty.\609\ Additional characteristics that could be considered 
in participant selection in a model could be related to factors 
documented to be associated with disparities in access to specialty 
care and disparities in specialty-sensitive outcomes. Such factors 
could include being a solo clinician, practicing within a rural area, 
serving a higher proportion of Medicare and Medicaid dually eligible 
beneficiaries and patients receiving Medicare Part D low-income 
subsidies, operating within a designated Health Provider Shortage Area, 
among others. For further discussion on additional health equity 
considerations for the model, see section III.J.2.f. of this proposed 
rule, Health Equity.
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    \609\ For example, special status designations for MIPS eligible 
clinicians confer additional flexibilities in performance category 
reporting requirements and category reweighting within final score 
calculations. For the 2024 performance period, several provider 
designations can receive additional flexibilities in MVP reporting. 
Ambulatory Surgical Center (ASC)-based, hospital-based, non-patient 
facing, and small practice-based (15 or fewer clinicians) providers 
are eligible for automatic reweighting of the Promoting 
Interoperability performance category to 0 percent, with the 
category weight redistributed to other performance categories. Small 
practice-based participants are also eligible for additional scoring 
flexibilities in the quality performance category (see Sec.  
414.1380). MVP policies for the CY 2024 performance period state 
that special status determination is determined at the group level 
for subgroup participants (see Sec.  414.1365).
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    Participant identification approaches would also need to consider 
the heterogeneity of existing specialty group practices as the 
variation in clinical practice across different specialties has 
historically presented challenges for specialists to engage more deeply 
in value-based care.
    Assuming an ambulatory specialty model would initially focus on a 
subset of specialists and eventually incorporate additional specialties 
over time, CMS would need to identify specialists for the prioritized 
clinical areas before the model begins. CMS seeks feedback on the 
following questions:
    (1) How should CMS identify single specialty and multispecialty 
groups while accounting for regular clinician turnover? Which data 
sources and methodology should CMS use to consider identifying 
specialists and sub-specialties that could potentially participate in 
an ambulatory specialty model?
    (2) Should CMS consider different identification approaches to 
identify individual clinician specialist type versus practice- or 
group-level specialty types? If so, how?
    (3) Are there certain characteristics of clinicians or practices or 
both that may warrant additional policy flexibilities or exemption from 
participation in a mandatory ambulatory specialty model? What 
flexibilities should CMS consider for these participants?
    (4) How should CMS collect unbiased comparison group data on 
quality and costs for evaluation purposes? Would mandating a control 
group to report MVPs be appropriate for model evaluation?
    (5) How can CMS support a multispecialty group's ability to 
successfully participate in MIPS and the model if a portion of its 
clinicians are reporting separate measures pursuant to the model? What 
steps could CMS take to reduce any added administrative burden that 
might arise from such separate reporting?
b. MVP Performance Assessment
    CMS adjusts future Medicare Part B payments to MIPS eligible 
clinicians based on the assessment of measures and activities \610\ 
reported across the 4 MIPS performance categories: Quality (including 
Population Health), Cost, Improvement Activities, and Promoting 
Interoperability (see Sec. Sec.  414.1380 and 414.1405). MVP 
Participants are assessed in the same manner (see Sec.  414.1365(d)). 
Scoring policies and procedures are standardized across MVPs (see Sec.  
414.1365(d)(3)). Resulting performance category scores are weighted as 
defined in regulations (see Sec. Sec.  414.1365(e)(1) and 414.1380(c)) 
and are aggregated to compute an overall final MVP score, which ranges 
from 0 to 100 points.
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    \610\ Pursuant to section 1848(q)(2)(D) of the Act, CMS selects 
measures for inclusion in the MIPS program through notice and 
comment rulemaking. To date, CMS has also elected to subject each 
MIPS measure to the pre-rulemaking process pursuant to section 
1848(q)(2)(D)(ix) of the Act.
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    Quality--Each MVP defines a set of reportable quality measures 
relevant to the specialty or medical condition that provide meaningful 
and actionable results. Quality measure sets are designed to cover a 
range of process and outcomes measures that are applicable to a range 
of clinicians working within a given specialty or medical condition. As 
of the CY 2024 performance period, MVP Participants must report at 
least 4 quality measures, including at least 1 outcome measure or 1 
measure designated ``high priority'' if an outcome measure is not 
available within an MVP (see Sec. Sec.  414.1365(c)(1) and 414.1305). 
Individual quality measures must also meet case minimums to be scored 
(see Sec.  414.1380(b)(1)). Please refer to section IV.A.4.c.(1). of 
this proposed rule for proposed quality measure reporting and scoring 
policies for the CY 2025 performance period. MVP participants are also 
scored on population health administrative claims-based measures, which 
are factored into the MVP participant's overall quality performance 
category score (see Sec.  414.1365(c)(4)(ii)) (please refer to sections 
IV.A.4.c.(1).(a). and IV.A.4.c.(1).(b). of this proposed rule for 
proposed population health measure reporting and scoring policies for 
the CY

[[Page 61988]]

2025 performance period).\611\ The population health measures help 
indicate the quality of a population or cohort's overall health and 
well-being, such as, access to care, clinical outcomes, coordination of 
care and community services, health behaviors, preventive care and 
screening, health equity, or utilization of health services (see Sec.  
414.1305).
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    \611\ For the CY 2024 performance period, the two population 
health measures from which participants could select to be scored 
are: Hospital-Wide, 30-day, All-Cause Unplanned Readmission Rate for 
the MIPS Groups and Clinician, or Clinician Group Risk-standardized 
Hospital Admission Rate for Patients with Multiple Chronic 
Conditions. If the participant does not meet the case minimum for 
either measure, then the population health measure is excluded from 
scoring within the quality performance category.
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    Cost--Each MVP identifies cost measures that are relevant and 
applicable to the MVP topic or medical condition. Given the 
availability of applicable cost measures, the number of reportable cost 
measures varies across MVPs. An MVP may include the episode-based cost 
measures (EBCM) that are relevant to MVP topic, total per capita cost 
(TPCC) measure, and Medicare Spending Per Beneficiary Clinician (MSPB 
Clinician) measure. Cost measures are calculated by CMS using 
administrative claims data, and CMS scores MVP participants on all cost 
measures included in the MVP that they select and report (see Sec.  
414.1365(d)(3)(ii)). Please refer to section IV.A.4.c.(2). of this 
proposed rule for proposed cost measure reporting and scoring policies 
for the CY 2025 performance period/2027 MIPS payment year.
    Improvement Activities--Improvement activities (IAs) are activities 
that relevant MIPS eligible clinician, organizations and other relevant 
interested parties identify as improving clinical practice or care 
delivery and that are likely to result in improved outcomes. (see Sec.  
414.1305). Improvement activities may cover multiple improvement 
domains, including expanded patient access, population management, care 
coordination, beneficiary engagement, patient safety and practice 
assessment, health equity, emergency response and preparedness, and 
behavioral and mental health (see Sec.  414.1355(c)). MVP participants 
must report IAs included in a given MVP while meeting overall IA 
reporting requirements for the performance period. Please refer to 
section IV.A.4.c.(3). of this proposed rule for proposed IA reporting 
and scoring policies for the CY 2025 performance period.
    Promoting Interoperability--The Promoting Interoperability 
requirements of MVPs are intended to emphasize the electronic exchange 
of information using certified electronic health record technology 
(CEHRT), patient access to health information, exchange of information 
among clinicians, and the systematic collection, analysis, and 
interpretation of health care data. As of the CY 2024 performance 
period/2026 MIPS payment year, MVP participants are required to report 
the entire MIPS Promoting Interoperability measure set, which includes 
measures related to use of CEHRT for e-prescribing, health information 
exchange, public health and clinical data exchange, and clinician-to-
patient exchange, as well as required attestations, as specified by CMS 
(see Sec. Sec.  414.1365(c)(4)(i) and 414.1375(b)). Please also refer 
to section IV.A.4.c.(4). and Table 62 for required objectives and 
measures for the MIPS Promoting Interoperability performance category 
for the CY 2025 performance period/2027 MIPS payment year.
    Operating within the MVP measures framework, an ambulatory 
specialty model would collect data on measures across quality, cost, 
and improvement activities performance categories that would be 
clinically relevant to specialties or sub-specialties or both within an 
MVP topic specified by the model. As discussed in III.J.1. of this 
proposed rule, the model could use a subset of measures and activities 
included in an MVP that are most clinically relevant to the model's 
clinical topics and specialties. A clinically focused measure and 
activity set could allow CMS to set performance standards that are most 
clinically relevant to sub-specialties within an MVP topic under the 
model.
    CMS requests the following feedback related to incorporating 
measures and activities from MVP performance categories in a possible 
ambulatory specialty model:
    (6) If CMS were to reduce the number of measures and activities in 
an MVP for clinicians participating in the model to those measures and 
activities most relevant to a specified specialty or subspecialty, how 
should CMS select the measures and activities? Consider the following 
prioritization approaches: (a) measures with a performance gap; (b) 
measures with meaningful benchmarks that can be applied; (c) measures 
that are reliable in the model context given the expected sample size; 
(d) measures that are evidence-based and either strongly linked to 
outcomes or an outcome measure; (e) measures that capture an adequate 
number and representativeness of the clinicians intended by a possible 
ambulatory specialty model; (f) measures that drive specialty 
integration with primary care and meaningful involvement with 
accountable entities. Are there other measure selection principles that 
should be prioritized when narrowing measuring in an MVP?
    (7) Are there specific measure focus areas or objectives that 
should be prioritized across MVPs (such as equity, population health 
measures, or patient-reported outcome-based performance measures (PRO-
PMs) and patient-reported experience measures)?
    (8) To support improvements in primary and specialty care 
integration, an ambulatory specialty model could initially focus on 
specialty types eligible to become rostered specialty care partner 
clinicians in the MCP model, which include general cardiologists and 
physical medicine and rehabilitation clinicians. Accordingly, which 
measures within the Advancing Care for Heart Disease MVP and the 
Rehabilitative Support for Musculoskeletal Care MVP might be subset to 
apply to general cardiology and physical medicine and rehabilitation, 
respectively?
    (9) Similar to how other Innovation Center models may test new 
measures during their implementation (for example, the Comprehensive 
Joint Replacement model (80 FR 73358 through 73382 and 86 FR 23543 
through 23549) and the Guiding an Improved Dementia Experience (GUIDE) 
Model \612\), what role could an ambulatory specialty model have in 
testing potential new measures, such as relevant PRO-PMs, by gathering 
data for consideration in future MVP measure sets?
---------------------------------------------------------------------------

    \612\ https://www.cms.gov/files/document/guide-rfa.pdf.
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    (10) What kinds of strategies could be tested to obtain patient and 
family feedback on how they experience care coordination between 
primary care and specialty care for the clinical focus areas of the 
model?
    (11) What types of peer engagement would specialists consider 
valuable to enhance their performance within a given sub-specialty or 
clinical topic?
c. Payment Methodology
    MIPS final scores are used to determine payment adjustments for 
future Medicare Part B payments during the payment year that occurs 2 
calendar years following the MIPS performance period (for example, 
scores from the CY 2021 MIPS performance period resulted in Part B 
Medicare payment adjustments for the 2023 calendar year) (see

[[Page 61989]]

Sec.  414.1305). CMS scores a MIPS eligible clinician's performance on 
measures and activities in accordance with section 1848(q)(5) of the 
Act and regulations at Sec. Sec.  414.1317, 414.1365, 414.1367, and 
414.1380, as applicable to determine a final score for each MIPS 
eligible clinician.
    In accordance with section 1848(q)(6) of the Act and Sec.  
414.1405(b), CMS compares each MIPS eligible clinician's final score 
against the performance threshold established for that MIPS payment 
year and against one another in a single comparison pool to determine 
whether each MIPS eligible clinician will receive a positive, negative, 
or neutral payment adjustment. CMS calculates MIPS payment adjustment 
factors in accordance with regulations at Sec.  414.1405. Scores equal 
to the defined performance threshold receive a neutral (0 percent) 
payment adjustment. Scores falling below one-quarter of the performance 
threshold receive a negative adjustment of minus 9 percent, while 
scores between one-quarter of the performance threshold and the 
performance threshold receive a negative payment adjustment less than 0 
percent and up to minus 9 percent based on a linear sliding scale. 
Scores above the performance threshold can receive positive payment 
adjustments greater than 0 percent and up to positive 9 percent based 
on a linear sliding scale. Depending on the range of scores within a 
given performance period, a scaling factor (ranging from 0 to 3) is 
applied to positive adjustments to retain budget neutrality.
    For the CY 2022 performance period/2024 MIPS payment year, over 
624,000 clinicians received MIPS payment adjustments to their Medicare 
Part B payments based on participation in traditional MIPS: 14 percent 
of MIPS eligible clinicians received negative MIPS payment adjustments, 
7 percent received neutral MIPS payment adjustments, and 79 percent 
received positive MIPS payment adjustments with a maximum positive 
payment adjustment of 8.26 percent.\613\ MVPs were not a reporting 
option for the CY 2022 performance period/2024 MIPS payment year.
---------------------------------------------------------------------------

    \613\ QPP 2022 Participation Results At-a-Glance https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2816/QPP-2022-Participation-and-Performance-Results-At-A-Glance.pdf. Note that for the CY 2022 
performance period, MIPS participants were eligible for an 
additional MIPS payment adjustment factor for exceptional 
performance (see Sec.  414.1405).
---------------------------------------------------------------------------

    As discussed in III.J.1. of this proposed rule, an ambulatory 
specialty model allow for more specific comparisons between clinicians 
of the same type who are providing similar services to patients. 
Comparing clinicians that provide a similar type of specialty care to 
determine future Medicare Part B payment adjustments could lead to 
payment adjustments that are more reflective of the range of 
performance of similar clinicians caring for beneficiaries within a 
given clinical topic area. Such comparisons could create financial 
incentives that drive quality improvement and care transformation 
within a given clinical topic and specialty. Further, a more targeted 
approach to performance measurement and assessment, including enhanced 
data on clinical and financial performance relative to similar 
clinicians, could incentivize shared accountability for care and lead 
to increased beneficiary access to coordinated specialty care.
    In considering an ambulatory specialty model that leverages the MVP 
framework to increase specialist engagement in value-based care and 
transform specialist care delivery, CMS is requesting feedback on the 
following questions:
    (12) How could a model for applicable specialists improve the 
comparison of similar specialists to determine future Medicare Part B 
payment adjustments?
    (13) What range of upside and downside risk (as measured by the 
range of possible payment adjustments to future Medicare Part B claims) 
could incentivize increased and meaningful participation of specialists 
in APMs, care transformation, and strengthened integration between 
primary and specialty care?
    (14) What model design features should CMS consider in designing an 
ambulatory specialty care model that increases risk over time to 
potentially qualify the model for Advanced APM (AAPM) status under the 
Quality Payment Program (see Sec.  414.1415)?
d. Care Delivery and Incentives for Partnerships With Accountable Care 
Entities and Integration With Primary Care
    CMS is exploring how an ambulatory specialty model could encourage 
model participants to better engage with primary care providers engaged 
in care coordination activities in the MCP model, Shared Savings 
Program, and other current and future accountable care models. By 
promoting coordination and partnership between specialists and these 
accountable entities, CMS seeks to extend opportunities for specialists 
to deliver comprehensive longitudinal care and improve the quality of 
care provided by both parties. For example, CMS could test the 
inclusion of new improvement activities in model MVPs that are 
fulfilled through care coordination activities with an accountable care 
entity or its participant clinicians. As CMS considers opportunities to 
encourage specialist delivery of comprehensive longitudinal care, an 
underlying priority is care delivery from the beneficiary's 
perspective. To address the issue of highly fragmented care delivery to 
the beneficiary, CMS recognizes the need for meaningful engagement 
among those who deliver care and seeks to create incentives for 
partnerships between specialist clinicians, accountable care entities, 
and primary care clinicians. To help us ensure these accountable 
entities reduce fragmentation and provide patients with the highest 
value care, we seek input on the following questions:
    (15) Are there model design features not discussed here that would 
incentivize primary care and specialty care providers to improve how 
beneficiaries experience care coordination?
    (16) How can CMS best encourage specialist clinicians and 
accountable care entities collaborate to establish clear care pathways 
and protocols that optimize patient outcomes while ensuring efficient 
resource utilization?
    (17) How may CMS identify specialists who are most engaged in care 
management, care coordination, and care improvement activities with an 
accountable care entity?
    (18) In what ways can the model define clear expectations and 
performance metrics for specialists, beyond what exists in the current 
MVP measure sets, to foster a collaborative environment with ACOs and 
primary care clinicians to enhance healthcare outcomes and reduce 
costs? What levers, such as the MIPS's Improvement Activities, could be 
used to support participants to close the care loop back to accountable 
care entities or primary care or both?
    (19) What characteristics should CMS consider in the design of this 
model to account for variations between ACOs, such as whether the ACO 
is physician-owned versus hospital-owned (or a low revenue ACO versus a 
high revenue ACO), whether or not an ACO identifies as an integrated 
delivery system (IDS), and differences in regional healthcare 
landscapes and local dynamics? What other characteristics should we 
consider?
    (20) How can the model proactively address concerns related to 
increased consolidation, ensuring that integration efforts do not lead 
to reduced

[[Page 61990]]

competition and potential negative impacts on healthcare quality and 
costs?
    (21) How might risk categorization of ACOs influence the design of 
incentive structures of model participants engaging with ACOs, and what 
adjustments might be necessary to accommodate different risk levels?
e. Health Information Technology and Data Sharing
    The Quality Payment Program releases publicly the QPP Experience 
Report Public Use Files (with companion methodology and data dictionary 
documentation), which allow users to review details concerning 
participation and performance information in the MIPS program during 
each performance period. These files cover eligibility and 
participation, performance categories, and final score and payment 
adjustments, with details at the TIN/NPI level on each of the 
performance categories for the previous performance period. Data can be 
sorted by variables like clinician type, practice size, scores, and 
payment adjustments. Clinicians and authorized representatives of 
practices, virtual groups, and APM Entities (including Shared Savings 
Program ACOs) also have access to summaries of data that they have 
submitted and that CMS has collected on their behalf. This includes 
performance category-level scores and weights, bonus points, measure-
level performance data and scores, activity-level scores, payment 
adjustment information, and patient-level reports. Clinicians 
frequently request more timely and expansive data feedback through MIPS 
to help guide continuous improvement efforts. CMS requests the 
following feedback on health information technology and data sharing:
    (22) What specific issues should CMS consider when determining 
whether additional requirements and objectives may be necessary beyond 
those currently specified in the MVP framework around the use of health 
IT by specialists participating in a potential model?
    (23) What investments in health IT or information exchange would be 
most beneficial to helping specialists succeed in such a model?
    (24) What is your experience with the integration of health IT 
systems? Please highlight any interoperability issues or opportunities 
for seamless data exchange between different systems, such as 
electronic health records (EHRs) and telehealth platforms.
    (25) How should CMS structure the model and any health IT and data 
sharing requirements to align with, build upon, and otherwise leverage 
advances in Federal interoperability policy (for example, USCDI and 
USCDI+ or FHIR; TEFCA)?
    (26) What data or metrics or both are important to clinicians in 
terms of monitoring performance and improving patient outcomes? What 
data or metrics or both should CMS share publicly to help inform 
beneficiaries of clinician performance?
    (27) What additional resources or support mechanisms could CMS 
provide to help clinicians make sense of the data, enhancing the data's 
usability, effectiveness, and frequency of updates, so that clinicians 
acquire actionable insights for improving patient care and experience? 
And to enable data-driven referrals?
    (28) What supports can this new model provide for decreasing burden 
of data collection and measure reporting?
f. Health Equity
    Disparities in access to ambulatory specialty care and chronic 
condition outcomes are well documented, such as racial/ethnic and 
geographic disparities in rates of ischemic heart disease (IHD) among 
Medicare fee-for-service beneficiaries.\614\ For example, Medicare fee-
for-service beneficiaries identifying as American Indian/Alaska Native 
(28 percent) had the highest age-standardized prevalence of IHD and 
Asian/Pacific Islander (22 percent) beneficiaries had the lowest 
prevalence, compared to the IHD prevalence among White (27 percent), 
Black/African American (26 percent), and Hispanic (25 percent) 
beneficiaries in 2021.\615\ Medicare fee-for-service beneficiaries with 
complex chronic conditions in rural areas have also been shown to have 
comparable access to primary care physicians but significantly lower 
access to ambulatory specialists and higher rates of avoidable 
hospitalizations for chronic conditions compared to similar 
beneficiaries in urban areas.\616\ Engaging specialists in value-based 
care to create more integrated and efficient care provides an 
opportunity to expand access to specialty care for historically 
underserved beneficiaries and advance health equity.
---------------------------------------------------------------------------

    \614\ Centers for Medicare & Medicaid Services. Ischemic Heart 
Disease Disparities in Medicare Fee-for-Service Beneficiaries Data 
Snapshot. April 2021. https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Dwnld-DataSnashot-Ischemic-Heart-Disease.pdf.
    \615\ Centers for Medicare & Medicaid Services. Ischemic Heart 
Disease Disparities in Medicare Fee-for-Service Beneficiaries Data 
Snapshot. April 2021. https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/OMH_Dwnld-DataSnashot-Ischemic-Heart-Disease.pdf.
    \616\ Johnston KJ, Wen H, Joynt Maddox KE. Lack Of Access to 
Specialists Associated with Mortality and Preventable 
Hospitalizations of Rural Medicare Beneficiaries. Health Aff 
(Millwood). 2019;38(12): 1993-2002. doi: 10.1377/hlthaff.2019.00838.
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    Consistent with President Biden's Executive Order 13985 on 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government'' (86 FR 7009) and Executive Order 14091 
on ``Further Advancing Racial Equity and Support for Underserved 
Communities Through the Federal Government'' (88 FR 10825), CMS has 
made advancing health equity \617\ the first pillar in its Strategic 
Plan. Health equity is also one of the five objectives in the 
Innovation Center's 2021 Strategy Refresh. Improving access to high-
quality, patient-centered care is a goal for the Innovation Center, and 
ensuring historically underserved beneficiaries are adequately 
represented in value-based care models may help reduce inequities when 
designed with the proper incentives.
---------------------------------------------------------------------------

    \617\ We define health equity as the attainment of the highest 
level of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, and other 
factors that affect access to care and health outcomes.
---------------------------------------------------------------------------

    The Innovation Center is also committed to prioritizing the unique 
needs of clinicians that care for a large proportion of underserved 
populations, such as creating flexibilities clinicians may need to be 
successful in models. To advance health equity goals within payment 
models, the Innovation Center has implemented multiple equity-focused 
strategies within existing models, including, but not limited to 
development of participant health equity plans, reporting of aggregated 
health-related social need (HRSN) screening,\618\ reporting and 
analysis of attributed beneficiary sociodemographic data to support 
identification and monitoring of health disparities, and payment 
adjustments.
---------------------------------------------------------------------------

    \618\ Health-related social needs are adverse social conditions 
that negatively impact a person's health or healthcare such as lack 
of access to transportation for appointments. See A Guide to Using 
the Accountable Health Communities Health-Related Social Needs 
Screening Tools: Promising Practices and Key Insights. CMS. (Updated 
Aug. 2022). https://www.cms.gov/priorities/innovation/media/document/ahcm-screeningtool-companion; Accountable Health 
Communities Health-Related Social Needs Screening Tool.
---------------------------------------------------------------------------

    Within the MVP framework, several MVPs include equity-focused 
measures within the quality and improvement activities performance 
categories, such as screening for HRSNs or engaging community resources 
to address HRSNs. MVPs also provide additional reporting

[[Page 61991]]

and scoring flexibilities for certain special status designations, many 
of which may include clinicians caring for historically underserved 
beneficiaries. There may be additional clinician- and practice-level 
characteristics, including the characteristics of beneficiaries served, 
that would be important to account for within an ambulatory specialty 
model to support clinicians in identifying and working to improve 
disparities related to access to specialty care and associated 
outcomes.
    To understand the potential health equity impacts of a new 
ambulatory specialty model and to help ensure the goals laid out in the 
CMS Strategic Plan and the Innovation Center Strategy Refresh are met, 
we request feedback on the following questions:
    (29) Similar to how other Innovation Center models may offer 
financial and technical supports to certain qualifying clinicians (for 
example, safety net clinicians) as part of a model's health equity 
strategy (for example, the GUIDE model \619\), how might CMS support 
the participation of clinicians in an ambulatory specialty model that 
may serve a higher proportion of underserved patients (for example, 
small practices or clinicians in rural areas)?
---------------------------------------------------------------------------

    \619\ Center for Medicare and Medicaid Services. Guiding an 
Improved Dementia Experience (GUIDE) Model. https://www.cms.gov/priorities/innovation/innovation-models/guide.
---------------------------------------------------------------------------

    (30) How could an ambulatory specialty model support participant 
efforts to identify health disparities within their practices, identify 
actionable equity goals, and design and implement strategies to improve 
identified disparities?
    (31) How could an ambulatory specialty focused model work 
synergistically with other primary care focused models to improve 
health disparities?
    (32) How could an ambulatory specialty model encourage clinicians 
to collect and use HRSN screening and follow-up data collected on 
patients attributed to the model?
    (33) How can measure stratification among patient subgroups or use 
of composite health equity measures improve how participants identifies 
and quantifies potential disparities in care and outcomes related to 
ambulatory specialty care?
g. Multi-Payer Alignment
    Given the Innovation Center's strategic goal to make multi-payer 
alignment available in all new models by 2030,\620\ we are seeking 
feedback on how to best promote multi-payer alignment between a 
potential ambulatory model, established models and programs, and payers 
to achieve sustainable system-wide transformation. The increased 
engagement in value-based care proposed in the model could support 
other payers like Medicare Advantage, Medicaid, and commercial plans in 
achieving their goals around value-based care activities by providing 
an onramp for specialists inexperienced with this form of payment. 
Also, leveraging existing design principles from MIPS promotes 
directional alignment as they adhere to the broader CMS National 
Quality Strategy, including an effort to move toward digital quality 
measurement,\621\ and plans to employ a ``Universal Foundation'' of 
quality measures to create greater consistency in quality reporting 
across payers.\622\
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    \620\ Centers for Medicare and Medicaid Services. Driving Health 
System Transformation--A Strategy for the CMS Innovation Center's 
Second Decade. October 2021. https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper.
    \621\ Centers for Medicare and Medicaid Services. dQMs--Digital 
Quality Measures. dQM Strategic Roadmap.
    \622\ Jacobs DB, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher LA. Aligning Quality Measures across CMS--The Universal 
Foundation. 2023. New England Journal of Medicine, 388 (9), 776-779. 
DOI: 10.1056/NEJMp2215539.
---------------------------------------------------------------------------

    We request feedback on the following questions:
    (34) Are there opportunities to reduce clinician burden between 
this model, other CMMI models, and beyond through multi-payer 
alignment, in areas such as performance measurement, quality 
measurement, and data/reporting requirements?
    (35) How could this model align with value-based care approaches in 
the Medicare Advantage, Medicaid, and commercial payer space that focus 
on specialty integration? What model components and payment incentives 
can be aligned with other payers to support improvement goals?
    (36) How can CMS align with other payer approaches to equity and 
disparity reduction? This could include alignment on definitions, 
methods, and requirements for equity-related data collection, etc.
    (37) What technical assistance can CMS provide to support alignment 
and reduce burden?

K. Expand Colorectal Cancer Screening

    Medicare coverage for colorectal cancer (CRC) screening tests under 
Part B are described in statutes (sections 1861(s)(2)(R), 1861(pp), 
1862(a)(1)(H) and 1834(d) of the Social Security Act (the Act)), 
regulation (42 CFR 410.37), and National Coverage Determination (NCD) 
(Section 210.3 of the Medicare National Coverage Determinations 
Manual). The statute and regulations expressly authorize the Secretary 
to add other tests and procedures (and modifications to tests and 
procedures) for colorectal cancer screening with such frequency and 
payment limits as the Secretary finds appropriate based on consultation 
with appropriate organizations. (Section 1861(pp)(1)(D) of the Act; 
Sec.  410.37(a)(1)(v)) We are proposing to exercise our authority at 
section 1861(pp)(1)(D) of the Act to update and expand coverage for CRC 
screening by:
     Removing coverage for the barium enema procedure in 
regulations at Sec.  410.37,
     Adding coverage for the computed tomography colonography 
(CTC) procedure in regulations at Sec.  410.37, and
     Expanding a ``complete colorectal cancer screening'' in 
Sec.  410.37(k) to include a follow-on screening colonoscopy after a 
Medicare covered blood-based biomarker CRC screening test (described 
and authorized in NCD 210.3).
1. Background
    The Center for Disease Control and Prevention (CDC) describes CRC 
as ``a disease in which cells in the colon or rectum grow out of 
control . . . Sometimes abnormal growths, called polyps, form in the 
colon or rectum. Over time, some polyps may turn into cancer. Screening 
tests can find polyps so they can be removed before turning into 
cancer. Screening also helps find colorectal cancer at an early stage, 
when treatment works best.'' \623\ The National Cancer Institute 
reports that CRC is the fourth most common type of cancer and estimates 
that the United States experienced 153,020 new cases and 52,550 new 
deaths from CRC in 2023. In addition, the rate of new cases and new 
deaths from CRC is more common in men than women and significantly 
greater for those of African American and Non-Hispanic American Indian/
Alaska Native descent compared to all races.\624\
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    \623\ CDC website: https://www.cdc.gov/cancer/colorectal/basic_info/what-is-colorectal-cancer.htm.
    \624\ NCI website: https://seer.cancer.gov/statfacts/html/colorect.html.
---------------------------------------------------------------------------

    At Sec.  410.37(a)(4), we define the barium enema procedure as a 
screening double contrast barium enema of the entire colorectum 
(including a physician's interpretation of the results of the 
procedure); or in the case of an individual whose attending physician 
decides that he or she cannot tolerate a screening double contrast 
barium

[[Page 61992]]

enema, a screening single contrast barium enema of the entire 
colorectum (including a physician's interpretation of the results of 
the procedure). The CDC describes CTC, (also called a virtual 
colonoscopy), as ``a screening test that uses X-rays and computers to 
produce images of the entire colon, which are displayed on a computer 
screen for the doctor to analyze.'' \625\
---------------------------------------------------------------------------

    \625\ CDC website: https://www.cdc.gov/cancer/colorectal/basic_info/screening/tests.htm.
---------------------------------------------------------------------------

    The U.S. Preventative Services Task Force (USPSTF) included CTC as 
a CRC screening method in their June 2016 revised Final Recommendation 
Statement which included the topline recommendations ``[t]he USPSTF 
recommends the (CRC screening) service. There is high certainty that 
the net benefit is substantial (Grade A)'' and ``[t]he USPSTF 
recommends the (CRC screening) service. There is high certainty that 
the net benefit is moderate, or there is moderate certainty that the 
net benefit is moderate to substantial) (Grade B)''.\626\ The USPSTF 
cautioned, ``[t]here is insufficient evidence about the potential harms 
of associated extracolonic findings, which are common.'' The USPSTF 
further wrote, ``[t]here are numerous screening tests to detect early-
stage colorectal cancer, including stool-based tests (gFOBT, FIT, and 
FIT-DNA), direct visualization tests (flexible sigmoidoscopy, alone or 
combined with FIT; colonoscopy; and CT colonography), and serology 
tests (SEPT9 DNA test). The USPSTF found no head-to-head studies 
demonstrating that any of these screening strategies are more effective 
than others, although they have varying levels of evidence supporting 
their effectiveness, as well as different strengths and limitations.'' 
\627\ The USPSTF again included CTC as a CRC screening method in the 
most recent May 2021 revised Final Recommendation Statement, which 
included the topline recommendations ``[t]he USPSTF recommends 
screening for colorectal cancer in all adults aged 50 to 75 years 
(Grade A)'' and ``[t]he USPSTF recommends screening for colorectal 
cancer in adults aged 45 to 49 years (Grade B)''.\628\ CMS describes 
our consultations with additional organizations and our review of 
clinical guidelines later in our proposal.
---------------------------------------------------------------------------

    \626\ USPSTF June 2016 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \627\ USPSTF June 2016 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \628\ USPSTF January 2021 Revised Final Recommendation Statement 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
---------------------------------------------------------------------------

2. Statutory Authority
    Section 4104 of the Balanced Budget Act of 1997 (Pub. L. 105-33) 
authorized the benefit colorectal cancer screening tests under Medicare 
Part B. Section 1861(s)(2)(R) of the Act includes CRC screening tests 
in the definition of medical and other health services that fall within 
the scope of Medicare Part B benefits described in section 1832(a)(1) 
of the Act. Section 1861(pp) of the Act defines colorectal cancer 
screening tests and specifically names the following tests:
     Screening fecal-occult blood test;
     Screening flexible sigmoidoscopy; and
     Screening colonoscopy.
    Section 1861(pp)(1)(D) of the Act also authorizes the Secretary to 
include in the definition of CRC screening tests other tests or 
procedures and modifications to the tests and procedures described 
under this subsection, with such frequency and payment limits as the 
Secretary determines appropriate, in consultation with appropriate 
organizations.
3. Regulatory and NCD Authority
    In the CY 1998 PFS final rule (62 FR 59048), after consulting with 
appropriate organizations, we finalized regulations to cover barium 
enema procedures for CRC screening in Sec.  410.37. Barium enema 
screening examinations have to be ordered by the beneficiary's 
attending physician (Sec.  410.37(h)). Currently, the regulations cover 
barium enemas as a CRC screening tests subject to frequency limitations 
and whether or not the individual was at high risk for colorectal 
cancer. As described in the CY 1998 PFS final rule (62 FR 59048), CMS 
consulted with a number of appropriate organizations such as the 
American Cancer Society, American College of Physicians, American 
Gastroenterological Association and U.S. Preventive Services Task Force 
(USPSTF) and the decision to cover the barium enema procedure was based 
on the prevailing clinical guidelines and recommendations at the time. 
In the CY 2023 PFS final rule (87 FR 69404), we lowered the age limit 
for barium enema procedures for CRC screening to age 45 at Sec.  
410.37(i)(1).
    In May 2009, we established a non-coverage policy for CTC in NCD 
210.3 CTC Screening Tests. We noted in the Final Decision Memorandum, 
``there is insufficient evidence on the test characteristics and 
performance of screening CT colonography in Medicare aged individuals 
and that the evidence is not sufficient to conclude that screening CT 
colonography improves health benefits for asymptomatic, average risk 
Medicare beneficiaries.'' \629\ At that time, the October 2008 USPSTF 
revised Final Recommendation Statement read, ``[t]he USPSTF concludes 
that the evidence is insufficient to assess the benefits and harms of 
computed tomographic colonography and fecal DNA testing as screening 
modalities for colorectal cancer. (Grade I)'' \630\ As described in the 
Final Decision Memo, guidelines from Professional Societies were mixed. 
A joint guideline from the American Cancer Society, the U.S. Multi-
Society Task Force on Colorectal Cancer, and the American College of 
Radiology concluded ``[i]n terms of detection of colon cancer and 
advanced neoplasia, which is the primary goal of screening for CRC and 
adenomatous polyps, recent data suggest CTC is comparable to Optical 
Colonoscopy for the detection of cancer and polyps of significant size 
when state-of-the-art techniques are applied.'' \631\ The American 
Gastroenterological Association issued the following recommendation 
statement in 2008, ``[t]he AGA does not endorse CT colonography as a 
first-line colon cancer screening test. While AGA supports CT 
colonography as a screening option, colonoscopy is the definitive test 
for colorectal cancer screening and prevention. Colonoscopy is the only 
test that can both detect cancer at an early curable stage and prevent 
cancer by removing pre-cancerous polyps. At this time, while CT 
colonography may be another technology for colorectal cancer screening, 
many questions about CT colonography remain to be

[[Page 61993]]

answered.'' \632\ The American Society for Gastrointestinal Endoscopy 
published guidelines in 2006 that concluded ``virtual colonoscopy is an 
evolving technique and is not currently recommended as the primary 
method of screening for CRC.'' \633\
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    \629\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer),).
    \630\ USPSTF October 2008 Final Recommendation Statement: 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-2008.
    \631\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
    \632\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
    \633\ National Coverage Analysis CAG-00396N Screening Computed 
Tomography Colonography (CTC) for Colorectal Cancer on Medicare 
Coverage Database: https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&NCAId=220&NcaName=Screening+Computed+Tomography+Colonography+(CTC)+for+Colorectal+Cancer).
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    In the 2023 PFS final rule (87 FR 69404) we expanded the regulatory 
definition of CRC Screening to include a complete colorectal cancer 
screening, which includes a follow-on screening colonoscopy after a 
Medicare covered non-invasive stool-based colorectal cancer screening 
test returns a positive result. (Sec.  410.37(k)) Although CMS had 
previously viewed a colonoscopy after a positive non-invasive stool-
based CRC screening test to be a diagnostic colonoscopy, the clinical 
recommendations and guidance of medical professional societies and 
screening experts have since evolved for stool-based colorectal cancer 
screening due to the relative number of false positive results, low 
follow-up colonoscopy rates and patient access barriers. Published 
evidence highlighted that individuals who did not get a follow-up 
colonoscopy were about twice as likely to die of colorectal cancer 
compared to individuals who had one. Since the overall goal of 
programmatic cancer screening using any CRC screening test is to 
prevent cancer, allowing for early detection and treatment and reducing 
cancer mortality, the follow-up colonoscopy was found to be integral 
with non-invasive stool-based CRC screening, since improvements in 
health outcomes would not be possible without the follow-up 
colonoscopy. Our goal was that the patient and their healthcare 
professional make the most appropriate choice in CRC screening, which 
included considerations of the risks, burdens and barriers presented 
with an invasive screening colonoscopy in a clinical setting as their 
first step. We went on to describe that CRC screening presents a unique 
scenario where there are significant differences between screening 
stool-based tests and screening colonoscopy tests in terms of 
invasiveness and burdens to the patient and healthcare system. We 
recognized there are several advantages to choosing a non-invasive 
stool-based CRC screening test as a first step compared to a screening 
colonoscopy, including relative ease of administering the test and 
potentially reducing the experience of unnecessary burdensome 
preparation and invasive procedures.
    We noted in preamble of the CY 2023 PFS final rule (87 FR 69404) 
that many commenters asked that CMS further expand our approach of a 
complete colorectal cancer screening. Many requested that we remove the 
text ``stool-based'' from our proposed regulatory text at Sec.  
410.37(k), resulting in a complete CRC screening including a follow-on 
screening colonoscopy after a Medicare covered non-invasive screening 
test. Many commenters requested that a complete CRC screening include a 
screening colonoscopy after a positive result from a blood-based 
biomarker test, as well as a stool-based test. We responded to these 
public comments by writing that ``we disagree with the commenters that 
requested a further expansion of a complete colorectal cancer screening 
that would include additional first step tests beyond a non-invasive 
stool-based test. We believe the stool-based tests are unique to other 
CRC screening tests in terms of their non-invasiveness, the fact that 
stool-based tests can be implemented by the patient at home and mailed 
into the lab, the absence of bowel preparation and anesthesia and the 
comparatively lighter burden and mitigated potential for over servicing 
of the patient and the healthcare system.'' We further wrote, ``[w]e 
agree that blood-based biomarker CRC screening tests have significant 
potential and we expanded coverage to include them in the reconsidered 
NCD 210.3, effective January 2021.'' We also recognized that blood-
based biomarker CRC screening tests continue to be an emerging and 
quickly evolving technology. However, we also noted that, as of 
September 2022, no blood-based Biomarker tests for CRC screening had 
achieved the coverage requirements of NCD 210.3 and that the May 2021 
USPSTF revised Final Recommendation Statement did not include serum 
tests.
    In the CY 2023 PFS final rule (87 FR 69404) we also established 
regulatory text at Sec.  410.37(k) that the frequency limitations 
described for screening colonoscopy shall not apply in the instance of 
a follow-on screening colonoscopy test. We wrote that we aimed to avoid 
disruption to the existing conditions of coverage and payment for CRC 
screening for this unique scenario and continuum of screening.
4. Proposed Revisions
    We propose to exercise our authority in section 1861(pp)(1)(D) of 
the Act to remove coverage for the barium enema procedure from CRC 
screening in regulations at Sec.  410.37. CMS has consulted with 
appropriate organizations and has heard that, while the barium enema 
procedure was reasonable and necessary for CRC screening when it was 
initially covered in the CY 1998 PFS final rule (62 FR 59048), 
circumstances have changed. The organizations have expressed that 
barium enema procedures no longer meet modern clinical standards, are 
no longer recommended in clinical guidelines, and would not be an 
appropriate CRC screening test given the advancement of alternatives 
such as Stool-based tests, Colonoscopies, and CT Colonography. In 
developing our proposal, we also considered that June 2016 and the May 
2021 USPSTF revised Final Recommendation Statements did not include the 
barium enema procedure as a CRC screening method in their revised Final 
Recommendation Statements.634 635 We also considered the 
2017 U.S. Multi-Society Task Force of Colorectal Cancer (MSTF) 
recommendation statement, which reads, ``CT colonography has replaced 
double-contrast barium enema as the test of choice for colorectal 
imaging for nearly all indications. CT colonography is more effective 
than barium enema and better tolerated.'' \636\ The 2018 American 
Cancer Society (ACS) Colorectal Cancer Screening for Average-Risk 
Adults Guideline Update also reads, ``double-contrast barium enema is 
no longer included as an acceptable screening option.'' \637\
---------------------------------------------------------------------------

    \634\ USPSTF June 2016 Revised Final Recommendation Statement, 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \635\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
    \636\ Am J Gastroenterol 2017; 112:1016-1030; doi: 10.1038/
ajg.2017.174; published online 6 June 2017.
    \637\ doi: 10.3322/caac.21457. Available online at 
cacancerjournal.com.
---------------------------------------------------------------------------

    During the CY 2023 PFS, CMS received a joint public comment from 
the American College of Gastroenterology (ACG), American 
Gastroenterological Association (AGA) and the American Society for

[[Page 61994]]

Gastrointestinal Endoscopy (ASGE) \638\ that brought to our attention 
that barium enema is not a recommended CRC screening modality in 
guidance from the USPSTF or the U.S. Multi-Society Task Force on 
Colorectal Cancer. The public comment went on to note that while the 
Barium Enema procedure once was considered a CRC screening modality and 
has been included in guidelines in the past, barium enema is no longer 
included in any recent CRC guidelines and is rarely performed today as 
it is considered inadequate for the exclusion of CRC. They urged CMS to 
remove Barium Enema as a covered CRC screening test for all 
individuals. An internal claims analysis indicates that Medicare only 
paid claims for barium enema for CRC screening for 72 beneficiaries in 
CY 2022.
---------------------------------------------------------------------------

    \638\ CY 2023 PFS Public Comment CMS-2022-0113-
21851_attachment_1.
---------------------------------------------------------------------------

    A 2016 study titled ``[n]ew era of colorectal cancer screening,'' 
states, ``double-contrast barium enema (DCBE) is a non-invasive 
radiological test, which provides a complete evaluation of the large 
intestine. The sensitivity and specificity of barium enema for polyps 
of any size is 38 percent and 86 percent, respectively. One study 
comparing barium enema to CTC and colonoscopy showed that DCBE has the 
lowest sensitivity and specificity with sensitivity of 41 percent for 
lesions >=6 mm and sensitivity and specificity of 48 and 90 percent 
respectively for lesions >=10 mm. These results are consistent with a 
meta-analysis comparing the performance of barium enema to that of CTC 
showing CTC is more sensitive and more specific than barium enema for 
large polyps (>=10 mm) and small polyps (6-9 mm) in average-risk and 
high-risk populations. In the United States, CTC has largely replaced 
DCBE as a radiographic option for CRC screening.'' \639\
---------------------------------------------------------------------------

    \639\ El Zoghbi M, Cummings LC. New era of colorectal cancer 
screening. World J Gastrointest Endosc. 2016 Mar 10;8(5):252-8. doi: 
10.4253/wjge.v8.i5.252. PMID: 26981176; PMCID: PMC4781905.
---------------------------------------------------------------------------

    In light of the new evidence and our consultations with appropriate 
organizations, we are proposing to remove barium enema as a colorectal 
screening test under 42 CFR 410.37(a)(1)(iv). We look forward to 
further consultation with the public and appropriate organizations 
through the public comment period of this proposed rule. We invite 
public comment on this proposal to remove all references to barium 
enemas in Sec.  410.37.
    We also propose to exercise our authority in section 1861(pp)(1)(D) 
of the Act to add coverage for the CTC procedure for CRC screening in 
regulations at Sec.  410.37. If finalized, we will also address and 
revise the current non-coverage policy for CTC in NCD 210.3. In 
developing our proposal to expand coverage for the CTC procedure, we 
consulted with appropriate organizations and considered a number of 
potential benefits, risks and tradeoffs described in guidelines and 
recommendations by professional societies and government bodies.
    In developing the proposed rule, we considered that the USPSTF 
included the CTC procedure as a CRC screening method in their June 2016 
and May 2021 revised Final Recommendation Statements.640 641 
In terms of benefits, the USPSTF wrote in their May 2021 revised Final 
Recommendation Statement, that CTC usually allows for greater colon 
visualization compared to Flexible Sigmoidoscopy. In terms of risks and 
tradeoffs, USPSTF noted that CTC, like Colonoscopy and flexible 
sigmoidoscopy, requires the burden of bowel preparation. The USPSTF 
wrote ``[u]nlike Colonoscopy and Flexible Sigmoidoscopy, CTC may reveal 
extracolonic findings that require additional workup, which could lead 
to other potential benefits or harms.'' The USPSTF went on to state, 
``[h]arms from CT colonography are uncommon (19 studies; n = 90,133), 
and the reported radiation dose for CT colonography ranges from 0.8 to 
5.3 mSv (compared with an average annual background radiation dose of 
3.0 mSv per person in the U.S.). Accurate estimates of rates of serious 
harms from colonoscopy following abnormal CTC results are not 
available.'' Regarding extracolonic findings, the USPSTF wrote, 
``[e]xtracolonic findings on CTC are common. Based on 27 studies that 
included 48,235 participants, 1.3 percent to 11.4 percent of 
examinations identified extracolonic findings that required workup. 
Three percent or less of individuals with extracolonic findings 
required definitive medical or surgical treatment for an incidental 
finding. A few studies suggest that extracolonic findings may be more 
common in older age groups. Long-term clinical follow-up of 
extracolonic findings was reported in few studies, making it difficult 
to know whether it represents a benefit or harm of CT colonography.'' 
The USPSTF recommends screening CTC frequency of every 5 years.\642\
---------------------------------------------------------------------------

    \640\ USPSTF June 2016 Revised Final Recommendation Statement, 
https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening-june-2016.
    \641\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
    \642\ USPSTF January 2021 Revised Final Recommendation 
Statement, https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
---------------------------------------------------------------------------

    In a study titled ``Incidental Extracolonic Findings on CT 
Colonography: The Impending Deluge and Its Implications,'' Lincoln L. 
Berland, MD, describes extracolonic findings as findings on CTC that 
have potential deleterious health effects and are asymptomatic, 
unsuspected, and unrelated to the colon. The study goes on to state, 
``as CT image quality has improved, there has been an increase in the 
frequency of detecting `incidental findings,' defined as findings that 
are unrelated to the clinical indication for the imaging examination 
performed. These `incidentalomas,' as they are also called, often 
confound physicians and patients with how to manage them. Although it 
is known that most incidental findings are likely benign and often have 
little or no clinical significance, the inclination to evaluate them is 
often driven by physician and patient unwillingness to accept 
uncertainty, even given the rare possibility of an important 
diagnosis.'' \643\ The potential for extracolonic findings, both 
clinically significant and insignificant, is an important tradeoff to 
be considered by the patient and clinician when considering CTC as a 
CRC Screening option.
---------------------------------------------------------------------------

    \643\ Lincoln L. Berland, Incidental Extracolonic Findings on CT 
Colonography: The Impending Deluge and Its Implications, Journal of 
the American College of Radiology, Volume 6, Issue 1, 2009, Pages 
14-20, ISSN 1546-1440, https://doi.org/10.1016/j.jacr.2008.06.018.
---------------------------------------------------------------------------

    We also consider the 2018 ACS Colorectal Cancer Screening for 
Average-Risk Adults Guideline Update, which includes the CTC procedure 
with their recommended tests and procedures for CRC Screening.\644\ In 
terms of benefits, the ACS guideline describes CTC Sensitivity and 
specificity for cancer and advanced adenomas comparable to colonoscopy, 
longer recommended screening intervals compared to stool-based tests, 
and no need for sedation (compared to colonoscopy). In terms of risks 
and tradeoffs, the ACS guideline notes incidental extracolonic findings 
may require workup (with unclear benefit-burden balance), exposure to 
low-dose radiation and requires full bowel cleansing. The ACS 
guidelines

[[Page 61995]]

recommended screening CTC frequency of every 5 years.
---------------------------------------------------------------------------

    \644\ doi: 10.3322/caac.21457. Available online at 
cacancerjournal.com.
---------------------------------------------------------------------------

    We also consider the United States Multi-Society Task Force (MSTF) 
of Colorectal Cancer, which represents the American College of 
Gastroenterology, the American Gastroenterological Association, and The 
American Society for Gastrointestinal Endoscopy, 2017 Colorectal Cancer 
Screening recommendations,\645\ which include CTC as a ``Tier 2'' 
procedure alongside FIT-fecal DNA and Flexible Sigmoidoscopy. The 
recommendation states that ``CRC screening tests are ranked in 3 tiers 
based on performance features, costs, and practical considerations. The 
first-tier tests are colonoscopy every 10 years and annual fecal 
immunochemical test (FIT). Colonoscopy and FIT are recommended as the 
cornerstones of screening regardless of how screening is offered. Thus, 
in a sequential approach based on colonoscopy offered first, FIT should 
be offered to patients who decline colonoscopy. Colonoscopy and FIT are 
recommended as tests of choice when multiple options are presented as 
alternatives. A risk-stratified approach is also appropriate, with FIT 
screening in populations with an estimated low prevalence of advanced 
neoplasia and colonoscopy screening in high prevalence populations. The 
second-tier tests include CT colonography every 5 years, the FIT-fecal 
DNA test every 3 years, and flexible sigmoidoscopy every 5 to 10 years. 
These tests are appropriate screening tests, but each has disadvantages 
relative to the tier 1 tests.'' In terms of benefits of CTC, the MSTF 
describes lower risk of perforation compared with colonoscopy and 
write, ``CT colonography appeals to a niche of patients who are willing 
to undergo bowel preparation and are concerned about the risks of 
colonoscopy.'' In terms of risks and tradeoffs, the MSTF describe the 
requirement for bowel preparation, extracolonic findings, inferior 
sensitivity compared to other screening tests and radiation exposure. 
The MSTF writes, ``[e]vidence that CT colonography reduces CRC 
incidence or mortality is lacking.''
---------------------------------------------------------------------------

    \645\ Am J Gastroenterol 2017; 112:1016-1030; doi: 10.1038/
ajg.2017.174; published online 6 June 2017.
---------------------------------------------------------------------------

    We also consider the online resource RadiologyInfo,\646\ which is 
an online public information resource developed by health care 
professionals in collaboration with patients. RadiologyInfo is 
sponsored by the Radiological Society of North America (RSNA) and the 
American College of Radiology (ACR). In terms of benefits of CTC, 
RadiologyInfo described CTC as less invasive than a Colonoscopy, though 
for CTC a small tube is inserted into the rectum to allow for inflation 
with carbon dioxide or air. In addition, CTC does not require sedation 
(and transportation accommodations) and carries less risk of bowel 
perforation compared to Colonoscopy. In addition, CTC can identify 
precancerous polyps that may not be detected by stool-based and blood-
based tests. CTC may be a less burdensome first option for patients who 
are medically fragile or have complex or unusual anatomy. In terms of 
risks and tradeoffs, RadiologyInfo describes a very small risk of 
perforated bowel (during inflation), a small risk of secondary cancer 
due to radiation exposure and it being not recommended for individuals 
who are pregnant. RadiologyInfo reports that CTC applies a patient 
radiation exposure similar to Barium Enema at 6 millisieverts (mSv), 
which is greater than other preventive screenings, such as CT Lung 
Cancer Screening at 1.5mSv and screening digital mammography at 0.21 
mSv.\647\
---------------------------------------------------------------------------

    \646\ RadiologyInfo website: https://www.radiologyinfo.org/.
    \647\ https://www.radiologyinfo.org/en/info/safety-xray.
---------------------------------------------------------------------------

    After considering the above recommendations and guidelines from 
appropriate organizations, we believe CTC to be reasonable and 
necessary as CRC screening test, especially for patients and clinicians 
who seek a direct visualization procedure as a first step in CRC 
screening that is less invasive and less burdensome on the patient and 
healthcare system compared to Screening Colonoscopy. Our goal is that 
the patient and their clinician make the most appropriate choice in CRC 
screening, which includes considerations of the risks, burdens and 
tradeoffs for each covered test or procedure. We expect that clinicians 
who order CTC for CRC Screening will educate their patients on risks 
and context of radiation exposure and potential extracolonic findings. 
A shared decision-making tool is not mandated but may be helpful for 
clinicians and patients to weigh their options for CRC screening.
    We propose to add CTC as a covered CRC screening test at Sec.  
410.37. We propose to describe in regulatory text that CTC means a test 
that uses X-rays and computers to produce images of the entire colon 
(including image processing and a physician's interpretation of the 
results of the procedure). We also propose to codify in regulatory text 
that Medicare Part B pays for a screening computed tomography 
colonography if it is ordered in writing by the beneficiary's attending 
physician, physician assistant, nurse practitioner, or clinical nurse 
specialist. We also propose the following limitations of coverage for 
CTC:
     In the case of an individual age 45 or over who is not at 
high risk of colorectal cancer, payment may be made for a screening 
computed tomography colonography performed after at least 59 months 
have passed following the month in which the last screening computed 
tomography colonography or 47 months have passed following the month in 
which the last screening flexible sigmoidoscopy or screening 
colonoscopy was performed.
     In the case of an individual who is at high risk for 
colorectal cancer, payment may be made for a screening computed 
tomography colonography performed after at least 23 months have passed 
following the month in which the last screening computed tomography 
colonography or the last screening colonoscopy was performed.
    Congress has eliminated Part B coinsurance (section 1833(a)(1)(Y) 
of the Act, Sec.  410.152(l)(5)) and deductibles (section 1833(b)(1) of 
the Act) for covered prevention services recommended with a grade of A 
or B by the USPSTF. As described earlier in our proposal, the USPSTF 
included CTC as a screening method in their May 2021 revised Final 
Recommendation Statement on CRC screening (Grade A). Thus, if our 
proposal is finalized, CTC will require no Part B coinsurance nor 
deductible when furnished as a CRC screening procedure. We clarify that 
CTC will continue to require Part B coinsurance and deductible when 
furnished as a diagnostic or other non-preventive/screening procedure.
    We look forward to further consultation with the public and 
appropriate organizations through the public comment period of this 
proposed rule. We invite public comment on this proposal.
    We also propose to exercise our authority in section 1861(pp)(1)(D) 
of the Act to expand our approach to a ``complete CRC screening'' 
finalized in Sec.  410.37(k). We propose to add a Medicare covered 
Blood-based Biomarker CRC screening test (described and authorized in 
NCD 210.3) alongside the Medicare covered non-invasive stool-based CRC 
screening test within our approach of a ``complete CRC screening.''
    Our goal is for the patient and their healthcare professional to 
make the most appropriate choice in CRC

[[Page 61996]]

screening, which include considerations of the risks, burdens and 
barriers presented with an invasive screening colonoscopy in a clinical 
setting as their first step. CRC screening presents a unique scenario 
where there are significant differences between screening stool-based 
tests and direct visualization procedures such as colonoscopy, flexible 
sigmoidoscopy and CTC tests in terms of invasiveness and burdens to the 
patient and healthcare system. We recognize there are several 
advantages to choosing a non-invasive CRC screening test as a first 
step compared to a screening colonoscopy, including relative ease of 
administering the test and potentially reducing the experience of 
burdensome preparation and invasive procedures. Since the CY 2023 PFS 
final rule we have heard from many interested parties, including a 
number of professional societies, that Medicare covered blood-based 
biomarker tests would be appropriately placed alongside covered non-
invasive stool-based tests within a complete colorectal cancer 
screening context. We have reconsidered our position that Medicare 
covered blood-based biomarker tests would not belong alongside covered 
non-invasive stool-based tests within our approach to a complete CRC 
screening. We consider that some patients may consider a blood test 
less uncomfortable than administering a stool-based test, especially if 
the blood draw is concurrent to a routine blood draw for other covered 
routine bloodwork. We have also heard that some patients may prefer a 
non-invasive test as their first step but view the stool sample 
collection process for stool-based tests as a meaningful barrier.\648\ 
We also consider that a blood test may be more accessible to many 
patients in rural and underserved communities than facilities that 
furnish screening colonoscopies, flexible sigmoidoscopies and CTC.
---------------------------------------------------------------------------

    \648\ Kolata, Gina. ``A Blood Test Shows Promise for Early Colan 
Cancer Detection'' The New York Times, March 13, 2024.
---------------------------------------------------------------------------

    NCD 210.3 requires that Blood-based Biomarker Tests for CRC 
screening must have Food and Drug Administration (FDA) market 
authorization with an indication for colorectal cancer screening; and 
proven test performance characteristics for a blood-based screening 
test with both sensitivity greater than or equal to 74 percent and 
specificity greater than or equal to 90 percent in the detection of 
colorectal cancer compared to the recognized standard (accepted as 
colonoscopy at this time), as minimal threshold levels, based on the 
pivotal studies included in the FDA labeling. We have heard from 
interested parties that Blood-based Biomarker tests for CRC screening 
may achieve the coverage requirements described in NCD 210.3 within the 
near term and thereafter quickly become adopted as a non-invasive 
option within the healthcare system and patient community. Given our 
existing coverage policy for Blood-based Biomarker Tests for CRC 
Screening (NCD 210.3), we believe our proposal is appropriately 
proactive, provides for consistent regulatory treatment between blood 
and stool-based tests, and will ready our regulatory policies for the 
quickly evolving state of medical technology in methods for CRC 
screening. We note that while blood-based biomarker tests were not 
included as a screening method within the May 2021 USPSTF revised Final 
Recommendation Statement on CRC Screening, they do not require 
beneficiary cost sharing (coinsurance and deductible) because blood-
based biomarker tests will be paid under the Clinical Laboratory Fee 
Schedule (CLFS). For additional information, see the CMS website at 
https://www.cms.gov/medicare/payment/fee-schedules/clinical-laboratory-fee-schedule-clfs.
    We propose to revise the regulatory text describing a complete CRC 
screening at Sec.  410.37(k) to state that colorectal cancer screening 
tests include a follow-on screening colonoscopy after a Medicare 
covered non-invasive stool-based colorectal cancer screening test or a 
Medicare covered blood-based biomarker CRC screening test returns a 
positive result. We also propose to revise the regulatory text at Sec.  
410.37(k) to state the instance of the follow-on colonoscopy in the 
context of a complete colorectal cancer screening shall not apply to 
the frequency limitations for colorectal cancer screenings. We believe 
this statement in regulatory text is clearer and recognizes, outside 
the context of a complete colorectal cancer screening, the instance of 
a screening colonoscopy is factored into the calculation of frequency 
limitations of other covered CRC screening tests and procedures in 
addition to a subsequent screening colonoscopy.
    We look forward to further consultation with the public and 
appropriate organizations through the public comment period of this 
proposed rule. We invite public comment on this proposal.
6. Summary
    In summary, we are proposing to exercise our authority at section 
1861(pp)(1)(D) of the Act update and expand coverage for CRC screening 
by (1) removing coverage for the barium enema procedure for CRC 
screening; (2) adding coverage of the CTC procedure for CRC screening; 
and (3) expanding our approach to a ``Complete CRC Screening'' to 
include a covered blood-based biomarker test alongside a covered non-
invasive stool-based test.
    Our proposal to update and expand CRC screening aligns with the 
administration's strategic pillar to advance health equity by 
addressing the health disparities that underlie our health system. In 
addition, our proposal supports Executive Order 13985 by advancing 
racial equity and support for underserved communities in the Medicare 
program. We believe our proposal will directly advance health equity by 
promoting access and removing barriers for much needed cancer 
prevention and early detection within rural communities and communities 
of color that are especially impacted by the incidence of CRC. Our 
proposal to expand colorectal cancer screening directly supports the 
Administration's Cancer Moonshot Goal of reducing the deadly impact of 
cancer and improving patient experiences in the diagnosis, treatment, 
and survival of cancer.\649\
---------------------------------------------------------------------------

    \649\ https://www.whitehouse.gov/cancer-moonshot/.
---------------------------------------------------------------------------

    Our proposal is also supportive of the Administration's 
Proclamation of March as National Colorectal Cancer Awareness Month in 
2024, which includes the statement, ``As a country, we have made 
impressive progress in the struggle to end cancer over the past several 
decades due to advancements in prevention, early-detection measures, 
and new medicines and therapies. Despite remarkable breakthroughs, 
every year, more Americans are diagnosed with cancer under the age of 
50. Earlier detection and improved treatment of colorectal cancer 
continue to be critical goals of medical research. Further progress is 
also needed to improve outcomes for those who are disproportionately 
impacted by this disease--including Americans over the age of 45, 
Native Americans, Black Americans, and people with a family history of 
colorectal cancer. There is still more work to be done to ensure more 
Americans can prevent, detect, treat, and survive colorectal cancer.'' 
\650\
---------------------------------------------------------------------------

    \650\ https://www.whitehouse.gov/briefing-room/presidential-actions/2024/02/29/proclamation-on-national-colorectal-cancer-awareness-month-2024/.

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[[Page 61997]]

L. Requirements for Electronic Prescribing for Controlled Substances 
for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD 
Plan

1. Previous Regulatory Action
    Section 2003 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment for Patients and Communities (SUPPORT) 
Act (Pub. L. 115-271, October 24, 2018) generally mandates that the 
prescribing of a Schedule II, III, IV, or V controlled substance under 
Medicare Part D be done electronically in accordance with an electronic 
prescription drug program beginning January 1, 2021, subject to any 
exceptions, which HHS may specify. In the CY 2021, CY 2022, CY 2023, 
and CY 2024 PFS final rules, we finalized policies for the CMS 
Electronic Prescribing for Controlled Substances (EPCS) Program 
requirements specified in section 2003 of the SUPPORT Act. We refer 
readers to 85 FR 84802 through 84807, 86 FR 65361 through 65370, 87 FR 
70008 through 70014, and 88 FR 79285 through 79292 for the details of 
those finalized policies. Specifically, in the CY 2021 PFS final rule, 
we established a requirement that all prescribers conduct electronic 
prescribing of Schedule II, III, IV, and V controlled substances 
covered under the Medicare prescription drug program, subject to any 
exceptions, which HHS may specify, using the NCPDP SCRIPT standard 
version 2017071 with an effective date of January 1, 2021, and a 
compliance date of January 1, 2022 (85 FR 84807). In the CY 2022 PFS 
final rule, we finalized a policy to require prescribers to 
electronically prescribe at least 70 percent of their Schedule II, III, 
IV, and V controlled substances that are Part D drugs, except in cases 
where an exception or waiver applies (86 FR 65366); and finalized 
multiple proposals related to the classes of exceptions specified by 
section 2003 of the SUPPORT Act (86 FR 65366 through 65369). We also 
extended the earliest date of compliance actions to no earlier than 
January 1, 2023 (86 FR 65364). For prescribers who do not meet the 
compliance threshold based on prescriptions written for a beneficiary 
in a long-term care (LTC) facility, we extended the earliest date of 
compliance actions to no earlier than January 1, 2025 (86 FR 65364 and 
65365). We also finalized our proposal to limit compliance actions with 
respect to compliance through December 31, 2023, to a non-compliance 
notice (86 FR 65370).
    In the CY 2023 PFS final rule (87 FR 70012 through 70013), we 
extended the non-compliance action of sending notices to non-compliant 
prescribers, which we had finalized for the CY 2023 CMS EPCS Program 
implementation year (January 1, 2023, through December 31, 2023), to 
the CY 2024 Program implementation year (January 1, 2024, through 
December 31, 2024). We also finalized a change to the data sources used 
to identify the geographic location of prescribers for purposes of the 
recognized emergency exception at Sec.  423.160(a)(5)(iii) (87 FR 70011 
through 70012) and finalized our proposal to use the Prescription Drug 
Event (PDE) data from the current evaluated year instead of the 
preceding year when CMS determines whether a prescriber qualifies for 
an exception based on issuing 100 or fewer Part D controlled substance 
prescriptions per calendar year (87 FR 70009 through 70011).
    In the CY 2024 PFS final rule (88 FR 79285 through 79287), we 
identified certain terms that we will use in the CMS EPCS Program and 
clarified that, by virtue of the cross reference in Sec.  423.160(a)(5) 
to ``the applicable standards in paragraph (b) of this section,'' which 
refers to the standards in Sec.  423.160(b), the CMS EPCS Program will 
automatically adopt the electronic prescribing standards at Sec.  
423.160(b) as they are updated. Additionally, we finalized our 
proposals to remove the same entity exception from the CMS EPCS Program 
and to add ``subject to the exemption in paragraph (a)(3)(iii) of this 
section'' to Sec.  423.160(a)(5) (88 FR 79287 through 79288). As a 
result, prescriptions that are prescribed and dispensed within the same 
legal entity are included in CMS EPCS Program compliance calculations 
as part of the 70 percent compliance threshold at Sec.  423.160(a)(5), 
and prescribers are not exempt from the requirement to prescribe 
electronically at least 70 percent of their Schedule II through V 
controlled substances that are Part D drugs--but such prescriptions 
have to meet the applicable standards in Sec.  423.160(b) subject to 
the exemption in Sec.  423.160(a)(3)(iii). We also finalized a policy 
to count only the unique prescriptions in the measurement year for the 
purposes of CMS EPCS Program compliance threshold calculations (88 FR 
79288). Furthermore, for the exceptions that we moved to Sec.  
423.160(a)(5)(ii) and (iii), we modified the exceptions to permit 
prescribers to apply for waivers in times of an emergency and disaster 
and to limit the emergencies or disasters that will trigger the 
recognized emergency exception. We also modified the duration of both 
exceptions and established timing requirements for submitting a waiver 
application (88 FR 79288 through 79291). Lastly, we stated that we will 
send notices of non-compliance for each measurement year a prescriber 
is non-compliant and will provide educational opportunities to support 
prescribers in becoming compliant (88 FR 79291 through 79292).
2. Timeline for Including Prescriptions Written for Beneficiaries in 
Long-Term Care (LTC) Facilities in CMS EPCS Program Compliance 
Calculation
a. Background
    In the CY 2021 PFS final rule (85 FR 84807), we adopted the 
requirement for all Schedule II, III, IV, and V controlled substances 
for covered Part D drugs prescribed electronically to be prescribed 
using the applicable standards in Sec.  423.160(b), including the NCPDP 
SCRIPT standard version 2017071. In the CY 2022 PFS final rule (86 FR 
65364), we finalized a policy to extend the date on or after which we 
will pursue compliance actions against prescribers based on Part D 
controlled substance prescriptions those prescribers write for 
beneficiaries in long-term care (LTC) facilities to January 1, 2025. We 
acknowledged that prescribers who work in LTC facilities or who provide 
care to residents in LTC facilities faced technological barriers that 
other prescribers did not face. One such barrier was that the NCPDP 
SCRIPT standard version 2017071 lacked appropriate guidance for EPCS in 
LTC facilities. We also noted that NCPDP was in the process of creating 
a new version of the SCRIPT standard that would be better suited for 
use by prescribers serving LTC facilities, which would allow willing 
partners to enable three-way communication between the prescriber, LTC 
facility, and pharmacy to bridge any outstanding gaps that impede use 
of the NCPDP SCRIPT standard version 2017071 for EPCS in the LTC 
setting (86 FR 65364).
    We received public comments on the CY 2022 PFS proposed rule 
requesting that we exempt prescribers writing Part D controlled 
substance prescriptions for beneficiaries in LTC facilities from having 
to conduct EPCS until after NCPDP SCRIPT standard version 2022011 was 
adopted. In response to those comments, in the CY 2022 PFS final rule, 
we noted that our intent when extending the date on or after which we 
will pursue compliance actions against prescribers based on Part D 
controlled substance prescriptions those prescribers write for 
beneficiaries in LTC facilities was to strike a balance between being 
responsive to stakeholder

[[Page 61998]]

concerns surrounding the increased implementation barriers faced by LTC 
facilities, while at the same time helping to ensure that these 
facilities eventually implement, and receive the benefits of EPCS (86 
FR 65364). Furthermore, we noted that we were not persuaded to further 
delay commencing compliance actions to await publication of the NCPDP 
SCRIPT standard version 2022011. We acknowledged that three-way 
communication is not as seamless in the NCPDP SCRIPT standard version 
2017071 as it may be in upcoming versions. We also stated that three-
way communication is still possible with some modifications to EPCS, 
and therefore, we did not believe it would be appropriate to adopt a 
further delay on this basis alone (86 FR 65364).
    In the 2024 PFS final rule (88 FR 79286 through 79287), we 
clarified that based on the existing regulatory text at Sec.  
423.160(a)(5), the CMS EPCS Program will automatically adopt the 
electronic prescribing standards at Sec.  423.160(b) as they are 
updated. We noted that in the ``Medicare Program; Contract Year 2024 
Policy and Technical Changes to the Medicare Advantage Program, 
Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, 
Medicare Parts A, B, C, and D Overpayment Provisions of the Affordable 
Care Act and Programs of All-Inclusive Care for the Elderly; Health 
Information Technology Standards and Implementation Specifications'' 
proposed rule (CY 2024 Medicare Advantage and Part D Policy and 
Technical Changes proposed rule) (87 FR 79550), we proposed to update 
provisions related to e-prescribing standards at Sec.  423.160(b), 
including, after a transition period, requiring the NCPDP SCRIPT 
standard version 2022011 proposed for adoption at 45 CFR 170.205(b) and 
retiring NCPDP SCRIPT standard version 2017071 by January 1, 2025.
    Although we did not propose any policy changes regarding the NCPDP 
SCRIPT standard version in the CY 2024 PFS proposed rule (88 FR 52532), 
we received public comments requesting clarification on when the new 
NCPDP SCRIPT standard version would be adopted and the implications for 
measuring EPCS compliance in LTC. In response to those comments, in the 
CY 2024 PFS final rule (88 FR 79286), we acknowledged that we had not 
finalized our proposal regarding the NCPDP SCRIPT standard version 
2022011 that was proposed in the CY 2024 Medicare Advantage and Part D 
Policy and Technical Changes proposed rule. We also acknowledged that 
some prescribers prescribing for beneficiaries in LTC facilities have 
adopted EPCS, but that others have waited for the standard to be 
updated (88 FR 79286 through 79287). We noted that if the requirement 
to use an updated version of the NCPDP SCRIPT standard is finalized for 
a date after January 1, 2025, we may explore whether a waiver is 
appropriate for prescribers who are not compliant solely as a result of 
prescriptions they have written for beneficiaries in LTC facilities or 
we may revisit the compliance start date, if needed, through future 
rulemaking (88 FR 79287).
    In the ``Medicare Program; Medicare Prescription Drug Benefit 
Program; Health Information Technology Standards and Implementation 
Specifications'' final rule (89 FR 51242 through 51247), which appeared 
in the June 17, 2024 Federal Register (hereinafter referred to as the 
June 2024 Part D and Health IT Standards final rule), we finalized at 
Sec.  423.160(b)(1) the requirement that Part D sponsors, prescribers 
and dispensers, when electronically transmitting prescriptions and 
prescription-related information for covered Part D drugs for Part D 
eligible individuals, must comply with a standard in 45 CFR 170.205(b). 
Taken in conjunction with the standards and expiration date adopted by 
the Office of the National Coordinator for Health Information 
Technology (ONC), as described in the June 2024 Part D and Health IT 
Standards final rule (89 FR 51258 through 51259), Sec.  423.160(b)(1) 
will require use of NCPDP SCRIPT standard version 2023011, which ONC is 
adopting at 45 CFR 170.205(b)(2), beginning January 1, 2028, and retire 
use of NCPDP SCRIPT standard version 2017071, which ONC previously 
adopted at 45 CFR 170.205(b)(1) and to which it is applying an 
expiration date of January 1, 2028. ONC finalized January 1, 2028, as 
the expiration date for NCPDP SCRIPT standard version 2017071 instead 
of January 1, 2027, in consideration of public comments requesting that 
the date be delayed. As a result of these policies being finalized, the 
NCPDP SCRIPT standard version 2023011 will be required for the CMS EPCS 
Program by January 1, 2028. As both NCPDP SCRIPT standard version 
2017071 and NCPDP SCRIPT standard version 2023011 will be adopted at 45 
CFR 170.205(b) and unexpired as of the effective date of the June 2024 
Part D and Health IT Standards final rule, entities subject to the 
requirement at Sec.  423.160(b)(1) may use either version of the NCPDP 
SCRIPT standard during the transition period beginning July 17, 2024, 
the effective date of the June 2024 Part D and Health IT Standards 
final rule, and ending December 31, 2027, which is the last day before 
NCPDP SCRIPT standard version 2017071 will expire for the purposes of 
HHS use.
b. Barriers to Electronic Prescribing of Controlled Substances for 
Beneficiaries in LTC and the Role of Three-Way Communication in the 
NCPDP SCRIPT Standard
    We understand the challenges of conducting EPCS in the LTC setting 
to be multifactorial. The specific challenges include prescribers being 
responsible for covering multiple LTC facilities, each with different 
electronic health record (EHR) systems; reliance on LTC nursing staff 
to communicate prescriptions to the pharmacy on behalf of the 
prescriber; and with respect to NCPDP SCRIPT standard version 2017071, 
lack of three-way (or multi-party) communication between the 
prescriber, the LTC facility, and the pharmacy.
    When conducting EPCS using the NCPDP SCRIPT standard version 
2017071, prescribers can submit prescriptions electronically to the 
pharmacy, but the prescriber must subsequently contact the LTC facility 
separately to give an order for the medication so the LTC facility can 
administer the medication to the patient as prescribed. In cases where 
EPCS is being conducted and the prescriber has not communicated a 
separate order to the LTC facility, the pharmacy may deliver a 
prescription to the LTC facility and the facility staff has no record 
of the order. Then the LTC facility staff must contact the prescriber 
for an order to be able to administer the drug to the patient.
    To conduct EPCS without having to separately communicate an order 
to the LTC facility, prescribers can use a web portal to enter an order 
in the LTC facility's EHR and then, if the EHR supports the necessary 
EPCS capability,\651\ the prescription can be transferred to the 
pharmacy. However, not all LTC facilities have EHRs with this 
functionality. Additionally, each LTC facility may have its own web 
portal, making the number of portals and credentials overly burdensome 
for prescribers who treat patients who

[[Page 61999]]

reside in multiple different LTC facilities. After providing an order 
to the LTC facility, prescribers often rely on LTC facility nursing 
staff to relay verbal prescription orders to pharmacies as permitted 
under 21 CFR 1306.03(b) and 1306.21(a).
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    \651\ According to the Drug Enforcement Administration (DEA), 
for an electronic prescribing system to be used to transmit 
controlled substance prescriptions, a third party must audit the 
electronic prescribing application for compliance with the 
requirements of 21 CFR part 1311, or a certifying organization whose 
certification process has been approved by DEA must verify and 
certify that the application meets the requirements of 21 CFR part 
1311. See https://www.deadiversion .usdoj.gov/ecomm/thirdparty.html.
---------------------------------------------------------------------------

    NCPDP SCRIPT standard version 2023011 permits three-way 
communication that would better facilitate LTC workflows in a way that 
NCPDP SCRIPT standard version 2017071 does not. In comments NCPDP 
submitted in response to the CY 2025 Medicare Advantage and Part D 
Policy and Technical Changes proposed rule, NCPDP confirmed that it 
attempted to create guidance on three-way communication using the NCPDP 
SCRIPT standard version 2017071, but it was not realistic in that 
version of the standard.\652\ In NCPDP SCRIPT standard version 2023011, 
through use of a MessageIndicatorFlag, an RxFill transaction may be 
sent as a copy to inform or synchronize systems.\653\ Through use of 
this functionality, a prescriber can electronically send a controlled 
substance prescription (including for a covered Part D drug) to a 
pharmacy, and the pharmacy can use the MessageIndicatorFlag in an 
RxFill transaction when dispensing the prescription to inform the LTC 
facility of the medication order. This functionality streamlines 
prescribers' workflows and ensures that the LTC facility responsible 
for providing the controlled substance to the patient is aware of the 
order.
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    \652\ https://standards.ncpdp.org/Standards/media/pdf/Correspondence/2024/NCPDP-Letter-to-CMS-regarding-CMS-4205-P.pdf.
    \653\ National Council for Prescription Drug Programs (NCPDP) 
SCRIPT Standard, Implementation Guide, Version 2023011. Approval 
Date for American National Standards Institute (ANSI): January 17, 
2023, April 2023. NCPDP SCRIPT standard implementation guides are 
available to NCPDP members for free and to non-members for a fee at 
https://standards.ncpdp.org/Access-to-Standards.aspx.
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c. Timeframe for Including Prescriptions Written for Beneficiaries in 
LTC in the CMS EPCS Program Compliance Calculation
    We received multiple public comments in response to the proposal in 
section III.B.4. of the CY 2025 Medicare Advantage and Part D Policy 
and Technical Changes proposed rule (88 FR 78489) to require NCPDP 
SCRIPT standard version 2023011 and retire NCPDP SCRIPT standard 
version 2017071, requesting that we reconsider the current January 1, 
2025, compliance date for when we will include prescriptions written 
for covered Part D drugs for Part D eligible individuals in a LTC 
facility in the CMS EPCS Program compliance calculation. Commenters 
requested that we align the CMS EPCS Program compliance date for 
prescriptions written for beneficiaries in LTC with the date that NCPDP 
SCRIPT standard 2023011 will be required. In the June 2024 Part D and 
Health IT Standards final rule, we indicated that we would consider a 
change to the CMS EPCS Program compliance date for LTC through the 
annual Medicare Physician Fee Schedule rulemaking process (89 FR 
51247).
    In this proposed rule, we are proposing to revise Sec.  
423.160(a)(5) to state that prescriptions written for a beneficiary in 
a LTC facility would not be included in determining compliance until 
January 1, 2028, and that compliance actions against prescribers who do 
not meet the compliance threshold based on prescriptions written for a 
beneficiary in a LTC facility would commence on or after January 1, 
2028. We do not otherwise propose to revise the text of Sec.  
423.160(a)(5).
    As of the effective date of the June 2024 Part D and Health IT 
Standards final rule, July 17, 2024, Part D sponsors, prescribers and 
dispensers, when electronically transmitting prescriptions and 
prescription-related information for covered Part D drugs for Part D 
eligible individuals, may use NCPDP SCRIPT standard version 2023011. 
However, as discussed, there will be a transition period where both 
NCPDP SCRIPT standard version 2023011 and NCPDP SCRIPT standard version 
2017071 can be used. ONC finalized an expiration date for NCPDP SCRIPT 
standard version 2017071 of January 1, 2028 (rather than January 1, 
2027, as proposed), in part due to commenters' concern about 
implementing the new standard in LTC facilities (89 FR 51247).
    We recognize the administrative burden prescribers could 
potentially face when implementing EPCS for prescriptions written for 
covered Part D drugs for Part D eligible individuals in LTC facilities 
using NCPDP SCRIPT standard version 2017071, particularly with the lack 
of guidance. We also believe that even though prescribers can use NCPDP 
SCRIPT standard version 2023011 as of July 17, 2024, it may not be 
feasible to have electronic prescribing systems configured to NCPDP 
SCRIPT standard version 2023011 by January 1, 2025, the current date by 
which prescriptions written for covered Part D drugs for Part D 
eligible individuals in LTC facilities would be included in the CMS 
EPCS Program compliance threshold calculation. By delaying the 
inclusion of prescriptions written for covered Part D drugs for Part D 
eligible individuals in LTC facilities in the CMS EPCS Program 
compliance threshold calculation to January 1, 2028, we would be 
aligning CMS EPCS Program compliance calculations to the date by which 
the NCPDP SCRIPT standard version 2017071 is retired and the new NCPDP 
SCRIPT standard version 2023011 is required for prescribers when 
electronically transmitting prescriptions and prescription-related 
information for covered Part D drugs for Part D eligible individuals. 
We believe doing so would provide sufficient time for prescribers and 
pharmacies to adopt the new standard. Moreover, LTC facilities will 
need to configure their EHR systems to be able to receive the 
MessageIndicatorFlag from the pharmacy, indicating that the 
prescription has been filled, and establish the necessary policies or 
operations to convert such a message into an order for the patient in 
the LTC facility.
    We considered an alternative where we would permit prescribers to 
apply for a waiver for circumstances beyond their control rather than 
modify the date to include prescriptions for beneficiaries in LTC in 
the compliance threshold calculation. In 2022, approximately 4.7 
percent (4.5 million) of Part D Schedule II, III, IV, and V controlled 
substance prescriptions were written for beneficiaries in LTC 
facilities, with roughly 52 percent (2.4 million) of them not meeting 
the CMS EPCS Program standards for e-prescribing. If we kept the 
existing start date of January 1, 2025, as in the current regulatory 
text at Sec.  423.160(a)(5) for the CMS EPCS Program, we estimate at 
least 6,800 additional prescribers would become non-compliant. These 
estimates are prior to considering emergency and disaster exceptions 
and waivers, which could reduce these numbers. If we do not extend the 
current date by which prescriptions written for covered Part D drugs 
for Part D eligible individuals in LTC facilities would be included in 
the CMS EPCS Program compliance threshold calculation, then starting 
with the CY 2025 measurement year, thousands of prescribers may become 
non-compliant, and those prescribers would potentially apply for a 
waiver. We would expect that by the CY 2028 measurement year, many of 
these prescribers would be compliant and would not need to apply for a 
waiver because beginning January 1, 2028, NCPDP SCRIPT standard version 
2023011 will be the required standard for prescribing and dispensing 
Part D

[[Page 62000]]

drugs to Part D eligible individuals and commenters have indicated that 
this version of the standard will facilitate EPCS in LTC. We remind 
prescribers that the CMS EPCS Program compliance rate is calculated 
using the Prescription Origin Code data element in the PDE record (88 
FR 79287), and the PDE is a record of the prescription dispensing 
event.\654\ We believe that the three-way communication in the NCPDP 
SCRIPT standard version 2023011 improves communication of the 
controlled substance prescription as a medication order to the LTC 
facility's EHR when the pharmacy fills the prescription, but we seek 
comment on how the NCPDP SCRIPT standard version 2023011 will improve 
prescribers' ability to conduct EPCS to the pharmacy dispensing the 
prescription for individuals in LTC facilities.
---------------------------------------------------------------------------

    \654\ CMS Memorandum. ``Updated Instructions: Requirements for 
Submitting Prescription Drug Event Data (PDE).'' April 27, 2006. 
Available from: https://www.csscoperations.com/internet/
csscw3_files.nsf/F/CSSCPDEGuidance.pdf/$FILE/PDEGuidance.pdf.
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    Should we finalize our proposal, we encourage prescribers who write 
Schedule II, III, IV, or V controlled substance prescriptions for 
covered Part D drugs for Part D eligible individuals in LTC facilities 
to use the additional time to prepare for when such prescriptions for 
beneficiaries in LTC facilities would be included in the CMS EPCS 
Program compliance threshold calculation by working to adopt the new 
standard or investing in technology necessary to conduct EPCS.
    We seek comment on our proposals to extend the date after which 
prescriptions for covered Part D drugs for Part D eligible individuals 
in LTC facilities would be included in our CMS EPCS Program compliance 
threshold calculation from January 1, 2025, to January 1, 2028, and 
that related non-compliance actions would commence on or after January 
1, 2028. We additionally seek comment on how NCPDP SCRIPT standard 
version 2023011 is expected to improve prescribers' ability to conduct 
EPCS to pharmacies dispensing covered Part D drugs to Part D eligible 
individuals in LTC facilities.

M. Expand Hepatitis B Vaccine Coverage

    Hepatitis B vaccines are currently covered as a Medicare Part B 
benefit under section 1861(s)(10)(B) of the Act. Medicare beneficiaries 
who are at high or intermediate risk of contracting hepatitis B can 
receive hepatitis B vaccines, with no cost to the beneficiary. The 
statute expressly authorizes the Secretary to determine who is at high 
or intermediate risk of contracting hepatitis B by issuing regulations. 
The Secretary, through past rulemaking, defined high and intermediate 
risk groups for hepatitis B vaccine at 42 CFR 410.63. This definition 
was last updated in the CY 2013 PFS final rule (77 FR 69363). 
Beneficiaries with coverage under Medicare Part D whose level of risk 
falls outside high or intermediate may have their vaccine covered under 
the Part D benefit.\655\
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    \655\ Sayed, BA, Finegold, K, Ashok, K, Schutz, S, De Lew, N, 
Sheingold, S, Sommers, BD. Inflation Reduction Act Research Series: 
Medicare Part D Enrollee Savings from Elimination of Vaccine Cost-
Sharing. (Issue Brief No. HP-2023-05). Office of the Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. September 2023. Retrieved from https://aspe.hhs.gov/sites/default/files/documents/407d41b6534e7af6702eb280b3945d00/aspe-ira-vaccine-part-d.pdf.
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    Medicare coverage of hepatitis B vaccination is outdated in light 
of more recent information about the risks of contracting hepatitis B. 
As explained in more detail in this section, we are proposing to 
improve access and utilization of hepatitis B vaccines by expanding the 
list of individuals who are at high or intermediate risk of contracting 
hepatitis B in Sec.  410.63(a).
1. Background
    Hepatitis B is a vaccine-preventable liver disease caused by the 
hepatitis B virus.\656\ The vaccine consists of a series of typically 
2-3 doses depending on the formulation delivered at various 
intervals.\657\ Hepatitis B virus is transmitted when body fluid 
(blood, semen, or other) from a person infected with the virus enters 
the body of someone who is uninfected.\658\ This can happen through 
sexual contact; sharing needles, syringes, or other drug-injection 
equipment; transmission from the gestational parent to baby during 
pregnancy or at birth; direct contact with blood or open sores; or 
sharing contaminated items such as toothbrushes, razors or medical 
equipment (such as a glucose monitor) of a person who has hepatitis 
B.\659\ Hepatitis B can be an acute, short-term illness and it can 
develop into a long-term, chronic infection. Chronic hepatitis B can 
lead to serious health problems, including cirrhosis, liver cancer, and 
death. Treatments for hepatitis B are available but no cure exists. 
There are currently an estimated 2.4 million individuals in the U.S. 
living with hepatitis B virus and an estimated 20,000 new infections 
every year.\660\ Acute hepatitis B infections among adults leads to 
chronic hepatitis B disease in an estimated 2-6 percent of cases.\661\ 
Rates of reported cases of acute hepatitis B have steadily increased 
among persons aged 40-49, 50-59 years, and 60 years and older from 
2015-2019.\662\ In 2020, rates declined in all adult age groups. In 
2021, rates among all age groups remain stable or declined compared to 
2020. The highest rates were among persons 40-49 years (1.6 cases per 
100,000 population) and 50-59 years (1.0 case per 100,000 population). 
The rates for people aged 60 years and older were 0.5 cases per 100,000 
population.
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    \656\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \657\ CDC. Viral hepatitis. FAQ for health professionals. 
Atlanta, GA: U.S. HHS, CDC; 2022. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
    \658\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \659\ CDC. 2024. Viral Hepatitis FAQs for the public. Retrieved 
from https://www.cdc.gov/hepatitis/hbv/bfaq.htm.
    \660\ Conners EE, Panagiotakopoulos L, Hofmeister MG, et al. 
Screening and testing for hepatitis B virus infection: CDC 
recommendations--United States, 2023. MMWR Recomm Rep. 2023;72(1):1-
25. Retrieved from https://www.cdc.gov/mmwr/volumes/72/rr/rr7201a1.htm.
    \661\ Weng, M., Doshani, M., Khan, M., Frey, S., et al. 
Universal hepatitis B vaccination in adults aged 19-59 years: 
Updated recommendations of the Advisory Committee on Immunization 
Practices--United States, 2022. MMWR, April 1, 2022, Vol 71(13);477-
483.
    \662\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.

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[[Page 62001]]

    Hepatitis B vaccines are safe and effective in preventing hepatitis 
B virus.\663\ The number of reported hepatitis B cases has declined 
substantially since the vaccine was introduced in 1982, which was 
achieved through incremental expansion of groups for whom the vaccine 
was recommended. However, vaccination coverage among adults has been 
deficient and further reduction in hepatitis B infections in the U.S. 
has stalled. Approximately 34 percent of adults aged >=19 years have 
been vaccinated against hepatitis B.\664\ Furthermore, an estimated 20 
percent of adults aged >=60 years have been vaccinated against 
hepatitis B.
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    \663\ Weng, M., et al. 2022. Universal hepatitis B vaccination.
    \664\ CDC. 2023. Vaccination Coverage among Adults in the United 
States, National Health Interview Survey, 2021. Retrieved from 
https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/
pubs-resources/vaccination-coverage-adults-
2021.html#:~:text=Hepatitis%20B%20vaccination%20coverage%20in,and%20O
ther%20(40.2%25)%20adults.
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    Since 2011, rates of reported cases of acute hepatitis B decreased 
among children and adolescents aged 0-19 years and persons aged 20-29 
years.\665\ The Centers for Disease Control and Prevention (CDC) states 
that this is due, in part, because of the childhood hepatitis B vaccine 
recommendations that were first implemented in 1991. The Advisory Group 
for Immunization Practices (ACIP) is a group of medical and public 
health experts that develops recommendations on how to use vaccines to 
control diseases in the U.S. and the CDC updates the U.S. adult and 
childhood immunization schedules consistent with ACIP 
recommendations.\666\ As the cohort of persons vaccinated as children 
have grown older, rates of acute hepatitis B among persons aged 30-39 
years began to consistently decrease beginning in 2015.\667\ 
Conversely, rates of reported cases of acute hepatitis B have steadily 
increased among persons aged 40-49, 50-59 years, and 60 years and older 
from 2015-2019 (see Table 52). Overall, the rate of acute hepatitis B 
cases increased 11 percent from 2014 (0.9 per 100,000) to 2018 (1.0 per 
100,000).\668\ Injection drug use and sexual transmission are known 
risk factors associated with rising acute hepatitis B cases. For 
example, acute hepatitis B infections increased 114 percent from 2006 
to 2013 in three states affected by the opioid epidemic (Kentucky, 
Tennessee, and West Virginia).\669\
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    \665\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
    \666\ CDC. ACIP. Retrieved from https://www.cdc.gov/vaccines/acip/index.html.
    \667\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
    \668\ CDC 2020. Viral hepatitis surveillance report 2018--
Hepatitis B. Retrieved from https://www.cdc.gov/hepatitis/statistics/2018surveillance/HepB.htm.
    \669\ HHS. 2016. Viral Hepatitis in the United States: Data and 
Trends. Retrieved from https://www.hhs.gov/hepatitis/learn-about-viral-hepatitis/data-and-trends/index.html.
[GRAPHIC] [TIFF OMITTED] TP31JY24.084

2. Statutory Authority
    Section 1861(s)(10)(B) of the Act provides a benefit category under 
Part B for hepatitis B vaccine and its administration, furnished to an 
individual who is at high or intermediate risk of contracting 
hepatitis. The statute expressly authorizes the Secretary to determine 
who is at high or intermediate risk of contracting hepatitis B for 
coverage of the hepatitis B vaccine.
3. Regulation
    Medicare Part B pays for the hepatitis B vaccine as defined in 
Sec.  410.63(a), which describes individuals who are at high or 
intermediate risk of contracting hepatitis and covered for hepatitis B 
vaccinations. In the CY 2013 PFS final rule (77 FR 69363), CMS expanded 
the definition of individuals at risk of contracting hepatitis B, 
citing updated ACIP recommendations about increased risk for diabetes 
patients to support the change. The ACIP stated that the hepatitis B 
outbreaks were associated with adults with diabetes receiving assisted 
blood glucose monitoring.\670\ Today, the regulations are outdated as 
these risk categories have been shown ineffective and are no longer the 
focus of how the medical community discusses hepatitis B infection and

[[Page 62002]]

prevention. In 2019, risk behavior and exposure data were missing for 
37 percent of case reports (1,183 of 3,192) of acute hepatitis B 
infections received by CDC.\671\ ACIP also cited a large national 
survey of family medicine and internal medicine physicians assessing 
barriers to adult hepatitis B vaccination and found that 68% cited 
patients' non-disclosure of risk factors.\672\
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    \670\ CDC. 2011. Use of Hepatitis B Vaccination for Adults with 
Diabetes Mellitus: Recommendations of the Advisory Committee on 
Immunization Practices (ACIP). MMWR. 60(50);1709-1711. Retrieved 
from https://www.cdc.gov/mmwr/preview/mmwrhtml/
mm6050a4.htm#:~:text=Based%20on%20the%20Work%20Group,made%20(recommen
dation%20category%20A).
    \671\ Weng, M., et al. 2022. Universal hepatitis B vaccination.
    \672\ Daley MF, Hennessey KA, Weinbaum CM, et al. Physician 
practices regarding adult hepatitis B vaccination: a national 
survey. Am J Prev Med 2009;36:491-6. PMID:19362798 https://doi.org/10.1016/j. amepre.2009.01.037.
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4. Proposed Regulatory Revisions
    Since 1991, hepatitis B vaccination has been recommended by ACIP 
and the CDC for infants at birth, completing the vaccination series by 
16 months of age.\673\ This is important because in the U.S., the age 
cohorts who have received the completed series have low to no risk of 
contracting the hepatitis B virus, as evidenced by the rate of zero 
acute hepatitis B virus infections for the 0-19 age group.\674\ The 
infant and childhood recommendations were not in place for most of 
today's adults which is evidenced by no other age group reaching a rate 
of zero acute hepatitis B virus infections. Given this information, we 
consider the population of people who have completed the vaccination 
series to be at low risk of contracting the hepatitis B virus. 
Individuals who remain unvaccinated against hepatitis B are at 
intermediate risk, at minimum, of contracting hepatitis B virus.
---------------------------------------------------------------------------

    \673\ CDC, 2024. Vaccine safety: Hepatitis B vaccines. Retrieved 
from https://www.cdc.gov/vaccinesafety/vaccines/hepatitis-b-
vaccine.html#:~:text=CDC%20recommends%20hepatitis%20B%20vaccine,not%2
0yet%20gotten%20the%20vaccine.
    \674\ CDC. Viral hepatitis. 2021 viral hepatitis surveillance 
report. Atlanta, GA: U.S. HHS, CDC; 2023. Retrieved from https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b/figure-2.4.htm.
---------------------------------------------------------------------------

    We conclude that anyone who is not fully vaccinated to be at 
intermediate risk of contracting the hepatitis B virus as their risk 
would be above zero. Additionally, rates of reported cases of acute 
hepatitis B steadily increased among age groups 40 and over between 
2015 and 2019, with stabilizing or declining rates between 2020 and 
2021, which may be due to the COVID-19 pandemic.\675\ While it is 
encouraging to see declining rates, these populations remain at 
intermediate risk given their reported cases remained above zero. 
Therefore, we propose to revise Sec.  410.63(a)(2), Intermediate Risk 
Groups, by adding a new paragraph (a)(iv) to include individuals who 
have not previously received a completed hepatitis B vaccination series 
or whose vaccination history is unknown. We include the latter group in 
this proposal because the CDC has stated that it is not harmful to 
receive either extra doses or a repeat vaccination series.\676\ This 
will allow these individuals to receive a covered vaccination series 
when medical history may not be available. Also, the CDC states that 
screening for hepatitis B virus is not a requirement for vaccination, 
and in settings where screening is not feasible, vaccination of persons 
recommended to receive the vaccine should continue.
---------------------------------------------------------------------------

    \675\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \676\ CDC. Viral hepatitis. FAQ for health professionals. 
Atlanta, GA: U.S. HHS, CDC; 2022. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
---------------------------------------------------------------------------

    We note that Sec.  410.63(a)(3) provides an exception to 
individuals considered intermediate or high risk of contracting 
hepatitis B. This includes individuals who have undergone a 
prevaccination screening and have been found to be currently positive 
for antibodies to hepatitis B. We propose that this exception apply to 
the proposed Sec.  410.63(a)(2)(iv) because individuals with previous 
infection would not benefit from the vaccine. However, it should be 
noted that the CDC states that it is not harmful to vaccinate people 
who are immune to hepatitis B virus because of current or previous 
infection or vaccination, nor does it increase the risk for adverse 
events.\677\
---------------------------------------------------------------------------

    \677\ CDC. Viral hepatitis. FAQ for health professionals. 
Atlanta, GA: U.S. HHS, CDC; 2022. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
---------------------------------------------------------------------------

5. Summary
    This proposal will help protect Medicare beneficiaries from 
acquiring hepatitis B infection, contribute to eliminating viral 
hepatitis as a public health threat in the United States and is in the 
best interest of the Medicare program and its beneficiaries. We look 
forward to receiving public comment on these proposals.

N. Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance 
Transport

1. Ambulance Fee Schedule Background
    Section 1861(s)(7) of the Act establishes an ambulance service as a 
Medicare Part B service where the use of other methods of 
transportation is contraindicated by the individual's condition, but 
only to the extent provided in regulations. Our regulations relating to 
coverage for ambulance services are set forth at 42 CFR part 410, 
subpart B. Since April 1, 2002, payment for ambulance services has been 
made under the ambulance fee schedule (AFS), which the Secretary 
established, as required by section 1834(l) of the Act, in 42 CFR part 
414, subpart H. Payment for an ambulance service is made at the lesser 
of the actual billed amount or the AFS amount, which consists of a base 
rate for the level of service, a separate payment for mileage to the 
nearest appropriate facility, a geographic adjustment factor (GAF), and 
other applicable adjustment factors as set forth at section 1834(l) of 
the Act and Sec.  414.610 of the regulations. In accordance with 
section 1834(l)(3) of the Act and Sec.  414.610(f), the AFS rates are 
adjusted annually based on an inflation factor. The AFS also 
incorporates two permanent add-on payments in Sec.  414.610(c)(5)(i) 
and three temporary add-on payments in Sec.  414.610(c)(1)(ii) and 
(c)(5)(ii) to the base rate and/or mileage rate.
2. Low Titer O+ Whole Blood Transfusion Therapy During Ground Ambulance 
Transport
    Under the AFS, Medicare Part B covers seven levels of service for 
ground (including water) ambulance transports and two levels of service 
for air ambulance transports. The levels of service for ground 
ambulance transports include basic life support (emergency); basic life 
support (non-emergency); advanced life support, level 1 (ALS1) 
(emergency); ALS1 (non-emergency); advanced life support, level 2 
(ALS2); paramedic intercept; and specialty care transport (Sec.  
410.40(c)). Definitions for the levels of service can be found at Sec.  
414.605 and in the Medicare Benefit Policy Manual, Chapter 10, 
Ambulance Services, section 30.1.1, Definition of Ground Ambulance 
Services.
    At Sec.  414.605, ALS2 is defined as either transportation by 
ground ambulance vehicle, medically necessary supplies and services, 
and the administration of at least three medications by intravenous 
push/bolus or by continuous infusion, excluding crystalloid, hypotonic, 
isotonic, and hypertonic solutions (Dextrose, Normal Saline, Ringer's 
Lactate); or transportation, medically necessary supplies and services, 
and the provision of at least one of the following ALS procedures: (1) 
Manual defibrillation/cardioversion; (2) Endotracheal intubation; (3) 
Central venous line; (4) Cardiac pacing; (5) Chest decompression; (6) 
Surgical airway; (7) Intraosseous line. These procedures must be 
performed by ALS personnel trained to the level of the emergency

[[Page 62003]]

medical technician-intermediate (EMT-Intermediate) or paramedic (Sec.  
414.605).
    According to the 2020 National Association of State Emergency 
Medical Services Organizations Assessment (NASEMSO), there are 
approximately 11,450 ground EMS agencies that provide 9-1-1 response 
with transport to an acute care hospital.\678\ The administration of 
low titer O+ whole blood transfusions, otherwise referred to as whole 
blood transfusion therapy (WBT), began in 2017 when two Emergency 
Medical Services (EMS) systems in Texas began providing WBT to patients 
in hemorrhagic shock during ambulance transports. Prior to this, use of 
blood products in the treatment of hemorrhagic shock in the form of 
blood component therapy was available only in the hospital setting and 
by one EMS system. Low titer O+ whole blood contains low levels of 
antibodies that patients of any blood type can receive and is provided 
in EMS settings to significantly increase these patients' chances of 
survival.
---------------------------------------------------------------------------

    \678\ National Association of State EMS Officials. 2020 National 
Emergency Medical Services Assessment 2020. Table 3, p 27. Available 
from: www./https://nasemso.org/. Accessed May 1, 2024.
---------------------------------------------------------------------------

    By September 2023, over 121 EMS systems in the United States were 
using blood products in the form of either WBT, packed red blood cells 
(PRBCs), plasma, or a combination of PRBCs and plasma.\679\ Seventy 
percent of these systems were using WBT.\680\ As of March 2024, 147 
(1.2 percent of the EMS systems in the United States) now carry whole 
blood products, with 200 or more systems anticipated to provide some 
form of blood product transfusion by the end of 2024.\681\ Today, 
nearly 60 percent of those 147 EMS systems carry low titer O+ whole 
blood, with the remainder utilizing other blood products.\682\
---------------------------------------------------------------------------

    \679\ Krohmer J. Chairman, steering committee of the Prehospital 
Blood Transfusion Initiative Coalition. Virtual Meeting April 23, 
2024.
    \680\ Levy MJ, Garfinkel EM, May R, et al. Implementation of a 
prehospital whole blood program: Lessons. J Am Coll Emerg Physicians 
Open. 2024;5: e13142. https://doi.org/10.1002/emp2.13142.
    \681\ Levy MJ, Garfinkel EM, May ER, et al. Implementation of a 
prehospital whole blood program: Lessons. learned. J Am Coll Emerg 
Physicians Open. 2024;5: Apr; 5(2): e13142. https://doi.org/10.1002/emp2.13142. Krohmer J. Chairman, steering committee of the 
Prehospital Blood Transfusion Initiative Coalition. Virtual Meeting 
April 23, 2024.
    \682\ Ibid.
---------------------------------------------------------------------------

    EMS systems that administer WBT and other blood products (PRBCs and 
plasma) generally utilize it for patients suffering hemorrhagic shock 
stemming from traumatic injury, though it may also be indicated in 
certain non-traumatic medical conditions such as hemorrhagic shock from 
a gastrointestinal bleed.\683\ Traditional resuscitation protocol for 
massive hemorrhage from trauma and other medical conditions such as 
gastrointestinal bleeding consists of crystalloid fluids and blood 
component transfusions, which consist of a balanced portion of PBRCs, 
platelets, and fresh frozen plasma.\684\
---------------------------------------------------------------------------

    \683\ Ibid.
    Braverman MA, Smith A, Ciaraglia AV, et al. The regional whole 
blood program in San Antonio, TX: A 3-year update on prehospital and 
in-hospital transfusion practices for traumatic and non-traumatic 
hemorrhage. Transfusion. 2022; 62: S80-S89.
    \684\ Young PP, Cotton BA, Goodnough LT. Massive Transfusion 
Protocols for Patients with Substantial Hemorrhage. Transfusion 
Medicine Reviews. 2011, Vol 25(4). 293-303.
    Washington State Department of Health Office of Community Health 
Systems Emergency Medical Services and Trauma Section. Trauma 
Clinical Guideline: Massive Transfusion for Trauma.
---------------------------------------------------------------------------

    During the conflicts in Iraq and Afghanistan, use of this 
traditional protocol was difficult due to the austere combat 
environment and limited availability of blood components, which often 
necessitated the use of fresh whole blood (FWB) in traumatic 
resuscitation.\685\ Data collected related to these conflicts 
demonstrated improvements in survival rate and reductions in 
transfusion requirements for military casualties in hemorrhagic shock 
who received FWB versus those receiving traditional blood component 
transfusion and spurred research and interest in the use of WBT in 
civilian trauma.\686\ Additional data demonstrating an improvement in 
24-hour and 30-day survival rate among medically evacuated combat 
casualties in Afghanistan who received prehospital transfusion 
encouraged research and interest in these techniques for possible 
deployment by EMS services.\687\
---------------------------------------------------------------------------

    \685\ Nessen SC, Eastridge BJ, Cronk D, et al. Fresh whole blood 
use by forward surgical teams in Afghanistan is associated with 
improved survival compared to component therapy without platelets. 
Transfusion. 2013;53: 107S-13S.
    \686\ Spinella PC, Perkins GJ, Grathwohl KW, Beekley AC, Holcomb 
J. Warm Fresh Whole Blood is Independently Associated with Improved 
Survival for Patients with Combat-Related Traumatic Injuries. J 
Trauma. 2009 April; 66(4 Suppl): S69-S76. doi:10.1097/
TA.0b013e31819d85fb. Nessen SC, Eastridge BJ, Cronk D, et al. Fresh 
whole blood use by forward surgical teams in Afghanistan is 
associated with improved survival compared to component therapy 
without platelets. Transfusion. 2013;53: 107S-13S.
    Gurney J, Staudt A, Cap A, Shackleford A, et al. Improved 
Survival in Critically Injured Combat Casualties Treated with Fresh 
Whole Blood by Forward Surgical Teams in Afghanistan. Transfusion. 
2020;60; S180-S188.
    \687\ Shackelford SA, del Junco DJ, Powell-Dunford N, 
Mazuchowski EL, et al. Association of Prehospital Blood Product 
Transfusion During Medical Evacuation of Combat Casualties in 
Afghanistan with Acute and 30-Day Survival. JAMA. 2017; 
318(16):1581-1591.
---------------------------------------------------------------------------

    In the treatment of civilian patients with hemorrhagic shock from 
trauma, studies have demonstrated that WBT provides a substantial 
survival benefit versus traditional component therapy,\688\ especially 
when provided early in the prehospital and hospital settings.\689\ One 
study found WBT increased the survival of such patients by as much 60 
percent and reduced the need for additional blood products in the 24-
hour period following the initial transfusion by 7 percent.\690\ 
Another study noted that there was a significant increase in the 24-
hour and 30-day survival rate in patients suffering from severe 
hemorrhage requiring a large transfusion volume.\691\
---------------------------------------------------------------------------

    \688\ Hazelton JP, Ssentongo AE, Oh JS, et al. Use of Cold-
Stored Whole Blood is Associated with Improved Mortality in 
Hemostatic Resuscitation of Major Bleeding. A Multicenter Study. 
2022. Annals of Surgery. Vol 276(4). 579-88.
    \689\ b. Torres CM, Kent A, Scantling D, et al. Association of 
Whole Blood With Survival Among Patients Presenting With Severe 
Hemorrhage in US and Canadian Adult Civilian Trauma Centers. JAMA 
Surg. 2023;158(5):532-540. doi: 10.1001/jamasurg.2022.6978.
    Brill JB, Tang B, Hatton G, Mueck KM, et al. Impact of 
incorporating whole blood into hemorrhagic shock resuscitation: 
Analysis of 1,377 consecutive trauma patients receiving emergency-
release uncrossmatched blood products. J Am Coll Surg. 
2022;234(4):408-418.
    Guyette FX, Sperry JL, Peitzman AB, et al. Prehospital blood 
product and crystalloid resuscitation in the severely injured 
patient: a secondary analysis of the prehospital air medical plasma 
trial. Ann Surg. 2021;273:358-364.
    \690\ Ibid.
    \691\ Ibid.
---------------------------------------------------------------------------

    Patients suffering from hemorrhagic shock require stabilization in 
the field and rapid transport to an acute care hospital to treat the 
source of hemorrhage.\692\ Individuals who are experiencing hemorrhagic 
shock primarily due to blood loss may require WBT as their only 
resuscitative treatment. Each unit of whole blood takes 5-8 minutes to 
transfuse.\693\ Depending on the time needed to transport and clinical 
need, patients generally receive 1-2 units of WBT during ground 
transport.\694\
---------------------------------------------------------------------------

    \692\ Centers for Disease Control and Prevention. Guidelines for 
field triage of injured patients. MMWR. 2009;58 (RR-1):1-34.
    \693\ Vitberg D. Assistant Medical Director. District of 
Columbia Fire and EMS Department. Zoom meeting. February 20, 2024. 
Bank EA. Assistant Chief of EMS. Co-Chair of the South East Regional 
Advisory Council Trauma Committee. Phone conversation, May 10, 2024.
    \694\ Krohmer J. Chairman, steering committee of the Prehospital 
Blood Transfusion Initiative Coalition. Virtual Meeting April 23, 
2024.
---------------------------------------------------------------------------

    While there may be variance between jurisdictions, the protocols 
for many EMS systems currently providing WBT

[[Page 62004]]

are designed for patients who require complex management at the 
advanced life support level, demonstrating suspicion of blood loss 
along with evidence of physiologic shock as indicated by parameters 
such as low blood pressure, an elevated pulse rate, or slow capillary 
refill.\695\ Other relevant factors may include an elevated lactate 
level, an EtCO2 waveform capnography reading <25 as surrogate for 
elevated lactate, a shock index (heart rate/systolic blood pressure) 
>1, and, where appropriate and consistent with protocol, authorization 
by online or other medical authority.\696\
---------------------------------------------------------------------------

    \695\ Mark H. Yazer, Philip C. Spinella, Eric A. Bank, Jeremy W. 
Cannon, Nancy M. Dunbar, John B. Holcomb, Bryon P. Jackson, Donald 
Jenkins, Michael Levy, Paul E. Pepe, Jason L. Sperry, James R. 
Stubbs & Christopher J. Winckler (2022) THOR-AABB Working Party 
Recommendations for a Prehospital Blood Product Transfusion Program, 
Prehospital Emergency Care, 26:6, 863-875.
    Ibid., https://miemss.org/home/Clinicians/Whole-Blood.
    \696\ Ibid.
---------------------------------------------------------------------------

    We believe that many ground ambulance transports providing WBT 
already qualify for ALS2 payment, since patients requiring such 
transfusions are generally critically injured or ill and often 
suffering from cardio-respiratory failure and/or shock, and therefore 
are likely to receive one or more procedures currently listed as ALS 
procedures in the definition of ALS2, with endotracheal intubation, 
chest decompression, and/or placement of a central venous line or an 
intraosseous line the most probable to be seen in these circumstances. 
Patients requiring WBT are typically suffering from hemorrhagic shock, 
for which the usual course of treatment includes airway stabilization, 
control of the hemorrhagic source, and stabilization of blood pressure 
using crystalloid infusion and the provision of WBT or other blood 
product treatments when available, but not necessarily the 
administration of advanced cardiac life support medications.\697\ 
Consequently, we do not believe it is likely that most patients who may 
require WBT would trigger the other pathway to qualify as ALS2, the 
administration of at least three medications by intravenous push/bolus 
or by continuous infusion, excluding crystalloid, hypotonic, isotonic, 
and hypertonic solutions (Dextrose, Normal Saline, Ringer's Lactate).
---------------------------------------------------------------------------

    \697\ Prehospital Hemorrhage Control and Treatment by 
Clinicians: A Joint Position Statement. Ann Emerg Med. 2023;82:e1-
e8.
---------------------------------------------------------------------------

    However, not all ground ambulance transports providing WBT may 
already qualify for ALS2 payment. An ambulance transport would not 
qualify for ALS2 payment where a patient received only WBT during a 
ground ambulance transport, and not one or more other services that, 
either by themselves or in combination, presently qualify as ALS2. We 
believe WBT should independently qualify as an ALS2 procedure because 
the administration of WBT and handling of low titer O+ whole blood 
require a complex level of care beyond ALS1 for which EMS providers and 
suppliers at the EMT-Intermediate or paramedic level require additional 
training. In addition, WBT requires specialized equipment such as a 
blood warmer and rapid infuser.\698\ While there is no established 
national training protocol, many systems follow the guidelines of the 
Association for the Advancement of Blood and Biotherapies (AABB), which 
requires additional training that is 4 hours in length for paramedics 
and 6 hours in length for EMS supervisory staff.\699\ Medicare's 
requirements for ambulance staffing at 42 CFR 410.41(b) include 
compliance with state and local laws, which here would establish 
appropriate training requirements with respect to WBT administration.
---------------------------------------------------------------------------

    \698\ Pokorny DM, Braverman MA, Edmundson PM, et al. The use of 
prehospital blood products in the resuscitation of trauma patients; 
a review of prehospital transfusion practices and a description of 
our regional whole blood program in San Antionio, TX. ISBT science 
series, 2018-08, Vol, 14(3), p. 332-42.
    Floccare D. Air Medical Director, State of Maryland. Email 
communication. May 14, 2024.
    Krohmer J. Chairman, steering committee of the Prehospital Blood 
Transfusion Initiative Coalition. Virtual Meeting April 23, 2024.
    \699\ Bank EA. Assistant Chief of EMS. Co-Chair of the South 
East Regional Advisory Council Trauma Committee. Email 
correspondence and phone conversation, May 10, 2024.
---------------------------------------------------------------------------

    Therefore, we believe it is appropriate to modify the definition of 
ALS2 to account for the instances where patients are administered WBT 
but do not otherwise qualify for ALS2 payment. Of note, we do not have 
the authority to provide an additional payment, such as an add-on 
payment for the administration of WBT under the AFS.
    We propose to modify the definition of ALS2 at Sec.  414.605 by 
adding the administration of low titer O+ whole blood transfusion to 
the current list of seven ALS2 procedures as a new number 8. We would 
also reflect this change in the Medicare Benefit Policy Manual, Chapter 
10, Ambulance Services, section 30.1.1, Definition of Ground Ambulance 
Services. Under this proposal, a ground ambulance transport that 
provides WBT would itself constitute an ALS2-level transport.
    We are aware that some established EMS systems may already provide 
WBT to treat patients in hemorrhagic shock, while other jurisdictions, 
including those in rural areas, will not and often will rely on 
alternative blood product treatments such as PRBCs and plasma. The 
availability of WBT in rural areas is a complex and multifactorial 
issue. Fluctuating stock of the ``raw product'' (blood donations) along 
with local healthcare demands for blood products (PRBCs, platelets, 
plasma, etc.) affect the availability of WBT. Other issues in rural 
areas include the logistical challenges and the costs involved in 
acquiring fresh units of WBT and returning any unused units to a 
supplier.\700\
---------------------------------------------------------------------------

    \700\ Apelseth TO, Strandenes G. Kristofferson K, Hagen KG. How 
do I implement a whole blood-based blood preparedness program in a 
small rural hospital? Transfusion. 2020. Vol 60(12) 2793-2800.
    Schaefer R, Bank EA, Krohmer J, Haskell A, et al. Removing the 
Barriers to Prehospital Blood: A Roadmap to Success. Journal of 
Trauma and Acute Care Surgery. 2024 (manuscript). Currently awaiting 
publication.
---------------------------------------------------------------------------

    The training, administration and monitoring is the same for these 
alternative blood product treatments as it is for WBT. While we are not 
including alternative blood product treatments in our proposal, we are 
seeking comment on whether we should add alternative blood product 
treatments to the list of ALS2 procedures. We invite comments on this 
proposal to add the administration of low titer O+ whole blood 
transfusion as an ALS2 procedure and comments on whether we should add 
alternative blood product treatments such as the administration of 
PRBCs or plasma.

O. Medicare Parts A and B Overpayment Provisions of the Affordable Care 
Act

1. Executive Summary
    In the proposed rule titled ``Medicare Program; Contract Year 2024 
Policy and Technical Changes to the Medicare Advantage Program, 
Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, 
Medicare Parts A, B, C, and D Overpayment Provisions of the Affordable 
Care Act and Programs of All-Inclusive Care for the Elderly; Health 
Information Technology Standards and Implementation Specifications'', 
which appeared in the December 27, 2022 Federal Register, we proposed 
to amend our regulations regarding the standard for an ``identified 
overpayment'' under Medicare Parts A, B, C, and D to align the 
regulations with the statutory language in section 1128J(d)(4)(A) of 
the Act, which provides that the terms ``knowing'' and ``knowingly'' 
have the meaning given those terms in the Federal False Claims Act (the 
False

[[Page 62005]]

Claims Act) at 31 U.S.C. 3729(b)(1)(A) (87 FR 79452). We refer to that 
rule as the ``December 2022 Overpayment Proposed Rule.'' In the 
December 2022 Overpayment Proposed Rule, we proposed to remove the 
existing ``reasonable diligence'' standard and adopt by reference the 
False Claims Act definition of ``knowing'' and ``knowingly'' as set 
forth at 31 U.S.C. 3729(b)(1)(A).
    We have not yet finalized our proposals with respect to 
overpayments under Medicare Parts A and B in the December 2022 
Overpayment Proposed Rule. Instead, after considering the public 
comments we received in connection with the December 2022 Overpayments 
Proposed Rule, we are retaining the Parts A and B proposals published 
in the December 2022 Overpayment Proposed Rule and we are now making 
additional proposals to revise existing regulations at Sec.  401.305(b) 
regarding the deadline for reporting and returning overpayments.
2. Provisions of the Proposed Regulation (Preamble)
    Section 6402(a) of the Patient Protection and Affordable Care Act 
(Pub. L. 111-148), as amended by the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152) (collectively known as the 
Affordable Care Act), established section 1128J(d) of the Act. Section 
1128J(d)(1) of the Act requires a person who has received an 
overpayment to report and return the overpayment to the Secretary, the 
State, an intermediary, a carrier, or a contractor, as appropriate, and 
to notify the Secretary, State, intermediary, carrier or contractor to 
which the overpayment was returned in writing of the reason for the 
overpayment. Section 1128J(d)(4)(B) of the Act defines the term 
``overpayment'' as any funds that a person receives or retains under 
title XVIII or XIX to which the person, after applicable 
reconciliation, is not entitled under such title. For purposes of 
Medicare Parts A and B, section 1128J(d)(4)(C) of the Act defines the 
term ``person'' to include providers and suppliers as those terms are 
defined in the Act. Section 1128J(d)(4)(C) of the Act also defines the 
term ``person,'' for purposes of Medicare Parts C and D, to also 
include a Medicare Advantage organization (MAO) (as defined in section 
1859(a)(1) of the Act) and a Part D Plan (PDP) sponsor (as defined in 
section 1860D-41(a)(13) of the Act).
    Section 1128J(d)(2) of the Act requires that an overpayment be 
reported and returned by the later of: (1) the date which is 60 days 
after the date on which the overpayment was identified; or (2) the date 
any corresponding cost report is due, if applicable. Section 
1128J(d)(3) of the Act specifies that any overpayment retained by a 
person after the deadline for reporting and returning an overpayment is 
an obligation (as defined in 31 U.S.C. 3729(b)(3)) for purposes of the 
False Claims Act, 31 U.S.C. 3729.
    Section 1128J(d)(4)(A) of the Act provides that the terms 
``knowing'' and ``knowingly'' have the meaning given those terms in the 
False Claims Act at 31 U.S.C. 3729(b)(1)(A). The False Claims Act (31 
U.S.C. 3729(b)(1)(A)) defines the terms ``knowing'' and ``knowingly'' 
to include information about which a person ``has actual knowledge,'' 
``acts in deliberate ignorance of the truth or falsity of the 
information,'' or ``acts in reckless disregard of the truth or falsity 
of the information.''
a. Regulations Promulgated Under Section 1128J(d) of the Act
    On May 23, 2014, CMS published a final rule titled ``Medicare 
Program; Contract Year 2015 Policy and Technical Changes to the 
Medicare Advantage and the Medicare Prescription Drug Benefit 
Programs'' (79 FR 29844) (hereinafter referred to as the ``Parts C and 
D Overpayment Final Rule''), which provided, among other things, that 
an MAO or PDP sponsor has identified an overpayment when the MAO or PDP 
sponsor has determined, or should have determined through the exercise 
of reasonable diligence, that the MAO or PDP sponsor has received an 
overpayment.
    On February 12, 2016, we published a final rule titled ``Medicare 
Program; Reporting and Returning of Overpayments'' (81 FR 7654) 
(hereinafter referred to as the ``Parts A and B Overpayment Final 
Rule''), which provided, among other things, that a provider or 
supplier has identified an overpayment when the provider or supplier 
has determined, or should have determined through the exercise of 
reasonable diligence, that the provider or supplier has received an 
overpayment and quantified the amount of the overpayment.
    In the December 2022 Overpayment Proposed Rule, we proposed to 
amend the existing regulations for Medicare Parts A and B, as well as 
Parts C and D, regarding the standard for an ``identified overpayment'' 
to align the regulations with the statutory language in section 
1128J(d)(4)(A) of the Act. If finalized, these regulations would assign 
the meaning of the terms ``knowing'' and ``knowingly'' in the False 
Claims Act at 31 U.S.C. 3729(b)(1)(A) to our regulations for purposes 
of Medicare overpayments. Specifically, in the December 2022 
Overpayment Proposed Rule, we proposed to remove the existing 
``reasonable diligence'' standard and adopt by reference the False 
Claims Act definition of ``knowing'' and ``knowingly'' as set forth at 
31 U.S.C. 3729(b)(1)(A). We continue to review the comments we received 
on the December 2022 Overpayment Proposed Rule, and we plan to respond 
both to those comments and the comments we receive on our new proposals 
when we publish the CY 2025 Physician Fee Schedule final rule.
b. Relevant Litigation
    In UnitedHealthcare Insurance Co. v. Azar, a group of MAOs 
challenged the Parts C and D Overpayment Final Rule, and the District 
Court held, in relevant part, that by requiring MAOs to use 
``reasonable diligence'' in searching for and identifying overpayments, 
CMS impermissibly established False Claims Act liability for mere 
negligence. UnitedHealthcare Ins. Co. v. Azar, 330 F. Supp. 3d 173, 191 
(D.D.C. 2018), rev'd in part on other grounds sub nom. UnitedHealthcare 
Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021), cert. denied, 142 
S. Ct. 2851 (U.S. June 21, 2022) (No. 21-1140). The District Court 
noted that ``(t)he False Claims Act--which the ACA refers to for 
enforcement, see 42 U.S.C. 1320a-7k(d)(3)--imposes liability for 
erroneous (`false') claims for payment submitted to the government that 
are submitted `knowingly' . . . a term of art defined in the FCA to 
include false information about which a person `has actual knowledge,' 
`acts in deliberate ignorance of the truth or falsity of the 
information,' or `acts in reckless disregard of the truth or falsity of 
the information.' '' Id. at 190.
    Although the court's ruling applied only to Medicare Part C, to 
provide for consistency in Medicare regulations related to reporting 
and returning overpayments, in the December 2022 Overpayment Proposed 
Rule, we proposed to amend the regulations at current Sec.  
401.305(a)(2) to remove the reference to ``reasonable diligence'' and 
replace it with language incorporating the terminology of section 
1128J(d)(4)(A) of the Act by ascribing the terms ``knowing'' and 
``knowingly'' the same meaning given those terms in the False Claims 
Act at 31 U.S.C. 3729(b)(1)(A). See UnitedHealthcare, 330 F. Supp. 3d 
at 191 (finding that this language would be consistent with a 2000 
agency rule, the False Claims Act,

[[Page 62006]]

and the Affordable Care Act's reference to the False Claims Act).
c. Provisions of Proposed Regulations
    In addition to our earlier proposals, which remain under 
consideration, we make the following new proposals.
    Existing Sec.  401.305(b)(1) specifies when a person who has 
received an overpayment must report and return an overpayment. We 
propose to amend this paragraph to reference revised Sec.  
401.305(b)(2), as well as to reference newly-proposed Sec.  
401.305(b)(3).
    Existing Sec.  401.305(b)(2) specifies the circumstances under 
which the deadline for returning overpayments will be suspended. 
Overpayments must be reported no later than the date which is 60 days 
after the date on which the overpayment was identified or the date any 
corresponding cost report is due, if applicable. However, the deadline 
for returning a reported overpayment will be suspended under specified 
circumstances, including the acknowledgement of receipt of a submission 
to the OIG Self-Disclosure Protocol or the CMS Voluntary Self-Referral 
Disclosure Protocol, or under specified conditions if a person requests 
an extended repayment schedule as defined in Sec.  401.603. We are 
proposing a technical modification to the introductory language in 
Sec.  401.305(b)(2) to acknowledge that this section might be 
applicable after the suspension described in new Sec.  401.305(b)(3) is 
complete.
    New proposed Sec.  401.305(b)(3) would specify the circumstances 
under which the deadline for reporting and returning overpayments would 
be suspended to allow time for providers to investigate and calculate 
overpayments. Proposed Sec.  401.305(b)(3)(i) provides that the 
deadline to report and return an overpayment would be suspended if: (1) 
a person has identified an overpayment but has not yet completed a 
good-faith investigation to determine the existence of related 
overpayments that may arise from the same or similar cause or reason as 
the initially identified overpayment; and (2) the person conducts a 
timely, good-faith investigation to determine whether related 
overpayments exist. Proposed Sec.  401.305(b)(3)(ii) provides that, if 
the conditions for proposed Sec.  401.305(b)(3)(i) are met, the 
deadline for reporting and returning the initially identified 
overpayment and related overpayments that arise from the same or 
similar cause or reason as the initially identified overpayment will 
remain suspended until the earlier of the date that the investigation 
of related overpayments has concluded and the aggregate amount of the 
initially identified overpayments and related overpayments is 
calculated, or the date that is 180 days after the date on which the 
initial identified overpayment was identified.
    The following example may elucidate a hypothetical circumstance. 
Assume that, on day 1, a person identifies an overpayment arising from 
a physician's failure to properly document the medical record to 
support the coding of a specific claim, and the person has reason to 
believe that this may be a common practice of the physician, so there 
could be more affected claims. At this point, the person has up to 180 
days to conduct and conclude a good faith investigation to determine 
whether related overpayments that arise from the same or similar cause 
or reason as the initially identified overpayment exist. If the person 
does NOT conduct an investigation, or the investigation is not timely 
or not conducted in good faith, the identified overpayment must be 
reported and returned by day 60. If the person does conduct a timely, 
good faith investigation, suspension of the report and return 
obligation under Sec.  401.305(b)(3) begins on day 1. The suspension 
ends when the investigation is concluded and the initially identified 
overpayment and related overpayments, if any, are calculated, or by day 
180, whichever is earlier. The overpayment must be reported and 
returned within 60 days after either completion of the investigation or 
day 180, whichever is earlier. However, the suspensions described in 
Sec.  401.305(b)(2) may also be applicable. For example, if the person 
is reporting the overpayment to the OIG Self-Disclosure Protocol, as 
provided for in Sec.  401.305(b)(2) the overpayment return requirement 
may be further suspended in accordance with that provision.
    We make these proposals because many of the comments that we 
received on the December 2022 Overpayment Proposed Rule expressed 
concern that we proposed to remove the term ``quantified'' from the 
original regulatory text. We believe that our proposals, especially 
proposed Sec.  401.305(b)(3)(ii)(A), would address this concern. Other 
commenters expressed concern that the December 2022 Overpayment 
Proposed Rule proposals removed a perceived 6-month time period to 
investigate all overpayments that was referenced in an example in the 
preamble to the original 2016 Parts A and B Overpayment Rule. The 
December 2022 Overpayment Proposed Rule was silent on this point and 
did not remove this time period to investigate overpayments. We 
understand the importance of allowing time to investigate and calculate 
overpayments. Therefore, we propose to codify this allowance into 
regulation at proposed Sec.  401.305(b)(3)(ii).
    We solicit comment on these proposals.

IV. Updates to the Quality Payment Program

A. CY 2025 Modifications to the Quality Payment Program

1. Executive Summary
a. Overview
    This section of this proposed rule sets forth proposed changes to 
the Quality Payment Program starting January 1, 2025, except as 
otherwise noted for specific provisions. We continue to move the 
Quality Payment Program forward, including focusing more on alignment 
and new options for clinicians to participate in a more meaningful way, 
to achieve continuous improvement in the quality of health care 
services provided to Medicare beneficiaries and other patients through 
the Quality Payment Program's Merit-based Incentive Payment System 
(MIPS) and Advanced Alternative Payment Models (APMs) for the CY 2025 
performance period/2027 MIPS payment year.
    Authorized by the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA) (Pub. L. 114-10, April 16, 2015), the Quality Payment 
Program is a value-based payment program, by which the Medicare program 
rewards clinicians who provide high-value, high-quality care to their 
patients in a cost-efficient manner. There are two ways for clinicians 
who provide services under the Medicare program to participate in the 
Quality Payment Program: MIPS and Advanced APMs. The statutory 
requirements for the Quality Payment Program are set forth in section 
1848(q) and (r) of the Act for MIPS and section 1833(z) of the Act for 
Advanced APMs.
    For the MIPS participation track, MIPS eligible clinicians (defined 
in Sec.  414.1305) \701\ are subject to a MIPS payment adjustment 
(positive, negative, or neutral) based on their performance in four 
performance categories: cost, quality, improvement activities, and 
Promoting Interoperability. We assess each MIPS eligible clinician's 
total performance according to established performance standards with 
respect to

[[Page 62007]]

the applicable measures and activities specified in each of these four 
performance categories during a performance period to compute a final 
composite performance score (a ``final score'' as defined at Sec.  
414.1305). In calculating the final score, we must apply different 
weights for the four performance categories, subject to certain 
exceptions, as set forth in section 1848(q)(5) of the Act and at Sec.  
414.1380. Unless we assign a different scoring weight pursuant to these 
exceptions, for CY 2025 performance period/2027 MIPS payment year, the 
scoring weights are as follows: 30 percent for the quality performance 
category; 30 percent for the cost performance category; 15 percent for 
the improvement activities performance category; and 25 percent for the 
Promoting Interoperability performance category.
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    \701\ We note that the term MIPS eligible clinician is defined 
in Sec.  414.1305 as including a group of at least one MIPS eligible 
clinician billing under a single tax identification number. We refer 
readers to our policies governing group reporting and scoring under 
MIPS as set forth in Sec.  414.1310(e).
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    Once calculated, each MIPS eligible clinician's final score is 
compared to the performance threshold established in prior rulemaking 
for that performance period to calculate the MIPS payment adjustment 
factor as specified in section 1848(q)(6) of the Act, such that the 
MIPS eligible clinician will receive in the applicable MIPS payment 
year: (1) a positive adjustment, if their final score exceeds the 
performance threshold; (2) a neutral adjustment, if their final score 
meets the performance threshold; or (3) a negative adjustment, if their 
final score is below the performance threshold. In calculating the MIPS 
payment adjustment factor for a MIPS eligible clinician, CMS accounts 
for scaling factor and budget neutrality requirements, as further 
specified in section 1848(q)(6) of the Act. CMS then applies the MIPS 
payment adjustment factor to amounts otherwise paid under Part B with 
respect to covered professional services for the MIPS eligible 
clinician for the applicable MIPS payment year such that their payments 
for such covered professional services are increased, decreased, or not 
adjusted based on the MIPS eligible clinician's final score relative to 
the performance threshold.
    Section 1848(q) of the Act sets forth other requirements applicable 
to MIPS, including opportunities for feedback and targeted review and 
public reporting of MIPS eligible clinicians' performance. Section 
1848(r) of the Act sets forth more specific requirements for 
development of measures for the cost performance category under MIPS.
    For the Advanced APM track, if an eligible clinician participates 
in an Advanced APM and achieves Qualifying APM Participant (QP) or 
Partial QP status, they are excluded from the MIPS reporting 
requirements and payment adjustment (though eligible clinicians who are 
Partial QPs may elect to be subject to the MIPS reporting requirements 
and payment adjustment). Eligible clinicians who are QPs for the CY 
2024 performance year receive a 1.88 percent APM Incentive Payment in 
the 2026 payment year. Beginning with the CY 2024 performance year 
(payment year 2026), QPs will also receive a higher PFS payment rate 
(calculated using the differentially higher ``qualifying APM conversion 
factor'') than non-QPs. QPs will continue to be excluded from MIPS 
reporting and payment adjustments for the applicable year.
    We plan to continue developing policies for the Quality Payment 
Program that more effectively reward high-quality of care for patients 
and increase opportunities for Advanced APM participation. We are 
continuing to develop new MIPS Value Pathways (MVPs) to allow for a 
more cohesive participation experience by connecting activities and 
measures from the four MIPS performance categories that are relevant to 
a specialty, medical condition, or a particular population.
    As we move into the eighth year of the Quality Payment Program, we 
are proposing the updates set forth in this section of this proposed 
rule, encouraging continued improvement in clinicians' performance with 
each performance year and driving improved quality of health care 
through payment policy.
b. Summary of Major Proposals
(1) Transforming the Quality Payment Program
    Our National Quality Strategy (https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy) addresses 
the urgent need to advance towards a more equitable, safe, and 
outcomes-based health care system for all individuals. We have a 
corresponding cohesive value-based care strategy for Medicare along 
three main pillars: Alignment, Growth, and Equity.\702\ We continue to 
focus on transforming health care delivery \703\ and our 2030 goal to 
have all traditional Medicare beneficiaries in an accountable care 
relationship with their health care provider. In pursuit of this 
vision, we are driving higher value care, supporting Advanced APM 
participation, increasing alignment to reduce burden, and promoting 
health equity. We are exploring new care delivery and payment models; 
for example, we are considering an ambulatory care model that would 
connect payment to performance for specialists in the ambulatory 
setting to increase the number of specialists who deliver longitudinal 
care in an accountable manner and to support greater integration 
between specialty and primary care. This potential model would utilize 
MVPs as a foundation for assessing specialist performance (refer to 
section III.J of this proposed rule). We are proposing in section 
II.G.2 of this proposed rule to make payment for advanced primary care 
management (APCM) services furnished by a physician or other qualified 
health care professional who is responsible for all primary care (for 
example, physicians and non-physician practitioners, including nurse 
practitioners, physician assistants, certified nurse-midwives and 
clinical nurse specialists), and serve as the continuing focal point 
for all needed health care services during a calendar month. This 
proposed payment would incorporate several specific, existing care 
management and communication technology-based services into a bundle 
and include a performance measurements requirement that could be met by 
reporting the Value in Primary Care MVP by clinicians billing for APCM 
services. We are proposing that billing practitioners who are not MIPS 
eligible clinicians (as defined at 42 CFR 414.1305) would not have to 
report the MVP in order to furnish and bill for APCM services.
---------------------------------------------------------------------------

    \702\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity, Health Affairs Forefront, March 14, 2024. 
https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
    \703\ Quality in Motion, Acting on the CMS National Quality 
Strategy, April 2024. https://www.cms.gov/files/document/quality-motion-cms-national-quality-strategy.pdf.
---------------------------------------------------------------------------

    Separately, we are implementing MVPs and subgroup reporting option 
to allow clinicians to report on a cohesive set of measures that more 
directly reflect their clinical practice. MVPs allow for more 
clinically relevant performance measurement, engage more specialists in 
performance measurement, and help reduce barriers to APM participation. 
While traditional MIPS continues to be a submission option, we intend 
to move to full MVP adoption and to sunset traditional MIPS in the 
future.
    In section IV.A.3.d of this proposed rule, we discuss a Request for 
Information (RFI) that addresses how we can best achieve full MVP 
adoption and subgroup participation as we plan to move forward with 
sunsetting traditional MIPS and advancing the three pillars and the 
National Quality Strategy. We seek feedback on clinician readiness to 
report MVPs, how we

[[Page 62008]]

should ensure there are applicable MVPs for all clinicians, and what 
parameters, including logistical and regulatory policies, are needed 
for multispecialty groups to place clinicians into subgroups for 
reporting an MVP relevant to the scope of care provided.
(a) MIPS Value Pathways Development and Maintenance
    In an effort to promote high-quality, safe, and equitable care and 
to implement the vision outlined in the CMS National Quality Strategy, 
we are proposing six new MVPs around the following topics: Complete 
Ophthalmologic Care, Dermatological Care, Gastroenterology Care, 
Optimal Care for Patients with Urologic Conditions, Pulmonology Care 
and Surgical Care. Complete Ophthalmologic Care, Dermatological Care, 
Gastroenterology Care, Optimal Care for Patients with Urologic 
Conditions, Pulmonology Care, and Surgical Care.
    We are also proposing to modify the MVP maintenance webinar process 
to provide more flexibility on how we communicate submitted maintenance 
recommendations prior to proposing them formally in rulemaking (refer 
to section IV.A.4.a of this proposed rule).
    Lastly, we are proposing MVP maintenance updates to our MVP 
inventory that are in alignment with the MVP development criteria, and 
in consideration of the feedback from interested parties we have 
received through the maintenance process.
(b) MVP Scoring
    We are proposing to update the scoring of population health 
measures in MVPs by using the highest score of all available population 
health measures, and we are proposing to remove the requirement for MVP 
Participants to select a population health measure at the time of MVP 
registration. We are also proposing to modify the MVP scoring policies 
at Sec.  414.1365(d)(3)(ii) with respect to the cost performance 
category to refer to, and therefore align with, our methodology for 
scoring cost measures at Sec.  414.1380(b)(2) under our traditional 
MIPS policies.. Additionally, we are proposing to align MVP scoring 
with traditional MIPS policies by removing references to high- and 
medium-weighted improvement activities in MVPs. We are proposing to 
update MVP scoring to assign 40 points for each improvement activity to 
provide full credit for the improvement activities performance category 
for MVP Participants who report one improvement activity. For the MVP 
Promoting Interoperability performance category, we are proposing to 
modify our policy at Sec.  414.1365(c)(4)(i)(A), requiring a subgroup 
to submit the affiliated group's data for the performance category, by 
removing references to specific performance periods/MIPS payment years, 
thereby permitting subgroups to report data for this category in this 
manner for the CY 2025 performance period/2027 MIPS payment year and 
beyond.
(c) APM Performance Pathway
    We are proposing to create within the APM Performance Pathway (APP) 
the APP Plus quality measure set beginning with the CY 2025 performance 
period/2027 MIPS payment year to align with the Universal Foundation 
measures under the CMS National Quality Strategy. We are not proposing 
to modify the existing APP quality measure set, which already includes 
five of the ten Universal Foundation measures. Instead, we are 
proposing to establish the APP Plus quality measure set as a second, 
optional measure set that would be comprised of all of the measures in 
the existing APP quality measure set and would additionally 
incrementally adopt the remaining five Universal Foundation measures 
from the CY 2025 performance period/2027 MIPS payment year through the 
CY 2028 performance period/2030 MIPS payment year. Under this proposal, 
a MIPS eligible clinician, group, or APM Entity that reports the APP 
may choose to report either the APP quality measure set or the APP Plus 
quality measure set.
(d) Data Submission for the Performance Categories
    We are proposing to adopt minimum criteria for a qualifying data 
submission for a MIPS performance period for the quality, improvement 
activities, and Promoting Interoperability performance categories, 
which we propose to codify at Sec.  414.1325(a)(1)(i) through (iii). 
Specifically, we are proposing that a qualifying data submission must 
include numerator and denominator data for at least one MIPS quality 
measure from the final list of MIPS quality measures for the quality 
performance category and include a response of ``yes'' for at least one 
activity in the MIPS improvement activities Inventory for the 
improvement activities performance category. For the Promoting 
Interoperability performance category, we are proposing a qualifying 
data submission must include: (1) performance data, including any claim 
of an applicable exclusion, for the measures in each objective, as 
specified by CMS; (2) required attestation statements, as specified by 
CMS; (3) CMS EHR Certification ID (CEHRT ID) from the Certified Health 
IT Product List (CHPL); and (4) the start date and end date for the 
applicable performance period as set forth in Sec.  414.1320.
    We are also proposing to codify our existing policies governing our 
treatment of multiple data submissions received for the quality and 
improvement activities performance categories at Sec.  414.1325(f)(1). 
We are also proposing to modify our policy governing our treatment of 
multiple data submissions received for the Promoting Interoperability 
performance category, which we propose to codify at Sec.  
414.1325(f)(2). Specifically, for the quality and improvement 
activities performance categories, we are proposing that for multiple 
data submissions received from submitters in multiple organizations, 
CMS will calculate a score for each submission received and assign the 
highest of the scores. For multiple data submissions received from a 
submitter in the same organization, CMS will score the most recent 
submission. For the Promoting Interoperability performance category, we 
are proposing to modify our policy so that, for multiple data 
submissions received, CMS would calculate a score for each data 
submission received and assign the highest of the scores.
(e) MIPS Performance Category Measures and Activities
(i) Quality Performance Category
    We are proposing to establish the data submission criteria for the 
Alternative Payment Model (APM) Performance Pathway (APP) quality 
measure set; maintain the data completeness criteria threshold to at 
least 75 percent for the CY 2027 and CY 2028 performance periods/2029 
and 2030 MIPS payment years; establish a measure set inventory of 196 
MIPS quality measures, of which 193 are available in traditional MIPS 
and 3 are available only for utilization in MVPs; and codify previously 
established criteria pertaining to the removal of MIPS quality 
measures. Additionally, in section IV.A.4.e.(1)(e) of this proposed 
rule, there are two quality-related RFIs. The first RFI pertains to the 
potential expansion of the survey modes for the administration of the 
Consumer Assessment of Healthcare Providers and Systems (CAHPS) for 
MIPS Survey, particularly expanding the survey modes from a mail-phone 
protocol to a web-mail-phone protocol. The second RFI pertains to the 
potential development of a set of guiding principles that would be 
utilized for the selection and

[[Page 62009]]

implementation of Patient-Reported Outcome Measures (PROMs) and 
Patient-Reported Outcome Performance Measures (PRO-PMs).
(ii) Cost Performance Category
    We are proposing to add six new episode-based measures to the cost 
performance category beginning with the CY 2025 performance period/2027 
MIPS payment year: Chronic Kidney Disease, End-Stage Renal Disease, 
Kidney Transplant Management, Prostate Cancer, Rheumatoid Arthritis, 
and Respiratory Infection Hospitalization. We are also proposing 
modifications to two existing episode-based cost measures so that their 
specifications reflect re-evaluated versions: Cataract Removal with 
Intraocular Lens (IOL) Implantation (currently titled Routine Cataract 
Removal with IOL Implantation) and Inpatient (IP) Percutaneous Coronary 
Intervention (PCI) (currently titled ST-Elevation Myocardial Infarction 
(STEMI) PCI). We are proposing to adopt a 20-episode case minimum for 
the six new episode-based cost measures. We are also proposing to 
maintain the existing case minimums for the two measures we are 
proposing to modify in this rulemaking, which are a 20-episode case 
minimum for the IP PCI measure and a 10-episode case minimum for the 
Cataract Removal with IOL Implantation measure. Additionally, we are 
proposing to update the operational list of care episode and patient 
condition groups and codes to reflect these new and modified measures 
that we are proposing. Lastly, we are proposing to adopt criteria to 
specify objective bases for the removal of any cost measures from the 
MIPS cost performance category, which we are also proposing to codify 
at Sec.  414.1350(e).
(iii) Improvement Activities Performance Category
    As part of our regular maintenance of the improvement activities 
Inventory, we are proposing to add two new, modify two existing, and 
remove eight existing improvement activities. The new activities help 
fill gaps we have identified in the Inventory while the modified and 
removed activities will ensure that it includes only the most 
meaningful activities that have a clear path to clinical practice 
improvement. In addition, we are proposing two changes to the 
traditional MIPS improvement activities reporting and scoring policies 
for the CY 2025 performance period/2027 MIPS payment year: to eliminate 
the weighting of activities and to reduce the number of activities to 
which clinicians are required to attest to achieve a score in the 
improvement activities performance category. Lastly, we are proposing 
to codify seven improvement activity removal factors to establish 
criteria used to identify activities for potential removal or 
modification.
(iv) Promoting Interoperability Performance Category
    We do not have any proposals for the Promoting Interoperability 
performance category. We are seeking public comment on a RFI regarding 
the Public Health Reporting and Data Exchange Objective.
(f) MIPS Final Scoring Methodology
(i) Scoring the Quality Performance Category
    We are proposing to implement defined topped out benchmarks for 
topped out measures in specialty sets affected by limited measure 
choice. Many specialty sets have not had the measure development that 
was envisioned early on the program. As a result, we have retained 
topped out measures to ensure there are applicable measures. To 
accommodate for this limited measure choice and the rising performance 
threshold, we are proposing to remove the 7-point topped out measure 
score cap for clinicians reporting measures included in certain 
specialty measures and implement a benchmarking strategy for affected 
measures that would ensure clinicians with limited measure choice are 
not unfairly penalized. Additionally, we are proposing to apply a 
Complex Organization Adjustment for virtual groups and APM Entities 
(including SSP ACOs) reporting eCQMs. We are also proposing to score 
Medicare CQMs using flat benchmarks for their first 2 years in the 
program consistent with the Shared Saving Program's policies.
(ii) Scoring the Cost Performance Category
    We are proposing to modify our methodology for scoring measures for 
the cost performance category beginning with the CY 2024 performance 
period/2026 MIPS payment year. Additionally, we are proposing to adopt 
a new cost measure exclusion policy beginning with the CY 2025 
performance period/2027 MIPS payment year.
(g) MIPS Payment Adjustments
    We are proposing to establish the mean as the methodology for 
determining the performance threshold for the CY 2025 performance 
period/2027 MIPS payment year through the CY 2027 performance period/
2029 MIPS payment year. To determine the performance threshold for the 
CY 2025 performance period/2027 MIPS payment year, we are proposing 
that we will use the mean of the final scores from the CY 2017 
performance period/2019 MIPS payment year. Based on the mean final 
score from that prior period, we are proposing to establish a 
performance threshold of 75 points for the CY 2025 performance period/
2027 MIPS payment year.
(h) Calculating the Final Score
    We are proposing to adopt a new reweighting policy at Sec.  
414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12). Specifically, we are 
proposing that, beginning with the CY 2024 performance period/2026 MIPS 
payment year, we may reweight one or more of the performance categories 
(specifically, quality, improvement activities, or Promoting 
Interoperability) where we determine, based on information submitted to 
us on or before November 1st of the year preceding the relevant MIPS 
payment year, that data for a MIPS eligible clinician are inaccessible 
or unable to be submitted due to circumstances outside of the control 
of the clinician because the MIPS eligible clinician delegated 
submission of the data to their third party intermediary, evidenced by 
a written agreement between the MIPS eligible clinician and third party 
intermediary, and the third party intermediary did not submit the data 
for the performance category(ies) on behalf of the MIPS eligible 
clinician in accordance with applicable deadlines. We also are 
proposing that, to determine whether to apply reweighting to the 
affected performance category(ies), we will consider: whether the MIPS 
eligible clinician knew or had reason to know of the issue with its 
third party intermediary's submission of the clinician's data for the 
performance category(ies); whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category(ies) in accordance 
with applicable deadlines.
(i) Third Party Intermediaries
    We are proposing to add a requirement that CMS-approved survey 
vendors must provide information on the cost of their services 
beginning with the CY 2026 performance period/2028 MIPS payment year. 
These costs will only be applicable to the CAHPS for MIPS Survey 
measure. If this proposal is finalized, the CAHPS for MIPS Survey

[[Page 62010]]

Vendor Participation Form and the CAHPS for MIPS Survey Minimum 
Business Requirements in the QPP Resource Library would be updated to 
detail the required survey vendor cost information.
(2) Advanced APM Proposals
(a) Overview of the APM Incentive
    Eligible clinicians who meet threshold levels of participation in 
Advanced APMs to become QPs (or partial QPs) are excluded from MIPS 
reporting requirements and payment adjustments. We assess the level of 
participation in Advanced APMs based on payment amounts or patient 
counts as provided in our regulation at Sec.  414.1425 using the 
threshold percentages specified in Sec.  414.1430. The threshold 
percentages are calculated using the ratio of attributed beneficiaries 
to attribution-eligible beneficiaries. A beneficiary is considered 
attribution-eligible if they meet the six criteria specified in the 
definition of ``attribution-eligible beneficiary'' under Sec.  414.1305 
of our regulations. We are proposing to modify the sixth criterion 
under the definition of ``attribution-eligible beneficiary.'' 
Specifically, we are proposing to include as attribution-eligible any 
beneficiary who has received a covered professional service furnished 
by the eligible clinician (identified by their National Provider 
Identifier (NPI)) for the purpose of making QP determinations. We are 
also proposing to amend Sec.  414.1430 to reflect the statutory QP and 
Partial QP threshold percentages for both the payment amount and 
patient count methods under the Medicare Option and the All-Payer 
Option with respect to payment year 2026 (performance year 2024) in 
accordance with amendments made by the CAA, 2024. Relatedly, we are 
proposing to amend Sec.  414.1450 to reflect the statutory APM 
Incentive Payment amount for the 2026 payment year (performance year 
2024) of 1.88 percent of the eligible clinician's estimated aggregate 
payments for covered professional services in accordance with 
amendments made by the CAA, 2024.
2. Definitions
    At Sec.  414.1305, we are proposing to revise the definition of the 
following term:

 Attribution-eligible beneficiary

    These terms and definitions are discussed in detail in the relevant 
sections of this proposed rule.
3. Transforming the Quality Payment Program
a. Vision and Strategy Overview
    Medicare plays a lead role in transitioning the health care system 
away from fee-for-service payment, which incentivizes the quantity of 
care, toward value-based payment, which incentivizes higher-quality 
care and smarter spending. We continue to focus on transforming health 
care delivery and our 2030 goal to have all traditional Medicare 
beneficiaries in an accountable care relationship with their health 
care provider. Under accountable care, a person-centered care team is 
responsible for improving quality of care, care coordination, and 
health outcomes for a defined group of individuals, reducing care 
fragmentation, and avoiding unnecessary costs for individuals and the 
health system. We continue to pursue driving higher value care, 
supporting Advanced APM participation, increasing alignment to reduce 
burden, and promoting health equity. As stated previously (85 FR 50279 
and 50284, 86 FR 65394 through 65396), we envision a full transition to 
MVP reporting and sunset of traditional MIPS to support movement 
towards value-based payment. Through this Request for Information (RFI) 
we seek feedback on policies to support full implementation of MVPs.
    We have a cohesive value-based care strategy for Medicare based on 
three pillars: Alignment, Growth, and Equity.\704\ These pillars are 
inter-related and address the following:
---------------------------------------------------------------------------

    \704\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity, Health Affairs Forefront, March 14, 2024. 
https://www.healthaffairs.org/content/forefront/update-medicare-value-based-care-strategy-alignment-growth-equity.
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     Aligning key aspects of value-based arrangements across 
Medicare can help set the stage for broader synchronization of our 
health system and move health care providers to higher levels of 
delivery system transformation.
     Growth of accountable care relationships in both 
traditional Medicare and Medicare Advantage can improve quality and 
increase savings for Medicare beneficiaries by promoting innovative 
care delivery that better provides whole-person care.
     The design of value-based arrangements in Medicare can be 
an important tool for advancing health equity by encouraging the 
movement of care upstream to address the health-related social needs 
and disparities that can lead to/exacerbate poor health outcomes.
    We intend to continue our efforts to align the Quality Payment 
Program with the three pillars and broader CMS initiatives. One of our 
CMS National Quality Strategy goals is to improve quality and health 
outcomes across the health care journey through the implementation of a 
``Universal Foundation'' of impactful measures across all our quality 
and value-based programs.705 706 707 Adoption of the 
Universal Foundation will focus clinician attention on specific quality 
measures, reduce burden, help identify disparities in care, prioritize 
development of interoperable digital quality measures, allow for cross-
comparisons across programs, and help identify measurement gaps. We 
have identified adult and pediatric measures for the Universal 
Foundation to be used across CMS programs and populations to the extent 
they are applicable. For example, we finalized in the CY 2024 PFS final 
rule our proposal to consolidate the previously finalized Promoting 
Wellness and Optimizing Chronic Disease Management MVPs into a single 
consolidated Value in Primary Care MVP which aligns with the adult 
Universal Foundation core set of quality measures (88 FR 80042 through 
80047). In section IV.A.4.c.(2) of this proposed rule we are proposing 
the creation of a new Alternative Payment Model (APM) Performance 
Pathway (APP) Plus quality measure set that incrementally adopts all 
ten of the Adult Universal Foundation measures starting in the CY 2025 
performance period/2027 MIPS payment year. In section 
IV.A.4.e.(1)(b)(i) of this proposed rule, we are proposing MIPS 
eligible clinicians, groups, and APM Entities have the option to report 
such measures starting the 2025 performance period/2027 MIPS payment 
year. We are launching the Making Care Primary (MCP) Model in July 2024 
to increase the number of primary care providers in value-based care 
and beneficiaries in accountable care relationships in eight 
States.708 709 The MCP model supports

[[Page 62011]]

care integration including expected strengthening of primary care 
clinicians' connections with specialists while using evidence-based 
behavioral health screening and evaluation to improve patient care 
coordination. This will include implementation of new model-specific 
billing codes that we expect to result in greater use of e-consults and 
expanded ongoing communication among clinicians with a shared patient. 
The quality performance measures included in the MCP model reflect our 
Universal Foundation work to streamline measures across programs and 
test new and innovative measures. We are proposing in section II.G.2. 
of this proposed rule to adopt specific coding and payment policies for 
advanced primary care management (APCM) services for use by 
practitioners who are providing services under this specific model of 
``advanced primary care'', beginning January 1, 2025. These services 
would be furnished under the direction of a physician or other 
qualified health care professional who is responsible for all primary 
care (e.g., physicians and non-physician practitioner, including nurse 
practitioner, physician assistant, certified nurse midwife and clinical 
nurse specialist), and serve as the continuing focal point for all 
needed health care services, during a calendar month. We are proposing 
three new APCM codes that would recognize the resources involved in 
furnishing ongoing, beneficiary-centered care management services under 
the broad model of advanced primary care without paying for each 
activity separately while allowing for flexibility in addressing 
patient needs. APCM payment would incorporate several specific, 
existing care management and communication technology-based services 
into a bundle and include performance measurements requirements that 
could be met by reporting the Value in Primary Care MVP beginning in 
the CY 2025 performance period/2027 MIPS payment year. Billing 
practitioners who are not MIPS eligible clinicians (as defined at 42 
CFR 414.1305) would not have to report the MVP in order to furnish and 
bill for APCM services. The Value in Primary Care MVP contains the 
Adult Universal Foundation quality measure set, which is consistent 
with the National Quality Strategy goal of using the Universal 
Foundation measures across as many programs as is feasible.\710\ The 
Shared Savings Program, Innovation Center, and MIPS continue to 
collaborate strategically to develop and elaborate on the long-term 
vision and implementation policies for the Quality Payment Program.
---------------------------------------------------------------------------

    \705\ CMS National Quality Strategy. (Centers for Medicare & 
Medicaid Services, April 2022). https://www.cms.gov/files/document/cms-national-quality-strategy-fact-sheet-april-2022.pdf.
    \706\ The CMS National Quality Strategy: A Person-Centered 
Approach to Improving Quality. Centers for Medicare & Medicaid 
Services, June 2022). The CMS National Quality Strategy: A Person-
Centered Approach to Improving Quality [verbar] CMS (https://www.cms.gov/blog/cms-national-quality-strategy-person-centered-approach-improving-quality#_ftn4).
    \707\ Quality in Motion, Acting on the CMS National Quality 
Strategy, April 2024. https://www.cms.gov/files/document/quality-motion-cms-national-quality-strategy.pdf.
    \708\ https://www.cms.gov/priorities/innovation/innovation-models/making-care-primary.
    \709\ The CMS Innovation Center's Strategy to Support High-
quality Primary Care [verbar] CMS, https://www.cms.gov/blog/cms-innovation-centers-strategy-support-high-quality-primary-care.
    \710\ https://www.cms.gov/medicare/quality/cms-national-quality-strategy/aligning-quality-measures-across-cms-universal-foundation.
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    This RFI addresses how we can achieve full MVP adoption and 
subgroup participation as we move toward the sunsetting of traditional 
MIPS and advancing the three pillars and the National Quality Strategy. 
We intend to obtain more meaningful comparable performance data and to 
drive higher value care through MVPs and to provide as much 
transparency as possible as we believe about the timing for sunsetting 
traditional MIPS (86 FR 39356). Specifically, we are seeking feedback 
on clinician readiness to report MVPs, how we should ensure there are 
applicable MVPs for all clinicians, including the option of creation of 
broadly applicable MVP(s), and what guidance/parameters are needed for 
multispecialty groups to place clinicians into subgroups for reporting 
an MVP relevant to the scope of care provided.
b. The Role of MVPs in Transforming MIPS
(1) Overview
    We are moving towards full implementation of MVPs, which are a key 
component of transforming MIPS. MVPs connect the MIPS performance 
categories to measure quality and patient experience of care linked to 
related costs of care, encourage improvement of care, simplify MIPS, 
and assure accessible health care performance data and 
interoperability. We are implementing MVPs in MIPS to encourage 
clinicians to report on measures that are directly relevant to their 
clinical practice and connect the performance categories to better 
measure the value of care and support care improvements (86 FR 39351). 
MVPs may make it easier for MIPS eligible clinicians to select the 
measures and activities that are most relevant to their practice. 
Rather than selecting individual measures and activities from large 
inventories to report under potentially siloed MIPS performance 
categories under traditional MIPS, eligible clinicians who submit an 
MVP will have a simplified process of selecting from a smaller, 
cohesive set of measures and activities focused on the clinician's 
performance in rendering care for a specialty or clinical condition. 
MVPs provide a pathway to improve value, reduce burden, help patients 
compare clinician performance to inform patient choice, and reduce 
barriers to movement into Advanced APMs (86 FR 65391).
    In the CY 2024 PFS final rule, we discussed the potential of 
developing policies to raise the bar on quality and support continuous 
improvement for clinicians who consistently perform well in MIPS (88 FR 
79322). At this time, we are not proposing any changes related to the 
continuous improvement based on feedback received. We are mindful of 
changes clinicians are making to move towards MVP reporting.
    MVPs support the measurement and improvement of specialty and 
primary care practice, through a portfolio of MVPs that address care 
and clinician conditions of importance to our patients. MVPs align the 
quality performance category, cost performance category, and 
improvement activities performance category and a foundational layer of 
the Promoting Interoperability performance category and population 
health measures. MVPs encourage the measurement of performance on a 
cohesive set of measures and activities focused on the clinician's 
performance, and over time, improvement in performance in rendering 
care for clinical conditions or patient populations. Widescale adoption 
of MVPs, using a standardized connected set of measures and activities 
for a specialty or medical condition, may generate important and 
meaningful information for patients to be able to compare performance 
of clinicians on the same or similar sets of measures. As we have 
greater MVP adoption and subgroup reporting we expect to obtain an 
expanded set of clinical specialty performance data that will be 
meaningful to patients as they choose clinicians.
(2) Furthering MVP Adoption
    We continue to incrementally develop and maintain MVPs that are 
relevant and meaningful for all clinicians who participate in MIPS to 
support a full transition to MVPs. We finalized five new MVPs in the CY 
2024 PFS final rule (88 FR 79322 through 79323) and finalized 
modifications to previously finalized MVPs (88 FR 79323). We refer 
readers to section IV.A.4.a.(1) of this proposed rule for the 
discussion of six additional proposed MVPs addressing a range of 
clinical conditions and specialty care. As we increase the inventory of 
MVPs, a greater percentage of MIPS eligible clinicians may report MVPs. 
Based on our internal data the proposed addition of six MVPs, if 
finalized, would allow approximately

[[Page 62012]]

80 percent of specialties participating in the program to submit 
applicable MVPs.
    In the CY 2022 PFS final rule, we finalized that voluntary 
reporting of MVPs would start in the CY 2023 performance period/2025 
MIPS payment year and to implement MVPs through a gradual process that 
allows MVP Participants and third-party intermediaries time to adapt to 
changes in policy, requirements, and programming updates that would 
need to occur in technology systems (86 FR 65394 through 65396). We 
support a gradual movement to MVPs. Existing flexibility allows 
organizations and clinicians to determine whether they are ready to 
make the transition to MVP reporting, and time to familiarize 
themselves with MVP policies and prepare to report MVPs that are 
relevant to their practice (86 FR 65396). Promisingly, based on 
internal data, over 750 groups and clinicians registered to report MVPs 
for the CY 2023 performance period/2025 MIPS payment year. We are 
interested in learning from early MVP Participants to understand 
lessons learned and any barriers that they encountered or overcame to 
enable MVP submission. We are taking steps to encourage MVP adoption 
and expect additional MIPS eligible clinicians to voluntarily begin 
reporting MVPs before the eventual sunset of traditional MIPS. To 
engage clinicians in MVP adoption we provide MVP webinars and outreach, 
and our qpp.cms.gov web page provides information for clinicians 
related to reporting MVPs, our MVP inventory and MVP development.\711\ 
We have increased our inventory of MVPs annually and we engage 
interested parties in MVP development, including a 45-day comment 
period for public input on MVP candidates each year.\712\
---------------------------------------------------------------------------

    \711\ MIPS Value Pathways (MVPs) (cms.gov), https://qpp.cms.gov/mips/mips-value-pathways.
    \712\ MVP Candidate Development & Submission. https://qpp.cms.gov/mips/mips-value-pathways/submit-candidate.
---------------------------------------------------------------------------

    We are collaborating with the CMS Innovation Center as new payment 
models are explored and developed that may incorporate specialist or 
clinical condition-based MVP reporting. See section III.J. of this 
proposed rule for a Request For Information which seeks input regarding 
the design of a future ambulatory specialty model, which may leverage 
MVPs as a foundation for increasing specialty care provider engagement 
in value-based payment.
(3) Sunset of Traditional MIPS
    We have discussed in previous PFS rules our intention to fully 
transition to MVPs and sunset traditional MIPS (85 FR 50279 and 50284, 
86 FR 65394 through 65396). Continuing to maintain the traditional MIPS 
submission option may impair MVP adoption by clinicians who have an 
available MVP. Slow adoption may delay the benefits of MVPs which will 
simplify MIPS and improve comparable clinician performance data that 
helps to drive value and inform clinician selection by patients. We 
solicited public comments in the CY 2022 PFS proposed rule on the 
length of time MVP reporting should be voluntary and the timing for 
when we should sunset traditional MIPS (86 FR 39356). Responding 
interested parties supported MVP goals and a transparent, gradual 
transition to MVPs with voluntary MVP reporting, with adequate time to 
prepare for reporting an MVP. Clinicians may take advantage of 
voluntary MVP reporting now to gain experience. We have not proposed a 
target year to sunset traditional MIPS; however, it is critical to 
develop a plan to sunset traditional MIPS for the awareness of all 
interested parties (such as MVP Participants, third-party 
intermediaries, and health systems) so they may plan their work 
accordingly to coincide with this timeline.
    We are developing the timeline for the full transition to MVPs and 
are seeking feedback on clinician readiness for MVP reporting and MIPS 
policies needed to sunset traditional MIPS in the CY 2029 performance 
period/2031 MIPS payment year. This timeline would ensure MVPs may be 
voluntarily reported during a period of 6 to 7 years while traditional 
MIPS is available, allowing clinicians time to prepare for MVP 
reporting and to engage in the development of the MVP inventory. As we 
plan for the full transition to MVPs, we appreciate that we must ensure 
that any MIPS policies that require rulemaking to sunset traditional 
MIPS are proposed and finalized, and that adequate prior notice is 
provided to clinicians who may need to update their systems and work 
processes to report MVPs. We continue to assess remaining MVP gaps that 
must be filled and to confirm participation options for MIPS eligible 
clinicians. We anticipate that we may be ready to fully transition to 
MVPs by the CY 2029 performance period/2031 MIPS payment year.
    Robust MVP availability and clinician coverage would be a precursor 
to sunsetting traditional MIPS. Ideally, there would be MVPs applicable 
to a diverse set of specialties, patient populations, and clinical 
conditions; and we are working towards this. We acknowledge that, even 
with a robust inventory of MVPs, there may be some clinicians who 
cannot submit an applicable MVP, as currently structured, due to lack 
of measures to build a respective MVP or lack of measure case counts or 
specialization that does not allow reporting of MVP quality measures 
and calculation of a cost measure.
    While we are expanding our MVP portfolio, we are hampered by the 
limited number of available quality and cost measures for certain 
patient populations, clinical conditions, and specialties. We refer 
readers to section IV.A.4.a.(1) of this proposed rule which discusses 
MVP development and measure gap areas. We recognize that resources for 
measure development are limited, and measure development must be 
prioritized to move forward with quality and cost measurement for the 
greatest impact. We are collaborating with measure developers and 
providing transparency on measure gaps and the limitations around 
quality and cost measure development.
(4) Potential Path Forward
    We are aiming to have sufficient MVPs to meet the goals of the MVP 
Framework, allow reporting by all clinicians in MIPS, sunset 
traditional MIPS, and transition fully to MVPs. Additionally, in the CY 
2026 performance period/2028 MIPS payment year, when subgroup reporting 
becomes mandatory for multispecialty groups that participate in MIPS as 
MVP Participants (Sec.  414.1305; 86 FR 65394 through 65397), we want 
to ensure there are opportunities for specialists within the 
multispecialty group to submit MVPs. This will allow us to better 
assess the scope of care provided by the group and provide a wider 
scope of clinician performance data to patients. While we endeavor to 
create a robust set of MVPs allowing for participation by all MIPS 
eligible clinicians as we sunset traditional MIPS in the future, we 
acknowledge there are constraints, including measure availability, 
hindering attainment of this goal. We refer readers to section 
IV.A.4.a.(1). of this proposed rule for a discussion of measure gaps 
and MVP development. We continue to explore different ways to increase 
MVP coverage for as many MIPS eligible clinicians as possible. The 
current MIPS quality and cost measure inventories contain gaps which 
affect both traditional MIPS and MVPs, with MVPs requiring fewer 
measures to meet requirements. Therefore, we are examining approaches 
to developing MVPs to ensure that all MIPS eligible clinicians have 
MVPs to report.
    Currently, MVPs include performance measures and activities that 
are broadly applicable across specialties in addition

[[Page 62013]]

to quality measures that are specialty/subspecialty specific. When 
subspecialty specific or more focused measures are implemented, they 
are considered for addition to the corresponding MVP. As stated 
earlier, we have made progress with developing MVPs for the majority of 
specialties and priority clinical conditions. However, we are exploring 
options of how MVPs can be further developed to facilitate greater 
reporting rates for clinicians with fewer measures available for their 
specialty. We refer readers to the 2025 MVP Needs and Priorities 
document,\713\ which identifies measurement gaps and specialties with 
limited quality measures, and often limited outcomes and high priority 
measures, and cost measures.
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    \713\ 2024 MVP Needs and Priorities. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip.
---------------------------------------------------------------------------

    We are considering approaches that would assist in making MVPs 
available to all MIPS eligible clinicians, however, all approaches to 
be more inclusive of clinicians are hindered by the existing gaps in 
quality and cost measures. We seek comment on approaches that include 
expanding finalized MVPs to include more specialties or subspecialties 
related to a care condition; developing new, broader MVPs with a 
different emphasis from current MVPs focused on a single specialty or 
clinical condition; and developing MVPs for non-patient facing MIPS 
eligible clinicians.
     Expand previously finalized MVPs to include different 
specialties included in care delivery for patient population. The 
applicability of an MVP could be expanded through embedding measures 
and activities specific to additional specialties in a relevant MVP, 
which may allow a broader array of clinicians to report the MVP. For 
example, in future program years, we may be interested in expanding the 
Advancing Cancer Care MVP to include measures related to non-patient 
facing MIPS eligible clinicians that would support care to cancer 
patients, such as pathologists. A benefit of this approach would be the 
expansion of the clinician specialties who could report a given MVP, 
without increasing the number of stand-alone MVPs. However, the 
addition of too many measures and activities could undermine the goal 
of having a smaller, cohesive set of measures and activities in MVPs.
     Expand previously finalized MVPs to include 
subspecialties. The applicability of an MVP could be increased by 
broadening the measures and activities to include additional 
subspecialties. For example, we do not anticipate the development of 
MVPs for each surgical subspecialty or type of surgical procedure, but 
rather maintain broader surgical MVPs inclusive of surgeries that are 
clinically related yet support multiple subspecialties and/or 
procedures within the surgery specialty. As an example, lumbar surgical 
measures may be included within MVPs for orthopedic surgeons and 
neurosurgeons but would not comprise a standalone MVP solely focused on 
lumbar surgery. Conversely, an Improving Spine Care MVP could be 
developed that encompasses multiple procedures and aspects of care that 
could support use by multiple specialties, such as orthopedic surgeons 
and neurosurgeons. Similar to an approach that expands MVPs to include 
additional specialties, this option adheres to our goal of having a 
meaningful set of MVPs.
     Develop MVPs based on Multiple Specialty Measure Sets. For 
specialties that currently do not have MVP coverage, we could develop 
an MVP applicable to multiple conditions or specialties that currently 
do not have MVP coverage. This approach would serve as a bridge until 
new applicable measures are developed that allow for creation of 
individual MVPs for clinicians without an MVP specific to their 
specialty, patient populations served, or the primary conditions 
treated. For example, we do not currently have an MVP for many non-
patient facing clinicians, but we could develop an MVP geared towards 
these multiple specialty types as a temporary bridge until more 
meaningful options can be finalized. The benefit could be allowing 
clinicians early experience in MVPs until we have additional 
specifically specific measures to create more robust and meaningful 
MVPs. However, this approach may replicate traditional MIPS and fall 
short of our MVP vision and goals of a cohesive set of measures and 
activities; as clinicians' performance would still be based upon the 
various measures and activities chosen. Clinicians might repeatedly 
choose unlinked measures with high performance levels rather than 
addressing performance areas in need of improvement and may also lesson 
the comparability of performance measures reported by clinicians 
providing similar services.
     Develop MVPs based on Cross-Cutting and Broadly Applicable 
Measures. We may consider building an MVP which applies to multiple 
specialty types by leveraging frequently reported cross-cutting or 
broadly applicable measures that can be reported by MIPS eligible 
clinicians who currently do not have MVPs specific to their scope of 
care. Cross-cutting quality measures address important health issues 
with clinical quality actions that can be completed by a multitude of 
clinician types, such as screening and cessation intervention for 
tobacco use, screening for high blood pressure and follow-up and 
screening for social drivers of health. Broadly applicable quality 
measures can be submitted by multiple specialties, including Screening 
for Depression and Follow-up Plan; Preventive Care and Screening: 
Unhealthy Alcohol Use: Screening & Brief Counseling, and Use of High-
Risk Medications in Older Adults. Population-based cost measures, such 
as the Total Per Capital Cost (TPCC) and Medicare Spending per 
Beneficiary (MSPB) measures, could be used in such an MVP. A benefit of 
developing new MVPs would be to create a bridge allowing for early 
experience in MVPs for clinicians that currently have no other MVP 
reporting options. MVP development would need to include examination of 
approaches to add additional quality and cost measures to MIPS. We 
acknowledge this is a temporary step towards either a more robust and 
meaningful standalone MVP or expansion of an existing MVP once 
specialty specific measures are developed and finalized for use in 
MIPS. We also have concerns that the MVP would be duplicative in nature 
to the Value in Primary Care MVP that represents concepts related to 
promoting wellness and appropriate chronic disease management, which is 
of critical importance in driving positive health outcomes. However, 
the broader, cross-cutting MVP does not appear to solve the concerns of 
all specialties identified in our 2024 MVPs Needs and Priorities \714\ 
interested in submitting measures and activities related to their 
specialties. Additionally, if we developed an MVP that relied on 
entirely cross-cutting and broadly applicable measures, we may need 
policies to discourage clinicians from choosing this broad MVP when 
there is a more specifically applicable MVP available. We may explore 
using claims-based data to ascertain services provided and whether a 
clinical condition or specialty specific MVP better matches the type of 
care delivered or if a bridge MVP submission fits,

[[Page 62014]]

potentially within an auditing activity or tying payment to MVP 
selection.
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    \714\ 2024 MVP Needs and Priorities. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip.
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     Develop MVPs for Non-Patient Facing MIPS Eligible 
Clinicians. We are considering exploring statutory flexibilities that 
could help address future challenges related to a lack of an applicable 
MVP for some clinicians. Any flexibilities we explore must support our 
overall MIPS goals. Reweighting a performance category, for example, 
would mean that the quality performance category or cost performance 
category could be reweighted in an MVP, and this would not support 
performance measurement to drive value or provide comparable 
information for patient use in selecting clinicians or care teams.
    We believe one such flexibility exists at section 1848(q)(2)(C)(iv) 
of the Act, which provides that we must consider the circumstances of 
professional types that typically furnish services that do not involve 
face-to-face interaction with a patient. We refer to these clinicians 
as non-patient facing MIPS eligible clinicians as defined at Sec.  
414.1305. Section 1848(q)(2)(C)(iv) of the Act further provides that, 
to the extent feasible and appropriate, we take into account such 
circumstances and apply to such non-patient facing MIPS eligible 
clinicians ``alternative measures or activities that fulfill the goals 
of the applicable performance category.'' In doing so, section 
1848(q)(2)(C)(iv)(II) of the Act requires that we consult with non-
patient facing MIPS eligible clinicians of such professional types or 
subcategories. We note that measure gaps for some non-patient facing 
MIPS eligible clinicians, for example diagnostic radiologists and 
pathologists, present challenges in developing a respective MVP. We 
refer readers to section IV.A.4.a.(1) of this proposed rule for 
discussion of MVP portfolio development and specialties with measure 
gaps. We are interested in exploring alternative measures and 
activities that would allow us to measure the performance of non-
patient facing MIPS eligible clinicians.
    As we explore various approaches to enable all MIPS eligible 
clinicians to report MVPs, we seek comment on options, such as 
expanding previously finalized MVPs, developing more global MVPs with 
broadly applicable measures as an interim bridge for those clinicians 
with too few specialty-specific quality measures and the potential use 
of statutory flexibilities, as we move to full MVP adoption and 
sunsetting traditional MIPS.
(5) Consideration of MVP Policies and Requirements
    A component of sunsetting traditional MIPS is examining 
requirements and policy that may require revision to ensure a smooth 
transition into MVP reporting. For example, we intend to assess our 
current policy which does not allow virtual groups and opt-in \715\ 
reporters to submit an MVP (Sec.  414.1305). We want to understand 
additional barriers preventing clinicians from reporting MVPs, and when 
possible, examine MVP policies that might need to be revised to remove 
the barriers. We may undertake these policy proposals in future 
rulemaking. We are interested in feedback on potential changes required 
as part of an effort to accommodate clinicians with few applicable and 
available quality and cost measures, who currently do not have an MVP 
available.
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    \715\ Entities that exceed one or two, but not all three 
elements of the low-volume threshold defined at 42 CFR 414.1305 can 
opt-in to participate in MIPS (Sec.  414.1310(b)(1)(iii) and 
(b)(2)).
---------------------------------------------------------------------------

    We have established a policy which states that, starting in the CY 
2026 performance period/2028 MIPS payment year, multispecialty groups 
must form subgroups to report MVPs (86 FR 65394 through 65397). This 
policy will enable a subset of clinicians in a group to submit measures 
and activities in an MVP relevant to the scope of care provided by the 
subgroup and will lead to a more comprehensive evaluation of services 
provided by groups. As described in section IV.A.3.d. of this proposed 
rule, we are interested in feedback on how to balance the MVP 
requirement for multispecialty groups to form multiple subgroups with 
the ability of the program to evaluate specialty care and for patients 
to have meaningful information to use when making care decisions.
c. Mandatory Subgroup Reporting Requirement
(1) Overview
    We have established a voluntary subgroup participation option for 
clinicians choosing to report an MVP beginning in the CY 2023 
performance period/2025 MIPS payment year. We have also finalized a 
mandatory subgroup reporting requirement for multispecialty groups 
choosing to report as an MVP Participant beginning in the CY 2026 
performance period/2028 MIPS payment year (Sec.  414.1305; 86 FR 65394 
through 65397). Beginning with the CY 2026 performance period/2028 MIPS 
payment year, a single specialty group may continue to submit data for 
an MVP at the group level, and a multispecialty group must form 
subgroups to report an MVP. Under the existing subgroup reporting 
policies, a group could place clinicians providing similar scope of 
care into one or more subgroups for reporting a relevant MVP. The 
remaining clinicians under the group TIN not part of a subgroup could 
participate as individuals for reporting an MVP or traditional MIPS. 
The entire group TIN (including the clinicians that are part of the 
subgroup) could also submit data as a group in traditional MIPS.
    Subgroup participation for MVP reporting will allow group practices 
to comprehensively capture the diverse range of services provided by 
the clinicians under a group TIN. We anticipate subgroup reporting will 
also provide clinician information to patients related to a specific 
condition or care needs. Subgroup reporting will provide specialist 
information to primary care clinicians allowing relevant patient 
referrals. We finalized the implementation of the subgroup reporting 
option to address public comments received that the existing group 
reporting requirements in MIPS allow a group to report on broadly 
applicable quality measures that are not representative of the scope of 
care provided and do not allow reporting of quality measures by only a 
portion of the clinicians under the group TIN.
(2) Specialty Composition of a Group
    We have previously established definitions for a single specialty 
group and a multispecialty group at Sec.  414.1305 (87 FR 70038 through 
70040). Specifically, we stated that a single specialty group means a 
group as defined at Sec.  414.1305 that consists of one specialty type 
as determined by CMS using Medicare Part B claims. A multispecialty 
group means a group as defined at Sec.  414.1305 that consists of two 
or more specialty types as determined by CMS using Medicare Part B 
claims. MIPS eligible clinicians can check their eligibility status 
(individual, group, virtual group, APM Entity, opt-in) on the QPP 
Participation Status Tool (https://qpp.cms.gov/participation-lookup) to 
determine their MIPS participation options and whether they are subject 
to MIPS payment adjustment for the applicable performance period. 
Currently, the QPP Participation Status Tool does not provide 
information on group specialty designations informing a group whether 
CMS considers its TIN is composed of a single or multiple specialties. 
In the CY 2023 PFS final rule (87 FR 70039), we discussed that CMS 
utilizes different data sources to identify a clinician's specialty. 
For

[[Page 62015]]

purposes of public reporting, we rely on PECOS as the primary data 
source, and for purposes of MIPS eligibility determination, we use both 
PECOS and claims data. Additionally, we use the information on Medicare 
Part B claims to identify clinician specialty when attributing some of 
the measures in the cost and quality performance categories. Based on 
CMS analysis of clinician specialty identification using Medicare Part 
B claims data and PECOS data, we found a variance rate of less than one 
percent between the two data sources and finalized the use of Medicare 
Part B claims data as the best data source to use to determine a 
group's specialty type or types for purposes of participation in MVPs. 
We refer readers to the CY 2023 PFS final rule (87 FR 70038 through 
70040) for additional details on using the Medicare Part B Claims data 
to determine a group's specialty composition.
    We also recognize there are additional nuances to consider for 
using the Medicare Part B claims data to appropriately implement the 
current definitions of a single specialty and multispecialty group. We 
acknowledge a multidisciplinary group practice could consist of 
clinicians across multiple specialties to provide team-based care in 
just one clinical area. For example, a group consisting of internists, 
geriatricians, family medicine practitioners, physician assistants, and 
nurse practitioners could be focused on providing primary care services 
to patients, which could be reflected as multiple specialties in 
Medicare Part B claims. Beginning in the CY 2026 performance period/
2028 MIPS payment year, such a group TIN will be considered a 
multispecialty group using the definition described under Sec.  
414.1305. The internists, geriatricians, and family medicine 
practitioners could inappropriately be identified as unique specialties 
resulting in the TIN having clinicians with more than one primary 
specialty designation. Based on our previously established definition 
of a multispecialty group, this TIN will be required to form subgroups 
to participate in MVPs even though all the clinicians under the group 
TIN provide primary care services. This may result in multiple 
subgroups under the same group TIN submitting data for the same MVP, 
which would yield redundant quality measure reporting. Based on the 
scope of care provided, all the clinicians under the TIN could choose 
to report the measures and activities in the Value in Primary Care MVP. 
Additional scenarios that we would like to consider include instances 
when a primary specialty designation of certain clinician types does 
not accurately reflect the scope of care provided. The physician 
assistants and nurse practitioners that are part of a cardiology group 
would potentially be involved in care relevant to stroke, heart 
failure, and other cardiac related conditions. The physician assistants 
and nurse practitioners that are part of a large group practice could 
be involved in a wide array of services. In both these instances, the 
primary specialty designation of a physician assistant or nurse 
practitioner would only be representative of their education 
credentials, and not the scope of care provided.
    One approach we could consider is providing flexibility for a group 
practice to determine and inform CMS of their specialty composition. We 
anticipate that allowing a group TIN to indicate if they are a single 
specialty or multispecialty group could mitigate a few of the above 
concerns. We use the above example of a group consisting of internists, 
geriatricians, family medicine practitioners, physician assistants, and 
nurse practitioners focused on providing primary care services to 
patients. By allowing a group TIN to identify the group's specialty 
composition, the group TIN could identify as a single specialty group 
and report the measures and activities in the Promoting Wellness MVP as 
a group. Providing the ability for groups to determine their specialty 
composition would provide the opportunity for groups to determine the 
MVP participation option that is consistent with the scope of care. We 
anticipate it would eliminate the need for duplicative reporting, 
support the team-based care approach, and allow groups to 
comprehensively categorize the care provided by the clinicians in a 
group.
(3) Establishing Limits on the Composition of a Subgroup
    We envision a future state in the Quality Payment Program where 
specific and highly meaningful clinician information is available for 
patients to determine their care choices while allowing clinicians to 
receive targeted feedback relevant to the scope of care provided. We 
anticipate a future state where a multispecialty group would only 
participate as subgroups for reporting MVPs. We have stated that one of 
the long-term goals of MVP and subgroup reporting is to encourage team-
based care and therefore, have not established any restrictions on 
subgroup formation. Specifically, we do not expect a subgroup to 
include only clinicians from a single specialty as it might be 
construed as discouraging team-based care. We are also concerned that 
the absence of limitations on subgroup formation would result in a 
subgroup mimicking a multispecialty group in traditional MIPS. A 
subgroup of 100 clinicians under a group TIN could report on an MVP 
where the quality measures and activities in the MVP are applicable 
only to a subset of clinicians in the subgroup.
    We are considering placing some limits on the composition of a 
subgroup to make subgroups meaningful and meet the end goals of MVP 
reporting. We also believe that a multispecialty group TIN could use 
the subgroup formation criteria as a guidance for placing clinicians 
into subgroups relevant to the scope of care provided. We recognize 
that any potential subgroup composition criteria should not interfere 
with the team-based approach for care provided by clinicians in 
multispecialty groups. We are considering whether we could establish 
limits on the number of clinicians per subgroup based on the size of 
the overall group TIN. For a multispecialty group TIN with less than 
100 clinicians, should we consider limiting the maximum size of a 
subgroup to 50 clinicians? Similarly for a multispecialty group TIN 
with 100+ clinicians, should we consider placing limits on the minimum 
size of a subgroup? We are interested in approaches that would 
encourage multispecialty groups to report more than one MVP.
    We are also considering whether we could utilize the information on 
Medicare claims data to potentially create subgroup composition 
restrictions. For example, we could identify the care provided by the 
clinicians in a group based on the specific procedures or services 
performed by the clinician. We are considering analyzing subgroups 
based on the volume of services billed by the clinicians in a group 
practice for a specific medical condition (for example, heart failure, 
joint replacement, etc.) or a specific procedure (beta blocker therapy, 
stent placement, hip and/knee surgery, etc.). We anticipate this 
approach would serve as a guidance for clinicians such as family 
practitioners, physician assistants, internists, etc. who provide a 
diverse range of services across specialty types.
(4) Mandatory Subgroup Reporting for Small Practice TINs
    At Sec.  414.1305, we define a small practice to mean a TIN 
consisting of 15 or fewer eligible clinicians during the MIPS 
determination period. For a group of 15 or fewer clinicians, 
participation at the group or subgroup level for MVP

[[Page 62016]]

reporting would provide similar performance information to clinicians 
and patients. Therefore, we do not anticipate additional benefits for 
mandating clinicians in a small practice TIN to split into multiple 
subgroups for reporting an MVP. One approach we could consider is 
making an exception for multispecialty small practice TINs from the 
mandatory subgroup reporting requirement for multispecialty practices 
beginning in the CY 2026 performance period/2028 MIPS payment year. 
This would alleviate the additional burden for small practice TINs to 
form subgroups and continue to participate as a group for reporting an 
MVP. A multispecialty small practice could voluntarily participate as 
subgroups for comprehensively capturing the diverse range of services 
provided by the group.
d. RFI Questions
    We request public comment on specifically the following questions:
     For those clinicians who submitted an MVP for the CY 2023 
performance period/2025 MIPS payment year, what practice level barriers 
did you overcome to successfully submit an MVP? How did you overcome 
any stated barriers? For those who did not submit an MVP, what key 
barriers impacted your decision to continue to report traditional MIPS?
    ++ For those clinicians who participated as a subgroup for 
reporting an MVP for the CY 2023 performance period/2025 MIPS payment 
year, we are interested to hear the technological barriers, if any, 
that impacted the ability to successfully submit subgroup level data. 
We are also interested to hear feedback from groups on any technical 
issues with de-aggregating data (specifically, the eCQM quality measure 
data) at the subgroup level.
     What does meaningful MIPS participation look like for 
clinicians who in the future with the sunset of traditional MIPS may 
not have an applicable MVP, e.g., clinician types without an MVP due to 
having less than four applicable quality performance measures and less 
than one cost measure identified in the 2025 MVP Needs and Priorities. 
Should CMS consider developing a more global MVP with broadly 
applicable measures as an interim bridge for those clinicians with too 
few specialty-specific quality measures, knowing that the measures may 
not be as highly relevant to the clinicians' scope of care as we would 
like? Should flexibilities or alternative policies such as non-patient 
facing clinician policy changes be considered for clinicians with 
limited performance measures that allow them to participate in MIPS?
     As subgroup participation becomes mandatory for 
multispecialty groups reporting an MVP beginning in CY 2026, how can we 
balance the increase in burden for groups while allowing comprehensive 
reporting on the diverse range of services provided by the clinicians 
in a group? For example, should we consider limiting the number of 
subgroups that a group must form based on group size and composition?
    ++ Are there alternative approaches we could consider for setting 
limits on the minimum and maximum number of subgroups per group TIN?
     Could we consider establishing a process during MVP 
registration for groups to self-identify if the group is considered a 
single specialty or multispecialty group? Are there any barriers that 
CMS should be aware of if we established a process for a group practice 
to identify the overall specialty composition of a group TIN?
     Is it meaningful for a small practice to form subgroups? 
What additional performance information would it provide to patients 
and clinicians?
     Are there additional approaches we should consider for 
providing guidance to groups on appropriately placing clinicians into 
subgroups based on the scope of care provided?
    Please note, this is an RFI only.
    In accordance with the implementing regulations of the Paperwork 
Reduction Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), this 
general solicitation is exempt from the PRA. Facts or opinions 
submitted in response to general solicitations of comments from the 
public, published in the Federal Register or other publications, 
regardless of the form or format thereof, provided that no person is 
required to supply specific information pertaining to the commenter, 
other than that necessary for self-identification, as a condition of 
the agency's full consideration, are not generally considered 
information collections and therefore not subject to the PRA.
    Respondents are encouraged to provide complete but concise 
responses. This RFI is issued solely for information and planning 
purposes; it does not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. This RFI does not 
commit the U.S. Government to contract for any supplies or services or 
make a grant award. Further, CMS is not seeking proposals through this 
RFI and will not accept unsolicited proposals. Responders are advised 
that the U.S. Government will not pay for any information or 
administrative costs incurred in response to this RFI; all costs 
associated with responding to this RFI will be solely at the interested 
party's expense. Not responding to this RFI does not preclude 
participation in any future procurement, if conducted. It is the 
responsibility of the potential responders to monitor this RFI 
announcement for additional information pertaining to this request. 
Please note that CMS will not respond to questions about the policy 
issues raised in this RFI. CMS may or may not choose to contact 
individual responders. Such communications would only serve to further 
clarify written responses. Contractor support personnel may be used to 
review RFI responses. Responses to this notice are not offers and 
cannot be accepted by the U.S. Government to form a binding contract or 
issue a grant. Information obtained as a result of this RFI may be used 
by the U.S. Government for program planning on a non-attribution basis. 
Respondents should not include any information that might be considered 
proprietary or confidential. This RFI should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. CMS may publicly post the comments received, 
or a summary thereof.
a. CY 2025 MVP Development and Maintenance
(1) Development of New MIPS Value Pathways (MVPs)
    In the CY 2023 PFS final rule (87 FR 70035 through 70037), we 
finalized modifications to the MVP development process to broaden 
opportunities for the general public to provide feedback on new 
candidate MVPs prior to the notice and comment rulemaking process. We 
refer readers to the Quality Payment Program website to review the 
public feedback we received for each 2025 MVP candidate (https://qpp.cms.gov/mips/candidate-feedback).
    Through our development processes for new MVPs (85 FR 84849 through 
84856, 87 FR 70035 through 70037), we aim to gradually develop new MVPs 
that are relevant and meaningful for all MIPS eligible clinicians. In 
this proposed rule, we are proposing the inclusion of six new MVPs 
titled:
     Complete Ophthalmologic Care;
     Dermatological Care;
     Gastroenterology Care;
     Optimal Care for Patients with Urologic Conditions;
     Pulmonology Care; and
     Surgical Care.

[[Page 62017]]

    We refer readers to Appendix 3 in this proposed rule for a detailed 
description of each proposed new MVP. With the proposed addition of the 
six new MVPs, we estimate approximately 80 percent of specialties will 
have applicable MVPs available for reporting.
    Although our intended goal has been to offer MVPs for all 
specialties and subspecialties during the transition from traditional 
MIPS to full MVP implementation (84 FR 40732 through 40740), we 
acknowledge our existing portfolio of quality and cost measures may not 
be applicable to all specialties and/or subspecialties. For quality 
measures, while most specialties and subspecialties can report on 
broadly applicable quality measures to meet the reporting requirements 
for the quality performance category within an MVP, some specialties/
subspecialties do not have sufficient robust quality measures that are 
specific to their scope of care. Thus, we continue to explore options 
for overcoming challenges to develop MVPs for those specialties/
subspecialties with limited quality measures.
    For cost measures, while most specialties have at least one 
applicable episode-based cost measure and/or population-based cost 
measure, these measures may not encompass the full array of care that 
could be covered by a given specialty and, in some instances, some 
specialties/subspecialties may not have an applicable cost measure. For 
example, the following specialties have limited cost measures available 
and applicable based on the current MIPS cost measure inventory:
     Diagnostic Radiology;
     Interventional Radiology;
     Optometry;
     Pathology;
     Radiation Oncology; and
     Speech Language Pathology.
    Additionally, some specialties have one or more applicable cost 
measures, but subspecialists may not be captured under these measures. 
In the case of the Melanoma Resection measure, it applies to individual 
MIPS eligible clinicians, groups, and subgroups that perform a 
sufficient number of melanoma excision procedures to meet the measure's 
case minimum. Although this measure is applicable to many 
dermatologists, whether a dermatologist is scored on this measure 
depends on multiple factors, including whether they submit claims on, 
and are attributed a sufficient number of qualifying melanoma excision 
procedures (minimum of 10 cases as specified under Sec.  
414.1350(c)(4)) to receive a score on this cost measure as set forth in 
Sec.  414.1380(b)(2). While there are existing policies to reweight the 
cost performance category for individual, groups, and subgroups of MIPS 
eligible clinicians that cannot be scored on cost measures in 
accordance with Sec.  414.1380(b)(2), an MVP cannot be developed for a 
specialty/subspecialty if there is not at least one applicable cost 
measure, as finalized in the CY 2021 PFS final rule (85 FR 84472). The 
intent of MVPs is to assess MIPS eligible clinicians, groups, and 
subgroups across all performance categories, and additional cost 
measures would support this intent.
    We use prioritization criteria from the CY 2022 PFS final rule (86 
FR 65456) to determine which cost measures to develop:
     Clinical coherence of measure concept (to ensure valid 
comparisons across clinicians).
     Impact and importance to MIPS (including cost coverage, 
clinician coverage, and patient coverage).
     Opportunity for performance improvement.
     Alignment with quality measures and improvement activities 
to ensure meaningful assessments of value.
    The CY 2022 PFS final rule (86 FR 65457) also established the 
following standards for cost measure construction:
     Measures must assign services that accurately capture the 
role of attributed clinicians.
     Measures must have clear, ex ante attribution to 
clinicians.
     Measures must be based on episode definitions that have 
clinical face validity and are consistent with practice standards.
     Measures' construction methodology must be readily 
understandable to clinicians.
     Measures must hold clinicians accountable for only the 
costs they can reasonably influence.
     Measures must convey clear information on how clinicians 
can alter their practice to improve measured performance.
     Measures must demonstrate variation to help distinguish 
quality of care across individual clinicians.
     Measure specifications must allow for consistent 
calculation and reproducibility using Medicare claims data.
    As of the CY 2024 performance period/2026 MIPS payment year, we 
have developed and implemented 29 MIPS cost measures, which reflect the 
prioritization criteria and input from interested parties about 
potential clinical topics, measure scope, clinically related services, 
and potential challenges or barriers to measurement. This is a 
substantial achievement in building out the cost measure portfolio 
since MIPS began with only two population-based cost measures, the 
Total Per Capita Cost (TPCC) measure and the Medicare Spending Per 
Beneficiary (MSPB) measure.
    However, there are still MIPS eligible clinicians that do not have 
cost measures that apply to the major aspects of their care practice. 
For example, there are specialties or clinical topics where clinically 
coherent measure concepts have not yet been identified or where impact 
in terms of cost, clinician, or patient coverage is lower than that of 
other measure concepts that were prioritized for development. 
Therefore, we continue to encourage interested parties to utilize our 
established pre-rulemaking processes, such as the Call for Measures 
(https://mmshub.cms.gov/measure-lifecycle/measure-implementation/pre-rulemaking/overview), to develop and submit candidate quality and cost 
measures relevant to their specialty. Furthermore, we continue to 
develop MVPs based on needs and priorities, as described in the MVP 
Needs and Priorities document (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip). In 
section IV.A.3. of this proposed rule, we discuss our request for 
information on Transforming the Quality Payment Program and solicit 
feedback on challenges to adopting MVPs and a potential path forward 
for developing MVPs for MIPS eligible clinicians with limited measures.
(2) MVP Maintenance Process
    In the CY 2023 PFS final rule (87 FR 70037), we finalized a 
modification to the annual maintenance process for MVPs previously 
finalized in the CY 2022 PFS final rule (86 FR 65410). We communicated 
that if we identified any potentially feasible and appropriate 
submitted maintenance recommendations, we would host a public facing 
webinar open to interested parties and the general public through which 
they could offer their feedback on the potential maintenance updates we 
have identified.
    In this proposed rule, because we have had a low volume of 
submitted maintenance recommendations in past years, we are proposing 
to modify the MVP maintenance webinar process to provide us more 
flexibility in how we communicate submitted maintenance recommendations 
prior to proposing them formally in rulemaking. Allowing flexibility in 
communicating

[[Page 62018]]

recommendations through alternative webinar formats or other public 
communication channels would offer similar opportunities for public 
review and feedback as a live public webinar. For example, in lieu of a 
live webinar, we could choose to communicate submitted maintenance 
recommendations via a pre-recorded webinar, which will encourage 
interested parties to submit their feedback on the submitted 
recommendations in writing by email before maintenance updates are 
formally proposed in rulemaking. It is important to reiterate this 
public webinar process supports our commitment to consider interested 
parties' feedback when determining which maintenance updates are 
appropriate for inclusion in formal notice and comment rulemaking. We 
request comment on this proposal.
(3) MVP Maintenance Updates to Previously Finalized MVPs
    Between the CY 2022 PFS final rule (86 FR 65998 through 66031) and 
the CY 2023 PFS final rule (87 FR 70037), we finalized 12 MVPs 
available for reporting beginning with the CY 2023 performance period/
2025 MIPS payment year:
     Adopting Best Practices and Promoting Patient Safety 
within Emergency Medicine;
     Advancing Cancer Care;
     Advancing Care for Heart Disease;
     Advancing Rheumatology Patient Care;
     Coordinating Stroke Care to Promote Prevention and 
Cultivate Positive Outcomes;
     Improving Care for Lower Extremity Joint Repair;
     Optimizing Chronic Disease Management;
     Optimal Care for Kidney Health;
     Optimal Care for Neurological Conditions;
     Patient Safety and Support of Positive Experiences with 
Anesthesia;
     Promoting Wellness; and
     Supportive Care for Cognitive-Based Neurological 
Conditions.
    In the CY 2024 PFS final rule (88 FR 79978 through 80047), we 
consolidated Promoting Wellness and Optimizing Chronic Disease 
Management MVPs into a single primary care MVP titled ``Value in 
Primary Care MVP'' as well as finalized five additional MVPs available 
for reporting beginning with the CY 2024 performance period/2026 MIPS 
payment year:
     Focusing on Women's Health;
     Prevention and Treatment of Infectious Disorders Including 
Hepatitis C and Human Immunodeficiency Virus (HIV);
     Quality Care for the Treatment of Ear, Nose, and Throat 
Disorders;
     Quality Care in Mental Health and Substance Use Disorder; 
and
     Rehabilitative Support for Musculoskeletal Care.
    In this proposed rule, we are proposing modifications to all 16 
MVPs with the addition and removal of measures and improvement 
activities based on the MVP development criteria (85 FR 84849 through 
84854). Through these modifications, we can expand upon the clinical 
concepts, advance health equity, address maintenance requests from the 
public, and remove measures and activities that would either be 
finalized for removal from their respective MIPS Inventory or replaced 
by more robust measures. In addition, through the MVP maintenance 
process, we are proposing to consolidate the previously finalized 
Optimal Care for Patients with Episodic Neurological Conditions MVP and 
the Supportive Care for Neurodegenerative Conditions MVP into a single 
consolidated neurological MVP titled Quality Care for Patients with 
Neurological Conditions MVP. We refer readers to Appendix 3 of this 
proposed rule for the proposed modifications and detailed descriptions 
to the previously finalized MVPs.
b. MVP Requirements and Scoring
    In the CY 2022 PFS final rule (86 FR 65411 through 65415), we 
finalized policies for MVP reporting requirements, including subgroup 
requirements, which took effect beginning in the CY 2023 performance 
period/2025 MIPS payment year, at Sec.  414.1365(c)(1) through (4). We 
noted that MVP reporting requirements are based on the reporting 
requirements of traditional MIPS but have some differences, such as 
reporting fewer measures, to reduce MVP reporting burden and allow for 
measurement that is more meaningful by requiring clinicians to report 
on measures and activities that comprehensively reflect an episode of 
care or clinical condition (86 FR 65411).
    In the CY 2022 PFS final rule, we finalized policies for MVP 
scoring that took effect beginning in the CY 2023 performance period/
2025 MIPS payment year. We refer readers to 86 FR 65419 through 65427 
for the details of those finalized policies. We previously finalized at 
Sec.  414.1365(d)(2) that, unless otherwise indicated in Sec.  
414.1365(d), the performance standards described at Sec.  
414.1380(a)(1)(i) through (iv) apply to the measures and activities 
included in the MVP (86 FR 65419 through 65421). We noted that in 
general, we have adopted the scoring policies from traditional MIPS for 
MVP Participants unless there is a compelling reason to adopt a 
different policy to further the goals of the MVP framework (86 FR 
65419). In this proposed rule, we are proposing to update the 
registration process and scoring policies for population health 
measures in the quality performance category, clarify the alignment 
between scoring cost measures in MVPs and traditional MIPS, update 
requirements and scoring policies for improvement activities in the 
improvement activities performance category, and update the 
requirements for subgroup reporting in the Promoting Interoperability 
performance category.
    We refer readers to section IV.A.4.d. of this proposed rule for 
proposed policies on data submission requirements; IV.A.4.e.(1)(c)(i) 
of this proposed rule for proposed policies on the data completeness 
threshold, IV.A.4.f.(1)(b) of this proposed rule for proposed policies 
on scoring of topped out measures, and scoring virtual groups and APM 
Entities (including SSP ACOs) in the quality performance category; 
IV.A.4.f.(1)(d)(ii)(B) of this proposed rule for proposed benchmarking 
policies for scoring the cost performance category; IV.A.4.e.(3)(b)(iv) 
of this proposed rule for proposed policies for requirements and 
scoring that remove medium- and high-weighting from improvement 
activities in the improvement activities performance category; and 
IV.A.4.e.(4) of this proposed rule for current requirements and a 
Request for Information (RFI) for the Promoting Interoperability 
performance category.
(1) Quality Performance Category in MVPs
(a) Background on Population Health Administrative Claims-Based 
Measures
    In the CY 2021 PFS final rule, we discussed the inclusion of 
population health measures as a part of the foundational layer of MVPs, 
to improve patient outcomes, reduce reporting burden and costs, and 
better align with clinician quality improvement efforts (85 FR 84856 
and 84857). In the CY 2022 PFS final rule we defined a population 
health measure as a quality measure that indicates the quality of a 
population or cohort's overall health and well-being, such as, access 
to care, clinical outcomes, coordination of care and community 
services, health behaviors, preventive care and screening, health 
equity, or utilization of health services (86 FR 65408). We also 
discussed in the CY 2022 PFS final rule the importance of currently 
adopted population health measures,

[[Page 62019]]

noting that they capture outcomes important to patients and thus 
provide meaningful information to clinicians so they can improve their 
practice, and discussed the use of population health measures as the 
foundational layer in MVPs to ensure that important areas of 
measurement are reflected within all MVPs (86 FR 65408).
    We finalized in the CY 2022 PFS final rule (86 FR 65414) at Sec.  
414.1365(c)(4)(ii) that an MVP Participant is scored on one population 
health measure in accordance with Sec.  414.1365(d)(1). Since the MVP 
population health measures are administrative claims-based, they do not 
require data submission from clinicians and do not contribute to 
reporting burden. To track which population health measure an MVP 
Participant intends to report, we finalized in the CY 2022 PFS final 
rule (86 FR 65417) at Sec.  414.1365(b)(2)(i) that MVP Participants are 
required to select one population health measure at the time of MVP 
registration.
(b) Proposal To Use the Highest Score of All Available Population 
Health Measures
    In the CY 2022 PFS final rule (86 FR 65421 and 65422) we finalized 
scoring rules for population health measures in MVPs. We finalized at 
Sec.  414.1365(d)(3)(i)(A) that, except as provided in paragraph 
(d)(3)(i)(A)(1), each selected population health measure that does not 
have a benchmark or meet the case minimum requirement is excluded from 
the MVP Participant's total measure achievement points and total 
available measure achievement points. In cases where an MVP Participant 
selects a population health measure that cannot be scored because it 
does not have a benchmark or meet the case minimum requirement, we do 
not score any other population health measures that may be applicable 
and available.
    Population health measures are included in the MVP foundational 
layer because they capture outcomes important to patients (that is, 
hospitalizations for acute illness) and thus provide meaningful 
information to clinicians so they can improve their practice (86 FR 
65408). Under the current policy, we cannot score an MVP Participant on 
a population health measure if the MVP Participant selects a measure at 
registration that lacks a benchmark or if their case volume does not 
meet the case minimum requirement for the selected measure, even if 
another measure is applicable and available. In the CY 2022 PFS final 
rule (86 FR 65414) we discussed calculating each population health 
measure and applying the higher score to the quality score, however, we 
ultimately proposed and finalized the current policy to score only one 
selected population health measure to mitigate concerns from interested 
parties that not all population health measures are applicable to all 
specialties (86 FR 65414). We now realize that at the time of 
registration, an MVP Participant will not be able to determine if they 
will have enough cases to meet the case minimum required for scoring 
the selected population health measure and will not know, in advance, 
how the measure will score compared to a benchmark. Requiring an MVP 
participant to select the population health measure to be scored at the 
time of registration may penalize an MVP Participant who selects a 
population health measure at MVP registration.
    To increase the likelihood that a population health measure can be 
scored, we had considered several options, including calculating the 
population health measure score by using an average score of all 
population health measures that have a benchmark and meet the case 
minimum requirement and using the score of the population health 
measure with the highest number of cases in order to score the 
population health measure that represents the most care provided by an 
MVP Participant. However, we determined these approaches could result 
in a lower score for an MVP Participant that did not correlate to the 
MVP Participant's performance. We also considered whether an MVP 
Participant could select a population health measure at the time of 
data submission when all other measures are reported. However, 
population health measures are calculated by CMS using administrative 
claims-based data and therefore do not require data submission from 
clinicians, and administrative claims-based data is not available for 
CMS calculation until at least 60 days after the end of the reporting 
period. Therefore, the MVP Participant would not know whether they 
would meet the case minimum requirement for the selected population 
health measure at the time of data submission.
    Because population health measures in the MVP capture outcomes 
important to patients (that is, for example, hospitalizations for acute 
illness) and thus, provide meaningful information to clinicians so they 
can improve their practice, we want to avoid scenarios where MVP 
Participants may inadvertently select a measure that cannot be scored. 
As described for traditional MIPS at Sec.  414.1380(b)(1)(i), CMS 
calculates all administrative claims-based quality measures and scores 
the clinician on each measure for which there is a benchmark and the 
clinician meets the case minimum requirement. Calculating all 
population health measures in MVPs would more closely align with the 
policy to calculate all administrative claims-based quality measures. 
Additionally, we have developed MVPs with a smaller, more cohesive set 
of measures and streamlined reporting requirements. A policy to take 
the highest population health score would increase the likelihood that 
an MVP Participant is scored on a population health measure and would 
ensure that MVP Participants receive the highest possible population 
health score that correlates to their performance.
    We are proposing to revise Sec.  414.1365(d)(3)(i)(A) to state that 
for the CY 2023 through 2024 performance periods/2025 through 2026 MIPS 
payment years, MVP Participants will be scored on the selected 
population health measure and beginning in the CY 2025 performance 
period/2027 MIPS payment year, we would use the highest score of all 
available population health measures. If no population health measure 
has a benchmark or meets the case minimum requirement, then the 
population health measure is excluded from the MVP Participant's total 
measure achievement points and total available measure achievement 
points. To apply this policy to subgroups reporting an MVP, we also 
propose to update Sec.  414.1365(d)(3)(i)(A)(1) to provide that for the 
CY 2023 through 2024 performance periods/2025 through 2026 MIPS payment 
years, subgroups will be scored on the selected population health 
measure based on its affiliated group score, if available, and 
beginning in the CY 2025 performance period/2027 MIPS payment year, a 
subgroup is scored on the highest scoring of all available population 
health measures based on its affiliated group score, if available. If 
the subgroup's affiliated group score is not available, each such 
measure is excluded from the subgroup's total measure achievement 
points and total available measure achievement points.
    We are also proposing to remove the requirement for an MVP 
Participant to select a population health measure at the time of MVP 
registration. If we implement our proposal to calculate each population 
health measure for an MVP Participant and use the participant's highest 
score for population health measures in MVPs, there would be no need 
for the MVP Participant to select a measure during registration. We 
propose to revise

[[Page 62020]]

Sec.  414.1365(b)(2)(i) to provide that for the CY 2024 performance 
period/2026 MIPS payment year, each MVP Participant must select an MVP, 
one population health measure included in the MVP, and any outcomes-
based administrative claims-based measure on which the MVP Participant 
intends to be scored. Beginning in the CY 2025 performance period/2027 
MIPS payment year, each MVP Participant must select an MVP and any 
outcomes-based administrative claims-based measure on which the MVP 
Participant intends to be scored. We seek comment on these proposals.
(2) Cost Performance Category in MVPs
    In the CY 2022 PFS final rule, we finalized at Sec.  
414.1365(d)(3)(ii) to use the methodology established at Sec.  
414.1380(b)(2)(i) through (v) to score the cost performance category 
for MVPs using the cost measures included in the MVP that MVP 
Participants select and report. The finalized policies at Sec.  
414.1380(b)(2) score cost measures based on achievement and improvement 
when the case minimum specified under Sec.  414.1350(c) is met or 
exceeded and CMS has determined a benchmark (86 FR 65422 and 65423). We 
discussed in the CY 2022 PFS final rule that aligning MVP scoring 
policies with existing MIPS scoring policies balances the statutory 
requirements and goals of the program with ease of use, stability, and 
meaningfulness to MIPS eligible clinicians (86 FR 65419). We refer 
readers to section IV.A.4.f.(1)(d)(ii)(B) of this proposed rule for 
proposals to modify the cost performance category's scoring 
methodology.
    To ensure alignment between MVP and MIPS scoring policies, it is 
important that MVP cost performance category scoring policies refer to 
the MIPS policy on how cost measures are scored. We remind readers that 
cost measures are scored based on the clinician's performance on the 
measure during the performance period compared to the measure's 
benchmark, as stated at Sec.  414.1380(b)(2). Currently, Sec.  
414.1365(d)(3)(ii) provides that the cost performance category score is 
calculated for an MVP Participant using the methodology at Sec.  
414.1380(b)(2)(i) through (v) and the cost measures included in the MVP 
that they select and report. To ensure continued alignment, we propose 
to modify Sec.  414.1365(d)(3)(ii) to replace the reference to Sec.  
414.1380(b)(2)(i) through (v) with a broader reference to the cost 
performance category scoring policies at Sec.  414.1380(b)(2).
    We also propose to similarly revise Sec.  414.1365(d)(3)(ii)(A). 
This regulation currently provides that a subgroup is scored on each 
cost measure included in the MVP that it selects and reports based on 
its affiliated group score for each such measure, if available. In 
addition, Sec.  414.1365(d)(3)(ii)(A) provides that, if the subgroup's 
affiliated group score is not available for a measure, the measure is 
excluded from the subgroup's total measure achievement points and total 
available measure achievement points, as described under Sec.  
414.1380(b)(2)(i) through (v). We propose to modify Sec.  
414.1365(d)(3)(ii)(A) to replace the reference to Sec.  
414.1380(b)(2)(i) through (v) with a broader reference to the cost 
performance category scoring policies at Sec.  414.1380(b)(2).
    We seek comment on these proposals.
(3) Improvement Activities Performance Category in MVPs
    The improvement activities performance category should provide 
clinicians with an opportunity to select from a subset of improvement 
activities within an MVP that are relevant to the clinical topic. In 
the CY 2022 final PFS rule (86 FR 65412 and 64513) we finalized at 
Sec.  414.1365(c)(3), that an MVP Participant who reports an MVP must 
report one of the following: two medium-weighted improvement 
activities; one high-weighted improvement activity; or participation in 
a certified or recognized patient-centered medical home (PCMH) or 
comparable specialty practice as described at Sec.  414.1380(b)(3)(ii). 
We established that MVP Participants submitting MVPs would report fewer 
improvement activities than eligible clinicians reporting traditional 
MIPS to support MVP adoption.
    Additionally, in the CY 2022 final PFS rule (86 FR 65423 and 65424) 
we finalized at Sec.  414.1365(d)(3)(iii) that the improvement 
activities performance category score for MVP Participants is 
calculated based on the submission of high- and medium-weighted 
improvement activities. We finalized that MVP Participants would 
receive 20 points for each medium-weighted improvement activity and 40 
points for each high-weighted improvement activity required under Sec.  
414.1360 on which data is submitted in accordance with Sec.  414.1325 
or for participation in a certified or recognized patient-centered 
medical home (PCMH) or comparable specialty practice, as described at 
Sec.  414.1380(b)(3)(ii). Therefore, to receive a score of 40 points, 
or full credit, an MVP Participant would be required to submit one 
high-weighted improvement activity, or two medium-weighted improvement 
activities included in the MVP. We stated that these requirements would 
provide an incentive for reporting MVPs, since fewer improvement 
activities are required to receive a full score for the improvement 
activities category in an MVP compared to traditional MIPS (86 FR 
65423).
    We refer readers to section IV.A.4.e.(3)(b)(iv) of this proposed 
rule for proposals to remove the medium- and high-weighting for 
improvement activities in traditional MIPS starting in the CY 2025 
performance period/2027 MIPS payment year. We now propose to align MVP 
policies with the traditional MIPS proposal regarding the weighting of 
improvement activities and to reduce the number of improvement 
activities an MVP Participant must submit for an MVP. Maintaining a 
lower reporting burden would encourage reporting MVPs. We finalized 
that incentives for reporting MVPs, including reduced reporting 
requirements, allow MVP Participants to report on a smaller, more 
cohesive subset of measures and activities that are relevant to a given 
clinical topic, condition, or episode of care (86 FR 65419 and 65420). 
Therefore, starting in the CY 2025 performance period/2027 MIPS payment 
year, MVP Participants would be required to submit one improvement 
activity to achieve 40 points, or full credit, whereas in traditional 
MIPS clinicians would be required to submit two improvement activities 
to achieve full credit for the improvement activities performance 
category. We propose to update reporting requirements and scoring rules 
related to the improvement activities performance category for MVPs 
accordingly.
    We propose to revise Sec.  414.1365(c)(3) to reflect reporting 
requirements for the CY 2023 and 2024 performance periods/2024 through 
2026 MIPS payment years and the reporting requirements beginning in the 
CY 2025 performance period/2027 MIPS payment year. The revisions 
proposed at Sec.  414.1365(c)(3)(i) introductory text and additions 
proposed at paragraphs (c)(3)(i)(A) through (C) would require that an 
MVP Participant who reports an MVP, in the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, report one of 
the following: two medium-weighted improvement activities; one high-
weighted improvement activity; or participation in a certified or 
recognized patient-centered medical home (PCMH) or comparable specialty 
practice as described at Sec.  414.1380(b)(3)(ii). Additionally, we 
propose at Sec.  414.1365(c)(3)(ii) introductory text and (c)(3)(ii)(A) 
and (B), beginning in the CY 2025 performance period/2027 MIPS

[[Page 62021]]

payment year an MVP Participant who reports an MVP must report either 
one improvement activity or participation in a certified or recognized 
patient-centered medical home (PCMH), or comparable specialty practice 
as described at Sec.  414.1380(b)(3)(ii). We seek comment on the 
proposals.
    We also propose to align MVP scoring with proposed modifications to 
traditional MIPS scoring that would remove the reference to high- and 
medium-weighted improvement activities for scoring and assign 40 points 
for each improvement activity submitted by MVP Participants. We propose 
at Sec.  414.1365(d)(3)(iii) that in the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, the 
improvement activities performance category score is calculated based 
on the submission of high- and medium-weighted improvement activities. 
MVP Participants would receive 20 points for each medium-weighted 
improvement activity and 40 points for each high-weighted improvement 
activity required under Sec.  414.1360 on which data is submitted in 
accordance with Sec.  414.1325 or for participation in a certified or 
recognized patient-centered medical home (PCMH) or comparable specialty 
practice, as described at Sec.  414.1380(b)(3)(ii). Beginning in the CY 
2025 performance period/2027 MIPS payment year, MVP Participants would 
receive 40 points for each improvement activity that is submitted or 
participation in a certified or recognized patient-centered medical 
home (PCMH) or comparable specialty practice. We seek comment on this 
proposal.
(4) Promoting Interoperability Performance Category in MVPs
    In the CY 2022 PFS final rule, we finalized at Sec.  
414.1365(c)(4)(i) that an MVP Participant is required to meet the 
Promoting Interoperability performance category's reporting 
requirements. We also finalized at Sec.  414.1365(c)(4)(i)(A) the 
requirements for a subgroup participating in MVP reporting (86 FR 65413 
and 65414). Specifically, we stated that for the CY 2023 and 2024 MIPS 
performance periods/2025 and 2026 MIPS payment years, an MVP 
Participant that is a subgroup is required to submit its affiliated 
group's data for the Promoting Interoperability performance category. 
The submission of the affiliated group's data will be on the subgroup's 
behalf. If the affiliated group chooses to report as a group for the 
Promoting Interoperability performance category, the group will still 
be required to submit its own data separately and in accordance with 
the reporting rules for groups. We refer readers to the CY 2022 PFS 
final rule for additional details (86 FR 65413 and 65414).
    We acknowledge the existing language under Sec.  
414.1365(c)(4)(i)(A) establishes the requirement for a subgroup to 
submit its affiliated group's data for the Promoting Interoperability 
performance category in the foundational layer of an MVP for only the 
CY 2023 and 2024 performance periods/2025 and 2027 MIPS payment years. 
In the CY 2022 PFS final rule, we stated our intent to assess the 
performance of clinicians participating in subgroups in the Promoting 
Interoperability performance category using subgroup level data to the 
extent that it is operationally feasible (86 FR 39371 and 39372). 
However, as discussed in the CY 2022 PFS final rule (86 FR 39371), we 
heard from interested parties through the MVP Town Hall (85 FR 84846), 
that some clinicians would need additional time to resolve operational 
challenges, including challenges related to configuration of EHR 
systems for reporting Promoting Interoperability data at the subgroup 
level. We recognize that clinicians and interested parties may need 
additional time to resolve the technical challenges related to 
configuration of EHR systems for capturing and submitting data at the 
subgroup level. We propose that this subgroup reporting policy for the 
Promoting Interoperability performance category in the MVP they select 
apply beyond the CY 2023 performance period/2025 MIPS payment year and 
CY 2024 performance period/2026 MIPS payment years currently specified 
at Sec.  414.1365(c)(4)(i)(A). Specifically, we propose to modify Sec.  
414.1365(c)(4)(i)(A) by removing the references to the specific 
performance periods/MIPS payment years and provide that an MVP 
Participant that is a subgroup is required to submit its affiliated 
group's data for the Promoting Interoperability performance category. 
The proposed change would allow a subgroup to continue to submit the 
affiliated group's data for the MVP Promoting Interoperability 
performance category for the CY 2025 performance period/2027 MIPS 
payment year and beyond. We note CMS will continue to monitor the 
operational challenges with the EHR systems and reassess whether 
subgroups should be required to submit subgroup level performance data 
for the Promoting Interoperability performance category.
    We request public comment on this proposal.
    We refer readers to section V.B.8. of this proposed rule for 
discussion on the burden estimates for these proposals.
c. APM Performance Pathway
(1) Overview
    In the CY 2021 PFS final rule (85 FR 84859 through 84866), we 
finalized the APM Performance Pathway (APP) at Sec.  414.1367 beginning 
in CY 2021 performance period/2023 MIPS payment year, which was 
designed as a reporting and scoring pathway available only to MIPS APM 
participants in order to provide a predictable and consistent MIPS 
reporting option to reduce reporting burden for, and encourage 
continued APM participation, by these clinicians. We also established 
that, beginning with the Shared Savings Program performance year 2021 
(CY 2021 performance period/2023 MIPS payment year), ACOs were required 
to report quality data for purposes of the Shared Savings Program via 
the APP (42 CFR 425.512(a)(3); 85 FR 84722).
    In that same rule, we finalized a quality measure set (85 FR 84860 
and 84861) for purposes of quality performance category scoring for the 
APP. For those MIPS eligible clinicians, groups, or APM Entities for 
whom a given measure is unavailable due to the size of the available 
patient population or who are otherwise unable to meet the minimum case 
threshold for a measure, we established that such measure would be 
removed from the quality performance category score for such MIPS 
eligible clinician, group, or APM Entity (85 FR 84861). The complete 
existing APP quality measure set is shown in Table 53. As indicated in 
Table 53, the current APP quality measure set includes six quality 
measures, of which five also are Universal Foundation measures. 
Further, for MIPS eligible clinicians, groups, and APM Entities 
reporting through the APP, we established that we would not apply the 
quality measure scoring cap at Sec.  414.1380(b)(1)(iv) in the event 
that a measure in the APP quality measure set is determined to be 
topped out. Because the APP quality measure set is fixed, we noted that 
it would not be appropriate to limit the maximum quality performance 
category score available to APP reporters. Should an APP quality 
measure be determined to be topped out, we would at that time consider 
amending the APP quality measure set through future rulemaking, if 
appropriate.
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[GRAPHIC] [TIFF OMITTED] TP31JY24.085

BILLING CODE C
    We stated when finalizing the APP that the goal of the APP quality 
measure set is not necessarily to reflect the specific quality goals of 
clinicians within their respective APMs, but rather to reduce the 
burden of reporting on quality measures twice: once to MIPS and once to 
their APMs. We believed that by using this broadly applicable 
population-health-based measure set, we would enable MIPS APM 
participants to focus more of their energy and attention on the quality 
measures being reported through their APMs, while relying on a 
consistent measure set within the APP from one year to the next (85 FR 
84862).
    We also finalized the Web Interface measure set for the CY 2021 
MIPS performance period within the APP for Shared Savings Program ACOs 
only (85 FR 84720 through 84723), and in the CY 2022 PFS final rule, 
extended this collection type through CY 2024 (86 FR 65429). In the CY 
2024 PFS final rule, we established the Medicare Clinical Quality 
Measure for Accountable Care Organizations Participating in the 
Medicare Shared Savings Program (Medicare CQM) collection type in the 
APP quality measure set and finalized that the Medicare CQM collection 
type would be available to only ACOs participating in the Shared 
Savings Program. Beginning with the 2024 performance year, ACOs in the 
Shared Savings Program have the option to report the Medicare CQM under 
the APP on only ``beneficiaries eligible for Medicare CQMs as defined 
at Sec.  425.20,

[[Page 62023]]

instead of their all payer/all patient population'' (88 FR 79329).
(2) Establishment of the APP Plus Quality Measure Set To Align With the 
Universal Foundation
    Under the goals of the CMS National Quality Strategy to improve the 
quality and safety of healthcare for everyone,\716\ CMS is implementing 
a building-block approach to streamline quality measures across CMS 
quality programs for measuring primary care clinician performance in 
the adult and pediatric populations by leveraging the Universal 
Foundation of quality measures. The Universal Foundation of quality 
measures focuses clinicians' attention on measures that are meaningful 
for the health of broad segments of the population; reduces provider 
burden by streamlining and aligning measures; advances equity with the 
use of measures that will help CMS recognize and track disparities in 
care among and within populations; aids the transition from manual 
reporting of quality measures to seamless, automatic digital reporting; 
and permits comparisons among various quality and value-based care 
programs to help the Agency better understand what drives quality 
improvement and what does not.\717\ The Universal Foundation, which 
identifies a set of key quality measures for use where relevant 
throughout CMS programs, is already reflected in the Medicaid Core Sets 
and the Marketplace Quality Rating System.\718\ In addition, in the CY 
2024 PFS final rule (88 FR 79321 and 80043), CMS consolidated the 
previously finalized Promoting Wellness and Optimizing Chronic Disease 
Management MIPS Value Pathways (MVPs) into a single consolidated 
primary care MVP (Value in Primary Care MVP) that aligns with the adult 
Universal Foundation quality measures. In the Announcement of CY 2024 
Medicare Advantage (MA) Capitation Rates and Part C and D Payment 
Policies, we also solicited comment on adding the Universal Foundation 
measures to Medicare Advantage and the Part D Star Ratings Program. We 
noted that we would take these comments into consideration in the 
future, and that any additional measures added to the Star Ratings 
Program would need to be added through rulemaking.\719\ Alignment of 
quality measures across CMS programs allows practitioners to better 
focus their quality efforts, reduces administrative burden, and drives 
digital transformation and stratification of a focused quality measure 
set to assess impact on disparities.\720\
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    \716\ https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.
    \717\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher L. Aligning Quality Measures across CMS--The Universal 
Foundation. New England Journal of Medicine, March 2, 2023, 
available at https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
    \718\ ``Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
    \719\ Centers for Medicare and Medicaid Services (2023). 
Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) 
Capitation Rates and Part C and Part D Payment Policies. Retrieved 
March 22, 2024 from Announcement of Calendar Year (CY) 2024 Medicare 
Advantage (MA) Capitation Rates and Part C and Part D Payment 
Policies (https://www.cms.gov/files/document/2024-announcement-pdf.pdf).
    \720\ ``Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
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    To further advance Medicare's overall value-based care strategy, 
which emphasizes preventive care and primary care and to promote 
greater alignment within and across CMS's quality programs, we are 
proposing to create the APP Plus quality measure set within the APP 
specifically to incorporate all of the Adult Universal Foundation 
measures. Five of the ten adult Universal Foundation measures already 
are represented in the existing APP quality measure set for the CY 2025 
performance period/2027 MIPS payment year under policies finalized in 
the CY 2024 PFS final rule (88 FR 79113 through 79114). The Universal 
Foundation measures included in the APP quality measure set are listed 
in Table 53. The inclusion of half of the measures in the Universal 
Foundation in the existing APP quality measure set and the recognition 
that a significant number of current and potential users of the APP--
those clinicians participating in MIPS APMs--practice in primary and 
preventive care areas that are relevant to the Universal Foundation 
make the APP a meaningful addition to CMS's efforts at quality 
alignment by bringing in MIPS reporting by MIPS APM participants and in 
turn by providing feedback in the form of their MIPS quality score to 
those participants as they also continue to work towards advancing the 
care they provide within the context of their respective MIPS APMs.
    We note that we are not proposing to modify the existing APP 
quality measure set or the overall framework for the APP as a reporting 
and scoring pathway. For example, the APP will continue to be available 
to MIPS eligible clinicians, groups, and APM Entities participating in 
MIPS APMs, meaning that only these clinician types will be able to 
report and be scored on the APP Plus quality measure set. We are 
proposing that, within the APP, the APP Plus quality measure set would 
be a second measure set distinct from the existing APP quality measure 
set that MIPS eligible clinicians identified on the Participation List 
or Affiliated Practitioner List of an APM Entity participating in a 
MIPS APM may optionally choose to report. Under the proposal, when an 
applicable MIPS eligible clinician, group, or APM Entity chooses to 
report the APP beginning in the CY 2025 performance period/2027 MIPS 
payment year, they will then choose whether to report the APP quality 
measure set or the APP Plus quality measure set. For the CY 2025 
performance period/2027 MIPS payment year, the APP Plus quality measure 
set would include the current APP quality measures and two additional 
quality measures from the Adult Universal Foundation measure set. The 
measure set would incrementally add the remaining three Adult Universal 
Foundation measures by the CY 2028 performance period/2030 MIPS payment 
year. Specifically, we are proposing to adopt one new quality measure 
beginning with the CY 2026 performance period/2028 MIPS payment year, 
and two new quality measures beginning with the CY 2028 performance 
period/2030 MIPS payment year.
    We are proposing to revise Sec.  414.1367(c)(1) such that each MIPS 
eligible clinician, group, or APM Entity APM that elects to report the 
APP would choose to report either the APP quality measure set or the 
APP Plus quality measure set. A MIPS eligible clinician, group, or APM 
Entity that chooses to report the APP Plus quality measure set for a 
performance period would be required to report all available measures 
in the APP Plus quality measure set for that performance period and 
would be scored on all such measures. For example, with respect to the 
CY 2026 performance period/2028 MIPS payment year, a MIPS eligible 
clinician, group, or APM Entity that chooses to report the APP Plus 
quality measure set would be required to report all nine MIPS quality 
measures (to the extent applicable and available): the nine measures 
are the six measures incorporated from the APP quality measure set and 
the three additional Universal Foundation measures we are proposing to 
incrementally adopt in the APP Plus quality measure set in the CY 2025 
and 2026 performance periods/2027 and 2028 MIPS payment years.

[[Page 62024]]

The clinician would also be scored on all nine of these measures.
    The proposal would incrementally incorporate into the APP Plus 
measure set the Universal Foundation measures that are not already 
included in the APP measure set beginning in the CY 2025 performance 
period/2027 MIPS payment year. The Universal Foundation measure set 
aligns quality measures used across CMS programs and initiatives and is 
relevant to a significant subset of the clinicians who are eligible to 
report the APP. The APP Plus quality measure set will allow MIPS 
eligible clinicians, groups, and APM Entities eligible to report the 
APP to report Universal Foundation quality measures, which are used 
across CMS programs and initiatives.
    The APP Plus quality measure set would be separate from the APP 
quality measure set and would be optional for a MIPS eligible 
clinician, group, or APM Entity to report.\721\ Although we want to 
promote greater familiarity with the Universal Foundation measures and 
to encourage clinicians to use the Universal Foundation measures 
through their MIPS participation, it is important to continue to allow 
the APP to serve its original purpose of offering a streamlined, stable 
reporting and scoring pathway for MIPS APM participants, who are 
already performing practice transformation and are reporting and being 
scored on quality measures within their APMs. Further, we recognize 
that while the Adult Universal Foundation quality measures are relevant 
to a significant portion of clinicians who are eligible to report the 
APP, they are not relevant for all such clinicians. For example, there 
are specialists for whom few, if any, of these measures may be 
relevant, and we do not wish to effectively exclude these clinicians 
from accessing the benefits of the APP when they otherwise are 
eligible. Moreover, we recognize that as CMS continues to evolve APM 
offerings for specialists, there may be more clinicians in the future 
who are participating in MIPS APMs and would therefore be eligible for 
the APP, which could shift the proportion of clinicians for whom the 
Universal Foundation measures are relevant as compared to today. For 
these reasons, we believe it is important to maintain the existing APP 
quality measure set and to continue to offer it as an option alongside 
the proposed APP Plus quality measure set.
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    \721\ That said, we note that the Shared Savings Program is 
proposing in section [B-G pages].4.(2).a to require that an ACO 
report the APP Plus quality measure set starting with PY 2025.
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    For the reasons specified above, we are proposing to amend Sec.  
414.1367(c)(1) to establish the APP Plus quality measure set and 
provide MIPS eligible clinicians, groups, and APM Entities the option 
to report the APP quality measure set or the APP Plus quality measure 
set beginning with the CY 2025 performance period/2027 MIPS payment 
year. We request comment on this proposal.
(3) Measures Proposed for Use in the APP Quality Measure Set and APP 
Plus Quality Measure Sets
    In the CY 2021 PFS final rule, we adopted the current APP quality 
measure set (85 FR 84860 and 84861). Table 53 contains the current APP 
quality measure set. We are not proposing any changes to the existing 
APP quality measure set for the CY 2025 performance period/2027 MIPS 
payment year or successive years.
    We are proposing a phased approach to establish the APP Plus 
quality measure set over four years. By the CY 2028 performance period/
2030 MIPS payment year, the APP Plus quality measure set would consist 
of the measures currently contained in the APP quality measure set and 
five additional quality measures from the Universal Foundation measure 
set. We are proposing to phase in these new measures over time to allow 
for both the eCQM and, for Shared Savings ACOs, Medicare CQM collection 
types to be developed and become available. Specifically, we are 
proposing that the APP Plus quality measure set will consist of the six 
measures currently contained in the APP quality measure set and the 
following five new measures, which will be added incrementally:
     Beginning with the CY 2025 performance period/2027 MIPS 
payment year and subsequent performance periods: The Breast Cancer 
Screening (Quality #: 112) and Colorectal Cancer Screening (Quality #: 
113) measures. These measures are currently available as eCQMs, MIPS 
CQMs, and Medicare Part B Claims measures. If this proposal is 
finalized, we would make the Medicare CQM collection type available for 
these measures prior to the start of performance year 2025 only for 
Shared Savings Program ACOs.
     Beginning with the CY 2026 performance period/MIPS payment 
year 2028 and continuing for subsequent performance periods: The 
Initiation and Engagement of Substance Use Disorder Treatment (Quality 
#: 305) measure. This measure is currently available as an eCQM. If 
this proposal is finalized, we would make the Medicare CQM collection 
type available for this measure prior to the start of performance year 
2026 and only for Shared Savings Program ACOs.
     Beginning with the CY 2028 performance period/2030 MIPS 
payment year and continuing for subsequent performance periods: The 
Screening for Social Drivers of Health (Quality #: 487) and Adult 
Immunization Status (Quality #: 493) measures. These measures are 
currently available as MIPS CQMs, but are not currently available as 
eCQMs or Medicare CQMs. Because developing eCQM specifications 
typically takes three years, we are proposing to add these measures to 
the APP Plus quality measure set in the CY 2028 performance period/2030 
MIPS payment year. If this proposal is finalized, we would make these 
measures available prior to the start of CY 2028 performance period/
2030 MIPS payment year to report as eCQMs and, for Shared Savings 
Program ACOs only, Medicare CQMs.
    As discussed above, we intend to incorporate the Adult Universal 
Foundation measures in the APP Plus quality measure set. We note that 
the additional Universal Foundation measures that we propose to include 
in the APP Plus quality measure set align with national condition-
specific initiatives and CMS priorities. Below, we briefly discuss each 
new Universal Foundation measure that would be added to the APP Plus 
quality measure set and that is not already included in the APP quality 
measure set: Breast Cancer Screening and Colorectal Cancer Screening 
Measures.
    Our proposed addition of the Breast Cancer Screening (Quality #: 
112) and Colorectal Cancer Screening (Quality #: 113) measures to the 
APP Plus quality measure set for CY 2025 performance period and 
subsequent performance periods aligns with the President and First 
Lady's Cancer Moonshot initiative, of which a key objective is to 
``make sure everyone has access to cancer screenings--so more Americans 
can catch cancer early, when outcomes are best.'' \722\ Breast cancer 
and colorectal cancer are two of the most common types of cancers, 
accounting for an estimated 23 percent of all new cancer diagnoses in 
the United States in 2023.\723\ Because the risk of developing

[[Page 62025]]

these types of cancers increases with age, the Breast Cancer Screening 
measure focuses on mammogram screening for breast cancer every 24 
months starting at age 50 and the Colorectal Cancer Screening measure 
focuses on appropriate screening for colorectal cancer once per 
performance period, also starting at age 50. Additionally, the February 
2024 preliminary measure specifications for the eCQM version of 
Colorectal Cancer Screening lower the starting age for screenings to 
45, an update that aligns with United States Preventive Services Task 
Force recommendation that colorectal cancer screening begin at age 45 
to reduce risk of death.\724\
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    \722\ The White House (n.d.). The President and First Lady's 
Cancer Moonshot. Accessed March 28, 2024. https://www.whitehouse.gov/cancermoonshot/.
    \723\ Siegel, R.L., Miller, K.D., Wagle, N.S., & Jemal, A. 
(2023). Cancer statistics, 2023. CA: a cancer journal for 
clinicians, 73(1), 17-48. https://doi.org/10.3322/caac.21763.
    \724\ eCQI Resource Center (2023). Colorectal Cancer Screening. 
Accessed March 29, 2024. https://ecqi.healthit.gov/ecqm/ec/2024/cms0130v12?compare=2024to2023. United States Preventative Task Force 
(2021). Final Recommendation on Screening for Colorectal Cancer. 
https://www.uspreventiveservicestaskforce.org/uspstf/sites/default/files/file/supporting_documents/colorectal-cancer-screening-final-rec-bulletin.pdf.
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(ii) Initiation and Engagement of Substance Use Disorder Treatment 
Measure
    An estimated 48.7 million Americans aged 12 or older (17.3 percent 
of the population) were classified as having had a substance use 
disorder (SUD) in the past year in 2022.\725\ These individuals are at 
an increased risk for having major medical conditions, injury, 
overdose, and death.\726\ Outcomes for individuals with SUDs are 
improved through early and regular treatment.\727\ The Initiation and 
Engagement of Substance Use Disorder Treatment (Quality #: 305) measure 
ensures patients 13 years of age and older with a new SUD episode have 
the initiation of intervention or medication within 14 days of the new 
SUD episode or engage in ongoing treatment, including two additional 
interventions or short-term medications, or one long-term medication 
within 34 days of the initiation of treatment. This measure also 
supports CMS efforts to reduce deaths related to opioid overdoses, 
which have significantly increased in recent years,\728\ and the CMS 
Behavioral Health Strategy.\729\
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    \725\ Substance Abuse and Mental Health Services Administration. 
(2023). Key substance use and mental health indicators in the United 
States: Results from the 2022 National Survey on Drug Use and Health 
(HHS Publication No. PEP23-07-01-006, NSDUH Series H-58). Center for 
Behavioral Health Statistics and Quality, Substance Abuse and Mental 
Health Services Administration. https://www.samhsa.gov/data/report/2022-nsduh-annual-national-report. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5291754/.
    \726\ Bahorik, A.L., D.D. Satre, A.H. Kline-Simon, C.M. Weisner, 
C.L. Campbell. 2017. ``Alcohol, Cannabis, and Opioid Use Disorders, 
and Disease Burden in an Integrated Health Care System.'' J 
Addiction Medicine 11(1),3-9. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5291754/.
    \727\ Kampman, K., K. Freedman. 2020. ``American Society of 
Addiction Medicine (ASAM) National Practice Guideline for the 
Treatment of Opioid Use Disorder: 2020 Focused Update.'' Journal of 
Addiction Medicine 14, no. 2S: 1-91, https://doi.org/10.1097/ADM.0000000000000633.
    \728\ National Institute on Drug Abuse (2023). Drug Overdose 
Deaths. Accessed March 28, 2024. https://nida.nih.gov/research-topics/trends-statistics/overdose-death-rates.
    \729\ Centers for Medicare and Medicaid Services (2024). CMS 
Behavioral Health Strategy. Accessed April 19, 2024. https://www.cms.gov/cms-behavioral-health-strategy.
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(iii) Screening for Social Drivers of Health Measure
    In the CY 2023 PFS proposed rule, we sought comment on the 
potential future inclusion of the Social Drivers of Health measure in 
the APP quality measure set (87 FR 46154 through 46155). While the 
majority of commenters were generally supportive of adding the 
Screening for Social Drivers of Health measure, several raised concerns 
related to the undue burden on collection, cost and resources of 
implementation, and holding providers accountable for the collection of 
data which could be beyond their scope or ability. Some supportive 
commenters appreciated that the Screening for Social Drivers of Health 
measure could drive the standardization of measures that examine social 
drivers of health in Federal health care quality and payment systems, 
and that this would ultimately drive the health of our patients and our 
Nation, maximize the use of limited Government resources to support 
vulnerable patients, and achieve quality improvement and equity in 
health outcomes. Commenters further stated that the Screening for 
Social Drivers of Health measure is crucial in recognizing the impact 
of Social Drivers of Health-related issues on patients and providers, 
in laying the foundation to invest in those communities, and in 
avoiding fragmentation and provider/patient burden by supporting 
alignment across public and private quality and payment programs. Some 
commenters opposed the addition of the measure and cautioned CMS to 
test it before it would be required. Other opposed commenters voiced 
their concern about the undue burden on data collection among patients 
and providers and the costs and resources associated with implementing 
new Social Drivers of Health measures, and that gathering Social Driver 
of Health measure data would lead to holding providers accountable for 
addressing social needs of patients that is beyond a provider's scope 
or ability.
    We believe that the benefits of adding the measure to the APP Plus 
quality measure set outweigh these concerns. For example, while the 
challenges and concerns noted previously in this section associated 
with implementing screening for social drivers of health are voiced by 
family medicine clinicians, social workers, and clinical staff, 
including the potential negative impact screening could have on the 
patient-clinician relationship, screening for social drivers of health 
uncovers patient needs, allows clinicians to provide their patients 
with resources or referrals, results in appropriately adapting patient 
care, and prioritizes patient safety.\730\ The addition of the 
Screening for Social Drivers of Health (Quality #: 487) measure also is 
consistent with our priorities to advance health equity and move toward 
whole-person care throughout our various programs, including the MIPS 
and the Hospital Inpatient Quality Reporting (HICR) programs. This 
measure addresses five social and economic determinants--namely, food 
insecurity, housing instability, transportation needs, utility 
difficulties, and interpersonal safety \731\--that are central to the 
Health Equity strategic plan pillar (https://www.cms.gov/pillar/health-equity) and have been identified as both a measurement priority and a 
performance gap among CMS programs.
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    \730\ Porterfield, L., Jan, Q.H., Jones, F., Cao, T., Davis, L., 
Guillot-Wright, S., & Walcher, C.M. (2024). Family Medicine Team 
Perspectives on Screening for Health-Related Social Needs. Journal 
of the American Board of Family Medicine: JABFM, 
jabfm.2023.230167R3. Advance online publication. https://doi.org/10.3122/jabfm.2023.230167R3.
    \731\ https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2023_Measure_487_MIPSCQM.pdf.
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    The movement to address socioeconomic, environmental, and 
behavioral health factors (referred to as drivers of health) has gained 
traction after a study estimated that only 20 percent of a person's 
health outcomes are linked to their medical care with the remaining 80 
percent attributable to drivers of health.\732\ Because of the strong 
relationship between Social Drivers of Health and physical health 
outcome, screening for Social Drivers of Health would support the goals 
of improving health outcomes by providing clinicians with a more 
comprehensive understanding of each patient's circumstances to inform

[[Page 62026]]

clinical decision making and ensure high-quality care.
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    \732\ Hood, C.M., K.P. Gennuso, G.R. Swain, and B.B. Catlin. 
2016. County health rankings: Relationships between determinant 
factors and health outcomes. American Journal of Preventive Medicine 
50(2):129-135. https://doi.org/10.1016/j.amepre.2015.08.024.
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    In addition, many of these drivers of health are not only linked to 
poorer health, but disproportionately impact communities of color and 
underserved populations. Through screening, once per performance 
period, of patients 18 years and older for food insecurity, housing 
instability, transportation needs, utility difficulties, and 
interpersonal safety, screening for Social Drivers of Health and 
appropriate referrals can potentially improve health outcomes and 
reduce health disparities. As we indicated when we proposed to adopt 
Screening for Social Drivers of Health in MIPS in the CY 2023 PFS 
proposed rule, we believe that consistently addressing drivers of 
health will have two significant benefits. First, because drivers of 
health disproportionately impact individuals and communities that are 
disadvantaged and/or underserved by the healthcare system, the 
promotion of screening for these factors would support clinician 
practices and health systems in actualizing an expressed commitment to 
address disparities in care, implementing associated equity measures to 
track progress, and improving overall health equity.\733\ Second, 
patient-level driver of health data through screening is essential in 
the long-term to encourage meaningful collaboration among clinicians 
and community-based organizations, and implement and evaluate related 
innovations in healthcare and social service delivery. (87 FR 46280)
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    \733\ American Hospital Association. (December, 2020). Health 
Equity, Diversity & Inclusion Measures for Hospitals and Health 
System Dashboards. Available at https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
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(iv) Adult Immunization Status Measure
    The Adult Immunization Status measure (Quality #: 493) ensures that 
adults are up to date with the recommended routine vaccines: influenza; 
tetanus and diphtheria (Td) or tetanus, diphtheria and acellular 
pertussis (Tdap); zoster; and pneumococcal. This robust measure 
supports the comprehensive evaluation of compliance with recommended 
adult immunizations that improve quality care and prevent disease.
(v) Maintaining the Use of the Clinician and Clinician Group Risk-
Standardized Hospital Admission Rates for Patients With Multiple 
Chronic Conditions Measure in the APP Quality Measure Set and Including 
It in the APP Plus Quality Measure Set
    We note that Clinician and Clinician Group Risk-standardized 
Hospital Admission Rates for Patients with Multiple Chronic Conditions 
(Quality # 484) is an administrative claims-based measure that is in 
the APP quality measure set for the MIPS CY performance period 2025/
2027 payment year under policies finalized in the CY 2024 PFS final 
rule (88 FR 79113 and 79114) but is not one of the ten Adult Universal 
Foundation measures. Our proposal would continue to maintain this 
measure in the APP quality measure set, and therefore also include it 
in APP Plus quality measure set, for the CY 2025 performance period/
2027 MIPS payment year and subsequent performance periods. We continue 
to believe that hospital admission rates are an effective marker of 
ambulatory care quality. As noted in our rationale for adopting the 
measure in the measure specifications, ``Hospital admissions from the 
outpatient setting reflect a deterioration in patients' clinical status 
and as such reflect an outcome that is meaningful to both patients and 
providers.\734\ Patients receiving optimal, coordinated high-quality 
care should use fewer inpatient services than patients receiving 
fragmented, low-quality care. Thus, high population rates of 
hospitalization may signal poor quality of care or inefficiency in 
health system performance. Furthermore, these effects may be 
exacerbated in disadvantaged areas.\735\ Patients with multiple chronic 
conditions are at high risk for hospital admission, often for 
potentially preventable causes, such as exacerbation of pulmonary 
disease.'' \736\ Maintaining this measure in the APP quality measure 
set and, as a consequence, including it in the APP Plus quality measure 
set also is consistent with our previously stated goals in the CY 2021 
PFS final rule to align the APP with the Meaningful Measures framework, 
an initiative to remove lower value quality measures across CMS 
programs while keeping measures that have less burden and are the most 
meaningful with the greatest impact on patient outcomes. This measure 
supports the framework's goals as it is identified among the highest 
priorities for quality measurement and improvement while also reducing 
burden, promoting alignment, moving payment toward value, and 
identifying key quality performance metrics for consumers (85 FR 
84726).
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    \734\ Centers for Medicare and Medicaid Services--Quality 
Payment Program (2023). Measure information for the Multiple Chronic 
Care Conditions (MCC) Risk-standardized Hospital Submission Rate for 
Patients for the Merit-based incentive Payment System (MIPS) Groups, 
Performance Year (PY)2023 MCC Measure Code Specifications, Retrieved 
March 22, 2024 from 2023 Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple 
Chronic Conditions--QPP. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2202/2023%20MIPS%20Multiple%20Chronic%20Conditions%20Measure%20Specifications.zip.
    \735\ Jencks, S.F., et al. (2019). ``Safety-Net Hospitals, 
Neighborhood Disadvantage, and Readmissions Under Maryland's All-
Payer Program: An Observational Study.'' Ann Intern Med. doi: 
10.7326/M16-2671.
    \736\ Abernathy, K., Zhang, J., Mauldin, P., Moran, W., 
Abernathy, M., Brownfield, E., & Davis, K. (2016). Acute Care 
Utilization in Patients With Concurrent Mental Health and Complex 
Chronic Medical Conditions. Journal of primary care & community 
health, 7(4), 226-233. https://doi.org/10.1177/2150131916656155.
---------------------------------------------------------------------------

(vi) The APP and APP Plus Quality Measure Sets Beginning With the CY 
2025 Performance Period/2027 MIPS Payment Year
    Table 54 identifies the measures in the Adult Universal Foundation 
measure set, crosswalks them to corresponding MIPS measures, and lists 
the proposed timeline for their incorporation into the APP Plus quality 
measure set between the CY 2025 and 2028 performance periods/2027 and 
2030 MIPS payment years as they become available for both the eCQM and 
Medicare CQM collection types. We note that Clinician and Clinician 
Group Risk-standardized Hospital Admission Rates for Patients with 
Multiple Chronic Conditions (Quality # 484) is not one of the ten Adult 
Universal Foundation measures and is not listed in Table 19; however, 
we are maintaining reporting of this measure in the APP quality measure 
set, and, as such, also proposing to include it in the APP Plus quality 
measure set for the CY 2025 performance period/2027 MIPS payment year 
and subsequent performance periods.
BILLING CODE P

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    We refer readers to Table 53 for the APP quality measure set for 
the CY 2025 performance period/2027 MIPS payment year and subsequent 
years. The proposed APP Plus quality measures for the CY 2025 
performance period, the CY 2026 and 2027 performance periods, and the 
CY 2028 performance period and subsequent performance periods are 
displayed in Tables 55, 56, and 57, respectively. Under our proposal, 
there would be eight measures in the APP Plus quality measure set in 
the CY 2025 performance period (Table 55), nine measures in the CY 2026 
and 2027 performance periods (Table 56), and eleven measures in the CY 
2028 and subsequent performance periods (Table 57). We refer readers to 
Appendix 1 of this proposed rule for additional measure specification 
information.

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[GRAPHIC] [TIFF OMITTED] TP31JY24.089

BILLING CODE C
    Under our proposal, scoring for the APP quality performance 
category scoring methodology at Sec.  414.1367(c)(1) would continue to 
be performed in

[[Page 62031]]

accordance with Sec.  414.1380(b)(1). For the APP quality measure set, 
this means that the scoring methodology would not change. For the APP 
Plus quality measure set, we are proposing to calculate the MIPS 
quality performance category score for a MIPS eligible clinician, 
group, or APM Entity that chooses to report the APP Plus quality 
measure set via the APP by summing the scores for all of the measures, 
as applicable, included in the APP Plus quality measure set for a given 
year. Scoring clinicians on all measures, as applicable, in the APP 
Plus quality measure set will promote the best, safest, and most 
equitable care and provide a comprehensive assessment of the 
performance of those who choose to report the measure set.
    Because we are proposing that a MIPS eligible clinician, group, or 
APM Entity that chooses to report the APP Plus quality measure set 
would be scored on all of the measures in that set, we are also 
proposing a conforming change to MIPS data submission requirements in 
Sec.  414.1335(b) to require that a MIPS eligible clinician, group, or 
APM Entity that reports the APP Plus quality measure set via the APP 
would be required to report on all measures included in the APP Plus 
quality measure set, except for administrative claims-based measures, 
which are calculated using data from claims submissions. We solicit 
comment on this proposal. For further discussion on the data submission 
proposal for the APP Plus quality measure set, see section 
IV.A.4.e.(1)(b) of this proposed rule.
d. Data Submission for the Performance Categories
(1) Overview
    For previously established policies relevant to data submission for 
the MIPS performance categories, we refer readers to Sec.  414.1325 and 
the CY 2017 Quality Payment Program final rule (81 FR 77087 through 
77097), CY 2018 Quality Payment Program final rule (82 FR 53619 through 
53626), CY 2023 PFS final rule (86 FR 65438 through 65441) and CY 2024 
PFS final rule (88 FR 79330 through 79332). Specifically, we finalized 
at Sec.  414.1325(a)(1) that individual MIPS eligible clinicians, 
groups, virtual groups, subgroups, and Advanced Payment Model (APM) 
Entities must submit data on measures and activities for the quality, 
improvement activities, and Promoting Interoperability performance 
categories in accordance with Sec.  414.1325. We note, that under the 
current policies described at Sec.  414.1325(a)(2), there are no data 
submission requirements for the cost performance category or 
administrative claims-based quality measures.
    In this section, we are proposing to adopt minimum criteria for a 
qualifying data submission for a MIPS performance period for the 
quality, improvement activities, and Promoting Interoperability 
performance categories, which we propose to codify at Sec.  
414.1325(a)(1)(i) through (iii). We are also proposing to codify our 
existing policies governing our treatment of multiple data submissions 
received for the quality and improvement activities performance 
categories at Sec.  414.1325(f)(1). We are also proposing to modify our 
policy governing our treatment of multiple data submissions received 
for the Promoting Interoperability performance category, which we 
propose to codify at Sec.  414.1325(f)(2).
    Proposals in this section of this proposed rule are intended to 
eliminate certain issues with the scoring of an unintended data 
submission affecting payment adjustments for individual MIPS eligible 
clinicians, groups, virtual groups, subgroups, and APM Entities. We are 
proposing these changes to be effective beginning with the CY 2024 
performance period/2026 MIPS payment year for the data submission 
period in CY 2025. Additionally, we refer readers to section V.B.8.e. 
of this proposed rule for discussion on the burden estimates for these 
proposals.
(2) Proposed Minimum Criteria for a Qualifying Data Submission for the 
MIPS Quality, Improvement Activities, and Promoting Interoperability 
Performance Categories
(a) Background
    CMS uses the data submitted by (or on behalf of) individual MIPS 
eligible clinicians, groups, virtual groups, subgroups, or APM Entities 
in the quality, improvement activities, and Promoting Interoperability 
performance categories to assess their performance on the measures and 
activities in these three categories and to determine their MIPS 
payment adjustments. Under the previously established data submission 
policies at Sec.  414.1325, individual MIPS eligible clinicians, 
groups, virtual groups, subgroups, and APM Entities generally submit 
data on measures and activities for the quality, improvement 
activities, and Promoting Interoperability performance categories in 
accordance with the data submission deadlines at Sec.  414.1325(e)(1). 
Currently, we consider any submission of data received for a MIPS 
performance category during the designated data submission period for a 
MIPS performance period in accordance with Sec.  414.1325(e)(1) to be a 
data submission for the corresponding MIPS performance period and 
assign a score for the submission.
    For the quality and improvement activities performance categories, 
under the current reweighting policies at Sec.  414.1380(c)(2)(i)(A)(6) 
through (8) for an extreme and uncontrollable circumstance (EUC) or 
other type of exception based on certain circumstances, we score any 
data submitted by (or on behalf of) a MIPS eligible clinician with an 
approved reweighting application. This includes MIPS eligible 
clinicians with an approved application-based EUC reweighting or an 
approved reweighting for a clinician identified in a CMS-designated 
region affected by an automatic EUC event. Under this current policy, 
in the event that a MIPS eligible clinician submits any data for the 
quality or improvement activities performance category, such submission 
overrides the approved reweighting for the applicable performance 
category and we will score the performance categories for which data 
was submitted, and include the performance category scores in the MIPS 
eligible clinician's final score as otherwise provided in Sec.  
414.1380(c).
    Similarly, for the Promoting Interoperability performance category, 
under the current reweighting policies at Sec.  414.1380(c)(2)(i)(C) 
for a significant hardship or other type of exception based on certain 
circumstances, we score any data submitted by (or on behalf of) a MIPS 
eligible clinician with an approved reweighting application, except as 
provided in Sec.  414.1380(c)(2)(i)(C)(10) and (11). Under this current 
policy, in the event that a MIPS eligible clinician submits any data 
for the Promoting Interoperability performance category, such 
submission overrides the approved reweighting for the performance 
category and we will score the Promoting Interoperability performance 
category and include the category score in the MIPS eligible 
clinician's final score as otherwise provided in Sec.  414.1380(c).
    We have received inquiries from MIPS eligible clinicians that 
highlight unintended consequences associated with our current data 
submission requirements. Several MIPS eligible clinicians have notified 
us that there have been instances where they unintentionally submitted 
non-scorable data for a MIPS performance category, which overrode an 
approved

[[Page 62032]]

reweighting or a previously scorable data submission for the MIPS 
quality, improvement activities, or Promoting Interoperability 
performance categories. Data submissions without any scorable data 
(non-scorable data submissions) generally only include limited data 
that cannot be scored such as a practice ID, date, activity ID, measure 
ID, or CMS Electronic Health Record (EHR) Certification ID (CEHRT ID). 
MIPS eligible clinicians have also notified us that, in some instances, 
the data submission overriding the prior approved reweighting or prior 
scorable submission was performed by a third party intermediary or a 
practice representative.
    The MIPS eligible clinician, group, virtual group, subgroup, APM 
Entity, or third party intermediary acting on behalf of a MIPS eligible 
clinician, group, virtual group, subgroup, APM Entity, as applicable, 
that submits data on measures and activities under MIPS is defined at 
Sec.  414.1305 as the submitter type.
    The mechanism by which a submitter type submits data to CMS 
(including, as applicable: Direct, log in and upload, log in and 
attest, Medicare Part B claims, and the CMS Web Interface) is defined 
at Sec.  414.1305 as the submission type. The direct submission type 
allows users to transmit data through a computer-to-computer 
interaction, such as an API. The log in and upload submission type 
allows users to upload and submit data in the form and manner specified 
by CMS with a set of authenticated credentials. The log in and attest 
submission type allows users to manually attest that certain measures 
and activities were performed in the form and manner specified by CMS 
with a set of authenticated credentials. We refer readers to Sec.  
414.1325(b) and (c) for available data submission types individual MIPS 
eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities may utilize to submit data for the quality, improvement 
activities, and Promoting Interoperability performance categories.
    To submit data, a submitter must gain access to the Quality Payment 
Program website (https://qpp.cms.gov/login) for submitting or viewing 
data for the associated individual MIPS eligible clinician, group, 
subgroup, virtual group, or APM Entity. We refer readers to the Quality 
Payment Program Resource Library (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/335/QPP%20Access%20User%20Guide.zip) 
for additional information on the MIPS data submission process and 
obtaining access to submit data during the designated submission period 
under Sec.  414.1325(e)(1).
    After gaining access to the Quality Payment Program website for the 
associated individual MIPS eligible clinician, group, subgroup, virtual 
group, or APM entity, a submitter can navigate to the ``Eligibility and 
Reporting'' tab and view whether there is any reweighting applied for 
one or more of the MIPS performance categories for the associated 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity. In addition, at the time of submission, the system 
generates warnings to the submitter (for all the available submission 
types) if there is an existing approved reweighting for the performance 
category in which the data is being submitted or an existing data 
submission for an individual MIPS eligible clinician, group, virtual 
group, subgroup, or APM Entity. For example, if a group has an approved 
reweighting for the Promoting Interoperability performance category, 
the system alerts the submitter prior to completing the data submission 
with a message stating: ``This Action Will Impact Your Category 
Weights. Currently, Promoting Interoperability does not count towards 
your final score. By choosing to report Promoting Interoperability 
data, your score for this category will be included in your final 
score. This action cannot be undone.'' The submitter must check the 
``Yes, I agree'' box prior to confirming the data submission in the 
performance category. We refer readers to the Quality Payment Program 
Resource Library (https://qpp.cms.gov/resources/resource-library) for 
additional details on the process to submit MIPS data for MIPS eligible 
clinicians, groups, virtual groups, subgroups, and APM Entities.
    Under the current process, we assign a score for any submission 
received from an individual MIPS eligible clinician, group, virtual 
group, subgroup or APM Entity for a performance period during the 
designated MIPS submission period regardless of whether the submission 
included data on the MIPS measures and activities. We implemented the 
process to recognize any data submitted as an extension of the policy 
that submission of any data overrides reweighting of the MIPS 
performance categories as described at Sec.  414.1380(c)(2). We assign 
a score for submissions with data on MIPS measures and activities, and 
also for submissions that only include non-scorable data, such that 
they do not include any data that allows us to measure a clinician's 
performance on the applicable measures and activities. For example, if 
we receive a submission for a MIPS performance category without any 
measure or activity data (for example, without numerator and 
denominator data for any quality measures, without a response of 
``yes'' for any improvement activities, without a ``yes'' or ``no'' 
response for an attestation, or responses for the required objectives 
and associated measures and attestation statements for the Promoting 
Interoperability performance category), and the data submission 
includes only non-scorable data (such as the practice ID, measure ID 
and TIN/NPI information), we assign a zero score for the applicable 
MIPS performance category in the event we do not receive a subsequent 
submission with measure or activity data.
    Despite implementing these system warnings to alert the submitter 
of a potential impact of their entry on the reweighting status or 
existing data submission, we continue to receive non-scorable data 
submissions, which override an approved reweighting, or a previously 
scored data submission, for the MIPS quality, improvement activities, 
or Promoting Interoperability performance categories. To help address 
the unintentional overriding of an existing scorable data submission or 
an approved reweighting for the MIPS performance categories, we are 
proposing a narrower set of minimum criteria of what would qualify as a 
data submission under our existing policies. We note that we are not 
proposing to change our existing policies to assign a score for a data 
submission (meeting the proposed narrower minimum criteria) for the 
applicable MIPS performance categories, including our policy governing 
data submissions from a third party intermediary, even if the 
submission overrides an approved reweighting or a prior scorable 
submission for the MIPS eligible clinician, group, virtual group, 
subgroup, or APM Entity.
    We have identified that we could potentially avoid submissions 
without any scorable data on MIPS measures or activities from 
overriding previously approved reweighting or a prior submission for 
the MIPS performance categories if we require a submission to include 
certain data on measures or activities in the MIPS quality, improvement 
activities, or Promoting Interoperability performance categories in 
order to assign a score. Therefore, we are proposing to adopt minimum 
criteria for what we would consider to be a qualifying data submission 
for which CMS can assign a score.
    Specifically, we are proposing to consider a submission valid and

[[Page 62033]]

scorable (including, potentially, a score of zero) for the applicable 
MIPS performance category only if the data submission includes: 
numerator and denominator data for at least one MIPS quality measure in 
the quality performance category; a response of ``yes'' for at least 
one improvement activity in the improvement activities performance 
category; and all required elements to report objectives and associated 
measures and attestation statements for the Promoting Interoperability 
performance category.\737\ We discuss the details of these proposed 
data submission criteria for each performance category in sections 
IV.A.4.d.(2)(b), IV.A.4.d.(2)(c), and IV.A.4.d.(2)(d) of this proposed 
rule.
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    \737\ Attestation is one possible way to for MIPS eligible 
clinicians participating in APMs to earn credit in the improvement 
activities performance category but is not required to earn credit. 
Consistent with our regulation at Sec.  414.1380(b)(3)(i), we 
automatically award 50 percent credit for the improvement activities 
performance category to MIPS eligible clinicians participating in 
APMs when they attest to having completed an improvement activity or 
submit data for the quality or Promoting Interoperability 
performance categories. We are not proposing to change this.
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    We note that we are not proposing any changes to the existing 
scoring or reweighting policies described under Sec.  414.1380 for the 
MIPS performance categories in this section of this proposed rule. If 
the MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity does not have an approved reweighting for one or more of the 
MIPS performance categories and we do not receive a data submission for 
a performance category that has not been reweighted, we will assign a 
score of zero for the applicable performance category.
(b) Quality Performance Category
    We refer readers to Sec. Sec.  414.1325 and 414.1330 through 
414.1340 and the CY 2017 Quality Payment program final rule (81 FR 
77097 through 77162) and CY 2018 Quality Payment Program final rule (82 
FR 53626 through 53641), the CY 2019 PFS final rule (83 FR 59754 
through 59765), CY 2020 PFS final rule (84 FR 63949 through 62959), CY 
2021 PFS final rule (85 FR 84866 through 84877), CY 2022 PFS final rule 
(86 FR 65431 through 65445), CY 2023 PFS final rule (87 FR 70047 
through 70057), and CY 2024 PFS final rule (88 FR 79329 through 79338) 
for a description of previously established policies related to the 
quality performance category. The data submitted from the final list of 
MIPS quality measures are used to assess the performance of an 
individual MIPS eligible clinician, group, virtual group, subgroup, or 
APM Entity for the quality performance category, to contribute to their 
overall score, and to help determine the payment adjustment for MIPS 
eligible clinicians.
    We are proposing that a data submission in the quality performance 
category must include numerator and denominator data for at least one 
quality measure from the list of MIPS quality measures to be assigned a 
score in the quality performance category. Under the current policies 
described at Sec.  414.1325, we finalized data submission types for 
MIPS eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities. In the CY 2018 Quality Payment Program final rule (82 FR 
53780), we stated that we will determine a quality performance category 
percent score whenever a MIPS eligible clinician has submitted at least 
one quality measure. As described previously in this section of this 
proposed rule, we currently assign a score for any data submitted for 
the MIPS performance categories and have implemented operational 
measures to limit unintentional overriding of an approved reweighting 
or existing scorable data submitted for a MIPS performance category. 
However, we continue to receive unintentional submissions without data 
that can be scored resulting in the overriding of an approved 
reweighting application or a prior data submission that can be scored 
for the quality performance category. We note that this proposal does 
not include any changes to the current scoring policies described under 
Sec.  414.1380(b)(1) for the quality performance category. Therefore, 
we will still assign a score of zero for the quality performance 
category if an individual MIPS eligible clinician, group, virtual 
group, subgroup, or APM Entity does not submit at least one available 
quality measure unless the performance category has been reweighted as 
defined at Sec.  414.1380(c)(2).
    We propose to specify what we consider to be a data submission at 
Sec.  414.1325(a)(1)(i) to state that, for the quality performance 
category, a data submission must include numerator and denominator data 
for at least one MIPS quality measure from the final list of MIPS 
quality measures. We anticipate the proposed change would potentially 
avoid unintentional overriding of an approved reweighting or a prior 
data submission for the quality performance category due to submissions 
without any quality measure data. We are not proposing any changes to 
the data submission requirements, data submission criteria, data 
completeness criteria, and scoring for the quality performance category 
described under Sec. Sec.  414.1325, 414.1335, 414.1440, and 
414.1380(b)(1) respectively. We request public comments on this 
proposal.
(c) Improvement Activities Performance Category
    We refer readers to Sec. Sec.  414.1355 and 414.1360 and the CY 
2017 Quality Payment Program final rule (81 FR 77177 and 77178), CY 
2018 Quality Payment Program final rule (82 FR 53648 through 53661), CY 
2019 PFS final rule (83 FR 59776 and 59777), CY 2020 PFS final rule (84 
FR 62980 through 62990), CY 2022 PFS final rule (86 FR 65462) and the 
CY 2024 PFS final rule (88 FR 79328) for a description of previously 
established policies related to the improvement activities performance 
category.
    We previously finalized at Sec.  414.1360(a)(2) that MIPS eligible 
clinicians, groups, virtual groups, or subgroups must submit a yes 
response for each improvement activity that is performed for at least a 
continuous 90-day period during the applicable performance period to 
receive points in the improvement activities performance category 
described under Sec.  414.1360(b)(3). We currently assign a score for 
any submission or attestation received in the improvement activities 
performance category via the submission types described under Sec.  
414.1325(a)(1) regardless of whether the submission or attestation 
included a yes response or not. In the event of a submission without 
yes responses, we currently assign a score of zero.
    Data submitted in the improvement activities performance category 
is used to assess the performance of an individual MIPS eligible 
clinician, group, virtual group, subgroup, or APM Entity on the 
attestation or data submission for the improvement activities and to 
determine the payment adjustment for MIPS eligible clinicians. We are 
proposing to specify for clinicians what we consider to be a data 
submission and that we would score a data submission only if the 
submission includes a response of ``yes'' for at least one improvement 
activity included in the improvement activities inventory for the MIPS 
performance period. We anticipate the proposed change would potentially 
avoid unintentional overriding of an approved reweighting or a prior 
data submission for the improvement activities performance category due 
to submissions or attestations without a response of ``yes'' for any of 
the improvement activities.
    We propose to specify what we consider to be a data submission at

[[Page 62034]]

Sec.  414.1325(a)(1)(ii) to state that for the improvement activities 
performance category, a data submission must include a response of 
``yes'' for at least one activity in the MIPS improvement activities 
inventory. We note that we are not proposing any changes to the data 
submission criteria and scoring for the improvement activities 
performance category described under Sec. Sec.  414.1360 and 
414.1380(b)(3) respectively. We request public comments on this 
proposal.
(d) Promoting Interoperability Performance Category
    We refer readers to Sec.  414.1375 for our previously established 
policies regarding reporting for the Promoting Interoperability 
performance category. We also refer readers to Sec.  414.1305 for the 
definition of attestation, Sec.  414.1325 for data submission 
requirements, and Sec.  414.1380(b)(4) for Promoting Interoperability 
performance category scoring. We refer readers to Sec.  
414.1380(c)(2)(i)(C) for our previously finalized policies regarding 
scoring of data submission in the Promoting Interoperability 
performance category after an approved reweighting for the performance 
category. We also refer readers to the CY 2017 Quality Payment Program 
final rule (81 FR 77199 through 77245), CY 2018 Quality Payment Program 
final rule (82 FR 53663 through 53688), CY 2019, CY 2021, CY 2022, CY 
2023, and CY 2024 PFS final rules (83 FR 59785 through 59820, 84 FR 
62991 through 63006, 85 FR 84886 through 84895, 86 FR 65466 through 
65490, 87 FR 70060 through 70087, and 88 FR 79351 through 79365, 
respectively) for a description of previously established policies 
related to the Promoting Interoperability performance category.
    We currently consider any information received for the Promoting 
Interoperability performance category in the Quality Payment Program 
Submission environment a data submission and assign a performance 
category score based on the submission. We assign a score of zero for 
incomplete submissions in the Promoting Interoperability performance 
category, for example, submissions that include only a date and CMS 
CEHRT ID without any data that can be scored with respect to the 
required objectives, measures, or attestations, as specified by CMS. 
Under Sec.  414.1375, if we receive a complete data submission for the 
Promoting Interoperability performance category with responses included 
for all the required Promoting Interoperability objectives, associated 
measures, and attestation statements as specified by CMS and utilizing 
the CEHRT (meeting the definition at Sec.  414.1305) as required, we 
score the data submission under our established scoring policies for 
the performance category.
    We previously finalized at Sec.  414.1380(c)(2)(i)(C) that, if a 
MIPS eligible clinician with an approved reweighting for the Promoting 
Interoperability performance category submits data, they will be scored 
in this performance category and the reweighting will not be applied, 
except as provided in Sec.  414.1380(c)(2)(i)(C)(10) and (11). We also 
included in the educational materials available on the Quality Payment 
Program resource library (https://qpp-cm-prod content.s3.amazonaws.com/uploads/2602/2023MIPSSubmissionGuide.pdf) that a MIPS eligible 
clinician will be scored in this performance category if they attest to 
any data, such as selecting performance period dates or responding to 
attestation statements during the submission period. As set forth under 
Sec.  414.1380(c)(2)(i)(C), submission of any data for the Promoting 
Interoperability performance category overrides reweighting, including 
reweighting due an approved significant hardship exception and 
automatic reweighting for clinicians that are Ambulatory Surgical 
Center (ASC)-based, hospital-based, non-patient facing, and small 
practices. Similarly, under Sec.  414.1380(c)(2)(i)(A)(4)(iii), 
submission of any data also overrides our automatic reweighting of the 
Promoting Interoperability performance category for clinical social 
workers.\738\
---------------------------------------------------------------------------

    \738\ We note that this automatic reweighting policy for 
clinical social workers only applies through the CY 2024 performance 
period/2026 MIPS payment year.
---------------------------------------------------------------------------

    Furthermore, to earn a performance category score for the Promoting 
Interoperability performance category, we established at Sec.  414.1375 
that, for the performance period established at Sec.  414.1320, 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
or APM Entities must use CEHRT as defined at Sec.  414.1305, report on 
objectives and associated measures as specified by CMS, and submit 
attestations as specified by CMS. Under Sec.  414.1325(b) and (c), 
individual MIPS eligible clinicians, groups, virtual groups, subgroups 
and APM entities (or authorized representatives submitting on their 
behalf) can submit data for the Promoting Interoperability performance 
category using the direct, login and attest, or login and upload 
submission types. Specifically, to submit data for the Promoting 
Interoperability performance category, individual MIPS eligible 
clinicians, groups, virtual groups, subgroups and APM entities (or 
authorized representatives submitting on their behalf) must use CEHRT 
as required (meeting the definition at Sec.  414.1305) for the 
continuous 180-day performance period (Sec.  414.1320(i)) to report the 
applicable objectives, measures, and attestations. We refer readers to 
section IV.A.4.e.(4) of this proposed rule for additional details on 
CEHRT requirements (including ONC health IT certification criteria set 
forth under 45 CFR 170.315) and objectives, measures, and attestations 
required for the Promoting Interoperability performance category.
    Currently, we receive submissions in the Promoting Interoperability 
performance category without completed responses for all the required 
objectives, measures, and attestations. For example, if a submission 
for the Promoting Interoperability performance category includes only a 
date, practice ID, and/or a CEHRT ID, or the submission does not 
include all of the required objectives, measures, and attestations, 
then we consider these to be incomplete data submissions. Currently, an 
incomplete data submission would void an approved reweighting of the 
Promoting Interoperability performance category in accordance with 
Sec.  414.1380(c)(2)(i)(C). As discussed in this section of this 
proposed rule, we believe that we should not consider data submissions 
for the Promoting Interoperability performance category if the 
submission is incomplete, and does not include all necessary required 
data. We are proposing that the minimum criteria for a qualifying data 
submission for the Promoting Interoperability performance category must 
include all required reporting elements for the performance category, 
as specified below.
    We considered whether CMS should accept incomplete submissions for 
the Promoting Interoperability performance category. If CEHRT is 
utilized as required to collect and report measure data and submit 
attestation statements and other requirements, it would generally 
result in only complete submissions for the Promoting Interoperability 
performance category. We recognize that some of the measures in the 
Promoting Interoperability performance category (such as the SAFER 
Guides measure and security risk analysis) do not directly require the 
use of CEHRT, whereas some measures (such as e-prescribing) directly 
require the use of CEHRT. However, all the requirements for the 
Promoting Interoperability performance category are directly related to 
a MIPS eligible clinician demonstrating that whether

[[Page 62035]]

they are a meaningful user of CEHRT in accordance with sections 
1848(q)(2)(A)(iv), (B)(iv) and 1848(o)(2)(A) of the Act. Further, 
section 1848(o)(2)(A) requires that all requirements set forth therein 
(meaningful use of CEHRT, electronic exchange of health information, 
and reporting on clinical quality and other measures using CEHRT) be 
met for a MIPS eligible clinician to be treated as a meaningful EHR 
user for the applicable performance period. Therefore, accepting an 
incomplete data submission for the Promoting Interoperability 
performance category would be counterintuitive to a MIPS eligible 
clinician demonstrating whether they are a meaningful user of CEHRT in 
accordance with sections 1848(q)(2)(A)(iv), (B)(iv) and 1848(o)(2)(A) 
of the Act.
    We are proposing to adopt minimum criteria for what we would 
consider a qualifying data submission for the Promoting 
Interoperability performance category only if the submission includes 
all of the required reporting elements for the category, including data 
on all required measures (including any claim of an applicable 
exclusion), required attestation statements, the CEHRT ID, and the 
start and end date for the applicable performance period. This proposal 
would clarify what counts as a data submission for MIPS eligible 
clinicians and it would potentially avoid partial data submissions from 
overriding an approved reweighting or a previously scored submission 
for the Promoting Interoperability performance category.
    Specifically, we propose to specify minimum criteria as a 
qualifying data submission for the Promoting Interoperability 
performance category at Sec.  414.1325(a)(1)(iii) to provide that a 
data submission must include all of the following elements:
     Performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS;
     Required attestation statements, as specified by CMS;
     CMS EHR Certification ID (CEHRT ID) from the Certified 
Health IT Product List (CHPL); and
     The start date and end date for the applicable performance 
period as set forth in Sec.  414.1320.
    As discussed previously, we are not proposing any changes to the 
existing scoring or reweighting policies described under Sec.  414.1380 
for the MIPS performance categories in this section of this proposed 
rule. If the MIPS eligible clinician, group, virtual group, subgroup, 
or APM Entity does not have an approved reweighting for one or more of 
the MIPS performance categories and we do not receive a data submission 
meeting the proposed minimum criteria for a performance category that 
has not been reweighted, we will assign a score of zero for the 
applicable performance category. If we receive a qualifying data 
submission meeting the proposed minimum criteria for reporting, then we 
will review the data submission and score the Promoting 
Interoperability performance category in accordance with our applicable 
scoring policies.
    We refer readers to section IV.A.4.e.(4) of this proposed rule for 
additional details on the reporting requirements and scoring of the 
objectives, measures, and attestations the Promoting Interoperability 
performance category.
    We request public comments on this proposal.
(3) Treatment of Multiple Data Submissions
(a) Background
    Under the current policies described at Sec.  414.1325(d), 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
and APM Entities may submit their MIPS data using multiple data 
submission types for any performance category in accordance with Sec.  
414.1325(a)(1), as applicable; provided, however, that the individual 
MIPS eligible clinician, group, virtual group, subgroup, or APM Entity 
uses the same identifier for all performance categories and all data 
submissions. We established the policy to offer flexibility for 
individual MIPS eligible clinicians, groups, virtual groups, subgroups, 
and APM Entities with reporting, as it provides more options for 
submission of data for the applicable performance categories. We refer 
readers to the CY 2017 and 2018 Quality Payment Program final rules (81 
FR 77094 and 77095 and 82 FR 53619 through 53626, respectively) for 
additional details on the use of multiple data submission mechanisms 
for any MIPS performance category.
    As discussed in this section of this proposed rule, at Sec.  
414.1305, we define a submitter type as a MIPS eligible clinician, 
group, virtual group, subgroup, APM Entity, or third party intermediary 
acting on behalf of a MIPS eligible clinician, group, virtual group, 
subgroup, APM Entity, as applicable, that submits data on measures and 
activities under MIPS. During a submission period, a submitter 
associated with an organization (for example, registry, practice 
administrator, or EHR vendor) could submit data for a MIPS eligible 
clinician, group, subgroup, virtual group, or APM Entity. If needed, 
the submitter could also review and correct the data submission 
resulting in multiple data submissions for the MIPS performance 
categories. Additionally, there could be instances when a submitter 
unintentionally submits data multiple times. There could also be 
instances when we receive data for a MIPS eligible clinician, group, 
subgroup, virtual group, or an APM Entity from multiple organizations. 
For example, both a registry and a QCDR could submit MIPS data on 
behalf of a group practice for a performance period. Individual MIPS 
eligible clinicians, groups, practice representatives, and third party 
intermediaries benefit from the flexibility to submit data multiple 
times as it provides opportunities to correct errors in a prior 
submission and allows clinicians to submit data from multiple sources 
(qualified registry and group submission) to increase their chances to 
provide the most clinically relevant data.
    For the quality, improvement activities, and Promoting 
Interoperability performance categories, there is an established policy 
governing our treatment of multiple data submissions received for a 
performance period; additional guidance on how we process and score 
multiple submissions received in the MIPS performance categories via 
educational and outreach materials is available on the Quality Payment 
Program Resource Library (https://qpp.cms.gov/resources/resource-library). However, we have not codified this policy in prior rules. In 
this section, we are proposing to codify at Sec.  414.1325(f)(1) our 
existing policies governing our treatment of multiple data submissions 
received for the quality and improvement activities performance 
categories. We are also proposing to modify our policy governing our 
treatment of multiple data submissions received for the Promoting 
Interoperability performance category, which we also propose to codify 
at Sec.  414.1325(f)(2).
(b) Quality and Improvement Activities Performance Categories
    In the CY 2018 Quality Payment Program final rule (82 FR 53619 
through 53626), we discussed scoring policies for multiple submissions 
received in the MIPS performance categories. Specifically, we stated 
that if an individual MIPS eligible clinician or group submits the same 
measure through two different mechanisms, each submission would be 
calculated and

[[Page 62036]]

scored separately and that we do not have the ability to aggregate data 
on the same measure across submission mechanisms. We would only count 
the submission that gives the clinician the higher score, thereby 
avoiding double counting (82 FR 53620). We refer readers to CY 2019 PFS 
final rule (83 FR59747 through 59749) for our discussion of previously 
finalized policies related to the use of the term ``submission 
mechanism.''
    Under the existing process for the quality and improvement 
performance categories, if we receive multiple submissions for an 
individual clinician, group, subgroup, or virtual group from submitters 
from separate organizations (for example, registry, practice 
administrator, or EHR vendor), we score each submission and assign the 
highest of the scores for the performance category. If we receive 
multiple submissions for an individual clinician, group, subgroup, or 
virtual group from a submitter or submitters from the same 
organization, we will use the most recent submission. For example, if a 
qualified registry submits improvement activities for a group on 
Tuesday and a practice administrator submits improvement activities 
data for the same group on Wednesday, we will score all the data 
submissions and assign the highest of the scores. If the practice 
administrator from a group practice submits improvement activities data 
for the group on Tuesday and either the practice administrator or 
another submitter employed by the group practice submits improvement 
activities data for the group again on Wednesday, we will score only 
the data submission received on Wednesday because a new data submission 
received from the same organization on Wednesday will override the 
prior data submission on Tuesday.
    To codify the existing process for multiple data submissions for 
the quality and improvement activities performance categories, we are 
proposing to add at Sec.  414.1325(f)(1) that for multiple data 
submissions received in the quality and improvement activities 
performance categories in accordance with paragraphs (a)(1)(i) and (ii) 
for an individual MIPS eligible clinician, group, subgroup, or virtual 
group from submitters in multiple organizations (for example, qualified 
registry, practice administrator, or EHR vendor), CMS will calculate 
and score each submission received and assign the highest of the 
scores. We are also proposing to modify our policy governing our 
treatment of multiple data submissions for the quality and improvement 
activities performance category received for an individual MIPS 
eligible clinician, group, subgroup, or virtual group from one or 
multiple submitters in the same organization and score the most recent 
submission. We request public comments on this proposal.
(c) Promoting Interoperability Performance Category
    For the Promoting Interoperability performance category, we 
explained in the educational materials published on the Quality Payment 
Program Resource Library (https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2602/2023MIPSSubmissionGuide.pdf) that any data submitted 
through multiple submission types or multiple submissions submitted 
through the same submission type will result in a score of zero for the 
Promoting Interoperability performance category. Additionally, we 
recommended using a single submission type (file upload, API, or 
attestation by an individual MIPS eligible clinician, group, virtual 
group, subgroup or a third party intermediary) to submit data for the 
Promoting Interoperability performance category. As discussed in 
section IV.A.4.d.(2)(d) of this proposed rule, the utilization of the 
CEHRT should not generate conflicting data for measures and objectives 
in the Promoting Interoperability performance category. However, we 
have received inquiries from MIPS eligible clinicians that were 
impacted by the existing process to assign a score of zero for multiple 
submissions in the Promoting Interoperability performance category. 
Specifically, we identified scenarios when a complete submission from 
an individual MIPS eligible clinician or group followed by an 
incomplete submission resulted in a score of zero, either overriding a 
previous score greater than zero or voiding an approved reweighting for 
the performance category.
    On this basis, we propose to amend our policy for treatment of 
multiple data submissions for the Promoting Interoperability 
performance category. We are proposing that, for multiple data 
submissions received, CMS would calculate a score for each data 
submission received and assign the highest of the scores. We also are 
proposing to codify this proposal at Sec.  414.1325(f)(2).
    We believe this proposal is consistent with our existing policy for 
treatment of multiple data submissions received in the quality and 
improvement activities performance categories, as discussed previously. 
Implementing a similar policy for allowing multiple data submissions in 
the Promoting Interoperability performance category may provide 
flexibility for individual MIPS eligible clinicians, groups, virtual 
groups, subgroups, and APM Entities to fix errors in a prior data 
submission. Additionally, we recognize there may be instances when a 
practice switches EHR vendors during a performance period, potentially 
resulting in separate data submissions for the Promoting 
Interoperability performance category. This proposed policy also aligns 
with our intent to maintain consistency in data submission requirements 
across all MIPS performance categories, to the extent possible, as it 
significantly reduces the complexity for MIPS eligible clinicians 
participating in MIPS.
    We request public comments on this proposal.
f. MIPS Performance Category Measures and Activities
(1) Quality Performance Category
(a) Background
    Section 1848(q)(1)(A)(i) and (ii) of the Act requires the Secretary 
to develop a methodology for assessing the total performance of each 
MIPS eligible clinician according to certain specified performance 
standards and, using such methodology, to provide for a final score for 
each MIPS eligible clinician. Section 1848(q)(2)(A)(i) of the Act 
provides that the Secretary must use the quality performance category 
in determining each MIPS eligible clinician's final score, and section 
1848(q)(2)(B)(i) of the Act describes the measures that must be 
specified under the quality performance category.
    We refer readers to Sec. Sec.  414.1330 through 414.1340 and the CY 
2017 and CY 2018 Quality Payment Program final rules (81 FR 77097 
through 77162 and 82 FR 53626 through 53641, respectively), and the CY 
2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 2024 PFS final rules 
(83 FR 59754 through 59765, 84 FR 63949 through 62959, 85 FR 84866 
through 84877, 86 FR 65431 through 65445, 87 FR 70047 through 70055, 
and 88 FR 79329 through 79338, respectively) for a description of 
previously established policies and statutory basis for policies 
regarding the quality performance category.
    In this proposed rule, we are proposing to:
     Establish the data submission criteria for the Alternative 
Payment Model (APM) Performance Pathway (APP) quality measure set.
     Maintain the data completeness criteria threshold of at 
least 75 percent for the CY 2027 and CY 2028

[[Page 62037]]

performance periods/2029 and 2030 MIPS payment years.
     Codify previously established criteria pertaining to the 
removal of MIPS quality measures.
     Modify the MIPS quality measure set as described in 
Appendix 1 of this proposed rule, including the addition of new 
measures, updates to specialty sets, removal of existing measures, and 
substantive changes to existing measures.
(b) Data Submission Criteria
(i) Data Submission Criteria for the Quality Performance Category
    In the CY 2021 PFS final rule (85 FR 84859 through 84866), we 
established the APP in Sec.  414.1367 as an available reporting option 
starting with the CY 2021 performance period/2023 MIPS payment year, 
which was designed to provide a predictable and consistent MIPS 
reporting option to reduce reporting burden and encourage continued APM 
participation. Additionally, we finalized a quality measure set (85 FR 
84860 through 84861) for purposes of the quality performance category 
scoring for the APP.
    The APP and the APP quality measure set were designed to reduce the 
reporting burden and create new scoring opportunities for MIPS APMs by 
having a stable, streamlined pathway for reporting and scoring in MIPS 
while recognizing the reporting burden and performance scoring that 
MIPS eligible clinicians, groups, and APM Entities already experience 
in their respective MIPS APMs. We believed that using a broadly 
applicable population health-based measure set would enable MIPS APM 
participants to focus on the quality measures being reported through 
their APMs, while relying on a consistent measure set within the APP 
from year to year. (85 FR 84862).
    In section IV.A.4.c.(3) of this proposed rule, we are proposing to 
create a second quality measure set as an available option under the 
APP, specifically the APP Plus quality measure set, which is a set of 
measures that are included in the Adult Universal Foundation measure 
set. Of the ten Adult Universal Foundation measures, five of the 
measures are already included in the APP quality measure set for the CY 
2025 performance period/2027 MIPS payment year (88 FR 79113 through 
79114). The APP Plus quality measure set would initially consist of all 
the measures currently within the APP quality measure set (five Adult 
Universal Foundation measures and a separate quality measure) plus two 
additional measures from the Adult Universal Foundation measure set. 
The set would incrementally add the remaining three Adult Universal 
Foundation measures by the CY 2028 performance period/2030 MIPS payment 
year. (We refer readers to section IV.A.4.c.(3) of this proposed rule 
for further discussion regarding the APP Plus quality measure set.) 
Aligning the APP Plus quality measure set with the Adult Universal 
Foundation measure set serves to advance Medicare's overall value-based 
care strategy and maintain alignment within and across CMS's quality 
programs. The alignment of quality measures across CMS programs allows 
clinicians to better focus their quality efforts, reduce administrative 
burden, and drive digital transformation and stratification of a 
focused quality measure set to assess the impact on disparities.\739\
---------------------------------------------------------------------------

    \739\ Update On The Medicare Value-Based Care Strategy: 
Alignment, Growth, Equity'', Health Affairs Forefront, March 14, 
2024. DOI: 10.1377/forefront.20240311.141546.
---------------------------------------------------------------------------

    For the APP Plus quality measure set, we are proposing in Sec.  
414.1335(b) to require MIPS eligible clinicians, groups, and APM 
Entities, including Medicare Shared Saving Program Accountable Care 
Organizations (ACOs), to report on all measures in the APP Plus quality 
measure set (with the exception of the administrative claims-based 
quality measures automatically calculated by CMS) for the applicable 
performance period. As discussed further in sections IV.A.4.c.(3) of 
this proposed rule, the APP Plus quality measure set would be optional 
for MIPS eligible clinicians, groups, and APM Entities (not including 
Medicare Shared Savings Program ACOs) meeting the reporting 
requirements under the APP starting with the CY 2025 performance 
period/2027 MIPS payment year. However, for a Medicare Shared Savings 
Program ACOs, they would be required to report the APP Plus quality 
measure set to meet the reporting requirements of the Medicare Shared 
Savings Program's quality performance standard as discussed in section 
IV.A.4.c.(2) of this proposed rule. Under the proposal in Sec.  
414.1335(b), the requirement to report all measures within the APP Plus 
quality measure set (with the exception of the administrative claims-
based quality measures automatically calculated by CMS) would be the 
same regardless of whether a MIPS eligible clinicians, group or APM 
Entity is reporting the APP Plus quality measure set on a mandatory or 
optional basis. We are proposing conforming amendments in Sec.  
414.1335(a).
    Having Medicare Shared Savings Program ACOs use the APP Plus 
quality measure set allows for the comprehensive incorporation of the 
quality measures in the Adult Universal Foundation measure set by the 
CY 2028 performance period/2030 MIPS payment year and the better 
alignment of the quality measures reported by Medicare Shared Savings 
Program ACOs with the Medicaid Core Sets and the Marketplace Quality 
Rating System, which have previously adopted the quality measures in 
the Adult Universal Foundation.\740\ Also, the alignment with the Adult 
Universal Foundation would better align the quality measures reported 
by Medicare Shared Savings Program ACOs with the Value in Primary Care 
MIPS Value Pathway (MVP). Alignment would allow clinicians to leverage 
their familiarity and experience with the Adult Universal Foundation 
quality measures among primary care clinicians participating in this 
MVP as they transition to reporting the APP Plus quality measure set in 
the Medicare Shared Savings Program. Experience and familiarity with 
the same quality measures, redesigned care processes, and quality 
improvement activities that are commonplace in ACOs would streamline 
the pathway for clinicians to join ACOs in the future, which is 
consistent with our goal to have all beneficiaries in an accountable 
care relationship by 2030. The Medicare Shared Savings Program has the 
authority under section 1899(b)(3)(C) of the Act to seek to improve the 
quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both for purposes of assessing such quality 
of care.
---------------------------------------------------------------------------

    \740\ Jacobs D, Schreiber M, Seshamani M, Tsai D, Fowler E, 
Fleisher L. Aligning Quality Measures across CMS--The Universal 
Foundation. New England Journal of Medicine, March 2, 2023, 
available at https://www.nejm.org/doi/full/10.1056/NEJMp2215539.
---------------------------------------------------------------------------

    Lastly, we note that the existing reporting requirements and 
scoring policies established in Sec.  414.1367(c)(1) continue to be 
applicable to the APP quality measure set. Similarly, the existing 
scoring policies established in Sec.  414.1367(c)(1) would be 
applicable to the APP Plus quality measure set. As discussed in more 
detail in section IV.A.4.c.(3) of this proposed rule we are proposing 
to require that all measures within the APP Plus quality measure set be 
reported (with the exception of the administrative claims-based quality 
measures that are automatically calculated by CMS), and all measures in 
the APP Plus quality measure set would be scored, unless a measure does 
not

[[Page 62038]]

have a benchmark or meet the case minimum requirements. If a measure 
within the APP Plus quality measure set does not have a benchmark or 
meet the case minimum requirements, the measure would still be required 
to be reported in order to meet the reporting requirements of the APP 
and for the measure to be excluded from scored (such measure would not 
contribute to the quality performance category score as long as the 
measure is reported). If such a measure is not reported, then the 
measure would fail to meet the reporting requirements of the APP and as 
a result, it would receive 0 achievement points.
    We are seeking public comment on the proposal to establish the data 
submission criteria for the APP Plus quality measure set, specifically 
the proposal to require the reporting of all measures within the APP 
Plus quality measure set (with the exception of the administrative 
claims-based quality measures automatically calculated by CMS).
(c) Data Completeness Criteria
(i) Data Completeness Criteria for the Quality Performance Category
    As described in the CY 2017 Quality Payment Program final rule (81 
FR 77125 through 77126), to ensure that data submitted on quality 
measures are complete enough to accurately assess each MIPS eligible 
clinician's quality performance, we established a data completeness 
requirement. Section 1848(q)(5)(H) of the Act provides that analysis of 
the quality performance category may include quality measure data from 
other payers, specifically, data submitted by MIPS eligible clinicians 
with respect to items and services furnished to individuals who are not 
entitled to benefits under Part A or enrolled under Part B of Medicare. 
For the CY 2017 performance period/2019 MIPS payment year (first year 
of the implementation of MIPS), we established the data completeness 
criteria threshold to reflect a threshold of at least 50 percent (81 FR 
77125). The data completeness criteria threshold means the following: 
an individual MIPS eligible clinician, group, virtual group, or APM 
Entity submitting measure data on qualified clinical data registry 
(QCDR) measures, MIPS clinical quality measures (CQMs), or electronic 
clinical quality measures (eCQMs) must submit data on at least a 
specific percent (that is, 50 percent as specified above and 60 
percent, 70 percent, and 75 percent as specified in the following 
paragraphs) of their patients that meet the measure's denominator 
criteria, regardless of payer; an individual MIPS eligible clinician, 
group, virtual group, or APM Entity submitting quality measure data on 
Medicare Part B claims measures must submit data on at least a 
specified percent (i.e., 50 percent as specified above and 60 percent, 
70 percent, and 75 percent as specified in the following paragraphs) of 
their Medicare Part B patients seen during the corresponding 
performance period; and an APM Entity, specifically a Medicare Shared 
Savings ACO that meets the reporting requirements under the APP, 
submitting quality measure data on Medicare CQMs must submit data on at 
least a specified percent (that is, 70 percent and 75 percent as 
specified in the following paragraphs) of the APM Entity's applicable 
beneficiaries eligible for the Medicare CQM, as defined at Sec.  
425.20, who meet the measure's denominator criteria.
    In the CY 2017 and CY 2018 Quality Payment Program final rules and 
the CY 2020 PFS final rule, we noted that we would increase the data 
completeness criteria threshold over time (81 FR 77121, 82 FR 53632, 
and 84 FR 62951). We increased the data completeness criteria threshold 
from at least 50 percent to at least 60 percent for the CY 2018 
performance period/2020 MIPS payment year (81 FR 77125 and 82 FR 53633) 
and maintained a threshold of at least 60 percent for the CY 2019 
performance period/2021 MIPS payment year (82 FR 53633 and 53634). For 
the CY 2020 performance period/2022 MIPS payment year, we increased the 
data completeness criteria threshold from at least 60 percent to at 
least 70 percent (84 FR 62952). We maintained data completeness 
criteria threshold of at least 70 percent for the CY 2021, CY 2022, and 
CY 2023 performance periods/2023, 2024, and 2025 MIPS payment years (86 
FR 65435 through 65438). For the CY 2024 and CY 2025 performance 
periods/2026 and 2027 MIPS payment years, we increased the data 
completeness criteria threshold from at least 70 percent to at least 75 
percent (87 FR 70049 through 70052). Lastly, we maintained the data 
completeness criteria threshold of at least 75 percent for the CY 2026 
performance period/2028 MIPS payment year (88 FR 79334 through 79337).
    We continue to believe that it is important to incrementally 
increase the data completeness criteria threshold as MIPS eligible 
clinicians, groups, virtual groups, subgroups, and Alternative Payment 
Model (APM) Entities gain experience with MIPS. The incorporation of 
higher data completeness criteria thresholds in future years ensures a 
more accurate assessment of a MIPS eligible clinician's performance on 
quality measures and prevents selection bias to the extent possible (81 
FR 77120, 82 FR 53632, 83 FR 59758, 86 FR 65436, 87 FR 70049, and 88 FR 
79334). In order to improve compliance with the data completeness 
threshold, we have encouraged all MIPS eligible clinicians to perform 
the quality actions associated with the quality measures on their 
patients (82 FR 53632, 86 FR 65436, 87 FR 70049, and 88 FR 79334) such 
that all applicable cases may be used when calculating a measure. The 
data submitted for each measure is expected to be representative of the 
individual MIPS eligible clinician, group, or virtual group's overall 
performance for that measure.
    Increasing the data completeness criteria threshold provides for a 
more accurate assessment of performance. We want to ensure that an 
appropriate, yet achievable, data completeness criteria threshold is 
applied to all eligible clinicians participating in MIPS. Based on our 
analysis of data completeness rates from data submission for the CY 
2017 performance period,\741\ it is generally feasible for eligible 
clinicians and groups to achieve a higher data completeness criteria 
threshold without jeopardizing their ability to successfully 
participate and perform well in MIPS. Our approach for increasing the 
data completeness criteria threshold slowly and incrementally over time 
enhances the ability for individual MIPS eligible clinicians, groups, 
virtual groups, subgroups, and APM Entities to meet the data 
completeness criteria threshold as it increases and consequently, 
enables successful participation under MIPS. Thus, a data completeness 
criteria threshold of less than 100 percent may reduce clinician burden 
and accommodate operational issues that may arise during data 
collection during the initial years of the program (82 FR 53632, 86 FR 
65436, 87 FR 70049, and 88 FR 79334).
---------------------------------------------------------------------------

    \741\ As described in the CY 2020 PFS final rule (84 FR 62951), 
the average data completeness rates were as follows: for individual 
eligible clinicians, it was 76.14; for groups, it was 85.27; and for 
small practices, it was 74.76.
---------------------------------------------------------------------------

    As MIPS eligible clinicians, groups, virtual groups, and APM 
Entities have gained experience participating in MIPS, particularly 
meeting the data completeness criteria threshold over the last 8 years 
(from the CY 2017 performance period to the CY 2024 performance 
period), such experience has prepared MIPS eligible clinicians, groups, 
virtual groups, subgroups (participation option available starting with 
the CY 2024 performance period),

[[Page 62039]]

and APM Entities to meet incremental increases in the data completeness 
criteria threshold. We have maintained a data completeness criteria 
threshold of at least 70 percent for 4 years from the CY 2020 
performance period through the CY 2023 performance period and as a 
result, individual MIPS eligible clinicians, groups, virtual groups, 
and APM Entities had 4 years of a maintained data completeness criteria 
threshold of at least 70 percent before transitioning to an increased 
data completeness criteria threshold of at least 75 percent starting 
with the CY 2024 performance period. We believed that maintaining the 
data completeness criteria threshold of at least 70 percent for 4 years 
provided adequate time for individual MIPS eligible clinicians, groups, 
virtual groups, and APM Entities to adjust to the increase that went 
into effect at the onset of the COVID-19 public health emergency and 
account for the implications the COVID-19 pandemic had on the 
healthcare system.
    As we assess the timeframe for a potential future increase to the 
data completeness criteria threshold, we have determined that 
maintaining the data completeness criteria threshold of at least 75 
percent for a total of 5 years would provide sufficient time for MIPS 
eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities to adjust to the data completeness criteria threshold of at 
least 75 percent. In response to the proposal in the CY 2023 PFS 
proposed rule to increase the data completeness criteria threshold to 
at least 80 percent starting with the CY 2026 performance period/2028 
MIPS payment year, interested parties indicated in the public comments 
that increasing the data completeness threshold from 75 to 80 percent 
within two years of increasing the threshold from 70 to 75 percent 
would present various challenges such as the following, which would 
make it more difficult to meet the data completeness criteria 
threshold: increased burden (in particular, disproportionately increase 
burden for smaller and rural practices due to limited resources and 
staff, and some practices that are continuing to recover from the 
COVID-19 Public Health Emergency); and exacerbated technical and 
interoperability challenges pertaining to data aggregation across 
multiple EHRs, systems (utilizing different registries, and EHR 
developers and vendors), and sites (including multiple TINs 
participating in the Medicare Shared Savings Program as an ACO) (88 FR 
79337). We accept these concerns, and we thus believe that MIPS 
eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities require more time to adjust and prepare for an increase. We 
have implemented the data completeness criteria threshold of at least 
75 percent for 2 years. Specifically, we previously established that 
for the CY 2024 performance period through the CY 2026 performance 
period/2026 MIPS payment year through the 2028 MIPS payment year, we 
would establish and maintain the data completeness threshold of at 
least 75 percent (87 FR 70049 through 70052, 88 FR 79334 through 
79337). Therefore, for the CY 2027 and CY 2028 performance periods/2029 
and 2030 MIPS payment years, we are proposing to maintain the data 
completeness criteria threshold of at least 75 percent. In establishing 
data completeness criteria thresholds in advance of an applicable 
performance period, it is advantageous to delineate the expectations 
for MIPS eligible clinicians, groups, virtual groups, subgroups, and 
APM Entities as it provides sufficient notice of the expectation and 
subsequently, allows such MIPS eligible clinicians, groups, virtual 
groups, subgroups, and APM Entities to prepare for a potential increase 
in future years.
    In this proposed rule, we are proposing to maintain the data 
completeness criteria threshold of at least 75 percent for 2 additional 
years. Specifically, in Sec.  414.1340(a), we are proposing the 
following data completeness criteria thresholds pertaining to QCDR 
measures, MIPS CQMs, and eCQMs:
     At paragraph (a)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on QCDR measures, MIPS CQMs, or eCQMs must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients that meet the 
measure's denominator criteria, regardless of payer.
    Similarly, in Sec.  414.1340(b), respectively, we are proposing the 
following data completeness criteria thresholds pertaining to Medicare 
Part B claims measures:
     At paragraph (b)(4), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, a MIPS eligible 
clinician, group, virtual group, subgroup, and APM Entity submitting 
quality measures data on Medicare Part B claims measures must submit 
data on at least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity's patients seen during the 
corresponding performance period to which the measure applies.
    Additionally, in Sec.  414.1340(d), respectively, we are proposing 
the following data completeness criteria thresholds pertaining to 
Medicare CQMs:
     At paragraph (d)(1), for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years, an APM Entity, 
specifically a Medicare Shared Savings Program ACO that meets the 
reporting requirements under the APP, submitting quality measure data 
on Medicare CQMs must submit data on at least 75 percent of the APM 
Entity's applicable beneficiaries eligible for the Medicare CQM, as 
defined at Sec.  425.20, who meet the measure's denominator criteria.
    Lastly, for the data completeness criteria pertaining to the 
quality performance category, we are proposing a conforming amendment 
to recognize that an APM Entity, specifically a Medicare Shared Savings 
Program ACO that meets the reporting requirements under the APP, must 
meet the data completeness criteria requirements established at Sec.  
414.1340(d)(1).
    We are seeking public comment on these proposals.
(d) Selection of Quality Measures
(i) Addition of New Quality Measures
(A) Pre-Rulemaking Process
    Prior to introducing a new MIPS quality measure in a proposed rule, 
CMS receives public input on measures through the pre-rulemaking 
process (referred to as the Pre-Rulemaking Measure Review (PRMR)) 
established in accordance with section 1890A of the Act. Although 
section 1848(q)(2)(D)(viii) of the Act provides that the pre-rulemaking 
process under section 1890A of the Act is not required to apply to the 
selection of MIPS quality measures, we have found that the pre-
rulemaking process provides a comprehensive review of measures from 
multi-stakeholder workgroups and have accordingly elected for such 
measures to be reviewed utilizing the PRMR process (87 FR 70048). 
Pursuant to the established PRMR process (additional information 
regarding the PRMR process is available at https://p4qm.org/PRMR), CMS 
has contracted with a Consensus-Based Entity (CBE), which is 
responsible for convening a multi-stakeholder panel comprised of 
clinicians, patients, measure experts, and health information 
technology specialists to provide input on measures CMS is considering 
for use in Medicare.

[[Page 62040]]

    The pre-rulemaking process begins with CMS's publication of 
measures under consideration for use in Medicare (the MUC List). Each 
measure on the MUC List is reviewed by one of several committees 
convened by the PQM for the purpose of providing multi-stakeholder 
input to the Secretary. The PRMR process includes opportunities for 
public comment through a 21-day public comment period, as well as 
public listening sessions. The PQM posts the compiled comments and 
listening session inputs received during the public comment period and 
the listening sessions within 5 days of the close of the public comment 
period. More details regarding the PRMR process may be found in the PQM 
Guidebook of Policies and Procedures for Pre-Rulemaking Measure Review 
and Measure Set Review.
    The final vote of a multistakeholder committee convened by the CBE 
may result in the following disposition of a measure: recommended, 
recommended with conditions, do not recommend, or no consensus. A ``no 
consensus'' recommendation signals continued disagreement among the 
committee despite being presented with perspectives from public 
comment, committee member feedback and discussion, and highlights the 
multi-faceted assessments of quality measures. Quality measures that 
are considered for potential implementation in MIPS starting with the 
CY 2025 performance period were included on the 2023 Measures Under 
Consideration (MUC) List (available at https://mmshub.cms.gov/sites/default/files/2023-MUC-List.xlsx). The new MIPS quality measures 
proposed are described in Table Group A of Appendix 1 of this proposed 
rule. There may be cases in which the CBE does not recommend for a 
measure to move forward to the rulemaking process and eventual 
implementation due to a measure not being endorsed by the CBE or other 
CBE, but we go forth with proposing a measure. We note that section 
1848(q)(2)(D)(iii)(v)(III) of the Act does not preclude the Secretary 
from proposing and implementing measures that are not endorsed by a CBE 
as long as the measure is evidence-based.
(ii) Removal of Quality Measures
    In this proposed rule, we are codifying previously established 
criteria for the removal of MIPS quality measures from the MIPS quality 
measure inventory. In the CY 2017 Quality Payment Program final rule 
(81 FR 77136 through 77137), we established the following criteria for 
measure removal to include: If the Secretary determines that the MIPS 
quality measure is no longer meaningful, such as MIPS quality measures 
that are topped out; and, if a measure steward is no longer able to 
maintain the quality measure. In the CY 2019 PFS final rule (83 FR 
59763), we expanded the criteria for measure removal to include MIPS 
quality measures that reached an extremely topped out status (for 
example, a measure with an average mean performance within the 98th to 
100th percentile range); the MIPS quality measure may be proposed for 
removal in the next rulemaking cycle, regardless of whether or not it 
is in the midst of the topped-out measure lifecycle, due to the 
extremely high and unvarying performance where meaningful distinctions 
and improvement in performance can no longer be made, after taking into 
account any other relevant factors.
    Also, in the CY 2019 PFS final rule (83 FR 59764), we established 
other criteria for measure removal, specifically MIPS quality measures 
that are: duplicative; not maintained or updated to reflect current 
clinical guidelines, which are not reflective of a clinician's scope of 
practice; and low-bar, standard of care process measures. As described 
in the CY 2019 PFS final rule (83 FR 59765), we established an approach 
to incrementally remove process measures where prior to removal, 
consideration will be given to, but will not be limited to the 
following:
     Whether the removal of the process measure impacts the 
number of measures available for a specific specialty.
     Whether the MIPS quality measure addresses a priority area 
highlighted in the Measure Development Plan: https://www.cms.gov/Medicare/Quality-Payment-Program/Measure-Development/Measuredevelopment.html.
     Whether the MIPS quality measure promotes positive 
outcomes in patients.
     Considerations and evaluation of the measure's performance 
data.
     Whether the MIPS quality measure is designated as high 
priority or not.
     Whether the MIPS quality measure has reached extremely 
topped out status within the 98th to 100th percentile range, due to the 
extremely high and unvarying performance where meaningful distinctions 
and improvement in performance can no longer be made.
    Lastly, in the CY 2020 PFS final rule (84 FR 62958 through 62959), 
we expanded the criteria for measure removal to include MIPS quality 
measures that do not meet case minimum and reporting volumes required 
for benchmarking after being in the program for 2 consecutive CY 
performance periods and not available for MIPS quality reporting by or 
on behalf of all MIPS eligible clinicians. For MIPS quality measures 
that do not meet case minimum and reporting volumes required for 
benchmarking after being in the program for 2 consecutive CY 
performance periods, we noted that we will factor in other 
considerations (such as, but not limited to: The robustness of the 
measure; whether it addresses a measurement gap; if the measure is a 
patient-reported outcome; and consideration of the MIPS quality measure 
in developing MVPs) prior to determining whether to remove the MIPS 
quality measure.
    We are proposing to codify the aforementioned criteria established 
for the removal of MIPS quality measures from the MIPS quality measure 
inventory in Sec.  414.1330(c), respectively.
(iii) Inventory of Quality Measures
    Section 1848(q)(2)(D)(i) of the Act requires the Secretary, through 
notice and comment rulemaking, to establish an annual final list of 
quality measures from which MIPS eligible clinicians may choose for the 
purpose of assessment under MIPS. Section 1848(q)(2)(D)(i)(II) of the 
Act requires that the Secretary annually update the list by removing 
measures from the list, as appropriate; adding new measures to the 
list, as appropriate; and determining whether measures that have 
undergone substantive changes should be included on the updated list.
    Previously finalized MIPS quality measures can be found in the CY 
2024 PFS final rule (88 FR 79556 through 79964), CY 2023 PFS final rule 
(87 FR 70250 through 70633), CY 2022 PFS final rule (86 FR 65687 
through 65968), CY 2021 PFS final rule (85 FR 85045 through 85377), CY 
2020 PFS final rule (84 FR 63205 through 63513), CY 2019 PFS final rule 
(83 FR 60097 through 60285), CY 2018 Quality Payment Program final rule 
(82 FR 53966 through 54174), and CY 2017 Quality Payment Program final 
rule (81 FR 77558 through 77816). We are proposing changes to the MIPS 
quality measure inventory, as set forth in Appendix 1 of this proposed 
rule, including the following: the addition of new measures; updates to 
specialty sets (i.e., creation of new specialty sets; addition and/or 
removal of measures; and substantive changes to existing measures 
within specialty sets); removal of existing measures; and substantive 
changes to existing measures. For the CY 2025 performance

[[Page 62041]]

period, we are proposing an inventory of 196 MIPS quality measures.
    The new MIPS quality measures that we are proposing to include in 
MIPS for the CY 2025 performance period and future years can be found 
in Table Group A of Appendix 1 of this proposed rule. For the CY 2025 
performance period, we are proposing 9 new MIPS quality measures, which 
includes 5 high priority measures, of which 2 are also patient-reported 
outcome measures.
    On January 3, 2024, we announced that we would be accepting 
recommendations for potential new specialty measure sets or revisions 
to existing specialty measure sets for year 9 (CY 2017 performance 
period/2019 MIPS payment year through CY 2025 performance period/2027 
MIPS payment year) of MIPS under the Quality Payment Program.\742\ The 
recommendations we received were based on the MIPS quality measures 
finalized in the CY 2024 PFS final rule and the 2023 MUC List; the 
recommendations include the addition or removal of current MIPS quality 
measures from existing specialty sets, and/or the creation of new 
specialty sets. All specialty set recommendations submitted for 
consideration were assessed and vetted, and as a result, the 
recommendations that we agree with are proposed in this proposed rule. 
We are proposing the addition of a new specialty set and additionally 
proposing modifications to existing specialty sets as described in 
Table Group B of Appendix 1 of this proposed rule. Modifications to 
specialty sets include the addition of new measures and/or existing 
measures within the MIPS quality measure inventory, removal of 
measures, and/or substantive changes to previously finalized measures 
(we refer readers to Table Group D of Appendix 1 in this proposed 
rule). Specialty and subspecialty sets are not inclusive of every 
specialty or subspecialty. We develop and maintain specialty measure 
sets to assist MIPS eligible clinicians with selecting quality measures 
that are most relevant to their scope of practice.
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    \742\ Message to the Quality Payment Program listserv on January 
3, 2024, entitled ``The Centers for Medicare & Medicaid Services 
(CMS) is Soliciting Stakeholder Recommendations for Potential 
Consideration of New Specialty Measure Sets and/or Revisions to the 
Existing Specialty Measure Sets for the 2025 Performance Year of the 
Merit-based Incentive Payment System (MIPS).''
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    In addition to establishing new individual MIPS quality measures, 
modifying existing specialty sets, and creating new specialty sets as 
described in Tables Group A and Group B of Appendix 1 of this proposed 
rule, we refer readers to Table Group C of Appendix 1 of this proposed 
rule for a list of MIPS quality measures proposed for removal and 
applicable rationale for each measure. We have previously specified 
certain criteria that will be used when we are considering the removal 
of a measure (81 FR 77136 and 77137; 83 FR 59763 through 59765; 84 FR 
62957 through 62959); and such criteria is outlined in the proposed 
Sec.  414.1330(c) (as further discussed in section IV.A.4.e.(1)(d)(ii) 
of this proposed rule). For the CY 2025 performance period, we are 
proposing to remove 11 MIPS quality measures based on the previously 
established criteria. Of the 11 MIPS quality measures proposed for 
removal, 2 MIPS quality measures are duplicative to a proposed new MIPS 
quality measure; 3 MIPS quality measures are duplicative of current 
measures; 1 MIPS quality measure has reached the topped out lifecycle; 
2 MIPS quality measures are extremely topped out; 1 MIPS quality 
measure is no longer owned/maintained; and 2 MIPS quality measures have 
limited adoption and consequently, have not been able to establish 
benchmarks to provide a meaningful impact to quality improvement. We 
have continuously communicated to interested parties our desire to 
reduce the number of process measures within the MIPS quality measure 
set (see, for example, 83 FR 59763 through 59765). Seven of the MIPS 
quality measures proposed for removal are process measures that would 
not provide granular information related to disparities. The proposal 
to remove the MIPS quality measures described in Table Group C of 
Appendix 1 of this proposed rule would lead to a more parsimonious 
inventory of meaningful, robust measures in the program, and that our 
approach to removing measures should occur through an iterative process 
that includes an annual review of the MIPS quality measures to 
determine whether they meet our removal criteria.
    Also, we are proposing substantive changes to several MIPS quality 
measures, which can be found in Table Group D of Appendix 1 of this 
proposed rule. We have previously established criteria that would apply 
when we are considering making substantive changes to a quality measure 
(81 FR 77137, and 86 FR 65441 through 65442). We are proposing 
substantive changes to 66 MIPS quality measures, which includes 2 MIPS 
quality measures previously retained for utilization only in MVPs (we 
refer readers to Table Group DD of Appendix 1 of this proposed rule for 
such measures). On an annual basis, we review the established MIPS 
quality measure inventory to consider updates to the measures. Possible 
updates to measures may be minor or substantive. The aforementioned 
proposed inventory of 196 MIPS quality measures includes 193 MIPS 
quality measure available for utilization in traditional MIPS and MVPs, 
and 3 MIPS quality measures available only for utilization in MVPs (as 
finalized in the CY 2024 PFS final rule (88 FR 79897 through 77902)). 
In the CY 2024 PFS final rule, we removed the following 3 MIPS quality 
measures from traditional MIPS, but retained for utilization in MVPs: 
Quality #112: Breast Cancer Screening; Quality #113: Colorectal Cancer 
Screening; and Quality #128: Preventive Care and Screening: Body Mass 
Index (BMI) Screening and Follow-Up Plan (88 FR 79338 and 79897 through 
79902). We note that some MIPS quality measures available in 
traditional MIPS and/or MVPs are measures adopted by the Medicare 
Shared Savings Program for utilization under the APP, specifically the 
APP quality measure set and the newly established APP Plus quality 
measure set, as proposed in section IV.A.4.c.(3) of this proposed rule. 
For the MIPS quality measures available in the APP quality measure set 
and APP Plus quality measure set for the CY 2025 performance period, we 
refer readers to section IV.A.4.c.(1) and section IV.A.4.c.(3) of this 
proposed rule.
    Lastly, it should be noted that in this proposed rule, we are 
proposing a substantive change to the following administrative claims 
measure, Quality #492: Risk-Standardized Acute Cardiovascular-Related 
Hospital Admission Rates for Patients with Heart Failure under the 
Merit-based Incentive Payment System (we refer readers to Table Group D 
of Appendix 1 of this proposed rule), that would be applied 
retroactively starting with the CY 2023 performance period/2025 MIPS 
payment year. In the CY 2023 PFS final rule, we inadvertently specified 
the measure was availability at the individual clinician level. The 
inclusion of the availability of the measure at the individual 
clinician level is a misrepresentation and erroneously conveys to MIPS 
eligible clinicians reporting at the individual clinician level that 
the measure is available to meet the minimum required number of 
measures to report under traditional MIPS or an MVP. The measure was 
tested and developed for implementation at the group, virtual group, 
subgroup via an MVP, and APM Entity levels. Thus, the measure is 
limited to groups, virtual groups,

[[Page 62042]]

subgroups via an MVP, and APM Entities participating in MIPS. We 
believe that a failure to apply this substantive change retroactively 
would be contrary to the public interest.
    Prior to the finalization of this measure as a new measure 
available within the MIPS quality measure inventory in the CY 2023 PFS 
final rule, the measure was initially proposed as a new measure in the 
CY 2022 PFS proposed rule. Based on the public comments received in 
response to the initial proposal of this measure in the CY 2022 PFS 
proposed rule, there were concerns regarding the attribution of certain 
patients to clinicians, particularly the risk adjustment for clinicians 
with higher caseloads of patients with more complicated or severe heart 
failure. As a result, the measure was not finalized as part of the CY 
2022 PFS final rule; however, we noted that we would continue to 
consider how to implement condition-specific measures such as this 
measure under MIPS (86 FR 65692 through 65694).
    In the CY 2023 PFS proposed rule, we re-proposed this measure, 
which mitigated the concerns regarding the attribution of such patients 
to clinicians by excluding patients at advanced stages of heart failure 
and requiring that a group, virtual group, subgroup via an MVP, and APM 
Entity to include at least 1 cardiologist (and a 21-patient case 
minimum); and subsequently, the measure was finalized in the CY 2023 
PFS final rule (87 FR 70266 through 70271). The intent of the measure 
is for assessment of performance to be conducted at the group, virtual 
group, subgroup via an MVP, and APM Entity levels. The measure was not 
tested, developed, or implemented at the individual clinician level. In 
order for this measure to be available at the individual clinician 
level, the measure would need to be tested at the individual clinician 
level to establish validity, reliability, and risk adjustments at the 
individual clinician level. It is not appropriate for the measure to be 
available at the individual clinician level without further testing. 
Consequently, any assessment of data for this measure at the individual 
clinician level would produce invalid and unreliable results. By 
retroactively applying the substantive change to this measure 
(modifying the measure to remove the individual clinician level as an 
option) effective starting with the CY 2023 performance period/2025 
MIPS payment year, the level of reporting available for the measure 
would align with the intent, implementation, and operationalization of 
the measure, and clarify that the measure is not available at the 
individual clinician level.
    We are seeking public comment on the proposals to modify the 
quality performance category measure inventory, a set of 196 MIPS 
quality measures for the CY 2025 performance period, which includes the 
following:
     Implementation of 9 new MIPS quality measures: 5 high 
priority measures, of which 2 are also patient-reported outcome 
measures;
     Removal of 11 MIPS quality measures: 2 MIPS quality 
measure are duplicative to a proposed new quality measure; 3 MIPS 
quality measures are duplicative to current quality measures; 1 MIPS 
quality measure has reached the topped-out lifecycle; 2 MIPS quality 
measures are extremely topped out; 1 MIPS quality measure is no longer 
owned/maintained; and 2 MIPS quality measures have limited adoption and 
consequently, have not been able to establish benchmarks to provide a 
meaningful impact to quality improvement; and
     Substantive changes to 66 MIPS quality measures.
    We refer readers to Table Groups A through DD of Appendix 1 of this 
proposed rule for the proposed modifications to the MIPS quality 
measure inventory for the CY 2025 performance period.
(e) Quality Performance Category Requests for Information
    In this proposed rule, we are seeking public comment on the 
following two requests for information (RFIs) regarding to the quality 
performance category (see sections IV.A.4.e.(1)(e)(i) and 
IV.A.4.e.(1)(e)(ii) of this proposed rule). In accordance with the 
implementation of regulations pertaining to the Paperwork Reduction Act 
of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), the general 
solicitation of public comments for the two RFIs are exempt from the 
PRA. Facts or opinions submitted in response to general solicitations 
of public comments published in the Federal Register or other 
publications, regardless of the form or format thereof, provided that 
no person is required to supply specific information pertaining to 
themself, other than that which is necessary for self-identification, 
as a condition of the agency's full consideration, are not generally 
considered information collections and therefore not subject to the 
PRA.
    Respondents are encouraged to provide complete, but concise 
responses. The following RFIs are issued solely for information and 
planning purposes; they do not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. The RFIs do not commit 
the U.S. Government to contract for any supplies or services or make a 
grant award. Further, CMS is not seeking proposals through the 
following RFIs and will not accept unsolicited proposals. Respondents 
are advised that the U.S. Government will not pay for any information 
or administrative costs incurred in response to the RFIs; all costs 
associated with responding to the RFIs will be solely at the interested 
party's expense. Not responding to the RFIs do not preclude 
participation in any future procurement, if conducted. It is the 
responsibility of the potential respondents to monitor these RFI 
announcements for additional information pertaining to the requests. 
Please note that CMS will not respond to questions about the policy 
issues raised in the RFIs. CMS may or may not choose to contact 
individual respondents. Such communications would only serve to further 
clarify written responses. Contractor support personnel may be used to 
review responses for each RFI. Responses to these notices are not 
offers and cannot be accepted by the U.S. Government to form a binding 
contract or issue a grant. Information obtained as a result of the RFIs 
may be used by the U.S. Government for program planning on a non-
attribution basis. Respondents should not include any information that 
might be considered proprietary or confidential. The following RFIs 
should not be construed as a commitment or authorization to incur cost 
for which reimbursement would be required or sought. All submissions 
become U.S. Government property and will not be returned. CMS may 
publicly post the comments received, or a summary thereof.
(i) Survey Modes for the Administration of the Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for MIPS Survey Request for 
Information
    We are seeking public comment on the potential expansion of the 
survey modes of the CAHPS for MIPS Survey from a mail-phone protocol to 
a web-mail-phone protocol. The current protocol is to administer the 
survey first through the mail and then by phone interview with non-
respondents. The expansion to the protocol would include an initial 
administration of the survey by web, followed by mail, and then by 
phone. During the 2023 CAHPS

[[Page 62043]]

for MIPS Web Mode Field Test,\743\ adding the web-based survey mode to 
the current mail-phone protocol of CAHPS for MIPS survey administration 
resulted in an increased response rate. Surveys for the field test were 
administered to a random sample of 8,613 survey-eligible patients from 
20 Medicare Shared Savings Program ACOs between March 6, 2023, and May 
31, 2023, and were compared to survey data collected from the CY 2022 
performance period CAHPS for MIPS Survey for the same Medicare Shared 
Savings Program ACOs. In total, 3,638 patients completed a survey 
during the field test, resulting in a 43 percent response rate for the 
web-mail-phone protocol compared to 28 percent for the mail-phone 
protocol from the CY 2022 performance period CAHPS for MIPS Survey. The 
percentage of patients with an email address varied by ACO, ranging 
from 40 percent to 88 percent, and 38 percent of sampled patients had 
an email address. Evidence from the 2023 field test indicates that the 
use of the web-mail-phone protocol results in a higher response rate. 
Analysis of this field test data revealed that 43 percent of surveys 
completed via the web-based survey mode came from patients who did not 
have an email address but responded by entering a URL and patient-
specific PIN code printed in either the pre-notification letter or web 
invitation letter. The web-mail-phone protocol also achieved higher 
response rates among patients of Latino or Hispanic ethnicity; no 
statistically significant differences in response rates were found by 
other demographic characteristics, including gender, age, or race. 
Analysis of the 2023 field test data also showed that adding the web-
based survey mode reduced the response by mail from 93 percent during 
the CY 2022 performance period to 73 percent during the field test 
timeframe.
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    \743\ Centers for Medicare & Medicaid Services. (June 2024). 
2023 CAHPS for MIPS Web Mode Field Test. Available at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/2893/2023_CAHPS_for_MIPS_WebMode_Field_Test.pdf.
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    Given the potential for an increased response rate by expanding to 
a web-mail-phone protocol, we are seeking public comment on the 
following:
     Would the increase in survey response rates (as shown from 
the results of the 2023 CAHPS field test), outweigh a possible increase 
in the cost of survey administration that would be associated with a 
three-mode survey protocol (web-mail-phone) compared to the current 
two-mode survey protocol (mail-phone)?
     Would providing email addresses to vendors be feasible for 
groups, virtual groups, subgroups, and APM Entities (including Medicare 
Shared Savings Program ACOs)?
(ii) Guiding Principles for Patient-Reported Outcome Measures in 
Federal Models, and Quality Reporting and Payment Programs Request for 
Information
    We are committed to elevating the patient voice in healthcare. One 
critical approach to elevating the patient voice that is aligned with 
the CMS National Quality Strategy and strategy of the CMS Innovation 
Center is to incorporate more Patient-Reported Outcome Measures (PROMs) 
and Patient-Reported Outcome Performance Measures (PRO-PMs) in CMS 
quality reporting and payment programs and CMS Innovation Center 
Models.
    CMS had defined a patient-reported outcome (PRO) as any report of 
the status of a patient's health condition or health behavior coming 
directly from the patient without interpretation of the patient's 
response by a clinician or anyone else.\744\ PROs are critical for the 
support of person-centered care, as they provide information from the 
patient or caregivers perspective and offer important information to 
improve patient-clinician communication, decision-making, and care 
delivery. PROMs are structured tools used to collect data on PROs, 
tested for validity and reliability in the population of interest. PRO-
PMs aggregate information collected using PROMs into a reliable, valid 
measure of performance at the measured entity level (for example, 
clinician or health system). Often these measures have established 
benchmarks for assessing risk-adjusted outcomes.
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    \744\ Centers for Medicare & Medicaid Services. (December, 
2023). Patient Reported Outcome Measures. Available at https://mmshub.cms.gov/sites/default/files/Patient-Reported-Outcome-Measures.pdf.
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    A potential path forward is the development of an accessible and 
unified database of PROMs/PRO-PMs used in programs and payment systems 
in health care by Federal, State-based, and commercial payers, and 
healthcare systems. This database would identify the measure steward 
and include information on the specifications of the measure. The PROMs 
in this database could serve as a resource for the subsequent 
development of PRO-PMs.
    Separately, considerations for a data infrastructure that allows 
PROMs and PRO-PMs to be integrated into clinical workflow with minimal 
cost and administrative burden, with data seamlessly shared across 
different healthcare settings and systems is important. Although we 
recognize there may be important reasons for not restricting PROMs/PRO-
PMs to a strictly defined data infrastructure, we seek to avoid the 
evolution of multiple PROM/PRO-PM repositories that may inhibit the 
development of these measures and potentially impose additional costs 
on clinicians and healthcare systems.
    One currently existing, unified, non-proprietary PROM repository is 
the Patient-Reported Outcomes Measurement Information System[supreg] 
(PROMIS[supreg]) developed and funded by the National Institutes of 
Health (NIH). PROMIS tools assess patient-reported health status for 
physical, social, and mental wellbeing. NIH supported the development 
of PROMIS, and in 2018 PROMIS was made available to the public through 
a platform known as HealthMeasures (www.healthmeasures.net). 
Northwestern University stewards HealthMeasures and oversees 
proprietary and copyright issues, as well as scientific work using 
PROMIS developed data elements and measures. HealthMeasures also 
provides several PRO-PMs for PROMIS available at https://www.healthmeasures.net/implement-healthmeasures/evaluate-quality-of-care/healthmeasures-pro-pms. As noted previously, this repository of 
PROMs and PRO-PMs could be used in conjunction with a data 
infrastructure that integrates PROMs and PRO-PMs into clinical workflow 
and is able to be shared across multiple healthcare environments.
    As we move forward with including more PROMs and PRO-PMs in CMS 
quality reporting and payment programs and CMS Innovation Center 
Models, it is important to develop a set of guiding principles and 
considerations for the selection and implementation of PROMs or PRO-
PMs. An illustrative set of guiding principles may include:
     Data Infrastructure--Measures implemented in programs 
should, to the extent possible, use existing data systems for data 
collection and reporting to minimize the administrative burden 
associated with collecting PROMs and deriving PRO-PMs. The PROMs and 
PRO-PMs should be deployed in a data infrastructure that supports 
necessary interoperability standards to support sharing across 
providers, practices, hospitals, health systems, health plans and 
States.
     Measure Testing--The PROMs have been psychometrically 
tested and undergone rigorous reliability and validity testing (fully 
developed PRO-PMs have also been tested for scientific acceptability 
including reliability as a

[[Page 62044]]

quality measure for the accountable entity). Moreover, PROMs have been 
tested as digital measures that can be collected and reported 
electronically, making their adaptation as electronic Patient Reported 
Outcomes (ePROs) feasible.
     Feasible Clinical Implementation--Measures that will be 
used for clinical decision making can be integrated into the clinical 
workflow with minimal cost and administrative burden. Further, the data 
can be seamlessly shared across different healthcare settings and payer 
systems. The measures can be expected to have meaningful participation 
and response rates to draw conclusions from measure score results 
(based on anticipated sample size from participating providers).
     Accessible--The measures are easily accessible to 
clinicians and care teams, without the creation of additional 
administrative or significant financial burdens, or the requirement for 
additional resources.
     Patient Engagement--The measures have been tested to show 
that the concept is meaningful to patients. Additionally, there is a 
validated feedback loop on how their patient-reported data is used to 
drive performance improvement. and improvement in individual patient 
outcomes/experience.
     Equity--Measures selection considers how measurement may 
ameliorate or exacerbate disparities including but not limited to 
considerations for language concordance and response rates. Measures 
may be stratified by subgroup to better understand disparities in 
response rates and outcomes.
    Through this RFI, we are seeking comment on principles related to 
data infrastructure, selection, feasible implementation, and patient 
engagement of PROMs and PRO-PMs. We request feedback from the public 
regarding the overarching principles and considerations.
    Specifically we are seeking input on the following areas:
     Are the aforementioned guiding principles outlined 
comprehensive or are there additional guiding principles and 
considerations we should consider for the selection, and implementation 
of PROM and PRO-PMs?
     How can CMS accelerate the development of PRO-PMs and 
advance them more rapidly into use? How can CMS support PRO-PM 
development while balancing the goal of accessible PRO-PMs with the 
additional time and resources required to construct PROMs and PRO-PMs 
from a PROM?
     How should CMS balance the use of broad PRO-PMs that might 
be applicable across multiple clinical contexts compared to condition-
specific PROMs and PRO-PMs measures that can be more tailored to a 
given clinical situation but lead to a greater number of tools in use 
across measures and health care providers?
     How can CMS support making PROMs broadly accessible 
without limiting both innovation and resources committed to developing 
new tools? Are there other examples (beside PROMIS) of currently 
existing PROMs/PRO-PMs repositories that make their tools widely 
available to clinicians and healthcare systems?
(2) Cost Performance Category
    Section 1848(q)(2)(A) of the Act includes resource use as a 
performance category under MIPS. We refer to this performance category 
as the cost performance category. As required by sections 1848(q)(2) 
and (5) of the Act, the four performance categories of MIPS are used in 
determining the MIPS final score for each MIPS eligible clinician. In 
general, MIPS eligible clinicians are evaluated under all four of the 
MIPS performance categories, including the cost performance category.
    We are proposing to add six new episode-based measures to the cost 
performance category beginning with the CY 2025 performance period/2027 
MIPS payment year. These six measures include:
     Chronic Kidney Disease (CKD), which assesses MIPS eligible 
clinicians on the risk-adjusted and specialty-adjusted cost to Medicare 
for patients who receive care to manage and treat CKD stages 4 and 5;
     End-Stage Renal Disease (ESRD), which assesses MIPS 
eligible clinicians on the risk-adjusted and specialty-adjusted cost to 
Medicare for patients who receive medical care to manage ESRD;
     Kidney Transplant Management, which assesses MIPS eligible 
clinicians on the risk adjusted and specialty-adjusted cost to Medicare 
for ongoing kidney transplant-related care and management starting at 
least 90 days after transplant surgery;
     Prostate Cancer, which assesses MIPS eligible clinicians 
on the risk-adjusted and specialty-adjusted cost to Medicare for the 
management and treatment of prostate cancer;
     Rheumatoid Arthritis, which assesses MIPS eligible 
clinicians on the risk-adjusted and specialty-adjusted cost to Medicare 
for the management and treatment of rheumatoid arthritis; and
     Respiratory Infection Hospitalization, which assesses MIPS 
eligible clinicians on the risk-adjusted cost to Medicare for the 
inpatient treatment of respiratory infection.
    We are proposing modifications to two existing episode-based 
measures so that their specifications reflect reevaluated versions 
beginning with the CY 2025 performance period/2027 MIPS payment year. 
These two measures are:
     Cataract Removal with Intraocular Lens (IOL) Implantation, 
which assesses MIPS eligible clinicians on the risk adjusted cost to 
Medicare for cataract removal procedures; and
     Inpatient (IP) Percutaneous Coronary Intervention (PCI), 
which assesses MIPS eligible clinicians on the risk-adjusted cost to 
Medicare for the inpatient PCI treatment of patients who present with a 
cardiac event.
    We are proposing that MIPS eligible clinicians must be attributed a 
minimum of 20 cases for each of the proposed six new measures. In 
addition, we are proposing to maintain the existing case minimums for 
the two measures we are proposing to modify in this rulemaking, which 
are a 20-episode case minimum for the IP PCI measure and a 10-episode 
case minimum for the Cataract Removal with IOL Implantation measure. We 
are also proposing to update the operational list of care episode and 
patient condition groups and codes to reflect these new and modified 
measures we are proposing.
    Finally, we are proposing to adopt criteria to specify objective 
bases for the removal of any cost measures from the MIPS cost 
performance category, which we are also proposing to codify at Sec.  
414.1350(e).
    For a description of the statutory authority for and existing 
policies pertaining to the cost performance category, we refer readers 
to Sec.  414.1350 and the CY 2017 Quality Payment Program final rule 
(81 FR 77162 through 77177), CY 2018 Quality Payment Program final rule 
(82 FR 53641 through 53648), CY 2019 PFS final rule (83 FR 59765 
through 59776), CY 2020 PFS final rule (84 FR 62959 through 62979), CY 
2021 PFS final rule (85 FR 84877 through 84881), CY 2022 PFS final rule 
(86 FR 65445 through 65461), CY 2023 PFS final rule (87 FR 70055 
through 70057), and CY 2024 PFS final rule (88 FR 79339 through 79349).
    More details on the proposals in this section, which we invite 
comments on, are provided in section IV.A.4.e.(2)(a) through section 
IV.A.4.e.(2)(d) of this proposed rule. We also refer readers to section 
V.B.8.k. of this proposed rule for discussion on the burden estimates 
for these proposals.

[[Page 62045]]

(a) Proposed Updates to MIPS Episode-Based Measure Inventory
(i) Background on Episode-Based Measure Development and Use
    Under Sec.  [thinsp]414.1350(a), we specify cost measures for a 
performance period to assess the performance of MIPS eligible 
clinicians on the cost performance category. There are currently 29 
cost measures in the cost performance category for the CY 2024 
performance period/2026 MIPS payment year, comprising of 27 episode-
based measures covering a range of conditions and procedures and two 
population-based measures. We worked with the measure development 
contractor to identify the proposed six new episode-based measures 
through empirical analyses and public comment. These measures cover 
clinical topics and MIPS eligible clinicians practicing in certain 
specialties for whom there are currently limited or no applicable cost 
measures. As such, these measures would help fill gaps in the cost 
performance category's measure set.
    In addition, these measures would support the transition from 
traditional MIPS to MVPs by allowing new MVPs to be created and 
enhancing existing MVPs. Further, the addition of these measures would 
address interested parties' feedback about the need for more clinically 
refined episode-based measures in the cost performance category. The 
measures would also increase the cost coverage of care episode and 
patient condition groups, moving closer towards the statutory goal of 
covering 50 percent of expenditures under Medicare Parts A and B, as 
specified under section 1848(r)(2)(i)(I) of the Act.
    At a high level, episode-based measures represent the cost to the 
Medicare Program and beneficiaries for the items and services furnished 
to Medicare beneficiaries during an episode. They aim to compare MIPS 
eligible clinicians on the basis of the cost of care that is clinically 
related to treatment and management of a Medicare beneficiary and 
provided during the episode's timeframe. Specifically, for such 
measures, we define and measure the cost of care for the episode based 
on the allowed amounts on Medicare claims, which include both Medicare 
trust fund payments and any applicable beneficiary deductible and 
coinsurance amounts. The cost of care for these measures includes 
amounts paid under Medicare Parts A and B, and, on a case-by-case 
basis, Medicare Part D that have been standardized to remove price 
variation from non-clinical factors. The Parts A and B payment 
standardization methodology and the Part D payment standardization 
methodology are available at https://resdac.org/articles/cms-price-payment-standardization-overview. Information about how the Part D 
standardization methodology incorporates rebates into standardized 
amounts is available at https://www.cms.gov/files/document/2023-part-d-rebate-methodology.pdf. We refer the readers to section 
IV.A.4.e.(2)(a)(iii) of this proposed rule for more information on the 
six episode-based measures we are proposing.
    In this proposed rule, we provide detail about the six new measures 
that we are proposing to adopt in the cost performance category 
beginning with the CY 2025 performance period/2027 MIPS payment year. 
In section IV.A.4.e.(2)(a)(ii) of this proposed rule, we summarize the 
timeline for development of these proposed measures, including 
engagement activities undertaken by the measure development contractor. 
In section IV.A.4.e.(2)(a)(iii) of this proposed rule, we summarize the 
proposed new measures that would be included in the cost performance 
category beginning with the CY 2025 performance period/2027 MIPS 
payment year. In section IV.A.4.e.(2)(a)(viii) of this proposed rule, 
we discuss the pre-rulemaking review process these measures underwent. 
In section IV.A.4.e.(2)(b) of this proposed rule, we discuss our 
proposal that MIPS eligible clinicians must be attributed a minimum of 
20 cases for each of these proposed measures to be assessed and scored 
on such measure.
(ii) Overview of Measure Development Process for New Episode-Based 
Measures
    In this section, we describe the development process for the six 
proposed episode-based measures.
    Development of episode-based measures for the cost performance 
category must comply with section 1848(q)(2)(B)(ii) of the Act, which 
provides that measures and activities specified for a performance 
period include the measurement of resource use (cost) as provided under 
section 1848(p)(3) of the Act, using the methodology under section 
1848(r) of the Act, to collaborate with physicians, practitioners, and 
other interested parties, as appropriate. Section 1848(p)(3) of the Act 
provides that costs shall be evaluated, to the extent practicable, 
based on a composite of appropriate measures of costs established by 
the Secretary as further specified therein. We note that the measure 
development contractor uses a ``wave'' approach to indicate cycles of 
measure development where clinical expert panels convene to select 
episode groups to develop into cost measures and to provide input on 
the measures' specifications. All six of the proposed measures have 
been developed with extensive engagement from interested parties, 
including clinicians, persons with lived experience, and the general 
public. The term ``persons with lived experience,'' as used in this 
section IV.A.4.e.(2) of this proposed rule, refers to persons and 
family of persons who have experienced these conditions or diseases. 
Our approach to engagement is outlined in the CY 2018 Quality Payment 
Program final rule (82 FR 53644 and 53645), the CY 2019 PFS final rule 
(83 FR 59767 through 59769), the CY 2022 PFS proposed rule (86 FR 39396 
and 39397), and the CY 2024 PFS proposed rule (88 FR 52568 through 
52576). These processes have been refined over time to incorporate 
feedback from interested parties, such as to extend the development 
timeline from 12 months in Wave 2 to 18 months in Waves 3 and 4, and to 
integrate conversations between persons with lived experience and 
clinical experts.
    We began development of the six episode-based measures across 
several of these waves:
     The Prostate Cancer, Rheumatoid Arthritis, and Kidney 
Transplant Management measures were initiated in Wave 5 in 2022 and 
followed the typical 18-month process.
     The CKD and ESRD measures were initiated in 2021 as part 
of an off-cycle development process and were incorporated into Wave 5 
in 2022 to be completed along with the other three episode-based 
measures (that is, Prostate Cancer, Rheumatoid Arthritis, and Kidney 
Transplant Management).
     The Respiratory Infection Hospitalization measure is a 
revised version of the Simple Pneumonia with Hospitalization measure 
that was initially developed in Wave 1 in 2018. The Simple Pneumonia 
with Hospitalization measure was adopted in MIPS in the CY 2019 PFS 
final rule (83 FR 59767 through 59773) and then removed from use in 
MIPS in the CY 2024 PFS final rule (88 FR 79348 and 79349). The measure 
underwent a comprehensive reevaluation process from 2022-2023 to 
identify and incorporate refinements based on public feedback, clinical 
input, and empiric testing. Unlike the other five new measures we are 
proposing, this measure did not undergo further development as part of 
Wave 5. Because the Simple Pneumonia with

[[Page 62046]]

Hospitalization measure is no longer in use in MIPS, we are proposing 
the Respiratory Infection Hospitalization measure as a new measure, and 
not as modifications to an existing measure. More information on the 
comprehensive reevaluation process that this measure underwent is 
described in sections IV.A.4.e.(2)(a)(iv) and IV.A.4.e.(2)(a)(v) of 
this proposed rule.
    This section of this proposed rule will provide more details on the 
development process for the measures that were developed during Wave 5 
(CKD, ESRD, Kidney Transplant Management, Prostate Cancer, and 
Rheumatoid Arthritis measures). We began developing the CKD and ESRD 
measures in 2021 as priority clinical areas by convening a clinician 
expert workgroup and gathering feedback from persons with lived 
experience. However, the clinician expert workgroup recommended that we 
develop a Kidney Transplant Management measure to fully capture the 
care continuum of kidney disease care before continuing to move forward 
with the CKD and ESRD measures. As a result, we halted measure 
development on the CKD and ESRD measures until 2022, while we gathered 
public feedback on the development of a Kidney Transplant Management 
measure, and later incorporated the CKD and ESRD measures into the Wave 
5 development process.
    The episode-based measures that were developed in the Wave 5 cycle 
of measure development (CKD, ESRD, Kidney Transplant Management, 
Prostate Cancer, and Rheumatoid Arthritis measures) underwent an 18-
month development process. As a first step, the measure development 
contractor held a public comment period from February to April 2022 to 
gather feedback on which clinical areas to prioritize for measure 
development. The public comment period solicited feedback on the 
importance and feasibility of prioritizing kidney transplant 
management, prostate cancer, and rheumatoid arthritis, among other 
clinical areas, for measure development. During the public comment 
period, the measure development contractor received 32 comments on the 
candidate episode groups for development in Wave 5. We used this 
feedback, in conjunction with empirical testing by the measure 
development contractor, to inform our decision to develop measures for 
three specific clinical areas--prostate cancer, rheumatoid arthritis, 
and kidney transplant management--into episode-based measures. The 
summary of the public comments is available in this document https://www.cms.gov/files/document/wave-5-public-comment-summary-report.pdf. We 
selected these clinical areas for measure development for several 
reasons including: representation of high priority clinical areas, 
potential to improve clinician performance or patient outcomes, 
potential to capture high costs of care paid by the Medicare Program, 
and ability to fill measurement gaps in the MIPS cost performance 
category and MVPs.
    Following our decision to develop measures for prostate cancer, 
rheumatoid arthritis, and kidney transplant management, in addition to 
continuing to develop the CKD and ESRD measures, the measure 
development contractor convened four clinician expert panels, comprised 
of a total of 45 members, affiliated with 36 organizations and 
specialty societies. The CKD and ESRD measures shared a clinician 
expert panel due to the close clinical overlap of these diseases. Each 
panel also incorporated the perspective of persons with lived 
experience; their input is collected via structured focus groups, 
interviews, or surveys, and then summarized and presented to the 
clinical expert panels.
    Then, the measure development contractor held a national field 
testing period from January 17, 2023, to February 14, 2023 for the Wave 
5 measures (CKD, ESRD, Kidney Transplant Management, Prostate Cancer, 
and Rheumatoid Arthritis measures). During this field testing period, 
individual MIPS eligible clinicians and groups meeting a minimum 
threshold of 20 episodes for each measure could review field test 
reports and an episode-level file with detailed information to 
understand the types of services that comprise a large or small share 
of their episode costs. Supplemental materials, such as testing 
information on measures, a Frequently Asked Questions document, and 
mock field test reports were posted publicly for interested parties' 
review. The measure development contractor gathered feedback via survey 
and a summary of this feedback from the field testing period is 
available at https://www.cms.gov/files/document/2023-field-testing-feedback-summary-report.pdf.
    The measure development contractor also has a standing technical 
expert panel (TEP), which is referred to as the Physician Cost Measures 
and Patient Relationship Codes (PCMP) TEP. The PCMP TEP is composed of 
20 members from different clinical areas, academia, health care and 
hospital administration, and persons with lived experience, which 
provides overarching input on cross-measure topics, such as testing 
approaches and methodology. For example, the PCMP TEP discussed general 
challenges in developing chronic condition episode-based measures and 
ways that the chronic condition framework can address those challenges, 
provided feedback on the attribution rules (that is, the algorithms and 
the types of codes used in each algorithm) that would demonstrate a 
relationship between a clinician group and a patient with a chronic 
condition(s), and discussed service assignment, risk adjustment, and 
exclusions, which support the overall development of episode-based 
measures, including, but not limited to those episode-based measures 
being proposed in this rulemaking. This input helped inform the 
specifications for the chronic condition episode-based measure 
framework, which serves as the framework for the chronic condition 
episode-based measures (that is, Prostate Cancer, Rheumatoid Arthritis, 
CKD, ESRD, and Kidney Transplant Management episode-based measures) 
developed in Wave 5 and being proposed in this proposed rule.
    More information about the measure development and interested 
parties' engagement process for the six episode-based measures we are 
proposing for adoption in the cost performance category is available in 
materials on the QPP Cost Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures. 
Summaries of the public comment period and clinician expert workgroup 
meetings organized by the measure development contractor are also 
available on the QPP Cost Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures. 
Descriptions of the methods through which the measure development 
contractor gathered expert input during measure development and other 
interested parties' engagement activities is available in the ``2024 
MIPS Summary of Cost Measures'' document at https://www.cms.gov/files/document/2024-mips-summary-costs-measures.pdf.
(iii) Description of Six New Episode-Based Measures Proposed for 
Adoption Beginning With the CY 2025 Performance Period/2027 MIPS 
Payment Year
    In this section of this proposed rule, we discuss the six new 
episode-based measures, which we propose to add to the cost performance 
category beginning with the CY 2025 performance period/2027 MIPS 
payment year.

[[Page 62047]]

    In conjunction with our measure development contractor, we 
developed these measures with consideration of the common standards 
that are described in the CY 2022 PFS final rule (86 FR 65455 through 
65459) to ensure consistency across episode-based measures being 
developed. Specifically, the CY 2022 PFS final rule requires that any 
episode-based measure for the cost performance category include the 
following: (1) episode definition based on trigger codes that determine 
the patient cohort; (2) attribution; (3) service assignment; (4) 
exclusions; and (5) risk adjustment. The six new episode-based measures 
we are proposing meet all requirements described in CY 2022 PFS final 
rule, including these features. We provide more information on the 
specific requirements for each of the episode-based measures later in 
this section of this rulemaking.
    Generally, for all episode-based measures, we exclude episodes 
where costs cannot be fairly compared to the costs for the whole cohort 
in the episode-based measure. These exclusions, like other features of 
each episode-based measure, are developed with extensive clinician and 
interested parties' engagement. We have specified exclusions for all 
six proposed episode-based measures.
    We also apply a risk adjustment model to all episode-based measures 
in the cost performance category. The model includes standard risk 
adjustors that are applied to all episode-based measures (for example, 
CMS Hierarchical Condition Category [HCC] variables, comorbidities, age 
brackets, disability status, ESRD status), and measure-specific risk 
adjustors (for example, for the Rheumatoid Arthritis episode-based 
measure, rheumatoid arthritis severity, fractures, frailty, and 
cognitive status). We assess the risk adjustment model at the level of 
each stratification to ensure that only like patients are compared to 
each other. The risk adjustment model we use in development of the cost 
performance category's episode-based measures is described in detail in 
CY 2019 PFS final rule (83 FR 59767 through 59773). As mentioned 
previously in this section, all six proposed episode-based measures 
have been risk adjusted in accordance with this model.
    More information on the episode-based measure development 
requirements, which were outlined so that external interested parties 
could develop measures in the future, are available in the Blueprint 
for the CMS Measures Management System (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/MMS-Blueprint) 
and the Meaningful Measures Framework (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page).
    The episode-based measures that we are proposing for adoption 
beginning with the CY 2025 performance period/2027 MIPS payment year 
are set forth in Table 58.
[GRAPHIC] [TIFF OMITTED] TP31JY24.090

    The five chronic condition episode-based measures assess outpatient 
treatment and ongoing management of the following chronic conditions: 
CKD, ESRD, kidney transplant management, prostate cancer, and 
rheumatoid arthritis. These measures assess the costs of services 
related to these conditions, such as physician services, imaging or 
diagnostic services, emergency room care or hospitalizations, 
medications, or other services related to ongoing management or post-
acute care. The measure construction for these proposed measures 
follows the approach described in the CY 2022 PFS final rule (86 FR 
65445 through 65461), which also includes detailed discussion of the 
attribution methodology and examples of how episodes are attributed.
    To briefly summarize, the attribution methodology that identifies a 
clinician-patient care relationship for these chronic condition 
episode-based measures is slightly different at the clinician group and 
individual MIPS eligible clinician levels, to reflect that care 
provided at the clinician group and individual MIPS eligible clinician 
levels, respectively. At a high level, these proposed chronic condition 
episode-based measures attribute episodes to the clinician group that 
renders services that constitute a trigger event, which is identified 
by the occurrence of two claims billed in close proximity by the same 
clinician group. Both claims must have a diagnosis code indicating the 
same chronic condition related to the specific episode-based measure. 
For example, for the Prostate Cancer measure, both claims of the 
trigger event must have a diagnosis indicating prostate cancer. The 
services that trigger an event for these chronic condition episode-
based measures are identified first by Evaluation and Management (E/M) 
codes for outpatient services, and then by a second claim with either 
another E/M code for outpatient services or a condition-related Current 
Procedural Terminology (CPT)/Healthcare Common Procedure Coding System 
(HCPCS) code (CPT/HCPCS) related to the treatment or management of the 
chronic condition. Note, some measures also use additional CPT/HCPS 
codes with a relevant diagnosis as the initial trigger service. The 
trigger event opens a year-long attribution window from the date of the 
initial E/M outpatient service, during which the same clinician group 
could reasonably be considered responsible for managing the patient's 
chronic condition. If we see evidence that the relationship is ongoing, 
represented by another E/M or condition-related procedure code that we 
refer to as the reaffirming claim, then this window can be extended.
    For individual MIPS eligible clinicians, we would attribute 
episodes to each individual MIPS eligible

[[Page 62048]]

clinician within an attributed clinician group that renders at least 30 
percent of trigger or reaffirming codes on Part B Physician/Supplier 
claim lines during the episode, such as office visits or diagnostic 
services. We also apply conditions to ensure the MIPS eligible 
clinicians to whom the episode is attributed are reasonably responsible 
for the management of the patient's chronic condition. Specifically, 
the MIPS eligible clinician must have provided condition-related care 
to this patient prior to or on the episode start date.
    Additionally, for some measures, we use provider-level prescription 
billing patterns to ensure that we are capturing the MIPS eligible 
clinicians directly involved in providing ongoing chronic care 
management. Specifically, for some measures, the MIPS eligible 
clinician must also have prescribed at least two prescriptions claimed 
under Medicare Part D and/or Medicare Part B related to the management 
of the condition for two different patients during the measurement 
period, plus a one-year lookback period. These conditions, which we use 
to attribute a cost measure to MIPS eligible clinicians, also apply to 
the attribution methodology at the clinician group level. Specifically, 
the clinician group would always meet the first condition by 
construction (that is, there would always be an individual MIPS 
eligible clinician under the clinician group that has provided care to 
the patient prior to or on the episode start date). However, the 
clinician group must have at least one potentially attributable MIPS 
eligible clinician under it who meets the second condition.
    More information about the chronic condition episode-based measures 
attribution methodology, including a one-page summary and a Frequently 
Asked Questions (FAQ) document, is available at https://www.cms.gov/files/zip/mips-chrcondition-episode-based-cost-measures-attribution-methodology-2023-zip.zip. More general information about the overall 
chronic condition cost measure framework is available at https://www.cms.gov/files/document/chronic-condition-cost-measure-framework-poster.pdf.
    The Respiratory Infection Hospitalization measure is an acute 
inpatient medical condition episode-based measure, which focuses on the 
inpatient treatment of respiratory infection and is attributed to 
clinicians and clinician groups treating a patient during the 
hospitalization. It includes the cost of services related to the 
inpatient treatment of a respiratory infection, such as initial 
inpatient services, subsequent outpatient physician visits, and 
emergency room care or hospitalizations for related complications. As 
noted in section IV.A.4.e.(2)(a)(ii) of this proposed rule, the 
Respiratory Infection Hospitalization measure is the reevaluated 
version of the Simple Pneumonia with Hospitalization measure, adopted 
for MIPS in CY 2019 PFS final rule (83 FR 59767 through 59773) and 
removed from MIPS in the CY 2024 PFS final rule (88 FR 79348 and 
79349). We developed the Simple Pneumonia with Hospitalization acute 
inpatient medical condition measure in accordance with the previously 
established framework for episode-based measures, which we described in 
detail in the CY 2019 PFS final rule (83 FR 59769 through 59771). The 
Simple Pneumonia with Hospitalization measure was reevaluated following 
the process described in sections IV.A.4.e.(2)(a)(iv), 
IV.A.4.e.(2)(a)(v), and IV.A.4.e.(2)(a)(viii) of this proposed rule. We 
are proposing the Respiratory Infection Hospitalization measure, the 
reevaluated version of the Simple Pneumonia with Hospitalization 
measure, because we continue to believe it is important to capture 
pneumonia and other respiratory infections, as pneumonia is a leading 
infectious cause of hospitalization and death among adults in the 
United States.\745\ This new, revised measure addresses the concerns 
with the previous version of the measure by expanding the patient 
cohort to include beneficiaries hospitalized for pneumonia and related 
respiratory infections, reflecting the coding changes as described in 
the CY 2024 PFS final rule (88 FR 79348 and 79349). The revised measure 
also incorporates feedback we received from interested parties about 
appropriate risk adjustment and exclusions during the reevaluation 
process of the prior Simple Pneumonia with Hospitalization measure.
---------------------------------------------------------------------------

    \745\ Regunath, Hariharan, and Yuji Oba. ``Community-Acquired 
Pneumonia.'' National Library of Information, August 8, 2022. 
https://www.ncbi.nlm.nih.gov/books/NBK430749.
---------------------------------------------------------------------------

    The specifications for all six episode-based measures we are 
proposing for adoption in this rulemaking are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures. The 
specifications documents for each measure consist of a methods document 
that describes the steps for constructing the measure and a measure 
codes list file that contains the medical codes used in that 
methodology. First, the methods document provides detailed methodology 
describing each step to construct the measure, including: identifying 
patients receiving care; defining an episode-based measure; attributing 
episodes to MIPS eligible clinicians and clinician groups; assigning 
costs; defining exclusions; risk adjusting; and calculating measure 
score. Second, the measure codes list file contains the codes used in 
the measure specifications, including the episode triggers, 
attribution, stratification, assigned items and services, exclusions, 
and risk adjustors.
    More information about the episode-based measures is available in 
the measure justification forms, which were posted to support Pre-
rulemaking Measure Review (PRMR) discussions. These documents provide a 
comprehensive characterization of the measures, their justification, 
and testing results of the measures' specifications at this time. These 
documents are available through the QPP Cost Measure Information page 
at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
(iv) Background on Episode-Based Measure Reevaluation and Maintenance
    In this section, we describe the measure maintenance process we 
use, in conjunction with our measure development contractor, to 
monitor, evaluate, and potentially modify cost measures. Using this 
maintenance process, we holistically reviewed, and evaluated whether to 
modify or take other actions with respect to, certain measures in the 
cost performance category. As a result of this process, we propose to 
modify two episode-based measures currently in use (the Routine 
Cataract Removal with Intraocular Lens (IOL) Implantation and ST-
Elevation Myocardial Infarction (STEMI) Percutaneous Coronary 
Intervention (PCI) measures), and propose the reevaluated Respiratory 
Infection Hospitalization as a new measure, replacing the Simple 
Pneumonia with Hospitalization measure previously removed from the cost 
performance category.
    The measure development contractor routinely conducts three types 
of measure maintenance: measure monitoring, annual measure 
specifications updates, and comprehensive reevaluation. Comprehensive 
reevaluation occurs every 3 years after a measure is implemented in 
MIPS. The purpose of comprehensive reevaluation is to ensure that 
measures continue to meet criteria for importance, scientific 
acceptability, and usability in line with the CMS Measures Management 
System Blueprint (https://mmshub.cms.gov/

[[Page 62049]]

blueprint-measure-lifecycle-overview). In this process, we holistically 
review the measure, seek public comment, and consider whether any 
changes need to be made to measure specifications. A new version of the 
measure may be considered for implementation in MIPS in future years, 
after undergoing the pre-rulemaking and the notice-and-comment 
rulemaking processes. For more information on recent reevaluation 
efforts, please refer to the documents under the ``Wave 1 cost measure 
comprehensive reevaluation (2022-2023)'' section of the QPP Cost 
Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior.
    For the purpose of assessing performance of MIPS eligible 
clinicians in the cost performance category, we finalized, in the CY 
2019 PFS final rule (83 FR 59767 through 59773), the Routine Cataract 
Removal with Intraocular Lens (IOL) Implantation, ST-Elevation 
Myocardial Infarction (STEMI) Percutaneous Coronary Intervention (PCI), 
and Simple Pneumonia with Hospitalization measures to be included in 
MIPS beginning with the CY 2019 performance period/2021 MIPS payment 
year. In this section, we are proposing to modify the Routine Cataract 
Removal with IOL Implantation and STEMI PCI measures based on input 
from interested parties from prior public comment periods and 
recommendations from Clinician Expert Workgroups.
    We also propose to modify the measure titles. Routine Cataract 
Removal with Intraocular Lens (IOL) Implantation would be revised to 
Cataract Removal with Intraocular Lens (IOL) Implantation to reflect 
substantive changes to the measure exclusions. ST-Elevation Myocardial 
Infarction (STEMI) Percutaneous Coronary Intervention (PCI) would be 
revised to Inpatient (IP) Percutaneous Coronary Intervention (PCI) to 
reflect the inclusion of patients with a non-STEMI PCI diagnosis and 
patients with a PCI diagnosis but neither STEMI nor non-STEMI 
diagnoses.
    The episode-based measures that we propose to modify beginning with 
the CY 2025 performance period/2027 MIPS payment year are listed in the 
Table 59.
[GRAPHIC] [TIFF OMITTED] TP31JY24.091

(v) Overview of Measure Reevaluation Process for Episode-Based Measures
    As part of the reevaluation process, we worked with the measure 
development contractor to gather feedback from interested parties on 
potential refinements to the measures. The measure development 
contractor worked with a standing TEP, Clinician Expert Workgroups, and 
held two public comment periods.
    Initially, a public comment period was held from February to May 
2022 to gather feedback on which of the Wave 1 measures implemented in 
MIPS in 2019 that the measure developer should prioritize reevaluating. 
A summary of public comments from the 2022 public comment period can be 
found in the Wave 1 Comprehensive Reevaluation Public Comment Summary 
Report at https://www.cms.gov/files/document/wave-one-public-comment-summary-report.pdf.
    The measure development contractor then convened the TEP for a 
meeting in August 2022 to provide input on the comprehensive 
reevaluation process for all Wave 1 episode-based measures. In October 
2022, the measure development contractor convened the Cataract Removal 
with IOL Implantation Clinician Expert Workgroup, the IP PCI Clinician 
Expert Workgroup, and the Respiratory Infection Hospitalization 
Clinician Expert Workgroup, to provide detailed clinical input on 
measure specifications for each reevaluated measure. This input was 
informed by empiric testing conducted by the measure development 
contractor. The workgroup discussions from October 2022 can be found in 
the Summary of Wave 1 Comprehensive Reevaluation Workgroup meetings at 
https://www.cms.gov/files/zip/summary-wave-1-comprehensive-reevaluation-workgroup-meetings.zip.
    After this, a second public comment period was held in February 
2023 to gather feedback on the draft revisions the measure developer 
made to the Cataract Removal with IOL Implantation, IP PCI, and 
Respiratory Infection Hospitalization measures. A summary of public 
comments from the 2023 public comment period can be found in the 2023 
Revised Cost Measure Feedback Period Summary Report at https://www.cms.gov/files/document/2023-revised-cost-measure-feedback-period-summary-report.pdf.
    The measure-specific expert workgroups then reviewed the feedback 
received through public comments and provided input on proposed 
decisions regarding the measure specifications. The workgroup 
discussions from Spring 2023 are available in the Summary of Wave 1 
Post-Feedback Period Workgroup meetings at https://www.cms.gov/files/zip/summary-wave-1-post-feedback-period-pfr-workgroup-meetings-23.zip. 
After the proposed specifications for each measure were finalized, we 
submitted the three revised measures (Cataract Removal with IOL 
Implantation, IP PCI, and Respiratory Infection with Hospitalization 
measures) to the 2023 MUC list and underwent review by the PRMR 
Clinician Committee and Clinician Committee Recommendation Group, which 
reviewed the measures for use in MIPS. We provide more information 
about this discussion in section IV.A.4.e.(2)(a)(viii) of this proposed 
rule.

[[Page 62050]]

(vi) Description of Proposed Modifications to the Routine Cataract 
Removal With Intraocular Lens (IOL) Implantation Measure With the Newly 
Titled Cataract Removal With IOL Implantation Measure
    We finalized the Routine Cataract Removal with Intraocular Lens 
(IOL) Implantation cost measure in the CY 2019 PFS final rule (83 FR 
59767 through 59773) for use in MIPS as an important measure of 
clinician cost performance, as cataract surgery is the most common 
surgical procedure in the United States.\746\ We continue to believe 
that the existing measure is appropriate to use in MIPS. When we 
finalized this measure for use in MIPS, we noted that as with all the 
cost measures, we would maintain this measure and update its 
specifications as appropriate (83 FR 59766 and 59767). As a part of our 
routine measure maintenance, we reevaluated the Routine Cataract 
Removal with IOL Implantation measure with consideration of input from 
interested parties and testing. This feedback from interested parties 
included:
---------------------------------------------------------------------------

    \746\ Pershing, S., D.E. Morrison, and T. Hernandez-Boussard. 
``Cataract Surgery Complications and Revisit Rates among Three 
States.'' [In eng]. Am J Ophthalmol 171 (Nov 2016): 130-38.
---------------------------------------------------------------------------

     The patient cohort for the measure should be expanded, 
while still accounting for patient heterogeneity, to expand clinician 
and beneficiary coverage.
     The measure should account for patients with ocular 
conditions that impact case complexity to account for patient 
heterogeneity.
     Certain Medicare Part B medication costs related to 
cataract procedures should be included in the measure, while Medicare 
Part D medication costs should remain excluded to better account for 
more clinically-related medication costs.
     The measure should more broadly capture services 
associated with cataract removal.
    In response to this feedback, CMS and the measure development 
contractor conducted additional empirical analyses and discussed 
potential modifications with the measure-specific expert workgroup. 
Summaries of these discussions are available here: https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. Based on 
these testing results and the clinician expert input, we are proposing 
to replace the Routine Cataract Removal with IOL Implantation with the 
revised Cataract Removal with IOL Implantation cost measure. The 
modifications that we are proposing to incorporate into the revised 
Cataract Removal with IOL Implantation measure and our rationale is 
outlined as follows.
    First, we propose to modify this cost measure by expanding the 
patient cohort based on changes to the exclusion criteria. Testing has 
shown that many episodes excluded due to ocular conditions had similar 
cost profiles, compared to episodes included in the measure, and 
represented a significant portion of triggered episodes. The measure-
specific expert workgroup discussed the appropriateness of the original 
exclusion criteria and recommended potential revisions. The proposed 
revised measure includes patients with certain previously excluded 
ocular conditions, such as glaucoma and macular degeneration, in the 
measure cohort because of their similar cost profiles. In response to 
expanding the measure cohort, we also propose updates to the risk 
adjustment model to risk adjust for ocular conditions that are no 
longer excluded but may still impact case complexity and episode costs. 
We believe that these changes are appropriate as they further account 
for patient heterogeneity in the more clinically diverse patient 
cohort. However, the proposed revised measure continues to exclude 
episodes for patients with significant ocular conditions impacting 
surgical complication rate or visual outcomes because testing did not 
suggest they had similar enough cost profiles for any expected cost 
differences to be accounted for through risk adjustment.
    Second, we propose to modify this cost measure's service assignment 
specifications in two ways, to include: (1) certain clinically-related 
telehealth services, pre-operative testing, emergency department (ED) 
visits for ocular complaints, and postoperative durable medical 
equipment (DME); and (2) certain additional clinically-related Medicare 
Part B medication costs that were not initially included in the 
measure. The previous version of the measure included a smaller subset 
of these services. However, testing showed that additional clinically-
related services within these categories occur during Cataract Removal 
episodes and exclusion of these services from the measure could result 
in failure to capture important costs. We are proposing to include the 
additional services because we believe this change would retain the 
original intent of the measure while capturing a more complete picture 
of cost performance variation. Additionally, we are proposing to expand 
the types of Part B medications assigned to the measure because we 
believe it would be appropriate to use similar service assignment rules 
for all clinically-related Part B medications.
    Further details about the revised Cataract Removal with IOL 
Implantation measure are available in the measure specifications 
documents, which are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
(vii) Description of the Proposed Modifications to the ST-Elevation 
Myocardial Infarction (STEMI) With Percutaneous Coronary Intervention 
(PCI) Measure With the Newly Titled Inpatient (IP) Percutaneous 
Coronary Intervention (PCI) Measure
    Similar to the Cataract Removal with IOL Implantation measure, we 
finalized the ST-Elevation Myocardial Infarction (STEMI) Percutaneous 
Coronary Intervention (PCI) measure in the CY 2019 PFS final rule (83 
FR 59767 through 59773) for use in MIPS as an important measurement of 
clinician cost performance, due to the high frequency and cost of PCI 
procedures in the United States. PCI is one of the most common 
procedures for cardiac events (AMIs) and is associated with $10 billion 
in health care costs annually.\747\ We continue to believe that the 
existing measure is appropriate for use in MIPS. However, when we 
finalized this measure for use in MIPS, we noted that, as with all the 
cost measures, we would maintain this measure and update its 
specifications as appropriate (83 FR 59766 and 59767). As a part of our 
routine measure maintenance, we reevaluated the STEMI PCI measure with 
consideration of input from interested parties and testing. This 
feedback from interested parties included:
---------------------------------------------------------------------------

    \747\ Amin, Amit P., Patterson, Mark, House, John A., 
Giersiefen, Helmut, Spertus, John A., Baklanov, Dmitri V., 
Chhatriwalla, Adnan K., Safley, David M., Cohen, David J., Rao, 
Sunil V., Marso, Steven., ``Cost Associated With Access Site and 
Same-Day Discharge Among Medicare Beneficiaries Undergoing 
Percutaneous Coronary Intervention: An Evaluation of the Current 
Percutaneous Coronary intervention Care Pathways in the United 
States,'' JACC Cardiovasc Interv 10, no. 4 (2017): 342-351.
---------------------------------------------------------------------------

     The patient cohort for the measure should be expanded, 
while still accounting for patient heterogeneity to increase clinician 
coverage and capture more clinically-related services.
     The measure should account for patients with cardiac 
arrest and patients who smoke tobacco to reduce factors outside of 
clinician control that influence measure performance.
    In response to this feedback, CMS and the measure development 
contractor conducted additional empirical analyses

[[Page 62051]]

and discussed potential modifications with the measure-specific 
Clinician Expert Workgroup. Summaries of these discussions are 
available here: https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/prior. Based on these testing results and the 
clinician expert input, CMS is proposing to replace the STEMI PCI 
measure with the revised IP PCI measure. The modifications that we are 
proposing to incorporate into the revised IP PCI measure and our 
rationale is outlined as follows.
    First, we propose to modify this cost measure by expanding the 
patient cohort based on changes to the triggering logic. The previous 
version of the measure narrowly defined a subset of STEMI PCI patients 
to promote homogeneity of the patient cohort. However, testing 
demonstrated that PCI episodes with and without STEMI appear to have 
similar cost profiles and involve similar clinician types. Therefore, 
it is appropriate to expand the patient cohort in the proposed revised 
measure to include episodes beyond those with STEMI diagnoses, such as 
PCI for non-STEMI diagnoses and PCI without either STEMI or non-STEMI 
diagnoses. As such, we would no longer use ICD-10 diagnosis information 
to restrict assessment of costs under this measure to only inpatient 
PCI procedures with a STEMI diagnosis. This change would increase the 
number of clinicians and beneficiaries for whom this cost measure would 
be applicable.
    Second, we are proposing to modify this cost measure to include 
additional sub-groups to stratify the patient cohort based on diagnosis 
to account for variations in cost and treatment pathways for inpatient 
procedures. While there are overall similarities between the diagnosis 
for inpatient PCI episodes (that is, STEMI, non-STEMI, and other 
inpatient PCI episodes), there are still expected differences in 
observed costs between these cohorts. This modification would allow us 
to assess variation in clinician cost performance rather than expected 
cost differences due to patient diagnoses. We believe this is 
appropriate as testing shows differences in observed episode costs 
among STEMI, non-STEMI, and other inpatient PCI episodes are 
neutralized via sub-grouping and risk adjustment.
    Third, we are proposing that the proposed revised measure excludes 
episodes with cardiac arrest and risk adjusts for patients with a 
history of tobacco use to further address heterogeneity in the patient 
cohort, as these cases can result in more complex treatment and higher 
observed costs for reasons outside of the control of the attributed 
clinician. This was supported by testing on the expanded patient 
cohort.
    Further detail about the revised IP PCI measure is included in the 
measure specifications documents, which are available at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures.
(viii) Pre-Rulemaking Measure Review Process
    After these extensive measure development and refinement 
activities, we included the six proposed new episode-based measures and 
two modified episode-based measures on our 2023 Measures Under 
Consideration (MUC) List (available for download at https://mmshub.cms.gov/sites/default/files/2023-MUC-List.xlsx) to be considered 
for potential use in MIPS. The measures then underwent PRMR during the 
2023-2024 review cycle. This process involved reviews by the PRMR 
Clinician Committee advisory and recommendation workgroups, as well as 
two public comment periods. More details on the PRMR process are 
available at https://p4qm.org/PRMR.
    Although we may pursue endorsement by the consensus-based entity 
(CBE), contracted in accordance with section 1890 of the Act, for the 
proposed measures at a later time, we are not required to use only CBE 
endorsed measures in MIPS. We emphasize that cost measures undergo 
extensive review and testing before they are implemented in MIPS. As 
described in section IV.A.4.e.(2)(a)(ii), the proposed new and revised 
cost measures in this proposed rule were vetted by clinicians, 
specialty societies, persons with lived experience, consensus panels, 
and the public at large without going through the CBE endorsement 
process. Cost measures are developed through a rigorous process with a 
Clinician Expert Workgroup providing detailed input on each aspect of 
the specifications, reviewing iterative empirical testing, and 
considering the input from persons with lived experience. The cost 
measures undergo field testing during the development process where 
MIPS eligible clinicians can download feedback reports to review their 
performance before measure implementation, and share input with the 
developer to help finalize the measure specifications. In addition, the 
proposed new and revised cost measures in this proposed rule were 
reviewed through the pre-rulemaking process described in this section 
of this proposed rule. We continue to believe in the strength of the 
episode-based measures, proposed for adoption and modification in this 
rulemaking, based on valid and reliable testing results and extensive 
review from interested parties as part of the measure development and 
implementation process.
    The PRMR Clinician Committee and Clinician Committee Recommendation 
Group reviewed the measure information, a preliminary analysis of the 
measures and their testing information developed by the CBE, and public 
comments. The PRMR Clinician Committee Recommendation Group met in 
January 2024 to discuss the measures in more detail and vote on their 
recommendations for the appropriateness of these measures' use in MIPS. 
The final result from the committee's vote can be: Recommend, Recommend 
with conditions, Do not recommend, or Consensus not reached. Consensus 
not reached signals continued disagreement among the committee despite 
being presented with perspectives from public comment, committee member 
feedback and discussion, and highlights the multi-faceted assessments 
of measures. More details regarding the CBE PRMR voting procedures may 
be found in Chapter 4 of the Guidebook of Policies and Procedures for 
Pre-Rulemaking Measure Review and Measure Set Review at https://p4qm.org/sites/default/files/2023-09/Guidebook-of-Policies-and-Procedures-for-Pre-Rulemaking-Measure-Review-%28PRMR%29-and-Measure-Set-Review-%28MSR%29-Final_0.pdf.
    The PRMR had mixed recommendations for the episode-based measures 
we are proposing to adopt and modify (in section IV.A.4.e.(2)(a)(ix)) 
in this rulemaking.
    The PRMR Clinician Committee Recommendation Group voted to 
``recommend with conditions'' for the revised Cataract Removal with IOL 
Implantation and IP PCI measures. For the Cataract Removal with IOL 
Implantation measure, while the committee did not provide or explain 
its conditions, they generally suggested further examination of how 
implementation of cost measures may impact patient outcomes. We plan to 
examine patient outcomes in more detail as part of routine measure 
monitoring. For the IP PCI measure, the committee recommended with the 
two conditions: CBE endorsement and additional testing to gather 
performance data over a longer period. As previously discussed, CBE 
endorsement is not required for measures to be adopted and used in 
MIPS. We plan to address these

[[Page 62052]]

conditions by monitoring the IP PCI measure's performance over time.
    The PRMR Clinician Committee Recommendation Group did not reach 
consensus on the CKD, ESRD, Kidney Transplant Management, Prostate 
Cancer, and Respiratory Infection Hospitalization measures. Overall, 
there was varied levels of support of the measures across the PRMR 
Clinician Committee Recommendation Group. The main concerns raised were 
related to scientific acceptability (for example, testing results 
suggesting low reliability for the CKD, ESRD and Kidney Transplant 
Management measures), appropriateness of risk adjustment, and potential 
unintended consequences. We recognize the Recommendation Group's 
concerns, but emphasize the tradeoffs between accuracy and reliability, 
as described in the CY 2022 PFS final rule (86 FR 65453 through 65456). 
However, we did work with the measure development contractor to conduct 
additional testing to address these concerns. We identified non-
substantive updates to existing outlier exclusions applied to cost 
measures that would address concerns about measure reliability for the 
CKD, ESRD, and Kidney Transplant Management measures. These adjusted 
outlier exclusions substantially improve reliability and are reflected 
in Table 60 of this proposed rule. We note that all the proposed new 
and revised measures meet the 0.4 mean reliability threshold that CMS 
typically applies for measures' use in MIPS. The Recommendation Group 
also expressed a strong interest in the measures undergoing CBE 
endorsement. As noted above, we may pursue CBE endorsement of these 
measures in the future, but it is not a requirement for measures to be 
adopted and used in MIPS.
    The voting results of the PRMR Clinician Committee Recommendation 
Group for the Rheumatoid Arthritis measure were ``do not recommend.'' 
The PRMR final recommendations state that the Recommendation Group 
supported the measure concept, but ultimately had reservations about 
its use in MIPS and concerns about measure performance. These concerns 
aligned with the concerns the Recommendation Group raised about cost 
measures overall, such as concerns around how cost measures impact 
patient outcomes. More information on the PRMR recommendations is 
available in the PRMR 2023 Final Recommendation Report: https://p4qm.org/sites/default/files/2024-02/PRMR-2023-MUC-Recommendations-Report-Final-.pdf.
    We acknowledge the feedback from the Recommendation Group regarding 
the Rheumatoid Arthritis measure, but we disagree that the measure 
should not be used in MIPS. We agree with the Recommendation Group's 
feedback regarding the importance of this measure to assess and address 
wide variation in cost performance for rheumatoid arthritis treatment 
and management. Literature states that rheumatoid arthritis is highly 
prevalent and is most common among older adults.748 749 
Given this high prevalence, rheumatoid arthritis is costly to the 
healthcare system and individual patients, though costs vary based on 
treatment regimen.\750\ Over the past decade, Medicare costs associated 
with disease-modifying treatments have increased substantially.\751\ 
Additionally, certain treatment choices for Rheumatoid Arthritis are 
associated with increased costs due to adverse outcomes associated with 
these choices, suggesting room for improvement in cost performance and 
patient care. For example, chronic glucocorticoid use among rheumatoid 
arthritis patients is associated with higher health care costs due to 
increased occurrence of adverse events (e.g., developing diabetes or 
osteoporosis, cardiovascular events such as thrombotic stroke, 
myocardial infarction, or death).752 753 754 We believe that 
the cost of these adverse events are important to assess in terms of 
Medicare spending and impact on the patient population. In line with 
these findings, the Recommendation Group did express support for the 
intent of this measure from a clinician and patient perspective.
---------------------------------------------------------------------------

    \748\ Centers for Disease Control and Prevention, ``Rheumatoid 
Arthritis (RA),'' 2020, https://www.cdc.gov/arthritis/basics/rheumatoid-arthritis.html.
    \749\ Hunter TM, Boytsov NN, Zhang X, Schroeder K, Michaud K, 
Araujo AB. Prevalence of rheumatoid arthritis in the United States 
adult population in healthcare claims databases, 2004-2014. 
Rheumatol Int. 2017;37(9):1551-1557. doi:10.1007/s00296-017-3726-1.
    \750\ Hunter et al., Prevalence of rheumatoid arthritis.
    \751\ Stolshek BS, Wade S, Mutebi A, De AP, Wade RL, Yeaw J. 
Two-year adherence and costs for biologic therapy for rheumatoid 
arthritis. Am J Manag Care. 2018;24(8 Spec No.): SP315-SP321.
    \752\ Black, R.J. et al., ``A Survey of Glucocorticoid Adverse 
Effects and Benefits in Rheumatic Diseases: The Patient 
Perspective,'' Journal of Clinical Rheumatology 23, no. 8 (December 
2017): 416-420, https://doi.org/10.1097/rhu.0000000000000585.
    \753\ Wilson, J.C. et al., ``Incidence and Risk of 
Glucocorticoid-Associated Adverse Effects in Patients With 
Rheumatoid Arthritis,'' Arthritis Care & Research, 71, no. 4, (April 
2019): 498-511, https://doi.org/10.1002/acr.23611.
    \754\ Best, J.H. et al., ``Association Between Glucocorticoid 
Exposure and Healthcare Expenditures for Potential Glucocorticoid-
related Adverse Events in Patients with Rheumatoid Arthritis,'' 
Journal of Rheumatology 45, no. 3 (March 2018): 320-328, https://doi.org/10.3899/jrheum.170418.
---------------------------------------------------------------------------

    The Recommendation Group stated that public comments submitted 
during the PRMR process suggest the Rheumatoid Arthritis measure does 
not have support by certain rheumatology associations. However, the 
comments received during PRMR did not include comments from a major 
rheumatologic association that has called for the development of an 
episode-based measure for rheumatologists. Members of this organization 
were also involved in the development of the Rheumatoid Arthritis 
measure through the participation in the Rheumatoid Arthritis Clinician 
Expert Workgroup. As described in section IV.A.4.e.(2)(a)(ii) of this 
proposed rule, the Rheumatoid Arthritis episode-based cost measure was 
developed with extensive engagement from interested parties (that is, 
clinicians who treat this disease, persons with lived experience with 
Rheumatoid Arthritis, and the general public) through several 
mechanisms including a TEP, public comment periods, a clinician expert 
workgroup, person and family engagement opportunities, and national 
field testing. During the public comment period for determining which 
measures to prioritize for development, we received feedback from 
rheumatology professional societies that they supported the development 
of a Rheumatoid Arthritis measure, as the current MIPS cost measure 
inventory does not include cost measures specific to care typically 
provided by rheumatologists. Additionally, the Rheumatoid Arthritis 
Clinician Expert Workgroup that advised on the measure specifications 
included representatives from 11 professional societies, including key 
rheumatology societies.
    The Recommendation Group also expressed concerns with the 
scientific acceptability of the Rheumatoid Arthritis measure. However, 
national field testing indicates the measure is valid and has high 
reliability at the group level, with a mean reliability of 0.74, and 
has moderate reliability at the individual level with a mean 
reliability of 0.52. At both the group and individual levels, the 
measure passes the 0.4 reliability threshold we typically apply for a 
cost measure's use in MIPS, as discussed in CY 2022 PFS final rule (86 
FR 65453 through 65455). Additionally, several commenters expressed 
concerns with the Rheumatoid Arthritis measure, such as the measure 
could hold clinicians accountable for costs that they cannot control 
(for example, medications), the risk adjustment methodology may not 
account for differences in the patient

[[Page 62053]]

population, and the measure is not tied directly to patient outcomes. 
Testing also indicates that the cost measure reflects the cost related 
to treatment choices and the cost of adverse outcomes resulting from 
care and that the risk adjustment model is working as intended. There 
has not been evidence to suggest that this cost measure would impact 
patient outcomes negatively. More information is available in the 
Measure Justification Form available for download at https://www.cms.gov/files/zip/2023-wave-5-measure-justification-forms-zip.zip. 
The Recommendation Group also acknowledged that the measure is already 
specified to adjust for expected differences in medication costs based 
on whether a patient is enrolled in Medicare Part D (that is, 
stratifying the measure by Part D enrollment), furthering supporting 
the scientific acceptability of this measure.
    The Recommendation Group suggested the measure should undergo 
endorsement review and receive CBE endorsement. As discussed 
previously, we may pursue CBE endorsement of these measures in the 
future, but CBE endorsement is not a requirement for measures to be 
adopted and used in MIPS.
    We are continuing to propose this measure despite the ``do not 
recommend'' vote from the PRMR committee because we continue to believe 
in the use of this measure based on the empiric testing results 
discussed in this section, including indications of moderate to high 
reliability, and because of the importance of capturing this clinical 
area of care. We originally selected this measure for development 
because of its high impact in terms of patient population, clinician 
coverage, and Medicare spending, and the opportunity to build a chronic 
condition measure that would address a condition not captured by other 
episode-based measures in the MIPS cost performance category. We 
believe that there is a strong rationale for including this measure in 
the cost performance category for these same reasons.
(ix) Proposal To Adopt Six Episode-Based Measures and Modify Two 
Episode-Based Measures
    In consideration of the extensive development, reevaluation, and 
pre-rulemaking review processes described in sections 
IV.A.4.e.(2)(a)(i) through IV.A.4.e.(2)(a)(viii), we are proposing to 
make the following updates to the MIPS cost performance category:
    We are proposing to adopt the six new episode-based measures in the 
cost performance category, outlined in Table 58 and described in 
section IV.A.4.e.(2)(a)(iii) of this rulemaking, beginning with the CY 
2025 performance period/2027 MIPS payment year.
    We are proposing to replace the original Routine Cataract Removal 
with Intraocular Lens (IOL) Implantation with the revised Cataract 
Removal with Intraocular Lens (IOL) Implantation measure, with the 
modifications described in section IV.A.4.e.(2)(a)(vi) of this 
rulemaking, in the cost performance category beginning with the CY 2025 
performance period/2027 MIPS payment year.
    We are proposing to replace the ST-Elevation Myocardial Infarction 
(STEMI) Percutaneous Coronary Intervention (PCI) with the revised 
Inpatient (IP) Percutaneous Coronary Intervention (PCI) measure, with 
the modifications described in section IV.A.4.e.(2)(a)(vii) of this 
rulemaking, in the cost performance category beginning with the CY 2025 
performance period/2027 MIPS payment year.
    We invite comments on the proposals in this section.
(b) Reliability and Case Minimum
    In this section of this proposed rule, we discuss the case minima 
we are proposing for the episode-based measures we are proposing to 
adopt and modify (in section IV.A.4.e.(2)(a)(ix)) in this rulemaking.
    Reliability is a metric that evaluates the extent that variation in 
a measure comes from clinician performance (``signal'') rather than 
random variation (``noise''). Higher reliability suggests that a 
measure is effectively capturing meaningful differences between 
clinicians' performance. However, we continued to caution against using 
reliability as the sole metric to evaluate a measure because of the 
tradeoffs between accuracy and reliability, and the role of service 
assignment in reducing noise. These and other considerations are 
detailed in the CY 2022 PFS final rule (86 FR 65453 through 65455). We 
also noted that increasing case minima necessarily reduces the number 
of clinicians who meet the case minimum for a given measure. Because 
these are clinically refined measures, we aim to have as many MIPS 
eligible clinicians as possible to be able to have their costs 
evaluated by them. Therefore, we considered that a mean reliability of 
0.4 represents moderate reliability because it accounts for these 
considerations and is a sufficient threshold to ensure that the measure 
is performing as intended when assessed in conjunction with other 
testing.
    We previously established at Sec.  414.1350(c)(5) a case minimum of 
20 episodes for acute inpatient medical condition episode-based 
measures and at Sec.  414.1350(c)(4) a case minimum of 10 episodes for 
procedural episode-based measures in the CY 2019 PFS final rule (83 FR 
59773 through 59774). We also established at Sec.  414.1350(c)(6) a 
case minimum of 20 episodes for chronic condition episode-based 
measures in the CY 2022 final rule (86 FR 65453 through 65455).
    We examined the reliability of the eight episode-based measures 
(six new and two modified) we are proposing in this rulemaking, and 
Table 60 presents the percentage of tax identification numbers (TINs) 
and TIN/National Provider Identifiers (NPIs) that meet the 0.4 
reliability threshold and the mean reliability for TINs and TIN/NPIs at 
our case minimum of 20 for each of the chronic condition and acute 
impatient medical condition episode-based measures. At a 20-episode 
case minimum, the mean reliability for the measures exceeds 0.4 for 
both groups and individual clinicians, and the majority of groups and 
individual clinicians meet the 0.4 reliability threshold. For the 
procedural measure, Cataract Removal with Intraocular Lens (IOL) 
Implantation, we applied the case minimum of 10 episodes. At a 10-
episode case minimum, the mean reliability for the measure exceeds 0.4 
for both groups and individual clinicians, and all groups and 
individual clinicians meet the 0.4 reliability threshold.

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    We believe that calculating these proposed episode-based measures 
with these case minimums would accurately and reliably assess the 
performance of clinicians and clinician group practices. Therefore, we 
are proposing to adopt a case minimum of 20 episodes for the chronic 
condition (CKD, ESRD, Kidney Transplant Management, Prostate Cancer, 
Rheumatoid Arthritis) and acute inpatient medical condition 
(Respiratory Infection Hospitalization and IP PCI) measures and a case 
minimum of 10 episodes for the procedural measure (Cataract Removal 
with IOL Implantation) listed in Table 60. For the IP PCI and Cataract 
Removal with IOL Implantation, these case minimums remain consistent 
with the case minimums for the original measures (that is, STEMI PCI 
and Routine Cataract Removal with IOL Implantation) that are currently 
in use. These proposals are also consistent with our regulation at 
Sec.  414.1350(c)(4) through (6). We do not propose to modify these 
regulations establishing the case minima for these types of cost 
measures.
    We invite comments on the proposals in this section.
(c) Proposed Revisions to the Operational List of Care Episode and 
Patient Condition Groups and Codes
    We are proposing revisions to the operational list of care episode 
and patient condition groups and codes to reflect the proposal of any 
new episode-based measures. This section of this proposed rule provides 
context on the statutory requirements for care episode and patient 
condition groups and proposes changes to the operational list.
    Section 1848(r) of the Act specifies a series of steps and 
activities for the Secretary to undertake to involve physicians, 
practitioners, and other interested parties in enhancing the 
infrastructure for cost measurement, including for purposes of MIPS and 
APMs. Section 1848(r)(2) of the Act requires the development of care 
episode and patient condition groups, and classification codes for such 
groups, and provides for care episode and patient condition groups to 
account for a target of an estimated one-half of expenditures under 
Medicare Parts A and B (with this target increasing over time as 
appropriate). Sections 1848(r)(2)(E) through (G) of the Act require the 
Secretary to post on the CMS website a draft list of care episode and 
patient condition groups and codes for solicitation of input from 
interested parties, and subsequently, post an operational list of such 
groups and codes. Section 1848(r)(2)(H) of the Act requires that not 
later than November 1 of each year (beginning with 2018), the Secretary 
shall, through rulemaking, revise the operational list of care episode 
and patient condition codes as the Secretary determines may be 
appropriate, and that these revisions may be based on experience, new 
information developed under section 1848(n)(9)(A) of the Act, and input 
from physician specialty societies and other interested parties.
    For more information about past revisions to the operational list 
that we made as we developed and proposed episode-based measures, we 
refer readers to the CY 2023 PFS final rule (87 FR 70056 through 70057) 
and CY 2024 PFS final rule (88 FR 79348). The current operational list 
and prior operational lists are available at the QPP Cost Measure 
Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
    Additionally, as required by section 1848(r)(2)(I) of the Act, 
information on resource use (or cost) measures currently in use in 
MIPS, cost measures under development and the time-frame for such 
development, potential future cost measure topics, a description of 
engagement with interested parties, and the percent of expenditures 
under Medicare Parts A and B that are covered by cost measures must be 
provided on the website of CMS not later than December 31 of each year.
    In accordance with section 1848(r)(2)(H) of the Act, we are 
proposing to revise the operational list beginning with the CY 2025 
performance period/2027 MIPS payment year to include six new care 
episode and patient condition groups, based on input from clinician 
specialty societies and other interested parties, as discussed in 
section IV.A.4.e.(2)(a) of this proposed rule. We propose including 
Respiratory Infection Hospitalization as a care episode group and CKD, 
ESRD, Kidney Transplant Management, Prostate Cancer, and Rheumatoid 
Arthritis as patient condition groups. These care episode and patient 
condition groups serve as the basis for the six new episode-based

[[Page 62055]]

measures that we are proposing in section IV.A.4.e.(2)(a)(ix) of this 
proposed rule for the cost performance category. The codes that define 
these six care episode and patient condition groups align with the 
trigger codes of the proposed episode-based measures in section 
IV.A.4.e.(2)(a)(ix) of this proposed rule. As described in section 
IV.A.4.e.(2)(a)(ii), these specifications are developed with extensive 
input from interested parties.
    Additionally, we propose to revise the care episode group codes 
listed to align with the modifications proposed for Cataract Removal 
with Intraocular Lens (IOL) Implantation and Inpatient (IP) 
Percutaneous Coronary Intervention (PCI) measures.
    Our proposed revisions to the operational list are available on our 
QPP Cost Measure Information page at https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
    We invite public comment on our proposals in this section.
(d) Proposed Removal Criteria for MIPS Cost Measures
    Once adopted, cost measures are retained in the cost performance 
category measure inventory, except when we specifically propose to 
remove a measure. We have identified a need to establish and codify 
objective criteria that can be used to inform the removal of a cost 
measure from the MIPS cost performance category. Specifically, when 
removing the Simple Pneumonia with Hospitalization episode-based 
measure from the CY 2024 PFS final rule (88 FR 79348 through 79349), we 
confirmed that, unlike the MIPS quality performance category, the MIPS 
cost performance category did not have clear guidelines for removing a 
measure established through the notice-and-comment rulemaking process. 
Establishing such criteria would allow for more consistency in our 
evaluation of the cost measures and our decision on whether to propose 
that a cost measure be removed from the MIPS cost performance category.
    Therefore, we are proposing to adopt the following factors that can 
be used to guide the removal of a cost measure:
     Factor 1: It is not feasible to implement the measure 
specifications.
     Factor 2: A measure steward is no longer able to maintain 
the cost measure.
     Factor 3: The implementation costs or negative unintended 
consequences associated with a cost measure outweigh the benefit of its 
continued use in the MIPS cost performance category.
     Factor 4: The measure specifications do not reflect 
current clinical practice or guidelines.
     Factor 5: The availability of a more applicable measure, 
including a measure that applies across settings, applies across 
populations, or is more proximal in time to desired patient outcomes 
for the particular topic.
    We selected these factors because they outline instances that we 
anticipate based on previous experience where a cost measure may not be 
appropriate to maintain in a program, but not limited to these 
instances. We also worked to align these criteria with the MIPS quality 
removal considerations and criteria outlined in the CY 2019 PFS final 
rule (83 FR 59763 through 59765) and CY 2020 PFS final rule (84 FR 
62957 through 62959), where possible, and, in part, the Hospital Value-
Based Purchasing (HVBP) Program's removal factors that are codified in 
our regulations at 42 CFR 412.164(c)(3). We are proposing these 
specific criteria to encourage a degree of alignment between existing 
measure removal policies within MIPS and across Medicare programs, 
where appropriate, for cost measures.
    There were some instances where certain removal criteria used by 
the MIPS quality performance category and the HVBP Program would not be 
applicable for cost measures and, in those instances, we are not 
proposing to adopt those factors. For example, we did not propose to 
adopt the removal criterion for measures that do not reach appropriate 
reporting volumes. This is because MIPS eligible clinicians do not 
separately report or submit data for cost measures. Instead, we assess 
and score cost measures based on administrative claims data. In 
addition, our existing scoring policies for the cost performance 
category at Sec.  414.1380(b)(2) already address situations where there 
are insufficient number of MIPS eligible clinicians meeting the case 
minimum, such that the cost measure is not scored. If we were to 
determine that a cost measure would be unlikely to be scored moving 
forwards due to insufficient number of MIPS eligible clinicians meeting 
the case minimum, we believe that the first factor we are proposing 
(that is, it is not feasible to implement the measure specifications) 
would be applicable for removal.
    We note that these factors are criteria that would be used as 
guidance when considering whether or not to propose to remove a 
measure, rather than firm requirements. Specifically, there could be 
instances when a measure meets one or multiple measure removal factors, 
but would be retained in the cost performance category regardless, 
provided that we determine that the benefit of keeping the measure in 
the cost performance category would outweigh the benefit of removing 
it. Prior to proposing a measure for removal in accordance with this 
policy, we would carefully review the specifications of the cost 
measures by conducting necessary literature reviews, empirical testing, 
or other information gathering.
    Additionally, we propose to codify this proposed measure removal 
policy by amending Sec.  414.1350 by adding the proposed cost removal 
criteria in paragraph (e). Specifically, we are proposing at Sec.  
414.1350(e) that CMS may remove a cost measure from MIPS based on one 
or more of the following factors, provided however CMS may retain a 
cost measure that meets one or more of the following factors if CMS 
determines the benefit of retaining the measure outweighs the benefit 
of removing it.
     It is not feasible to implement the measure 
specifications.
     A measure steward is no longer able to maintain the cost 
measure.
     The implementation costs or negative unintended 
consequences associated with a cost measure outweigh the benefit of its 
continued use in the MIPS cost performance category.
     The measure specifications do not reflect current clinical 
practice or guidelines.
     The availability of a more applicable measure, including a 
measure that applies across settings, applies across populations, or is 
more proximal in time to desired patient outcomes for the particular 
topic.
    We invite comments on this proposal.
(3) Improvement Activities Performance Category
(a) Background
    For previous discussions on the general background of the 
improvement activities performance category, we refer readers to the CY 
2017 Quality Payment Program final rule (81 FR 77177 and 77178), the CY 
2018 Quality Payment Program final rule (82 FR 53648 through 53661), 
the CY 2019 Physician Fee Schedule (PFS) final rule (83 FR 59776 and 
59777), the CY 2020 PFS final rule (84 FR 62980 through 62990), CY 2021 
PFS final rule (85 FR 84881 through 84886), the CY 2022 PFS final rule 
(86 FR 65462 through 65466), the CY 2023 PFS final rule (87 FR 70057 
through 70061), and the CY 2024 PFS final rule (88 FR 79350 and 88 FR 
79351). We also refer readers to 42 CFR 414.1305 for the definitions of 
improvement activities

[[Page 62056]]

and attestation, Sec.  414.1320 for standards establishing the 
performance period, Sec.  414.1325 for the data submission 
requirements, Sec.  414.1355 for standards related to the improvement 
activity performance category generally, Sec.  414.1360 for data 
submission criteria for the improvement activity performance category, 
and Sec.  414.1380(b)(3) for improvement activities performance 
category scoring.
    We are proposing two changes to the traditional Merit-based 
Incentive Payment System (MIPS) and the MIPS Value Pathways (MVPs) 
improvement activities policies for the CY 2025 performance period/2027 
MIPS payment year. We are also proposing at Sec.  414.1355 to codify 
the seven improvement activity removal factors, which were adopted in 
the CY 2020 PFS final rule (FR 84 62988 through 62990) to establish 
criteria used to identify activities for potential removal or 
modification. In addition, we are proposing changes to the improvement 
activities Inventory for the CY 2025 performance period/2027 MIPS 
payment year and future years as follows: adding two new improvement 
activities; modifying two existing improvement activities; and removing 
eight previously adopted improvement activities.
(b) Improvement Activities Inventory
(i) Annual Call for Activities Background
    In the CY 2017 Quality Payment Program final rule (81 FR 77190), 
for the transition year of MIPS, we implemented the initial improvement 
activities Inventory consisting of approximately 95 activities (81 FR 
77817 through 77831). We took several steps to ensure the Inventory was 
inclusive of activities in line with statutory and program 
requirements, including conducting interviews with highly performing 
organizations of all sizes, conducting an environmental scan to 
identify existing models, activities, or measures that met all or part 
of the improvement activities performance category criteria, and 
reviewing comments received in the CY 2016 PFS final rule with comment 
period (80 FR 71259) and in response to the MIPS and Advanced Payment 
Models (APMs) Requests for Information (RFIs) in relation to the 
improvement activities performance category.
    For the CY 2018 performance period/2020 MIPS payment year, we 
provided an informal process for submitting new improvement activities 
or modifications for potential inclusion in the comprehensive 
improvement activities Inventory for the CY 2018 performance period/
2020 MIPS payment year and future years through guidance.\755\ In the 
CY 2018 Quality Payment Program final rule (82 FR 53656 through 53659), 
for the CY 2019 performance period/2021 MIPS payment year and for 
future years, we finalized a formal Annual Call for Activities process 
for the addition of possible new activities and possible modifications 
to current activities in the improvement activities Inventory. An 
interested party must submit a nomination form regarding a new activity 
or a modification to an existing improvement activity (OMB control # 
0938-1314) available at www.qpp.cms.gov during the Annual Call for 
Activities.
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    \755\ CMS, Annual Call for Measures and Activities: Fact Sheet, 
https://www.cms.gov/Medicare/Quality-IniCtiatives-Patient-Assessment-Instruments/MMS/Downloads/Annual-Call-for-Measures-and-Activities-for-MIPS_Overview-Factsheet.pdf.
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(ii) Codification of Improvement Activity Removal Factors
    In the CY 2018 Quality Payment Program proposed rule (82 FR 30056), 
we solicited comments on the criteria that may be used to identify 
improvement activities for removal from the improvement activities 
Inventory, citing that, over time, certain improvement activities 
should be considered for removal to ensure the Inventory is robust and 
relevant. In the CY 2020 PFS final rule (84 FR 62568 through 63563), we 
established seven removal factors to identify activities for potential 
removal or modification from the Inventory. In this proposed rule, we 
are proposing to codify at Sec.  414.1355 the following existing seven 
improvement activity removal factors:
     Factor 1: Activity is duplicative of another activity.
     Factor 2: There is an alternative activity with a stronger 
relationship to quality care or improvements in clinical practice.
     Factor 3: Activity does not align with current clinical 
guidelines or practice.
     Factor 4: Activity does not align with at least one 
meaningful measure area.
     Factor 5: Activity does not align with the quality, cost, 
or Promoting Interoperability performance categories.
     Factor 6: There have been no attestations of the activity 
for 3 consecutive years.
     Factor 7: Activity is obsolete.
    We note that these factors are criteria that are used as guidance 
in determining removal of an activity, but its use is at CMS 
discretion. For example, there may be instances when an activity meets 
one or multiple activity removal factors but may be retained in the 
improvement activities performance category Inventory, because the 
benefit of retaining outweighs the benefit of removing. We believe that 
codifying these removal factors would provide transparency and 
alignment with removals of improvement activities from the Inventory. 
We solicit comment on this proposal.
(iii) Changes to the Improvement Activities Inventory
    In the CY 2018 Quality Payment Program final rule (82 FR 53660), we 
finalized that we would establish improvement activities through 
notice-and-comment rulemaking. We refer readers to Table H in the 
Appendix to the CY 2017 Quality Payment Program final rule (81 FR 77177 
through 77199), Tables F and G in the Appendix to the CY 2018 Quality 
Payment Program final rule (82 FR 54175 through 54229), Tables A and B 
in the Appendix 2 to the CY 2019 PFS final rule (83 FR 60286 through 
60303), Tables A, B, and C in the Appendix 2 to the CY 2020 PFS final 
rule (84 FR 63514 through 63538), Tables A, B, and C in the Appendix 2 
to the CY 2021 PFS final rule (85 FR 85370 through 85377), Tables A, B, 
and C in the Appendix 2 to the CY 2022 PFS final rule (86 FR 65969 
through 65997), Tables A, B, and C in the Appendix 2 to the CY 2023 PFS 
final rule (70633 through 70650), and Tables A, B, and C in the 
Appendix 2 to the CY 2024 PFS final rule (88 FR 79965 through 79977) 
for our previously finalized improvement activities Inventories. We 
also refer readers to the Quality Payment Program website under Explore 
Measures and Activities at https://qpp.cms.gov/mips/explore-measures?tab=improvementActivities&py=2024#measures for a complete list 
of the current improvement activities. In the CY 2017 Quality Payment 
Program final rule (81 FR 77539), we codified the definition of 
improvement activities at Sec.  414.1305 to mean an activity that 
relevant MIPS eligible clinicians, organizations, and other relevant 
interested parties identify as improving clinical practice or care 
delivery and that the Secretary determines, when effectively executed, 
is likely to result in improved outcomes.
    We are proposing to add two new improvement activities, modify two 
existing improvement activities, and remove eight previously adopted 
improvement activities for the CY 2025 performance period/2027 MIPS 
payment year and future years. We refer readers to Appendix 2 of this 
proposed rule for more details.

[[Page 62057]]

    In response to stakeholder feedback, we are making efforts to 
streamline the Inventory over the coming rulemaking cycles to include 
only the most robust and clinically meaningful improvement activities. 
The removal and modification of 10 total activities is an initial step 
toward our goal of reducing the size of the Inventory and helping to 
ensure that it includes only the most meaningful activities that have a 
clear path to clinical practice improvement, while the two proposed new 
activities would help fill gaps we have identified in the Inventory.
    Currently, there are 106 finalized activities in the improvement 
activities Inventory, all of which are assigned either a high or medium 
weight. When each of the activities was added, their requirements 
reflected clinical practice standards of the time, addressed areas of 
opportunity for fostering clinical practice improvements, and aligned 
with national public health priorities and CMS programs. The last seven 
performance periods have provided sufficient time for analysis and 
review of submissions data to learn how MIPS eligible clinicians are 
choosing activities to report each year. Over the last several 
performance years, we have observed that some activities have not 
remained aligned with the latest updates to clinical practice 
standards, have not incorporated the latest national priorities, and/or 
have activity requirements that are no longer substantive enough to 
promote a sufficient level of clinical practice improvement in today's 
health care environment. Some activities are continuing to be highly 
utilized even though the goals of the improvement activity have largely 
been achieved, with the completion of these improvement activities 
contributing toward a final score without a corresponding result of 
ongoing improvement. Therefore, we are proposing to remove several of 
these improvement activities and to modify activities to better promote 
more meaningful clinical practice improvement opportunities. In 
proposing activities for removal or modification, we are considering 
the seven adopted improvement activity removal factors, discussed in 
the CY 2020 PFS final rule (84 FR 62568 through 63563) and in section 
IV.A.4.e.(3)(b)(ii) of this proposed rule.
    We refer readers to Table C of Appendix 2 of this proposed rule for 
details on the proposal of these eight activity removals.
    We are proposing two new improvement activities in the Population 
Management subcategory. One new activity, IA_PM_XX, titled 
``Implementation of Protocols and Provision of Resources to Increase 
Lung Cancer Screening Uptake'' would allow MIPS eligible clinicians to 
receive credit for establishing a process or procedure to increase 
rates of lung cancer screening. While lung cancer is a leading cause of 
cancer-related deaths in the U.S., lung cancer screening is under-
utilized. This activity aims to increase this screening and improve 
associated outcomes. Another activity, IA_PM_XX, titled ``Save a 
Million Hearts: Standardization of Approach to Screening and Treatment 
for Cardiovascular Disease Risk'' would allow MIPS eligible clinicians 
to receive credit for implementing a standardized, evidence-based 
cardiovascular disease risk assessment and care management plan in 
their practices. This activity proposal is informed by the results of 
the CMS Innovation Center Million Hearts Model, which included initial 
atherosclerotic cardiovascular disease (ASCVD) assessment as well as 
cardiovascular care management, which were shown to contribute to 
improved identification and treatment of patients at risk for ASCVD and 
would expand on the work of this Model by (1) increasing flexibility in 
requirements, allowing more clinician specialties to participate, along 
with increased flexibility in risk assessment to fit the needs of 
attesting clinicians and their patient populations; and (2) requiring 
the use of structured documentation of risk factors and associated 
treatment plans with the aim of addressing all risk factors directly.
    We are proposing two modifications to improvement activities 
focused on strengthening the activities to better promote more 
meaningful clinical practice improvement. We are proposing to modify 
IA_PM_XX (formerly IA-ERP_6), titled ``Vaccine Achievement for Practice 
Staff--COVID-19, Influenza, and Hepatitis B,'' and its validation 
criteria to revise its target goals, and to expand its focus and 
promote the vaccination of staff for COVID-19 as well as Influenza and 
Hepatitis B. Adjusting the target goals for this activity would align 
with the latest Centers for Disease Control and Prevention (CDC) 
recommendations, and feedback received indicates that this could 
increase its utilization. Additionally, we are proposing to expand the 
focus of this activity to include influenza and hepatitis B to 
highlight the importance of staff vaccination for vaccine-preventable 
diseases prevalent today. We are also proposing to change the 
activity's subcategory, from Emergency Response & Preparedness to 
Population Management, to emphasize that staff vaccination is a long-
term strategy in reducing morbidity and mortality rates for these 
diseases.
    We are proposing to modify IA_BE_4, currently titled ``Engagement 
of patients through implementation of improvements in patient portal,'' 
and its validation criteria to limit the activity to new 
implementations of a patient/caregiver portal and encourage the 
measure's adoption by clinicians who do not currently utilize this 
health information exchange technology. We are proposing to modify this 
activity's name, description, and its validation criteria to better 
align with current practices. This activity was originally created 
during a time of transition to EHRs to encourage electronic information 
exchange. It has become standard practice to use patient portals; 
therefore, the activity is no longer driving improvement among 
clinicians who have already implemented patient portals.
    We are separately proposing to remove eight existing activities, 
presented in Table 61.

[[Page 62058]]

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[[Page 62059]]


    We refer readers to Appendix 2 of this proposed rule for details on 
the proposed revisions to the improvement activities Inventory.
(iv) Improvement Activity Scoring and Reporting Policies
    We are proposing two scoring and reporting policy changes for the 
improvement activities performance category effective for the CY 2025 
performance period/2027 MIPS payment year and subsequent years. First, 
we are proposing to eliminate the weighting of improvement activities. 
This would simplify scoring of the category, as well as complement our 
ongoing efforts to refine and improve the Inventory. In the CY 2017 
Quality Payment Program final rule (81 FR 77177 and 77178), we codified 
at 42 CFR 414.1380(b)(3) the scoring policies for the improvement 
activities performance category. We established there that clinicians 
(except for non-patient facing MIPS eligible clinicians, small 
practices, and practices located in rural areas and geographic health 
professional shortage areas (HPSAs)) receive 10 points for each medium-
weighted improvement activity and 20 points for each high-weighted 
improvement activity. Non-patient facing MIPS eligible clinicians, 
small practices, and practices located in rural areas and geographic 
HPSAs receive 20 points for each medium-weighted improvement activity 
and 40 points for each high-weighted improvement activity. We 
established a differentially weighted model for the improvement 
activities performance category with two categories, medium and high, 
to provide flexible scoring and because there are no nationally 
recognized standards or definitions for these activities (81 FR 28210). 
Weights were assigned based on the level of effort and resources needed 
to complete each activity, as well as alignment with current national 
public health priorities and programs such as the Quality Innovation 
Network-Quality Improvement Organization (QIN/QIO).
    We have subsequently determined that the benefit to categorizing 
activities as high or medium weighted has greatly diminished. Over the 
last several years of the Quality Payment Program, we have made 
refinements and enhancements to the improvement activities Inventory by 
adding new activities to incorporate newly identified opportunities for 
clinical improvement and by modifying existing activities to support 
changes in practice standards, while also eliminating activities that 
are duplicative or that no longer promote a sufficient level of 
clinical improvement. In this and subsequent rulemaking cycles, we are 
focusing our efforts on streamlining the Inventory to retain the 
highest priority activities that offer the strongest promotion of 
clinical practice improvement. As the Inventory is streamlined, each 
retained activity highlights a unique and vital aspect of clinical 
practice improvement, and therefore every activity would be considered 
high priority.
    Second, and related to the proposal in this section of this 
proposed rule, we are proposing to further simplify improvement 
activity reporting requirements by reducing the number of activities to 
which clinicians are required to attest to achieve a full score in the 
improvement activities performance category. Currently, MIPS eligible 
clinicians are required to report two high-weighted activities, four 
medium-weighted activities, or one high-weighted and two medium-
weighted activities while MVP participants are currently required to 
report one high-weighted activity or two medium-weighted activities. We 
are proposing that MIPS eligible clinicians who participate in 
traditional MIPS would be required to report two activities. In 
addition, we are proposing that MIPS eligible clinicians who are 
categorized as small practice, rural, in a provider-shortage area, or 
non-patient facing would now be required to report one activity. We are 
proposing that these policies would be effective for the CY 2025 
performance period/2027 MIPS payment year and subsequent years.
    We are also proposing that MVP participants would be required to 
report one activity. In the CY 2022 PFS final rule (86 FR 65412 through 
65413), we established that MVP Participants submitting MVPs report 
fewer improvement activities than eligible clinicians reporting 
traditional MIPS to incentivize and support MVP adoption. We continue 
to believe that reduced reporting requirements are necessary to support 
the adoption of and reduce the burden for implementation of MVPs.
    We are proposing to lower the number of activities that MIPS 
eligible clinicians are required to complete in order to obtain a full 
score to adjust for the ongoing reduction of activities in the 
Inventory as well as to support eligible clinicians with simplified 
reporting as they engage in fewer but more demanding activities. If the 
number of activities in the Inventory is reduced after this and 
subsequent rulemaking, there would be fewer activities from which to 
choose. However, the retained activities in the Inventory from which to 
choose would be the highest priority activities that offer the 
strongest promotion of clinical practice improvement. This proposal is 
also responsive to commenters who, in the past, have requested that the 
number of required activities be reduced and that more activities be 
highly weighted (81 FR 77182). The activity removals and modifications 
being proposed would result in an Inventory of activities that are 
meaningful, timely, and rigorous. While decreasing the number of 
required activities would simplify reporting, MIPS eligible clinicians 
would still be required to participate in meaningful activities that 
yield significant practice improvement.
    We are requesting comments on our proposals to remove weighting and 
to reduce the number of activities to which clinicians are required to 
attest to achieve a full score in the improvement activities 
performance category.
    Specifically, we are requesting comments on our proposal to revise 
Sec.  414.1380(b)(3) to read that, beginning with the CY 2025 
performance period/2027 MIPS payment year, MIPS eligible clinicians 
(except for non-patient facing MIPS eligible clinicians, small 
practices, and practices located in rural areas and geographic HPSAs) 
receive 20 points for each improvement activity, while non-patient 
facing MIPS eligible clinicians, small practices, and practices located 
in rural areas and geographic HPSAs receive 40 points for each 
improvement activity. Therefore, to receive a score of 40 points, or 
full credit, MIPS eligible clinicians (except for non-patient facing 
MIPS eligible clinicians, small practices, and practices located in 
rural areas and geographic HPSAs) must report two improvement 
activities, while non-patient facing MIPS eligible clinicians, small 
practices, and practices located in rural areas and geographic HPSAs 
must report one improvement activity.
    We are also requesting comment on our proposal to revise Sec.  
414.1365(c)(3) to state that, beginning with the CY 2025 performance 
period/2027 MIPS payment year, MVP participants receive 40 points for 
each improvement activity. Therefore, to receive a score of 40 points, 
or full credit, MVP participants would be required to report one 
improvement activity.
(4) Promoting Interoperability Performance Category
(a) Background
    Section 1848(q)(2)(A) of the Act includes the meaningful use of 
certified electronic health record (EHR) technology (CEHRT) as a 
performance category under MIPS. We refer to this performance category 
as the Promoting

[[Page 62060]]

Interoperability performance category (and in past rulemaking, we 
referred to it as the advancing care information performance category).
    For our previously established policies regarding the Promoting 
Interoperability performance category, we refer readers to our 
regulation at 42 CFR 414.1375, the CY 2017 Quality Payment Program 
final rule (81 FR 77199 through 77245), CY 2018 Quality Payment Program 
final rule (82 FR 53663 through 53688), CY 2019 PFS final rule (83 FR 
59785 through 59820), CY 2020 PFS final rule (84 FR 62991 through 
63006), CY 2021 PFS final rule (85 FR 84886 through 84895), CY 2022 PFS 
final rule (86 FR 65466 through 65490), CY 2023 PFS final rule (87 FR 
70060 through 70087), and CY 2024 PFS final rule (88 FR 79308 through 
79312 and 88 FR 79351 through 79365).
(b) Current Definition of CEHRT for the Quality Payment Program
    In the CY 2024 Medicare Physician Fee Schedule (PFS) final rule (88 
FR 79307 through 79312), we finalized revisions to the definition of 
CEHRT for the Quality Payment Program at 42 CFR 414.1305. In the CY 
2024 PFS final rule (88 FR 79309 and 79310), we amended the definition 
of CEHRT to be more flexible in response to changes proposed by the 
Office of the National Coordinator for Health IT (ONC) in the ``Health 
Data, Technology, and Interoperability: Certification Program Updates, 
Algorithm Transparency, and Information Sharing'' (HTI-1) proposed rule 
(88 FR 23746 through 23917). Specifically, we amended our definition of 
CEHRT at Sec.  414.1305 to ensure references to ONC's definition of 
Base EHR at 45 CFR 170.102 and its health IT certification criteria at 
45 CFR 170.315 were responsive to any changes ONC makes to its 
definition and criteria at any time. Instead of requiring that CEHRT 
meet only the ``2015 Edition Base EHR definition,'' we added that it 
also may meet the ``subsequent Base EHR definition'' as defined at 45 
CFR 170.102. We also amended our definition of CEHRT to provide that 
the CEHRT must be certified to the ONC health IT certification criteria 
``as adopted and updated'' in 45 CFR 170.315. This approach is 
consistent with the policies subsequently finalized in the HTI-1 final 
rule (89 FR 1205 through 1210). For additional background and 
information on this update, we refer readers to the discussion in the 
CY 2024 PFS final rule on this topic (88 FR 79307 through 79312).
    In consideration of the updates finalized in the CY 2024 PFS final 
rule and the HTI-1 final rule, we refer to ``ONC health IT 
certification criteria'' throughout this proposed rule where we 
previously would have referred to ``2015 Edition health IT 
certification criteria.'' These revisions to the definition of CEHRT in 
42 CFR 414.1305 ensure that updates to the definition of Base EHR in 45 
CFR 170.102, and updates to applicable ONC health IT certification 
criteria in 45 CFR 170.315, are incorporated into the CEHRT definition 
without additional regulatory action by CMS. For ease of reference, 
Table 65 sets forth the ONC health IT certification criteria required 
to meet the Promoting Interoperability performance category objectives 
and measures.
    In the CY 2024 PFS final rule (88 FR 79408 through 79414), we also 
finalized changes to the CEHRT definition at 42 CFR 414.1305 for 
Advanced APMs requiring use of EHR technology certified under the ONC 
Health IT Certification Program that meets the ONC Base EHR definition 
at 45 CFR 170.102 and any such ONC health IT certification criteria 
adopted or updated in 45 CFR 170.315 that are determined applicable for 
the APM, for the year, considering factors such as clinical practice 
area, promotion of interoperability, relevance to reporting on 
applicable quality measures, clinical care delivery objectives of the 
APM, or any other factor relevant to documenting and communicating 
clinical care to patients or their health care providers in the APM. 
This CEHRT definition affords Advanced APMs the ability to tailor 
additional CEHRT use requirements to those features or capabilities 
that are clinically relevant to the APM and its participants, rather 
than referring to the same criteria associated with measures in the 
Promoting Interoperability performance category of MIPS (88 FR 79413).
    We highlight certain updates to ONC health IT certification 
criteria finalized in the ONC HTI-1 final rule that impact 
certification criteria referenced under the CEHRT definition. ONC 
adopted the certification criterion ``Decision Support Interventions 
(DSI)'' in 45 CFR 170.315(b)(11) to ultimately replace the ``clinical 
decision support (CDS)'' certification criterion in 45 CFR 
170.315(a)(9) included in the Base EHR definition (89 FR 1236). The 
finalized ``DSI'' criterion ensures that Health IT Modules certified to 
45 CFR 170.315(b)(11) must, among other functions, enable a limited set 
of identified users to select (that is, activate) certain evidence-
based decision support interventions and Predictive DSI (as the latter 
term is defined in 45 CFR 170.102) (89 FR 1241) and support user access 
to specified ``source attributes''--categories of technical performance 
and quality information--for both evidence-based and Predictive DSI (89 
FR 1236). ONC further finalized that a Health IT Module may meet the 
Base EHR definition by either being certified to the existing CDS 
certification criterion in 45 CFR 170.315(a)(9) or being certified to 
the revised DSI criterion in 45 CFR 170.315(b)(11), for the period up 
to, and including, December 31, 2024. On and after January 1, 2025, ONC 
finalized that a Health IT Module must be certified to the DSI 
certification criterion in 45 CFR 170.315(b)(11) in order to meet the 
Base EHR definition, and the adoption of the CDS certification 
criterion in 45 CFR 170.315(a)(9) will expire on January 1, 2025 (89 FR 
1281).
    In the HTI-1 final rule, ONC also finalized other updates related 
to ONC health IT certification criteria referenced in the CEHRT 
definition. ONC finalized January 1, 2026, as the date when updates 
discussed below would take effect; accordingly, health IT developers 
must update and provide certified Health IT Modules to their customers 
consistent with the Maintenance of Certification requirements in 45 CFR 
170.402(b)(3) by this date, including the following updates:
     ONC updated the ``Transmission to public health agencies--
electronic case reporting'' criterion in 45 CFR 170.315(f)(5) to 
specify the use of consensus-based, industry-developed electronic 
standards and implementation guides (IGs) to replace functional, 
descriptive requirements in the existing criterion on and after January 
1, 2026 (89 FR 1228).
     ONC adopted the United States Core Data for 
Interoperability (USCDI) version 3 in 45 CFR 170.213(b) and finalized 
that USCDI version 1 in 45 CFR 170.213(a) will expire on January 1, 
2026 (89 FR 1211 and 1223). This change impacts ONC health IT 
certification criteria that reference the USCDI, including the 
``transitions of care'' certification criteria in 45 CFR 
170.315(b)(1)(iii)(A)(1) and (2), ``clinical information reconciliation 
and incorporation--Reconciliation'' (45 CFR 170.315(b)(2)(iii)(D)(1) 
through (3)); and ``view, download, and transmit to 3rd party'' (45 CFR 
170.315(e)(1)(i)(A)(1)) (89 FR 1214).
     ONC updated the ``demographics'' certification criterion 
(45 CFR 170.315(a)(5)), including renaming the criterion to ``patient 
demographics and observations'' (89 FR 1295 and 1296).
     ONC updated the ``standardized API for patient and 
population services'' certification criterion in 45 CFR

[[Page 62061]]

170.315(g)(10) including finalizing references to newer versions of 
standards referenced in the criterion, such as the US Core IG 6.1.0 (89 
FR 1285) and the SMART App Launch Implementation Guide Release 2.0.0 
(89 FR 1292).
    For complete information about the updates to ONC health IT 
certification criteria finalized in the HTI-1 final rule, we refer 
readers to the text of the final rule (89 FR 1192) as well as resources 
available on ONC's website.\756\
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    \756\ For more information, see https://www.healthit.gov/topic/laws-regulation-and-policy/health-data-technology-and-interoperability-certification-program.
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(c) Potential Future Update of the SAFER Guides Measure
(i) Background
    ONC developed the Safety Assurance Factors for EHR Resilience 
Guides (SAFER Guides) in 2014, and later updated in 2016. ONC provided 
the SAFER Guides, including the High Priority Practices SAFER Guide, as 
a tool to help organizations at all levels conduct self-assessments to 
optimize the safety and use of EHRs.\757\ In the CY 2022 PFS final rule 
(86 FR 65475 through 65477), we adopted the SAFER Guides measure under 
the Protect Patient Health Information objective beginning with the CY 
2022 performance period/2024 MIPS payment year. For the CY 2022 
performance period/2024 MIPS payment year and the CY 2023 performance 
period/2025 MIPS payment year, MIPS eligible clinicians were required 
to attest to whether they have conducted an annual self-assessment 
using the High Priority Practices SAFER Guide \758\ at any point during 
the calendar year in which the performance period occurs, with one 
``yes/no'' attestation statement. MIPS eligible clinicians were not 
scored based on their answer to the attestation, or their level of 
implementation of each of the practices. However, failure to attest to 
this measure would result in earning a score of zero for the Promoting 
Interoperability performance category for failing to meet the minimum 
reporting requirements.
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    \757\ https://www.healthit.gov/topic/safety/safer-guides.
    \758\ https://www.healthit.gov/sites/default/files/safer/guides/safer_high_priority_practices.pdf.
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    In the CY 2024 PFS final rule (88 FR 79354 through 79356), we 
modified the SAFER Guides measure. Beginning with the CY 2024 
performance period/2026 MIPS payment year, this modified measure 
requires MIPS eligible clinicians to conduct, and attest ``yes'' to 
having completed, an annual self-assessment of their CEHRT, using the 
High Priority Practices SAFER Guide. We remind readers that the SAFER 
Guides measure only requires completion of a self-assessment and does 
not require MIPS eligible clinicians to implement fully each of the 
practices identified in their self-assessment.
(ii) Status of Updates to SAFER Guides
    As summarized in the CY 2024 PFS final rule (88 FR 79354 through 
79356), we received comments in response to our proposal to modify the 
SAFER Guides measure, including many comments recommending that we 
collaborate with ONC to update the SAFER Guides, noting that the SAFER 
Guides were last updated in 2016 (88 FR 59264). In response to these 
comments, we noted that, while the current SAFER Guides reflect 
relevant and valuable guidelines for safe practices with respect to 
current EHR systems, we would consider exploring updates in 
collaboration with ONC. We reminded readers to visit the CMS resource 
library website at https://www.cms.gov/regulations-guidance/promoting-interoperability/resource-library and the ONC website at https://www.healthit.gov/topic/safety/safer-guides for resources on the content 
and appropriate use of the SAFER Guides (88 FR 59262). We also noted 
that future updates to the SAFER Guides would be provided with 
accompanying educational and promotional materials to notify 
participants, in collaboration with ONC, when available (88 FR 59265).
    In this proposed rule, we are seeking to make readers aware that 
efforts to update the SAFER Guides are currently underway. We 
anticipate that updated versions of the SAFER Guides may become 
available as early as CY 2025. We would consider proposing a change to 
the SAFER Guides measure, as soon as feasible, potentially beginning in 
the CY 2026 performance period/2028 MIPS payment year to permit use of 
an updated versions of the SAFER Guides at that time. We encourage MIPS 
eligible clinicians to become familiar with the updated versions of the 
SAFER Guides when they become available and consider them as they 
implement appropriate EHR safety practices.
(d) Modification of the Definition of Meaningful EHR User for 
Healthcare Providers That Have Committed Information Blocking
    The Department of Health and Human Services (HHS) final rule ``21st 
Century Cures Act: Establishment of Disincentives for Health Care 
Providers That Have Committed Information Blocking'' (hereafter 
referred to as the Disincentives final rule), was displayed for public 
inspection by the Office of the Federal Register on June 26, 2024, and 
appeared in the Federal Register on July 1, 2024.\759\ The final rule 
implements the provision of the 21st Century Cures Act specifying that 
a healthcare provider, determined by the HHS Office of the Inspector 
General (OIG) to have committed information blocking, shall be referred 
to the appropriate agency to be subject to appropriate disincentives 
set forth through notice and comment rulemaking. In the Disincentives 
final rule, we finalized that a MIPS eligible clinician (other than a 
qualified audiologist) will not be considered a meaningful EHR user in 
a performance period if the OIG refers, during the calendar year of the 
performance period, a determination that the MIPS eligible clinician 
committed information blocking as defined at 45 CFR 171.103. 
Information blocking, in the case of a health care provider as defined 
in 45 CFR 171.102, is a practice that is likely to interfere with the 
access, exchange, or use of electronic health information, except as 
required by law or specified in an information blocking exception in 45 
CFR part 171, subpart B, C, or D, and that the health care provider 
knows is unreasonable and is likely to interfere with access, exchange, 
or use of electronic health information. Furthermore, we finalized to 
revise the definition of ``meaningful EHR User for MIPS'' at Sec.  
414.1305 to state that a MIPS eligible clinician (other than a 
qualified audiologist) is not a meaningful EHR user for a performance 
period if the OIG refers a determination that the MIPS eligible 
clinician committed information blocking, as defined at 45 CFR 171.103, 
during the calendar year of the performance period. We also finalized 
amending the requirements at Sec.  414.1375(b) to specify that a MIPS 
eligible clinician must be a meaningful EHR user for MIPS (as defined 
at Sec.  414.1305) to earn a score for MIPS Promoting Interoperability 
performance category. Under the final policies, a MIPS eligible 
clinician that OIG determines has committed information blocking would 
not be a meaningful EHR user, and therefore would be unable to earn a 
score (instead earning a score of zero) for the Promoting 
Interoperability performance category.
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    \759\ 88 FR 54662. Available at https://www.govinfo.gov/content/pkg/FR-2024-07-01/pdf/2024-13793.pdf. See also https://www.healthit.gov/topic/information-blocking#Disincentives.
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    Additional regulatory provisions were finalized at 45 CFR part 171, 
subpart J,

[[Page 62062]]

related to the application of disincentives.
    We note that, as finalized, the revised definition of ``meaningful 
EHR user for MIPS'' at Sec.  414.1305 and the revisions to Sec.  
414.1375(b) would become effective when the final rule takes effect on 
July 31, 2024. For additional background and information, we refer 
readers to the discussion in the ``21st Century Cures Act: 
Establishment of Disincentives for Health Care Providers That Have 
Committed Information Blocking'' proposed rule (88 FR 74957 through 
74962), as well as the Disincentives final rule.
(e) Future Goals of the Promoting Interoperability Performance Category
(i) Future Goals With Respect to Fast Healthcare Interoperability 
Resources[supreg] (FHIR) APIs for Patient Access
    In partnership with ONC, we envision a future where patients have 
timely, secure, and easy access to their health information through the 
health application of their choice. We are working with ONC to enable 
this type of access to health information by requiring the use of APIs 
that utilize the Health Level Seven International[supreg] (HL7) FHIR 
standard. We work with ONC and other Federal partners to improve timely 
and accurate data exchange, partner with industry to enhance digital 
capabilities, advance adoption of FHIR, support enterprise 
transformation efforts that increase our technological capabilities, 
and promote interoperability.
    In the CY 2021 PFS proposed rule (85 FR 50303), we described our 
future vision for the Promoting Interoperability performance category 
and stated that we will continue to consider changes that support a 
variety of HHS goals, including supporting alignment with the 21st 
Century Cures Act, advancing interoperability and the exchange of 
health information, and promoting innovative uses of health IT. We also 
described plans to continue to align the Promoting Interoperability 
performance category with policies finalized in the ``21st Century 
Cures Act: Interoperability, Information Blocking, and the ONC Health 
IT Certification Program'' final rule (85 FR 25642), including 
finalization of a new certification criterion for a standards-based API 
using FHIR, among other health IT topics.
    ONC finalized the HTI-1 final rule (89 FR 1192), effective March 
11, 2024, to further implement the 21st Century Cures Act, among other 
policy goals. ONC finalized revisions to the ``standardized API for 
patient and population services'' certification criterion at Sec.  
170.315(g)(10). It also adopted the HL7 FHIR US Core Implementation 
Guide (IG) Standard for Trial Use version 6.1.0 at Sec.  
170.215(b)(1)(ii), which provides the latest consensus-based 
capabilities aligned with the USCDI version 3 \760\ data elements for 
FHIR APIs. The HTI-1 final rule also created the Insights Condition and 
Maintenance of Certification requirements (Insights Condition) within 
the ONC Health IT Certification Program to provide transparent 
reporting on certified health IT (89 FR 1199). This Insights Condition 
will require developers of certified health IT subject to the 
requirements to report on measures that provide information about the 
use of specific certified health IT functionalities by end users. One 
such measure calculates the number of unique individuals who access 
their electronic health information overall and by different methods 
such as through a standardized API for patient and population services 
(89 FR 1313 and 1314).
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    \760\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi#uscdi-v3.
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    By adopting these new and updated standards, implementation 
specifications, certification criteria, and conditions of 
certification, provisions in the HTI-1 final rule advance 
interoperability, improve transparency, and support the access, 
exchange, and use of electronic health information. We aim to further 
advance the use of FHIR APIs through policies in the Promoting 
Interoperability performance category to advance interoperability, 
encourage the exchange of health information, and promote innovative 
uses of health IT. We also hope to gain insights into the adoption and 
use of FHIR APIs by MIPS eligible clinicians due to the ONC Health IT 
Certification Program's Insights Condition. We believe maintaining our 
focus on promoting interoperability, alignment, and simplification 
would reduce healthcare provider burden while allowing flexibility to 
pursue innovative applications that improve care delivery. For 
additional background and information, we refer readers to the 
discussion in the ONC HTI-1 final rule on this topic (89 FR 1192).
(ii) Improving Cybersecurity Practices
    The Promoting Interoperability performance category encourages the 
advancement of EHR safety by promoting appropriate cybersecurity 
practices through the Security Risk Analysis and SAFER Guides measures. 
On February 14, 2023, the National Institute of Standards and 
Technology (NIST) published updated guidance for health care entities 
implementing requirements of the Health Insurance Portability and 
Accountability of 1996 (HIPAA) Security Rule (45 CFR part 160 and 
subparts A and C of 45 CFR part 164). The guidance, NIST SP 800-66r2, 
provides information and resources to HIPAA-covered entities to improve 
their cybersecurity risk practices.\761\ We also wish to alert readers 
of additional HHS resources and activities regarding cybersecurity best 
practices as recently summarized in an HHS strategy document that 
provides an overview of HHS recommendations to help the health care 
sector address cyber threats.\762\ HHS has also recently published a 
website detailing recommended cybersecurity performance goals.\763\ We 
intend to consider how the Promoting Interoperability performance can 
promote cybersecurity best practices for MIPS eligible clinicians in 
the future.
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    \761\ https://csrc.nist.gov/pubs/sp/800/66/r2/final.
    \762\ https://aspr.hhs.gov/cyber/Documents/Health-Care-Sector-Cybersecurity-Dec2023-508.pdf.
    \763\ https://hphcyber.hhs.gov/performance-goals.html.
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(iii) Improving Prior Authorization Processes
    We recently released the CMS Interoperability and Prior 
Authorization final rule, which appeared in the Federal Register on 
February 8, 2024 (89 FR 8758). The final rule aims to enhance health 
information exchange and access to health records for patients, 
healthcare providers, and payers, and improve prior authorization 
processes. In the final rule, we finalized the addition of a new 
measure, the ``Electronic Prior Authorization'' measure, under the HIE 
objective for the MIPS Promoting Interoperability performance category 
beginning with the CY 2027 performance period/2029 MIPS payment year 
(89 FR 8909 through 8927).
(f) Requirements for the Promoting Interoperability Performance 
Category for the CY 2025 Performance Period/2027 MIPS Payment Year
(i) Objectives and Measures for the CY 2025 Performance Period/2027 
MIPS Payment Year
    For ease of reference, Table 62 lists the objectives and measures 
for the Promoting Interoperability performance category required for 
the CY 2025 performance period/2027 MIPS payment year as revised to 
reflect the

[[Page 62063]]

policies we will finalize in the final rule.
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(ii) Scoring Methodology for the CY 2025 Performance Period/2027 MIPS 
Payment Year
    Table 63 reflects the scoring methodology for the Promoting 
Interoperability performance category for the CY 2025 performance 
period/2027 MIPS payment year.

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(iii) Exclusion Redistribution
    Many required measures have exclusions associated with them as 
shown in Table 62. If a MIPS eligible clinician believes that an 
exclusion for a particular measure applies to them, they may claim it 
when they submit their data. The maximum points available in Table 63 
do not include the points that will be redistributed if a MIPS eligible 
clinician claims an exclusion for a specific measure. For ease of 
reference, Table 64 shows how points will be redistributed among the 
objectives and measures specified for the Promoting Interoperability 
performance category for the CY 2025 performance period/2027 MIPS 
payment year in the event a MIPS eligible clinician claims an exclusion 
for a given measure.

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(iv) ONC Health IT Certification Criteria
    For ease of reference, Table 65 lists the objectives and measures 
for the Promoting Interoperability performance category for the CY 2025 
performance period/2027 MIPS payment year and the associated ONC health 
IT certification criteria set forth at 45 CFR 170.315, as is currently 
applicable. We refer readers to the CY 2024 PFS final rule (88 FR 79307 
through 79312) for our discussion of and amendments to the definition 
of CEHRT at Sec.  414.1305.

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(g) Request for Information (RFI) Regarding Public Health Reporting and 
Data Exchange
    Please note, this is an RFI only. In accordance with the 
implementing regulations of the Paperwork Reduction Act of 1995 (PRA), 
specifically 5 CFR 1320.3(h)(4), this general solicitation is exempt 
from the PRA. Facts or opinions submitted in response to general 
solicitations of comments from the public, published in the Federal 
Register or other publications, regardless of the form or format 
thereof, provided that no person is required to supply specific 
information pertaining to the commenter, other than that necessary for 
self-identification, as a condition of the agency's full consideration, 
are not generally considered information collections and therefore not 
subject to the PRA.
    Respondents are encouraged to provide complete but concise 
responses. This RFI is issued solely for information and planning 
purposes; it does not constitute a Request for Proposal (RFP), 
applications, proposal abstracts, or quotations. This RFI does not 
commit the U.S. Government to contract for any supplies or services or 
make a grant award. Further, CMS is not seeking proposals through this 
RFI and will not accept unsolicited proposals. Responders are advised 
that the U.S. Government will not pay for any information or 
administrative costs incurred in response to this RFI; all costs 
associated with responding to this RFI will be solely at the interested 
party's expense. Not responding to this RFI does not preclude 
participation in any future procurement, if conducted. It is the 
responsibility of the potential responders to monitor this RFI 
announcement for additional information pertaining to this request. 
Please note that CMS will not respond to questions about the policy 
issues raised in this RFI. CMS may or may not choose to contact 
individual responders. Such communications would only serve to further 
clarify written responses. Contractor support personnel may be used to 
review RFI responses. Responses to this notice are not offers and 
cannot be accepted by the U.S. Government to form a binding contract or 
issue a grant. Information obtained as a result of this RFI may be used 
by the U.S. Government for program planning on a non-attribution basis. 
Respondents should not include any information that might be considered 
proprietary or confidential. This RFI should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. CMS may publicly post the comments received, 
or a summary thereof.
(i) Background
    The COVID-19 public health emergency (PHE) highlighted the 
interdependencies of public health and healthcare, and the importance 
of timely, integrated, and interoperable data exchange across the 
health ecosystem to protect the health and safety of patients, 
populations, and the broader public. It also called attention to the 
distance between where we are as a nation, and where we want to be, 
with the interoperability of data between healthcare providers and 
Public Health Agencies (PHAs), especially in the event of a fast-
evolving pandemic or other type of PHE. While many jurisdictions were 
able to demonstrate the advantages of capabilities such as electronic 
laboratory reporting for reportable conditions, surveillance systems to 
support case investigations, immunization registries to track COVID-19 
immunizations, and syndromic surveillance data for situational 
awareness, exchange across jurisdictions remains inconsistent and, in 
some cases, burdensome.
    The Promoting Interoperability performance category plays an 
important role in advancing the exchange of health information between 
PHAs and MIPS eligible clinicians, using certified Health IT Modules 
that meet criteria and standards established under the ONC Health IT 
Certification Program. Measures under the Public Health and Clinical 
Data Exchange objective focus on a key set of exchange capabilities for 
healthcare providers that have evolved over time to incorporate new 
priorities and technical approaches. In recent years, we have also 
focused on expanding and strengthening the Public Health and Clinical 
Data Exchange objective to further support the exchange of data that 
ultimately supports better patient and public health outcomes.
    Efforts across HHS to advance the public health information 
infrastructure offer opportunities to further evolve the Promoting 
Interoperability performance category. In 2020, Centers for Disease 
Control and Prevention (CDC) launched the Data Modernization Initiative 
(DMI),\764\ a multi-year, billion-plus dollar public health ecosystem 
initiative aimed at moving the public health community from a siloed 
and brittle public health data system to connected, resilient, 
adaptable, and sustainable ``response-ready'' systems capable of 
meeting present and future health challenges. CDC's vision for public 
health data expands on modernization efforts and focuses on critical 
components to advance data for public health action to equitably 
protect health, safety and security.\765\ To establish clear, near-term 
priorities and milestones that complement that longer term vision and 
improve alignment of data modernization efforts at all levels of public 
health and across partners, CDC released its first Public Health Data 
Strategy (Ph.D.S) in 2023 and recently updated it.\766\ The Ph.D.S 
outlines the data, technology, policy, and administrative actions 
essential to exchange critical core data efficiently and securely 
across healthcare and public health and sets ambitious goals against 
which CDC will measure progress over the next two years.
---------------------------------------------------------------------------

    \764\ https://www.cdc.gov/surveillance/data-modernization/index.html.
    \765\ https://www.cdc.gov/ophdst/about/advancing-data-for-public-health-action.html.
    \766\ https://www.cdc.gov/ophdst/public-health-data-strategy/index.html.
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    In tandem with these efforts to chart a new strategic direction for 
improvements to the nation's public health infrastructure, evolving 
technical approaches are offering opportunities to automate and expand 
information exchange between healthcare providers and PHAs. ONC is 
exploring updates to existing health IT certification criteria that 
support current measures in the Promoting Interoperability performance 
category's Public Health and Clinical Data Exchange objective, new 
criteria that incorporate modern approaches to exchange, support 
additional types of information needed by PHAs, and criteria that focus 
on entities receiving public health data. In the HTI-1 final rule, ONC 
finalized updates to the health IT certification criterion for 
electronic case reporting in 45 CFR 170.315(f)(5) incorporating 
standards-based approaches to existing functional requirements in 
accordance with the HL7 FHIR Electronic Case Report (eCR) 
Implementation Guide (IG) or HL7 Clinical Document Architecture (CDA) 
Electronic Initial Case Report (eICR) IG (89 FR 1226). ONC is also 
considering recent recommendations from Federal advisory committees 
that have focused on issues related to public health interoperability. 
These include the Public Health Data Systems Task Force, which was 
charged by the Health Information Technology Advisory Committee (HITAC) 
to inform ONC's continued collaborative work with CDC

[[Page 62073]]

on improving public health data systems, and in support of CDC's 
greater DMI efforts. In November 2022, the Public Health Data Systems 
Task Force issued recommendations to the HITAC,\767\ which included a 
focus on new criteria for Health IT modules that support public health 
use cases that aim to standardize technology that receives information 
from healthcare providers. In addition, the CDC Advisory Committee to 
the Director (ACD) Data and Surveillance Workgroup adopted a report on 
November 3, 2022, which addressed standards for public health data 
systems and implementing a certification program for public health IT 
as well as other issues.\768\
---------------------------------------------------------------------------

    \767\ See ``Final Report of the Health Information Technology 
Advisory Committee on Public Health Data Systems'' https://www.healthit.gov/sites/default/files/page/2022-11/2022-11-10_PHDS_TF_Recommendations_Report_Transmittal_Letter_508.pdf.
    \768\ See ``Data and Surveillance Workgroup Report,'' CDC 
Advisory Committee to the Director (ACD) Data and Surveillance 
Workgroup (DSW). www.cdc.gov/about/pdf/advisory/DSW-Recommendations-Report.pdf.
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    We are working in partnership with the CDC and ONC to explore how 
the Promoting Interoperability performance category could advance 
public health infrastructure through more advanced use of health IT and 
data exchange standards. This RFI describes a series of goals and 
principles for the Promoting Interoperability performance category's 
Public Health and Clinical Data Exchange objective, provides 
information about recommended updates to health IT certification 
criteria under consideration that may impact MIPS eligible clinicians, 
and seeks public comment on potential updates that could help achieve 
these goals.
(ii) Goals for Public Health Reporting
    As we look toward the future of the Public Health and Clinical Data 
Exchange objective of the Promoting Interoperability performance 
category, we believe decision-making and prioritization about policy 
change should adhere to four goals:
    (1) The meaningful use of CEHRT enables continuous improvement in 
the quality, timeliness, and completeness of public health data being 
reported;
    (2) The meaningful use of CEHRT allows for flexibility to respond 
to new public health threats and meet new data needs without requiring 
new and substantial regulatory and technical development;
    (3) The meaningful use of CEHRT supports mutual data sharing 
between public health and healthcare providers; and
    (4) Reporting burden on MIPS eligible clinicians is significantly 
reduced.
    These goals inform the questions provided at the end of this RFI. 
We invite public comment on these four goals.
(iii) Public Health in the ONC Health IT Certification Program
    We continue to collaborate closely with ONC on policy changes in 
the ONC Health IT Certification Program that either impact existing 
functionality reflected in the Promoting Interoperability performance 
category's measures or represent new capabilities for MIPS eligible 
clinicians that could offer opportunities to achieve our goals for the 
Public Health and Clinical Data Exchange objective in the Promoting 
Interoperability performance category. In this section, we describe 
specific topics we are discussing through this collaboration with ONC.
    (1) Making available new capabilities for exchanging data with PHAs 
using the FHIR standard.
    Current public health certification related criteria at 45 CFR 
170.315(f)(1) through (7) generally reference HL7 version 2 and CDA 
standards that support single-patient, event-based submission of data 
from healthcare providers to PHAs, such as electronic transmission of 
laboratory results (HL7[supreg] Version 2.5.1 Implementation Guide for 
Electronic Laboratory Reporting to Public Health, Release 1 with Errata 
and Clarifications) or electronic initial case reports (HL7 CDA[supreg] 
R2 Implementation Guide: Public Health Case Report--the Electronic 
Initial Case Report (eICR) Release 2). However, these standards may not 
adequately support more complex data exchange use cases, such as bulk 
exchange of data for patients who received a specific vaccine. 
Approaches using FHIR could more effectively support a wide-scale 
public health response and reduce burden of implementation and 
maintenance for data exchange between and among healthcare providers 
and PHAs.
    Increased availability of FHIR-based APIs across systems used by 
PHAs and healthcare providers could help to create an ecosystem where 
PHAs could use health IT to securely query data directly from the 
source, in real time, based on an initial push of relevant data when 
needed. Availability of a FHIR API in a healthcare provider's certified 
health IT could enable a PHA to query a MIPS eligible clinician's CEHRT 
for data on any patient with a specific condition when needed, avoiding 
the need for a MIPS eligible clinician to take action to submit 
additional information.
    As noted, ONC has already finalized an update to the electronic 
case reporting criterion in 45 CFR 170.315(f)(5), which provides an 
option to implement the HL7 FHIR eCR IG as part of a Health IT Module 
certified to the criterion (89 FR 1226). The Public Health Data Systems 
Task Force report stated that ``FHIR-based query may offer public 
health additional avenues to meet the needs of case investigation to 
supplement electronic case reporting and emerging public health 
threats'' and that ``FHIR may support a more focused and relevant 
response by providers to meet public health queries.'' \769\
---------------------------------------------------------------------------

    \769\ See ``Final Report of the Health Information Technology 
Advisory Committee on Public Health Data Systems,'' https://www.healthit.gov/sites/default/files/page/2022-11/2022-11-10_PHDS_TF_Recommendations_Report_Transmittal_Letter_508.pdf.
---------------------------------------------------------------------------

    While FHIR specifications are not available for all the use cases 
currently supported in the public health criteria at Sec.  
170.315(f)(1) through (7), ONC continues to evaluate standards 
development activities around the use of FHIR for public health data 
exchange that could be incorporated into existing or new certification 
criteria, such as replacing HL7 version 2 and CDA exchange 
specifications with a FHIR approach over time.
    (2) Expanding the scope of public health exchange supported by 
certified health IT capabilities.
    Existing health IT certification criteria are linked to measures 
under the Promoting Interoperability performance category, covering use 
cases from transmission to immunization registries and syndromic 
surveillance, and electronic case reporting.
    The Public Health Data Systems Task Force report recommended the 
addition of several additional certification criteria reflecting 
exchange of information such as birth and death data, the results of 
newborn screening services, and situational awareness. ONC is 
monitoring these and other areas of importance to public health that 
are not reflected in the current certification criteria.
    (3) Introducing health IT certification criteria for systems that 
receive public health data.
    To date, ONC health IT certification criteria have been designed 
with systems that send data to PHAs in mind, particularly health IT 
systems used by healthcare providers, that exchange data with PHAs. 
Misalignment between certified health IT products and technology and 
systems used by PHAs has created challenges for both healthcare 
providers and PHAs, including reliance on complex

[[Page 62074]]

workflows to accommodate non-harmonized and variable data elements and 
exchange standards. Inefficiencies associated with workarounds and 
custom processes can lead to further reductions in data quality, 
completeness, consistency, and interoperability.
    The HITAC Public Health Data Systems Task Force's report includes a 
recommendation that ONC establish certification criteria for public 
health technologies used by Public Health Authorities in support of 
their responsibilities in exchanging data for public health purposes 
including those defined in the existing (f) criteria.\770\
---------------------------------------------------------------------------

    \770\ Public Health Data Systems Task Force, Recommendation 23, 
p. 11 https://www.healthit.gov/sites/default/files/page/2022-11/2022-11-10_PHDS_TF_Recommendations_Report_Transmittal_Letter_508.pdf.
---------------------------------------------------------------------------

    By establishing minimum functional capabilities and exchange 
standards to both send and receive public health data, health IT 
certification criteria could enhance interoperability across healthcare 
providers and PHAs and provide a long-term mechanism for alignment as 
data exchange matures over time. An expansion of the ONC Health IT 
Certification Program to focus on the receiving side could also bolster 
CDC's public health infrastructure modernization efforts, described 
above, by helping PHAs to align with healthcare provider data sources 
using the same certification criteria and standards, enabling these 
entities to move together on a common timeline for updating technology 
requirements.
(iv) RFI Questions
    Section 1848(q)(2)(B)(iv) of the Act requires that we must apply 
the requirements under section 1848(o)(2) of the Act for our assessment 
of whether a MIPS eligible clinician is a meaningful EHR user under the 
Promoting Interoperability performance category. Section 1848(o)(2)(A) 
of the Act sets forth three criteria for determining whether a MIPS 
eligible clinician is a meaningful EHR user. One of these criteria at 
section 1848(o)(2)(A)(ii) of the Act requires that the MIPS eligible 
clinician demonstrate to the satisfaction of the Secretary that during 
the performance period their CEHRT is connected in a manner that 
provides, in accordance with law and standards applicable to the 
exchange of information, for the electronic exchange of health 
information to improve the quality of health care, such as promoting 
care coordination. We request that commenters consider this criterion 
in responding to our questions for this RFI.
(1) Questions for Goal #1: Quality, Timeliness, and Completeness of 
Public Health Reporting
    The Promoting Interoperability performance category's requirement 
that MIPS eligible clinicians report the level of ``active engagement'' 
between the MIPS eligible clinician, and a PHA, as well as the recently 
established one-year limitation in how long a MIPS eligible clinician 
may spend in Pre-Production and Validation for measures under the 
Public Health and Clinical Data Exchange objective, has provided a 
basis to broadly incentivize the exchange of EHR data (87 FR 49339 
through 49340). It has helped to identify barriers that prevent MIPS 
eligible clinicians from moving from Pre-Production and Validation 
(Option 1) to Validated Data Production (Option 2), and it has helped 
the development of solutions to overcome identified barriers. However, 
because active engagement reporting only requires an attestation of 
whether a MIPS eligible clinician is reporting production data or still 
in the process of validation, this approach does not allow us to assess 
MIPS eligible clinicians on the comprehensiveness, quality, or 
timeliness of the data they provide to PHAs.
    We are considering whether alternatives to the ``active 
engagement'' approach for the measures under the Public Health and 
Clinical Data Exchange objective could better allow us to assess MIPS 
eligible clinician's performance, meet the data needs of PHAs, and 
ultimately allow us to incentivize increased performance in these 
areas. We are interested in how we could recommend alternatives to the 
``active engagement'' approach in the context of the evolving technical 
infrastructure described above. We are also interested in the 
increasing focus on leveraging FHIR-based data exchange for public 
health reporting. Finally, we are interested in ensuring that any 
changes to the active engagement approach are implemented in a way that 
takes advantage of opportunities to further automate reporting and 
minimize administrative burden for MIPS eligible clinicians.
     To date, all the measures in the Public Health and 
Clinical Data Exchange objective assess whether there is active 
engagement between a MIPS eligible clinician, but they do not measure 
the level of performance the MIPS eligible clinician has achieved in 
sending information. Specifically, we are seeking public comment on the 
following questions:
    ++ Should CMS shift to numerator/denominator reporting requirements 
for current and future measures in the Public Health and Clinical Data 
Exchange objective? If so, should CMS prioritize only certain measures 
for numerator/denominator reporting?
    ++ New technical approaches such as the use of FHIR APIs to support 
information exchange with PHAs could enable PHAs to query healthcare 
provider systems directly, after an initial trigger, rather than 
relying on a healthcare provider to take action to share information. 
Healthcare providers having to take action to share information adds 
burden to the healthcare providers and increases the time it takes for 
the PHA to receive the information. How could performance be measured 
under approaches such as the use of FHIR APIs to support information 
exchange with PHAs? Would numerator/denominator reporting be 
appropriate under such approaches?
     Continued expansion of the measures under the Public 
Health and Clinical Data Exchange objective to address different 
reporting use cases can incentivize MIPS eligible clinicians to make 
more comprehensive information available to PHAs. We are seeking public 
comment on the following questions:
    ++ Should CMS continue add measures under the Public Health and 
Clinical Data Exchange objective to include additional system-specific 
requirements (for example, vital records)? If so, which ones and why?
    ++ Should CMS create a new measure for each new type of data or use 
case added to the Public Health and Clinical Data Exchange objective? 
What are the risks of including too many measures under the objective?
    ++ Alternatively, should CMS explore ways to group data types and 
use cases under a more limited set of Public Health and Clinical Data 
Exchange objective measure? If so, are there specific scenarios where 
doing so would make sense? Anecdotal reports suggest that some 
healthcare providers are attesting to active engagement with public 
health for the eCR measure if they report cases for at least one 
notifiable condition (for example, COVID-19).
    ++ How can CMS incentivize more complete electronic case reporting 
to PHAs? For example, should CMS update the measure to require 
healthcare providers to meet a certain threshold for conditions 
reported?
    ++ What potential benefit versus burden trade-offs CMS should 
consider? How should CMS account for varying levels of public health 
readiness and capacity for expanding conditions

[[Page 62075]]

reported electronically, such as in rural areas?
    ++ What additional levers besides the Promoting Interoperability 
performance category should CMS explore to improve the completeness of 
reporting to public health? How should CMS work with other partners to 
incentivize or require reporting?
(2) Questions for Goal #2: Flexibility and Adaptability of the Public 
Health Reporting Enterprise
    During the COVID-19 and Mpox PHEs, healthcare providers and PHAs 
often had to quickly update their systems to report case, laboratory, 
and vaccination data related to these novel pathogens and interventions 
devised in response to them. In this section, we are seeking 
information about how the Promoting Interoperability performance 
category could improve the ability for public health infrastructure 
\771\ to quickly adapt to new threats. Specifically, we are seeking 
public comment on the following questions:
---------------------------------------------------------------------------

    \771\ https://www.cdc.gov/infrastructure/pdfs/PHIC-Overview.pdf.
---------------------------------------------------------------------------

     How can the Promoting Interoperability performance 
category support or incentivize response ready reporting capabilities 
for healthcare providers? What, if any, challenges exist around sharing 
data with PHAs?
     How can CMS and ONC work with EHR vendors to ensure that 
provider systems are being continually updated to meet new data needs, 
such as those in rural areas?
(3) Questions for Goal #3: Increasing Bi-Directional Exchange With 
Public Health Agencies
    The transition to, and use of more modern, flexible approaches and 
networks that support data exchange between and across public health 
and healthcare is a key goal of HHS efforts to modernize the public 
health information infrastructure. We are interested in ways that the 
Promoting Interoperability performance category can support this 
transition. Specifically, we are seeking public comment on the 
following questions:
     Both CDC's ACD and ONC's HITAC have recommended that CDC 
and ONC work together to establish certification criteria for public 
health technologies used by PHAs and implement a coordinated, phased 
approach to incentivize and eventually require their adoption.\772\ 
How, if at all, could the Promoting Interoperability performance 
category support or incentivize PHA adoption of certified systems and 
technologies?
---------------------------------------------------------------------------

    \772\ https://www.healthit.gov/sites/default/files/page/2023-03/2023-02 08_HITAC_Annual_Report_for_FY22_508_1.pdf.
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     How can CMS use the Public Health and Clinical Data 
Exchange objective to incentivize early adoption of FHIR-based APIs for 
public health data exchange?
     CMS previously finalized the Enabling Exchange under TEFCA 
measure under the HIE objective for MIPS eligible clinicians to attest 
to engaging in health information exchange. Should CMS introduce an 
additional measure to allow MIPS eligible clinicians to receive credit 
for the HIE objective by exchanging public health data through 
participation in TEFCA?
(4) Questions for Goal #4: Significantly Reduce Reporting Burden for 
Healthcare Providers
    We are committed to continuing to reduce reporting burden for 
healthcare providers, such as in rural areas, as part of any updates to 
the Promoting Interoperability performance category undertaken to 
support the priorities described above. Specifically, we are seeking 
public comment on the following questions:
     Under the current Public Health and Clinical Data Exchange 
objective, which measures, or other requirements result in the most 
administrative burden for MIPS eligible clinicians?
     How can the Promoting Interoperability performance 
category balance robust Public Health and Clinical Data Exchange 
objective requirements with our desire to reduce burden on MIPS 
eligible clinicians?
     How can new technical approaches to data exchange with 
PHAs, such as the use of FHIR APIs, reduce burden for MIPS eligible 
clinicians? What are potential barriers to achieving burden reduction 
as these new approaches are implemented?
f. MIPS Final Score Methodology
(1) Performance Category Scores
(a) Background
    Sections 1848(q)(1)(A)(i) and (ii) and (5)(A) of the Act provide, 
in relevant part, that the Secretary shall develop a methodology for 
assessing the total performance of each MIPS eligible clinician 
according to certain specified performance standards and, using such 
methodology, provide for a final score for each MIPS eligible 
clinician. Section 1848(q)(6)(A) of the Act specifies that, to then 
determine a MIPS payment adjustment factor for each MIPS eligible 
clinician for an applicable MIPS payment year, we must compare the MIPS 
eligible clinician's final score for the given year to the performance 
threshold we established for that same year in accordance with section 
1848(q)(6)(D) of the Act. We refer readers to section IV.A.4.g.(2) of 
this proposed rule for further discussion of the performance threshold, 
and our calculation of MIPS payment adjustment factors, and our 
proposals with respect thereto.
    Section 1848(q)(2)(A) of the Act provides that the Secretary must 
assess each MIPS eligible clinician with respect to four performance 
categories in determining each MIPS eligible clinician's final score: 
quality, resource use (referred to as ``cost''), clinical practice 
improvement activities (referred to as ``improvement activities''), and 
meaningful use of certified EHR technology (referred to as ``Promoting 
Interoperability''). Section 1848(q)(2)(B) of the Act describes the 
measures and activities that must be specified under each performance 
category, including the quality performance category and cost 
performance category. Section 1848(q)(3) of the Act provides that we 
must establish performance standards with respect to the measures and 
activities specified under the four performance categories for a 
performance period, considering historical performance standards, 
improvement, and the opportunity for continued improvement. To 
calculate a final score for each MIPS eligible clinician for the 
performance period of an applicable MIPS payment year, section 
1848(q)(5)(A) of the Act provides that we must develop a methodology 
for assessing the total performance of each MIPS eligible clinician 
according to the performance standards we have established with respect 
to applicable measures and activities specified for each performance 
category, using a scoring scale of 0 to 100.
    In calculating the final score, we must apply different weights for 
the four performance categories, subject to certain exceptions, as set 
forth in section 1848(q)(5) of the Act and at Sec.  414.1380. Unless we 
assign a different scoring weight pursuant to these exceptions, for the 
CY 2025 performance period/2027 MIPS payment year, the scoring weights 
for each performance category are as follows: 30 percent for the 
quality performance category; 30 percent for the cost performance 
category; 15 percent for the improvement activities performance 
category; and 25 percent for the Promoting Interoperability performance 
category.

[[Page 62076]]

    For the CY 2025 performance period/2027 MIPS payment year, we 
propose to update our scoring methodologies to respond to statutory 
requirements and impacts observed in performance data. In this proposed 
rule, we are proposing to update our scoring policies consistent with 
these goals. Specifically, we propose to--
     Establish defined topped out benchmarks for certain topped 
out measures for clinicians impacted by limited measure choice;
     Establish Complex Organization Adjustment for eCQMs 
reported by Virtual Groups and APM Entities.
     Score Medicare CQMs using flat benchmarks for their first 
two performance periods in the program.
     Modify the benchmarking methodology for scoring measures 
in the cost performance category;
     Adopt a new cost measure exclusion policy;
     Eliminate the weighting of activities in the improvement 
activities performance category; and
     Reduce the number of activities to which clinicians are 
required to attest.
    We do not propose any changes to scoring policies for the Promoting 
Interoperability performance category.
    We refer readers to section IV.A.4.e.(3)(b)(iv) for discussion of 
scoring proposals in the Improvement Activities performance category.
    We refer readers to section IV.A.4.f.(1)(d) for discussion of 
proposals for scoring the cost performance category.
(b) Scoring the Quality Performance Category for the Following 
Collection Types: Medicare Part B Claims Measures, eCQMs, MIPS CQMs, 
QCDR Measures, the CAHPS for MIPS Survey Measure and Administrative 
Claims Measures
    We refer readers to the CY 2017, CY 2018, and CY 2019 Quality 
Payment Program final rules, the CY 2020, CY 2021, CY 2022, and CY 2023 
PFS final rules, and Sec.  414.1380(b)(1) for our current policies 
regarding, among other things, quality measure benchmarks, calculating 
total measure achievement points, calculating the quality performance 
category score, including achievement and improvement points, and the 
small practice bonus (81 FR 77276 through 77308, 82 FR 53716 through 
53748, 83 FR 59841 through 59855, 84 FR 63011 through 63018, 85 FR 
84898 through 84913, 86 FR65490 through 65509, and 87 FR 70088 through 
70091). In the CY 2024 PFS final rule, we finalized updates to our 
scoring flexibilities policy at Sec.  414.1380(b)(1)(vii)(A) (88 FR 
79368 through 79369).
(i) Scoring for Topped Out Measures in Specialty Measure Sets With 
Limited Measure Choice
    We refer readers to the CY 2017, CY 2018, and CY 2019 Quality 
Payment Program final rules, the CY 2023 PFS final rule (81 FR 77282 
through 77287, 82 FR 53721 through 53727, 83 FR 59761 through 59765, 
and 88 FR 70090 through 70091), and Sec.  414.1380(b)(1)(iv) for our 
established topped out measure scoring policies.
    Topped out measures are measures for which measure performance is 
considered so high and unvarying that meaningful distinctions and 
improvements in performance can no longer be made (81 FR 77136). We 
define topped out measures in Sec.  414.1305 differently for process 
measures and non-process measures. A topped out process measure means a 
measure with a median performance rate of 95 percent or higher. A 
topped out non-process measure means a measure where the Truncated 
Coefficient of Variation is less than 0.01 and the 75th and 90th 
percentile are with 2 standard errors. For MIPS eligible clinicians 
electing to report on measures where they expect to perform well, we 
anticipated many measures would have performance distributions 
clustered near the top. (81 FR 77282). Section 1848(q)(3)(B) of the Act 
requires that in establishing performance standards with respect to 
measures and activities, we consider, among other things, the 
opportunity for continued improvement. Topped out measures do not 
provide an opportunity for continued improvement nor, more broadly, do 
payment adjustments based on topped out measures incentivize clinicians 
to improve their care. As a result, we finalized policies to identify 
and cap the scoring potential of such measures. Additionally, we 
established practices for the removal of such measures, such as 
establishing the topped out measure lifecycle, to continue to drive 
quality improvement in areas where such improvement is possible and 
necessary.
    The topped out measure lifecycle is described in the CY 2018 PFS 
final rule (82 FR 53721 and 53727). We established at Sec.  
414.1380(b)(1)(iv)(B) that we would cap scoring for topped out measures 
at 7 points in the second consecutive year that it is identified as 
topped out. If a measure has been identified as topped out for 3 
consecutive years after being originally identified through the 
benchmarks, such measure may then be proposed for removal through 
notice-and-comment rulemaking (83 FR 59761). This timeline, however, is 
not fixed. We noted our concern where removal of topped out measures 
would leave clinicians with fewer than 6 applicable measures to report 
and that such removal in those instances would impact some specialties 
more than others (82 FR 53721). We stated that consideration for 
ensuring available applicable measures would be made when considering 
measure removals (83 FR 59763).
    The topped out scoring cap and the topped out measure lifecycle 
were established with the intention to drive continued quality 
improvement by providing clinicians with the ability to plan for 
optimal quality measurement and reporting and by providing measure 
developers time to develop and submit alternative measures for use in 
the program (82 FR 53727). However, the pace of measure development has 
not matched the rate at which topped out measures would ideally be 
removed under the established topped out lifecycle policy. Since the CY 
2017 performance period/2019 MIPS payment year, the MIPS final list of 
quality measures has decreased from 271 to 198 including the removal of 
34 topped out measures that had reached the end of the topped out 
measure lifecycle.
    We have received feedback from interested parties and independently 
verified that clinicians reporting specialty sets in which there is 
high presence of topped out measures receiving the 7-point cap are 
often facing both limited measure choice and limited scoring 
opportunities. Analysis of data from the CY 2022 performance period/
2024 MIPS payment year showed that only 7 percent of quality measure 
submissions were for topped out measures. However, of those 
submissions, clinicians representing five specialties accounted for 54 
percent of the submissions of topped out measures that contributed to 
the final score. When we analyzed the data from the CY2022 performance 
period/2024 MIPS payment year, we found that clinicians in these 
specialties were facing limited measure choice, with an 
overrepresentation of topped out measures among their measure 
selection. Some such topped out measures have been retained in the 
program to ensure specialists will have applicable measures in the 
absence of more robust measure development.
    We acknowledge that certain clinician specialists have limited 
measure choice and that their opportunities to maximize their MIPS 
performance score may be

[[Page 62077]]

particularly affected by the current topped out measure scoring policy. 
We appreciate that, as the performance threshold increases, it may 
become more difficult for these clinician specialists to maximize their 
MIPS performance score and secure positive payment adjustments for 
reasons entirely outside of their control, primarily the topped-out 
measure scoring cap. In order to determine a MIPS payment adjustment 
factor for each MIPS eligible clinician for a year, we must compare the 
MIPS eligible clinician's final score for the given year to the 
performance threshold we established for that same year in accordance 
with section 1848(q)(6)(D) of the Act. Section 1848(q)(6)(D)(i) of the 
Act requires that we compute the performance threshold such that it is 
the mean or median (as selected by the Secretary) of the final scores 
for all MIPS eligible clinicians with respect to a ``prior period'' 
specified by the Secretary. In the CY 2024 PFS final rule, we finalized 
the performance threshold at a score of 75 points for the CY 2024 
performance period/2026 MIPS payment year at Sec.  414.1405(b)(9)(iii) 
(88 FR 79319). We are proposing in section IV.A.4.g.(2)(c) to maintain 
the performance threshold at 75 points for the CY 2025 performance 
year/2027 MIPS payment year. As the number of topped out measures a 
clinician reports increases, a clinician who must report topped out 
measures will see their maximum potential quality performance category 
score decrease and the clinician must score as close to perfect as 
possible on the topped out measures to mitigate the effect of the 7-
point cap on the clinician's final score. Affected clinicians face 
additional difficulty should they be subject to additional scoring 
policies, including reweighting of performance categories and reporting 
quality measures that lack benchmarks. Reweighting of the Promoting 
Interoperability, cost, or both performance categories increases the 
weighting of the quality performance category in the final score from 
30 percent to 55 or 85 percent.
    We want to address scoring scenarios in which limited measure 
choice compels clinicians to report topped out measures with scoring 
caps consistent with our desire to facilitate fairer scoring of all 
specialties. For this reason, we are proposing that beginning with the 
CY 2025 performance period/2027 MIPS payment year CMS could remove the 
7-point cap for certain topped out measures that we would select based 
on evaluating the factors discussed below. This would allow clinicians 
who practice in specialties impacted by limited measure choice to be 
scored according to defined topped out measure benchmarks that do not 
cap scores at 7 measure achievement points. Table 66 is an illustrative 
example of the defined topped out measure benchmark.
[GRAPHIC] [TIFF OMITTED] TP31JY24.103

    As discussed above, given that clinicians reporting specialty 
measure sets with limited measure choice are disproportionately 
hindered by the 7-point topped out measure scoring cap, we would, in 
accordance with the methodology discussed below, focus on identifying 
the topped out measures within specialty measure sets which clinicians 
with limited measure choice report. We propose to identify the measures 
for which we would apply the defined topped out measure benchmark on a 
yearly basis. Measures receiving the defined topped out measure 
benchmarks would be proposed and adopted through notice-and-comment 
rulemaking concurrent with our adoption of the MIPS final list of 
quality measures.
    This proposed performance standard would aim, for clinicians with 
limited measure availability, to continue to require high performance, 
but would not cap scoring potential for exceptional performers and 
would offer better scoring opportunities for those performing below the 
median in the distribution than under our current policy. Under the 
proposed topped out measure benchmarking methodology, those achieving 
high performance rates would be rewarded for high performance. Scores 
between 9-9.9 were intentionally left out. We considered inclusion of 
scores in the 9th decile, but ultimately excluded them to necessitate 
exceptional clinical quality performance to achieve maximum scores. 
This approach would ameliorate the challenge of reporting on measures 
with a scoring cap while maintaining a high performance standard for 
topped out measures.
    In addition to addressing the scoring limit of the cap, we are also 
proposing to address the scoring limits caused by the heavily skewed 
distribution of topped out measures. Previously, because median 
clinician performance was heavily skewed towards the top of 
distribution for many topped out measures the second highest achievable 
decile after the 7th decile may be the 3rd or 4th decile. We therefore 
propose to specify a topped out measure benchmark that would set an 
even performance standard. Such a benchmark policy would facilitate 
clinician efforts to improve clinical quality among clinicians for whom 
improvement is still possible. The proposed distribution would allow 
those performing at or above the 97th percentile to achieve a score of 
7.5 measure achievement points or greater to reward high performance 
and encourage clinical quality improvement for those who perform below 
the median.
    We propose to conduct an analysis annually to determine which 
specialty

[[Page 62078]]

measure sets are impacted by limited measure choice and which measures 
should be subject to the scoring cap exemption. Our analysis would 
evaluate all specialty measure sets by collection type to assess the 
impact of limited measure choice taking into account the influence of 
several scoring considerations including the number of capped topped 
out measures, the number of measures in the specialty set without 
historical benchmarks, and the scoring potential to meet or exceed the 
performance threshold. We would then consider each capped topped out 
measure in the corresponding specialty measure sets on a case-by-case 
basis for application of the defined topped out measure benchmark. 
Additionally, annual consideration of which measures would have the 
defined topped out measure benchmark applied would take into account 
any changes to the availability of applicable measures and changes in 
the topped out status of measures that previously had the defined 
topped out measure applied. A measure would not have a defined topped 
out measure benchmark applied until it was identified as topped out for 
2 consecutive performance periods, the point at which point the 7-point 
cap would be applied. If suppression of a measure or removal of a 
benchmark impacts a measure scored according to the defined topped out 
measure benchmark, it would not be proposed again for the application 
of the defined topped out measure benchmark and the performance 
standard would return to the standard scoring policy at Sec.  
414.1380(b)(1)(i).
    Measures that are identified as topped out for 3 consecutive 
performance periods may still be proposed for removal through notice-
and-comment rulemaking and extremely topped out measures, those with an 
average mean performance within the 98th to 100th percentile range, can 
also still be proposed for removal in the next rulemaking cycle, 
regardless of whether or not they are in the midst of the topped out 
measure lifecycle (83 FR 59763). If a measure that is scored according 
to a defined topped out measure benchmark later shows extremely topped 
out status, it will be subject to this policy. Any such measure removal 
would continue to occur through notice-and-comment rulemaking. While we 
aim to be responsive to those facing limited measure choice, we do not 
believe that measures with topped out performance have the same value 
in the program as measures that are not topped out, and they should be 
scored accordingly in instances where doing so does not unfairly limit 
a clinician's scoring opportunity. We believe these parameters identify 
those most impacted by limited measure choice while continuing to 
encourage high clinical quality measure performance.
    This proposal would remain consistent with our current topped out 
measure lifecycle, program goals, and historical approaches to scoring 
scenarios with limited measure choice. In the CY 2017 Quality Payment 
Program final rule, we exempted measures reported via the CMS Web 
Interface from the 7-point measure cap. The CMS Web Interface requires 
that MIPS eligible clinicians submitting via the CMS Web Interface must 
submit all measures included in the CMS Web Interface (81 FR 77116). 
Their lack of ability to select alternative measures made the 
application of the 7-point measure cap inappropriate. Instead, we 
finalized a proposal at Sec.  414.1380(b)(1)(ii)(A) to use benchmarks 
from the corresponding year of the Shared Saving Program as the Shared 
Savings Program incorporates a methodology for measures with high 
performance into the benchmark (82 FR 53721). The defined topped out 
measure benchmark similarly aims to score clinicians facing limited 
measure choice on topped out measures using a methodology that adjusts 
for high performance.
    We considered several policy options to address topped out measure 
scoring for clinicians facing limited measure choice. These included 
removing all topped out measures at the end of the topped out measure 
lifecycle, exempting all topped out measures in specialty measure sets 
from application of the 7-point cap, applying a denominator reduction 
for those scoring 7 out of 10 measure achievement points on topped out 
measures in specialty measure sets, and adopting a new reweighting 
policy for the quality performance category for clinicians impacted by 
limited measure choice that score below the performance threshold. 
These approaches would not appropriately address the barriers to fair 
scoring posed by limited measure choice, nor would they incentivize and 
reward improvement in clinical quality measure performance. 
Additionally, these alternatives would introduce additional scoring 
complexity and in one case, require clinicians' additional submission 
of a reweighting application to access potential benefits. The proposed 
approach of applying defined topped out measure benchmarks for certain 
topped out measures selected in accordance with the methodology set 
forth above avoids the additional complexity of the other approaches by 
building on historical and current quality measure scoring policies to 
topped out measures that does not require additional steps to access 
and is applicable as we transition to MVPs.
    For the reasons stated above, we are proposing to add Sec.  
414.1380(b)(1)(iv)(C) to state that beginning with the CY 2025 
performance period/2027 MIPS payment year, measures impacted by limited 
measure choice as specified in paragraph (b)(1)(ii)(E) are not subject 
to the 7 measure achievement point cap specified in paragraph 
(b)(1)(iv)(B). We propose a conforming change to Sec.  
414.1380(b)(1)(iv)(B).
    We also propose to add Sec.  414.1380(b)(1)(ii)(E) to state that, 
beginning with the CY 2025 performance period/2027 MIPS payment year, 
CMS will publish a list in the Federal Register of topped out measures 
determined to be impacted by limited measure choice. Measures included 
in the list are scored from 1 to 10 measure achievement points 
according to defined topped out measure benchmarks calculated from 
performance data in the baseline period in which a performance rate in 
the 97th percentile corresponds to 7.5 measure achievement points. 
Accordingly, we also propose to update Sec.  414.1380(b)(1)(ii) to 
state that except as provided in paragraphs (b)(1)(ii)(B) through (F), 
benchmarks will be based on performance by collection type, from all 
available sources, including MIPS eligible clinicians and APMs, to the 
extent feasible, during the applicable baseline or performance period. 
We are also proposing to make conforming changes to this section to 
include a previous inadvertent omission of paragraph (b)(1)(ii)(D) in 
addition the proposed new exceptions in paragraphs (b)(1)(ii)(E) and 
(F) corresponding to policies discussed in sections IV.A.4.f.(1)(b)(i) 
and IV.A.4.f.(1)(c)(i) respectively.
(ii) Proposed Approach for Determining Topped Out Measures Impacted by 
Limited Measure Choice and Subject to the Proposed Defined Topped Out 
Measure Benchmark and the Proposed List of Measures That Would Be 
Subject to the Defined Topped Out Measure Benchmark for the CY 2025 
Performance Period/2027 MIPS Payment Year
    Under this proposal, we would annually determine and publish a list 
of topped out measures that would have the 7-point cap removed and be 
subject to the proposed defined topped out measure benchmark. To 
identify which topped out measures would be added to

[[Page 62079]]

the list, we would review each specialty measure set by collection type 
and identify if the prevalence of topped out measures within such a set 
hinders a clinician's ability to successfully participate in the MIPS 
quality performance category. To make such a determination, we would 
analyze the ability of clinicians reporting the specialty measure sets 
under review to reasonably achieve 75 percent of available quality 
achievement points based upon the measures available to them and 
program requirements. As stated, the analysis would be conducted for 
each specialty measure set and would be further broken down by 
collection type. At the collection type level, each measure would be 
assigned points based upon the current benchmarking data: new measures 
receive 7 or 5 points based on year in the program, measures with 
benchmarks are given points based upon the highest decile achievable 
with a less than perfect score (less than 100 percent or greater than 0 
percent for inverse measures), and measures with no available historic 
benchmark are given 0 points. All measure set points would be added 
together to get an output of scoring potential; the Medicare Part B 
claims collection type measure sets have an additional 6 points added 
to the output to account for the small practice bonus. The sum of 
quality achievement points for each measure set would be compared to 
the analysis threshold, which is 75 percent of available quality 
achievement points, based upon number of available measures. Any 
measure sets that are not able to meet or exceed the threshold would be 
flagged as `at-risk.' Additional factors that we would take into 
consideration would include whether or not:
     A measure within the specialty measure set is considered a 
cross cutting measure;
     A measure within the specialty measure set is a broadly 
applicable measure, which we would consider to be a measure included in 
three or more specialty sets; and
     There are more than ten measures, by collection type, 
available in the specialty set. We request comment on our proposal to 
score topped out measures impacted by limited measure choice using 
specialty defined topped out measures including the proposed defined 
topped out measure benchmark.
    Table 67 contains the list of measures that meet the criteria 
specified above and for which we are proposing to apply the defined 
topped out measure benchmark for the CY 2025 performance period/2027 
MIPS payment year. Specialty sets impacted by limited measure choice 
include Pathology, Anesthesiology, Diagnostic Radiology, and Radiation 
Oncology.
BILLING CODE P

[[Page 62080]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.104

BILLING CODE C
    We request comment on the proposed approach that we would use each 
year to identify the list of measures subject to the defined topped out 
measure benchmark, as well as the proposed list of topped out measures 
impacted by limited measure choice and subject to defined topped out 
measure benchmark for CY 2025 performance period/2027 MIPS Payment 
Year.
(iii) Complex Organization Adjustment for Virtual Groups and APM 
Entities
    Section 1848(q)(5)(B)(ii)(I) of the Act requires the Secretary to 
encourage MIPS eligible clinicians to report on applicable quality 
measures through the use of Certified Electronic Health Record 
Technology (CEHRT) and qualified clinical data registries. Section 
1848(q)(5)(B)(ii)(II) of the Act provides that the Secretary shall 
treat such clinicians as satisfying the clinical quality measures 
reporting requirement described in section 1848(o)(2)(A)(iii) of the 
Act if they report such measures through the use of such EHR technology 
for a given performance period.\773\ In the CY 2017 Quality Payment 
Program final rule (81 FR 77297), we established the measure bonus 
point and bonus cap for

[[Page 62081]]

using CEHRT for end-to-end electronic reporting. We refer readers to 
Sec.  414.1380(b)(1)(v)(B) for our previously finalized policies 
regarding measure bonus points for end-to-end electronic reporting.
---------------------------------------------------------------------------

    \773\ Section 1848(o)(2)(A)(iii) of the Act requires a 
meaningful EHR user to demonstrate to the satisfaction of the 
Secretary that the eligible professional, among other things, has 
not knowingly and willfully taken action to limit or restrict the 
compatibility or interoperability of the certified EHR technology.
---------------------------------------------------------------------------

    In the CY 2022 PFS final rule, we finalized our proposal to end 
measure bonus points for end-to-end electronic reporting. We noted that 
as we move to MVPs we are simplifying scoring by removing many of the 
transition policies that we established in the early years of the 
program in order to develop a stronger MVP program and promote 
alignment between MIPS and MVPs. As stated in previous rulemaking, we 
are working to develop ways to encourage the use of CEHRT for 
electronic reporting without offering measure bonus points. We stated 
that we believed that we could fulfill the statutory requirement at 
section 1848(q)(5)(B)(ii)(I) of the Act to encourage the usage of 
CEHRT, through other means. Accordingly, over the past few years, we 
have reduced the availability and limited who can submit data for the 
Medicare Part B claims collection type to only small practices noting 
that the Medicare Part B claims collection type is not an electronic 
means of submission.
    In the current state, satisfying quality reporting requirements is 
not equally attainable for each MIPS eligible clinician or entity in 
the Quality Payment Program (QPP). As the QPP and its components (MIPS 
and Advanced APMs) has matured, reliance on and subsequent requirements 
necessitating the use of CEHRT have increased (88 FR 79331). The 
adoption of CEHRT has been slower than anticipated, indicating 
additional support for quality reporting may further support attainment 
of program goals while also addressing the observed and reported 
challenges faced by complex entities and organizations working to meet 
new requirements.
    Virtual Groups and APM Entities may experience technological 
barriers to electronic report, including challenges aggregating patient 
data across multiple TINs, data deduplication, and interoperability 
between different health IT/EHR systems. In the CY 2018 Quality Payment 
Program final rule, commenters indicated that data aggregation across 
multiple TINs for Virtual Groups would be burdensome for rural and 
small practices and that this burden could be prohibitive for Virtual 
Groups' successful participation in MIPS (82 FR 53610). Commenters 
stated that the requirement for Virtual Groups to aggregate data across 
the Virtual Group could be a potential barrier for Virtual Group 
participation and would not likely occur without error (82 FR 53610). 
Commenters noted that the potential penalty for failure to overcome 
technical challenges in data aggregation was, at that time, a severe 5 
percent decrease to the payment adjustment for TINs that are already 
operating on small margins (82 FR 53610). Commenters noted that the 
aggregation of data across various TINs and health IT systems may be 
logistically difficult and complex, as groups and health IT systems 
have different ways of collecting and storing data and stated that data 
aggregation across various systems for measures and activities under 
each performance category may not be possible if qualified registries 
do not have the option to assist Virtual Groups (82 FR 53610). 
Additionally, commenters stated that practices already have an issue of 
not being able to deduplicate patient data across different health IT 
systems/multiple EHRs and indicated that Virtual Groups need clear 
guidelines regarding how to achieve accurate reporting (82 FR 53613).
    Furthermore, commenters expressed concerns that registries 
supporting Virtual Group reporting would be opening themselves to 
potential penalties as a result of technical challenges in data 
aggregation across multiple EHR systems (82 FR 53610). The commenters 
indicated that registries may not be able to support Virtual Group 
reporting due to legal and operational complexity. Certain registries 
have internal data governance standards, including patient safety 
organization requirements, that they must follow when contracting with 
single TIN participants that may complicate their ability to support 
Virtual Group reporting due to necessary legal agreements between solo 
practitioners and small groups within a Virtual Group (82 FR 53611). 
Commenters requested that CMS provide guidance to registries regarding 
how to handle data sharing among Virtual Groups with respect to patient 
safety organization requirements and provide guidance regarding the 
expectations for registries supporting virtual group reporting (82 FR 
53611).
    APM Entities are organizations that participate in CMS's various 
APMs, including the Medicare Shared Savings Program and CMS Innovation 
Center models. APM Entities face similar organizational challenges 
reporting eCQMs because of their complex structures, new and innovative 
partnerships under their respective APMs, and utilization of multiple 
EHR technologies (88 FR 79097). For ACOs in the Shared Savings Program, 
and ACOs and other large organizations in CMS Innovation Center models, 
these issues are further exacerbated by scale and patient volume, as 
discussed in more detail further in this section. In the CY 2023 PFS 
proposed rule, commenters noted issues for ACOs participating in the 
Shared Savings Program reporting all payer/all patient eCQMs/MIPS CQMs 
related to meeting all-payer data requirements, data completeness 
requirements, and data aggregation (87 FR 69837). ACOs also noted the 
financial burden of aggregating, deduplicating, and exporting eCQM data 
across multiple TINs and EHRs (88 FR 79097). As summarized in the CY 
2024 PFS final rule, commenters noted that the current state of data 
standards and interoperability will not yet fully enable Shared Saving 
Programs ACOs to meet the eCQM reporting requirements successfully and 
encouraged CMS to continue working with providers to facilitate the 
transition to all-payer/all-patient measures even as/if the provider or 
ACO chooses to report Medicare CQMs (88 FR 79107). In the CY 2024 PFS 
final rule (88 FR 79098), we stated that our long-term goal continues 
to be to support Shared Savings Program ACOs in the adoption of all 
payer/all patient measures and transition to digital quality 
measurement reporting. These challenges also can be faced by other 
large APM Entities participating in CMS Innovation Center models.
    Additionally, APM Entities in CMS Innovation Center models, 
regardless of size, are participating in innovative payment and 
delivery designs through which they may forging new partnerships among 
different providers and provider types to provide care to attributed 
beneficiaries to meet the APM's care delivery requirements. For 
example, the Making Care Primary (MCP) Model includes several payment 
innovations to support participants in delivering advanced primary care 
and aims to strengthen coordination between patients' primary care 
clinicians, specialists, social service providers, and behavioral 
health clinicians, ultimately leading to chronic disease prevention, 
fewer emergency room visits, and better health outcomes. The model will 
operate through three progressive tracks, with the first track being 
designed for organizations with no prior value-based care experience. 
Additionally, the model includes State partnerships and multi-payer 
alignment objectives. Participation in this model will involve forming 
new relationships to provide whole-person care to

[[Page 62082]]

beneficiaries, which is likely to necessitate bridging data across 
multiple technologies and involve new and complex administrative 
burdens in the provision of this advanced primary care.
    Based on our assessment and understanding over the past 2 years, we 
have learned that there are complexities and challenges for Virtual 
Groups and APM Entities in adopting all-payer/all-patient collection 
types, and as a result, the widespread adoption of the all-payer/all 
patient collection types requires further time and support. We have 
come to understand that further support is needed for complex 
organizations. As an example, Shared Saving Program ACOs provide a high 
volume of services, particularly those related to preventative 
screening measures. An internal analysis of performance year 2022 
submission data indicates that Shared Savings Program ACOs reported on 
33 times more denominator eligible patients for eCQM 001--Diabetes: 
HbA1c Poor Control (>9%), 53 times more denominator eligible patients 
for eCQM 134--Preventative Care and Screening: Screening for Depression 
and Follow-Up Plan, and 25 times more denominator eligible patients for 
eCQM 236--Controlling High Blood Pressure than other MIPS reporters. In 
performance year 2022, one ACO reported on over 700,000 denominator 
eligible beneficiaries for a single eCQM.
    The requirement to aggregate patient data collected across multiple 
health records into a single data stream before sending to CMS poses 
administrative challenges and the need for additional resources for 
Virtual Groups and APM Entities, including Shared Savings Program ACOs. 
Additionally, data deduplication is resource intensive and requires the 
development of new workflows to ensure accuracy. Stakeholders have also 
noted that patient files exist in multiple, disparate EHRs since each 
EHR system collects and stores data differently. This is important as 
moving to reporting eCQMs requires building new processes to fill data 
gaps and ensure data accuracy and causes participants often to 
customize workflows for data processing, such as using Quality 
Reporting Document Architecture (QRDA) I (individual patient) and QRDA 
III (measured entity's aggregate) data submission approaches for 
quality reporting. EHR vendors have also expressed concerns regarding 
the need for more time to develop new features that can facilitate eCQM 
reporting processes. Some interested parties have also voiced concerns 
that clinician specialty or patient population could yield lower 
quality scores when reporting eCQMs and create resistance to switching 
to this collection type.
    We noted in the CY 2024 PFS final rule that a few commenters agreed 
that Medicare CQMs would address most of ACOs' concerns regarding all 
payer/all patient reporting in the Shared Saving Program, such as 
difficulties reporting for those ACOs with a higher proportion of 
specialty practices or groups with multiple EHRs, beneficiaries with no 
primary care relationship, and shouldering a greater burden when 
matching and deduplicating patient records (88 FR 79101). Other 
commenters noted Medicare CQMs reduce concerns about specialists 
reporting on primary care focused measures. Commenters shared that 
Medicare CQMs were responsive to several key concerns raised by Shared 
Savings Program ACOs regarding feasibility of implementing eCQMs/MIPS 
CQMs, including equity concerns (88 FR 79101). However, we maintain 
that consistent with section 1848(q)(5)(B)(ii)(I) we support and 
encourage providers as they perform any necessary bridging of data 
across multiple technologies, which can involve new and complex 
administrative burdens.
    To account for the organizational complexities faced by Virtual 
Groups and APM Entities, including ACOs in the Shared Savings Program, 
we are proposing to establish a Complex Organization Adjustment 
beginning in the CY 2025 performance period/2027 MIPS Payment Year. 
Virtual Group and APM Entities would receive one measure achievement 
point for each submitted eCQM that meets the data completeness at Sec.  
414.1380(b)(1)(iii) and case minimum requirements at Sec.  414.1340. 
Each reported eCQM may not receive more than 10 measure achievement 
points and the total achievement points (numerator) may not exceed the 
total available measure achievement points (denominator) for the 
quality performance category. The Complex Organization Adjustment for a 
Virtual Group or APM Entity may not exceed 10 percent of the total 
available measure achievement points in the quality performance 
category. The adjustment would be added for each measure submitted at 
the individual measure level.
    Adding one point for each eCQM would help complex organizations to 
overcome barriers to reporting eCQMs while not masking overall quality 
performance. By limiting the Complex Organization Adjustment to Virtual 
Groups and APM Entities, we can limit scoring inflation and target this 
intervention to those facing challenges to eCQM implementation. 
Moreover, while acknowledging the Complex Organization Adjustment is a 
recognition of current challenges to eCQM reporting we believe that 
adoption of the Fast Healthcare Interoperability Resources (FHIR) 
Application Programing Interface (API) would reduce or eliminate the 
barriers posed by organizational complexities to eCQM reporting and 
will revisit and end this Adjustment as uptake of FHIR API increases, 
requirements surrounding the use of FHIR API are established, or other 
barriers posed by organizational complexity are otherwise reduced. This 
Adjustment differs from the previous end-to-end electronic reporting 
bonus in that it does not merely award measure achievement points for 
reporting but provides an adjustment for clinicians facing complex 
organizational barriers for adopting the eCQM collection type.
    We propose to add Sec.  414.1380(b)(1)(vii)(C) to provide that, 
beginning in the CY 2025 performance period/2027 payment year, a 
Virtual Group and an APM Entity receives one measure achievement point 
for each eCQM submitted that meets the case minimum requirement at 
paragraph (b)(1)(iii) and the data completeness requirement at Sec.  
414.1340. Each measure may not to exceed 10 measure achievement points. 
The total adjustment to the Virtual Group or APM Entity's quality 
performance category score under this paragraph may not exceed 10 
percent of the total available measure achievement points. Accordingly, 
we proposed to update Sec.  414.1380(b)(1)(vii) to state a MIPS 
eligible clinician's quality performance category score is the sum of 
all the measure achievement points assigned for the measures required 
for the quality performance category criteria plus the measure bonus 
points in paragraph (b)(1)(v) and Complex Organization Adjustment in 
paragraph (b)(1)(vii)(C). The sum is divided by the sum of total 
available measure achievement points. The improvement percent score in 
paragraph (b)(1)(vi) is added to that result. The quality performance 
category score cannot exceed 100 percentage points.
    We request comment on our proposal to implement a Complex 
Organization Adjustment for Virtual Groups and APM Entities, including 
ACOs in the Shared Savings Program.

[[Page 62083]]

(c) Scoring the Quality Performance Category Through MIPS for ACOs in 
the Shared Saving Program.
(i) Proposal To Score for Shared Savings Program ACOs Reporting 
Medicare CQMs Using Flat Benchmarks
    In section III.G.4.c.2.c of this proposed rule we are proposing to 
score Shared Savings Program ACOs reporting Medicare CQMs in the APP 
Plus quality measure set using flat benchmarks for their first two 
performance periods in MIPS. Consistent with this discussion, we are 
proposing to add Sec.  414.1380(b)(1)(ii)(F) to state that beginning in 
the CY 2025 performance period/2027 MIPS payment year, measures of the 
Medicare CQM collection type would be scored using flat benchmarks for 
their first two performance periods in MIPS. We request comment on our 
proposal to score Medicare CQMs using flat benchmarks for their first 
two performance periods in MIPS.
(d) Cost Performance Category Score
(i) Scoring the Cost Performance Category Background
    As discussed previously, to calculate a final score for each MIPS 
eligible clinician for the performance period of an applicable MIPS 
payment year, section 1848(q)(5)(A) of the Act requires that we must 
develop a methodology for assessment of the total performance of each 
MIPS eligible clinician, according to the performance standards we have 
established in accordance with section 1848(q)(3) of the Act, with 
respect to applicable measures and activities specified for each 
performance category. For the final score, we must use a scoring scale 
of 0 to 100.
    We refer readers to Sec.  414.1380(b)(2) for our policies regarding 
scoring for the cost performance category and to previous rules where 
these policies were finalized, including the CY 2017 Quality Payment 
Program final rule (81 FR 77308 through 77311), the CY 2018 Quality 
Payment Program final rule (82 FR 53748 through 53752), the CY 2019 PFS 
final rule (83 FR 59856), the CY 2021 PFS final rule (85 FR 84877 
through 84880), the CY 2022 PFS final rule (86 FR 65507 through 65509), 
the CY 2023 PFS final rule (87 FR 70091 through 70093), and the CY 2024 
PFS final rule (88 FR 79369 through 79373).
    We are proposing to: (1) modify the benchmark methodology for 
scoring measures specified for the cost performance category beginning 
with the CY 2024 performance period/2026 MIPS payment year; and (2) 
adopt a new cost measure exclusion policy beginning with the CY 2025 
performance period/2027 MIPS payment year.
(ii) Benchmark Methodology for Scoring the Cost Performance Category
(A) Background on Methodology for Scoring the Cost Performance Category
    Under Sec.  414.1350(a), we specify cost measures for a performance 
period to assess the performance of MIPS eligible clinicians on the 
cost performance category. Under Sec.  414.1380(b)(2), we score each 
MIPS eligible clinician \774\ on each cost measure attributed to them 
in accordance with Sec.  414.1350(b) so long as the MIPS eligible 
clinician meets the minimum case volume specified under Sec.  
414.1350(c) to be scored on that cost measure. Cost performance 
category measures are attributed to MIPS eligible clinicians through, 
and scored based on, claims data; we do not require MIPS eligible 
clinicians to submit any additional data on cost measures to CMS (Sec.  
414.1325(a)). We have codified our cost performance category scoring 
policies at Sec.  414.1380(b)(2).
---------------------------------------------------------------------------

    \774\ As noted previously, the term MIPS eligible clinician is 
defined in Sec.  414.1305 as including a group of at least one MIPS 
eligible clinician billing under a single tax identification number. 
A cost measure therefore may be attributed to a group that includes 
at least one MIPS eligible clinician and the group may therefore be 
scored on the cost performance category as a whole. We refer readers 
to our policies governing group reporting and scoring under MIPS as 
set forth in Sec.  414.1310(e).
---------------------------------------------------------------------------

    Specifically, we finalized at Sec.  414.1380(b)(2) that we will 
score each cost measure attributed to a MIPS eligible clinician 
(meeting or exceeding the minimum case volume) by assigning achievement 
points between one and ten based on the MIPS eligible clinician's 
performance on the cost measure during the performance period compared 
to the measure's benchmark. We award the achievement points (including 
partial points) based on which benchmark decile range the MIPS eligible 
clinician's performance on the measure is between. The MIPS eligible 
clinician's cost performance category score (to be added to the final 
score) is the sum (not to exceed 100 percent) of: (1) the total number 
of achievement points earned by the MIPS eligible clinician divided by 
the total number of available achievement points; and (2) the cost 
improvement score, as determined under Sec.  414.1380(b)(2)(iv) (Sec.  
414.1380(b)(2)(iii)). We will not calculate a cost performance category 
score if the MIPS eligible clinician is not attributed any cost 
measures for the performance period because the MIPS eligible clinician 
has not met the minimum case volume as specified under Sec.  
414.1350(c) for any of the cost measures or a benchmark has not been 
created for any of the cost measures that would otherwise be attributed 
to the MIPS eligible clinician (Sec.  414.1380(b)(2)(v)).
    As set forth in Sec.  414.1380(b)(2)(i), we determine cost measure 
benchmark ranges based on all MIPS eligible clinicians' performance on 
each attributed cost measure during the performance period. We 
determine a benchmark for a cost measure only if at least 20 MIPS 
eligible clinicians are attributed and meet the minimum case volume for 
that measure, as specified under Sec.  414.1350(c). If we cannot 
determine a benchmark for a cost measure because an insufficient number 
of MIPS eligible clinicians were attributed the measure (that is, less 
than 20 MIPS eligible clinicians meet the minimum case volume), then we 
will not assign any score for the measure for any MIPS eligible 
clinician (Sec.  414.1380(b)(2)(i) and (v)). We refer readers to our 
prior rulemakings, including the CY 2017 Quality Payment Program final 
rule (81 FR 77308 through 77311), for detailed discussion of our 
previously finalized policies for determining a benchmark for each cost 
measure and then assignment of achievement points based on comparison 
of a MIPS eligible clinician's performance to that established 
benchmark.
    Specifically, under our current scoring policy at Sec.  
414.1380(b)(2) and benchmark methodology, MIPS eligible clinicians with 
the lowest average cost per episode or per beneficiary would be in the 
top decile (Decile 10) and receive the highest number of available 
achievement points (10). On the other end of the spectrum, MIPS 
eligible clinicians with the highest average cost per episode or per 
beneficiary would be in the bottom decile (Decile 1) and receive the 
lowest number of achievement points (1). More information about how 
average cost per beneficiary or per episode are calculated and 
translated to MIPS achievement points is available in the 2023 MIPS 
Cost User Guide.\775\
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    Table 68 provides an example of using benchmark deciles along with 
partial achievement points to assign achievement points for a sample 
cost measure under our current methodology. The following formula is 
used to determine the number of partial points awarded to the MIPS 
eligible clinician:

Benchmark Decile # + [(measure score, expressed as a dollar amount-
bottom

[[Page 62084]]

of benchmark decile range)/(top of benchmark decile range-bottom of 
benchmark decile range)] = Cost Measure Achievement Points.\776\
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[GRAPHIC] [TIFF OMITTED] TP31JY24.105

    In the CY 2021 PFS final rule (85 FR 84877 through 84880), we 
finalized at Sec.  414.1350(d)(4) the weight of the cost performance 
category to be 20 percent of the MIPS final score for the 2023 MIPS 
payment year and at Sec.  414.1350(d)(5) the weight of the cost 
performance category to be 30 percent of the MIPS final score for the 
2024 MIPS payment year and each subsequent MIPS payment year. We noted 
that such an approach would allow us to reach the statutorily required 
weight of 30 percent by the 2024 MIPS payment year (see section 
1848(q)(5)(E)(i)(II) of the Act) while reducing the impact of 
experiencing an increase in the weight of the cost performance category 
too much in any one year and providing clinicians with an eased gradual 
and incremental transition starting with the 2023 MIPS payment year.
    Since, MIPS eligible clinicians have raised concerns about cost 
performance category scoring having a negative impact on their final 
MIPS score. Multiple factors have likely contributed to clinician 
concerns.
    First, there has been an increase in weight for the cost 
performance category over time. Particularly, due to the COVID-19 
Public Health Emergency (PHE) which ended on May 11, 2023, we 
reweighted the cost performance category's score to zero percent of the 
final score for many MIPS eligible clinicians. Specifically, we 
announced on April 6, 2020 that, due to the COVID-19 PHE, we would 
apply our extreme and uncontrollable circumstances reweighting policies 
described under Sec.  414.1380(c)(2)(i) to MIPS eligible clinicians 
nationwide and extend the deadline to submit an application for 
reweighting the quality, cost, improvement activities or Promoting 
Interoperability reporting categories for the CY 2019 performance 
period/2021 MIPS payment year (85 FR 19277 and 19278). Also, for the CY 
2020 performance period/2022 MIPS payment year and the CY 2021 
performance period/2023 MIPS payment year, we extensively applied our 
reweighting policies, described under Sec.  414.1380(c)(2)(i), to MIPS 
eligible clinicians nationwide due to the COVID-19 
PHE.777 778 As a result, the CY 2022 performance period/2024 
MIPS payment year was the first MIPS payment year that the cost 
performance category score generally constituted 30 percent of MIPS 
eligible clinicians' final scores (section 1848(q)(5)(E)(i)(II) of the 
Act). Second, the number of cost measures has increased over time, and 
therefore, more MIPS eligible clinicians are being measured on the cost 
performance category and on new measures.
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    Additionally, based on our calculation of cost performance category 
scores for the CY 2022 performance period/2024 MIPS payment year, we 
observed lower scores for the cost performance category than for the 
quality performance category, even though they each generally 
constitute 30 percent of the final score. Recent analyses of CY 2022 
performance period/2024 MIPS payment year data have identified the 
unweighted mean cost performance category score was 59 out of 100, 
while the unweighted mean score for the quality performance category 
was 74 out of 100. We also note that the unweighted mean scores were 95 
out of 100 for the improvement activities performance category and 94 
out of 100 for the Promoting Interoperability performance category.
    There are several factors that may have contributed to a 
significantly lower score in the cost performance category, compared to 
the other categories. First, measures in the cost performance category 
are scored against a benchmark determined based on average performance 
of all MIPS eligible clinicians during that same performance period 
(Sec.  414.1380(b)(2) introductory text and (b)(2)(i)) rather than a 
benchmark determined based on historical data, which is used, wherever 
possible, for non-administrative claims-based quality measures in the 
quality performance category. Benchmarks determined based on historical 
data for the quality performance category provide MIPS eligible 
clinicians with helpful performance targets in advance of or during the 
performance period. Meanwhile, the performance period benchmarks for 
the cost performance category do not provide MIPS eligible clinicians 
with information about performance targets before or during the 
performance period. We believe that using benchmarks based in the 
performance period is a better approach for the cost performance 
category than using benchmarks based on historical data because 
different payment policies

[[Page 62085]]

may apply during the historical period than during the performance 
period, which may affect the cost of care for patients treated by MIPS 
eligible clinicians.
    Second, in traditional MIPS (compared to MVP reporting), MIPS 
eligible clinicians are scored on each cost measure for which they meet 
the established case minimum and a benchmark can be calculated. In the 
quality performance category, if a clinician reports more than the 
required number of quality measures, we use the highest scored outcome 
measure and then the next highest scored measures to reach a total of 6 
sored quality measures to calculate the clinician's MIPS quality 
performance category score. The current cost benchmark methodology uses 
a decile range based on linear percentile distributions and assigns 5.0 
to 6.9 achievement points to clinicians with cost measure scores within 
the 50th to 60th percentiles (Table 68).
    For the example cost measure presented in Table 68, the cost 
measure median, the 50th percentile, is $969.72. If a MIPS eligible 
clinician's average cost per episode for the measure is $1,104 (about 
$135 above the median), the MIPS eligible clinician's cost falls within 
Benchmark Decile 2, for which the MIPS eligible clinician may receive 
between 2.0 and 2.9 achievement points. We then use the following 
formula to determine the number of partial points awarded to the MIPS 
eligible clinician:

Benchmark Decile # + [(measure score, expressed as a dollar amount-
bottom of benchmark decile range)/(top of benchmark decile range-bottom 
of benchmark decile range)] = Cost Measure Achievement Points.\779\
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    Based on this partial points calculation formula, the clinician 
would receive 0.3 partial points, resulting in a cost measure score of 
2.3 out of 10 achievement points for the Screening/Surveillance 
Colonoscopy cost measure under this example.
    This score may have the effect of lowering the MIPS eligible 
clinician's final score, as discussed previously. If the MIPS eligible 
clinician is only attributed and scored on this single cost measure and 
does not receive a cost improvement score, then their score for the 
cost performance category would be based on the cost measure's score of 
2.3 out of 10 achievement points. Their score for the cost performance 
category would be 0.23 (2.3/10 = 0.23), equal to the total number of 
achievement points earned by the MIPS eligible clinician divided by the 
total number of available achievement points under Sec.  
414.1380(b)(2)(iii)(A). Based on the final score calculation under 
Sec.  414.1380(c), the contribution of the cost performance category 
score to the final score for this MIPS eligible clinician would be 
equal to the cost performance category score multiplied by the cost 
performance category weight (30 percent if the MIPS eligible clinician 
has not received any reweighting) and would be 6.9 out of 30 (0.23 x 30 
= 6.9), which would be 23 out of 100 points for the cost performance 
category's contribution to the final score.
    To illustrate how this cost performance category score could lower 
the final score, if this MIPS eligible clinician received perfect 
scores in each of the other three performance categories, based on the 
final score calculation under Sec.  414.1380(c) and the respective 
performance category weights when all four performance categories are 
scored without reweighting, we would use the formula as described 
below. For this example, we have not included the complex patient 
bonus.

MIPS Final score = [(60/60 x 30 for quality) + (2.3/10 x 30 for cost) + 
(40/40 x 15 for improvement activities) + (100/100 x 25 for Promoting 
Interoperability)] x 100 = 76.9.

    In this example, MIPS final score of 76.9 for the MIPS eligible 
clinician is just above the 2024 MIPS payment year performance 
threshold of 75. Therefore, under the current cost scoring methodology, 
a MIPS eligible clinician scoring near the median on a cost measure 
would need to score perfectly (or nearly perfectly) within the other 
three performance categories to receive a final score slightly above 
the performance threshold and to avoid a negative payment adjustment. 
The unweighted cost performance category score of 23 out of 100 
noticeably lowers the MIPS eligible clinician's MIPS final score.
(B) Proposed Modification to Scoring Methodology for the Cost 
Performance Category Beginning With CY 2024 Performance Period/2026 
MIPS Payment Year
    In light of the concerns identified with our current cost scoring 
policies, we are proposing to modify the methodology for scoring the 
cost performance category beginning with the CY 2024 performance 
period/2026 MIPS payment year. The proposed cost scoring methodology 
would be based on standard deviation, median, and an achievement point 
value that is derived from the performance threshold. Specifically, for 
a MIPS eligible clinician whose average costs attributed under a cost 
measure would be equal to the median cost for all MIPS eligible 
clinicians attributed that measure, we would assign an achievement 
point value equal to 10 percent of the performance threshold. For 
example, for the CY 2024 performance period/2026 MIPS payment year, the 
median would have an achievement point value of 7.5, based on a 
performance threshold of 75 as finalized at Sec.  414.1405(b)(9)(iii). 
For each cost measure, the cut-offs for benchmark ranges would be 
calculated based on standard deviations, expressed in dollars, from the 
median.
    The benchmark ranges, the median, and the performance threshold-
derived achievement point values aligned with the median would be 
dynamic and responsive to changes in average costs per episode or per 
beneficiary assessed by cost measures and performance thresholds for 
each CY performance period/MIPS payment year. The performance 
threshold-derived point values could change based on the performance 
threshold established for each performance period/MIPS payment year. 
The standard deviations from the median used to determine cutoffs for 
benchmark ranges for each year would be reviewed for any necessary 
updates annually based on performance across MIPS eligible clinicians 
within the cost performance category and the performance threshold 
established for the performance period/MIPS payment year. We would 
perform analyses when the performance threshold changes to set the 
benchmark ranges. To determine the benchmark ranges, we would adhere to 
the following principles: (1) center the majority of average costs per 
episode or per beneficiary around the performance threshold-derived 
point value; (2) determine benchmark ranges according to the 
statistical distribution curve of the average cost per episode or per 
beneficiary; and (3) distribution of achievement points for cost 
measures should be reflective of overall program performance. We refer 
readers to Table 69 for an example of how the proposed cost scoring 
methodology could be implemented for a specific cost measure when the 
performance threshold is set to 75.

[[Page 62086]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.106

    Continuing with the example of the Screening/Surveillance 
Colonoscopy cost measure, now presented in Table 69 as an example of 
implementation of the proposed cost scoring methodology, the median 
(50th percentile) cost would remain $969.72. Under the proposed cost 
scoring methodology, for the CY 2024 performance period/2026 MIPS 
payment year, a MIPS eligible clinician with a cost per episode equal 
to the median cost of all cases attributed to all MIPS eligible 
clinicians would receive 7.5 achievement points out of 10 possible 
achievement points.
    Using the same example as previously presented in section 
IV.A.4.f.(1)(d)(ii)(A) of this proposed rule, we would apply the 
proposed cost scoring benchmark methodology as shown in Table 69 to a 
MIPS eligible clinician with an average cost per episode for this 
measure that is $1,104 (about $135 above the median). Based on the 
analysis of data in this example, the standard deviation for the 
Screening/Surveillance Colonoscopy cost measure would be $135.35. This 
value for the standard deviation would then be used to calculate the 
benchmark ranges in Table 69 by plugging in this value for the standard 
deviation for each benchmark range. For example, ``Median cost + (1 x 
$135.35)'' would be calculated for ``Median cost + (1 standard 
deviation)'' for the bottom of Benchmark range 6. As shown with the 
example in Table 69, under our proposed cost scoring methodology, the 
MIPS eligible clinician's average cost per episode of $1,104 would fall 
within Benchmark Range 6 for the Screening/Surveillance Colonoscopy 
cost measure, for which the MIPS eligible clinician may receive between 
6.0 and 6.9 achievement points.
    Under our proposal to modify the cost performance category's 
scoring methodology for individual cost measures, we would continue to 
use our established formula to assign partial achievement points:

Benchmark Range # + [(measure score, expressed as a dollar amount-
bottom of benchmark range)/(top of benchmark range-bottom of benchmark 
range)] = Cost Measure Achievement Points.

    As a result, using the example shown in Table 69, under our 
proposed cost scoring methodology, the MIPS clinician would receive 
6.02 cost measure achievement points (6 + [($1,104-$1,105.07)/
($1,037.40-$1,105.07)] = 6.02). The assignment of 6.02 achievement 
points under the proposed cost scoring methodology would be closer to 
the performance threshold equivalent of 7.5 than the assignment of 2.3 
achievement points under the current cost scoring methodology, as 
discussed in our previous example in section IV.A.4.f.(1)(d)(ii)(A) of 
this proposed rule.
    In this example, the MIPS eligible clinician's score for the cost 
performance category would be 0.602 (6.02/10 = 0.602), equal to the 
total number of achievement points earned by the MIPS eligible 
clinician divided by the total number of available achievement points 
under Sec.  414.1380(b)(2)(iii)(A). Based on the final score 
calculation under Sec.  414.1380(c), the contribution of the cost 
performance category score to the final score for this MIPS eligible 
clinician would be equal to the cost performance category score 
multiplied by the cost performance category weight (30 percent if the 
MIPS eligible clinician has not received any reweighting) and would be 
18.06 out of 30 (0.602 x 30 = 18.06) or 60.2 out of 100.
    If this MIPS eligible clinician received perfect scores in each of 
the other three performance categories, based on the final score 
calculation under Sec.  414.1380(c) and the respective performance 
category weights when all four performance categories are scored 
without reweighting, we would use the formula as described below. For 
this example, we have not included the complex patient bonus.

MIPS Final score = [(60/60 x 30 for quality) + (6.02/10 x 30 for cost) 
+ (40/40 x 15 for improvement activities) + (100/100 x 25 for Promoting 
Interoperability)] x 100 = 88.06.

    This MIPS final score of 88.06 for the MIPS eligible clinician 
would be well above the 2024 MIPS payment year performance threshold of 
75. The cost performance category score of 60.2 out of 100 would not 
noticeably lower the MIPS eligible clinician's MIPS final score.
    This proposed modification in our scoring methodology for cost 
measures would align the assignment of achievement points for cost 
measures so that clinicians with costs near the measure's 50th 
percentile (median) would not receive a disproportionately low score. 
Based on our analyses utilizing data from the CY 2022 performance 
period/2024 MIPS payment year, this proposed methodology would increase 
the mean cost performance category score (unweighted) for clinicians 
with a cost performance category score from 59 out of 100 to 71 out of 
100 (an increase of 11.9 points). Further, this proposed cost scoring 
methodology would increase the means for each cost measure score by 
amounts ranging from 0.04 to 2.52

[[Page 62087]]

points. Our analysis showed that, under our proposed methodology, the 
mean final score for MIPS eligible clinicians assessed on at least one 
cost measure and receiving a cost performance category score would 
increase by 3.89 points. Under our analysis, our proposed scoring 
methodology would not negatively impact MIPS eligible clinicians whose 
average costs for a specific cost measure are around the median.
    Specifically, our analysis supports our intended goal for the 
proposed modification to the scoring methodology: MIPS eligible 
clinicians who deliver care at an average cost near the median costs 
for all MIPS eligible clinicians attributed the measure would receive 
scores at, or very close to, the performance threshold-derived score. 
Additionally, this proposed modification would address MIPS eligible 
clinicians' concerns that cost measure scoring negatively impacts their 
final scores more than other performance categories, including 
disparate negative effects for MIPS eligible clinicians who are scored 
on the cost performance category compared to clinicians not scored on 
the cost performance category.
    To codify this proposed policy, we propose to modify Sec.  
414.1380(b)(2) to specify that achievement points are awarded based on 
which benchmark range the MIPS eligible clinician's performance on the 
measure is in. We also propose to specify that CMS assigns partial 
points based on where the MIPS eligible clinician's performance falls 
between the top and the bottom of the benchmark ranges. The terms 
``decile'' and ``percentile distribution'' are currently used in Sec.  
414.1380(b)(2) to describe the scoring methodology used to award 
achievement points and assign partial points. However, under the 
proposed methodology, the term ``decile'' no longer accurately 
describes how the benchmark ranges would be constructed. We believe the 
more general term ``benchmark range'' accurately describes both the 
current and the proposed cost scoring methodology, and therefore 
propose to modify Sec.  414.1380(b)(2) to use ``benchmark range'' in 
lieu of ``decile'' and ``percentile distribution.'' We are not 
proposing any modifications to the remainder of the language currently 
at Sec.  414.1380(b)(2), which provides that, for each cost measure 
attributed to a MIPS eligible clinician, the clinician receives one to 
ten achievement points based on the clinician's performance on the 
measure during the performance period compared to the measure's 
benchmark.
    We are also not proposing any modifications to the language 
currently at Sec.  414.1380(b)(2)(i), generally governing if and how 
CMS determines a cost measure's benchmark. However, we are proposing to 
codify our current cost scoring policy, previously finalized in the CY 
2017 QPP final rule (81 FR 77308 through 77311), with modification by 
adding language at Sec.  414.1380(b)(2)(i)(A). We propose to specify at 
Sec.  414.1380(b)(2)(i)(A) that, for the 2019 through 2025 MIPS payment 
years, CMS determines cost measure benchmark ranges based on linear 
percentile distributions.
    We are also proposing to codify our proposed benchmarking 
methodology at Sec.  414.1380(b)(2)(i)(B). We propose to specify at 
Sec.  414.1380(b)(2)(i)(B) that, beginning with the 2026 MIPS payment 
year, for each cost measure, CMS determines 10 benchmark ranges based 
on the median cost of all MIPS eligible clinicians attributed the 
measure, plus or minus standard deviations and that CMS awards 
achievement points based on which benchmark range a MIPS eligible 
clinician's average cost for a cost measure corresponds. We also 
propose to codify at Sec.  414.1380(b)(2)(i)(B) that, beginning with 
the 2026 MIPS payment year, CMS awards achievement points equivalent to 
10 percent of the performance threshold for a MIPS eligible clinician 
whose average cost attributed under a cost measure is equal to the 
median cost for all MIPS eligible clinicians attributed the measure.
    We request public comments on this proposal to modify our scoring 
methodology for measures specified under the cost performance category.
(iii) Proposed Adoption of Additional Cost Measure Exclusion Policy
(A) Background on Cost Measure Exclusion Policy
    We refer readers to Sec.  414.1380(b)(2)(v)(A) and the CY 2022 PFS 
final rule (86 FR 65507 through 65509) for our previously established 
policy for excluding a single cost measure from a MIPS eligible 
clinician's score for the cost performance category. As described at 
Sec.  414.1380(b)(2)(v)(A), we established that, beginning with the 
2024 MIPS payment year, if data used to calculate a score for a cost 
measure are impacted by significant changes during the performance 
period, such that calculating the cost measure score would lead to 
misleading or inaccurate results, then the affected cost measure is 
excluded from the MIPS eligible clinician's or group's cost performance 
category score. We also established at Sec.  414.1380(b)(2)(v)(A) that 
``significant changes'' are changes external to the care provided, and 
that CMS determines may lead to misleading or inaccurate results. We 
specified at Sec.  414.1380(b)(2)(v)(A) that significant changes 
include, but are not limited to, rapid or unprecedented changes to 
service utilization, and will be empirically assessed by CMS to 
determine the extent to which the changes impact the calculation of a 
cost measure score that reflects clinician performance.
    As described in the CY 2022 PFS final rule (86 FR 65507 through 
65509), we finalized the policy at Sec.  414.1380(b)(2)(v)(A) to 
provide scoring flexibility in instances where changes during a 
performance period impede the effective measurement of cost. We 
identified that there is a need for additional flexibility in 
calculating the scores for cost measures to account for the impact of 
changing conditions that are beyond the control of individual MIPS 
eligible clinicians and groups. We noted that this flexibility would 
allow us to ensure that clinicians are not impacted negatively when 
performance is affected not due to the care provided, but due to 
external factors. We noted that we would determine whether such 
external changes impede the effective measurement of cost by 
considering factors including: The extent and duration of the changes, 
and the conceptual and empirically tested relationship between the 
changes and each measure's ability to accurately capture clinician cost 
performance (86 FR 65508). Empirical testing could include assessing 
whether there are rapid or unprecedented changes to patient case volume 
or case mix, and the extent to which this could lead to misleading or 
inaccurate results (86 FR 65508).
(B) Proposal To Permit Exclusion of a Cost Measure When Impacted by 
Errors and When Significant Changes Occur Outside of the Performance 
Period
    In the CY 2022 PFS final rule, for the quality performance 
category, we modified the quality measure exclusion policy at Sec.  
414.1380(b)(1)(vii)(A) to change ``significant changes'' to 
``significant changes or errors'' (86 FR 65492) and to include the 
omission of codes or inclusion of inactive or inaccurate codes to 
provide that for each measure submitted, if applicable, and impacted by 
significant changes or errors prior to the applicable data submission 
deadline at Sec.  414.1325(e), performance is based on data for 9 
consecutive months of the applicable CY performance period. Currently, 
for

[[Page 62088]]

the cost performance category, we do not include ``errors'' in addition 
to ``significant changes'' within our cost measure exclusion policy at 
Sec.  414.1380(b)(2)(v)(A). To provide CMS with greater flexibilities 
to be responsive to any errors or significant changes outside of the 
control of MIPS eligible clinicians that negatively impact the ability 
of specific cost measure(s) to assess clinician performance, we are 
proposing to add a new cost measure exclusion policy at Sec.  
414.1380(b)(2)(v)(B) similar to the quality measure exclusion policy. 
Additionally, to further align our measure exclusion policies among the 
performance categories, we propose to include ``errors'' for the cost 
performance category. Specifically, we are proposing that, beginning 
with the 2027 MIPS payment year, if data used to calculate a score for 
a cost measure are impacted by significant changes or errors affecting 
the performance period, such that calculating the cost measure score 
would lead to misleading or inaccurate results, then the affected cost 
measure is excluded from the MIPS eligible clinician's or group's cost 
performance category score.
    For purposes of this cost measure exclusion policy at Sec.  
414.1380(b)(2)(v)(B), we are proposing to define ``significant changes 
or errors'' as changes or errors external to the care provided, and 
that CMS determines may lead to misleading or inaccurate results that 
negatively impact the measure's ability to reliably assess performance. 
While we are proposing to include ``errors'' within this policy for the 
cost performance category, as the quality performance category already 
does, the list of what ``significant changes or errors'' includes would 
differ by performance category to capture differences in how cost 
measures and quality measures are calculated and measured. For 
instance, unlike quality measures for which MIPS eligible clinicians 
generally must submit data to CMS to be assessed, cost measures are 
calculated by CMS solely based on the review of administrative claims 
data and should not be impacted by reporting errors. However, cost 
measures could be impacted by CMS calculation errors. Further, under 
our proposed cost measure exclusion policy, errors would be external to 
the care provided, and such that CMS determines may lead to misleading 
or inaccurate results that negatively impact the measure's ability to 
reliably assess performance. Under our proposed exclusion policy for 
cost measures, significant changes or errors would include, but would 
not be limited to, rapid or unprecedented changes to service 
utilization, the inadvertent omission of codes or inclusion of codes, 
or changes to clinical guidelines or measure specifications. 
Additionally, these would not automatically result in cost measure 
exclusion. Instead, we would determine whether there is a negative 
impact from the significant change or error when deciding if a cost 
measure will be excluded.
    Specifically, before applying this cost measure exclusion policy, 
we are proposing that CMS would empirically assess the affected cost 
measure to determine the extent to which the changes or errors impact 
the calculation of a cost measure score such that calculating the cost 
measure score would lead to misleading or inaccurate results that 
negatively impact the measure's ability to reliably assess performance. 
We believe that it is important to clarify that a change or error would 
not automatically result in measure exclusion, but instead, that we 
would need to determine whether there is a negative impact from the 
change or error that would affect cost measure scoring.
    Because significant changes or errors can have an ongoing impact on 
a measure beyond a single performance period, we are proposing that the 
new cost measure exclusion policy at Sec.  414.1380(b)(2)(v)(B) allow 
us to exclude cost measures when such changes and errors occur outside 
of the performance period, but otherwise affect the performance period. 
For example, if a cost measure is impacted by a coding change or 
guidance that requires substantive changes to a measure, we may not be 
able to modify the measure within one performance period. In such 
circumstances, we would want to exclude the cost measure for the 
affected performance periods due to the ongoing impact on the measure. 
We would ensure that if data used to calculate a score for a cost 
measure are impacted by significant changes or errors affecting one or 
more performance periods delivering misleading or inaccurate results, 
then the affected cost measure could be excluded from the MIPS eligible 
clinician's or group's cost performance category score. We believe that 
the cost measure should be able to be excluded regardless of when we 
become aware of the issue, when the significant change came into 
effect, or when the error first occurred. Therefore, we are proposing 
language at Sec.  414.1380(b)(2)(v)(B) to address data used to 
calculate a score for a cost measure being impacted by significant 
changes and errors affecting a performance period, even if they do not 
occur during the performance period.
    We are proposing that this cost measure exclusion policy would be 
effective beginning with the CY 2025 performance period/2027 MIPS 
payment year so this policy would be in place as soon as feasible after 
the opportunity for notice-and-comment rulemaking.
    This proposal would add language at Sec.  414.1380(b)(2)(v)(B) to 
specify that, beginning with the 2027 MIPS payment year, if data used 
to calculate a score for a cost measure are impacted by significant 
changes or errors affecting the performance period, such that 
calculating the cost measure score would lead to misleading or 
inaccurate results, then the affected cost measure would be excluded 
from the MIPS eligible clinician's or group's cost performance category 
score. We propose to specify that ``significant changes or errors'' are 
changes or errors external to the care provided, and that CMS 
determines may lead to misleading or inaccurate results that negatively 
impact the measure's ability to reliable assess performance. We also 
propose to specify that significant changes or errors would include, 
but are not limited to, rapid or unprecedented changes to service 
utilization, the inadvertent omission of codes or inclusion of codes, 
or changes to clinical guidelines or measure specifications. We propose 
that CMS would empirically assess the affected cost measure to 
determine the extent to which the changes or errors impact the 
calculation of a cost measure score such that calculating the cost 
measure score would lead to misleading or inaccurate results that 
negatively impact the measure's ability to reliably assess performance.
    We request public comments on this proposal.
g. MIPS Payment Adjustments
(1) Background
    Section 1848(q)(6)(A) of the Act requires that we specify a MIPS 
payment adjustment factor for each MIPS eligible clinician for a year. 
This MIPS payment adjustment factor is a percentage determined by 
comparing the MIPS eligible clinician's final score for the given year 
to the performance threshold we established for that same year in 
accordance with section 1848(q)(6)(D) of the Act. The MIPS payment 
adjustment factors specified for a year must result in differential 
payments such that MIPS eligible clinicians with final scores above the 
performance threshold receive a

[[Page 62089]]

positive MIPS payment adjustment factor, those with final scores at the 
performance threshold receive a neutral MIPS payment adjustment factor, 
and those with final scores below the performance threshold receive a 
negative MIPS payment adjustment factor.
    For previously established policies regarding our determination and 
application of MIPS payment adjustment factors to each MIPS eligible 
clinician, we refer readers to the CY 2017 Quality Payment Program 
final rule (81 FR 77329 through 77343), CY 2018 Quality Payment Program 
final rule (82 FR 53785 through 53799), CY 2019 PFS final rule (83 FR 
59878 through 59894), CY 2020 PFS final rule (84 FR 63031 through 
63045), CY 2021 PFS final rule (85 FR 84917 through 84926), CY 2022 PFS 
final rule (86 FR 65527 through 65537), CY 2023 PFS final rule (87 FR 
70096 through 70102), and CY 2024 PFS final rule (88 FR 79373 through 
79380).
(2) Establishing the Performance Threshold
(a) Statutory Authority and Background
    As discussed above, to determine a MIPS payment adjustment factor 
for each MIPS eligible clinician for a year, we must compare the MIPS 
eligible clinician's final score for the given year to the performance 
threshold we established for that same year in accordance with section 
1848(q)(6)(D) of the Act. Section 1848(q)(6)(D)(i) of the Act requires 
that we compute the performance threshold such that it is the mean or 
median (as selected by the Secretary) of the final scores for all MIPS 
eligible clinicians with respect to a prior period specified by the 
Secretary. Section 1848(q)(6)(D)(i) of the Act also provides that the 
Secretary may reassess the selection of the mean or median every 3 
years.
    Sections 1848(q)(6)(D)(ii) through (iv) of the Act provided special 
rules, applicable only for certain initial years of MIPS, for our 
computation and application of the performance threshold for our 
determination of MIPS payment adjustment factors. These special rules 
are no longer applicable for establishing the performance threshold for 
the CY 2025 performance period/2027 MIPS payment year. We refer readers 
to the CY 2024 PFS proposed rule (88 FR 52596) for further information 
on these previously applicable requirements as they explain our prior 
computations of the performance threshold.
    In the CY 2022 PFS final rule (86 FR 65527 through 65532), we 
selected the mean as the methodology for determining the performance 
threshold for the CY 2022 performance period/2024 MIPS payment year 
through CY 2024 performance period/2026 MIPS payment year. We also 
established in our regulation at Sec.  414.1405(g) that, for each of 
the 2024, 2025, and 2026 MIPS payment years, the performance threshold 
would be the mean of the final scores for all MIPS eligible clinicians 
from a prior period. As discussed under section IV.A.4.g.(2)(b) of this 
proposed rule, we are proposing to continue using the mean as the 
methodology for determining the performance threshold for the 2027, 
2028, and 2029 MIPS payment years.
    In the CY 2024 PFS final rule (88 FR 79373 through 79380), we 
established the performance threshold for the CY 2024 performance 
period/2026 MIPS payment year by calculating the mean of the final 
scores for all MIPS eligible clinicians using CY 2017 performance 
period/2019 MIPS payment year data. As further discussed under section 
IV.A.4.g.(2)(c), we are proposing to continue using the mean of the 
final scores for all MIPS eligible clinicians from the CY 2017 
performance period/2019 MIPS payment year to establish the performance 
threshold as 75 points for the CY 2025 performance period/2027 MIPS 
payment year.
    For further information on our current performance threshold 
policies, we refer readers to the CY 2017 Quality Payment Program final 
rule (81 FR 77333 through 77338), CY 2018 Quality Payment Program final 
rule (82 FR 53787 through 53792), CY 2019 PFS final rule (83 FR 59879 
through 59883), CY 2020 PFS final rule (84 FR 63031 through 63037), CY 
2021 PFS final rule (85 FR 84919 through 84923), CY 2022 PFS final rule 
(86 FR 65527 through 65532), CY 2023 PFS final rule (87 FR 70096 
through 70100), and CY 2024 PFS final rule (88 FR 79373 through 79380).
    We codified the performance thresholds for each of the first 8 
years of MIPS at Sec.  414.1405(b)(4) through (9). These performance 
thresholds are shown in Table 71.
[GRAPHIC] [TIFF OMITTED] TP31JY24.107

(b) Establishing the Performance Threshold Methodology for the 2027, 
2028, and 2029 MIPS Payment Years
    Section 1848(q)(6)(D)(i) of the Act requires that we compute the 
performance threshold such that it is the mean or median (as selected 
by the Secretary) of the final scores for all MIPS eligible clinicians 
with respect to a prior period specified by the Secretary. That section 
also provides that the Secretary may reassess the selection of the mean 
or median every three years. In accordance with section 
1848(q)(6)(D)(i) of the Act, we are

[[Page 62090]]

proposing to continue using the mean of the final scores for all MIPS 
eligible clinicians to compute the performance threshold for the 2027, 
2028, and 2029 MIPS payment years.
    In the CY 2022 PFS final rule (86 FR 65527 through 65532), we 
selected the mean (rather than the median) as the methodology for 
determining the performance threshold for the 2024, 2025, and 2026 MIPS 
payment years. For the CY 2019 performance period/CY 2021 MIPS payment 
year through CY 2021 performance period/2023 MIPS payment year, section 
1848(q)(6)(D)(iv) of the Act required that we methodically increase the 
performance threshold each year to ``ensure a gradual and incremental 
transition'' to the performance threshold we estimated would be 
applicable in the CY 2022 performance period/2024 MIPS payment year. 
Although sections 1848(q)(6)(D)(ii) through (iv) of the Act were no 
longer applicable for establishing the performance threshold for the CY 
2024 performance period/2026 MIPS payment year, these previously 
applicable statutory requirements explained prior computations of the 
performance threshold that impacted our policy considerations for 
establishing the performance threshold for MIPS going forward. Based on 
our review of possible values for the CY 2022 performance period/2024 
MIPS payment year, we believed that using the mean as our methodology 
for setting the performance threshold for the CY 2022 performance 
period/2024 MIPS payment year through the CY 2024 performance period/
2026 MIPS payment year would continue the ``gradual and incremental 
transition'' that was previously required under section 
1848(q)(6)(D)(iv) of the Act, as well as to provide consistency to our 
stakeholders. Therefore, we finalized the proposal to use the mean as 
our methodology for setting the performance threshold for that 3-year 
period. We also codified this methodology in our regulation at Sec.  
414.1405(g), providing that, for each of the 2024, 2025, and 2026 MIPS 
payment years, the performance threshold would be the mean of the final 
scores for all MIPS eligible clinicians from a prior period as 
specified.
    At the time of this proposed rule, we have data available on MIPS 
eligible clinicians' final scores from the CY 2017 performance period/
2019 MIPS payment year through CY 2022 performance period/2024 MIPS 
payment year, as shown in Table 72. These values represent all 
available computations of mean and median final scores for those 
performance periods/MIPS payment years. As discussed previously, we may 
use either the mean or median of the final scores from a prior period 
for computing the performance threshold for the next three years, 
beginning with the CY 2025 performance period/2027 MIPS payment year. 
At the time of this proposed rule, we do not have available MIPS 
eligible clinicians' final scores from performance periods after the CY 
2022 performance period/2024 MIPS payment year, which may inform the 
performance thresholds for the CY 2026 performance period/2028 MIPS 
payment year and CY 2027 performance period/2029 MIPS payment year. As 
provided in section 1848(q)(6)(D)(i) of the Act, we must select whether 
we will use the mean or median of MIPS eligible clinicians' final 
scores from a prior period, which we may reassess after three years. We 
assess these selection options based on the data we currently have 
available.
[GRAPHIC] [TIFF OMITTED] TP31JY24.108

    As shown in Table 72, using the median final score gives a possible 
range of performance thresholds from 85.17 points to 99.63 points 
(rounded to 85 points and 100 points, respectively). Given our 
performance threshold of 75 points for the CY 2024 performance period/
2026 MIPS payment year, these values would result in an increase of 10 
points to 25 points for the CY 2025 performance period/2027 MIPS 
payment year, and potentially the CY 2026 performance period/2028 MIPS 
payment year and CY 2027 performance period/2029 MIPS payment year. 
Selecting the median of final scores as our methodology would, at a 
minimum, result in a 13 percent increase in the performance threshold 
of 75 points, which we had established for the CY 2022 performance 
period/2024 MIPS payment year through the CY 2024 performance period/
2026 MIPS payment year. Further, as shown in Table 71, 75 points is the 
highest performance threshold we have established for any MIPS payment 
year to date.
    As shown in Table 72, using the mean final score as the methodology 
would yield a possible range of performance thresholds from 74.65 
points to 89.47 points (rounded to 75 points and 89 points, 
respectively). Given our performance threshold of 75 points in the CY 
2024 performance period/2026 MIPS payment year, these values would 
result in an increase of zero to 14 points for the CY 2025 performance 
period/2027 MIPS payment year, and potentially the CY 2026 performance 
period/2028 MIPS payment year and CY 2027 performance period/2029 MIPS 
payment year. Selecting the mean of final scores as our methodology 
would, at a maximum, result in a 19 percent increase in the performance 
threshold of 75 points, which we had established for the CY 2022 
performance period/2024 MIPS payment year through the CY 2024 
performance period/2026 MIPS payment year.
    We believe that it is appropriate to incentivize performance 
improvement while also ensuring that it is reflective of true clinician 
performance. Moreover, we believe that where possible, it is important 
to offer stability and consistency for clinicians. After evaluating the 
possible values for mean and median shown in Table 72 and our prior 
policies for consistently selecting a performance threshold value of 75 
points for the CY 2022 performance period/2024 MIPS payment year 
through the CY 2024 performance period/2026 MIPS payment year, we 
believe that using the mean as our methodology for the 2027 through 
2029 MIPS payment years would offer the most consistent and predictable 
approach for MIPS eligible clinicians.

[[Page 62091]]

On this basis, we are proposing to continue using the mean of the final 
scores for all MIPS eligible clinicians from a prior period as 
specified to compute the performance threshold for each of the 2027 
through 2029 MIPS payment years.
    We also are proposing to codify this proposal by amending our 
regulation text at Sec.  414.1405. We propose to amend Sec.  414.1405 
by: (1) revising paragraph (g) to read only ``Performance Threshold 
Methodology''; (2) redesignating, with minor technical modification, 
the substantive provision at paragraph (g) as a new paragraph (g)(1) to 
reflect the performance threshold methodology we established and used 
to specify the performance threshold for the 2024, 2025 and 2026 MIPS 
payment years under Sec.  414.1405(b)(9); and (3) adding paragraph 
(g)(2) to provide that, for each of the 2027, 2028, and 2029 MIPS 
payment years, the performance threshold is the mean of the final 
scores for all MIPS eligible clinicians from a prior period as 
specified under Sec.  414.1405(b)(10).
    We request public comments on this proposal.
(c) Establishing the Performance Threshold for the CY 2025 Performance 
Period/2027 MIPS Payment Year
    We believe using the mean of 75 points from the CY 2017 performance 
period/2019 MIPS payment year continues to be the most appropriate 
option for establishing the performance threshold for the CY 2025 
performance period/2027 MIPS payment year for various reasons described 
in this section, including: providing consistency for MIPS eligible 
clinicians while allowing additional time for more recent data to 
become available, continuing to provide opportunities for MIPS eligible 
clinicians to gain experience with cost measure scoring (particularly 
if the methodology proposed in section IV.A.4.f.(1)(d)(ii)(B) of this 
proposed rule is finalized), and ensuring that we do not inadvertently 
disadvantage certain clinician types, such as small practices and solo 
practitioners, as we increase the performance threshold.
    As shown in Table 72, we calculated the mean values for the CY 2017 
performance period/2019 MIPS payment year through the CY 2022 
performance period/2024 MIPS payment year, and we believe that the mean 
of 75 points from the CY 2017 performance period/CY 2019 MIPS payment 
year continues to be the most appropriate option that would provide 
stability for MIPS eligible clinicians while still encouraging high 
quality of care. The final scores for the CY 2023 performance period/
2025 MIPS payment year were not finalized in time for this proposed 
rule and, therefore, the mean final score for the CY 2023 performance 
period/2025 MIPS payment year was not included for consideration as a 
potential performance threshold value for the CY 2025 performance 
period/2027 MIPS payment year.
    Though we did consider the mean of 87 points from the CY 2018 
performance period/2020 MIPS payment year, we believe a substantial 
increase of 12 points could unfairly impact clinicians as they continue 
to recover from the COVID-19 public health emergency (PHE), which ended 
on May 11, 2023. We also considered using the means of the final scores 
from the CY 2019 performance period/2021 MIPS payment year through the 
CY 2022 performance period/2024 MIPS payment year for establishing the 
CY 2025 performance period/2027 MIPS payment year performance 
threshold. However, we decided they would not be appropriate for 
measuring future clinician performance given the impact of the COVID-19 
PHE on data for MIPS, as described below.
    Given issues with underlying data in prior periods due to the 
COVID-19 pandemic, we believe that we should wait for more recent data 
that better reflects clinicians' performance and continue to rely on 
data from the CY 2017 performance period/2019 MIPS payment year, which 
predated the COVID-19 PHE. Due to the timing of the COVID-19 PHE and 
our announcement on March 22, 2020, extending the deadline for MIPS 
data submission,\780\ we are still evaluating the usability of data 
from the CY 2019 performance period/2021 MIPS payment year. While data 
collection occurred during the CY 2019 performance period prior to the 
start of the COVID-19 PHE, data submission for the CY 2019 performance 
period (occurring during the first quarter of CY 2020) was impacted. 
Specifically, in addition to extending the deadline for submitting MIPS 
data, we announced on April 6, 2020, that, due to the COVID-19 PHE, we 
would apply our extreme and uncontrollable circumstances reweighting 
policies described under Sec.  414.1380(c)(2)(i) to MIPS eligible 
clinicians nationwide and extend the deadline to submit an application 
for reweighting the quality, cost, improvement activities or Promoting 
Interoperability reporting categories for the CY 2019 performance 
period/2021 MIPS payment year (85 FR 19277 and 19278). These 
flexibilities for the submission of MIPS data occurring in the first 
quarter of CY 2020 were intended to alleviate reporting burden on 
clinicians that were responding to the onset of the COVID-19 pandemic. 
We believe the geographic differences of COVID-19 incidence rates along 
with different impacts resulting from Federal, state, and local laws 
and policy changes implemented in response to COVID-19 may have 
affected which MIPS eligible clinicians were able to submit data for 
the CY 2019 performance period. This may have led to final scores that 
were not wholly representative of performance for all MIPS eligible 
clinicians. Also, for the CY 2020 performance period/2022 MIPS payment 
year and the CY 2021 performance period/2023 MIPS payment year, we 
extensively applied our reweighting policies, described under Sec.  
414.1380(c)(2)(i), to MIPS eligible clinicians nationwide due to the 
COVID-19 PHE. We believe these actions, particularly reweighting the 
performance categories, skewed the final scores from those years such 
that they are not an appropriate indicator for future performance of 
MIPS eligible clinicians. Specifically, we are concerned that the final 
scores during the COVID-19 PHE reflect the performance of only MIPS 
eligible clinicians that may have been less impacted by the pandemic, 
and do not accurately represent MIPS eligible clinician performance 
overall during this period.
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    \780\ https://www.cms.gov/newsroom/press-releases/cms-announces-relief-clinicians-providers-hospitals-and-facilities-participating-quality-reporting.
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    As discussed further in section IV.A.4.f.(1)(d)(ii) of this 
proposed rule, MIPS eligible clinicians have expressed concern that the 
cost performance category scoring has a negative impact on their MIPS 
final score. The CY 2022 performance period/2024 MIPS payment year was 
the first MIPS payment year that the cost performance category score 
generally constituted 30 percent of MIPS eligible clinicians' final 
scores (section 1848(q)(5)(E)(i)(II) of the Act). We have observed 
lower category scores for the cost performance category as compared to 
the quality performance category. In light of these concerns, which are 
supported by our analysis of cost performance category scores as 
discussed in section IV.A.4.f.(1)(d)(ii) of this proposed rule, we 
believe that maintaining a performance threshold of 75 points for the 
CY 2025 performance period/2027 MIPS payment year would provide 
stability for MIPS eligible

[[Page 62092]]

clinicians as they become acquainted with the cost performance category 
(particularly if the scoring methodology proposed in section 
IV.A.4.f.(1)(d)(ii)(B) of this proposed rule is finalized) without 
unfairly and negatively impacting their final scores and MIPS payment 
adjustments. We also believe maintaining the performance threshold at 
75 points for the 2027 MIPS payment year would provide us time to 
incorporate the impacts of this proposed cost performance category 
scoring methodology (if finalized) as we establish future performance 
thresholds.
    As discussed in section IV.A.4.f.(1)(d)(ii) of this proposed rule, 
we believe multiple factors have likely contributed to MIPS eligible 
clinicians' concerns, including increases in the weight for the cost 
performance category over time (see section 1848(q)(5)(E)(i)(II) of the 
Act), the number of cost measures, and the number of MIPS eligible 
clinicians that are being attributed new cost measures and receiving a 
score for the cost performance category. This increase in weight for 
the cost performance category over time has been particularly notable 
because, as discussed previously, due to the application of our 
reweighting policies described under Sec.  414.1380(c)(2)(i) for the 
COVID-19 PHE, many MIPS eligible clinicians were not scored on the cost 
performance category for the CY 2019 performance period/2021 MIPS 
payment year through the CY 2021 performance period/2023 MIPS payment 
year (85 FR 19277 through 19278).781 782 We believe that our 
proposal to maintain a performance threshold of 75 points for the CY 
2025 performance period/2027 MIPS payment year may help alleviate some 
of MIPS eligible clinicians' concerns related to the cost performance 
category and its impact on their MIPS final score.
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    \781\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1198/2020%20MIPS%20Automatic%20EUC%20Fact%20Sheet.pdf.
    \782\ https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1437/2021%20MIPS%20Automatic%20EUC%20Fact%20Sheet.pdf.
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    We are also concerned that any increase in the performance 
threshold may inadvertently and unfairly disadvantage certain clinician 
types, specifically small practices and solo practitioners. As we 
stated in the CY 2024 PFS final rule, we want to consider the impacts 
of the performance threshold and its related policies on small 
practices (88 FR 79377). We have received feedback that many small 
practices and solo practitioners face challenges in their ability to 
participate in MIPS, including the costs to implement and maintain 
certified electronic health record (EHR) technology (CEHRT), staff and 
training costs, and limited staff capacity to manage the complexity of 
the program. We have also heard that increases in the performance 
threshold add administrative and financial burden for small practices 
that discourage their participation in MIPS. Though we have several 
policies within MIPS that continue to support small and solo practices, 
including scoring and reweighting policies, we are interested in 
understanding how to best support small practices and enhance their 
ability to successfully participate in MIPS as MIPS continues to 
evolve. As such, we have performed qualitative analysis through 
engagement with small practices, third party intermediaries, and other 
interested parties to gather information about the experience of small 
practices participating in the program. We are also planning to reach 
out to small practices and solo practitioners in CY 2024 to gather 
additional information about barriers for actively engaging with MIPS. 
On this basis, we believe establishing a performance threshold of 75 
points for the CY 2025 performance period/2027 MIPS payment year would 
allow us time to gather additional data on the impacts of new policies 
on small and rural practices, and to develop strategies to reduce 
barriers for small practices and solo practitioners participating in 
MIPS.
    We refer readers to the Regulatory Impact Analysis in section 
VII.E.17.d.(4) of this proposed rule for an estimate of the percent of 
MIPS eligible clinicians that would receive a negative payment 
adjustment for the CY 2025 performance period/2027 MIPS payment year if 
the policies proposed in this proposed rule are finalized and the 
performance threshold is established at 75 points.
    As discussed in this section IV.A.4.g.(2)(c), we believe that 
maintaining a performance threshold of 75 points allows additional time 
for more data to become available, continues to provide opportunities 
for clinicians to become familiar with the cost measure scoring, and 
ensures that we do not inadvertently disadvantage certain clinician 
types, such as small practices and solo practitioners. Therefore, we 
are proposing to establish a performance threshold of 75 points for the 
CY 2025 performance period/2027 MIPS payment year based on the mean of 
MIPS eligible clinicians' final scores from the CY 2017 performance 
period/2019 MIPS payment year, and to codify this performance threshold 
in our regulation by adding paragraphs at Sec.  414.1405(b)(10) 
introductory text and (b)(10)(i).
    We request public comments on this proposal.
(3) Example of Adjustment Factors
    Figure 4 provides an illustrative example of how various final 
scores would be converted to a MIPS payment adjustment factor using the 
statutory formula and based on our proposed policies for the CY 2025 
performance period/2027 MIPS payment year. In Figure 4, the performance 
threshold is set at 75 points, as we have proposed in section 
IV.A.4.g.(2)(c) of this proposed rule.
    For purposes of determining the maximum and minimum range of 
potential MIPS payment adjustment factors, section 1848(q)(6)(B) of the 
Act defines the applicable percentage as 9 percent for the CY 2025 
performance period/2027 MIPS payment year. The MIPS payment adjustment 
factor is determined on a linear sliding scale from zero to 100, with 
zero being the lowest possible score which receives the negative 
applicable percentage and resulting in the lowest payment adjustment, 
and 100 being the highest possible score which receives the highest 
positive applicable percentage and resulting in the highest payment 
adjustment.
    However, there are two modifications to this linear sliding scale. 
First, as specified in section 1848(q)(6)(A)(iv)(II) of the Act, there 
is an exception for a final score between zero and one-fourth of the 
performance threshold (zero and 18.75 points based on the proposed 
performance threshold of 75 points for the CY 2025 performance period/
2027 MIPS payment year). All MIPS eligible clinicians with a final 
score in this range will receive a negative MIPS payment adjustment 
factor equal to 9 percent (the applicable percentage). Second, the 
linear sliding scale for the positive MIPS payment adjustment factor is 
adjusted by the scaling factor, which cannot be higher than 3.0, as 
required by section 1848(q)(6)(F)(i) of the Act.
    If the scaling factor is greater than zero and less than or equal 
to 1.0, then the MIPS payment adjustment factor for a final score of 
100 will be less than or equal to 9 percent (the applicable 
percentage). If the scaling factor is above 1.0 but is less than or 
equal to 3.0, then the MIPS payment adjustment factor for a final score 
of 100 will be greater than 9 percent. Only those MIPS eligible 
clinicians with a final score equal to 75 points (the performance 
threshold

[[Page 62093]]

proposed for the CY 2025 performance period/2027 MIPS payment year) 
will receive a neutral MIPS payment adjustment.
    Beginning with the CY 2023 performance period/2025 MIPS payment 
year, the additional MIPS payment adjustment for exceptional 
performance described in section 1848(q)(6)(C) of the Act is no longer 
available. For this reason, Figure 4 does not illustrate an additional 
adjustment factor for MIPS eligible clinicians with final scores at or 
above the additional performance threshold described in section 
1848(q)(6)(D)(ii) of the Act.
[GRAPHIC] [TIFF OMITTED] TP31JY24.109

    Table 73 illustrates the changes in payment adjustment based on the 
final policies from the CY 2024 PFS final rule (88 FR 52599 through 
56001) for the CY 2024 performance period/2026 MIPS payment year and 
the proposed policies for the CY 2025 performance period/2027 MIPS 
payment year, as well as the applicable percent required by section 
1848(q)(6)(B) of the Act.

[[Page 62094]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.110

h. Review and Correction of MIPS Final Score--Feedback and Information 
To Improve Performance
    Under section 1848(q)(12)(A)(i) of the Act, we are required to 
provide MIPS eligible clinicians with timely (such as quarterly) 
confidential feedback on their performance under the quality and cost 
performance categories beginning July 1, 2017, and we have discretion 
to provide such feedback regarding the improvement activities and 
Promoting Interoperability performance categories. In the CY 2018 
Quality Payment Program final rule (82 FR 53799 through 53801), we 
finalized that on an annual basis, beginning July 1, 2018, performance 
feedback will be provided to MIPS eligible clinicians and groups for 
the quality and cost performance categories, and if technically 
feasible, for the improvement activities and advancing care information 
(now called the Promoting Interoperability) performance categories.
    We made performance feedback available for the CY 2019 performance 
period/2021 MIPS payment year on August 5, 2020; for the CY 2020 
performance period/2022 MIPS payment year on August 2 and September 27, 
2021; for the CY 2021 performance period/2023 MIPS payment year on 
August 22, 2022; and for the CY 2022 performance period/2024 MIPS 
payment year on August 10, 2023. Although we aim to provide feedback 
for the CY 2023 performance period/2025 MIPS payment year on or around 
July 1, 2024, it is possible the release date could be later depending 
on circumstances. We direct readers to qpp.cms.gov for more 
information.
i. Calculating the Final Score
    For a description of the statutory basis and our previously 
finalized policies for calculating the final score for each MIPS 
eligible clinician, including performance category weights and 
reweighting the performance categories, we refer readers to Sec.  
414.1380(c) and the discussion in the CY 2017 and CY 2018 Quality 
Payment Program final rules, and the CY 2019, CY 2020, CY 2021, CY 2022 
and CY 2023 PFS final rules (81 FR 77319 through 77329, 82 FR 53769 
through 53785, 83 FR 59868 through 59878, 84 FR 63020 through 63031, 85 
FR 84908 through 84917, 86 FR 65509 through 65527, and 87 FR 70093 
through 70096, respectively).
    As described in more detail in the following sections, we propose 
to supplement our current policies for reweighting one or more 
performance categories (that is, quality, improvement activities, and 
Promoting Interoperability) to permit reweighting in circumstances 
where we determine that data for a MIPS eligible clinician are 
inaccessible or unable to be submitted due to circumstances outside of 
the control of the clinician because the MIPS eligible clinician 
delegated submission of the data to their third party intermediary, 
evidenced by a written agreement between the MIPS eligible clinician 
and third party intermediary, and the third party intermediary did not 
submit the data for the performance category(ies) on behalf of the MIPS 
eligible clinician in accordance with applicable deadlines.
    We note that we are only proposing that this reweighting policy be 
available for the quality, improvement activities, and Promoting 
Interoperability performance categories because a MIPS eligible 
clinician may delegate data submission to a third party intermediary 
only with respect to these three performance categories, and not the 
cost performance category. MIPS eligible clinicians do not submit data 
separately for measures for the cost performance category; we score 
cost measures based solely on Medicare claims data.
(1) Background
    Section 1848(q)(5)(A) of the Act requires the Secretary to develop 
a methodology for assessing the total performance of each MIPS eligible 
clinician according to the performance standards for the applicable 
measures and activities for each performance category applicable to 
such clinician for a performance period and, using the methodology, 
provide for a final score (using a scoring scale of 0 to 100) for each 
MIPS eligible clinician for the performance period.
    Additionally, section 1848(q)(5)(E) of the Act specifies how we 
must weigh the scores for each performance category in our calculation 
of the MIPS eligible clinician's final score. We have codified these 
weights at Sec.  414.1380(c)(1). Meanwhile, section 1848(q)(5)(F) of 
the Act provides that, if there are not sufficient measures and 
activities applicable and available to each type of

[[Page 62095]]

MIPS eligible clinician involved, the Secretary shall assign different 
scoring weights (including a weight of 0). We previously finalized at 
Sec.  414.1380(c) that if a MIPS eligible clinician is scored on fewer 
than two performance categories, they will receive a final score equal 
to the performance threshold (81 FR 77326 through 77328 and 82 FR 53778 
through 53779).
    We also have finalized at Sec.  414.1380(c)(2) several policies 
addressing on what basis we may reweight one or more performance 
categories, and how those weights will be redistributed to the 
remaining performance categories. For example, in the CY 2020 PFS final 
rule (84 FR 63023 through 63026), we finalized a reweighting policy at 
Sec.  414.1380(c)(2)(i)(A)(9) and (c)(2)(i)(C)(10) for the four MIPS 
performance categories. Under this policy, we may reweight one or more 
of the performance categories for a MIPS eligible clinician if we 
determine, based on information known to us prior to the beginning of 
the relevant MIPS payment year, that data for a MIPS eligible clinician 
for the applicable performance category(ies) are inaccurate, unusable, 
or otherwise compromised due to circumstances outside of the control of 
the clinician and its agents. Under this policy, we are able to address 
circumstances where submitted data are inaccurate, unusable, or 
otherwise compromised.
    However, we have found this policy, and our other reweighting 
policies at Sec.  414.1380(c)(2), do not address circumstances where 
data are inaccessible or unable to be submitted due to circumstances 
outside of the control of the MIPS eligible clinician, particularly 
where the clinician has delegated submission of the data to a third 
party intermediary and that third party intermediary does not submit 
the data in accordance with applicable deadlines. In accordance with 
our regulations governing third party intermediaries at Sec.  
414.1400(a)(3)(iv) and (e)(1), we may take remedial action in the event 
a third party intermediary fails to meet the criteria necessary for 
their approval as a third party intermediary, fails to comply with 
other requirements applicable to third party intermediaries, has 
submitted a false certification, or discontinues their services and do 
not assist MIPS eligible clinicians in connecting with a different 
third party intermediary. However, our regulations do not address the 
impact of a third party intermediary's action or inaction resulting in 
failure to submit the MIPS eligible clinician's data as required, over 
which the MIPS eligible clinician has little to no control, on a MIPS 
eligible clinician's final score.
    Currently, if we determine that data for a MIPS eligible clinician 
were not submitted during the MIPS data submission period for reasons 
outside the clinician's control, we assign the clinician a score of 
zero for the performance category or categories for which data were not 
submitted.\783\ Because an excusable failure to submit data is not 
currently a basis for reweighting, the lack of data may reduce the MIPS 
eligible clinician's final score and therefore may reduce the 
clinician's MIPS payment adjustment. However, we believe that 
reweighting of the applicable performance categories may be appropriate 
in these rare cases as described in this section IV.A.4.i. of this 
proposed rule.
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    \783\ As set forth in Sec.  414.1325(a), data is only required 
to be submitted for certain measures and activities as specified for 
certain performance categories. For example, MIPS eligible 
clinicians are not required to submit data for the cost performance 
category to receive a score for that category because cost measures 
are scored based on Medicare claims data. We refer readers to our 
data submission requirements at Sec.  414.1325 and our proposal to 
modify these requirements in section IV.A.4.d. of this proposed 
rule.
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    Specifically, we believe that a MIPS eligible clinician should not 
be penalized in cases where the MIPS eligible clinician enters into an 
agreement with a third party intermediary to submit data on their 
behalf, and the data are not submitted due to reasons outside of the 
control of the MIPS eligible clinician. While we encourage the impacted 
MIPS eligible clinician to take steps to ensure data submission for 
subsequent years, by, for example, selecting an alternate third party 
intermediary, there may be cases where there is insufficient time for 
the MIPS eligible clinician to submit the data through an alternative 
mechanism in time for the data to be considered for the relevant 
performance period. For instance, the MIPS eligible clinician may 
become aware that their third party intermediary did not submit data on 
their behalf after the data submission period closes. In these cases, 
we believe it is appropriate to provide relief to the MIPS eligible 
clinician so that they are not unfairly penalized for their third party 
intermediary's inaction.
(2) Proposal To Adopt Reweighting Performance Category(ies) Policy When 
a Third Party Intermediary Did Not Submit Data Due to Reasons Outside 
the MIPS Eligible Clinician's Control
    We are proposing to adopt a new reweighting policy at Sec.  
414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12) to address this 
circumstance. Specifically, beginning with the CY 2024 performance 
period/2026 MIPS payment year, we are proposing that we may reweight 
one or more of the quality, improvement activities, and Promoting 
Interoperability performance categories where we determine, based on 
documentation submitted to us through a reweighting request on or 
before November 1st of the year preceding the relevant MIPS payment 
year, that data for a MIPS eligible clinician are inaccessible or 
unable to be submitted due to circumstances outside of the control of 
the clinician because the MIPS eligible clinician delegated submission 
of their data to a third party intermediary, evidenced by a written 
agreement between the MIPS eligible clinician and the third party 
intermediary, and the third party intermediary did not submit the data 
for the performance category(ies) on behalf of the MIPS eligible 
clinician in accordance with applicable deadlines. We also are 
proposing that, to determine whether to apply reweighting to the 
affected performance category(ies), we will consider: whether the MIPS 
eligible clinician knew or had reason to know of the issue with its 
third party intermediary's submission of the clinician's data for the 
performance category(ies); whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category(ies) in accordance 
with applicable deadlines. We believe these factors are necessary to 
ensure we are only granting these requests in circumstances where MIPS 
eligible clinicians would otherwise be unfairly penalized due to the 
actions or inactions of a third party intermediary. MIPS eligible 
clinicians could request reweighting under this proposed policy in 
circumstances where no data was submitted on their behalf by their 
third party intermediary through the help desk at [email protected].
    Under this proposed policy, MIPS eligible clinicians would be able 
to request reweighting for each performance category for which their 
third party intermediary, to which the MIPS eligible clinician 
delegated submission of their data, did not submit data for reasons 
outside of the control of the MIPS eligible clinician. We note that we 
are only proposing that this reweighting policy be available for the 
quality, improvement activities, and Promoting Interoperability 
performance categories because a MIPS eligible

[[Page 62096]]

clinician may delegate data submission to a third party intermediary 
only with respect to these three performance categories, and not the 
cost performance category. MIPS eligible clinicians do not submit data 
separately for measures for the cost performance category; we score 
cost measures based solely on Medicare claims data.
    Under this proposed reweighting policy, the MIPS eligible clinician 
must submit reweighting requests beginning with the close of a relevant 
performance period's data submission period, only after it is confirmed 
that no data has been submitted in accordance with applicable 
deadlines. MIPS eligible clinicians would be able to submit reweighting 
requests on or before November 1st of the year preceding the associated 
MIPS payment year in order to allow time for CMS to re-calculate their 
final score and MIPS payment adjustment factor.
    We would only approve reweighting requests with evidence of a 
written agreement between the MIPS eligible clinician and a third party 
intermediary. Such written agreement must provide that the MIPS 
eligible clinician delegated submission of their data to the third 
party intermediary, and that the third party intermediary agreed to 
submit data on their behalf in accordance with applicable deadlines, 
for the performance category or performance categories in question.
    We would review requests and make determinations to reweight based 
on our assessment that data were not submitted outside the control of 
the MIPS eligible clinician. As discussed in this section of this 
proposed rule, we are proposing that we would determine whether to 
apply reweighting to the affected performance category(ies) under this 
policy based on our consideration of the following criteria: whether 
the MIPS eligible clinician knew or had reason to know of the issue 
with its third party intermediary's submission of the clinician's data 
for the performance category(ies); whether the MIPS eligible clinician 
took reasonable efforts to correct the issue; and whether the issue 
between the MIPS eligible clinician and their third party intermediary 
caused no data to be submitted for the performance category(ies) in 
accordance with applicable deadlines. These criteria would inform 
whether we would grant reweighting requests under our proposed policy 
at Sec.  414.1380(c)(2)(i)(A)(10) and (c)(2)(i)(C)(12). Circumstances 
resulting in a clinician's data being inaccessible or unable to be 
submitted that would merit reweighting could include, but are not 
limited to, a critical systems failure, the third party intermediary 
going out of business, the third party intermediary having collected 
data on a MIPS eligible clinicians behalf and refusing to hand it over 
for the MIPS eligible clinician to submit, or other circumstances CMS 
determines to be outside the control of the MIPS eligible clinician.
    This proposed reweighting policy is solely intended to mitigate the 
potentially adverse financial impact of no data being submitted during 
the MIPS data submission period for one or more performance categories 
on behalf of the MIPS eligible clinician due to the failure of a third 
party intermediary to fulfill its contractual responsibilities. Our 
determination to grant a reweighting request under this proposed policy 
does not indicate, and should not be interpreted to suggest, that the 
third party intermediary could not be held liable for the failure to 
perform the task as delegated, that is, to submit data on the 
performance category(ies) on behalf of the MIPS eligible clinician. In 
these circumstances where we determine that a third party intermediary 
failed to fulfill its agreement with the MIPS eligible clinician to 
submit their data, we believe it is appropriate to give the MIPS 
eligible clinician the opportunity to request reweighting of the 
affected performance category(ies), provided that all elements of our 
proposed policy are met.
    We propose to apply reweighting only in cases when we receive 
documentation of a third party intermediary failing to submit data on 
behalf of a MIPS eligible clinician demonstrating that all elements of 
our proposed policy are met.
    We propose that this policy would be effective beginning with CY 
2024 performance period/2026 MIPS payment year. If finalized, this 
policy change would become effective prospectively, prior to the 
beginning of the data submission period for the CY 2024 performance 
period/2026 MIPS payment year, which will occur January 2, 2025, 
through March 31, 2025. We are proposing this effective date to provide 
relief to MIPS eligible clinicians, whose circumstances meet all 
requirements set forth in this proposed reweighting policy, as soon as 
feasible.
    We propose to codify this new reweighting policy, including all 
proposed elements as described in section IV.A.4.i.(2) of this proposed 
rule, at Sec.  414.1380(c)(2)(i)(A)(10) for the quality and improvement 
activities performance categories and at Sec.  414.1380(c)(2)(i)(C)(12) 
for the Promoting Interoperability performance category.
    We request public comments on this proposal.
j. Third Party Intermediaries General Requirements
(1) Requirements for CMS-Approved Survey Vendors
(a) Background
    As codified at Sec.  414.1305, a CMS-approved survey vendor means a 
survey vendor that is approved by CMS for a particular performance 
period to administer the Consumer Assessment of Healthcare Providers & 
Systems (CAHPS) for MIPS survey and to transmit survey measures data to 
CMS.
    We refer readers to Sec.  414.1400(d), the CY 2017 Quality Payment 
Program final rule (81 FR 77386), the CY 2018 Quality Payment Program 
final rule (82 FR 53818 and 53819), the CY 2019 PFS final rule (83 FR 
59907 and 59908), and the CY 2022 PFS final rule (86 FR 65538 and 
65539) for previously finalized standards and criteria for CMS-approved 
survey vendors.
(b) Requirement To Submit Cost of Services
    In the CY 2017 Quality Payment Program final rule (81 FR 77386 and 
77387), we established that CMS-approved survey vendors may transmit 
data collected from the CAHPS for MIPS survey to CMS for use in MIPS. 
Section 414.1400(d)(2) requires that CMS-approved survey vendors submit 
a survey vendor application to CMS in a form and manner specified by 
CMS for each MIPS performance period for which it wishes to transmit 
such data. We implemented this requirement through the Vendor 
Participation Form, which is available at https://qpp.cms.gov/resources/resource-library.
    The CY 2017 Quality Payment Program final rule contained 
requirements applicable to other types of third party intermediaries, 
which varied based on whether the third party intermediary was a 
Qualified Clinical Data Registry (QCDR) or qualified registry. For 
example, we established requirements for QCDRs and qualified registries 
to ``sign a document verifying the QCDR's name, contact information, 
cost for MIPS eligible clinicians or groups to use the QCDR or 
qualified registry'' (81 FR 77368 and 77369; 81 FR 77385 and 77386). If 
QCDRs and qualified registries do not provide this information, CMS may 
exclude them from MIPS in a subsequent year. This requirement helps 
eligible clinicians determine which vendors to use prior to 
registration and provides transparency on the cost of program 
participation. Currently, CMS-approved survey

[[Page 62097]]

vendors are not required to provide cost information even though other 
third party intermediaries (QCDRs and qualified registries) are 
required to do so.
    We are proposing under the current application submission 
requirement at Sec.  414.1400(d)(2) that beginning with the CY 2026 
performance period/2028 MIPS payment year, a survey vendor must include 
on its application the range of costs of its third party intermediary 
services. Ranges of cost estimates would vary based on different levels 
of service (i.e., number of survey respondents, languages provided, 
etc.). With respect to a third party intermediary that is solely a CMS-
approved survey vendor, the publishable costs would be limited to the 
cost of services related to the CAHPS for MIPS survey. CMS has received 
inquiries from MIPS participants regarding survey vendor costs but has 
not been able to provide any specific information in response to those 
requests. The cost information from survey vendors is not easily 
available to the MIPS eligible clinicians who are considering 
contracting for services. Having such information in the publicly-
accessible QPP Resource Library (as part of the list of approved 
vendors) would make it easier for MIPS eligible clinicians to contract 
for services and educate themselves about the cost of using a third 
party intermediary survey vendor. In recent years, some participants 
who registered for the CAHPS for MIPS survey later withdrew their 
participation once they learned the costs of survey administration. 
Providing information on the cost of CMS-approved CAHPS for MIPS survey 
vendor services may support MIPS participants who are interested in the 
CAHPS for MIPS Survey but want to know what the costs of administering 
the survey would be, thus allowing them to make more informed decisions 
about whether to participate in the CAHPS for MIPS survey. This would 
also increase the consistency in requirements across different types of 
third party intermediaries.
    If this proposal is finalized, the CAHPS for MIPS Survey Vendor 
Participation Form \784\ and the CAHPS for MIPS Survey Minimum Business 
Requirements \785\ in the QPP Resource Library would be updated to 
detail the required survey vendor cost estimate information. The CAHPS 
for MIPS Survey Vendor Participation Form submitted by vendors seeking 
CMS approval would be updated to include fields to report the cost 
information. The vendor-specific cost information would then be 
published in the list of CAHPS for MIPS Survey Approved Vendors which 
is also posted in the Resource Library. We refer readers to section 
V.B.8.c.(5) of this proposed rule for discussion on the burden 
estimates for this proposal.
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    \784\ 2024 CAHPS for MIPS Survey Vendor Participation Form, 
March 25, 2024. https://qpp.cms.gov/resources/document/6386fe4b-49b9-42c8-9a2b-a1149f7b142a.
    \785\ 2024 CAHPS for MIPS Survey Vendor Minimum Business 
Requirements, March 11, 2024. https://qpp.cms.gov/resources/document/02e6e596-51de-4336-a6a6-ab63fc639dbc.
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    We request comment on this proposal.
k. Overview of QP Determinations and the APM Incentive
(1) Overview
    The Quality Payment Program provides incentives for eligible 
clinicians to engage in value-based, patient-centered care under 
Medicare Part B via MIPS and Advanced APMs. The structure of the 
Quality Payment Program enables the Department to advance 
accountability and encourage improvements in care. The Secretary has 
also adopted the closely related goal that all people with Original 
Medicare be in an accountable care relationship by 2030, so that their 
needs can be holistically assessed, and their care is coordinated 
within a broader total cost of care system. Our vision for increased 
participation among clinicians in Advanced APMs is driven by the belief 
that integrating individuals' clinical needs across a spectrum of 
clinicians and settings will improve patient care and population 
health.
    As we continue to make improvements to the Quality Payment Program, 
we seek to develop, propose, and implement policies that encourage 
broad and meaningful clinician participation, including by specialists, 
in Advanced APMs.
    In the CY 2017 Quality Payment Program final rule (81 FR 77450 
through 77457), we finalized the payment amount method and patient 
count method for calculation of Threshold Scores used for QP 
determinations under the Medicare option and codified these methods at 
Sec.  414.1435(a) and (b), respectively. The payment amount method is 
based on payments for Medicare Part B covered professional services, 
including certain supplemental service payments, while the patient 
count method is based on numbers of patients. Both methods use the 
ratio of ``Attributed beneficiaries'' to ``Attribution-eligible 
beneficiaries'', as defined at Sec.  415.1305.
    An attributed beneficiary is a beneficiary attributed to the APM 
Entity under the terms of the Advanced APM as indicated on the most 
recent available list of attributed beneficiaries at the time of a QP 
determination. An attribution-eligible beneficiary is a beneficiary 
who:
     Is not enrolled in Medicare Advantage or a Medicare cost 
plan;
     Does not have Medicare as a secondary payer;
     Is enrolled in both Medicare Parts A and B;
     Is at least 18 years of age;
     Is a United States resident; and
     Has a minimum of:
    ++ One claim for E/M services furnished by an eligible clinician 
who is in the APM Entity for any period during the QP Performance 
Period.
    ++ Or, for an Advanced APM that does not base attribution on E/M 
services and for which attributed beneficiaries are not a subset of the 
attribution-eligible beneficiary population based on the requirement to 
have at least one claim for E/M services furnished by an eligible 
clinician who is in the APM Entity for any period during the QP 
Performance Period, the attribution basis determined by CMS based upon 
the methodology the Advanced APM uses for attribution, which may 
include a combination of E/M and/or other services.
    In this section, we propose to modify the definition of 
``attribution-eligible beneficiary'' to include any beneficiary who has 
received a covered professional service (section 1833(z)(3)(A) of the 
Act; 42 CFR 414.1305; section 1848(k)(3)(A) of the Act) furnished by 
the eligible clinician (NPI) for whom we are making the QP 
determination. By no longer specifying evaluation and management (E/M) 
services as the default attribution basis, we also would eliminate the 
need to develop customized attribution bases for Advanced APMs that do 
not use E/M services as the basis for attribution. Therefore, our 
proposal would standardize the attribution methodology for QP 
determinations by making covered professional services the basis for 
attribution across all Advanced APMs.
(2) Payment Amount and Patient Count Methods
    The payment amount method for calculating threshold scores is based 
on payments for Medicare Part B covered professional services, 
including certain supplemental service payments, while the patient 
count method is based on numbers of patients. Both methods use the 
ratio of ``attributed beneficiaries'' to

[[Page 62098]]

``attribution-eligible beneficiaries,'' as defined at Sec.  
415.1305.\786\
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    \786\ For technical information on the QP calculation 
methodology, see the ``QP Methodology Fact Sheet'' that we publish 
annually, which can be found as part of the ``2024 Learning 
Resources for QP Status and APM Incentive Payment'' materials on the 
Quality Payment Program Resource Library at qpp.cms.com.
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    Attributed beneficiaries are those who are attributed to the APM 
Entity (or individual eligible clinician) under the terms of the 
Advanced APM as indicated on the most recent available list of 
attributed beneficiaries at the time of a QP determination. 
Attribution-eligible beneficiaries generally are those who, during the 
QP Performance Period, meet six criteria (listed below) specified in 
the definition of that term at Sec.  414.1305 and described in section 
IV.A.4.m.(3) of this proposed rule.
    When making QP determinations, we begin by calculating Threshold 
Scores using the payment amount and patient count methodologies. These 
Threshold Scores are percentages based on the ratio of the payment 
amounts or patient counts for attributed beneficiaries to the payment 
amounts or patient counts for attribution-eligible beneficiaries during 
the QP performance period. If the Threshold Score (using either the 
payment amount or patient count method) calculated at the APM Entity or 
individual eligible clinician level, as applicable, meets or exceeds 
the relevant QP threshold described at Sec.  414.1430(a), the relevant 
eligible clinician or clinicians (either the individual eligible 
clinician or all those on the APM Entity's Participation List) achieve 
QP status for such year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.111

    Our regulation at Sec.  414.1435(b)(3) provides that a beneficiary 
may be counted only once in the numerator and denominator for a single 
APM Entity group, and at Sec.  414.1435(b)(4) provides that a 
beneficiary may be counted multiple times in the numerator and 
denominator for multiple different APM Entity groups. In the CY 2021 
PFS final rule (85 FR 84951 through 84952), we amended Sec.  
414.1435(c)(1)(i) to specify that beneficiaries who have been 
prospectively attributed to an APM Entity for a QP Performance Period 
will be excluded from the attribution-eligible beneficiary count for 
any other APM Entity that is participating in an APM where that 
beneficiary would be ineligible to be added to the APM Entity's 
attributed beneficiary list. This means that beneficiaries who have 
been attributed to one APM Entity and are thus barred under the terms 
of an Advanced APM from attribution to another APM Entity are removed 
from the denominator of both the payment amount method and patient 
count method in QP Threshold Score calculations for the APM Entity to 
which they cannot be attributed. In other words, we do not penalize an 
APM Entity in the QP Threshold Score calculation by including a 
beneficiary in its denominator when the terms of an Advanced APM do not 
permit such beneficiary to be attributed to such APM Entity.
(a) Attributed Beneficiary
    An attributed beneficiary is a beneficiary attributed to the APM 
Entity under the terms of the Advanced APM as indicated on the most 
recent available list of attributed beneficiaries at the time of a QP 
determination. There may be beneficiaries on the most recent available 
list who do not meet the criteria to be attribution-eligible 
beneficiaries because the QP performance period does not align with the 
Advanced APM's performance period or attribution period, or for other 
reasons. There may also be cases where a beneficiary's status changes, 
for example by enrolling in a Medicare Advantage Plan. We exclude these 
beneficiaries from our Threshold Score calculations because they do not 
meet criteria to be attribution-eligible beneficiaries. Although APMs 
may have reconciliation processes in place to address changes in 
beneficiary status at various intervals, those processes do not 
necessarily coincide with the timeframe of QP determinations. 
Therefore, when calculating Threshold Scores for QP determinations, we 
exclude from the list of attributed beneficiaries any beneficiaries who 
do not meet the criteria to be attribution-eligible beneficiaries at 
that point in time.
(b) Attribution-Eligible Beneficiary
    Under our regulation at Sec.  414.1305, we define an attribution-
eligible beneficiary as a beneficiary who:
     Is not enrolled in Medicare Advantage or a Medicare cost 
plan;
     Does not have Medicare as a secondary payer;
     Is enrolled in both Medicare Parts A and B;
     Is at least 18 years of age;
     Is a United States resident; and
     Has a minimum of one claim for E/M services furnished by 
an eligible clinician who is in the APM Entity for any period during 
the QP Performance Period or, for an Advanced APM that does not base 
attribution on E/M services and for which attributed beneficiaries are 
not a subset of the attribution-eligible beneficiary population based 
on the requirement to have at least one claim for E/M services 
furnished by an eligible clinician who is in the APM Entity for any 
period during the QP Performance Period, the attribution basis 
determined by CMS based upon the methodology the Advanced APM uses for 
attribution, which may include a combination of E/M and/or other 
services.
    Our stated intent when we finalized the definition of attribution-
eligible beneficiary (81 FR 77451 through 77452) was to have a 
definition that would, for purposes of QP determinations, allow us to 
be consistent across Advanced APMs in how we consider the population of 
beneficiaries served by an APM Entity. The criteria we used to define 
attribution-eligible beneficiary were aligned with the attribution

[[Page 62099]]

methodologies and rules for our then-contemporaneous Advanced APMs. The 
first five criteria are conditions that are required for a beneficiary 
to be attributed to any Advanced APM. The sixth criterion identifies 
beneficiaries who have received certain services from an eligible 
clinician who is associated with an APM Entity for any period during 
the QP Performance Period. We chose to refer to E/M services as the 
primary basis for purposes of attribution-eligibility because many 
Advanced APMs use E/M claims to attribute beneficiaries to their APM 
Entity groups. Over time, we have updated the list of services that are 
considered to be E/M services for purposes of identifying attribution-
eligible beneficiaries and have published this list as part of the 
``2024 Learning Resources for QP Status and APM Incentive Payment'' 
materials on the Quality Payment Program Resource Library at 
qpp.cms.gov.
    We also included an exception in this sixth criterion to allow us 
to use an alternative approach for Advanced APMs that do not base 
attribution on E/M services, and thus for which attributed 
beneficiaries are not a subset of the attribution-eligible beneficiary 
population based on the requirement to have at least one claim for an 
E/M service. To date, we have implemented this alternative approach for 
four Advanced APMs:
     Bundled Payments for Care Improvement Advanced Model.
     Comprehensive Care for Joint Replacement Payment Model 
(CEHRT Track).
     Comprehensive ESRD Care Model (LDO arrangement and Non LDO 
Two Sided Risk Arrangement).
     Maryland Total Cost of Care Model (Care Redesign Program).
    We have published links to the methodologies we use to identify 
attribution-eligible beneficiaries for these Advanced APMs in the 
``2024 Learning Resources for QP Status and APM Incentive Payment'' 
materials on the Quality Payment Program Resource Library at 
qpp.cms.gov.
    We adopted the general rule with flexibility to apply alternative 
methods for this criterion to ensure that, for the Advanced APMs for 
which attribution is based on services other than E/M services, the 
attributed beneficiary population is truly a subset of such Advanced 
APMs' attribution-eligible beneficiary populations and, ultimately, so 
that our way of identifying beneficiaries for purposes of Threshold 
Score calculations for QP determinations would be appropriate for such 
Advanced APMs. That said, our thinking when we developed these 
approaches was shaped by the form and nature of the Advanced APMs that 
existed at that time. We believed that, by affording sufficient 
flexibility within the program, we could both foster innovation in 
Advanced APMs and simplify our execution of the program. However, with 
our more narrowly defined default approach to beneficiary attribution 
(relying on claims for E/M services), we have increasingly needed to 
exercise the flexibility to identify an alternative approach to 
attribution eligibility for Advanced APMs that fell into the exception, 
which meant that we identified several individually-tailored ways of 
performing the attribution methodology for specific Advanced APMs. We 
anticipate that Advanced APMs will continue to evolve and use novel 
approaches to value-based care that may emphasize a broad range of 
covered professional services, and in that event the application of our 
current regulations may result in increased variability among the ways 
we define attribution-eligible when making QP determinations, which 
frustrates our goal of a consistent approach.
    Further, we recognize that primary care practitioners generally 
furnish a higher proportion of E/M services than do specialists for the 
same beneficiary. The current reliance on E/M services for attribution 
in our Threshold Score calculations means that primary care 
practitioners may contribute more significantly to achieving QP status 
for an APM Entity group. As such, our current policy may have 
inadvertently encouraged APM Entities to prefer primary care 
practitioners over specialists in their Participation Lists.
    As discussed in the CY 2024 PFS final rule (88 FR 79400 through 
79406), we proposed but did not finalize to revise the definition of 
``attribution-eligible beneficiary'' at Sec.  414.1305 to use covered 
professional services as the basis for attribution for purposes of 
Threshold Score calculations for all Advanced APMs regardless of the 
attribution methodology used under the specific Advanced APMs in which 
the eligible clinician participates. We expressed concern that the 
current policy to use E/M services as the default basis for 
attribution, and to use an alternative approach for Advanced APMs that 
use a different attribution basis, could result in a complex set of 
unique attribution approaches for various Advanced APMs.
    After further consideration and consultation with interested 
parties, we believe it would be appropriate to create a uniform basis 
for beneficiary attribution for purposes of Threshold Score 
calculations across all Advanced APMs. We are once again proposing to 
modify the sixth criterion of the definition of ``attribution-eligible 
beneficiary'' at Sec.  414.1305 to include any beneficiary who has 
received a covered professional service furnished by the eligible 
clinician (NPI) for whom we are making the QP determination, beginning 
with the 2025 QP performance period. By no longer specifying a claim 
for E/M services as the default attribution basis in the sixth 
criterion, we also would eliminate the need to create unique 
attribution bases that are tied to a specific Advanced APM's 
attribution methodology. This would standardize the attribution 
methodology by basing attribution on covered professional services 
across all Advanced APMs.
    The proposal would address the issue discussed earlier in this 
section whereby, under our current policy, beneficiary attribution for 
purposes of QP determinations in the default methodology is contingent 
upon the beneficiary receiving an E/M service, and as a result, 
beneficiaries who are actually furnished covered professional services 
by eligible clinicians on an APM Entity's Participation List are not 
attribution-eligible for purposes of the QP determination if none of 
the services are E/M services. Under our proposal, we would consider 
all covered professional services for purposes of attribution, and not 
solely the limited range of E/M services currently used for 
attribution. As a result, we would be able to include as attributed 
beneficiaries those who are receiving any services within the entire 
range of covered professional services through the Advanced APM. We 
believe this proposal would result in a QP calculation that, by 
including beneficiaries receiving any covered professional service, 
more accurately reflects eligible clinicians' actual participation in 
Advanced APMs and would be consistent across all Advanced APMs. 
Further, we believe that the proposal better aligns the QP 
determination methodology with the universe of services to which the 
Quality Payment Program (MIPS and APMs) applies, noting that its 
provisions generally pertain to covered professional services (for 
example, its financial incentives for both MIPS eligible clinicians and 
QPs are applied to covered professional services payments).
    We note that the proposal would not change the dates of service 
used for purposes of QP determinations. As such, QP determinations at 
any given snapshot date (March 31, June 30, and

[[Page 62100]]

August 31, respectively) will be made by including all covered 
professional services furnished during the QP Performance Period for 
January 1 through the applicable snapshot date.
    We believe that this change would more appropriately recognize the 
Advanced APM participation of the eligible clinicians for whom these 
determinations are being made. We further believe that this proposal 
would simplify and streamline QP determinations and address the 
challenges to Advanced APM participation reportedly faced by 
specialists who are less likely than primary care practitioners to 
provide E/M services. Finally, we believe that the proposal would 
standardize the approach to QP determinations across all Advanced APMs 
and conform more closely with the scope of services that are subject to 
the Quality Payment Program. We also acknowledge that, while this 
proposal would represent significant progress toward rationalizing 
attribution for the broader range of Advanced APMs, our continued 
analysis suggests there may be more work to be done in this area. We 
believe there still may be situations in which the proposed change in 
attribution policy would limit QP determinations in certain Advanced 
APMs, particularly in situations where an Advanced APM is focused on a 
limited set of services. We recognize the need to provide, consistent 
with statutory requirements, equitable opportunities to achieve QP 
status for participants in Advanced APMs that have different focus 
areas, goals, scopes, and design features. Further, in the case of CMS 
Innovation Center models, we recognize that there will be ongoing 
evolution and innovation in the model tests that are Advanced APMs, 
including the development of new approaches to attribution that apply 
within the models. We will continue to analyze these developments and 
issues with the goal to provide for an equitable, rational, 
transparent, and meaningful methodology for QP determinations across 
the full range of Advanced APMs.
    We seek comment on this proposal to revise the sixth criterion of 
the definition of ``attribution-eligible beneficiary'' at Sec.  
414.1305 to include a beneficiary who has at least one claim for a 
covered professional service furnished by an eligible clinician who is 
on the Participation List for the APM Entity (or by the individual 
eligible clinician, as applicable) at any determination date during the 
QP Performance Period. We also invite comment more generally on 
potential approaches we could consider to make QP determinations in the 
most equitable, rational, transparent, and meaningful way for eligible 
clinicians across the broad range of Advanced APMs, including Advanced 
APMs that are focused on a limited set of services.
(3) QP Thresholds and Partial QP Thresholds
    Section 1833(z)(2) of the Act specifies the thresholds for the 
level of participation in Advanced APMs required for an eligible 
clinician to become a QP for a year. The Medicare Option, based on Part 
B payments for covered professional services or counts of patients 
furnished covered professional services under Part B, has been 
applicable since payment year 2019 (performance period 2017). The All-
Payer Combination Option, through which QP status is calculated using 
the Medicare Option in addition to an eligible clinician's 
participation in Other Payer Advanced APMs, has been applicable since 
payment year 2021 (performance period 2019). In the CY 2017 Quality 
Payment Program final rule (81 FR 77433 through 77439), we finalized 
our policy for QP and Partial QP Thresholds for the Medicare Option as 
codified at Sec.  414.1430(a) and for the All-Payer Combination Option 
at Sec.  414.1430(b).
    Section 304(a)(2) of Division G, Title I, Subtitle C, of the 
Consolidated Appropriations Act, 2024 (CAA, 2024) (Pub. L. 118-42, 
March 9, 2024) amended section 1833(z)(2) of the Act by extending for 
payment years 2025 and 2026 (performance periods 2023 and 2024) the 
applicable payment amount and patient count thresholds for an eligible 
clinician to achieve QP status. Specifically, section 304(a)(2) of the 
CAA, 2024, amended section 1833(z)(2) of the Act to continue the QP 
payment amount thresholds that applied in payment year 2025 
(performance period 2023) to payment year 2026 (performance period 
2024). Additionally, section 304(a)(2) of the CAA, 2024, amended 
section 1833(z)(2) of the Act to require that, for payment year 2026, 
the Secretary use the same percentage criteria for the QP patient count 
threshold that applied in payment year 2022. As such, the Medicare 
Option QP thresholds for payment year 2026 will remain at 50 percent 
for the payment amount method and 35 percent for the patient count 
method. Section 304(b) of the CAA, 2024, also amended section 
1848(q)(1)(C)(iii) of the Act to extend through payment year 2026 the 
Partial QP thresholds that were established beginning for payment year 
2021 under the Medicare Option. Therefore, the Partial QP thresholds 
for payment year 2026 (performance period 2024) will remain at 40 
percent for the payment amount method and 25 percent for the patient 
count method.
    Under the All-Payer Combination Option, the QP thresholds for 
payment year 2026 (performance period 2025) will remain at 50 percent 
for the payment amount method and 35 percent for the patient count 
method. The Partial QP thresholds for payment year 2026 (performance 
period 2024) will continue at 40 percent for the payment amount method 
and 25 percent for the patient count method. To become a QP through the 
All-Payer Combination Option, eligible clinicians must first meet 
certain minimum threshold percentages under the Medicare Option. For 
payment year 2026 (performance period 2024), the minimum Medicare 
Option threshold an eligible clinician must meet for the All-Payer 
Combination Option to become a QP is 25 percent for the payment amount 
method or 20 percent for the patient count method. For Partial QP 
status, the minimum Medicare Option threshold an eligible clinician 
must meet for the All-Payer Combination Option is 20 percent for the 
payment amount method or 10 percent for the patient count method.
    To conform our regulation with the amendments made by the CAA, 
2024, we propose to amend Sec.  414.1430 by revising paragraphs (a) and 
(b) to reflect the statutory QP and Partial QP threshold percentages 
for both the payment amount and patient count under the Medicare Option 
and the All-Payer Option with respect to payment year 2026 (performance 
period 2024).
    The proposed revisions to Sec.  414.1430(a) and (b) for the 
Medicare Option and All-Payer Combination Option QP and Partial QP 
thresholds are as follows:
     Paragraph (a)(1)(v) to state that for 2026 the amount is 
50 percent, and a new paragraph (a)(1)(vi) to state that for 2027and 
later, the amount is 75 percent.
     Paragraph (a)(2)(v) to state that for 2026 the amount is 
40 percent, and a new paragraph (a)(2)(vi) to state that for 2027 and 
later, the amount is 50 percent.
     Paragraph (a)(3)(v) to state that for 2026 the amount is 
35 percent, and a new paragraph (a)(3)(vi) to state that for 2027 and 
later, the amount is 50 percent.
     Paragraph (a)(4)(v) to state that for 2026 the amount is 
25 percent, and a new paragraph (a)(4)(vi) to state that for 2027 and 
later, the amount is 35 percent.
     Paragraph (b)(1)(i)(A) to state that for 2021 through 2026 
the amount is 50 percent, and paragraph (b)(1)(i)(B) to

[[Page 62101]]

state that for 2027 and later, the amount is 75 percent.
     Paragraph (b)(2)(i)(A) to state that for 2021 through 2026 
the amount is 40 percent and paragraph (b)(2)(i)(B) to state that for 
2027 and later, the amount is 50 percent.
     Paragraph (b)(3)(i)(A) to state that for 2021 through 2026 
the amount is 35 percent, and paragraph (b)(3)(i)(B) to state that for 
2027 and later, the amount is 50 percent.
     Paragraph (b)(4)(i)(A) to state that for 2021 through 2026 
the amount is 25 percent, and paragraph (b)(4)(i)(B) to state that for 
2027 and later, the amount is 35 percent.
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(4) APM Incentive Payment
    Prior to amendments made by section 304(a)(1) of the CAA, 2024, 
section 1833(z)(1) of the Act provided for APM Incentive Payments for 
eligible clinicians who are QPs with respect to a year in each payment 
year from 2019 through 2025. Specifically, for each of the specified 
payment years, in addition to the amount of payment that would 
otherwise be made for covered professional services furnished by an 
eligible clinician who is determined to be a QP for such year, an 
additional lump sum APM Incentive Payment equal to 5 percent of the 
eligible clinician's estimated aggregate payment amounts for such 
covered professional services for the preceding year (which we defined 
as the ``base year'') in each payment year from 2019 through 2024, and 
3.5 percent of such amounts in payment year 2025. Covered professional 
services is defined at Sec.  414.1305, with reference to the statutory 
definition at section 1848(k)(3) of the Act, as services for which 
payment is made under, or based on, the PFS and which are furnished by 
an eligible clinician (physician; practitioner as defined in section 
1842(b)(18)(C) of the Act; PT, OT, or speech-language pathologist; or 
qualified audiologist as defined under section 1861(ll)(4)(B) of the 
Act).
    Section 304(a) of the CAA, 2024 amended section 1833(z)(1) of the 
Act to

[[Page 62102]]

provide that eligible clinicians who are QPs with respect to payment 
year 2026 (performance period 2024) will receive an APM Incentive 
Payment equal to 1.88 percent of their estimated aggregate payment 
amounts for Medicare Part B covered professional services in the 
preceding year. In effect, this statutory change extends the APM 
Incentive Payment for one additional year, at 1.88 percent.
    Accordingly, we propose to incorporate the change made by the CAA, 
2024, by amending the regulation text at Sec.  414.1450 to add the 
payment year 2026 APM Incentive Payment amount of 1.88 percent of 
covered professional services payments. We propose to amend paragraph 
(b)(1) to state that the amount of the APM Incentive Payment for 
payment years 2019 through 2024 is equal to 5 percent, for payment year 
2025, 3.5 percent, and for payment year 2026, 1.88 percent of the 
estimated aggregate payments for covered professional services 
furnished during the calendar year immediately preceding the payment 
year.
    Beginning with the 2026 payment year, which relates to the 2024 QP 
Performance Period, section 1848(d)(1)(A) of the Act specifies that 
there shall be two separate PFS conversion factors, one for items and 
services furnished by an eligible clinician who is a QP for the year 
(the qualifying APM conversion factor), and the other for other items 
and services not furnished by a QP (the nonqualifying APM conversion 
factor). Each conversion factor will be equal to the conversion factor 
for the previous year multiplied by the applicable update for the year 
specified in section 1848(d)(20) of the Act. The update specified for 
the qualifying APM conversion factor for CY 2025 is 0.75 percent, while 
the update for the nonqualifying APM conversion factor is 0.25 percent.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to provide 60-day notice in the Federal Register 
and solicit public comment before a ``collection of information'' 
requirement (as defined under 5 CFR 1320.3(c) of the PRA's implementing 
regulations) is submitted to the Office of Management and Budget (OMB) 
for review and approval. To fairly evaluate whether a collection of 
information should be approved by OMB, section 3506(c)(2)(A) of the PRA 
requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment (see section VI. of this proposed 
rule) on each of the aforementioned issues for the following sections 
of this document that contain information collection requirements 
(ICRs). Comments, if received, will be responded to within the 
subsequent final rule.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' (BLS) May 2023 National Occupational Employment and Wage 
Estimates for all salary estimates (https://bls.gov/oes/2023/may/oes_nat.htm). In this regard, Tables 75 and 76 presents BLS' mean 
hourly wage, our estimated cost of fringe benefits and other indirect 
costs (calculated at 100 percent of salary), and our adjusted hourly 
wage. There are many sources of variance in the average cost estimates, 
both because fringe benefits and other indirect costs vary 
significantly from employer to employer, and because methods of 
estimating these costs vary widely from study to study. Therefore, we 
believe that doubling the hourly wage to estimate total cost is a 
reasonably accurate estimation method.
    We note that the May 2023 BLS data does not include median hourly 
wage rates for a number of the physician occupation types listed in 
Table 76; in these cases, the BLS identifies that the median wage rate 
is equal to or greater than $115.00/hr or $239,200 per year. BLS data 
for prior years, such as the May 2021 and May 2022 data, provide 
similar notes for median wage rates for occupations that are above a 
given threshold ($100.00/hr or $208.000 per year for the May 2021 BLS 
data (https://www.bls.gov/oes/2021/may/oes_nat.htm), and $115.00/hr or 
$239,200 per year for the May 2022 BLS data (https://www.bls.gov/oes/2022/may/oes_nat.htm)). Therefore, for consistency with previous years 
for estimating physician wage rates, we have continued to use mean 
hourly wage rates across our wage estimates.
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[[Page 62103]]


    For our purposes, BLS' May 2023 National Occupational Employment 
and Wage Estimates does not provide an occupation that we could use for 
``Physician'' wage data. To estimate a Physician's costs, we are using 
an average conglomerate wage of $291.64/hr as demonstrated below in 
Table 76.
[GRAPHIC] [TIFF OMITTED] TP31JY24.114

B. Proposed Information Collection Requirements (ICRs)

1. ICRs Regarding Clinical Laboratory Fee Schedule: Revised Data 
Reporting Period and Phase-In of Payment Reductions (Sec.  414.504)
    On November 17, 2023, section 502 of the Further Continuing 
Appropriations and Other Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 
2024) was passed and delayed data reporting requirements for CDLTs that 
are not ADLTs, and it also delayed the phase-in of payment reductions 
under the CLFS from private payor rate implementation under section 
1834A of the Act. As described in section III.D of this proposed rule, 
under the Clinical Laboratory Fee Schedule, ``reporting entities'' must 
report to CMS during a ``data reporting period'' ``applicable 
information'' collected during a ``data collection period'' for their 
component ``applicable laboratories.'' We are proposing to revise Sec.  
414.504(a)(1) to account for a delay in reporting until January 1, 
2025, through March 31, 2025. As stated in section 1834A(h)(2) of the 
Act, chapter 35 of title 44 U.S.C., which includes such provisions as 
the PRA, does not apply to information collected under section 1834A of 
the Act. Consequently, we are not setting out any proposed burden 
estimates under this section of this proposed rule. Please refer to 
section VII.XX. of this proposed rule for a discussion of the impacts 
associated with the proposed changes described in section III.D. of 
this proposed rule.
2. ICRs Regarding the Updates to the Medicare Diabetes Prevention 
Program
    In section Sec.  410.79(b), we are proposing to make conforming 
changes to our regulation Conditions of Coverage to align with the 2024 
Centers for Disease Control and Prevention (CDC) Diabetes Prevention 
Recognition Program (DPRP) Standards.\787\ We are proposing to amend 
Sec.  410.79(b) to add a new term for MDPP, ``in-person with a distance 
learning component.'' The proposed ``in-person with a distance learning 
component'' code will reduce administrative burden and allow MDPP 
suppliers to streamline data reporting to CDC because they will only 
have to maintain one code if they are providing in-person and distance 
learning delivery. To further align with 2024 CDC DPRP Standards, we 
are also adding the term ``combination with an online component'' and 
revising the current ``online'' definition. We are also clarifying in 
Sec.  [thinsp]410.79(d)(1) that MDPP make-up sessions can only be 
furnished using distance learning and in-person delivery modes, in 
alignment with the Extended flexibilities as defined in the CY 2024 PFS 
final rule (88 FR 79528). We are also proposing to amend Sec.  
410.79(e)(3)(iii)(C) in response to comments that beneficiaries are 
unable to take a picture while standing on their home scales due to 
risk of injury and physical health limitations (88 FR 79249). We are 
proposing revised language to specify that a beneficiary can self-
report their weight for an MDPP distance learning session by sending 2 
(two) date-stamped photos: one with their weight on the digital scale 
and one of the beneficiary visible in their home. Additionally, at 
Sec.  414.84(c), to make it possible for Medicare Administrative 
Contractors (MACs) to process claims for same day make-up sessions in 
MDPP, we are proposing that suppliers be required to append an existing 
claim modifier (Current Procedural Terminology (CPT) Modifier 79) to 
any claim for G9886 or G9887 to indicate a

[[Page 62104]]

make-up session that was held on the same day as a regularly scheduled 
MDPP session. We are proposing to remove the MDPP bridge payment in 
Sec.  414.84(a), (d), and (e). This payment is no longer necessary in 
MDPP's CY 2024 fee for service payment structure and could introduce 
the potential for fraud, waste, or abuse. Finally, we are proposing to 
make minor edits throughout Sec. Sec.  410.79, 424.205, and 414.84 to 
update outdated references and align with previous rulemaking 
pertaining to MDPP terminology, payment structure, and requirements. 
Section 1115A(d)(3) of the Act exempts Innovation Center model tests 
and expansions, which include the MDPP expanded model, from the 
provisions of the PRA. Accordingly, this collection of information 
section does not set out any burden for the provisions, including the 
collection of weights, per the CY 2024 PFS final rule.
---------------------------------------------------------------------------

    \787\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

3. ICRs Regarding the Medicare Shared Savings Program
    Section 1899(e) of the Act provides that chapter 35 of title 44 
U.S.C., which includes such provisions as the PRA, shall not apply to 
the Shared Savings Program. Accordingly, we are not setting out 
proposed Shared Savings Program burden estimates under this section of 
the preamble. Please refer to section VII.E.11. of this proposed rule 
for a discussion of the impacts associated with the changes to the 
Shared Savings Program as described in section III.G. of this proposed 
rule.
4. ICRs Regarding Rebate Reduction Requests Submitted Under Sections 
11101 and 11102 of the Inflation Reduction Act
    The following proposed changes will be submitted to OMB for review 
under control number 0938-NEW (CMS-10858).
    As described in section III.I. of this proposed rule, to receive 
consideration for an inflation rebate reduction for a specific 
rebatable drug when the manufacturer believes there is a severe supply 
chain disruption or likely shortage, we are proposing that a 
manufacturer must submit a rebate reduction request form along with 
supporting documentation. We are proposing this because manufacturers 
hold some of the information and documentation that is needed to 
determine whether the rebate amount for a Part B or Part D rebatable 
drug should be reduced due to either a severe supply chain disruption 
or a likely shortage as required by sections 1847A(i)(3)(G)(ii), 1860D-
14B(b)(1)(C)(ii), and 1860D-14B(b)(1)(C)(iii) of the Act.
    In Sec. Sec.  427.402(c)(4) and 428.302(c)(4), we are proposing the 
criteria that a Part B or Part D rebatable drug would have to meet for 
CMS to grant a severe supply chain disruption rebate reduction request. 
In Sec. Sec.  427.402(c)(5) and 428.302(c)(5), we propose that if a 
manufacturer believes a severe supply chain disruption continues into a 
fifth consecutive calendar quarter for a Part B rebatable biosimilar 
biological product, or a second applicable period for a generic Part D 
rebatable drug or biosimilar after the start of the natural disaster or 
other unique or unexpected event, the manufacturer may request an 
extension of the rebate reduction one time by submitting a rebate 
reduction extension request and supporting documentation. In Sec.  
428.303(c)(4), we propose the criteria that a generic Part D rebatable 
drug would have to meet for CMS to grant a rebate reduction request 
because the generic Part D rebatable drug is likely to be in shortage, 
including the requirements for a one-time extension of a rebate 
reduction.
    Outside of this proposed rule we have proposed additional 
submission requirements for rebate reduction requests under OMB control 
number: 0938-NEW (CMS-10858). At this time, the rebate reduction 
request forms are currently going through the PRA review and approval 
process. The 30-day notice appeared in the Federal Register on June 3, 
2024 (89 FR 47563).
    We believe that few manufacturers will submit a rebate reduction 
request form due to the statutory specifications regarding eligible 
rebatable drugs, as well as the policy criteria proposed in this 
proposed rule. Using the wage rates in Table 75 of this proposed rule, 
we anticipate collecting a total of 10 rebate reduction request forms 
per year. We estimate a total annual burden of 310 hours (31 hrs per 
form * 10 forms) and total annual cost of $37,378 ((160 hrs x $84.66/
hr) + (80 hrs x $129.62/hr) + (50 hrs x $169.68/hr) + (20 hrs x 
$248.94/hr)).
    Using the wage rates in Table 75 of this proposed rule, we also 
anticipate collecting a total of 10 rebate reduction extension request 
forms per year, and a total annual burden estimate of 310 hours (31 hr 
per form * 10 forms) at a cost of $37,378 ((160 hrs x $84.66/hr) + (80 
hrs x $129.62/hr) + (50 hrs x $169.68/hr) + (20 hrs x $248.94/hr)).
5. ICRs Regarding Medicare Parts A and B Overpayment Provisions of the 
Affordable Care Act (Sec.  401.305(b)(1), (2), and (3))
    Existing Sec.  401.305(b)(1) specifies when a person who has 
received an overpayment must report and return an overpayment. We 
propose to amend this regulation to reference revised Sec.  
401.305(b)(2) and new Sec.  401.305(b)(3). We are proposing a technical 
modification to the introductory language in Sec.  401.305(b)(2) to 
acknowledge that this paragraph may be applicable after the suspension 
described in new Sec.  401.305(b)(3) is complete. New proposed Sec.  
401.305(b)(3) would identify the circumstances under which the deadline 
for reporting and returning overpayments would be suspended to allow 
time for providers to investigate and calculate overpayments.
    The proposed amendments for Medicare Parts A and B are associated 
with OMB control number 0938-1323 (CMS-10405); however, we are not 
making any revisions to the currently approved requirements and burden 
under this control number since we cannot predict if there will be any 
change to the number of overpayments identified or reported based on 
this rulemaking's proposed changes. We solicit comment on this 
assumption.
6. The Quality Payment Program (42 CFR Part 414 and Section IV of This 
Proposed Rule)
    The following Quality Payment Program-specific ICRs reflect changes 
to our currently approved burden to capture proposed policy changes in 
this CY 2025 proposed rule as well as adjustments to the policies that 
have been previously finalized in the CY 2017 and CY 2018 Quality 
Payment Program final rules (81 FR 77008 and 82 FR 53568, 
respectively), and the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and 
CY 2024 Physician Fee Schedule (PFS) final rules (83 FR 59452, 84 FR 
62568, 85 FR 84472, 86 FR 64996, 87 FR 70131, and 88 FR 78818, 
respectively) due to revised assumptions based on updated data 
available at the time of the publication of this proposed rule.
    As described in the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77008 and 82 FR 53568, respectively), and the CY 
2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 2024 Physician Fee 
Schedule (PFS) final rules (83 FR 59452, 84 FR 62568, 85 FR 84472, 86 
FR 64996, 87 FR 70131, and 88 FR 78818, respectively), we have used an 
exhaustive approach for describing the burden associated with

[[Page 62105]]

the MIPS requirements for the Quality Payment Program. With the 
maturity and stabilization of the Quality Payment Program, we believe 
there may be opportunities to present streamlined annual burden 
estimates to account for changes, including changes due to proposed 
policies. We are soliciting public comment as part of this proposed 
rule on our exhaustive approach to presenting burden estimates 
associated with the Quality Payment Program.
a. Background
(1) ICRs Associated With Merit-Based Incentive Payment System (MIPS) 
and Advanced Alternative Payment Models (APMs)
    In this section of this proposed rule, we discuss a series of ICRs 
associated with the Quality Payment Program, including for MIPS and 
Advanced APMs. The following sections describe the changes in the 
estimated burden for the information collections relevant to the 
proposed revisions in the policies associated with the CY 2025 PFS 
proposed rule and proposed revisions to our currently approved 
information requests for MIPS and Advanced APM ICRs. The proposed 
changes will be submitted to OMB for review under control number 0938-
1314 (CMS-10621). In the CY 2024 PFS final rule (88 FR 79446 and 
79447), we provided updated burden estimates for the information 
collections under the Consumer Assessment of Healthcare Providers and 
Systems (CAHPS) for MIPS Survey PRA package. We have submitted these 
burden estimates to OMB for approval under control number 0938-1222 
(CMS-10450): the 60-day notice appeared in the Federal Register on 
October 17, 2023 (88 FR 71573), while the 30-day notice appeared on 
January 16, 2024 (89 FR 2622). The updated information collections for 
the CAHPS for MIPS Survey discussed in section IV.A.4.j. of this 
proposed rule will be submitted to OMB for review under control number 
0938-1222 (CMS-10450) if the related policy proposal is finalized in 
the CY 2025 PFS final rule, to be a requirement for CAHPS for MIPS 
survey vendors beginning with the CY 2026 performance period/2028 MIPS 
payment year. We note that we have received approval for the collection 
of information associated with the virtual election process under OMB 
control number 0938-1343 (CMS-10652).
(a) Summary of Annual Quality Payment Program Burden Estimates
    Table 77 summarizes this proposed rule's total burden estimates for 
the Quality Payment Program for the CY 2025 performance period/2027 
MIPS payment year. We provide details of the proposed policies, updated 
assumptions, and ICRs beginning in section V.B.8. of this proposed 
rule.
    In the CY 2024 PFS final rule (87 FR 70169), the total estimated 
burden for the CY 2024 performance period/2026 MIPS payment year was 
724,212 hours at a cost of $81,322,556 (see Table 77, row a). 
Accounting for updated wage rates and the subset of all Quality Payment 
Program ICRs outlined in this proposed rule compared to the CY 2024 PFS 
final rule, the total estimated annual burden of continuing policies 
and information set forth in the CY 2024 PFS final rule into the CY 
2025 performance period/2027 MIPS payment year is 727,906 hours at a 
cost of $85,867,252 (see Table 77, row b). These represent an increase 
of 3,694 hours and an increase of $4,544,696.
    To understand the burden implications of the policies proposed in 
this rulemaking, we provided an estimate of the total burden associated 
with continuing the policies and information collections set forth in 
the CY 2024 PFS final rule into the CY 2025 performance period/2027 
MIPS payment year. The estimated burden of 657,110 hours at a cost of 
$77,779,594 (see Table 77, row c) reflects the availability of more 
accurate data to account for all potential respondents and submissions 
across all the performance categories and represents a decrease of 
70,796 hours and $8,087,658 (see Table 77, row d).
    Our total proposed burden estimate for the CY 2025 performance 
period/2027 MIPS payment year is 649,540 hours and $76,866,418 (see 
Table 77, row e), which represents a decrease of 78,366 hours and 
$9,000,834 from the CY 2024 PFS final rule estimate with updated wage 
rates and ICRs (see Table 77, row f). From these estimates, updated 
data and assumptions not related to policies proposed in this proposed 
rule would reduce burden by 70,796 hours and $8,087,658. We estimate 
that the policies proposed in this proposed rule would further reduce 
burden by 7,570 hours (-78,366 hours --70,796 hours) and $913,176 (-
$9,000,834 --$8,087,658) (see Table 77, row g) between this estimate 
and the total burden shown in Table 78 is the decrease in burden 
associated with impacts of the policies proposed for the CY 2025 
performance period/2027 MIPS payment year.
BILLING CODE P

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[[Page 62107]]


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[[Page 62108]]


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    Table 79 provides the reasons for changes in the estimated burden 
for the CY 2025 performance period/2027 MIPS payment year for 
information collections in the Quality Payment Program segment of this 
proposed rule. We divided the reasons for our change in burden into 
those related to proposed policies in the CY 2025 PFS proposed rule and 
those related to adjustments in burden continued from the CY 2024 PFS 
final rule policies that reflect updated data and revised methods.

[[Page 62109]]

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BILLING CODE C
(2) Summary of Proposed Changes for the Quality Payment Program: MIPS
    We have included the change in the estimated burden for the CY 2025 
performance period/2027 MIPS payment year due to the proposed policies 
and information collections in this proposed rule. The proposed 
policies in this proposed rule impact the burden estimates for the CY 
2025 performance period/2027 MIPS payment year.
    The following five MIPS ICRs show changes in burden due to the 
proposed policies in this proposed rule: (1) Quality performance 
category data submission by Medicare Part B claims

[[Page 62111]]

collection type; (2) Quality performance category data submission by 
qualified clinical data registry (QCDR) and MIPS clinical quality 
measure (CQM) collection type; (3) Quality performance category data 
submission by electronic clinical quality measure (eCQM) collection 
type; (4) MIPS Value Pathways (MVP) quality performance category 
submission, and (5) MVP registration. In aggregate, we estimate the 
proposed policies would result in a net decrease in burden of 7,570 
hours and $913,176 for the CY 2025 performance period/2027 MIPS payment 
year. The remaining changes to our currently approved burden estimates 
are proposed adjustments due to the revised burden assumptions based on 
the updated data available at the time of preparation of this proposed 
rule.
    We are not proposing any changes or adjustments to the following 
ICRs: Registration for virtual groups; CAHPS survey vendor 
requirements; CAHPS beneficiary burden; group registration for the 
CAHPS survey; call for Improvement Activities; Open Authorization 
(OAuth) credentialing and token request process; nomination of MVPs; 
subgroup registration; and opt-out of performance data display on 
Compare Tools for voluntary participants. See section V.B.8.a.(1). of 
this proposed rule for a summary of the ICRs, the overall burden 
estimates, and a summary of the assumption and data changes affecting 
each ICR.
    We incorporate submission data from CY 2022 performance period/2024 
MIPS payment year to calculate the total burden for data submission 
under the quality, Promoting Interoperability, and improvement 
activities performance categories. The accuracy of our estimates of the 
total burden for data submission for those performance categories may 
be impacted by several primary factors. First, we are unable to predict 
with absolute certainty who will be a Qualifying APM Participant (QP) 
for the CY 2025 performance period/2027 MIPS payment year. Newly 
eligible clinician participants in Advanced APMs who become QPs will be 
excluded from MIPS payment adjustments, and as such, are unlikely to 
report under MIPS; while some current Advanced APM participants may end 
participation such that the APM Entity's eligible clinicians may not be 
QPs for a year based on Sec.  414.1425(c)(5), and thus be required to 
report under MIPS. Second, it is difficult to predict whether Partial 
QPs, who can elect to report to MIPS, will choose to participate in the 
CY 2025 performance period/2027 MIPS payment year compared to the CY 
2022 performance period/2024 MIPS payment year. Therefore, the actual 
number of Advanced APM participants and how they elect to submit data 
may differ from our estimates. However, we believe our estimates are 
the most appropriate given the available data. We will continue to 
revise our estimates as updated data becomes available.
    In the CY 2024 PFS final rule, we finalized requirements to align 
the Shared Savings Program's certified electronic health record 
technology (CEHRT) requirements with MIPS Promoting Interoperability 
(88 FR 79124 through 79131), codified at Sec.  425.507(a) and (b). For 
performance years beginning on or after January 1, 2025, unless 
otherwise excluded, an Accountable Care Organization (ACO) participant, 
ACO provider/supplier, and (ACO) professional that is a MIPS eligible 
clinician, Qualifying APM Participant (QP) and Partial Qualifying APM 
Participant (Partial QP), regardless of track must report the MIPS 
Promoting Interoperability measures and requirements to MIPS according 
to Sec.  414(o) at the individual, group, virtual group, or APM entity 
level, and earn a MIPS performance category score for the MIPS 
Promoting Interoperability performance category at the individual, 
group, virtual group, or APM entity level, barring an applicable 
exclusion defined at Sec.  425.507(b). We refer readers to the CY 2024 
PFS final rule (88 FR 79124 through 79131) for details. We note we are 
not updating burden estimates for the Promoting Interoperability 
performance category to reflect requirements for ACO participants who 
are not MIPS eligible clinicians. Section 1899(e) of the Act provides 
that chapter 35 of title 44 of the U.S.C., which includes such 
provisions as the PRA, shall not apply to the Shared Savings Program. 
In section V.B.8.e.(7). of this proposed rule, we provide our burden 
estimates for the Promoting Interoperability performance category for 
MIPS eligible clinicians.
(3) Summary of Quality Payment Program Changes: Advanced APMs
    For these ICRs, we are proposing adjustments to the currently 
approved burden estimates for the CY 2025 performance period/2027 MIPS 
payment year based on updated submission trends: Partial QP elections; 
Other Payer Advanced APM determinations: Payer-Initiated and Eligible 
Clinician-initiated processes; and submission of Data for QP 
Determinations under the All-Payer Combination Option.
(4) Framework for Understanding the Burden of MIPS Data Submission
    Because of the wide range of information collection requirements 
under MIPS, Table 80 presents a framework for understanding how the 
organizations permitted or required to submit data on behalf of 
clinicians vary across the types of data, and whether the clinician is 
a MIPS eligible clinician or other eligible clinician voluntarily 
submitting data, MIPS APM participant, or an Advanced APM participant. 
In Table 80, MIPS eligible clinicians and other clinicians voluntarily 
submitting data to MIPS may submit data as individuals, groups, or 
virtual groups for the quality, Promoting Interoperability, and 
improvement activities performance categories. Note that virtual groups 
are subject to the same data submission requirements as groups, and 
therefore, we will refer only to groups for the remainder of this 
section, unless otherwise noted.
    Beginning with the CY 2023 performance period/2025 MIPS payment 
year, clinicians could also participate as subgroups for reporting 
measures and activities in an MVP. We note that the subgroup reporting 
option is not available for clinicians participating in traditional 
MIPS. We finalized in the CY 2022 PFS final rule that for the CY 2023 
and 2024 MIPS performance periods/2025 and 2026 MIPS payment years, a 
subgroup reporting measures and activities in an MVP will submit its 
affiliated group's data for the Promoting Interoperability performance 
category and in the scenario that a subgroup does not submit its 
affiliated group's data, the subgroup will receive a zero score for the 
Promoting Interoperability performance category (86 FR 65413 and 
65414). As discussed in section IV.A.4.b.(1)(4). of this proposed rule, 
we are proposing to clarify that we intend for the policy to apply 
beyond the CY 2023 and 2024 performance periods/2025 and 2026 MIPS 
payment years. We refer readers to section V.B.8.g.(3). of this 
proposed rule for our burden estimates for the Promoting 
Interoperability performance category.
    Because MIPS eligible clinicians are not required to submit any 
additional information for assessment under the cost performance 
category, the administrative claims data used to calculate the scores 
for the cost performance category is not represented in Table 80.
    For MIPS eligible clinicians participating in MIPS APMs, the 
organizations submitting data on behalf of MIPS eligible clinicians 
will vary

[[Page 62112]]

between performance categories and, in some instances, between MIPS 
APMs. We previously finalized in the CY 2021 PFS final rule that the 
APM Performance Pathway (APP) is available for clinicians who 
participate in a MIPS APM for both ACO participants and non-ACO 
participants to submit quality data (85 FR 84859 through 84866). Due to 
data limitations and our inability to determine who will use the APP 
versus the traditional MIPS submission mechanism for the CY 2025 
performance period/2027 MIPS payment year, we assume Shared Savings 
Program ACO APM Entities will submit quality data through the APP as 
required, and MIPS eligible clinicians in non-Shared Savings Program 
ACO APM Entities will participate through traditional MIPS or MVPs, 
submitting as an individual or group rather than as an APM Entity. Per 
section 1899(e) of the Act, submissions received from eligible 
clinicians in ACOs are not included in burden estimates for this 
proposed rule because quality data submissions to fulfill requirements 
of the Shared Savings Program are not subject to the PRA. Accordingly, 
this burden is not included in Quality Payment Program burden 
estimates.
    In the CY 2021 PFS final rule (85 FR 84860 and 84861), we adopted 
the current APP quality measure set. As discussed in section 
IV.A.4.c.(2). of this proposed rule, we are proposing to create the APP 
Plus quality measure set that would allow for alignment of the APP with 
the Adult Universal Foundation measures. Under this proposal, Shared 
Savings Program ACOs would be required to report the APP Plus quality 
measure beginning with the CY 2025 performance period/2027 MIPS payment 
year. We are not proposing to modify the existing APP quality measure 
set of six quality measures; instead, we are proposing to create the 
APP Plus measure set that would be optional, with exception to the 
Shared Savings Program ACOs, beginning in the CY 2025 performance 
period/2027 MIPS payment year. Under this proposal, each MIPS eligible 
clinician, group, or APM Entity that elects to report the APP may 
choose to report either the APP quality measure set or the APP Plus 
quality measure set. MIPS APM participants may also elect to report via 
traditional MIPS or MVPs.
    We are proposing to adopt five new quality measures for the APP 
Plus quality measure set incrementally over several performance 
periods/MIPS payment years, as detailed in Tables 55, 56, and 57 in 
section IV.A.4.c.(3)(f): two new quality measures beginning with the CY 
2025 performance period; one new quality measure beginning with the CY 
2026 performance period, and two new quality measures beginning with 
the CY 2028 performance period. We refer readers to section 
IV.A.4.c.(3). of this proposed rule for additional details on the 
proposed measures and collection types of the APP Plus quality measure 
set. As noted in section IV.A.4.c.(3). of this proposed rule, we are 
proposing to establish that all measures in the APP Plus quality 
measure set must be reported. As detailed in Table 53, the current APP 
quality measure set consists of six measures: two administrative claims 
measures, the CAHPS for MIPS survey, and three measures that MIPS 
eligible clinicians reporting the APP must actively report to CMS via 
the Medicare CQM (Shared Savings Program ACOs only), eCQM, CQM, or Part 
B claims collection types. MIPS eligible clinicians, groups, or APM 
Entities reporting the proposed APP Plus quality measure set would 
report via the available collection types: eight measures for the CY 
2025 performance period/2027 MIPS payment year; nine measures for the 
CY 2026 and 2027 performance periods/2028 and 2029 MIPS payment years; 
and eleven measures for the CY 2028 performance period/2030 MIPS 
payment period.
    The quality performance category burden for MIPS eligible 
clinicians who elect to report the proposed APP Plus quality measure 
set varies compared to the current APP quality measure set, traditional 
MIPs, and MVPs. We assume MIPS eligible clinicians incur no burden for 
reporting the two administrative claims quality measures currently 
required under the APP quality measure set, as similar to cost 
measures, we automatically calculate scores from administrative claims 
reporting. Additionally, burden estimates for the CAHPS for MIPS 
registration and patient reporting are provided in the CAHPS for MIPS 
PRA package under OMB control number 0938-1222 (CMS-10450); we do not 
assume that MIPS eligible clinicians incur additional reporting burden 
for reporting this measure under the current APP quality measure set. 
Therefore, we assume that MIPS eligible clinicians reporting the 
proposed APP Plus quality measure set would incur burden for actively 
submitting their quality performance category data via the available 
collection types--eCQM, CQM/QCDR, and Medicare Part B claims. We note, 
these assumptions for actively submitting to assess clinician reporting 
burden may differ from MIPS scoring policy. This active submission of 
quality performance data would include five of the eight quality 
measures for the CY 2025 performance period/2027 MIPS payment year, six 
of the nine quality measures for the CY 2026 and 2027 performance 
periods/2028 and 2029 MIPS payment years, and eight of the eleven 
measures for the CY 2028 performance period/2030 MIPS payment year. 
Continuing this burden comparison for MIPS eligible clinicians 
reporting the proposed APP Plus quality measure set for the CY 2025 
performance period/2027 MIPS payment year, clinicians would need to 
actively submit quality performance category data for one less quality 
measure than clinicians participating in traditional MIPS (six 
measures), two more quality measures than clinicians participating via 
the APP (three measures), and one more quality measure than clinicians 
participating via MVPs (four measures). For the CY 2026 and 2027 
performance periods/2028 and 2029 MIPS payment years, clinicians 
reporting the proposed APP Plus quality measure set would need to 
actively submit quality performance category data for the same number 
of quality measures as clinicians participating in traditional MIPS 
(six measures); they would need to report three more quality measures 
than clinicians participating via the APP (three measures), and two 
more quality measures than clinicians participating via MVPs (four 
measures). Beginning in the CY 2028 performance period/2030 MIPS 
payment year, clinicians reporting the proposed APP Plus quality 
measure set would need to actively submit quality performance category 
data for two more quality measures than clinicians reporting via 
traditional MIPS (six measures), five more quality measures that 
clinicians participating via the APP (three measures), and four more 
measures than clinicians participating via MVPs (four measures). For 
this comparison of MIPS reporting requirements, we assume that 
clinicians reporting via traditional MIPS and MVPs will report eCQM, 
CQM, and Part B Claims measures, and will not elect to report the CAHPS 
for MIPS survey. As proposed in section IV.A.4.c.(2). of this proposed 
rule, all Shared Savings Program ACOs would be required to report the 
APP Plus measure set for the CY 2025 performance period/2027 MIPS 
payment year. Per section 1899(e) of the Act, submissions received from 
eligible clinicians in ACOs are not included in burden estimates for 
this proposed rule because quality data submissions to fulfill 
requirements of the Shared Savings Program are not subject to the

[[Page 62113]]

PRA. As the APP Plus is a new measure set, and optional, with exception 
to the Shared Savings Program ACOs, we are unable to estimate how many 
MIPS eligible clinicians would submit quality measures via the APP Plus 
at this time via individual, group, or non-Shared Savings Program ACO 
Entity reporting. We will update these estimates as additional data are 
available. We refer readers to section VII.E.17.e.(2)(h). of this 
proposed rule for additional discussion.
    For the Promoting Interoperability performance category, group TINs 
may submit data on behalf of eligible clinicians in MIPS APMs, or 
eligible clinicians in MIPS APMs may submit data individually. 
Additionally, APM Entities may report the Promoting Interoperability 
performance category at the APM Entity level beginning with the CY 2023 
performance period/2025 MIPS payment year (87 FR 70087 and 70088). In 
the CY 2017 Quality Payment Program final rule (81 FR 30132), we 
codified at Sec.  414.1380(b)(3)(i) that individual MIPS eligible 
clinicians participating in APMs (as defined in section 1833(z)(3)(C) 
of the Act) for a performance period will earn at least 50 percent for 
the improvement activities performance category. We also stated that 
MIPS eligible clinicians participating in an APM for a performance 
period may receive an improvement activity score higher than 50 percent 
(81 FR 30132). To provide clarity for APM participants not scored under 
the APP in the CY 2024 PFS final rule (88 FR 79365 through 79367), we 
revised Sec.  414.1380(b)(3)(i) to state that a MIPS eligible clinician 
participating in an APM receives an improvement activities performance 
category score of at least 50 percent if the MIPS eligible clinician 
reports a completed improvement activity or submits data for the 
quality and Promoting Interoperability performance categories.
    MIPS eligible clinicians who attain Partial QP status may incur 
additional burden if they elect to participate in MIPS, which is 
discussed in more detail in the CY 2018 Quality Payment Program final 
rule (82 FR 53841 through 53844).
BILLING CODE P

[[Page 62114]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.120

BILLING CODE C
    The policies finalized in the CY 2017 and CY 2018 Quality Payment 
Program final rules (81 FR 77008 and 82 FR 53568), the CY 2019, CY 
2020, CY 2021, CY 2022, CY 2023, and CY 2024 PFS final rules (83 FR 
59452, 84 FR 62568, 85 FR 84472, 86 FR 64996, 87 FR 70131, and 88 FR 
78818), and continued in this proposed rule create some additional data 
collection requirements not listed in Table 80. These additional data 
collections, some of which are currently approved by OMB under the 
control number 0938-1314 (Quality Payment Program/MIPS, CMS-10621) or 
pending renewal under 0938-1222 (CAHPS for MIPS, CMS-10450), are as 
follows:
    Additional ICRs related to MIPS third party intermediaries (see 
sections V.B.8.c. and V.B.8.d. of this proposed rule):
     Self-nomination of new QCDRs (81 FR 77507 and 77508, 82 FR 
53906 through 53908, and 83 FR 59998 through 60000) (OMB 0938-1314).
     Simplified self-nomination process of returning QCDRs (88 
FR 79426 and 79427) (OMB 0938-1314).
     Self-nomination of new qualified registries (81 FR 77507 
and 77508, 82 FR 53906 through 53908, and 83 FR 59997 and 59998) (OMB 
0938-1314),
     Simplified self-nomination process of returning qualified 
registries (88 FR 79429) (OMB 0938-1314).
     Third party intermediary plan audits (87 FR 70140 through 
70144) (OMB 0938-1314).

[[Page 62115]]

     Approval process for new and returning CAHPS for MIPS 
survey vendors (82 FR 53908) (OMB 0938-1222).
     Open Authorization Credentialing and Token Request Process 
(OMB 0938-1314) (85 FR 84969 and 84970).
    Additional ICRs related to the data submission and the quality 
performance category (see section V.B.8.e. of this proposed rule):
     CAHPS for MIPS Survey completion by beneficiaries (81 FR 
77509, 82 FR 53916 and 53917, and 83 FR 60008 and 60009) (OMB 0938-
1222).
     Quality Payment Program Identity Management Application 
Process (82 FR 53914 and 83 FR 60003 and 60004) (OMB 0938-1314).
    Additional ICRs related to the Promoting Interoperability 
performance category (see section V.B.8.g. of this proposed rule):
     Reweighting Applications for MIPS performance categories 
(82 FR 53918 and 83 FR 60011 and 60012) (OMB 0938-1314).
    Additional ICRs related to call for new MIPS measures and 
activities (see sections V.B.8.i., V.B.8.f., and V.B.8.j. of this 
proposed rule):
     Nomination of improvement activities (82 FR 53922 and 83 
FR 60017 and 60018) (OMB 0938-1314).
     Call for MIPS quality measures (83 FR 60010 and 60011) 
(OMB 0938-1314).
     Nomination of MVPs (85 FR 84990 through 84991) (OMB 0938-
1314).
    Additional ICRs related to MIPS (see section V.B.8.n. of this 
proposed rule):
     Opt out of performance data display on Compare Tools for 
voluntary reporters under MIPS (82 FR 53924 and 53925 and 83 FR 60022) 
(OMB 0938-1314).
    Additional ICRs related to APMs (see sections V.B.8.l. and V.B.8.m. 
of this proposed):
     Partial QP Election (81 FR 77512 and 77513, 82 FR 53922 
and 53923, and 83 FR 60018 through 60019) (OMB 0938-1314).
     Other Payer Advanced APM determinations: Payer Initiated 
Process (82 FR 53923 and 53924 and 83 FR 60019 through 60020) (OMB 
0938-1314).
     Other Payer Advanced APM determinations: Eligible 
Clinician Initiated Process (82 FR 53924 and 83 FR 60020) (OMB 0938-
1314).
     Submission of Data for All-Payer QP Determinations (83 FR 
60021) (OMB 0938-1314).
b. ICRs Regarding the Virtual Group Election (Sec.  414.1315)
    This rulemaking is not proposing any new or revised collection of 
information requirements or burden related to the virtual group 
election. The virtual group election requirements and burden are 
currently approved by OMB under control number 0938-1343 (CMS-10652). 
Consequently, we are not proposing any changes under that control 
number.
c. ICRs Regarding Third Party Intermediaries (Sec.  414.1400)
    In sections V.B.8.c.(2)., V.B.8.c.(3)., V.B.8.c.(4)., and 
V.B.8.c.(5). of this proposed rule, we identify proposed adjustments to 
the estimated burden for ICRs regarding third party intermediaries that 
will be submitted to OMB for review under control number 0938-1314 
(CMS-10621), as summarized in Tables 78 and 79. We note that these 
proposed adjustments to estimated burden are due to the availability of 
updated data and related assumptions as identified per ICR, rather than 
proposed policies or statute changes in section IV.A.4. of this 
proposed rule.
(1) Background
    Under MIPS, the quality, Promoting Interoperability, and 
improvement activities performance category data may be submitted via 
relevant third party intermediaries, such as QCDRs and qualified 
registries. Data on the CAHPS for MIPS Survey, which counts as either 
one quality performance category measure, or towards an improvement 
activity, can be submitted via CMS-approved survey vendors. We refer 
readers to Sec.  414.1400 for details on third party intermediary 
requirements. Entities seeking approval to submit data on behalf of 
clinicians as a QCDR, qualified registry, or survey vendor must 
complete a self-nomination process annually. The processes for self-
nomination of entities seeking approval as QCDRs and qualified 
registries are similar with the exception that QCDRs have the option to 
nominate QCDR measures for CMS consideration for the reporting of 
quality performance category data. Therefore, the difference between 
the QCDR and qualified registry self-nomination is associated with the 
preparation of QCDR measures for CMS consideration. As established in 
the CY 2024 PFS final rule (88 FR 79425), we continue to estimate 
burden separately for the simplified and full self-nominations of QCDRs 
and qualified registries, to more accurately capture the distinct 
number of estimated respondents and burden per self-nomination for the 
different processes. In the CY 2024 PFS final rule (88 FR 79390 and 
79391), we eliminated the category of health information technology 
(IT) vendors from MIPS third party intermediaries beginning with the CY 
2025 performance period/2027 MIPS payment period.
(2) QCDR Self-Nomination Applications
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77507 and 77508, and 82 FR 53906 through 53908, 
respectively), and the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and 
CY 2024 PFS final rules (83 FR 59998 through 60000, 84 FR 63116 through 
63121, 85 FR 84964 through 84969, 86 FR 65569 through 65573, 87 FR 
70138 and 70139, and 88 FR 79426 through 79429 respectively) for our 
previously finalized requirements and estimated burden for self-
nomination of QCDRs and nomination of QCDR measures.
    We are proposing to adjust burden for QCDR self-nomination 
applications based on updated assumptions for the number of 
applications and QCDR measure submissions that we expect to receive 
during the CY 2024 self-nomination period for the CY 2025 performance 
period/2027 MIPS payment year. As discussed later in this section, we 
are proposing to adjust our estimates for: (1) the number of QCDRs that 
will submit applications under the simplified and full self-nomination 
processes; (2) the number of QCDR measures (existing or borrowed and 
new measures) submitted by a QCDR; and (3) the average time required 
for a QCDR to submit the QCDR measure information.
(a) Simplified Self-Nomination Process and Other Requirements
    We estimate that 39 existing QCDRs will submit applications under 
the simplified self-nomination process for the CY 2025 performance 
period/2027 MIPS payment year. We derive this estimate from the number 
of applications received during the CY 2023 QCDR self- nomination 
period for the CY 2024 performance period/2026 MIPS payment year, while 
anticipating that: (1) some QCDRs may face remedial action or 
termination during the CY 2024 performance period/2026 MIPS payment 
year, and (2) some intermediaries may electively discontinue 
participating as a QCDR. This estimate is a decrease of 5 respondents 
from the currently approved estimate of 44 for the QCDR simplified 
self-nomination process (88 FR 79426 and 79427).
    In line with these assumptions and QCDR measure submission trends, 
we estimate that simplified QCDR applicants will propose 14 QCDR 
measures, on average, for the CY 2025 performance period/2027 MIPS

[[Page 62116]]

payment year, consisting of approximately 3 new QCDR measures and 11 
existing or borrowed QCDR measures per QCDR. This is an increase of 1 
new QCDR measure and 1 borrowed QCDR measure per QCDR from the 
currently approved aggregated estimate of 12 QCDR measures in the CY 
2024 PFS final rule (88 FR 79426). Due to this change, we propose to 
adjust the estimated weighted average time required for each QCDR to 
submit a QCDR measure from 0.75 hours to 0.82 hours [((3 new QCDR 
measures x 2 hr) + (11 existing or borrowed QCDR measures x 0.5 hr)) / 
total # of QCDR measures (14)]. We are continuing our currently 
approved estimated response times to submit a new QCDR measure (2 hr/
response) and an existing or borrowed QCDR measure (0.5 hr/response). 
We are also continuing our currently approved response time of 0.5 
hours required for existing QCDRs that do not submit QCDR measures 
under the simplified self-nomination process.
    For existing QCDRs that submit QCDR measures as part of their self-
nomination application, we estimate that it will take 11.98 hours [0.5 
hr for the simplified self-nomination process + (14 QCDR measures x 
0.82 hr/measure for QCDR measure submission)] for a QCDR to submit an 
application under the simplified self-nomination process. We note that 
this proposed change will result in an increase of 2.48 hours (11.98 hr 
adjusted estimate -9.5 hr currently approved estimate) for each 
applicant to complete the simplified QCDR self-nomination process (88 
FR 79426 and 79427).
    From these assumptions, we estimate the total annual burden 
associated with a QCDR self-nominating to be considered ``qualified'' 
to submit data on behalf of MIPS eligible clinicians. As shown in Table 
81, we assume that the staff involved in the simplified QCDR self-
nomination process will continue to be computer systems analysts or 
their equivalent, who have an average adjusted labor rate of $106.54/
hr. We estimate the burden per application will be $1,276.35 (11.98 hr 
x $106.54/hr). In aggregate and inclusive of the 2.48 hr adjustment for 
the CY 2025 performance period/2027 MIPS payment year, we estimate an 
annual burden of 467 hours (39 applications x 11.98 hr/application) at 
a cost of $49,778 (39 applications x $1,276.35/application) for the 
simplified QCDR self-nomination process.
[GRAPHIC] [TIFF OMITTED] TP31JY24.121

    In Table 82, we illustrate the proposed net change in estimated 
burden for simplified QCDR self-nomination and QCDR measure submission 
using the currently approved burden in the CY 2024 PFS final rule (88 
FR 79426 and 79427). In aggregate, using our currently approved 
estimates for responses and time per response, the proposed decrease in 
the number of simplified QCDR self-nomination applications and the 
increase in the estimated burden hours per simplified QCDR self-
nomination will result in a total annual adjustment of +49 hours at a 
cost of +$5,244 for the CY 2025 performance period/2027 MIPS payment 
year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.122

(b) Full QCDR Self-Nomination Process and Other Requirements
    We estimate that 17 QCDRs will submit applications under the full 
self-nomination process for the CY 2025 performance period/2027 MIPS 
payment year. We derive this estimate from the number of applications 
received during the CY 2023 QCDR self-nomination period for the CY 2024 
performance period/2026 MIPS payment year, while anticipating that: (1) 
some existing QCDRs may face remedial action and would need to complete 
the full self-nomination

[[Page 62117]]

process for the CY 2025 performance period/2027 MIPS payment year, and 
(2) several new QCDR self-nominations. This estimate is an increase of 
5 respondents (17 revised-12 active applications) for the QCDR full 
self-nomination process (88 FR 79427).
    As estimated for the QCDR simplified self-nomination process in 
section V.B.8.c.(2)(a). of this proposed rule, we estimate that QCDR 
applicants completing the full self-nomination process will propose on 
average 14 QCDR measures for the CY 2025 performance period/2027 MIPS 
payment year, consisting of approximately 3 new QCDR measures and 11 
existing or borrowed QCDR measures per QCDR. This is an increase of 1 
new QCDR measure and 1 borrowed QCDR measure per QCDR from the 
currently approved aggregated estimate of 12 QCDR measures in the CY 
2024 PFS final rule (88 FR 79427). Due to this change, we also propose 
to adjust the estimated weighted average time required for each QCDR to 
submit a QCDR measure from 0.75 hours (10 existing QCDR measures x 0.5 
hr + 2 new QCDR measures x 2 hr) / 12 total QCDR measures) to 0.82 
hours (11 existing QCDR measures x 0.5 hours + 3 new QCDR measures x 2 
hours) / 14 total QCDR measures). We are continuing our currently 
approved time of 2.5 hours required for new QCDRs that do not submit 
QCDR measures under the full self-nomination process, and our estimated 
per response times for a QCDR to submit a new QCDR measure (2 hr/
response) and an existing or borrowed QCDR measure (0.5 hr/response).
    Due to the estimated (-5 applications = 44 active-39 new estimate) 
increase in the average number of existing or borrowed QCDR measures 
(+1) and new QCDR measures (+1) submitted with the full self-nomination 
application, we estimate that it will take 13.98 hours [2.5 hr for the 
full self-nomination process + (14 QCDR measures x 0.82 hr/measure for 
QCDR measure submission)] for a QCDR to submit an application under the 
full self-nomination process. This proposed change will result in an 
overall increase of 2.48 hours (13.98 hr revised-11.5 hr active) 
required for the full QCDR self-nomination application (88 FR 79428 and 
79429).
    From these updated assumptions, we provide an estimate of the total 
annual burden associated with a QCDR self-nominating to be considered 
``qualified'' to submit data on behalf of MIPS eligible clinicians. In 
Table 83, we assume that the staff involved in the full QCDR self-
nomination process will continue to be computer systems analysts or 
their equivalent who have an average adjusted labor rate of $106.54/hr. 
We estimate the burden per application will be $1,489.43 (13.98 hr x 
$106.54/hr). In aggregate, for the CY 2025 performance period/2027 MIPS 
payment year, we estimate an annual burden of 238 hours (17 
applications x 13.98 hr) at a cost of $25,320 (17 applications x 
$1,489.43/application) for the full QCDR self-nomination process.
[GRAPHIC] [TIFF OMITTED] TP31JY24.123

    In Table 84, we use the currently approved burden as the baseline 
for calculating the proposed net change in burden for the full QCDR 
self-nomination process (88 FR 79427). For the CY 2025 performance 
period/2027 MIPS payment year, the proposed adjustment in the number of 
applicants and time per applicant results in a total annual adjustment 
of +100 hours at a cost of +$10,617 for the CY 2025 performance period/
2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.124


[[Page 62118]]


(3) Qualified Registry Self-Nomination Process and Other Requirements
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77507 and 77508, and 82 FR 53906 through 53908, 
respectively), and the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and 
CY 2024 PFS final rules (83 FR 59997 and 59998, 84 FR 63114 through 
63116, 85 FR 84968 and 84969, 86 FR 65573 through 65576, 87 FR 70139 
and 70140, and 88 FR 79429 and 79430 respectively) for our previously 
finalized requirements and estimated burden for self-nomination of 
qualified registries.
    In the CY 2024 PFS final rule (88 FR 79390 through 79391), we 
established the elimination of the health IT vendor category amid MIPS 
third party intermediary beginning with the CY 2025 performance period/
2027 MIPS payment year. We believe that many third party intermediaries 
serve as both health IT vendors and qualified registries for the 
purposes of submitting data for MIPS eligible clinicians. As with our 
burden assumptions in the CY 2024 PFS final rule (88 FR 79425), we are 
not proposing any adjustments to the number of qualified registries 
that will submit applications for the qualified registry self-
nomination process during the CY 2025 performance period/2027 MIPS 
payment year.
    We are proposing to adjust burden for qualified registry self-
nomination applications based on the number of applications we expect 
to receive for the CY 2025 performance period/2027 MIPS payment year. 
We note these proposed changes are not due to proposed policies 
discussed in section IV.A. of this proposed rule.
(a) Simplified Qualified Registry Self-Nomination Process
    For this proposed rule, we estimate that 76 qualified registries 
will complete the simplified self-nomination process in CY 2025 
performance period/2027 MIPS payment year. We derive this estimate from 
the number of applications received during the CY 2023 qualified 
registry self- nomination period for the CY 2024 performance period/
2026 MIPS payment year, while anticipating that: (1) some qualified 
registries may face remedial action or termination during the CY 2024 
performance period/2026 MIPS payment year, and (2) some intermediaries 
may electively discontinue participating as a qualified registry. This 
estimate is a decrease of eight applications from the currently 
approved estimate of 84 in the CY 2024 PFS final rule (88 FR 79429). We 
note that we are continuing the currently approved time of 0.5 hours 
for the simplified qualified registry self-nomination process.
    Based on these assumptions, we estimate the total annual burden 
associated with a qualified registry self-nominating to be considered 
``qualified'' to submit data on behalf of MIPS eligible clinicians. In 
Table 85, we assume that the staff involved in the simplified qualified 
registry self-nomination process will continue to be computer systems 
analysts or their equivalent, who have an average adjusted labor rate 
of $106.54/hr. We estimate the burden per response will be $53.27 (0.5 
hr x $106.54/hr) for the simplified self-nomination process. In 
aggregate, we estimate that the annual burden for the simplified 
qualified registry self-nomination process will be 38 hours (76 
applications x 0.5 hr) at a cost of $4,049 (76 applications x $53.27/
application) for the CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.125

    In Table 86, we illustrate the proposed net change in estimated 
burden for the simplified qualified registry self-nomination using the 
currently approved burden in the CY 2024 PFS final rule (88 FR 79429). 
In aggregate, using our proposed adjustment to the number of 
applications results in a total annual change of minus 4 hours (42 hr 
active-38 hr revised) and minus $426 ($4,475-$4,049) for the CY 2025 
performance period/2027 MIPS payment year.

[[Page 62119]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.126

(b) Full Qualified Registry Self-Nomination Process
    We estimate that 30 qualified registries will submit applications 
under the full self-nomination process for the CY 2025 performance 
period/2027 MIPS payment year. We derive this estimate from the number 
of applications received during the CY 2023 qualified registry self- 
nomination period for the CY 2024 performance period/2026 MIPS payment 
year, while anticipating: (1) that some existing qualified registries 
may face remedial action during the CY 2025 performance period/2026 
MIPS payment year and may need to submit full self-nomination 
applications, and (2) several new qualified registry applicants. This 
is an increase of 3 respondents from the currently approved estimate of 
27 in the CY 2024 PFS final rule (88 FR 79430). We note we are 
continuing our currently approved per response time estimate of 2 hours 
for the full qualified registry self-nomination process.
    Based on the assumptions discussed in this section, we provide an 
estimate of the total annual burden associated with a qualified 
registry self-nominating to be considered ``qualified'' to submit data 
on MIPS eligible clinicians.
    In Table 87, we assume the staff involved in the qualified registry 
self-nomination process will continue to be computer systems analysts 
or their equivalent, who have an average labor rate of $106.54/hr. We 
estimate the burden per response will be $213.08 (2 hr x 106.54/hr) for 
the full qualified registry self-nomination process. In aggregate, for 
the CY 2025 performance period/2027 MIPS payment year, we estimate that 
the annual burden for the full qualified registry self-nomination 
process will be 60 hours (30 applications x 2 hr) at a cost of $6,392 
(30 applications x $213.08/application).
[GRAPHIC] [TIFF OMITTED] TP31JY24.127

    In Table 88, we illustrate the proposed net change in estimated 
burden for the full qualified registry self-nomination process using 
the currently approved burden in the CY 2024 PFS final rule (88 FR 
79429). In aggregate, the proposed adjustments result in a total annual 
adjustment of +6 hours (+3 applications x 2 hr/response) at a cost of 
+$639 (3 applications x $213.08/application) for the full qualified 
registry self-nomination process for the CY 2025 performance period/
2027 MIPS payment year.

[[Page 62120]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.128

(4) Third Party Intermediary Plan Audits
    The following proposed burden adjustments are due to the 
availability of updated data and assumptions, rather than proposed 
policy changes.
(a) Targeted Audits
    In the CY 2022 PFS final rule (86 FR 65547 and 65548), we finalized 
that beginning with the CY 2021 performance period/CY 2023 MIPS payment 
year, the QCDR or qualified registry must conduct targeted audits in 
accordance with requirements at Sec.  414.1400(b)(3)(vi). Consistent 
with our assumptions in the CY 2022 PFS, CY 2023 PFS, and CY 2024 PFS 
final rules for the QCDRs (86 FR 65574, 87 FR 70141, and 88 FR 79431 
and 79432 respectively) and qualified registries (86 FR 65571, 87 FR 
70141, and 88 FR 79431 and 79432 respectively) that would submit the 
results of targeted audits, we estimate that the time required for a 
QCDR or qualified registry to submit a targeted audit ranges between 5 
and 10 hours for the simplified and full self-nomination process, 
respectively. We assume the staff involved in submitting the targeted 
audits will continue to be computer systems analysts or their 
equivalent, who have an average labor rate of $106.54/hr.
    Due to an increase in data issues among third party intermediaries 
during the CY 2023 performance period/2025 MIPS payment year, we 
estimate that 35 third party intermediaries will submit targeted audits 
for the CY 2025 performance period/2027 MIPS payment year (see Table 
89). We estimate that the cost for a QCDR or a qualified registry to 
submit a targeted audit will range from $532.70 (5 hr x $106.54/hr) to 
$1,065.40 (10 hr x $106.54/hr). In aggregate for the CY 2025 
performance period/2027 MIPS payment year, we estimate an annual burden 
ranging from 175 hours (35 responses x 5 hr/audits x 5 hr/audit) and 
$18,645 (35 targeted audits x $532.70/audit) to 350 hours (35 audits x 
10 hr/audit) and $37,289 (35 targeted audits x $1,065.40/audit) (see 
Table 90 for the cost per audit).
(b) Participation Plans
    In the CY 2022 PFS final rule (86 FR 65546), we finalized 
requirements for approved QCDRs and qualified registries that did not 
submit performance data and therefore will need to submit a 
participation plan as part of their self-nomination process. We refer 
readers to Sec.  414.1400(e) for to submit a participation plan as part 
of their self-nomination process. We refer readers to Sec.  414.1400(e) 
for additional details on policies for remedial action and termination 
of third party intermediaries. In the CY 2020 PFS final rule (82 FR 
63074), we finalized requirements for QCDRs to submit a QCDR measure 
participation plan in instances where a QCDR believes the low-reported 
QCDR measure that did not meet benchmarking thresholds is still 
important and relevant to a specialist's practice. We refer readers to 
Sec.  414.1400(b)(4)(iii)(B)(10) for additional details on policies for 
QCDR measure participation plans.
    Consistent with our assumptions in the CY 2024 PFS final rule (88 
FR 79431), we estimate that it will take 2 hours for a QCDR or 
qualified registry to submit a participation plan. We assume the staff 
involved in submitting the participation plans will continue to be 
computer systems analysts or their equivalent, who have an average 
labor rate of $106.54/hr.
    As shown in Table 89, following additional review of the MIPS data 
submission reports, we estimate that 28 third party intermediaries will 
submit self-nomination or QCDR measure participation plans for the CY 
2025 performance period/2027 MIPS payment year. This is a decrease of 
36 participation plans from the currently approved estimate of 64 (88 
FR 79431). Many QCDRs submitted a QCDR measure participation plan in 
their self-nomination for CY 2024 performance period/2026 MIPS payment 
year, and therefore we anticipate limited QCDR measure participation 
plan for QCDR self-nominations for the CY 2025 performance period/2027 
MIPS payment year.
    In Table 90, we estimate that the cost for a QCDR or a qualified 
registry to submit a participation plan is $213.08 (2 hr x $106.54/hr). 
In aggregate for the CY 2025 performance period/2027 MIPS payment year, 
we estimate the total impact associated with QCDRs and qualified 
registries to submit participation plans will be 56 hours (28 
participation plans x 2 hr/plan) at a cost of $5,966 ((28 participation 
plans x $213.08/plan) (see Table 90 for the cost per audit).
(c) Corrective Action Plans (CAPs)
    In the CY 2017 Quality Payment Program final rule, we established 
the process for corrective action plans (CAPs) (81 FR 77386 through 
77389). We refer readers to Sec.  414.1400(e)(1)(i) for third party 
intermediary requirements for submitting CAPs.
    We have observed a decrease in the number of CAPs required from 
third party intermediaries due to non-compliance with MIPS program 
requirements. Accordingly, we estimate 20 third party intermediaries 
will submit CAPs for the CY 2025 performance period/2027 MIPS payment 
year. This is a decrease of 4 respondents from the currently approved 
estimate of 24 (88 FR 79431). We are continuing our currently approved 
estimate of 3 hours for a QCDR or qualified registry to submit a CAP. 
We also assume the staff involved in submitting the CAP will continue 
to be computer systems analysts or their equivalent, who have an 
average labor rate of $106.54/hr. In Table 90, we estimate that the 
cost for a QCDR or a qualified registry to submit a CAP is $319.62 (3 
hr x $106.54/hr). In aggregate for the CY 2025 performance period/2027 
MIPS payment year, we estimate

[[Page 62121]]

the total impact associated with QCDRs and qualified registries to CAPs 
would be 60 hours (20 CAPs x 3 hr/plan) at a cost of $6,392 (20 CAPs x 
$319.62/plan).
(d) Transition Plans
    We established a policy at Sec.  414.1400(a)(3)(iv) that states a 
condition of approval for the third party intermediary is to agree that 
prior to discontinuing services to any MIPS eligible individual 
clinician, group, virtual group, subgroup, or APM Entity during a 
performance period, the third party intermediary must support the 
transition of such MIPS eligible clinician, group, virtual group, 
subgroup, or APM Entity to an alternate third party intermediary, 
submitter type, or, for any measure on which data has been collected, 
collection type according to a CMS approved transition plan. In this 
proposed rule, we estimate that we will receive 6 transition plans for 
the CY 2025 performance period/2027 MIPS payment year. This adjustment 
would result in a decrease of 3 transition plans from the currently 
approved estimate of 9 transition plans (88 FR 79431). We continue to 
estimate it will take 1 hour for a computer system analyst or their 
equivalent at a labor rate of $106.54/hr to develop a transition plan 
on behalf of each QCDR or qualified registry during the self-nomination 
period. However, we are unable to estimate the burden for implementing 
the actions in the transition plan because the level of effort may vary 
for each QCDR or qualified registry. In aggregate for the CY 2025 
performance period/2027 MIPS payment year, we estimate the impact 
associated with QCDRs and qualified registries completing transition 
plans is 6 hours (6 transition plans x 1 hr/plan) at a cost of $639 (6 
transition plans x $106.54/plan).
(e) Estimated Burden for Third Party Intermediary Plan Audits
    In aggregate, as shown in Table 89, we assume that 89 third party 
intermediaries will submit plan audits for the CY 2025 performance 
period/2027 MIPS payment year (35 targeted audits, 28 participation 
plans, 20 CAPs, and 6 transition plans).
[GRAPHIC] [TIFF OMITTED] TP31JY24.129

    As shown in in Table 90, we assume that the staff involved in the 
submission of the plan audits during the third party intermediary self-
nomination process will continue to be computer systems analysts or 
their equivalent, who have an average labor rate of $106.54/hr. For the 
CY 2025 performance period/2027 MIPS payment year, in aggregate, the 
proposed estimated annual burden for the submission of third party 
intermediary plan audits will range from 297 hours to 472 hours at a 
cost ranging from $31,642 and $50,286.

[[Page 62122]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.130

    As shown in Table 91, for the CY 2025 performance period/2027 MIPS 
payment year, the change in the number of respondents for third party 
intermediary plan audits results in an adjustment of -57 hours at a 
cost of -$12,303 under the simplified self-nomination process and -27 
hours at a cost of -$2,878 under the full self-nomination process. We 
note for the purposes of calculating estimated change in burden in 
Tables 77 through 79 of this proposed rule, we use only estimated 
burden for the plan audits submitted under the full self-nomination 
process.
[GRAPHIC] [TIFF OMITTED] TP31JY24.131

(5) Survey Vendor Requirements
    The following proposed changes associated with CAHPS survey vendors 
to submit data for eligible clinicians will be submitted to OMB for 
review under control number 0938-1222 (CMS-10450) if the policy 
proposal described in section IV.A.4.j. of this proposed rule is 
finalized in the CY 2025 PFS final rule. We would plan to make the 
revised files available for public review under the standard non-rule 
PRA process which includes the publication of 60- and 30-day Federal 
Register notices.
    We refer readers to Sec.  414.1400(d) for the requirements for CMS-
approved survey vendors that may submit data on the CAHPS for MIPS 
Survey.

[[Page 62123]]

    In section IV.A.4.j.(1)(b). of this proposed rule, we are proposing 
under the current application submission requirement at Sec.  
414.1400(d)(2) that beginning with the CY 2026 performance period/2028 
MIPS payment year, a survey vendor must include on its application the 
range of cost of its third party intermediary services (cost estimates 
would vary based on the level of services provided). With respect to a 
third party intermediary that is solely a CMS-approved survey vendor, 
the publishable costs would be limited to the cost of services related 
to the CAHPS for MIPS survey. If this proposal is finalized, we would 
update the CAHPS for MIPS Survey Vendor Participation Form. We would 
also update the CAHPS for MIPS Survey Minimum Business Requirements to 
detail the required survey vendor cost information. We refer readers to 
section IV.A.4.j.(1). of this proposed rule for additional detail.
    We anticipate that the proposed fields for cost information would 
request cost information that is readily available to survey vendors. 
Therefore, we are not proposing any adjustments in burden because we 
assume the additional cost requirement would not add significant burden 
to the currently approved 10 hours per application first established in 
the CY 2018 Quality Payment Program final rule (82 FR 30216). We also 
assume this change would not affect survey vendor participation. We 
note that we proposed updates to our estimated burden under control 
number 0938-1222 (CMS-10450) as discussed in the CY 2024 PFS final rule 
(88 FR 79433 and 79434). The 60-day notice appeared in the Federal 
Register on October 17, 2023 (88 FR 71573), while the 30-day notice 
appeared on January 16, 2024 (89 FR 2622). The status for OMB's 
approval of the changes can be monitored at: https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=0938-1222. We are not 
proposing any additional updates under this control number due to 
policies proposed in this rulemaking. We refer readers to section 
VII.E.17.e(2)(a) of this proposed rule for additional discussion.
    The proposed change, if finalized, would result in updates to the 
CAHPS for MIPS Survey Vendor Participation Form and the CAHPS for MIPS 
Survey Minimum Business Requirements. The instrument and requirements 
guide are currently approved by OMB under control number 0938-1222 
(CMS-10450). The CAHPS for MIPS Survey Vendor Participation Form and 
the CAHPS for MIPS Survey Minimum Business Requirements guide 
reflecting these proposed changes will be updated if the policy 
proposal is finalized in the CY 2025 PFS final rule as a requirement 
for CAHPS for MIPS survey vendors beginning in the CY 2026 performance 
period/2028 MIPS payment year. We will make the updated files available 
for public review through a stand-alone non-rule Federal Register 
notice that is expected to appear in the Federal Register in CY 2025 
performance period/2027 MIPS payment period.
d. ICRs Regarding Open Authorization (OAuth) Credentialing and Token 
Request Process
    This rulemaking is not proposing any new or revised collection of 
information requirements or burden related to the OAuth credentialing 
and token request process for the CY 2025 performance period/2027 MIPS 
payment year. The requirements and burden for the OAuth credentialing 
and token request process are currently approved by OMB under control 
number 0938-1314 (CMS-10621). Consequently, we are not proposing any 
changes to the burden for the OAuth credentialing and token request 
process under that control number.
e. ICRs Regarding Quality Data Submission (Sec. Sec.  414.1318, 
414.1325, 414.1335, and 414.1365)
(1) Background
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77502 and 77503 and 82 FR 53908 through 53912, 
respectively), the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 
2024 PFS final rules (83 FR 60000 through 60003, 84 FR 63121 through 
63124, 85 FR 84970 through 84974, 86 FR 65576 through 65588, 87 FR 
70145 through 70154, and 88 FR 79434 through 79442, respectively) for 
our previously finalized estimated burden associated with data 
submission for the quality performance category.
    Under our current policies, two groups of clinicians submit data 
for the quality performance category under MIPS: those who submit data 
as MIPS eligible clinicians, and those who submit data voluntarily but 
are not subject to MIPS payment adjustments. Clinicians are ineligible 
for MIPS payment adjustments if they are newly enrolled to Medicare; 
are QPs; are partial QPs who elect to not participate in MIPS; are not 
one of the clinician types included in the definition for MIPS eligible 
clinician; or do not exceed the low-volume threshold as an individual 
or as a group.
(2) Changes and Adjustments to Quality Performance Category Respondents
    To determine QPs that are excluded from MIPS, we used the Advanced 
APM payment and patient percentages from the APM Participant List for 
the final snapshot date for the 2022 QP Performance period. From this 
data, we calculated the QP determinations as described in the 
Qualifying APM Participant (QP) definition at Sec.  414.1305 for the CY 
2025 performance period/2027 MIPS payment year. Due to data 
limitations, we could not identify specific clinicians who have not yet 
enrolled in Advanced APMs, but who may become QPs in the future for the 
CY 2025 performance period/2027 MIPS payment year (and therefore will 
no longer need to submit data to MIPS); hence, our model may 
underestimate or overestimate the number of respondents.
    In this proposed rule, we use submissions data from the CY 2022 
performance period/2024 MIPS payment year to estimate the number of 
respondents that will submit data for the CY 2025 performance period/
2027 MIPS payment year. We have adjusted the estimated number of 
respondents that will submit data for the CY 2025 performance period/
2027 MIPS payment year from the currently approved estimates, as our 
burden estimates for the CY 2024 PFS final rule (88 FR 79434) did not 
incorporate all data updates in the CY 2024 PFS final rule regulatory 
impact analysis model (88 FR 79503 through 79505) due to the timing of 
data availability. These estimates in this proposed rule reflect 
updated performance category submissions for the CY 2022 performance 
period/2024 MIPS payment year. We refer readers to sections V.B.8.e., 
V.B.8.g.(3)., and V.B.8.h. of this proposed rule for additional details 
per performance category and collection type.
    We assume 100 percent of ACO APM Entities will submit quality data 
to CMS as required under their models. While we do not believe there is 
additional quality reporting for ACO APM entities, consistent with 
assumptions used in the CY 2021, CY 2022, CY 2023, and CY 2024 PFS 
final rules (85 FR 84972, 86 FR 65567, 87 FR 70145, and 88 FR 79434, 
respectively), we include all quality data voluntarily submitted by 
MIPS APM participants at the individual or TIN-level in our respondent 
estimates. As stated in section V.B.8.a.(4). of this proposed rule, we 
assume non-Shared Savings Program ACO APM Entities will participate 
through traditional MIPS or

[[Page 62124]]

MVPs and submit as an individual or group rather than as an entity. To 
estimate who will be a MIPS APM participant in the CY 2025 performance 
period/2027 MIPS payment year, we used the Advanced APM payment and 
patient percentages from the APM Participant List for the final 
snapshot date for the 2022 QP performance period. We elected to use 
this data source because the overlap with the data submissions for the 
CY 2022 performance period/2024 MIPS payment year enabled the exclusion 
of Partial QPs that elected to not participate in MIPS and required 
fewer assumptions as to who is a QP or not. Based on this information, 
if we determine that a MIPS eligible clinician will not be scored as a 
MIPS APM, then their reporting assumption is based on their reporting 
as a group or individual for the CY 2022 performance period/2024 MIPS 
payment year.
    Our burden estimates for the quality performance category do not 
include the burden for the quality data that Shared Savings Program APM 
Entities submit to fulfill the requirements of their APMs. The 
associated burden is excluded from this collection of information 
section but is discussed in the regulatory impact analysis section of 
this proposed rule because sections 1899(e) and 1115A(d)(3) of the Act 
(42 U.S.C. 1395jjj(e) and 1315a(d)(3), respectively) state that the 
Shared Savings Program and the testing, evaluation, and expansion of 
Innovation Center models tested under section 1115A of the Act (or 
section 3021 of the Affordable Care Act) are not subject to the 
PRA.\788\
---------------------------------------------------------------------------

    \788\ Our estimates do reflect the burden on MIPS APM 
participants of submitting Promoting Interoperability or improvement 
activities performance category data, which is outside the 
requirements of their APMs.
---------------------------------------------------------------------------

    For the CY 2025 performance period/2027 MIPS payment year, 
respondents would have the option to submit quality performance 
category data via Medicare Part B claims, direct, and log in and upload 
submission types. We estimate the burden for collecting data via 
collection type: Medicare Part B claims, QCDR and MIPS CQMs, and eCQMs. 
We do not estimate burden for administrative claims quality measures; 
similar to cost measures, we automatically calculate scores for 
individuals, groups, virtual groups, or APM Entities that meet 
requirements to be scored on individual measures due to their 
administrative claims reporting. Additionally, we capture the burden 
for clinicians who choose to submit via these collection types for the 
quality performance category of MVPs. We believe that, while estimating 
burden by submission type may be better aligned with the way clinicians 
participate with the Quality Payment Program, it is more important to 
reduce confusion and enable greater transparency by maintaining 
consistency with previous rulemaking. In the CY 2019 PFS final rule (83 
FR 59752), we finalized proposals to limit the Medicare Part B claims 
collection type to small practices beginning with the CY 2019 
performance period/2021 MIPS payment year and to allow clinicians in 
small practices to report Medicare Part B claims as a group or as 
individuals.
    Because MIPS eligible clinicians may submit data for multiple 
collection types for a single performance category, the estimated 
numbers of individual clinicians and groups to collect via the various 
collection types are not mutually exclusive and reflect the occurrence 
of individual clinicians or groups that collected data via multiple 
collection types during the CY 2022 performance period/2024 MIPS 
payment year. We captured the burden of any eligible clinician that may 
have historically collected via multiple collection types, as we assume 
they will continue to collect via multiple collection types and that 
our MIPS scoring methodology will take the highest score where the same 
measure is submitted via multiple collection types.
    We are not proposing changes to the quality performance category 
submission burden due to the proposals discussed in section IV.A. of 
this proposed rule. We discuss below in this section these proposed 
policies and our reasons for not changing the currently approved burden 
for the relevant ICRs.
    For the quality performance category, we are proposing to adopt 
minimum criteria for a qualifying data submission for a MIPS 
performance period. Specifically, we are proposing to specify what we 
consider to be a data submission at Sec.  414.1325(a)(1)(i) to state 
that, for the quality performance category, a data submission must 
include numerator and denominator data for at least one MIPS quality 
measure from the final list of MIPS quality measures. Additionally, we 
are proposing to codify our existing policies governing our treatment 
of multiple data submissions received for the quality performance 
category at Sec.  414.1325(f)(1). We refer readers to sections 
IV.A.4.d.(2)(b) and IV.A.4.d.(3)(b) for details. These proposals, if 
finalized, would not affect the requirements for MIPS eligible 
clinicians and groups that submit data for the quality performance 
category. We assume these proposals, if finalized, would not affect the 
number of quality submissions, as the intent is to eliminate certain 
issues with the scoring of an unintended data submission affecting 
payment adjustments for individual MIPS eligible clinicians, groups, 
virtual groups, subgroups, and APM Entities. Therefore, we are not 
proposing any adjustments to our currently approved estimated burden 
for this ICR due to these policy proposals.
    As described in the CY 2017 Quality Payment Program final rule (81 
FR 77125 and 77126), to ensure that data submitted on quality measures 
are complete enough to accurately assess each MIPS eligible clinician's 
quality performance, we established a data completeness requirement. 
For the CY 2024 and CY 2025 performance periods/2026 and 2027 MIPS 
payment years, we increased the data completeness criteria threshold 
from at least 70 percent to at least 75 percent (87 FR 70049 through 
70052). We maintained the data completeness criteria threshold of at 
least 75 percent for the CY 2026 performance period/2028 MIPS payment 
year (88 FR 79334 through 79337). In section IV.A.4.e.(1)(c)(i). of 
this proposed rule, we are proposing to maintain the data completeness 
criteria threshold of at least 75 percent for the CY 2027 and CY 2028 
performance periods/2029 and 2030 MIPS payment years. As this data 
completeness threshold proposal is consistent with the existing data 
completeness criteria, this proposal will not affect burden for the 
applicable interested parties. We refer readers to section 
IV.A.4.e.(1)(c)(i). of this proposed rule for additional information on 
this proposal.
    In this proposed rule, we are not proposing any new or revised 
collection of information requirements or burden related to the 
submission of Medicare Part B claims data, QCDR and MIPS CQMs, and 
eCQMs for the quality performance category. Several factors drive the 
proposed changes and adjustments for the number of clinicians 
submitting quality data for MIPS using each collection type. First, we 
incorporated the updated submission data available for the CY 2022 
performance period/2024 MIPS payment year as discussed in section 
V.B.8.e.(7)(a). of this proposed rule. Second, our updated estimates 
for MVP participation impact the number of estimated clinicians 
submitting quality data using each collection type. In section 
V.B.8.e.(7)(a) of this rulemaking, we propose to adjust our estimates 
for the number of participants in previously finalized MVPs, due to the 
availability of updated data. We then propose to update this estimate 
to account for increased MVP participation due to the

[[Page 62125]]

proposed addition of six new MVPs. With this approach, any proposed 
adjustments to increase the number of MVP participants will reduce the 
number of estimated submissions for each quality performance category 
collection type via traditional MIPS. Similarly, any proposed decreases 
to the number of MVP participants will increase the number of estimated 
submissions for each quality performance category collection type via 
traditional MIPS. We refer readers to sections V.B.8.e.(4)., 
V.B.8.e.(5)., and V.B.8.e.(6). of this proposed rule for estimated 
burden on each quality performance category collection type.
    Table 92 uses similar methods to estimate the number of MIPS 
eligible clinicians that will submit data as individual clinicians via 
each collection type in the CY 2025 performance period/2027 MIPS 
payment year. For the CY 2025 performance period/2027 MIPS payment 
year, we estimate that approximately 13,522 clinicians will submit data 
as individuals using the Medicare Part B claims collection type; 
approximately 12,056 clinicians will submit data as individuals using 
MIPS CQM and QCDR collection type; and approximately 23,600 clinicians 
will submit data as individuals using eCQMs collection type. Based on 
the availability of updated data for the CY 2022 performance period/
2024 MIPS payment year and updated assumptions for MVP reporting as 
described in section V.B.8.e.(7)(a). of this proposed rule, these are 
decreases of 1,216 and 1,657 respondents from the currently approved 
estimates of 13,413 and 22,897 for the Medicare Part B claims and eCQM 
collection types, respectively and an increase of 168 respondents for 
MIPS CQM and QCDR collection type from the currently approved estimate 
of 10,682.
[GRAPHIC] [TIFF OMITTED] TP31JY24.132

    Consistent with the policy finalized in the CY 2018 Quality Payment 
Program final rule, we established that for MIPS eligible clinicians 
who collect measures via Medicare Part B claims, MIPS CQM, eCQM, or 
QCDR collection types and submit more than the required number of 
measures (82 FR 53735 and 54736), we will score the clinician on the 
required measures with the highest assigned measure achievement points 
and thus, the same clinician may be counted as a respondent for more 
than one collection type. Therefore, our columns in Table 92 are not 
mutually exclusive.
    Table 93 provides our estimates for the number of groups or virtual 
groups that will submit quality data on behalf of clinicians for each 
collection type in the CY 2025 performance periods/2027 MIPS payment 
year. We assume clinicians who submitted quality data as groups in the 
CY 2022 performance period/2024 MIPS payment year will continue to 
submit data for the quality performance category either as groups, or 
virtual groups for the same collection types for the CY 2025 
performance period/2027 MIPS payment years. We used the same 
methodology described in the CY 2022 PFS final rule (86 FR 65577) on 
our assumptions related to the use of an alternate collection type for 
groups that submitted data via the CMS Web Interface collection type 
for the CY 2022 performance period/2024 MIPS payment year.
    As shown in Table 93, for the CY 2025 performance period/2027 MIPS 
payment year, we estimate that 6,158 groups and virtual groups will 
submit data for the MIPS CQM and QCDR collection type and 5,939 groups 
and virtual groups will submit for the eCQM collection type. These are 
increases of 208 and 122 respondents from the currently approved 
estimates of 5,950, and 5,817 for the groups and virtual groups that 
will submit data using MIPS CQM and QCDR, and eCQM collection types, 
respectively.

[[Page 62126]]

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    The burden associated with the submission of quality performance 
category data has some limitations. We believe it is difficult to 
quantify the burden accurately because clinicians and groups may have 
different processes for integrating quality data submission into their 
practices' workflows. Moreover, the time needed for a clinician to 
review quality measures and other information, select measures 
applicable to their patients and the services they furnish, and 
incorporate the use of quality measures into the practice workflows is 
expected to vary along with the number of measures that are potentially 
applicable to a given clinician's practice and by the collection type. 
For example, clinicians submitting data via the Medicare Part B claims 
collection type need to integrate the capture of quality data codes for 
each encounter whereas clinicians submitting via the eCQM collection 
types may have quality measures automated as part of their electronic 
health record (EHR) implementation.
    We believe the burden associated with submitting quality measures 
data will vary depending on the collection type selected by the 
clinician, group, or third party intermediary. As such, we separately 
estimate the burden for clinicians, groups, and third party 
intermediaries to submit quality measures data by the collection type 
used. For the purposes of our burden estimates for the Medicare Part B 
claims, MIPS CQM and QCDR, and eCQM collection types, we also assume 
that, on average, each clinician or group will submit 6 quality 
measures. Additionally, as finalized in the CY 2022 PFS final rule (86 
FR 65394 through 65397), group tax identification numbers (TINs) could 
also choose to participate as subgroups for MVP reporting beginning 
with the CY 2023 performance period/2025 MIPS payment year. We refer 
readers to the CY 2022 PFS final rule for additional details on MVP 
quality reporting requirements (86 FR 65411 and 65412).
    In terms of the quality measures available for clinicians and 
groups to report for the CY 2025 performance period/2027 MIPS payment 
year, we are proposing a measure set of 196 quality measures. The new 
MIPS quality measures proposed for inclusion in MIPS for the CY 2025 
performance period/2027 MIPS payment year and future years are found in 
Table Group A of Appendix 1; MIPS quality measures with substantive 
changes can be found in Table Group D of Appendix 1; and MIPS quality 
measures proposed for removal can be found in Table Group C of Appendix 
1. These measures are stratified by collection type in Table 94, as 
well as counts of new, removed, and substantively changed measures. 
There are no changes to the remaining measures not included in Appendix 
1. We refer readers to Appendix 1 of this proposed rule for additional 
information.
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[[Page 62127]]


    For the CY 2025 performance period/2027 MIPS payment year, we are 
proposing 196 measures, a net decrease of 2 quality measures compared 
to the currently approved estimate of 198 measures. Specifically, as 
discussed in section IV.A.4.e.(1)(d). of this rulemaking, we are 
proposing to add 9 new MIPS quality measures, remove 11 MIPS quality 
measures, and make substantive updates to 66 MIPS quality measures. We 
do not anticipate our provision to remove these measures will increase 
or decrease the reporting burden on clinicians and groups as 
respondents generally are still required to submit quality data for 6 
measures in traditional MIPS reporting or submit quality data for 4 
measures in an MVP.
(3) Quality Payment Program Identity Management Application Process
    This rulemaking does not propose any new or revised collection of 
information requirements or burden related to the identity management 
application process. We are adjusting our currently approved estimates 
based on updated data and assumptions. The proposed changes will be 
submitted to OMB for review under control number 0938-1314 (CMS-10621).
    In the CY 2023 and CY 2024 PFS final rules (87 FR 70148 and 88 FR 
79437), we estimated the number of eligible clinicians, groups, or 
third party intermediaries that register for new accounts by applying a 
rolling average of the number of respondents registering for new 
accounts. The Quality Payment Program requires users to utilize HCQIS 
Access Roles and Profiles (HARP), a secure identity management portal, 
to log into the Quality Payment Program portal. To assess the 
incremental change for new Quality Payment Program Identity Management 
application registrations, we will assess the number of unique TINs 
associated with new Quality Payment Program user accounts that signed 
into the Quality Payment Program portal for the first time in a given 
year. Based on this approach and new data available from March 2022 to 
February 2023, we propose to adjust our estimates from 6,500 to 6,237 
for the number of unique TINs accessing the Quality Payment Program 
portal for the first time in the CY 2025 performance period/2027 MIPS 
payment year. This proposed adjustment will result in a decrease of 263 
registrations. We do not propose to adjust the currently approved 
estimated time of 1 hour per response to obtain a new account. As shown 
in Table 95, it will take 1 hour at $106.54/hr for a computer systems 
analyst (or their equivalent) to obtain a HARP account, required to 
access the Quality Payment Program portal. In aggregate we estimate an 
annual burden of 6,237 hours (6,237 registrations x 1 hr/registration) 
at a cost of $664,490 (6,237 registrations x $106.54/registrations).
[GRAPHIC] [TIFF OMITTED] TP31JY24.135

    In Table 96, we illustrate the proposed net change in estimated 
burden for the Quality Payment Program Identity Management Application 
Process using the currently approved burden in the CY 2023 PFS final 
rule (87 FR 70148 and 70149). In aggregate, using the currently 
approved per response time estimate, the proposed decrease of 
respondents results in a total annual adjustment of -263 hours (-263 
responses x 1 hr/response) at a cost of -$28,020 (-263 responses x 
$106.54/response) for the CY 2025 performance period/2027 MIPS payment 
year.
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[[Page 62128]]


(4) Quality Data Submission by Clinicians: Medicare Part B Claims-Based 
Collection Type
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1314 (CMS-10621). In this section of this 
proposed rule, we propose updates to the estimated burden for the 
Quality Data Submission by Individuals and Groups Using Medicare Part B 
Claims-Based Collection Type that will be submitted to OMB for review 
under control number 0938-1314 (CMS-10621). As noted in Table 79, the 
proposed change in burden reflects adjustments for updated data and 
assumptions, and as well as the proposal for additional MVPs as 
outlined in section V.B.8.e.(4). of this proposed rule. In Table 95, we 
identify the changes in burden to this ICR due to the proposed 
policies.
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77501 through 77504 and 82 FR 53912, respectively), 
the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 2024 PFS final 
rules (83 FR 60004 and 60005, 84 FR 63124 through 63126, 85 FR 84975 
and 84976, 86 FR 65582 through 65584, 87 FR 70149 through 70151, and 88 
FR 79437 through 79439 respectively) for our previously finalized 
requirements and burden for quality data submission via the Medicare 
Part B claims collection type.
    In this proposed rule, we are not proposing any new or revised 
collection of information requirements related to the submission of 
Medicare Part B claims data for the quality performance category. We 
refer readers to section V.B.8.e.(2). of this proposed rule for the 
factors affecting the proposed changes and adjustments for each quality 
performance collection type. We refer readers to Table 92 of this 
section for the estimated change in associated burden for quality data 
submissions using Medicare Part B claims data related to MVP and 
subgroup reporting in CY 2025 performance period/2027 MIPS payment 
year.
    As noted in Table 92, based on updated data available for the CY 
2022 performance period/2024 MIPS payment year and updated MVP 
reporting assumptions, we estimate that 12,197 individual clinicians 
will collect and submit quality data via the Medicare Part B claims 
collection type, a decrease of 1,216 from the currently approved 
estimate of 13,413 (88 FR 79437 and 79438).
    In Table 97, consistent with our currently approved per response 
time figures and using the updated wage rates in Table 75 of this 
proposed rule, we continue to estimate the burden of quality data 
submission using Medicare Part B claims will range from 0.15 hours (9 
minutes) at a cost of $15.98 (0.15 hr x $106.54) for a computer systems 
analyst to 7.2 hours at a cost of $767.09 (7.2 hr x $106.54/hr). The 
burden estimate also accounts for the effort to become familiar with 
MIPS quality measure specifications.
    Consistent with our currently approved per response time estimates 
and using the updated wage rates in Table 75 of this proposed rule, we 
believe that the start-up cost for a clinician's practice to review 
measure specifications is 7 hours, consisting of 3 hours for a medical 
and health services manager at $129.28/hr, 1 hour for a computer 
systems analyst at $106.54/hr, 1 hour for a Licensed Practical Nurse 
(LPN) at $58.46/hr, 1 hour for a billing and posting clerk at $45.32/
hr, and 1 hour for a physician at $291.64/hr.
    In Table 97, considering both data submission and start-up 
requirements for our adjusted number of clinicians, the estimated time 
(per clinician using the Medicare Part B claims collection type) ranges 
from a minimum of 7.15 hours (0.15 hr + 7 hr) to a maximum of 14.2 
hours (7.2 hr + 7 hr). In aggregate, the estimated total annual time 
for the CY 2025 performance period/2027 MIPS payment year ranges from 
87,209 hours (7.15 hr/response x 12,197 responses) to 173,197 hours 
(14.2 hr/response x 12,197 responses). The total annual cost for the CY 
2025 performance period/2027 MIPS payment year ranges from a minimum of 
$11,047,799 (12,197 responses x $905.78/response) to a maximum of 
$20,209,087 (12,197 responses x $1,656.89/response). For purposes of 
calculating total burden associated with this proposed rule as shown in 
Tables 77 through 79, only the maximum burden is used.
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    In Table 98, we illustrate the net change in estimated burden for 
quality data submissions from clinicians using the Medicare Part B 
Claims-based collection type using the currently approved burden in the 
CY 2024 PFS final rule (88 FR 79438 and 79439). In aggregate, using our 
currently approved per response time estimates, the decrease in number 
of responses from 13,413 to 12,197 (-1,216) (Table 92) will result in a 
total maximum adjustment of -17,268 hours at a cost of -$2,014,779 for 
the CY 2025 performance period/2027 MIPS payment year. For purposes of 
calculating total burden associated with this proposed rule as shown in 
Tables 77 through 79, only the maximum burden is used.

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BILLING CODE C
(5) Quality Data Submission by Individuals and Groups Using MIPS CQM 
and QCDR Collection Types
    In this section, we identify proposed updates to the estimated 
burden for the Quality Data Submission by Individuals and Groups Using 
MIPS CQM and QCDR Collection Types ICR that will be submitted to OMB 
for review under control number 0938-1314 (CMS-10621). As noted in 
Table 79, the proposed change in burden reflects adjustments for 
updated data and assumptions, and as well as the proposal for 
additional MVPs as outlined in section V.B.8.e.(4). of this proposed 
rule. In Table 146 (section VII.E.17.e.(1).), we identify the changes 
in burden to this ICR due to the proposed policies.
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77504 and 77505 and 82 FR 53912 and 53914, 
respectively), the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and CY 
2024 PFS final rules (83 FR 60005 and 60006, 84 FR 63127 and 63128, 85 
FR 84977 through 84979, 86 FR 65584 through 65586, and 87 FR 70151 
through 70153, and 88 FR 79439 through 79441, respectively) for our 
previously finalized requirements and burden for quality data 
submission via the MIPS CQM and QCDR collection types. We refer readers 
to Table 105 for the estimated change in associated burden for quality 
data submission using MIPS CQM and QCDR collection types related to MVP 
and subgroup reporting in the CY 2025 performance period/2027 MIPS 
payment year. We refer readers to section V.B.8.e.(2). of this proposed 
rule for the factors affecting the proposed changes and adjustments for 
each quality performance collection type.
    As noted in Tables 92 and 93, based on updated data available from 
the CY 2022 performance period/2024 MIPS payment year and updated MVP 
reporting assumptions, for the CY 2025 performance period/2027 MIPS 
payment year, we estimate that 17,008 clinicians (10,850 individuals 
and 6,158 groups and virtual groups) will submit quality data as 
individuals or groups using MIPS CQM or QCDR collection types. This is 
an increase of 376 clinicians from the currently approved estimate of 
16,632 clinicians provided in the CY 2024 PFS final rule (88 FR 79439 
through 79441). Given the number of measures required for clinicians 
and groups is the same, we expect the burden to be the same for each 
respondent collecting data via MIPS CQM or QCDR, whether the clinician 
is participating in MIPS as an individual or group.
    Under the MIPS CQM and QCDR collection types, the individual 
clinician or group may either submit the quality measures data directly 
to us, log in and upload a file, or utilize a third party intermediary 
to submit the data to us on the clinician's or group's behalf. We 
estimate that the burden associated with the QCDR collection type is 
similar to the burden associated with the MIPS CQM collection type; 
therefore, we discuss the burden for both collection types together. 
For MIPS CQM and QCDR collection types, we estimate an additional time 
for respondents (individual clinicians and groups) to become familiar 
with MIPS quality measure specifications and, in some cases, specialty 
measure sets and QCDR measures. Therefore, we believe the burden for an 
individual clinician or group to review measure specifications and 
submit quality data is a total of 9 hours at a cost of $1,088.98 per 
response. This consists of 3 hours at $106.54/hr for a computer systems 
analyst (or their equivalent) to submit quality data along with 2 hours 
at $129.28/hr for a medical and health services manager, 1 hour at 
$106.54/hr for a computer systems analyst, 1 hour at $58.46/hr for a 
LPN, 1 hour at $45.32/hr for a billing clerk, and 1 hour at $291.64/hr 
for a physician to review measure specifications. Additionally, 
clinicians and groups who do not submit data directly will need to 
authorize or instruct the qualified registry or QCDR to submit quality 
measures' results and numerator and denominator data on quality 
measures to us on their behalf. We estimate the time and effort 
associated with authorizing or instructing the quality registry or QCDR 
to submit this data will be approximately 5 minutes (0.083 hr) at 
$106.54/hr for a computer systems analyst at a cost of $8.84 (0.083 hr 
x $106.54/hr). Overall, we estimate 9.083 hr/response (3 hr + 2 hr + 1 
hr + 1 hr + 1 hr + 1 hr + 0.083 hr) at a cost of $1,088.98/response [(3 
hr x $106.54/hr) + (2 hr x $129.28/hr) + (1 hr x $106.54/hr) + (1 hr x 
$58.46/hr) + (1 hr x $45.32/hr) + (1 hr x $291.64/hr) + (0.083 hr x 
$106.54/hr)].
    In Table 99, for the CY 2025 performance period/2027 MIPS payment 
year, in aggregate, we estimate a burden of 154,484 hours (9.083 hr/
response x 17,008 responses) at a cost of $18,521,372 (17,008 responses 
x $1,088.98/response).
BILLING CODE P

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    In Table 100, we calculated the net change in estimated burden for 
quality performance category submissions using the MIPS CQM and QCDR 
collection type by using the currently approved burden in the CY 2024 
PFS final rule (88 FR 79439 through 79441). In aggregate, using the 
unchanged currently approved time per response estimate, the increase 
of 376 respondents from 16,632 to 17,008 for the CY 2025 performance 
period/2027 MIPS payment year results in an increase of 3,416 hours at 
a cost of +$409,457.

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BILLING CODE C
(6) Quality Data Submission by Clinicians and Groups: eCQM Collection 
Type
    In this section, we identify proposed updates to the estimated 
burden for the Quality Data Submission by Individuals and Groups Using 
eCQM Collection Type ICR that will be submitted to OMB for review under 
control number 0938-1314 (CMS-10621). As noted in Table 79, this 
proposed change in burden reflects adjustments for updated data and 
assumptions, and as well as the proposal for additional MVPs as 
outlined in section V.B.8.e.(4). of this proposed rule. In Table 146 
(section VII.E.17.e.(1).of this proposed rule), we identify the changes 
in burden to this ICR due to the proposed policies.
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77505 and 77506 and 82 FR 53914 and 53915), CY 2019, 
CY 2020, CY 2021, the CY 2022 PFS, the CY 2023, and the CY 2024 PFS 
final rule (83 FR 60006 and 60007, 84 FR 63128 through 63130, 85 FR 
84979 and 84980, 86 FR 65586 through 65588, 87 FR 70153 and 70154, and 
88 FR 79441 through 79443 respectively) for our previously finalized 
requirements and burden for quality data submission via the eCQM 
collection types. For the change in associated burden for quality data 
submission related to the provisions introducing MVP and subgroup 
reporting beginning in the CY 2025 performance period/2027 MIPS payment 
year, we refer readers to Table 105. We refer readers to section 
V.B.8.e.(2). of this proposed rule for the factors affecting the 
proposed changes and adjustments for each quality performance 
collection type.
    As noted in Tables 92 and 93, based on updated data available from 
the CY 2022 performance period/2024 MIPS payment year and updated MVP 
reporting assumptions, we assume that 27,179 clinicians (21,240 
individual clinicians and 5,939 groups and virtual groups) will submit 
quality data using the eCQM collection type for the CY 2025 performance 
period/2027 MIPS payment year. This is a decrease of 1,535 clinicians 
from the currently approved estimate of 28,714 clinicians in the CY 
2024 PFS final rule (88 FR 78818)). We assume the burden to be the same 
for each respondent using the eCQM collection type, whether the 
clinician is participating in MIPS as an individual or group.
    Under the eCQM collection type, the individual clinician or group 
may either submit the quality measures data directly to us from their 
eCQM, log in and upload a file, or utilize a third party intermediary 
to derive data from their certified electronic health record technology 
(CEHRT) and submit it to us on the clinician's or group's behalf.
    To prepare for the eCQM collection type, the clinician or group 
must review the quality measures on which we will be accepting MIPS 
data extracted from eCQMs, select the appropriate quality measures, 
extract the necessary clinical data from their CEHRT, and submit the 
necessary data to a QCDR/qualified registry to submit the data on 
behalf of the clinician or group. We assume the burden for collecting 
quality measures data via eCQM is similar for clinicians and groups who 
submit their data directly to us from their CEHRT and clinicians and 
groups who use a QCDR or qualified registry to submit the data on their 
behalf. This includes extracting the necessary clinical data from their 
CEHRT and submitting the necessary data to a QCDR/qualified registry. 
We note that the CY 2024 PFS final rule eliminated the category of 
health IT vendors for the Quality Payment Program beginning in the CY 
2025 performance period/2027 MIPS payment period (88 FR 79390 and 
79391).
    We estimate that it will take no more than 2 hours at $106.54/hr 
for a computer systems analyst or their equivalent to submit the data 
file. The burden will also involve becoming familiar with MIPS quality 
measure specifications. In this regard, we estimate it will take 6 
hours for a clinician or group to review measure specifications. Of 
that time, we estimate 2 hours at $129.28/hr for a medical and health 
services manager, 1 hour at $291.64/hr for a physician, 1 hour at 
$106.54/hr for a computer systems analyst, 1 hour at $58.46/hr for an 
LPN, and 1 hour at $45.32/hr for a billing clerk. Overall, we estimate 
a cost of $973.60/response [(2 hr x $106.54/hr) + (2 hr x $129.28/hr) + 
(1 hr x $106.54/hr) + (1 hr x $58.46/hr) + (1 hr x $45.32/hr) + (1 hr x 
$4291.64/hr)].
    In Table 101, for the CY 2025 performance period/2027 MIPS payment 
year, in aggregate, we estimate a burden of 217,432 hours (8 hr x 
27,179 responses) at a cost of $26,461,474 (27,179 responses x $973.60/
response).

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[GRAPHIC] [TIFF OMITTED] TP31JY24.141

    In Table 102, we illustrate the net change in burden for 
submissions in the quality performance category using the eCQM 
collection type from the currently approved burden in the CY 2024 PFS 
final rule (88 FR 79441 and 79442). In aggregate, using our currently 
approved time per response burden estimate, the decrease of 1,535 
respondents from 28,714 to 27,179 for the CY 2025 performance period/
2027 MIPS payment year results in a decrease of 12,280 hours (1,535 
responses x 8 hr/response) at a cost of -$1,494,476 (-1,535 response) 
at a cost of -$1,494,476 (-1,535 responses x $973.60/response).
[GRAPHIC] [TIFF OMITTED] TP31JY24.142


[[Page 62134]]


(7) ICRs Regarding Burden for MVP Reporting
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1314 (CMS-10621).
(a) Burden for MVP Reporting Requirements
    In the CY 2022 PFS final rule, we finalized an option for 
clinicians choosing to report MVPs to participate through subgroups 
beginning with the CY 2023 performance period/2025 MIPS payment year 
(86 FR 65392 through 65394). We refer readers to the CY 2022, CY 2023, 
and CY 2024 PFS final rules for our previously finalized burden 
assumptions and requirements for submission data for the MVP 
performance category, and for the estimated number of clinicians 
participating as subgroups in the CY 2024 performance period/2026 MIPS 
payment year (86 FR 65590 through 65592, 87 FR 70155, and 88 FR 79443).
    As discussed in section II.G.2. of this proposed rule, we are 
proposing to make payment for advanced primary care management(APCM) 
services furnished by a physician or other qualified health care 
professional who is responsible for all primary care (for example, 
physicians and non-physician practitioners, including nurse 
practitioners, physician assistants, certified nurse-midwives and 
clinical nurse specialists), and serve as the continuing focal point 
for all needed health care services during a calendar month. This 
proposed payment would incorporate several specific, existing care 
management and communication technology-based services into a bundle 
and require reporting the Value in Primary Care MVP by clinicians 
billing for APCM services beginning in the CY 2025 performance period/
2027 MIPS payment year. We are proposing that billing practitioners who 
are not MIPS eligible clinicians (as defined at Sec.  414.1305) would 
not be required to report the MVP in order to furnish and bill for APCM 
services. Based on our approach for estimating MVP as a percentage of 
previous traditional MIPS quality submissions discussed in section 
V.B.8.e.(7)(a)(i).of this proposed rule, we are unable to determine how 
many additional clinicians or practices would report the Value in 
Primary Care MVP for the CY 2025 performance period/2027 MIPS payment 
year above our current MVP submission estimates. Similarly, we cannot 
assess what participation levels clinicians or practices who may use 
these APCM codes, if finalized, have reported MIPS in the past (for 
example, eligibility requirements and special statuses, participation 
at the individual, group, virtual group, or Alternative Payment Model 
(APM) Entity level, or reporting via traditional MIPS, the APM 
Performance Pathway (APP), or MVPs), or if they will be MIPS eligible 
clinicians in future years. We refer readers to section II.G.2. of this 
proposed rule for details on this proposal, and section 
VII.E.17.e.(2)(f) for additional discussion on burden impacts to the 
Quality Payment Program.
    In the CY 2024 PFS final rule (88 FR 79442), we conducted an 
analysis to calculate the average quality measure submission rate for 
each newly proposed MVP for the CY 2024 performance period/2026 MIPS 
payment period, using measures submissions in the CY 2021 performance 
period/2023 MIPS payment year for clinicians with relevant clinical 
specialties for each proposed MVP. The total of these average quality 
measure submissions for each MVP was equivalent to about 2 percent of 
total quality measure submissions in the CY 2021 performance period/
2023 MIPS payment year. We added this incremental increase of 2 
percentage points to the previously approved estimate in the CY 2023 
PFS final rule that 12 percent of clinicians who participated in MIPS 
for the CY 2021 performance period/2023 MIPS payment year will submit 
data for the quality performance category through MVP reporting in the 
CY 2023 performance period/2025 MIPS payment year (88 FR 79443).
    With updated submission data available for the CY 2022 performance 
period/2024 MIPs payment year as discussed in section V.B.8.e.(3). of 
this proposed rule and updated quality measure list revisions within 
the MVP inventory for the CY 2024 performance period/2026 MIPS payment 
year (88 FR 79978 through 80047), we conducted the analysis identified 
in the preceding paragraph for the 16 MVPs approved for the CY 2024 
performance period/2026 MIPS payment year. The total of these average 
quality measure submissions for each approved MVP was equivalent to 6 
percent of the total quality measure submissions in the CY 2022 
performance period/2024 MIPS payment year. This is a decrease from the 
14 percent estimate provided in the CY 2024 PFS final rule (88 FR 
79443).
    As discussed in section IV.A.4.a.(1). of this proposed rule, we are 
proposing modifications to the 16 MVPs approved for the CY 2024 
performance period/2026 MIPS payment year reporting with the addition 
and removal of measures and improvement activities based on the MVP 
development criteria (85 FR 84849 through 84854). We are proposing to 
consolidate the previously finalized Optimal Care for Patients with 
Episodic Neurological Conditions MVP and Supportive Care for 
Neurodegenerative Conditions MVP into a consolidated neurological MVP 
titled Quality Care for Patients with Neurological Conditions. We are 
also proposing to add six (6) new MVPs to the MVP inventory. These 
proposals would provide 21 MVPs for the CY 2025 performance period/2027 
MIPS payment year.
    For each newly proposed MVP, we similarly calculated the average 
quality measure submission rate across the measures available in each 
MVP for the CY 2022 performance period/2024 MIPS payment year. Using 
updated data available from the CY 2022 performance period/2024 MIPS 
payment year, we calculated that the total of these average quality 
measure submissions for each proposed MVP was equivalent to about 4 
percent of total quality measure submissions. We assume there would not 
be any changes to MVP submissions due to the proposal to consolidate 
the measures in the Optimal Care for Patients with Episodic 
Neurological Conditions MVP and Supportive Care for Neurodegenerative 
Conditions MVP into the Quality Care for Patients with Neurological 
Conditions MVP. That is, we assume clinicians who would have submitted 
the Optimal Care for Patients with Episodic Neurological Conditions MVP 
or the Supportive Care for Neurodegenerative Conditions MVP would 
instead submit the Quality Care for Patients with Neurological 
Conditions MVP. Therefore, we estimate the proposed changes to the MVP 
inventory in this proposed rule will result in an additional 4 percent 
of MIPS clinicians moving from traditional MIPS to MVP reporting.
    Taking together the aforementioned analyses where we assessed the 
MVP participation rate for the 16 established MVPs at 6 percent using 
updated quality measure submission data from the CY 2022 performance 
period/2024 MIPS payment year, and the assessment that 4 percent of 
MIPS clinicians may move to the six proposed MVPs due to quality 
measure submission trends for the CY 2022 performance period/2024 MIPS 
payment year, we estimate that a total of 10 percent of the clinicians 
will participate in MVP reporting in the CY 2025 performance period/
2027 MIPS payment year. This is a decrease of 4 percentage points from 
the currently approved estimate of 14 percent in the

[[Page 62135]]

CY 2024 PFS final rule (88 FR 79443). This decrease reflects the 
updated analysis of MVP submissions for established MVPs (from 14 
percent to 4 percent) to account for the latest available MIPS 
submission data, and the additional 6 percent of MIPS clinicians we 
believe may report the 6 newly proposed MVPs due to updated quality 
measure submission data.
    Continuing our approach used in the CY 2022, CY 2023, and CY 2024 
PFS final rules (86 FR 65589 and 65590, 87 FR 70156 and 701566, and 88 
FR 79443 and 79444, respectively), we assume that the number of MVP 
registrations will equal our estimated MVP quality submissions. We note 
the MVP registration window for the 12 MVPs available for the CY 2023 
performance period/2025 MIPS payment year closed on November 30, 2023. 
As noted in section IV.A.3.b.(2). of this proposed rule, we received 
over 750 MVP registrations for the CY 2023 performance period/2025 MIPS 
payment year. MIPS submission data for the CY2023 performance period/
2025 MIPS payment year was unavailable while preparing these burden 
estimates. We will reassess our approach as needed in future rules when 
both MVP registration and submission data are available for the same 
performance period.
(i) Burden for MVP Registration: Individuals, Groups and APM Entities
    We refer readers to the CY 2024 PFS final rule (88 FR 79443 and 
79444) for our previously finalized burden relevant to MVP registration 
for clinicians participating as an individual and/or group for MVP 
reporting.
    In the CY 2022 PFS final rule (86 FR 65414), we finalized at Sec.  
414.1365(c)(4)(ii) that an MVP Participant is scored on one population 
health measure in accordance with Sec.  414.1365(d)(1). Since the MVP 
population health measures are administrative claims-based, they do not 
require data submission from clinicians and do not contribute to 
reporting burden. To track which population health measure an MVP 
Participant intends to report, we finalized in the CY 2022 PFS final 
rule (86 FR 65417) at Sec.  414.1365(b)(2)(i) that MVP Participants are 
required to select one population health measure at the time of MVP 
registration.
    MVP Participants currently select one population measure during 
registration (86 FR 65589), via a drop-down list. In section 
IV.A.4.b.(1)(b) of this proposed rule, we are proposing to update the 
registration process and scoring policies for population health 
measures in the quality performance category. We are proposing to 
revise Sec.  414.1365(d)(3)(i)(A) to state that for the CY 2023 through 
2024 performance periods/2025 through 2026 MIPS payment years, MVP 
Participants will be scored on the selected population health measure 
and beginning in the CY 2025 performance period/2027 MIPS payment year, 
we would use the highest score of all available population health 
measures. To apply this policy to subgroups reporting an MVP, we also 
propose to update Sec.  414.1365(d)(3)(i)(A)(1) to provide that for the 
CY 2023 through 2024 performance periods/2025 through 2026 MIPS payment 
years, subgroups will be scored on the selected population health 
measure based on its affiliated group score, if available, and 
beginning in the CY 2025 performance period/2027 MIPS payment year a 
subgroup is scored on the highest score of all available population 
health measures based on its affiliated group score, if available. We 
propose to revise Sec.  414.1365(b)(2)(i) to provide that beginning in 
the CY 2025 performance period/2027 MIPS payment year, each MVP 
Participant must select an MVP and any outcomes-based administrative 
claims-based measure on which the MVP Participant intends to be scored. 
We refer readers to section IV.A.4.b.(1) of this rulemaking for details 
on this proposal and scoring implications. This proposal would remove 
the requirement for the MVP Participant to select a population health 
measure during MVP registration. We assume the associated reduction in 
burden per application would be minimal. Therefore, we are not 
adjusting the burden per MVP registration from the currently approved 
registration time of 15 minutes (0.25 hr) (88 FR 79443 and 79444).
    As discussed, we estimate that approximately 10 percent of the 
clinicians that currently participate in MIPS will submit data for the 
measures and activities in an MVP. For the CY 2025 performance period/
2027 MIPS payment year, we assume that the total number of individual 
clinicians, groups, subgroups and APM Entities that will complete the 
MVP registration process is 6,285. In Table 103, we estimate that it 
will take 1,571 hours (6,285 responses x 0.25 hr/response) at a cost of 
$167,432 (6,285 registrations x $26.64/registration) for individual 
clinicians, groups and APM Entities to register for MVP reporting in 
the CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.143

    In Table 104, we illustrate the net change in burden for MVP 
registration using the currently approved burden in the CY 2024 PFS 
final rule (88 FR 79443 and 79444). In aggregate, for the CY 2025 
performance period/2027 MIPS payment year, the change in the number of 
respondents expected to register for MVP reporting from 9,585 to 6,285 
will result in a decrease of 3,300 responses. In aggregate, when 
combined with the currently approved per response time estimate, this 
will result in a decrease of 825 hours (-3,300 responses x 0.25hr/

[[Page 62136]]

response) at a cost of -$87,912 (-3,300 responses x $26.64/response).
[GRAPHIC] [TIFF OMITTED] TP31JY24.144

(ii) Burden for Subgroup Registration
    We are not proposing any changes to our currently approved subgroup 
registration burden (86 FR 65590) of 10 annual hours (20 responses at 
0.5hr/response). As discussed in section V.B.8.e.(7)(a) of this 
proposed rule, we assume the proposal to remove the selection of a 
population health measure at the time of registration, as detailed in 
section IV.A.4.b.(1)(b). of this proposed rule, will not significantly 
impact the currently approved burden for MVP registration. We continue 
this assumption to subgroup registration. Therefore, we are continuing 
our currently approved burden for subgroup registration time of 30 
minutes (0.5 hr).
    We expect clinician participation in subgroups will be relatively 
low for the CY 2025 performance period/2027 MIPS payment year due to 
the voluntary subgroup reporting option and the additional burden 
involved for groups to organize clinicians into subgroups. Therefore, 
we are not proposing any adjustments to our previously finalized 
estimate in the CY 2022 PFS final rule (86 FR 65590) that 20 subgroups 
will participate in MVP reporting.
    As identified in section IV.A.3.c.(1) of this proposed rule, we 
finalized a mandatory subgroup reporting requirement for multispecialty 
groups choosing to report as an MVP Participant beginning in the CY 
2026 performance period/2028 MIPS payment year (Sec.  414.1305; 86 FR 
65394 through 65397). Section IV.A.3.d. of this proposed rule includes 
a Request for Information (RFI) to obtain feedback on what guidance/
parameters are needed for multispecialty groups to place clinicians 
into subgroups for reporting an MVP relevant to the scope of care 
provided. Absent available submission data on MVP reporting as 
discussed in section V.B.8.e.(7)(a). of this proposed rule, we are 
unable to estimate the effect of this established policy on reporting 
for the CY 2026 performance period/2028 MIPS payment. We refer readers 
to section VII.E.17.e.(2)(g). of this proposed rule for additional 
discussion on burden impacts of this established policy to the Quality 
Payment Program.
    The burden relevant to the subgroup registration requirement is 
currently approved by OMB under control number 0938-1314 (CMS-10621). 
Since this rulemaking is not proposing any new or revised subgroup 
registration requirements or burden, we are not proposing any changes 
under that control number.
(iii) Burden for MVP Quality Performance Category Submission
    In the CY 2022 PFS final rule (86 FR 65411 through 65415), we 
finalized the reporting requirements for the MVP quality performance 
category at Sec.  414.1365(c)(1)(i).
    In sections IV.A.4.d.(2)(b). and IV.A.4.d.(3).(b). of this proposed 
rule, we are proposing to adopt minimum criteria for a qualifying data 
submission for a MIPS performance period for the quality performance 
category and to codify our existing policies governing our treatment of 
multiple submissions received for the quality performance category. In 
accordance with our discussion of this policy proposal relevant to 
traditional MIPS quality reporting in section V.B.8.e.(2). of this 
proposed rule, these proposed policies will not introduce new 
requirements to submit data for the quality performance category of 
MVPs. Therefore, we are continuing our currently approved per response 
time estimates for submitting the MVP quality performance category data 
due to this proposal.
    As described in section V.B.8.e.(7)(a) of this proposed rule, we 
estimate that 10 percent of the clinicians who participated in MIPS for 
the CY 2022 performance period/2024 MIPS payment year will submit data 
for the quality performance category of MVP in the CY 2025 performance 
period/2027 MIPS payment year. We also estimate there will be 20 
subgroup reporters in the CY 2025 performance period/2027 MIPS payment 
year. In Table 105, we estimate that 3,020 clinicians and 10 subgroups 
will submit data using eCQMs collection type at $644.93/response (see 
line q for eCQMs); 1,890 clinicians and 10 subgroups will submit data 
using MIPS CQM and QCDR collection type at $716.31/response (see line q 
for CQM and QCDRs); and 1,355 clinicians and 0 subgroups will submit 
data for the MVP quality performance category using the Medicare Part B 
claims collection type at $1,101.24/response (see line q for claims). 
For the CY 2025 performance period/2027 MIPS payment year, using our 
currently approved per response time estimates for the clinicians and 
subgroups submitting data for the MVP quality performance category, we 
estimate a burden of 16,059 hours [5.3 hr x 3,030 (3,020 + 10) 
responses] at a cost of $1,954,138 (3,030 responses x $644.93/response) 
for the eCQM collection type, 11,343 hours [5.97 hr x 1,900 (1,890 + 10 
responses)] at a cost of $1,360,989 (1,900 responses x $716.31/
response) for the MIPS CQM and QCDR collection type, and 12,791 hours 
(9.44 hr x 1,355 clinician responses) at a cost of $1,492,180 (1,355 
responses x

[[Page 62137]]

$1,101.24/response) for the Medicare Part B claims collection type.
BILLING CODE P

[[Page 62138]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.145

BILLING CODE C
    Table 106 illustrates the changes in estimated burden for 
clinicians who will submit the MVP quality performance category 
utilizing the

[[Page 62139]]

eCQM, MIPS CQM and QCDR, and Medicare Part B claims collection types in 
the CY 2025 performance period/2027 MIPS payment year. We note we used 
the currently approved burden in the CY 2024 PFS final rule (88 FR 
79444 through 79446) as the baseline to determine the net change in 
burden. In aggregate, when combined with our currently approved per 
response time estimate, the decrease in 3,300 respondents who will 
submit data for the MVP quality performance category will result in a 
change of -8,766 hours and -$1,066,714 for the eCQM collection type, -
4,877 hours and -$585,225 for the CQM and QCDR collection type, and -
7,826 hours and -$912,928 for the Medicare Part B claims collection 
type.
[GRAPHIC] [TIFF OMITTED] TP31JY24.146

(8) Beneficiary Responses to CAHPS for MIPS Survey
    We are not proposing any new or revised collection of patient 
experience information from survey respondents during the 
administration of the CAHPS for MIPS Survey for the CY 2025 performance 
period/2027 MIPS payment year. We note that we proposed updates to our 
estimated burden under control number 0938-1222 (CMS-10450) as 
discussed in the CY 2024 PFS final rule (88 FR 79446 and 79447), which 
were submitted under the standard non-rule PRA package. The 60-day 
notice for public comment for this PRA package appeared in the Federal 
Register on October 17, 2023 (88 FR 71573), and the 30-day notice for 
public comment appeared in the Federal Register on January 16, 2024 (89 
FR 2622). Since this rulemaking is not proposing any new or revised 
CAHPS for MIPS survey requirements or burden for this ICR, we are not 
proposing any changes for this ICR under that control number.
(9) Group Registration for CAHPS for MIPS Survey
    We are not proposing any new or revised collection of information 
requirements or burden related to group registration for the CAHPS for 
MIPS Survey for the CY 2025 performance period/2027 MIPS payment year. 
We note that we proposed updates to our estimated burden under control 
number 0938-1222 (CMS-10450) as discussed in the CY 2024 PFS final rule 
(88 FR 79447 and 79448), which were submitted under the standard non-
rule PRA package. The 60-day notice for this PRA package appeared in 
the Federal Register on October 17, 2023 (88 FR 71573), while the 30-
day notice appeared on January 16, 2024 (89 FR 2622). Since this 
rulemaking is not proposing any new or revised CAHPS for MIPS survey 
requirements or burden for this ICR, we are not proposing any changes 
for this ICR under that control number.
f. ICRs Regarding the Call for MIPS Quality Measures
    In this section of this proposed rule, we identify proposed 
adjustments to the estimated burden for the Call for MIPS Quality 
Measures ICR, that will be submitted to OMB for review under control 
number 0938-1314 (CMS-10621). These proposed adjustments are summarized 
in Tables 78 and 79. We are not proposing any new or revised collection 
of information requirements related to the call for MIPS quality 
measures. However, based on quality measure submissions received for 
CMS' consideration during the 2023 MIPS Annual Call for Quality 
Measures, we are adjusting our burden estimates for the CY 2025 
performance period/2027 MIPS payment year. In the CY 2024 PFS proposed 
rule (88 FR 52662) and the CY 2024 PFS final rule (88 FR 79448), we 
inadvertently noted we that we derived our estimates of 31 responses 
from submissions during the 2023 MIPS Annual Call for Quality Measures; 
we derived these estimated response from data for the 2022 MIPS Annual 
Call for Quality Measures. The proposed estimates in this proposed rule 
reflect submission changes from the 2022 and 2023 MIPS Annual Call for 
Quality Measures, and do not reflect proposed policies or statute 
changes in this proposed rule.
    In this proposed rule, we estimate that we will receive 16 quality 
measure submissions during the 2025 MIPS Annual Call for Quality 
Measures, a decrease of 15 from the currently approved number of 
quality measure submissions for consideration (88 FR 79448 and 79449). 
We are not proposing any changes to the 5.5 hour (2.4 hr for practice 
administrator + 3.1 hr for clinician) per response time estimate for 
quality measure submissions.
    In Table 107, we estimate an annual burden of 88 hours (16 measure 
submissions x 5.5 hr/measure) at a cost of $19,430 (16 measure 
submissions x $1,214.35/submission for the CY 2025 performance period/
2027 MIPS payment year).

[[Page 62140]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.147

    In Table 108, we illustrate the net change in estimated burden for 
the call for quality measures using the currently approved burden in 
the CY 2024 PFS final rule (88 FR 79448 and 79449). In aggregate, the 
estimated decrease in the number of quality measure submissions will 
result in an adjustment of -83 hours (-15 measure submissions x 5.5 hr/
measure submission) at a cost of -$18,215 (-15 measure submissions x 
$1,214.35/measure submission) for the CY 2025 performance period/2027 
MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.148

g. ICRs Regarding Promoting Interoperability Data (Sec. Sec.  414.1375 
and 414.1380)
(1) Background
    For the CY 2025 performance period/2027 MIPS payment year, MIPS 
eligible clinicians, groups, subgroups, and APM Entities can submit 
Promoting Interoperability performance category data through direct log 
in and upload or log in and attest submission types. We note that the 
log in and attest submission type is only available for the Promoting 
Interoperability performance category and is not available for the 
quality performance category. With the exception of submitters who 
elect to use the log in and attest submission type for the Promoting 
Interoperability performance category, we anticipate that MIPS eligible 
individual clinicians, groups, subgroups, and APM Entities will use the 
same data submission type for both the quality and Promoting 
Interoperability performance categories and that the clinicians, 
practice managers, and computer systems analysts involved in supporting 
the quality data submission will also support the Promoting 
Interoperability data submission process. The following burden 
estimates show only incremental hours required above and beyond the 
time already accounted for in the quality data submission process. We 
note that this analysis assesses burden by performance category and 
submission type and emphasizes that MIPS is a consolidated program. We 
analyzed data submitted by MIPS eligible clinicians, groups, subgroups 
and APM Entities, and assessed clinician performance based on all the 
four MIPS performance categories, as applicable.
(2) Reweighting Applications for MIPS Performance Categories
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1314 (CMS-10621).
    We refer readers to the CY 2017 Quality Payment Program final rule 
(81 FR 77240 through 77243), CY 2018 Quality Payment Program final rule 
(82 FR 53918 and 53919), and the CY 2019, CY 2020, CY 2021, CY 2022, CY 
2023, and CY 2024 PFS final rules (83 FR

[[Page 62141]]

60011 and 60012, 84 FR 63134 and 63135, 85 FR 84984 and 84985, 86 FR 
65596 through 65598, 87 FR 70160 through 70162, and 88 FR 79449 and 
97450, respectively) for our previously finalized requirements for, and 
our analysis of the information collection and reporting burden 
associated with, reweighting applications for the four MIPS performance 
categories.
    As established in the CY 2017 and CY 2018 Quality Payment Program 
final rules, MIPS eligible clinicians may submit an application 
requesting reweighting to zero percent for the Promoting 
Interoperability, quality, cost, and/or improvement activities 
performance categories under specific circumstances as set forth in 
Sec.  414.1380(c)(2), including, but not limited to, extreme and 
uncontrollable circumstances, significant hardship, or other exceptions 
(81 FR 77240 through 77243, 82 FR 53680 through 53686, and 82 FR 53783 
through 53785).
    Respondents (MIPS eligible individual clinicians, groups, or APM 
Entities) who apply for reweighting of the quality, cost, and/or 
improvement activities performance categories have the option of 
applying for reweighting of the Promoting Interoperability performance 
category on the same online form. We assume respondents applying for a 
reweighting of the Promoting Interoperability performance category due 
to extreme and uncontrollable circumstances will also request a 
reweighting of at least one of the other performance categories 
simultaneously and not submit multiple reweighting applications.
    In section IV.A.4.i.(2) of this proposed rule, we are proposing to 
adopt a new reweighting policy at Sec.  414.1380(c)(2)(i)(A)(10) and 
(c)(2)(i)(C)(12). Specifically, we are proposing that, beginning with 
the CY 2024 performance period/2026 MIPS payment year, that we may 
reweight one or more of the performance categories (that is, quality, 
improvement activities, or Promoting Interoperability) where we 
determine, based on information submitted to us on or before November 
1st of the year preceding the relevant MIPS payment year, that data for 
a MIPS eligible clinician are inaccessible or unable to be submitted 
due to circumstances outside of the control of the clinician because 
the MIPS eligible clinician delegated submission of the data to their 
third party intermediary, evidenced by a written agreement between the 
MIPS eligible clinician and third party intermediary, and the third 
party intermediary did not submit the data for the performance 
category(ies) on behalf of the MIPS eligible clinician in accordance 
with applicable deadlines. Since MIPS eligible clinicians do not submit 
data separately for measures in the cost performance category and we 
score cost measures based solely on Medicare claims data, the proposed 
reweighting policy does not apply to the cost performance category. We 
also are proposing that, to determine whether to apply reweighting to 
the affected performance category(ies), we would consider: whether the 
MIPS eligible clinician knew or had reason to know of the issue with 
its third party intermediary's submission of the clinician's data for 
the performance category(ies); whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category(ies) in accordance 
with applicable deadlines. Because we believe these occurrences would 
be rare based on our experience with related requests for reweighting, 
and the extent and source of documentation provided to us for each 
event may vary considerably, we are not proposing any changes to our 
currently approved burden estimates for this proposal. We refer readers 
to section VII.E.17.e.(2)(e). of this proposed rule for additional 
discussion on these burden estimates.
    Table 109 summarizes our analysis of the estimated burden, 
including for MIPS eligible clinicians to apply for reweighting of one 
or more of the MIPS performance categories to zero percent due to an 
extreme or controllable circumstance, significant hardship, or other 
exception as provided in Sec.  414.1380(c)(2)(i).
    We are updating our burden estimates relevant to this ICR based on 
the number of reweighting applications received for the CY 2023 
performance period/2025 MIPS payment year by January 2, 2024, that do 
not cite the public health emergency (PHE) for COVID-19 (PHE for COVID-
19) as the basis for reweighting. The Federal PHE for COVID-19 under 
section 319 of the Public Health Service Act ended on May 11, 
2023.\789\ As a result of the end of the PHE, MIPS eligible clinicians 
will no longer be able to submit a reweighting application citing 
hardships from the PHE for COVID-19; therefore, we are excluding 
reweighting applications citing the PHE for COVID-19 in our estimate 
for CY 2025 performance period/2027 MIPS payment year reweighting 
applications. In this proposed rule, we estimate that we will receive a 
total of 3,297 applications to request reweighting for any or all of 
the four MIPS performance categories for the CY 2025 performance 
period/2027 MIPS payment year. Of the 3,297, we estimate that 2,490 
MIPS eligible clinicians or groups will submit a request that includes 
reweighting the Promoting Interoperability performance category to zero 
percent due to a significant hardship or other exception as provided in 
Sec.  414.1380(c)(2)(i)(C). and we estimate that 802 MIPS eligible 
clinicians or groups will submit a request to reweight one or more of 
the MIPS performance categories as provided in Sec.  414.1380(c)(2)(i). 
Additionally, we estimate 5 APM Entities will submit an extreme and 
uncontrollable circumstances exception application to reweight one or 
more MIPS performance category for the CY 2025 performance period/2027 
MIPS payment year. This adjustment, due to both updated data and the 
end of the PHE for COVID-19, results in a decrease of 25,930 
respondents compared to our currently approved estimate of 29,227 
respondents (88 FR 79449 and 79450). We note the currently approved 
estimate included reweighting applications citing the PHE for COVID-19.
---------------------------------------------------------------------------

    \789\ https://www.hhs.gov/coronavirus/covid-19-public-health-emergency/index.html.
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    Consistent with our assumptions in the CY 2024 PFS final rule (88 
FR 79449 and 79450), we continue to estimate it will take 0.25 hours at 
$106.54/hr for a computer system analyst to complete and submit the 
reweighting application. In Table 109, we estimate an annual burden of 
824 hours (3,297 applications x 0.25 hr/application) at a cost of 
$87,832 (3,297 applications x $26.64/application) for the CY 2025 
performance period/2027 MIPS payment year.

[[Page 62142]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.149

    In Table 110, we illustrate the net change in estimated burden for 
submission of reweighting applications for MIPS performance categories 
using the currently approved burden in the CY 2024 PFS final rule (88 
FR 79449 and 79450). The adjustment in the estimated number of 
respondents, from 29,227 to 3,297 respondents, results in a decrease of 
25,930 respondents. In aggregate, using our currently approved per 
response time estimate, as shown in Table 110, the decrease in 25,930 
respondents results in an adjustment of -6,483 hours and -$690,775 the 
CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.150

(3) Submitting Promoting Interoperability Data
    The following proposed changes relevant to the submission of 
Promoting Interoperability data requirements and burden will be 
submitted to OMB for review under OMB under control number 0938-1314 
(CMS-10621).
    We note that we adjusted the burden estimates from the currently 
approved CY 2024 PFS final rule (88 FR 79451 through 79453) to 
incorporate updated available MIPS submission data for the CY 2022 
performance period/2024 MIPS payment year, as discussed in section 
V.B.8.e.(3). of this proposed rule. We are not proposing changes based 
on the proposals discussed in section IV.A. of this proposed rule. In 
the following paragraphs, we discuss these proposed policies and our 
rationale for maintaining the currently approved burden for the 
submission of Promoting Interoperability data requirements.
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77509 through 77511, and 82 FR 53919 and 53920, 
respectively), and the CY 2019, CY 2020, CY 2021, CY 2022, CY 2023, and 
CY 2024 PFS final rules (83 FR 60013 and 60014, 84 FR 63135 through 
63137, 85 FR 84985 through 84987, 86 FR 65598 through 65600, 87 FR 
70162 through 70164, and 88 FR 79451 through 79453, respectively) for 
our previously finalized requirements and burden for submission of data 
for the Promoting Interoperability performance category. We refer 
readers to Sec.  414.1375 for our previously established policies 
regarding reporting for the Promoting Interoperability performance 
category. We also refer readers to Sec.  414.1305 for the definition of 
attestation, Sec.  414.1325 for data submission requirements, and Sec.  
414.1380(b)(4) for Promoting Interoperability performance category 
scoring. We refer readers to Sec.  414.1380(c)(2)(i)(C) for our 
previously finalized policies regarding scoring of data submission in 
the Promoting Interoperability performance category after an approved 
reweighting for the performance category.
    In section IV.A.4.d.(2)(d) of this proposed rule, we are proposing 
to adopt minimum criteria for a qualifying data submission for the 
Promoting Interoperability performance category at Sec.  
414.1325(a)(1)(iii). Currently, an incomplete data submission would 
void an approved reweighting of the Promoting Interoperability 
performance category in accordance with Sec.  414.1380(c)(2)(i)(C). 
This proposal would clarify what counts as a data submission for MIPS 
eligible clinicians

[[Page 62143]]

and it would potentially avoid partial data submissions from overriding 
an approved reweighting or a previously scored submission for the 
Promoting Interoperability performance category. Specifically, we 
propose that a qualifying data submission for the Promoting 
Interoperability performance category must include all the following 
elements: (1) performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS; (2) 
required attestation statements, as specified by CMS; specified by CMS; 
(3) CMS EHR Certification ID (CEHRT ID) from the Certified Health IT 
Product List (CHPL); and (4) the start date and end date for the 
applicable performance period as set forth in Sec.  414.1320. If we 
receive a qualifying data submission meeting the proposed minimum 
criteria for reporting, then we will review the data submission and 
score the Promoting Interoperability performance category in accordance 
with our applicable scoring policies. We refer readers to section 
IV.A.4.d.(2)(d) of this proposed rule for additional background and 
details on this proposal. We are not proposing any changes to the 
existing scoring or reweighting policies described under Sec.  414.1380 
for the MIPS performance categories in this section IV.A.4.d. Our 
current estimates assume that PI submissions include all requirements 
for scoring; therefore, we are not adjusting our established per 
response time estimate.
    In section IV.A.4.d.(3)(c). of this proposed rule, we are also 
proposing to modify our policy governing our treatment of multiple data 
submissions received for the Promoting Interoperability performance 
category, which we propose to codify at Sec.  414.1325(f)(2). 
Specifically, we are proposing that, in cases where CMS receives 
multiple submissions for the Promoting Interoperability performance 
category, CMS would calculate a score for each data submission received 
and assign the highest of the scores.
    In our analysis of the information collection and reporting burden, 
we are not adjusting our estimated number of respondents submitting 
Promoting Interoperability data. These proposals intend to 
significantly reduce certain issues with the scoring of unintended data 
submissions affecting MIPS payment adjustments for individual MIPS 
eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities. These two proposals may limit the unintentional overriding of 
an approved reweighting or an existing scoreable submission. Our 
currently approved per response estimates incorporate the required 
measures and attestations and other required data elements identified 
in sections IV.A.4.d.(2)(d). and IV.A.4.d.(3)(c). of this proposed 
rule.
    In the CY 2022 PFS final rule, we finalized at Sec.  
414.1365(c)(4)(i) that an MVP Participant is required to meet the 
Promoting Interoperability reporting requirements. We also finalized at 
Sec.  414.1365(c)(4)(i)(A) the requirements for a subgroup 
participating in MVP reporting (86 FR 65413 and 65414). Specifically, 
we stated that for the CY 2023 and 2024 MIPS performance periods/2025 
and 2026 MIPS payment years, an MVP Participant that is a subgroup is 
required to submit its affiliated group's data for the Promoting 
Interoperability performance category. The submission of the affiliated 
group's data will be on the subgroup's behalf. If the affiliated group 
chooses to report as a group for the Promoting Interoperability 
performance category, the group will still be required to submit its 
own data separately and in accordance with the reporting rules for 
groups. In section IV.A.4.b.(4). of this rulemaking, we are proposing 
to modify Sec.  414.1365(c)(4)(i)(A) by removing the references to the 
specific MIPS performance periods/payment years to state that an MVP 
Participant that is a subgroup is required to submit its affiliated 
group's data for the Promoting Interoperability performance category. 
The proposed change would allow a subgroup to submit the affiliated 
group's data for the MVP Promoting Interoperability performance 
category for the CY 2025 performance period/2027 MIPS payment year and 
beyond. As this proposal would not create new reporting requirements, 
there are no burden implications for this proposal.
    The Department of Health and Human Services (HHS) final rule, 21st 
Century Cures Act: Establishment of Disincentives for Health Care 
Providers That Have Committed Information Blocking (hereafter referred 
to as the Disincentives final rule) was released on June 24, 2024 
(https://www.healthit.gov/topic/information-blocking#Disincentives). 
Section IV.A.4.e.(4)(d). of this proposed rule summarizes several 
policies in the Disincentives final rule under which a MIPS eligible 
clinician that the Office of Inspector General determines has committed 
information blocking would not be a meaningful EHR user, and therefore 
would be unable to earn a score (instead earning a score of zero) for 
the Promoting Interoperability performance category. We note the 
Disincentives final rule described in section IV.A.4.e.(4)(d). of this 
proposed rule would not create any additional reporting, recordkeeping, 
or third party disclosure requirements. Consequently, we are not 
proposing any updates in this proposed rule.
    In sections IV.A.4.e (4)(e)(iii) of this proposed rule, we note 
that we recently released the CMS Interoperability and Prior 
Authorization final rule which appeared in the Federal Register on 
February 8, 2024 (89 FR 8758). In the CMS Interoperability and Prior 
Authorization final rule final rule, we finalized the addition of a new 
measure, the ``Electronic Prior Authorization'' measure, under the 
Health Information Exchange (HIE) objective for the MIPS Promoting 
Interoperability performance category beginning with the CY 2027 
performance period/2029 MIPS payment year (89 FR 8909 through 8927). 
The burden estimate for MIPS clinicians to report the ``Electronic 
Prior Authorization measure'' was provided in the CMS Interoperability 
and Prior Authorization final rule (89 FR 8953 through 8956). In the 
CMS Interoperability and Prior Authorization final rule final rule, we 
identified that this measure will be included in a PRA package related 
to the CMS Interoperability and Prior Authorization final rule (89 FR 
8946). Consequently, we are not proposing any updates in this proposed 
rule.
    Due to the availability of updated data on the Promoting 
Interoperability submissions during the CY 2022 performance period/2024 
MIPS payment year, we are adjusting our currently approved estimated 
burden for the submission of data in Promoting Interoperability 
performance category (88 FR 79451 and 79452). In Table 111, we estimate 
that a total number of 18,609 respondents, consisting of 14,500 
individual MIPS eligible clinicians, 4,089 groups and virtual groups, 
and 20 subgroups will submit data for the Promoting Interoperability 
performance category in the CY 2025 performance period/2027 MIPS 
payment year.
    As noted in section V.B.8.a.(1)(a) of this proposed rule, we have 
not updated our Quality Payment Program burden estimates to reflect 
MIPS Promoting Interoperability reporting requirements of non-MIPS 
eligible clinicians due to requirements for the Shared Savings Program. 
For MIPS eligible clinicians participating in an APM, we continue our 
assumption from the CY 2023 PFS final rule (87 FR 70163) and CY 2024 
PFS final rule (88 FR 79451) that each MIPS eligible clinician in an 
APM Entity reports data for the Promoting Interoperability performance 
category through either their group TIN or individual reporting in the 
CY 2019 PFS final rule, we established that MIPS

[[Page 62144]]

eligible clinicians who participate in the Shared Savings Program are 
no longer limited to reporting for the Promoting Interoperability 
performance category through their ACO participant TIN (83 FR 59822 and 
59823). Burden estimates for this proposed rule assume group TIN-level 
reporting as we believe this is the most reasonable assumption for MIPS 
eligible clinicians in the Shared Savings Program, which requires that 
ACOs include full TINs as ACO participants. Accordingly, we assume that 
any Promoting Interoperability data submitted at the APM-Entity level 
adheres to APM or Shared Savings Program requirements. Sections 1899 
and 1115A of the Act (42 U.S.C. 1395jjj and 42 U.S.C. 1315a, 
respectively) state that the Shared Savings Program and the testing, 
evaluation, and expansion of Innovation Center models are not subject 
to the PRA.
[GRAPHIC] [TIFF OMITTED] TP31JY24.151

    As shown in Table 112, we are continuing our currently approved 
estimated time of 2.70 hours per response. Therefore, we estimate that 
it will result in a total burden of 50,244 hours (18,609 respondents x 
2.70 incremental hours for a computer analyst's time above and beyond 
the physician, medical and health services manager, and computer 
system's analyst time required to submit quality data) and $5,353,065 
(18,609 responses x $287.66/response) to submit data for the Promoting 
Interoperability performance category in the CY 2025 performance 
period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.152

    In Table 113, we illustrate the change in burden for clinicians to 
submit data in the Promoting Interoperability performance category for 
the CY 2025 performance period/2027 MIPS payment year. In aggregate, we 
estimate that the decrease in the number of respondents from 25,990 to 
18,609 will result in an adjustment of -19,929 hours (-7,381 
respondents x 2.70 hr/response) and -$2,123,218.

[[Page 62145]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.153

h. ICRs Regarding Improvement Activities Submission (Sec. Sec.  
414.1305, 414.1355, 414.1360, and 414.1365)
    The following proposed changes will be submitted to OMB for review 
under control number 0938-1314 (CMS-10621)
    We are not proposing changes due to the improvement activities 
proposals discussed in section IV.A. of this proposed rule. In the 
following paragraphs, we discuss these proposed policies and our 
reasons for not changing the currently approved per response burden for 
improvement activities submission.
    In section IV.A.4.e.(3)(b)(iv) of this proposed rule, we are 
proposing two scoring and reporting policy changes for the improvement 
activities performance category effective for the CY 2025 performance 
period/2027 MIPS payment year and subsequent years. First, we are 
proposing to eliminate the weighting of improvement activities. In the 
CY 2017 Quality Payment Program final rule, we established a 
differentially weighted model for the improvement activities 
performance category with two categories, medium and high, to provide 
flexible scoring (81 FR 28210). In that rule (81 FR 77177 and 77178), 
we codified at Sec.  414.1380(b)(3) that clinicians (except for non-
patient facing MIPS eligible clinicians, small practices, and practices 
located in rural areas and geographic health professional shortage 
areas (HPSAs)) receive 10 points for each medium-weighted improvement 
activity and 20 points for each high-weighted improvement activity. 
Non-patient facing MIPS eligible clinicians, small practices, and 
practices located in rural areas and geographic HPSAs receive 20 points 
for each medium-weighted improvement activity and 40 points for each 
high-weighted improvement activity.
    Second, we are proposing to further simplify improvement activity 
reporting requirements by reducing the number of activities to which 
clinicians are required to attest to achieve a score in the improvement 
activities performance category, beginning in the CY 2025 performance 
period/2027 MIPS payment year. Currently, MIPS eligible clinicians are 
required to report two high-weighted activities, four medium-weighted 
activities, or one high-weighted and two medium-weighted activities 
while MVP participants are currently required to report one high-
weighted activity or two medium-weighted activities. We are proposing 
that MIPS eligible clinicians who participate in traditional MIPS would 
be required to report two activities and MVP participants would be 
required to report one activity to achieve 40 points, or full credit. 
In addition, we are proposing that MIPS eligible clinicians who are 
categorized as small practice, rural, in a provider-shortage area, or 
non-patient facing would now be required to report one activity (for 
either traditional MIPS or MVPs).
    We established our currently approved estimate that it will take a 
computer analyst 5 minutes to log in and manually attest that 
improvement activities were completed in the CY 2019 PFS final rule (83 
FR 60016). We believe the proposed removal of weighting for improvement 
activities will decrease burden for MIPS eligible clinicians who 
previously reported medium-weighted activities. As MIPS eligible 
clinicians who previously only reported high-weighted activities will 
have the same attestation requirements under this proposal, we are not 
proposing a change to our currently estimated per response burden. We 
refer readers to section VII.E.17.e.(2)(c). of this proposed rule where 
we discuss our impact analysis for this proposal.
    In section IV.A.4.e.(3)(b)(iii) of this rulemaking, we are also 
proposing changes to the improvement activities inventory for the CY 
2025 performance period/2027 MIPS payment year and future years as 
follows: adding two new improvement activities; modifying two existing 
improvement activities; and removing eight previously adopted 
improvement activities. In the CY 2023 PFS final rule (87 FR 70211) and 
the 2024 PFS final rule (88 FR 79519), we anticipated that most 
clinicians performing improvement activities, to comply with existing 
MIPS policies, will continue to perform the same activities because 
previously finalized improvement activities continue to apply for the 
current and future years unless otherwise modified per rulemaking (82 
FR 54175). We believe this proposal will not significantly affect 
burden because the majority of activities are not revised. We refer 
readers to section VII.E.17.e.(2)(b) of this proposed rule where we 
discuss our impact analysis for this proposal, and section 
VII.E.17.e.(2)(c) where we discuss the impact analysis for 
modifications to modifications to improvement activities scoring and 
reporting policies. As discussed in section IV.A.4.d.(2)(c) in this 
proposed rule, we previously finalized at Sec.  414.1360(a)(2) that 
MIPS eligible clinicians, groups, virtual groups, or subgroups must 
submit a yes response for each improvement activity that is performed 
for at least a continuous 90-day period during the applicable 
performance period to receive points in the improvement activities 
performance category described under Sec.  414.1360(b)(3). We currently 
assign a score for any submission or attestation received in the 
improvement activities performance category via the submission types 
described under Sec.  414.1325(a)(1) regardless of whether the 
submission or

[[Page 62146]]

attestation included a yes response or not. Several MIPS eligible 
clinicians have notified us that there have been instances where they 
unintentionally submitted non-scorable data for a MIPS performance 
category, which overrode an approved reweighting or a previously 
scorable data submission for a performance categories. In the event of 
a submission without yes responses, we currently assign a score of 
zero. In section IV.A.4.d.(2)(c). of this proposed rule, we are 
proposing to adopt minimum criteria for a qualifying data submission 
for a performance period for the improvement activities performance 
category. We are proposing to specify what we consider to be a data 
submission at Sec.  414.1325(a)(1)(ii) to state that for the 
improvement activities performance category, a data submission must 
include a response of ``yes'' for at least one activity in the MIPS 
improvement activities inventory. We anticipate the proposed change 
would potentially avoid unintentional overriding of an approved 
reweighting or a prior data submission for the improvement activities 
performance category due to submissions or attestations without a 
response of ``yes'' for any of the improvement activities. We note that 
we are not proposing any changes to the data submission criteria and 
scoring for the improvement activities performance category described 
under Sec. Sec.  414.1360 and 414.1380(b)(3) respectively.
    Additionally, we are proposing to codify our existing policies 
governing multiple data submissions received for the improvement 
activities performance category at Sec.  414.1325(f)(1). We refer 
readers to section IV.A.4.d.(3)(b) of this proposed rule for details. 
These proposals, if finalized, would not affect the requirements for 
MIPS eligible clinicians and groups that submit data for the 
improvement activities performance category. We assume these proposals 
would not affect the number improvement activities submissions, as the 
intent is to eliminate certain issues with the scoring of an unintended 
data submission affecting payment adjustments for individual MIPS 
eligible clinicians, groups, virtual groups, subgroups, and APM 
Entities. Therefore, we are not proposing any adjustments to our 
currently approved estimated burden due to these policy proposals.
    As shown in Table 114, we are adjusting the currently approved 
burden estimates (88 FR 79454 and 79455) due to available updated 
submission data for the CY 2022 performance period/2024 MIPS payment 
year, as discussed in section V.B.8.e.(3). of this proposed rule. As 
identified in Table 79, the proposed change in burden reflects 
adjustments for updated data, rather than proposed requirements or 
statues in this proposed rule. We estimate that a total of 38,433 
respondents consisting of 29,017 individual clinicians, 9,396 groups 
and 20 subgroups will submit improvement activities during the CY 2025 
performance period/2027 MIPS payment year. This adjustment represents a 
decrease of 11,856 respondents from the currently approved estimate of 
50,289 respondents in the CY 2024 PFS final rule (88 FR 79454 and 
79455). We did not include in our estimates clinicians who participated 
in an APM Entity and are determined to be QPs for the CY 2022 
performance period/2024 MIPS payment year as we assume they are not 
required to submit improvement activities data.
[GRAPHIC] [TIFF OMITTED] TP31JY24.154

    In Table 115, we continue to estimate that the time required per 
response per individual or group is 5 minutes or 0.083 hours for a 
computer system analyst at a labor rate of $106.54/hr to submit by 
logging in and manually attesting that certain activities were 
performed in the form and manner specified by CMS with a set of 
authenticated credentials. Therefore, we estimate an annual burden of 
3,190 hours (38,433 respondents x 0.083 hr/response) at a cost of 
$339,748 (38,433 respondents x $8.84/response) for the CY 2025 
performance period/2027 MIPS payment year.

[[Page 62147]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.155

    As shown in Table 116, using our unchanged currently approved per 
respondent burden estimate, the decrease in the number of respondents 
results in an adjustment of -984 hours and -$104,807 for the CY 2025 
performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.156

i. ICRs Regarding the Nomination of Improvement Activities (Sec.  
414.1360)
    In this rulemaking, we are not proposing any new or revised 
collection of information requirements or burden related to the 
Nomination of Improvement Activities for the CY 2025 performance 
period/2027 MIPS payment year. The requirements and burden associated 
with this information collection are currently approved by OMB under 
control number 0938-1314 (CMS-10621). Consequently, we are not 
proposing any changes to the Nomination of Improvement Activities under 
that control number.
j. ICRs Regarding the Nomination of MVPs
    In section IV.A.4.a.(2) of this proposed rule, we are proposing a 
modification to the MVP maintenance webinar process previously 
finalized in the CY 2022 PFS final rule (86 FR 65410) and modified in 
the CY 2023 PFS final rule (87 FR 70037). Specifically, we are 
proposing to modify the MVP maintenance webinar process to provide us 
more flexibility in how we communicate submitted maintenance 
recommendations prior to proposing them formally in rulemaking. We 
believe this flexibility in communicating recommendations through 
alternative webinar formats or other public communication channels 
would offer similar opportunities for public review and feedback as a 
live public webinar. As this proposal would not require additional 
steps to the MVP nomination process described in the CY 2021 PFS final 
rule (85 FR 84990 and 84991), we are continuing our currently approved 
12 hours per response burden estimate for the CY 2025 performance 
period/2027 MIPS payment year. We refer readers to section 
VII.E.17.e.(2)(d). of this proposed rule where we discuss our impact 
analysis for this proposal.
    The requirements and burden for the nomination of MVPs are 
currently approved by OMB under control number 0938-1314 (CMS-10621). 
Since the proposed change does not set out any new or revised 
requirements or burden outside of providing CMS with flexibility in how 
we communicate, we are not proposing any changes to the nomination of 
MVPs under that control number.
k. ICRs Regarding the Cost Performance Category (Sec.  414.1350)
    The cost performance category relies on administrative claims data. 
The Medicare Parts A and B claims submission process (OMB control 
number 0938-1197; CMS-1500 and CMS-1490S) is used to collect data on 
cost measures from MIPS eligible clinicians. MIPS eligible clinicians 
are not required to provide any documentation by CD or hardcopy. 
Moreover, the following proposals in section IV.A.4.e.(2). of this 
proposed rule would not result in the need to add or revise or delete 
any claims data fields: (1) add 6 new episode-based cost measures; (2) 
modify 2 existing episode-based measures; (3) update the operational 
list of care episode and

[[Page 62148]]

patient condition groups and codes to reflect new and modified measures 
we are proposing; (4) and adopt criteria to specify objective bases for 
the removal of any cost measures from the MIPS cost performance 
category. Consequently, we are not proposing any changes under the 
aforementioned control number. We refer readers to section 
IV.A.4.e.(2).for details on these proposals.
l. ICRs Regarding Partial QP Elections (Sec. Sec.  414.1310(b) and 
414.1430)
    We are not proposing any new or revised collection of information 
requirements or related to the Partial QP Elections to participate in 
MIPS as a MIPS eligible clinician in the CY 2025 performance period/
2027 MIPS payment year. In this section of this proposed rule, we 
identify proposed adjustments to the estimated burden for partial QP 
elections that will be submitted to OMB for review under control number 
0938-1314 (CMS-10621), as summarized in Tables 78 and 79. These 
proposed adjustments to estimated burden for the CY 2025 performance 
period/2027 MIPS payment year are due to the availability of updated 
data, rather than proposed policies or statute changes in section 
IV.A.4. of this proposed rule.
    Based on the number of QP elections submitted for the CY 2023 
performance period/2025 MIPS payment year, we estimate in this proposed 
rule that we will receive a total of 18 partial QP elections from 18 
APM respondents (representing 333 distinct national provider 
identifiers (NPIs) and 363 distinct TIN/NPIs). We do not estimate any 
partial QP elections at the eligible clinician level, as no individual 
eligible clinicians elected to report as partial QPs for the CY 2023 
performance period/2025 MIPS payment year. This estimate is a decrease 
of 269 submissions from the currently approved estimate of 287 (87 FR 
70167 and 70168). We continue to estimate it will take 0.25 hours for a 
computer system analyst or equivalent to complete and submit the 
election process.
    In Table 117, we estimate an annual burden of 5 hours (18 responses 
x 0.25 hr/response) at a cost of $480 (18 responses x $26.64/response) 
for the CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.157

    In Table 118, we illustrate the net change in estimated burden for 
the Partial QP Election Process using the currently approved burden in 
the CY 2023 PFS final rule (87 FR 70167 and 70168). In aggregate, the 
estimated change in responses will result in an adjustment of -67 hours 
and -$7,166 for the CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.158


[[Page 62149]]


m. ICRs Regarding Other Payer Advanced APM Determinations: Payer-
Initiated Process (Sec.  414.1445) and Eligible Clinician-Initiated 
Process (Sec.  414.1445)
    In this section, we identify proposed adjustments to the estimate 
burden for ICRs regarding other payer advanced APM determinations. 
These proposed adjustments, summarized in Tables 78 and 79, reflect the 
availability of updated data rather than proposed policies or statutory 
requirements, and will be submitted to OMB for review under control 
number 0938-1314 (CMS-10621).
(1) Payer-Initiated Process (Sec.  414.1445)
    We are not proposing any new or revised collection of information 
requirements related to the Payer-Initiated Process for the CY 2025 
performance period/2027 MIPS payment year. Due to declining requests in 
recent years, we are adjusting our burden estimates for the CY 2025 
performance period/2027 MIPS payment year. In this proposed rule, we 
estimate that we will receive 10 submissions for the Payer-Initiated 
Process for the CY 2025 performance period/2027 MIPS payment year, a 
decrease of 5 submissions from the currently approved estimate of 15 
responses (86 FR 65607 and 65608). We continue to estimate it will take 
10 hours for a computer system analyst per arrangement.
    In Table 119, we estimate an annual burden of 100 hours (10 
responses x 10 hr/response) at a cost of $10,654 (10 responses x 
$1,065.40/response) for the CY 2025 performance period/2027 MIPS 
payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.159

    In Table 120, we illustrate the net change in estimated burden for 
the Payer-Initiated Process using the currently approved responses in 
the CY 2022 PFS final rule (86 FR 65606 and 65607). In aggregate, the 
estimated change in the number of responses will result in an 
adjustment of -50 hours and -$5,327 for the CY 2025 performance period/
2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.160

(2) Eligible Clinician-Initiated Process (Sec.  414.1445)
    We are not proposing any new or revised collection of information 
requirements related to the Eligible Clinician-Initiated Process for 
the CY 2025 performance period/2027 MIPS payment year. Due to declining 
requests in recent years, we are adjusting our burden estimates for the 
CY 2025 performance period/2027 MIPS payment year. In this proposed 
rule, we estimate that we will receive 10 submissions for the Eligible 
Clinician-Initiated Process for the CY 2025 performance period/2027 
MIPS payment year, a decrease of 5 submissions from the currently 
approved estimate of 15 (86 FR 65607 and 65608). We continue to 
estimate it will take 10 hours for a computer system analyst to 
complete and submit the payment arrangement.

[[Page 62150]]

    In Table 121, we estimate an annual burden of 100 hours (10 
responses x 10 hr/response) at a cost of $10,654 (10 responses x 
$1,065.40/response) for the CY 2025 performance period/2027 MIPS 
payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.161

    In Table 122, we illustrate the net change in estimated burden for 
the Eligible Clinician-Initiated Process using the currently approved 
responses in the CY 2022 PFS final rule (86 FR 65607 and 65608). In 
aggregate, the estimated change in the number of responses will result 
in an adjustment of -50 hours and -$5,327 for the CY 2025 performance 
period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.162

(3) Submission of Data for QP Determinations Under the All-Payer 
Combination Option (Sec.  414.1440)
    We are not proposing any new or revised collection of information 
requirements related to the Submission of Data for QP Determinations 
under the All-Payer Combination Option for the CY 2025 performance 
period/2027 MIPS payment year. In the past few years, we have observed 
a significant drop in the number of submissions from payment 
arrangements from outside parties. Therefore, we are adjusting our 
estimates downward for the CY 2025 performance period/2027 MIPS payment 
year. In this proposed rule, we estimate that 10 APM Entities, 100 
TINs, and 10 eligible clinicians will submit data for QP determinations 
under the All-Payer Combination Option in CY 2025 performance period/
2027 MIPS payment year. Our aggregated estimate of 120 submissions is a 
decrease of 431 submissions from our currently approved estimate of 551 
in the CY 2020 PFS final rule (84 FR 63113 and 63114). We continue to 
estimate it will take 5 hours for a medical or health systems to 
prepare and submit an arrangement.
    In Table 123, we estimate an annual burden of 600 hours (120 
responses x 5 hr/response) at a cost of $77,568 (120 responses x 
$646.40/response) for the CY 2025 performance period/2027 MIPS payment 
year.

[[Page 62151]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.163

    In Table 124, we illustrate the net change in estimated burden for 
the submission of data for all-payer QP determinations using the 
currently approved responses in the CY 2020 PFS final rule (84 FR 63113 
and 63114). In aggregate, the estimated change in the number of 
responses will result in an adjustment of -2,155 hours and -$278,598 
for the CY 2025 performance period/2027 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP31JY24.164

n. ICRs Regarding Voluntary Participants Election to Opt-Out of 
Performance Data Display on Compare Tools (Sec.  414.1395)
    This rulemaking is not proposing any new or revised collection of 
information requirements or burden related to the election by voluntary 
participants to opt-out of public reporting on Compare Tools for the CY 
2025 performance period/2027 MIPS payment year. The requirements and 
burden associated with this information collection are currently 
approved by OMB under control number 0938-1314 (CMS-10621). 
Consequently, we are not proposing any changes to the election of 
voluntary participants to opt-out of performance data display on 
Compare Tools under that control number.

C. Summary of Proposed Annual Burden Estimates

    Table 125 sets out the burden for this rulemaking's proposed 
provisions that are subject to the PRA. It does not score burden 
adjustments that are strictly based on updated data and are unrelated 
to any of the proposed provisions.

[[Page 62152]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.165

D. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection requirements. The 
requirements are not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed previously, please visit the CMS 
website at https://www.cms.gov/regulations-and-guidance/legislation/paperworkreductionactof1995/pra-listing, or call the Reports Clearance 
Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you wish to comment, please submit your comments 
electronically as specified in the DATES and ADDRESSES sections of this 
proposed rule and identify the rule (CMS-1807-P), the ICR's CFR 
citation, and OMB control number.

VI. Response to Comments

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

VII. Regulatory Impact Analysis

A. Statement of Need

    In this proposed rule, we are proposing payment and policy changes 
under the Medicare PFS and changes to implement amendments made under 
the section 502 of the Further Continuing Appropriations and Other 
Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 2024). Our proposed 
policies in this rulemaking specifically address: changes to the PFS; 
and other changes to Medicare Part B payment policies to ensure that 
payment systems are updated to reflect changes in medical practice, the 
relative value of services, and changes in the statute; updates and 
refinements to Medicare Shared Savings Program (Shared Savings Program) 
requirements; updates to the Quality Payment Program (MIPS and Advanced 
APMs); changes to payment policies for drugs and biologicals products 
paid under Medicare Part B, changes to the Clinical Laboratory Fee 
Schedule requirements, other changes to Medicare Part B payment 
policies for Rural Health Clinics and Federally Qualified Health 
Centers, the Medicare coverage of opioid use disorder services 
furnished by opioid treatment programs and coverage and payment for 
certain preventive services; updates to electronic prescribing for 
controlled substances for a covered Part D drug under a prescription 
drug plan or an MA-PD plan (section 2003 of the SUPPORT Act); and 
proposed change to the regulations associated with the Ambulance Fee 
Schedule. The policies reflect CMS' stewardship of the Medicare program 
and overarching policy objectives for ensuring equitable beneficiary 
access to appropriate and quality medical care.
1. Statutory Provisions
a. Clinical Laboratory Fee Schedule (CLFS)--Proposed Revisions 
Consistent With Recent Statutory Changes
    In section III.F. of this proposed rule, we propose the conforming 
regulations text changes for CLFS data reporting requirements due to 
the enactment of section 502 of the Further Continuing Appropriations 
and Other Extensions Act, 2024 (Pub. L. 118-22) (FCAOEA, 2024). For 
clinical diagnostic laboratory tests (CDLTs) that are not advanced 
diagnostic laboratory tests (ADLTs), section 502(b) of the FCAOEA, 2024 
delayed the next data reporting period by one year. Instead of taking 
place from January 1, 2024, through March 31, 2024, data reporting will 
now take place from January 1, 2025, through March 31, 2025, based on 
the original data collection period of January 1, 2019, through June 
30, 2019. Data reporting for these tests then resumes on a 3-year 
cycle. Additionally, section 502(a) of the

[[Page 62153]]

FCAOEA, 2024 amended the statutory provisions for the phase-in of 
payment reductions resulting from private payor rate implementation to 
specify that the applicable percent for CY 2024 is 0 percent, meaning 
that the payment amount determined for a CDLT for CY 2024 shall not 
result in any reduction in payment as compared to the payment amount 
for that test for CY 2023. Section 502(a) of the FCAOEA, 2024 further 
amended the statutory phase-in provisions to provide that for CYs 2025 
through 2027, the payment amount for a CDLT may not be reduced by more 
than 15 percent as compared to the payment amount for that test 
established in the preceding year.
b. Medicare Prescription Drug Inflation Rebate Program
    Section III.I. of this proposed rule proposes regulations to 
implement provisions of the Inflation Reduction Act (IRA) that 
establish the Medicare Prescription Drug Inflation Rebate Program. 
Section 11101 of the IRA adds new section 1847A(i) to the Act, which 
establishes a requirement for manufacturers to pay Medicare Part B 
rebates for certain single source drugs and biological products with 
prices that increase faster than the rate of inflation, beginning on 
January 1, 2023. Section 11102 of the IRA adds new section 1860D-14B to 
the Act, which established a requirement for manufacturers to pay 
Medicare Part D rebates for certain Part D drugs and biological 
products with prices that increase faster than the rate of inflation, 
beginning on October 1, 2022.
c. Requirement for Electronic Prescribing for Controlled Substances for 
a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan
    In section III.L. of this rulemaking, we propose a change to the 
electronic prescribing for controlled substances (EPCS) requirement 
specified in Sec.  423.160(a)(5) (referred to as the CMS EPCS Program). 
The provision in section III.L. of this proposed rule proposes to 
revise Sec.  423.160(a)(5) to specify that prescriptions written for a 
beneficiary in a long-term care (LTC) facility would not be included in 
determining CMS EPCS Program compliance until January 1, 2028, and that 
compliance actions against prescribers who do not meet the compliance 
threshold based on prescriptions written for a beneficiary in a LTC 
facility would commence on or after January 1, 2028.
d. Quality Payment Program
    This proposed rule is also necessary to make changes to the Quality 
Payment Program to move the program forward to focus more on 
measurement efforts, refine how clinicians would be able to participate 
in a more meaningful way through the Merit-based Incentive Payment 
System (MIPS) Value Pathways (MVPs), and highlight the value of 
participating in Advanced Alternative Payment Models (APMs). Authorized 
by MACRA, the Quality Payment Program is an incentive program that 
includes two participation tracks, MIPS and Advanced APMs. MIPS 
eligible clinicians are subject to a MIPS payment adjustment based on 
their performance in four performance categories: cost, quality, 
improvement activities, and Promoting Interoperability. Currently, 
reporting for traditional MIPS is seen as siloed across the performance 
categories. These policy proposals are intended to promote better 
quality reporting to improve patient health outcomes by coordinating 
reporting for MIPS across performance categories and make changes to 
scoring that would provide a better picture of clinicians' performance.
2. Discretionary Provisions
a. Drugs and Biological Products Paid Under Medicare Part B
    In Section III.A.1. of this proposed rule, as part of our continued 
implementation of section 90004 of the Infrastructure Investment and 
Jobs Act (Pub. L. 117-58, November 15, 2021) (IIJA), which amended 
section 1847A of the Act to require manufacturers to provide a refund 
to CMS for certain discarded amounts from a refundable single-dose 
container or single-use package drug (hereinafter, refundable drug), we 
are proposing a change in how we would identify certain drugs that are 
excluded from the definition of refundable drug for those which payment 
has been made under Part B for fewer than 18 months; how we identify 
drugs from a single-dose container; to require the JW modifier if a 
billing supplier is not administering a drug, but there are discarded 
amounts during the preparation process before supplying the drug to the 
patient; and we discuss an application received for increased 
applicable percentage.
    In section III.A.2 of this proposed rule, we are proposing how 
payment limits would be calculated when manufacturers report negative 
or zero ASP data to CMS. Generally, we are proposing that negative and 
zero ASP data be considered ``not available'' under section 
1847A(c)(5)(B) of the Act and that positive ASP data be considered 
available. In circumstances in which negative or zero ASP data is 
reported for some, but not all National Drug Codes (NDCs) associated 
with a billing and payment code for a drug, we are proposing to 
calculate the payment limit using only NDCs with positive ASP data. In 
certain circumstances, we are proposing to carryover the most recent 
positive ASP data for the drug to calculate a payment limit when the 
manufacturer's ASP is negative or zero. For biosimilars with negative 
or zero ASP data for all NDCs, we are proposing to use positive ASP 
data from other biosimilars with the same reference product, when 
available, to calculate the payment limit.
    In section III.A.3. of this proposed rule, we are proposing to 
clarify how Medicare Administrative Contractors (MACs) pay for 
radiopharmaceuticals that are furnished in the physician's office. We 
are proposing to codify in regulations at Sec.  414.904(e)(6) that, for 
radiopharmaceuticals furnished in a setting other than the hospital 
outpatient department, MACs shall determine payment limits for 
radiopharmaceuticals based on any methodology used to determine payment 
limits for radiopharmaceuticals in place on or prior to November 2003. 
Such methodology may include, but is not limited to, the use of 
invoice-based pricing.
    In section III.A.4. of this proposed rule, we are proposing 
policies to reduce barriers faced by beneficiaries receiving 
immunosuppressive drugs under the Medicare Part B immunosuppressive 
drug benefit. That is, we are proposing at Sec.  410.30 to include 
orally and enterally administered compounded formulations with active 
ingredients derived only from FDA-approved drugs that have approved 
immunosuppressive indications or FDA-approved drugs that have been 
determined by a MAC to be reasonable and necessary for specific 
purposes in immunosuppressive treatment in the immunosuppressive drug 
benefit. In addition, we are proposing changes regarding supplying fees 
and refills for immunosuppressive drugs. These proposals include 
allowing payment of a supply fee for a prescription of a supply of up 
to 90 days and allowing prescriptions for immunosuppressive drugs to be 
refillable.
    In section III.A.5. of this proposed rule, we are proposing to 
update Sec.  410.63(b) to clarify existing CMS policy that blood 
clotting factors must be self-administered to be considered

[[Page 62154]]

clotting factors for which the furnishing fee applies. Additionally, we 
are proposing to clarify at Sec.  410.63(c) that the furnishing fee is 
only available to entities that furnish blood clotting factors, unless 
the costs associated with furnishing the clotting factor are paid 
though another payment system, including the PFS. That is, we are 
proposing to clarify through revisions to Sec.  410.63 that clotting 
factors (as specified in section 1861(s)(2)(I) of the Act) and those 
eligible to receive the clotting factor furnishing fee (as specified in 
section 1842(o)(5) of the Act) are the same subset of products.
b. RHCs and FQHCs
    In section III.B.2. of this proposed rule, we are proposing several 
changes to the furnishing of care coordination services in RHCs and 
FQHCs. We are proposing to require RHCs and FQHCs to report the 
individual HCPCS codes that make up the general care management HCPCS 
code G0511 and to utilize the same codes as those billing under the 
PFS. RHCs and FQHCs would no longer be required to report the general 
care management HCPCS code (G0511). We are also proposing to permit 
billing of the add-on codes associated with these services. In 
addition, beginning in CY 2025, we are proposing to adopt the coding 
and policies regarding Advanced Primary Care Management (APCM) 
services, as discussed in section II.G of this proposed rule.
    For all of the care coordination services, we are proposing to 
allow separate payment at the national non-facility PFS payment rate 
when the individual code is on an RHC or FQHC claim, either alone or 
with other payable services. Payment rates would be updated annually 
based on the PFS amounts for these codes. We are also seeking comment 
on how we can improve the transparency and predictability regarding 
which HCPCS codes are considered care coordination services to automate 
processes downstream for RHCs and FQHCs.
    In section III.B.3. of this proposed rule, we are proposing the 
policy to continue to adopt the definition ``immediate availability'' 
as including real-time audio and visual interactive telecommunications 
for the direct supervision of services and supplies furnished incident 
to a physician's service through December 31, 2025, for RHCs and FQHCs. 
We are also proposing, on a temporary basis, to allow payment for non-
behavioral health visits furnished via telecommunication technology in 
a manner that would closely align with the payment mechanisms mandated 
by statute through December 31, 2024, that is, RHCs and FQHCs would 
continue to bill for RHC and FQHC services furnished using 
telecommunication technology services by reporting HCPCS code G2025 on 
the claim through December 31, 2025. In addition, we are proposing to 
continue to delay the in-person visit requirement for mental health 
services furnished via communication technology by RHCs and FQHCs to 
beneficiaries in their homes until January 1, 2026.
    In section III.B.4. of this proposed rule, we discuss the 
implementation of section 4124 of the CAA, 2023. Section 4124 of the 
CAA, 2023 established Medicare coverage for intensive outpatient 
program (IOP) services furnished by a hospital to its outpatients, or 
by a community mental health center, a RHC or a FQHC, as a distinct and 
organized intensive ambulatory treatment service offering less than 24-
hour daily care in a location other than an individual's home or 
inpatient or residential setting, effective January 1, 2024 (88 FR 
81838). We are proposing to provide a payment rate for 4 or more 
services per day in the RHC and FQHC setting.
    In section III.B.5. of this rulemaking, we are proposing to allow 
RHCs and FQHCs to bill for Part B preventive vaccines and the 
administration at the time of service. We propose that payments for 
these claims will be made according to Part B preventive vaccine 
payment rates in other settings, to be annually reconciled with the 
facilities' actual vaccine costs on their cost reports. Due to the 
operational systems changes needed to facilitate payment through 
claims, we propose that RHCs and FQHCs begin billing for preventive 
vaccines and their administration at the time of service, for dates of 
service on or after July 1, 2025.
    In section III.B.6. of this proposed rule, we discuss our proposal 
relating to RHC productivity standards. We are proposing to remove 
productivity standards for RHCs.
    In section III.B.7. of this proposed rule, we discuss proposals 
relating to the FQHC market basket. We are proposing to rebase and 
revise the FQHC PPS market basket to reflect a 2022 base year.
    In section III.B.8. of this proposed rule, we are clarifying that 
when RHCs and FQHCs furnish dental services that align with the 
inextricably linked policies and operational requirements in the 
physician setting, we would consider those services to be a qualifying 
visit and the RHC would be paid at the RHC AIR and the FQHC would be 
paid under the FQHC PPS.
c. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    In section III.F.2 of this proposed rule, we are proposing 
telecommunication flexibilities related to periodic assessments and 
initiation of treatment with methadone. We are proposing to allow 
periodic assessments to be furnished via audio-only communications when 
two-way audio-video communications technology is not available to the 
beneficiary on a permanent basis, to the extent that this flexibility 
is authorized by SAMHSA and DEA at the time the service is furnished, 
and all other applicable requirements are met. We believe that making 
this current flexibility permanent is appropriate, as it would allow a 
beneficiary to decide with their provider the best modality for 
receiving care, and evidence has shown that audio-only visits produce 
many of the same benefits as video-based visits.\790\ Additionally, 
permanently extending the flexibility to allow periodic assessments to 
be furnished via audio-only communications would further contribute 
towards health equity, especially among Medicare beneficiaries who are 
from underserved populations.\791\ We are also proposing to allow OTPs 
to use audio-visual telecommunications for initiation of treatment with 
methadone for any new patient who will be treated by the OTP with 
methadone if the OTP determines that an adequate evaluation of the 
patient can be accomplished via an audio-visual telehealth platform. We 
would allow the OTP intake add-on code (HCPCS code G2076) to be paid 
for two-way audio-video communications technology when it is billed for 
the initiation of treatment with methadone to the extent that the use 
of audio-video telecommunications technology to initiate treatment with 
methadone is authorized by DEA and SAMHSA at the time the service is 
furnished, and all other applicable requirements are met. We believe 
this flexibility is needed to align with new policy amendments 
finalized by SAMHSA for initiation of treatment with methadone at Sec.  
8.12(f)(2)(v)(A), and it would help reduce barriers for many 
individuals

[[Page 62155]]

beginning treatment with methadone who often experience at least one 
barrier to accessing treatment (for example, reliable transportation, 
work schedule conflicts, distance to treatment, etc.).\792\
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    \790\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9446840.
    \791\ https://pubmed.ncbi.nlm.nih.gov/33471458/; https://www.kff.org/medicare/issue-brief/medicare-and-telehealth-coverage-and-use-during-the-covid-19-pandemic-and-options-for-the-future/
;https://pubmed.ncbi.nlm.nih.gov/34534186/.
    \792\ https://ascpjournal.biomedcentral.com/articles/10.1186/s13722-022-00316-3.
---------------------------------------------------------------------------

    In section III.F.3 of this proposed rule, we are proposing payment 
updates to intake activities (HCPCS code G2076) furnished by OTPs in 
response to recent regulatory reforms finalized by SAMHSA at 42 CFR 
part 8 that aim to recognize more patient-centered and evidence-based 
paradigms of care for OUD treatment (for example, harm reduction 
interventions, recovery support services, etc.). Specifically, we are 
proposing to update the payment for intake activities (HCPCS code 
G2076) to include payment for social determinants of health risk 
assessments (HCPCS code G0136) in order to adequately reflect 
additional effort for OTPs to identify a patient's unmet health-related 
social needs (HRSNs), or the need and interest for harm reduction 
interventions and recovery support services that are critical to the 
treatment of an OUD. These would be consistent with new revisions to 
standards for initial assessment service activities required by SAMHSA 
under Sec.  8.12(f)(4)(i). CMS is further requesting information to 
understand how OTPs currently coordinate care and make referrals to 
community-based organizations (CBOs) that address unmet HRSNs, provide 
harm reduction services, and/or offer recovery support services. 
Altogether, we believe these proposals are necessary to help OTPs 
address key issues during initial assessments that may increase the 
risk of a patient leaving OUD treatment prematurely or that pose as 
barriers to treatment engagement. For example, patients with an OUD are 
more likely to have lower educational attainment, be food insecure, 
encounter financial hardship, and housing instability, and they often 
report financial and logistical barriers (for example, lack of access 
to transportation) as reasons for not receiving treatment.\793\ 
However, providers (including SUD treatment facilities) who coordinate 
care with CBOs, including peer support organizations, housing agencies, 
and educational and employment agencies, to address unmet HRSNs (for 
example, housing, transportation, etc.) identified during assessments 
can positively influence health outcomes and better support a patient's 
engagement in SUD treatment.\794\
---------------------------------------------------------------------------

    \793\ https://www.sciencedirect.com/science/article/pii/S1544319123000560?via%3Dihub. https://www.sciencedirect.com/science/article/pii/S0749379722001040?via%3Dihub.
    \794\ https://www.commonwealthfund.org/sites/default/files/202209/ROI_calculator_evidence_review_2022_update_Sept_2022.pdf; 
https://aspe.hhs.gov/sites/default/files/private/pdf/260791/BestSUD.pdf.
---------------------------------------------------------------------------

    Furthermore, in section III.F.4 of this proposed rule, we are 
proposing to establish payment for new opioid agonist and antagonist 
medications that were recently approved by the FDA. We would create a 
new add-on code to the bundled payment to reflect take-home supplies 
for nalmefene hydrochloride (nalmefene) nasal spray (Opvee[supreg]), 
which is indicated for the emergency treatment of known or suspected 
opioid overdose induced by natural or synthetic opioids. The add-on 
code would include payment for a carton of two 2.7 mg nasal sprays of 
nalmefene and overdose education furnished in conjunction with 
distributing nalmefene. We are also proposing payment for a new 
extended-release injectable buprenorphine product (Brixadi[supreg]), 
indicated to treat moderate to severe OUD and that comes in a weekly (8 
mg, 16 mg, 24 mg, 32 mg) and monthly formulation (64 mg, 96 mg, and 128 
mg). We would create a new weekly bundled payment code (including both 
a non-drug and drug component) for weekly injectable buprenorphine to 
reflect the weekly formulation of Brixadi[supreg]. In addition, we are 
proposing to update payment for the drug component of the existing 
bundled payment under the Medicare OTP benefit for monthly injectable 
buprenorphine (HCPCS G2069) in order to reflect payment for the monthly 
formulation of Brixadi[supreg]. We believe these proposals are 
consistent with our statutory authority under sections 1861(jjj)(1)(A) 
and 1834(w) of the Act, which allow the Secretary to establish Medicare 
bundled payment for opioid agonist and antagonist treatment medications 
that are approved by the FDA. These proposals would expand access to 
new opioid agonist and antagonist medications that are important to 
help prevent additional opioid overdose deaths, reduce illicit opioid 
use, and retain more individuals with an OUD in treatment.\795\
---------------------------------------------------------------------------

    \795\ https://www.cdc.gov/drugoverdose/pdf/pubs/2018-evidence-based-strategies.pdf; https://pubmed.ncbi.nlm.nih.gov/24247147/.
---------------------------------------------------------------------------

    Lastly, in section III.F.5 of this proposed rule, we are clarifying 
a billing requirement that an OUD diagnosis code is required on claims 
submitted under the Medicare OTP benefit for OUD treatment services. 
This clarification is needed to ensure payments made to OTPs are in 
alignment with statutory requirements under sections 1861(s)(2)(HH), 
1861(jjj)(1), and 1834(w) of the Act, which all specify that services 
paid to OTPs under Medicare Part B must be for the treatment of opioid 
use disorder.
d. Medicare Shared Savings Program
    In section III.G. of this proposed rule, we are proposing 
modifications to the Shared Savings Program to further advance 
Medicare's value-based care strategy of growth, alignment, and equity, 
and to make changes that would allow for timely improvements to program 
policies and operations.
    The proposed changes to the Shared Savings Program include the 
following:
    Proposed changes to the quality performance standard and other 
quality reporting requirements, including to (1) require Shared Savings 
Program ACOs to report the APP Plus quality measure set that would 
incrementally grow to comprise of 11 measures, consisting of the 6 
measures in the existing APP quality measure set and 5 newly proposed 
measures from the Adult Universal Foundation measure set that would be 
incrementally incorporated into the APP Plus quality measure set over 
performance years 2025 through 2028, (2) focus the collection types 
available to Shared Savings Program ACOs for reporting the APP Plus 
quality measure set to all payer/all patient eCQMs and Medicare CQMs, 
(3) require Shared Savings Program ACOs that report the APP Plus 
quality measure set, to report on all measures in the APP Plus quality 
measure set, as applicable, (4) establish a Complex Organization 
Adjustment for Virtual Groups and APM Entities, including Shared 
Savings Program ACOs, when reporting eCQMs, (5) score Medicare CQMs 
using flat benchmarks in their first 2 performance periods in MIPS, and 
(6) extend the eCQM reporting incentive in order to promote the 
adoption of eCQMs.
    Proposed changes to establish a new ``prepaid shared savings'' 
option to assist eligible ACOs, with a history of earning shared 
savings, with cash flow and encourage investments that would provide 
additional services for beneficiaries, and proposed refinements to 
recently-established advance investment payment policies.
    Proposed modifications to the Shared Savings Program's financial 
methodology including to (1) ensure the benchmarking methodology 
includes sufficient incentive for ACOs providing care to underserved 
communities to enter and remain in the program through the application 
of a proposed health equity benchmark adjustment, (2) specify a 
calculation methodology to

[[Page 62156]]

account for the impact of improper payments in recalculating 
expenditures and payment amounts used in Shared Savings Program 
financial calculations, upon reopening a payment determination pursuant 
to Sec.  425.315(a), (3) establish a methodology for excluding payment 
amounts for HCPCS and CPT codes exhibiting significant, anomalous, and 
highly suspect (SAHS) billing activity during CY 2024 or subsequent 
calendar years that warrant adjustment, and (4) technical changes for 
consistency and clarity in provisions of the Shared Savings Program 
regulations on financial calculations, to align and clarify the 
language we used to describe weights applied to the growth in ACO and 
regional risk scores for each Medicare enrollment type, as part of the 
calculation for capping ACO and regional risk score growth, 
respectively.
    Proposed changes to other programmatic areas, including: a proposal 
in connection with the Shared Savings Program compliance requirements 
to permit continued participation by ACOs whose number of assigned 
beneficiaries falls below 5,000 during their agreement period; proposed 
updates to provisions of the Shared Savings Program regulations on 
application procedures to reflect the latest approach Antitrust 
Agencies use to evaluate ACOs and enforce antitrust measures; proposed 
updates to the beneficiary assignment methodology including to (1) 
revise the definition of primary care services to align with payment 
policy proposals and include, among other services for the purposes of 
beneficiary assignment, Safety Planning Interventions, Post-Discharge 
Telephonic Follow-up Contacts Intervention, Virtual Check-in Services, 
Advanced Primary Care Management Services, Cardiovascular Risk 
Assessment and Risk Management Services, Interprofessional Consultation 
Services, Direct Care Caregiver Training Services, and Individual 
Behavior Management/Modification Caregiver Training Services, and (2) 
broaden the existing exception to the program's voluntary alignment 
policy to allow for additional beneficiaries to be claims-based 
assigned to entities participating in certain disease- or condition-
specific Innovation Center ACO models; and proposed modifications to 
the beneficiary notification requirements.
e. Medicare Part B Payment for Preventive Services
    Section III.H.1 of this proposed rule outlines the implementation 
of policies that impact the payment amount for administration of 
preventive vaccines paid under the Part B vaccine benefit, as well 
COVID-19 monoclonal antibodies and the in-home additional payment for 
Part B vaccine administration. These provisions are necessary to 
provide stable payment for preventive vaccine administration and 
related policies, and to allow predictability for providers and 
suppliers to rely on for building and sustaining robust vaccination 
programs.
    Section III.H.2 of this proposed rule addresses two items related 
to payment for hepatitis B vaccine administration under Part B. In 
section III.M. of this proposed rule, we propose to expand coverage of 
hepatitis B vaccinations by revising existing regulations. If that 
coverage expansion of hepatitis B vaccines under Part B is finalized, 
we would clarify that a physician's order is no longer required for the 
administration of a hepatitis B vaccine in Part B, which will 
facilitate roster billing by mass immunizers for hepatitis B vaccine 
administration. We are also proposing that payment for hepatitis B 
vaccines and their administration be made at 100 percent of reasonable 
cost in RHCs and FQHCs, separate from the FQHC PPS or the RHC All-
Inclusive Rate (AIR) methodology, to streamline payment for all Part B 
vaccines in those settings.
    In section III.H.3. of this proposed rule, we are proposing a fee 
schedule for Drugs Covered as Additional Preventive Services (DCAPS), 
per section 1833(a)(1)(W)(ii) of the Act. We propose to determine 
payment limits for DCAPS drugs based on the ASP payment methodology set 
forth under section 1847A of the Act if possible, and we propose 
alternative payment mechanism for calculating payment limits for DCAPS 
drugs if ASP data is not available. We also propose payment limits for 
supplying and administration fees for DCAPS drugs that are similar to 
those fees for drugs paid under the ASP payment methodology set forth 
under section 1847A of the Act. Finally, we propose to determine 
payment limits for DCAPS drugs in RHCs and FQHCs, and any supply and 
administration fee, using this same fee schedule, and to pay for DCAPS 
drugs and their administration on a claim-by-claim basis.
f. Expand Colorectal Cancer Screening
    In section III.K. of this rulemaking, we propose to update and 
expand coverage for CRC screening by (1) removing coverage for the 
barium enema procedure in regulations at Sec.  410.37, (2) adding 
coverage for the CTC procedure in regulations at Sec.  410.37, and (3) 
expanding a ``complete colorectal cancer screening'' in Sec.  410.37(k) 
to include a follow-on screening colonoscopy after a Medicare covered 
blood-based biomarker CRC screening test (described and authorized in 
NCD 210.3) returns a positive result. The Center for Disease Control 
and Prevention (CDC) describes CRC as ``a disease in which cells in the 
colon or rectum grow out of control . . . Sometimes abnormal growths, 
called polyps, form in the colon or rectum. Over time, some polyps may 
turn into cancer. Screening tests can find polyps so they can be 
removed before turning into cancer. Screening also helps find 
colorectal cancer at an early stage, when treatment works best.'' \796\ 
The National Cancer Institute reports that CRC is the fourth most 
common type of cancer and estimates that the United States experienced 
153,020 new cases and 52,550 new deaths from CRC in 2023. In addition, 
the rate of new cases and new deaths from CRC is more common in men 
than women and significantly greater for those of African American and 
Non-Hispanic American Indian/Alaska Native descent compared to all 
races.\797\
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    \796\ CDC website: https://www.cdc.gov/cancer/colorectal/basic_info/what-is-colorectal-cancer.htm.
    \797\ NCI Website: https://seer.cancer.gov/statfacts/html/colorect.html.
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g. Expand Hepatitis B Vaccine Coverage
    In section III.M. of this rulemaking, we propose to expand 
Hepatitis B vaccine coverage by revising our regulatory definition for 
intermediate risk groups by adding a new paragraph to include 
individuals who have not previously received a completed hepatitis B 
vaccination series or whose vaccination history is unknown (Sec.  
410.63(a)(2)). Hepatitis B is a vaccine-preventable liver disease 
caused by the hepatitis B virus.\798\ The vaccine consists of a series 
of typically 3 doses delivered at various intervals.\799\ Hepatitis B 
virus is transmitted when body fluid (blood, semen, or other) from a 
person infected with the virus enters the body of someone who is 
uninfected.\800\ This can happen through sexual contact; sharing 
needles, syringes, or other drug-injection equipment; transmission from 
the gestational parent to baby during pregnancy or at birth; direct 
contact with blood or open sores; or sharing

[[Page 62157]]

contaminated items such as toothbrushes, razors or medical equipment 
(such as a glucose monitor) of a person who has hepatitis B.\801\ 
Hepatitis B can be an acute, short-term illness and it can develop into 
a long-term, chronic infection. Chronic hepatitis B can lead to serious 
health problems, including cirrhosis, liver cancer, and death. 
Treatments for hepatitis B are available but no cure exists. There are 
currently an estimated 2.4 million individuals in the U.S. living with 
hepatitis B virus and an estimated 20,000 new infections every 
year.\802\ We believe our proposal will help protect Medicare 
beneficiaries from acquiring hepatitis B infection, contribute to 
eliminating viral hepatitis as a public health threat in the United 
States and is in the best interest of the Medicare program and its 
beneficiaries.
---------------------------------------------------------------------------

    \798\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \799\ CDC. Viral hepatitis. FAQ for health professionals. 
Atlanta, GA: U.S. HHS, CDC; 2022. Retrieved from https://www.cdc.gov/hepatitis/hbv/hbvfaq.htm.
    \800\ CDC, 2023. Hepatitis B surveillance 2021. Retrieved from 
https://www.cdc.gov/hepatitis/statistics/2021surveillance/hepatitis-b.htm.
    \801\ CDC. 2024. Viral Hepatitis FAQs for the public. Retrieved 
from https://www.cdc.gov/hepatitis/hbv/bfaq.htm.
    \802\ Conners EE, Panagiotakopoulos L, Hofmeister MG, et al. 
Screening and testing for hepatitis B virus infection: CDC 
recommendations--United States, 2023. MMWR Recomm Rep. 2023;72(1):1-
25. Retrieved from https://www.cdc.gov/mmwr/volumes/72/rr/rr7201a1.htm.
---------------------------------------------------------------------------

h. Medicare Parts A and B Overpayment Provisions of the Affordable Care 
Act (Sec.  401.305(b)(1) Through (3))
    Section III.O. of this proposed rule discusses existing Sec.  
401.305(b)(1), which specifies when a person who has received an 
overpayment must report and return an overpayment. We propose to amend 
this regulation to reference revised Sec.  401.305(b)(2) and new Sec.  
401.305(b)(3). We are proposing a technical modification to the 
introductory language in Sec.  401.305(b)(2) to acknowledge that this 
paragraph might be applicable after the suspension described in new 
Sec.  401.305(b)(3) is complete. New proposed Sec.  401.305(b)(3) would 
identify the circumstances under which the deadline for reporting and 
returning overpayments would be suspended to allow time for providers 
to investigate and calculate overpayments. We do not have a basis for 
estimating the impact associated with this amendment. We solicit 
comment on the analysis and conclusions provided in the RIA.

B. Overall Impact

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), Executive Order 14094 entitled ``Modernizing 
Regulatory Review'' (April 6, 2023), the Regulatory Flexibility Act 
(RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the 
Social Security Act, section 202 of the Unfunded Mandates reform Act of 
1995 (March 22, 1995; Pub. L. 104-4), and Executive Order 13132 on 
Federalism (August 4, 1999).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 14094, entitled ``Modernizing Regulatory Review'' (hereinafter, 
the Modernizing E.O.), amends section 3(f)(1) of Executive Order 12866 
(Regulatory Planning and Review). The amended section 3(f) of Executive 
Order 12866 defines a ``significant regulatory action'' as an action 
that is likely to result in a rule: (1) having an annual effect on the 
economy of $200 million or more in any 1 year (adjusted every 3 years 
by the Administrator of the Office of Information and Regulatory 
Affairs (OIRA) for changes in gross domestic product), or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, territorial, or tribal governments or 
communities; (2) creating a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially altering the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in this Executive order, as specifically 
authorized in a timely manner by the Administrator of OIRA in each 
case.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with significant regulatory action/s and/or with significant effects as 
per section 3(f)(1) ($200 million or more in any 1 year). Based on our 
estimates, OMB's Office of Information and Regulatory Affairs has 
determined this rulemaking is significant per section 3(f)(1)) as 
measured by the $200 million or more in any 1 year. Accordingly, we 
have prepared an RIA that, to the best of our ability, presents the 
costs and benefits of the rulemaking. The RFA requires agencies to 
analyze options for regulatory relief of small entities. For purposes 
of the RFA, small entities include small businesses, nonprofit 
organizations, and small governmental jurisdictions. Most hospitals, 
practitioners, and most other providers and suppliers are small 
entities, either by nonprofit status or by having annual revenues that 
qualify for small business status under the Small Business 
Administration standards. (For details, see the SBA's website at 
https://www.sba.gov/document/support-table-size-standards (refer to the 
620000 series).) Individuals and States are not included in the 
definition of a small entity.
    The RFA requires that we analyze regulatory options for small 
businesses and other entities. We prepare a regulatory flexibility 
analysis unless we certify that a rule would not have a significant 
economic impact on a substantial number of small entities. The analysis 
must include a justification concerning the reason action is being 
taken, the kinds and number of small entities the rule affects, and an 
explanation of any meaningful options that achieve the objectives with 
less significant adverse economic impact on the small entities.
    Approximately 95 percent of practitioners, other suppliers, and 
providers are considered to be small entities, based upon the SBA 
standards. There are over 1 million physicians, other practitioners, 
and medical suppliers that receive Medicare payment under the PFS. 
Because many of the affected entities are small entities, the analysis 
and discussion provided in this section, as well as elsewhere in this 
proposed rule is intended to comply with the RFA requirements regarding 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 603 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. Medicare does not pay 
rural hospitals for their services under the PFS; rather, Medicare 
payment is made under the PFS for physicians' services, which can be 
furnished by physicians and NPPs in a variety of settings, including 
rural hospitals. We did not prepare an analysis for section 1102(b) of 
the Act because we determined, and the Secretary certified, that this 
rulemaking will not have a significant

[[Page 62158]]

impact on the operations of a substantial number of small rural 
hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits on State, 
local, or tribal governments or on the private sector before issuing 
any rule whose mandates require spending in any 1 year of $100 million 
in 1995 dollars, updated annually for inflation. In 2024, that 
threshold is approximately $183 million. This proposed rule will impose 
no mandates on State, local, or tribal governments or on the private 
sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule (and subsequent final 
rule) that imposes substantial direct requirement costs on State and 
local governments, preempts State law, or otherwise has federalism 
implications. Since this rulemaking does not impose any costs on State 
or local governments, the requirements of Executive Order 13132 are not 
applicable.
    We prepared the following analysis, which, together with the 
information provided in the rest of this proposed rule, meets all 
assessment requirements. The analysis explains the rationale for and 
purposes of this proposed rule; details the costs and benefits of this 
rulemaking; analyzes alternatives; and presents the measures we will 
use to minimize the burden on small entities. As indicated elsewhere in 
this proposed rule, we discussed various changes to our regulations, 
payments, or payment policies to ensure that our payment systems 
reflect changes in medical practice and the relative value of services 
and to implement provisions of the statute. We provide information for 
each policy change in the relevant sections of this proposed rule. We 
are unaware of any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule. The relevant sections of this 
rulemaking describe significant alternatives we considered, if 
applicable.

C. Changes in Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and MP RVUs
    Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or 
decreases in RVUs may not cause the amount of Medicare Part B 
expenditures for the year to differ by more than $20 million from what 
expenditures would have been in the absence of these changes. If this 
threshold is exceeded, we make adjustments to preserve budget 
neutrality.
    Our estimates of changes in Medicare expenditures for PFS services 
compared payment rates for CY 2024 with payment rates for CY 2025 using 
CY 2023 Medicare utilization. The payment impacts described in this 
proposed rule reflect averages by specialty based on Medicare 
utilization. The payment impact for an individual practitioner could 
vary from the average and will depend on the mix of services they 
furnish. The average percentage change in total revenues will be less 
than the impact displayed here because practitioners and other entities 
generally furnish services to both Medicare and non-Medicare patients. 
In addition, practitioners and other entities may receive substantial 
Medicare revenues for services under other Medicare payment systems. 
For instance, independent laboratories receive approximately 83 percent 
of their Medicare revenues from clinical diagnostic laboratory tests 
that are paid under the Clinical Laboratory Fee Schedule (CLFS). The 
PFS update adjustment factor for CY 2025, as specified in section 
1848(d)(19) of the Act, is 0.00 percent before applying other 
adjustments.
    To calculate the estimated CY 2025 PFS conversion factor (CF), we 
took the CY 2024 conversion factor without the payment increase of 1.25 
percent provided by the CAA, 2023 that applied to services furnished 
from January 1, 2024 through March 8, 2024, and the 2.93 percent 
payment increase provided by the CAA, 2024 that replaced the previous 
1.25 percent increase and applies to services furnished from March 9, 
2024 through December 31, 2024 and multiplied it by the budget 
neutrality adjustment required as described in the preceding 
paragraphs. We estimate the CY 2025 PFS CF to be 32.3562 which reflects 
a 0.05 percent positive budget neutrality adjustment required under 
section 1848(c)(2)(B)(ii)(II) of the Act, the 0.00 percent update 
adjustment factor specified under section 1848(d)(19) of the Act, and 
the removal of the temporary 2.93 percent payment increase for services 
furnished from March 9, 2024 through December 31, 2024, as provided in 
the CAA, 2024. We estimate the CY 2025 anesthesia CF to be 20.3340, 
reflecting the same overall PFS adjustments with the addition of 
anesthesia-specific PE and MP adjustments.
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    Table 128 shows the impact on PFS payment for physicians' services 
based on the proposed policies included this proposed rule. To the 
extent that there are year-to-year changes in the volume and mix of 
services provided by practitioners, the actual impact on total Medicare 
revenues will be different from those shown in Table 128 (CY 2025 PFS 
Estimated Impact on Total Allowed Charges by Specialty). The following 
is an explanation of the information represented in Table 128.
     Column A (Specialty): Identifies the specialty for which 
data are shown.
     Column B (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2023 utilization and CY 
2024 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
     Column C (Impact of Work RVU Changes): This column shows 
the estimated CY 2025 impact on total allowed charges of the changes in 
the work RVUs, including the impact of changes due to potentially 
misvalued codes.
     Column D (Impact of PE RVU Changes): This column shows the 
estimated CY 2025 impact on total allowed charges of the changes in the 
PE RVUs.
     Column E (Impact of MP RVU Changes): This column shows the 
estimated CY 2025 impact on total allowed charges of the changes in the 
MP RVUs.
     Column F (Combined Impact): This column shows the 
estimated CY 2025 combined impact on total allowed charges of all the 
changes in the previous columns. Column F may not equal the sum of 
columns C, D, and E due to rounding.
BILLING CODE P

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    In recent years, we have received requests from interested parties 
to provide more granular information that separates the specialty-
specific impacts by site of service. These interested parties have 
presented us with high-level information suggesting that Medicare 
payment policies are directly responsible for consolidating privately 
owned physician practices and freestanding supplier facilities into 
larger health systems. Their concerns highlight a need to update the 
information under the PFS to account for current trends in healthcare 
delivery, especially concerning independent versus facility-based 
practices. We published an RFI in the CY 2023 PFS proposed rule to 
gather feedback on this issue and refer readers to the discussion in 
the CY 2023 PFS final rule (87 FR 69429 through 69438). As part of our 
holistic review of how best to update our data and offer interested 
parties additional information that addresses some of the concerns 
raised, we have recently improved our current suite of public use files 
(PUFs) by including a new file that shows estimated specialty payment 
impacts at a more granular level, specifically by showing ranges of 
impact for practitioners within a specialty. This file is available on 
the CMS website under downloads for the CY 2025 PFS proposed rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    We provided an additional impact table for this rulemaking cycle 
that includes a facility/non-facility breakout of payment changes. The 
following is an explanation of the information represented in Table 
129.
     Column A (Specialty): Identifies the specialty for which 
data are shown.
     Column B (Setting): Identifies the facility or nonfacility 
setting for which data are shown.
     Column C (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2023 utilization and CY 
2024 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
     Column D (Combined Impact): This column shows the 
estimated CY 2025 combined impact on total allowed charges.

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BILLING CODE C
2. CY 2025 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty-level impacts of the RVU changes are 
generally related to the changes to RVUs for specific services 
resulting from the misvalued code initiative, including RVUs for new 
and revised codes. The estimated impacts for some specialties, 
including clinical social workers and clinical psychologists, 
geriatrics, anesthesiology, and nurse anesthetists, psychiatry, and 
family practice, reflect increases relative to other specialties. These 
increases can largely be attributed to the Year 4 update to clinical 
labor pricing and/or the proposed adjustments to transfer of 
postoperative care for global surgical procedures. These increases are 
also due to increases in values for particular services after 
considering the recommendations from the American Medical Association's 
(AMA) Relative Value Scale Update Committee (RUC) and CMS review, and 
increased payments resulting from supply and equipment pricing updates.
    The estimated impacts for several specialties, including diagnostic 
testing facilities, vascular surgery, interventional radiology, 
ophthalmology, and orthopedic surgery, reflect decreases in payments 
relative to payment to other specialties, largely resulting from the 
redistributive effects of the implementation of the Year 4 update to 
clinical labor pricing and/or the proposed adjustments to transfer of 
postoperative care for global surgical procedures. The services 
furnished by these specialties were negatively affected by the 
redistributive effects of increases in work RVUs for other codes, and/
or rely primarily on supply/equipment items for their practice expense 
costs and, therefore, were affected negatively by the updated Year 4 
clinical labor pricing under budget neutrality. These decreases are 
also due to the revaluation of individual procedures based on reviews, 
including consideration of AMA RUC review and recommendations, as well 
as decreases resulting from the continued phase-in implementation of 
the previously finalized supply and equipment pricing updates. The 
estimated impacts also reflect decreases due to the continued 
implementation of previously finalized code-level reductions that are 
being phased in over several years. For independent laboratories, it is 
important to note that these entities receive approximately 83 percent 
of their Medicare revenues from services that are paid under the CLFS.
    We often receive comments regarding the changes in RVUs displayed 
on the specialty impact table (Table 128), including comments received 
in response to the valuations. We remind interested parties that 
although the estimated impacts are displayed at the specialty level, 
typically, the changes are driven by the valuation of a relatively 
small number of new and/or potentially misvalued codes. The percentage 
changes in Table 128 are based upon aggregate estimated PFS allowed 
charges summed across all services furnished by physicians, 
practitioners, and suppliers within a specialty to arrive at the total 
allowed charges for the specialty, and compared to the same summed 
total from the previous calendar year. Therefore, they are averages and 
may not necessarily represent what is happening to the particular 
services furnished by a single practitioner within any given specialty.
    As discussed previously, we have reviewed our suite of public use 
files and have worked on new ways to offer interested parties 
additional information that addresses concerns about the lack of 
granularity in our impact tables. To illustrate how impacts can vary 
within

[[Page 62167]]

specialties, we created a public use file that models the expected 
percentage change in total RVUs per practitioner. Using CY 2023 
utilization data, Total RVUs change between -1 percent and 1 percent 
for more than 80 percent of practitioners, representing approximately 
75 percent of the changes in Total RVUs for all practitioners, with 
variation by specialty. Specialties, such as gastroenterology, exhibit 
little variation in changes in total RVUs per practitioner. Table 128 
(CY 2025 PFS Estimated Impact on Total Allowed Charges by Specialty) 
indicates an overall change of 0 percent for this specialty, and the 
practitioner-level distribution shows that 98 percent of these 
practitioners will experience a change in Total RVUs between -1 percent 
and 1 percent. The specific service mix within a specialty may vary by 
practitioner, so individual practitioners may experience different 
changes in total RVUs. For example, Table 128 indicates a 1 percent 
increase in RVUs for the physical/occupational therapy specialty as a 
whole; however, 24 percent of physical/occupational therapy specialty 
practitioners--representing over 21 percent of Total RVUs for the 
specialty--will experience a 1 percent or more increase in Total RVUs. 
Meanwhile, 13 percent of physical/occupational therapy specialty 
practitioners will experience 1 percent or more decreases in Total 
RVUs, and these practitioners account for 14 percent of Total RVUs for 
this specialty. We also note the code level RVU changes are available 
in the Addendum B public use file that we make available with each rule 
(see https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/addendum-a-b-updates).
    The specialty impacts displayed in Table 128 reflect changes within 
the pool of total RVUs. The specialty impacts table, therefore, 
includes any changes in spending that result from finalized policies 
that are subject to the statutory budget neutrality requirement at 
section 1848(c)(2)(B)(ii)(II) (such as the updated proposals associated 
with the transfer of postoperative care for global surgical procedures 
in CY 2025 or the clinical labor pricing update phase-in that began in 
CY 2022) but does not include any changes in spending which result from 
finalized policies that are not subject to the statutory budget 
neutrality adjustment, and therefore, have a neutral impact across all 
specialties. The 2.50 and 2.93 percent temporary payment increases for 
CY 2023 and CY 2024, respectively, are statutory changes that take 
place outside of BN, and therefore, are not captured in the specialty 
impacts displayed in Table 128. Section 1848(t)(2)(C) specifies that 
these temporary payment increases are not to be taken into account in 
determining fee schedules for physicians' services furnished in years 
after the respective increases end. As such, these temporary increases 
are not subject to the PFS budget neutrality adjustment.
b. Impact
    Column F of Table 128 displays the estimated CY 2025 impact on 
total allowed charges, by specialty, of all the RVU changes. A table 
showing the estimated impact of all of the changes on total payments 
for selected high volume procedures is available under ``downloads'' on 
the CY 2025 PFS proposed rule website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We selected these 
procedures for the sake of illustration from among the procedures most 
commonly furnished by a broad spectrum of specialties. The change in 
both facility rates and nonfacility rates are shown. For an explanation 
of facility and nonfacility PE, we refer readers to Addendum A on the 
CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

D. Impact of Changes Related to Telehealth Services

    We are proposing to add several codes to the Medicare Telehealth 
Services List on a provisional basis, including HCPCS codes G0011, 
G0013, G0248, GCTD1-3, and GCTB1-2, and CPT Codes 97550, 97551, 97552, 
96202, and 96203. We are proposing to maintain certain 
Telecommunications technology-related flexibilities through 2025, 
including that we will continue to use a definition of direct 
supervision that allows ``immediate availability'' of the supervising 
practitioner using real-time audio and video interactive 
telecommunications. We are also proposing to delay implementation of 
the telehealth frequency limitations for subsequent nursing facility 
and inpatient hospital visits for an additional year, to include two-
way, real-time audio-only communication technology for any telehealth 
service furnished to a beneficiary in their home, and to continue to 
permit the distant site practitioner to use their currently enrolled 
practice location instead of their home address when providing 
telehealth services from their home. While we note that certain other 
Medicare telehealth flexibilities related to the PHE for COVID-19 are 
expiring, including the removal of statutory geographic and location 
limitations for most Medicare telehealth services, the beneficiary's 
home continues to be a permissible originating site for certain types 
of services including those furnished for the diagnosis, evaluation, or 
treatment of a mental health disorder, including a Substance Use 
Disorder (SUD), and for monthly End Stage Renal Disease (ESRD) related 
clinical assessments described in section 1881(b)(3)(B). However, 
expiration of certain flexibilities for Medicare telehealth services is 
not expected to impact broader utilization of these services because 
reasonable and necessary services for the diagnosis or treatment of an 
illness or injury continue to be covered. Please see our request for 
comment in section II.E. of this proposed rule with regard to what 
impact, if any, the expiration of the current flexibilities would be 
expected to have on overall service utilization for CY 2025. Despite 
the fact that some services will no longer be furnished under 
telehealth, we expect that they will continue to be furnished in-
person. We therefore anticipate that our proposed provisions will 
result in continued utilization of services that can be furnished as 
Medicare telehealth services during CY 2025 at levels comparable to 
observed utilization of these services during CY 2024.

E. Other Provisions of the Regulation

1. Impact of Proposals for Medicare Parts A and B Payment for Dental 
Services Inextricably Linked to Specific Covered Medical Services
    In section II.J.2. of this proposed rule, we are proposing to add 
to the list in Sec.  411.15(i)(3)(i) of clinical scenarios under which 
FFS Medicare payment may be made for dental services inextricably 
linked to covered services to now include certain dental services 
associated with dialysis services for beneficiaries with end-stage 
renal disease (ESRD). Specifically, we are proposing that Medicare 
Parts A and B payment may be made for dental or oral examination 
performed as part of a comprehensive workup prior to Medicare-covered 
dialysis services when used in the treatment of ESRD; and medically 
necessary diagnostic and treatment services to eliminate an oral or 
dental infection prior to, or contemporaneously with covered dialysis 
services in the treatment of ESRD. By proposing to provide payment for 
these dental services, we would respond to the interested parties' 
request that we focus on the ESRD

[[Page 62168]]

patient population. We are also soliciting comment on the potential 
connection between dental services and covered services used in the 
treatment of diabetes as well as covered services for individuals with 
sickle cell disease, hemophilia, or autoimmune diseases receiving 
immunosuppressive therapies. We do not anticipate any significant 
increase in utilization or payment impact for additional dental 
services given the historically low utilization of these therapies.
    Based on the Renal Management Information System (REMIS) and 
Enrollment Data Base (EDB) gathered from the Integrated Data Repository 
(IDR) we estimate Fee-For-Service (FFS) Part B ESRD enrollment to have 
averaged roughly 240 thousand enrollees during CY 2023. Based on United 
States Renal Data System (USRDS) from the NIH, we estimate that roughly 
40,000 of these enrollees are on the kidney transplant waitlist in any 
given year and that roughly 10,000 of these patients on the waitlist 
would typically receive a transplant. Since we already include dental 
services associated with kidney transplant patients in Sec.  
411.15(i)(3)(i)(A) as an example of services for which payment can be 
made for certain dental services, we removed these patients from the 
estimate, which left roughly 30,000 FFS beneficiaries.
    For a variety of reasons outlined previously, we have historically 
observed low FFS dental utilization in instances when coverage could 
apply (<1 percent of potential users). FFS dental billing patterns have 
shown a cost per covered utilizer of about $525 in recent years. To 
illustrate the potential cost of the proposed payment for dental 
services inextricably linked to dialysis services for beneficiaries 
with ESRD we applied three scenarios of utilization (0.1 percent, 1 
percent, 3 percent) and cost per patient of approximately $525 to the 
30,000 patients. Under all of these scenarios the policy is projected 
to represent a negligible cost to the Medicare program (<$1,000,000) in 
any given year.
    Therefore, we do not anticipate a significant payment impact for 
these provisions. It is important to note that there is some 
uncertainty in these take-up rate assumptions, but they are consistent 
with the current utilization of dental services, including after the 
regulation changes made in the CYs 2023 and 2024 PFS final rules. 
Additionally, given that our proposed addition to the list of clinical 
scenarios under which payment may be made for dental services 
inextricably linked to covered services is not a change in coverage or 
payment policy, the cost impact of this proposal is negligible and 
therefore it is not necessary to adjust the conversion factor under the 
PFS budget neutrality requirement.
2. Impact of Proposed Changes Related to Supervision of Outpatient 
Therapy Services in Private Practices
    As discussed in section II.H. of this proposed rule, we are 
proposing to change our regulatory requirements for OTs and PTs who are 
enrolled as suppliers in Medicare as OTs and PTs in private practice 
(OTPPs and PTPPs, respectively) to allow for general supervision of 
their occupational therapy assistants (OTAs) and physical therapist 
assistants (PTAs) to the extent permitted under State law. The 
requirement for OTPPs and PTPPs to provide direct supervision of OTAs 
and PTAs, which has been in place since 2005, requires the OTPP/PTPP to 
be present in the office suite or in the patient's home, and 
immediately available to furnish assistance and direction throughout 
the performance of the procedure performed by the OTA/PTA (or by an OT 
or PT they are supervising who is not enrolled in Medicare as a 
supplier). In contrast, the proposal to allow for general supervision 
would mean that the procedure is furnished under the OTPP's/PTPP's 
overall direction and control, but the OTPP/PTPP need not be present in 
the treatment location or immediately available.
    Should we finalize this proposal, we believe that the change to 
allow for general supervision of OTAs/PTAs by OTPPs and PTPPs will have 
a positive impact on patient access to outpatient therapy services; and 
will align with the currently required general supervision of PTAs/OTAs 
by PTs and OTs who work for Medicare institutional providers, such as 
rehabilitation agencies, outpatient hospitals, and SNFs. It would also 
reflect the supervision level specified in 44 State physical therapy 
practice acts \803\ and all but one State occupational therapy practice 
act.
---------------------------------------------------------------------------

    \803\ Federation of State Boards of Physical Therapy 
Jurisdiction Licensure Reference Guide, https://www.fsbpt.net/lrg/Home/SupervisionRequirementLevelsBySetting.
---------------------------------------------------------------------------

3. Impacts of Proposed Changes Related to Advanced Primary Care 
Management Services
    In section II.G.2 of this proposed rule, ``Advanced Primary Care 
Management (APCM) Services,'' we are proposing to create three HCPCS 
codes to use for reporting the proposed APCM services (HCPCS codes 
GPCM1, GPCM2, and GPCM3) to recognize the resources involved in 
furnishing services using an advanced primary care delivery model under 
the PFS. As described in sections II.G.2.b and II.G.2.c of this 
proposed rule, the proposed APCM services incorporate elements of 
existing services with the understanding that some patients will 
require more resources and some fewer based on variability in patient 
complexity and needs. As we ordinarily do, we are proposing to base the 
PFS valuation for APCM codes on the resources involved in furnishing 
the typical case of the service which may not necessarily reflect the 
actual resources involved in furnishing every individual service. To 
value APCM, we compared the service elements described by the proposed 
APCM codes to the values we have established for the specific care 
management services and communication technology-based services (CTBS) 
codes on which we modeled the proposed service elements of the APCM 
codes and which we built into the service descriptors for GPCM1, GPCM2, 
and GPCM3 (see also Table 129 and sections II.G.2.b. through II.G.2.d. 
of this proposed rule). Specifically, the proposed APCM services 
incorporate elements of chronic care management (CPT codes 99487, 
99489, 99490, 99491, 99439, 99437), principal care management (CPT 
codes 99424, 99425, 99426, 99427)), transitional care management (CPT 
codes 99495 and 99496), interprofessional internet consultation 
furnished by treating/requesting practitioner (CPT code 99452), remote 
evaluation of patient videos/images (HCPCS code G2250), virtual check-
ins (HCPCS code G2251 and G2252), and online digital E/M or e-visits 
(CPT codes 98970, 98971, 98972, 99421, 99422, 99423) into this new 
bundled PFS payment beginning for CY 2025.
    As discussed throughout section II.G.2 of this proposed rule, we 
believe that the proposed elements of APCM services reflect the 
comprehensive approach to care management involved in care delivery 
using the advanced primary care model. This is a model of primary care 
that is being integrated into current medical practice. As such, we 
believe that it would be appropriate to use the current valuation and 
uptake of the codes on which we modeled the APCM codes to inform our 
valuation of APCM services. Using Medicare FFS claims data and evidence 
from the CMS Innovation Center's testing of a series of advanced 
primary care models (see discussion in section II.G.2.a.(1) of this 
proposed rule), we sought to understand how these different services 
have been

[[Page 62169]]

used historically and relate that information to the way we are 
thinking about the service elements for APCM and the valuation of the 
three APCM code levels. As discussed in section II.G.2.e. of this 
proposed rule, for Medicare beneficiaries who receive care management 
services during a year, the non-complex CCM base code is billed on 
average for five months and with three add-on codes during those five 
months. However, this does not account for the care management services 
that are provided beyond one time-based billing interval and without 
reaching the next; nor does it account for the resources involved in 
maintaining certain advanced primary care practice capabilities and 
readiness, including patient population monitoring and care needs 
assessment, to fully furnish and bill APCM services as is medically 
reasonable and necessary for any individual patient during any calendar 
month. Finally, this does not account for changes to utilization of 
APCM that may occur as a result of the billing and documentation 
requirements for APCM services when compared to the current coding and 
payment for care management and CTBS services.
    We are estimating a utilization of approximately 300,000 claims for 
the proposed HCPCS code GPCM1, 1.3 million claims for the proposed 
HCPCS code GPCM2, and 400,000 claims for the proposed HCPCS code GPCM3, 
and are seeking comment on our assumptions. To estimate utilization for 
GPCM1, we first calculated an eligible GPCM1 population by estimating 
the number of Medicare beneficiaries without multiple chronic 
conditions who have an established relationship with a primary care 
provider using Welcome to Medicare and Annual Wellness Visit claims and 
estimating the uptake of APCM Level 1 based on average uptake of CCM/
PCM/TCM in CY 2022 claims data; then, we adjusted this estimate to 
account for increased frequency of billing (multiplied by 12 to account 
for 12 months of assumed practitioner billing for the proposed APCM 
service). To estimate utilization for GPCM2, we first calculated 
estimated ratios to represent the average utilization of CCM/PCM/TCM 
services in the first year of policy implementation compared to CY 2022 
claims; then, we applied a reduced utilization ratio to CY 2022 claims 
for CPT codes 99490 and 99487 (10.4 percent) and multiplied by the 
eligible GPCM2 population of Medicare beneficiaries with multiple 
chronic conditions who are non-QMB; finally, as described for GPCM1, we 
adjusted this estimate to account for increased frequency of billing 
(increase from an average of five months of CCM claims per beneficiary 
to 12 months of assumed practitioner billing for the proposed APCM 
service, or 237.3 percent). To estimate utilization for GPCM3, we took 
the estimated number of GPCM2 claims for CPT codes 99490 and 99487 and 
multiplied by the eligible GPCM3 population of Medicare beneficiaries 
with multiple chronic conditions who are QMB; again, we adjusted this 
estimate to account for increased frequency of billing (same percentage 
applied to GPCM2).
    We anticipate that these proposed coding and payment policies for 
APCM services would result in slight reductions in utilization of 
existing care management and CTBS services during CY 2025 when compared 
to observed utilization of these services during CY 2024. Specifically, 
we are estimating an approximate 11.4 percent reduction in utilization 
from CY 2024 across the 20 service codes which are incorporated into 
the APCM services (see previously). The estimated total net increase is 
approximately 700,000 claims, and we do not anticipate a significant 
payment impact for these provisions. We believe that the cost impact of 
this proposal is negligible and therefore it is not necessary to adjust 
the conversion factor under the PFS budget neutrality requirement.
4. Impact of Proposed Changes Related to Strategies for Improving 
Global Surgery Payment Accuracy
    In section II.G.5 of this proposed rule, ``Strategies for Improving 
Global Surgery Payment Accuracy,'' we discuss our current policy to 
require the use of modifiers to help us identify and adjust payment for 
a global package when there is a formal transfer of care (that is, a 
written agreement) between the practitioner who furnishes the procedure 
(proceduralist) and another practitioner. The transfer of care 
modifiers identify and adjust the global package payment for cases 
where the pre-operative, operative, and post-operative portions of the 
global package are furnished by different practitioners. We are 
proposing to require the use of the appropriate transfer of care 
modifier (modifier -54, -55, or -56) for all 90-day global surgical 
packages in any case when a practitioner (or another in the same group 
practice) expects to furnish only a portion of a global package 
(including but not limited to when there is a formal, documented 
transfer of care as under current policy, or an informal, non-
documented but expected, transfer of care. This could result in more 
application of, and therefore more impact on spending from the 
appropriate usage of the transfer of care modifiers (modifiers -54, -
55, and -56).
    As noted earlier, we are proposing to require the use of the 
existing modifier (-54) for all 90-day global surgical packages in any 
case when a practitioner (or group practice) expects to furnish only 
the procedure portion of a global package (including when there is a 
formal, documented transfer of care as under current policy). Since we 
believe that this will result in expanded use of the transfer of care 
modifiers, which will have a corresponding effect on the payment for 
the affected services, we have reflected this in our utilization 
estimates accordingly (see download file for this proposed rule titled 
CY 2025 PFS final rule 2023 Utilization Data Crosswalked to 2025 at 
https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending) 
and anticipate more global surgical packages and post-op care to be 
billed separately using the modifiers, which could have payment 
consequences for a selection of high-volume global surgery codes. We 
assume that the same number of global surgery codes would be billed; 
however, we anticipate more codes would be billed using the transfer of 
care modifiers. We do not expect the utilization of separately billable 
post-operative E/M services would change. Rather than modify our 
utilization estimates for these codes, our utilization estimate in this 
proposal includes only 90-day high volume and/or high-cost procedure 
codes where reporting post-operative visits with CPT code 99024 
(Postoperative follow-up visit, normally included in the surgical 
package, to indicate that an evaluation and management service was 
performed during a postoperative period for a reason(s) related to the 
original procedure) is required. This is a relatively small set of 
codes (approximately 180) versus the full range of approximately 4,000 
global surgical codes; however, this subset of codes accounts for about 
73 percent of total Medicare 90-day procedure volume. The full list of 
affected codes is available in the file titled ``CY 2024 Analytic 
Crosswalk to CY 2025'' on the CMS website under downloads for the CY 
2025 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For this select list of global surgical codes, we are estimating 
that the transfer of care modifier, modifier -54, will be employed 20 
percent of the time.

[[Page 62170]]

We believe that this is a conservative estimate given the frequency 
with which these global surgical services involve a transfer of 
postoperative care. RAND's research has indicated that a post-operative 
transfer of care is common for 90-day global surgical procedures but 
that these transfers of care are almost never reported with the 
appropriate -54 or -55 modifiers. Then, for the 20 percent of cases 
where we believe the transfer of care modifier will be employed, we are 
proposing to apply the payment reduction associated with the modifier -
54 for postoperative care and apply it to the utilization estimate for 
the associated procedures billed using the transfer of care modifiers. 
These percentages can be found in the PFS Relative Value Files under 
the columns labeled ``pre op, intra op, post op'' at https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files. For example, CPT code 27447 (Arthroplasty, knee, condyle 
and plateau; medial AND lateral compartments with or without patella 
resurfacing (total knee arthroplasty)) is a high-volume knee 
replacement procedure where the postoperative portion of the total 
payment is 21 percent. We are proposing that there will be a 
postoperative transfer of care 20 percent of the time for CPT code 
27447, and in those 20 percent of cases, there will be a corresponding 
21 percent decrease in payment. This is reflected in a utilization 
crosswalk of 0.958 for CPT code 27447 as a result of this 4.2 percent 
reduction (20 percent times 21 percent) to capture this estimated 
reduction in spending associated with our proposal to require the use 
of these transfer of care modifiers.
    We note that for purposes of estimating the utilization of the 
transfer of care modifiers, our estimates include increased reporting 
of the transfer of care modifier for codes that are subject to the RAND 
data collection exercise, with the exception of cases where the 
modifier is already used 5% of the time or more. We recognize that this 
policy will apply more broadly and seek comment on this.
    We note that the impact of the conversion factor on this proposed 
reduction in spending associated with this policy is redistributed 
across the PFS via an increase in the budget neutrality adjustment to 
the conversion factor. We are soliciting comments from interested 
parties on our proposed implementation of this postoperative transfer 
of care policy.
    We are also proposing a new HCPCS code, GPOC1, to capture the 
additional practitioner time and resources spent in providing follow up 
post-operative care by a practitioner who did not perform the surgical 
procedure. Additionally, we expect the proposed global surgical add-on 
code, HCPCS code GPOC1, will be billed during the post-operative period 
of 90 days following the procedure. We expect that this code will be 
billed once during the global period when the patient is seen for an 
office/outpatient (O/O) evaluation and management (E/M) visit that is 
related to the recent surgical procedure. We believe that this code 
will be billed by a physician or other practitioner (other than the 
proceduralist or another practitioner in the same practice) who is 
seeing the patient for a visit during the post-operative period and did 
not furnish the surgical procedure. We believe that there is additional 
time, resources, and complexity involved in the first O/O E/M visit 
following a procedure that should be captured during the post-operative 
period and may be billed in certain instances when a transfer of care 
modifier was not appended to the claim.
    We are estimating a utilization of approximately 40,000 total 
claims in the first year for the proposed add-on code, HCPCS code 
GPOC1. We calculated this utilization estimate based on claims data for 
procedure codes with a post-operative diagnosis code and an observed to 
expected ratio (that is the ratio of visits that are included in the 
global surgical package compared to the number of visits actually 
furnished) of less than 25 percent. We anticipate that uptake of HCPCS 
code GPOC1 would be low initially, consistent with initial uptake of 
other new services we have finalized under the PFS. We are seeking 
comment on these assumptions and welcome input from the public.
5. Drugs and Biological Products Paid Under Medicare Part B
a. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs To Provide Refunds With Respect to Discarded Amounts
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-58, November 15, 2021) amended section 1847A of the Act to 
require manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug. The refund amount is either as noted in section 1847A(b)(1)(B) of 
the Act in the case of a single source drug or biological or as noted 
in section 1847A(b)(1)(C) of the Act in the case of a biosimilar 
biological product, multiplied by the amount of discarded drug that 
exceeds an applicable percentage, which is required to be at least 10 
percent, of total charges (subject to certain exclusions) for the drug 
in a given calendar quarter. In the CY 2023 and 2024 final rules, we 
finalized several policies to implement the provision. These policies 
are described in section III.A.1 of this proposed rule.
    In section III.A.1 of this proposed rule, we are proposing 
additional policies for implementing the provision including: a change 
in how we would identify certain drugs that are excluded from the 
definition of refundable drug for those which payment has been made 
under Part B for fewer than 18 months; how we identify drugs from a 
single-dose container; to require the JW modifier if a billing supplier 
is not administering a drug, but there are discarded amounts during the 
preparation process before supplying the drug to the patient; and we 
discuss an application for increased applicable percentage (CMS 10835, 
OMB 0938-1435).
    In the CY 2024 PFS final rule (88 FR 79485 through 79490), we 
analyzed JW modifier data from 2021 as if the data represented dates of 
service on or after the effective date of section 90004 of the 
Infrastructure Act (that is, January 1, 2023).\804\ Similar to our 
regulatory impact analysis in the CY 2023 PFS final rule (87 FR 70187 
through 70188), we used the 2021 JW modifier data to estimate refund 
amounts as described in section 1847A(h)(3) of the Act. In this 
proposed rule, we performed the same analysis on the 2022 JW modifier 
data. First, we subtracted the percent units discarded by 10 percent 
(the applicable percentage for most refundable drugs), except for drugs 
with an increased applicable percentage as described in Sec.  
414.940(d). We note that since the data indicating which drugs will 
have an increased applicable percentage of 26 percent for the unique 
circumstances of rarely utilized orphan drugs (Sec.  414.940(d)(5)) 
will not be available until the data is analyzed for the initial 
report, we entered 26 percent for orphan drugs furnished to fewer than 
100 beneficiaries in CY 2022 based on data on the CMS website.\805\ 
Therefore, the drugs with increased applicable percentage under Sec.  
414.940(d)(5) may change each year based on claims data; it is applied 
in this analysis for estimation purposes only. Then, we multiplied that 
percentage by the CY 2022 total allowed amount to estimate the annual 
refund for a given billing and

[[Page 62171]]

payment code. The quarterly refund was estimated by dividing the annual 
estimate by 4. This analysis remains appropriate for this proposed rule 
because we are applying the finalized policies from the CY 2023 and 
2024 PFS final rules to the most recent publicly available data for the 
JW modifier data from 2022.
---------------------------------------------------------------------------

    \804\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
    \805\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-spending-by-drug.
---------------------------------------------------------------------------

    Overall, according to data on the CMS website \806\ for Medicare 
Part B discarded drug units in the 2022 calendar year, Medicare paid 
over $800 million for discarded amounts of drugs from a single-dose 
container or single-use package paid under Part B. In that year, there 
were 55 billing and payment codes with 10 percent or more discarded 
units based on JW modifier data. Of these, 10 did not meet the 
definition of refundable single-dose container or single-use package 
drug in section 1847A(h)(8) of the Act because they are not single 
source drugs or biologicals; 5 were excluded from the definition of 
refundable single-dose container or single-use package drug (as 
specified in section 1847A(h)(8)(B) of the Act) because they are 
identified as radiopharmaceuticals or imaging agents in FDA-approved 
labeling; and 3 are products referred to as skin substitutes, which 
were removed because we anticipate making changes to coding and payment 
policies regarding those products in future rulemaking. After these 
exclusions, there were 35 billing and payment codes that met the 
definition of refundable single-dose container or single-use package 
drug. Of these, 29 codes have discarded units above the relevant 
finalized applicable percentage, and 6 codes have discarded units that 
would fall below increased applicable percentages finalized in this 
proposed rule.
---------------------------------------------------------------------------

    \806\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
---------------------------------------------------------------------------

    We estimated refund amounts as described in section 1847A(h)(3) of 
the Act were calculated based on this data by subtracting the percent 
units discarded by 10 percent (the applicable percentage), except for 
drugs with higher applicable percentages finalized in the CY 2023 or 
2024 final rules. Then, we multiplied the appropriate percentage by the 
CY 2022 total allowed amount to estimate the annual refund for a given 
billing and payment code. The quarterly refund was estimated by 
dividing the annual estimate by 4. Based on this data, there would be 
approximately $98.7 million in refunds due from manufacturers for the 
calendar year of 2022 ($24.7 million each calendar quarter).
    There are several limitations to this analysis that could 
substantially affect the total quarterly refund. Since new drugs are 
continually being approved, this estimate does not consider newer drugs 
that will meet the definition of refundable single-dose container or 
single-use package drug on or after the effective date of January 1, 
2023. Since section 1847A(h)(8)(B)(iii) of the Act excludes drugs 
approved by FDA on or after November 15, 2021, and for which payment 
has been made under Part B for fewer than 18 months from this 
definition, we expect an impact on refund amounts after the 18-month 
exclusion has ended if the drug otherwise meets the definition. We also 
noted that this estimate is based on CY 2022 data for discarded drug 
amounts, which, for reasons discussed in the CY 2023 PFS final rule (87 
FR 69716), we believe to be an underestimate due to the frequent 
omission of the JW modifier Claims edits for both the JW and JZ 
modifiers will likely increase accurate reporting of discarded drug 
amounts. Other substantial changes to this estimate may occur if a 
billing and payment code no longer meets this definition. For example, 
if a generic version of one of these drugs is marketed, the billing and 
payment code will become a multiple source drug code and will no longer 
meet the definition of refundable single-dose container or single-use 
package drug. Subsequently, the manufacturers will not be responsible 
for refunds under this provision. There may be changes in the percent 
discarded units for a given refundable single-dose container or single-
use package drug if the manufacturer introduces additional vial sizes 
or modifies the vial size to reduce the amount discarded. Lastly, since 
data from the CMS website only includes billing and payment codes on 
the ASP drug pricing file \807\ and implementation of section 90004 of 
the Infrastructure Act is not restricted to billing and payment codes 
included on the file, there may be other applicable data that was not 
assessed as part of this estimate.
---------------------------------------------------------------------------

    \807\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
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b. Impacts Related to the Payment Limit Calculation When Manufacturers 
Report Negative or Zero Average Sales
    In section III.A.2 of this proposed rule, CMS is proposing how 
payment limits would be calculated when manufacturers report negative 
or zero ASP data to CMS. We are proposing to amend Sec.  414.904(i) to 
reflect CMS' approach to setting a payment limit for circumstances in 
which negative or zero ASP data is reported by a manufacturer for a 
single source drug.
    Specifically, we are proposing to codify that in cases where 
negative or zero ASP data is reported for some, but not all, NDCs of a 
multiple source drug, we would calculate the payment limit using the 
positive ASP data reported for the drug, except for the existing 
carryover policy for multiple source drugs that we would apply when 
missing data results in a significant change in the ASP payment limit. 
We are proposing to move this carryover policy for multiple source 
drugs within Sec.  414.904(i) to fit within the structure of the 
proposed new set of payment limit methodologies. We are also proposing 
to codify that in the case of a multiple source drug for which negative 
or zero ASP data is reported for all NDCs, we would set the payment 
limit using the most recent available positive ASP data from a previous 
quarter until at least one NDC for the drug has positive ASP data for a 
quarter.
    We are proposing to codify that in cases where negative or zero ASP 
data is reported for some, but not all, NDCs of a single source drug 
that is not a biosimilar, we would calculate the payment limit using 
the positive ASP data reported for the drug. We are proposing to codify 
that for single source drugs that are not biosimilars with all negative 
or zero ASP data for a given quarter, the payment limit would be, until 
at least one NDC for the drug has positive manufacturer ASP data for a 
quarter, the lesser of 106 percent of the volume-weighted average of 
the most recent available positive manufacturer ASP data for at least 
one NDC from a previous quarter and 106 percent of the wholesale 
acquisition cost, and we would use 106 percent of the lowest wholesale 
acquisition cost per billing unit if there is more than one wholesale 
acquisition cost per billing unit.
    We are also proposing to codify that in cases where negative or 
zero ASP data is reported for some, but not all, NDCs of a biosimilar, 
we would calculate the payment limit using the positive ASP data 
reported for the biosimilar. Lastly, we are proposing to codify two 
scenarios when the manufacturer reports negative or zero ASP for all 
NDCs for a biosimilar for a given quarter: (1) when positive ASP data 
is available for another biosimilar(s) with the same reference product 
for the given quarter, we are proposing to set the payment limit equal 
to the sum of the volume-weighted average of the positive ASP data from 
all other biosimilars referencing the same

[[Page 62172]]

reference product plus 6 percent (or 8 percent for a qualifying 
biosimilar biological) of the amount determined under section 
1847A(b)(4) of the Act for the reference biological product for the 
given quarter; and (2) when either no other biosimilars have been 
approved for the same reference product or no other biosimilars with 
the same reference product report positive ASP data for the given 
quarter, we are proposing to set the payment limit equal to the sum of 
the volume-weighted average of the most recent available positive ASP 
data from a previous quarter plus 6 percent (or 8 percent for a 
qualifying biosimilar biological) of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product for 
the given quarter.
    With regard to estimating changes in expenditures for CY 2025, 
because drugs and biologicals that report negative or zero ASP data 
vary by quarter and we cannot predict those that will report such data, 
we used historic claims data to perform an illustrative analysis of how 
program spending would have changed had the proposed policies been in 
place in CY 2023. In the analysis, we identified single source and 
multiple source billing and payment codes associated with negative or 
zero ASP data for which we published payment limits based on other 
applicable pricing data (that is, the manufacturer or published 
wholesale acquisition cost) in the four calendar quarters of 2023. For 
each such billing and payment code, we used claims data to identify: 
(1) the number of allowed billing units in a calendar quarter (that is, 
the number of billing units of a drug or biological paid for by 
Medicare); (2) the payment limit per billing unit we applied to that 
drug or biological under our current policies; and (3) the payment 
limit per billing unit our proposal would apply to the billing and 
payment code. We then subtracted the product of the allowed billing 
units for the payment limit under current policies by the product of 
the allowed billing units and the payment limit under our proposal, and 
the difference between the two is what the difference between what 
Medicare spending on the billing and payment codes would have been if 
our proposed payment limit methodologies were used in that calendar 
quarter of 2023 and what Medicare actually spent. These data and net 
reductions (or increases) in program spending are illustrated in Table 
130.
BILLING CODE P

[[Page 62173]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.175


[[Page 62174]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.176

BILLING CODE C
    As illustrated in Table 131, the application of the proposed 
payment limit calculation approaches would have reduced program 
spending for all but three drugs that reported negative or zero ASP 
data in calendar quarters in 2023 and reduced spending by a total of 
$7,241,960.21 over the year.
    We separately analyzed theoretical changes in program spending for 
one biosimilar product (ZIEXTENZO[supreg], Q5120) that has reported 
negative ASP data for all NDCs for three consecutive quarters beginning 
with the second calendar quarter of 2022, and calculated the payment 
limit under our proposed method for biosimilars with negative or zero 
ASP data and changes in program spending for the three impacted 
quarters had our proposed payment approach been applied. We also 
analyzed payment limits and theoretical changes in program spending 
under two alternatives considered under the proposed rule. Under the 
first alternative, we would include the ASP data and billing units sold 
of the reference biological for a given quarter along with those of the 
other biosimilars in the volume-weighted average calculation. Under the 
second alternative, we would set the payment limit for a given quarter 
using the biosimilar's most recent available positive ASP data and 
either 6 percent (or 8 percent for qualifying biosimilar biologicals) 
of the amount determined under section 1847A(b)(4) of the Act for the 
reference biological product (as defined in Sec.  414.902) for the 
given quarter. The calculated payment limits under the proposal and the 
two alternatives, as well as the estimate reductions in program 
expenditures, are illustrated in Table 131.
[GRAPHIC] [TIFF OMITTED] TP31JY24.177

    We note that the spending change estimates reflect preliminary 
claims data. Providers and suppliers have a 12-month period to submit 
Medicare Part B claims, including claims for drugs payable under Part 
B, so a lag exists between the date of service when a drug is 
administered and when the claim is submitted and adjudicated. Because 
of this lag in finalized claims, there may also be a lag in available 
JW modifier data for any given date of service quarter. An evaluation 
of July 2010 Medicare Part B claims in the Physician/Supplier-Carrier 
setting showed that 91.68, 96.84, and 98.32, and 99.13 percent of 
claims were final at 3, 6, 9, and 12 months, respectively, following 
the date of service. At 24 and 48 months, 99.83 and 100 percent of the 
claims, respectively, were considered to be final. Therefore, for the 
allowed billing units and estimated program expenditure reduction for 
the first 2 calendar quarters of CY 2024 are significantly lower than 
we would expect after claims mature for a full

[[Page 62175]]

year. Over the 3 calendar quarters (4Q2023, 1Q2024, and 2Q2024), our 
proposed approach for calculating the payment limit for biosimilars 
with only negative or zero ASP and the two alternative approaches would 
have reduced program expenditures by at least $821,599.473, 
$914,463.917, and $1,148,055.145, respectively.
    After assessing the effect of applying the proposed alternative 
payment limit calculation approaches to recent Medicare FFS claims 
experience over 2023 and 2024, we estimate an average annual gross Part 
B effect of $10 million dollars in reduced program spending for 2025 
and approximately $100 million over 2025 to 2034, as shown in Table 
134. Historically we have observed that negative or zero ASP pricing 
data may occasionally occur for a drug when it is discontinued or 
substituted away for another product and assume this to occur in the 
future. Moreover, given the infrequency of negative or zero ASP data, 
we do not expect in all years that alternative pricing approaches will 
be necessary or to affect drugs with material levels of utilization. 
Therefore, for a low estimate we project the policy to have a 
negligible effect on program spending for the projection window. To 
illustrate a potential high impact estimate scenario, the affected 
utilization from 2023 was doubled relative to the observed data. Please 
note that the actual effect of the policy will be specific to the 
affected drugs in any given year and considerations that affect their 
utilization and pricing, therefore actual experience may deviate 
considerably from these projections.
c. Impacts Related to the Payment of Radiopharmaceuticals in the 
Physician Office
    In section III.A.3. of this proposed rule, while we evaluate our 
broader policies in this space for future rulemaking, we are proposing 
to codify in regulations at Sec.  414.904(e)(6) that, for 
radiopharmaceuticals furnished in a setting other than the hospital 
outpatient department, MACs shall determine payment limits for 
radiopharmaceuticals based on any methodology used to determine payment 
limits for radiopharmaceuticals in place on or prior to November 2003. 
Such methodology may include, but is not limited to, the use of 
invoice-based pricing. The proposal does not necessarily change the 
payment methodology in place for a MAC but rather clarifies that any 
payment methodology that was being used by any MAC prior to the 
enactment of the MMA can continue to be used by any MAC. Therefore, we 
believe that this proposal will have no impact on Medicare spending.
d. Impacts Related to Immunosuppressive Therapy
    In section III.A.4 of this proposed rule, we are proposing to 
modify regulations to include orally or enterally administered 
compounded formulations of FDA-approved drugs that have approved 
immunosuppressive indications, or that have been determined by a 
Medicare Administrative Contractor (MAC) to be reasonable and necessary 
for specific purposes in immunosuppressive treatment in the 
immunosuppressive drug benefit. In addition, we are proposing two 
changes regarding supplies of immunosuppressive drugs to align with 
current standards of practice and reduce barriers to medication 
adherence: to allow payment of a supply fee for a prescription of a 
supply of up to 90 days and to allow prescriptions for these 
immunosuppressive drugs to be refillable.
    CMS has limited insight into how many patients who are currently 
prescribed compounded immunosuppressive drugs would have their 
immunosuppressive medication paid for under Part B if the proposed 
changes to the immunosuppressive drug benefit are finalized. Medicare 
Part D claims data for CY 2023 indicates there were 2,662 prescriptions 
filled that year for compounded immunosuppressive drugs that could have 
been administered through oral or enteral routes (that is, that would 
likely be paid under Part B if the immunosuppressive drug benefit 
revision is finalized as proposed). We estimate that this number of 
prescriptions correlates to up to 2,000 Part D enrollees that were 
prescribed compounded immunosuppressive drugs that would be covered if 
the proposal is finalized. However, we do not know how many Part B 
beneficiaries currently have their compounded immunosuppressive drugs 
paid for by means other than a Part D policy. And finally, and perhaps 
most importantly, compounded drugs are priced by each A/B and DME MAC 
and have no estimable payment limit. Thus, we are unable to estimate 
the cost shift from Part D and other plans to Part B that would result 
from a finalization of the immunosuppressive drug benefit proposed 
policies, including allowing payment of supply fees for prescriptions 
fills for supplies of up to 90 days and for immunosuppressive drugs to 
be refillable.
e. Impacts Related to Clotting Factors
    In section III.A.5. of this proposed rule, we are proposing to 
update Sec.  410.63(b) to clarify existing CMS policy that blood 
clotting factors must be self-administered to be considered clotting 
factors for which the furnishing fee applies. Additionally, we are 
proposing to clarify at Sec.  410.63(c) that the furnishing fee is only 
available to entities that furnish blood clotting factors, unless the 
costs associated with furnishing the clotting factor are paid though 
another payment system, including the PFS. That is, we are proposing to 
clarify through revisions to Sec.  410.63 that clotting factors (as 
specified in section 1861(s)(2)(I) of the Act) and those eligible to 
receive the clotting factor furnishing fee (as specified in section 
1842(o)(5) of the Act) are the same subset of products. Accordingly, 
the clarification will not be adding a furnishing fee to any new 
products. Therefore, we believe that this clarification will have no 
impact on Medicare spending.
6. Impacts Related to Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs)
    In section III.B.2. of this proposed rule, we are proposing to 
require RHCs and FQHCs to bill the individual codes that make up the 
general care management HCPCS code, G0511. Payment amounts for some 
services that comprise HCPCS code G0511 are less than the payment 
amount for G0511 and if an RHC or FQHC mostly furnishes these services, 
they could see a potential decline in payment. We are also proposing to 
allow RHCs and FQHCs to bill the add-on codes for additional time spent 
once the minimum threshold of time was met to account for a complete 
encounter. This could potentially offset any decrease in payments. In 
addition, beginning in CY 2025, we are proposing to adopt the coding 
and policies regarding Advanced Primary Care Management (APCM) services 
proposed under the PFS, as discussed in section II.G of this proposed 
rule. In terms of estimated impacts to the Medicare program, we believe 
that the proposals discussed in section III.B.2 of this proposed rule 
would have no impact on Medicare spending.
    In section III.B.3. of this proposed rule, we are proposing the 
policy to continue to adopt the definition ``immediate availability'' 
as including real-time audio and visual interactive telecommunications 
for the direct supervision of services and supplies furnished incident 
to a physician's service through December 31, 2025, for

[[Page 62176]]

RHCs and FQHCs. We are also proposing, on a temporary basis, to allow 
payment for non-behavioral health visits furnished via 
telecommunication technology in a manner that would closely align with 
the payment mechanisms mandated by statute through December 31, 2024, 
that is, RHCs and FQHCs would continue to bill for RHC and FQHC 
services furnished using telecommunication technology services by 
reporting HCPCS code G2025 on the claim through December 31, 2025. In 
addition, we are proposing to continue to delay the in-person visit 
requirement for mental health services furnished via communication 
technology by RHCs and FQHCs to beneficiaries in their homes until 
January 1, 2026. We believe these RHC/FQHC proposals related to 
telecommunication technology would have a negligible impact on Medicare 
spending.
    In section III.B.4. of this proposed rule, we discuss the 
implementation of section 4124 of the CAA, 2023. Section 4124 of the 
CAA, 2023 established Medicare coverage for intensive outpatient (IOP) 
services furnished by a hospital to its outpatients, or by a community 
mental health center, a RHC or a FQHC, as a distinct and organized 
intensive ambulatory treatment service offering less than 24-hour daily 
care in a location other than an individual's home or inpatient or 
residential setting, effective January 1, 2024 (88 FR 81838). We are 
proposing to provide a payment rate for 4 or more services per day in 
the RHC and FQHC setting. In terms of impact, we believe that this 
proposal would have negligible impact on Medicare spending.
    In section III.B.5. of this rulemaking, we are proposing to allow 
RHCs and FQHCs to bill for Part B preventive vaccines and the 
administration at the time of service. We propose that payments for 
these claims will initially be made according to Part B preventive 
vaccine payment rates in other settings, but that they will be annually 
reconciled with the facilities' actual vaccine costs on their cost 
reports, which is current practice and statutorily mandated. Therefore, 
we believe that this proposal would have no impact on Medicare 
spending.
    In section III.B.6. of this proposed rule, we discuss our proposal 
relating to RHC productivity standards. We are proposing to remove 
productivity standards for RHCs and therefore believe that the proposal 
discussed in this section III.B.6. of this proposed rule would have no 
impact on Medicare spending.
    In section III.B.8. of this proposed rule, we are clarifying that 
when RHCs and FQHCs furnish dental services that align with the 
inextricably linked policies and operational requirements in the 
physician setting, we would consider those services to be a qualifying 
visit and the RHC would be paid at the RHC AIR and the FQHC would be 
paid under the FQHC PPS. We believe this clarification related to 
dental services furnished in RHCs and FQHCs would have a negligible 
impact on Medicare spending. Even though this is a new benefit, it 
would only cover dental services inextricably linked to specific 
medical services as described in section II.J. of this proposed rule.
7. Changes in the RHC and FQHC CfCs: Provision of Services (Sec.  
491.9(a)(2) and (c)(2)(ii) and (vi))
Provision of Services (Sec.  491.9)
    At Sec.  491.9(a)(2), we are proposing to explicitly state that an 
RHC and FQHC must provide primary care services and an RHC cannot be a 
rehabilitation agency or a facility that is primarily for the care and 
treatment of mental diseases. We believe this proposal would result in 
real, but difficult to estimate, long-term benefits to patients 
receiving services at RHCs and FQHCs, as well as economic benefits to 
the clinic or center. Regarding the estimated impacts on the Medicare 
program, the proposals discussed in section III.C.2 of this proposed 
rule would have no impact on Medicare spending.
    This proposed change would provide RHCs with additional flexibility 
to provide outpatient specialty services on-site or hire additional 
providers with specialized expertise to meet the needs of their 
community, including internal medicine, pediatrics, geriatrics, 
obstetrics and gynecology, dermatology, cardiology, neurology, 
endocrinology, and ear, nose and throat. As a result, RHCs would be 
able to improve access to care by serving more patients in communities 
served by RHCs and FQHCs, including rural communities, and not 
requiring patients to travel longer distances to receive specialty 
services. Patients could have access to specialists within their own 
communities, improving overall access for Medicare beneficiaries. 
Moreover, if this policy were to be finalized, CMS would no longer 
determine or enforce the standard of RHCs ``being primarily engaged in 
furnishing primary care services.'' \808\ which has been enforced via 
the sub-regulatory guidance contained in the State Operations Manual 
Appendix G--Guidance for Surveyors: Rural Health Clinics (RHCs). 
Resources that clinics are currently using to evaluate if they are 
meeting this requirement could be devoted to other administrative 
tasks. Therefore, we believe that there would be no burden imposed on 
RHCs or FQHCs related to this proposal.
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    \808\ Centers for Medicare & Medicaid Services. (2020, February 
21). State Operations Manual Appendix G--Guidance for Surveyors: 
Rural Health Clinics (RHCs) (pp. 63-64). https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_g_rhc.pdf.
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    We are also proposing to remove hemoglobin and hematocrit (H&H) lab 
tests from the list of specific tests RHCs must provide, as well as 
update the language regarding the primary culturing requirement to 
reflect current standards of practice at Sec.  491.9(c)(2)(ii) and 
(vi), respectively. As discussed in section III.C.2.b of this proposed 
rule, RHCs report the H&H lab requirement is particularly burdensome 
and costly for clinics due to purchasing and maintaining the equipment, 
even if it is seldom or never used.
    This proposed change would reduce the overall burden for RHCs by 
reducing the number of diagnostic tests they must provide. RHCs would 
no longer be required to purchase or maintain H&H lab test equipment or 
supplies, freeing up resources for other essential services. H&H lab 
tests are most often ordered as part of a larger panel of labs that is 
not provided at the RHC. When this is the case, patients will receive 
the H&H as part of that larger panel at an outside lab that offers the 
larger panel of labs. These patients may be inconvenienced by having to 
travel to another laboratory, but this limits the number of specimens 
they must provide for the laboratory tests, reducing the number of 
times a patient's veins must be accessed for blood draws. RHCs report 
that when laboratory tests are ordered that are not provided by the 
RHC, such as a comprehensive blood count (CBC), their patients are 
often sent to the nearest hospital that would have a full-service 
laboratory available to perform the test. A CBC test looks at a 
patient's overall health and can detect a wide range of conditions that 
the hemoglobin and hematocrit tests cannot. This ensures comprehensive 
patient care and may result in a decreased need for follow-up testing 
and decreased patient turnaround time.\809\
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    \809\ Mayo Foundation for Medical Education and Research. (2023, 
January 14). Complete blood count (CBC). Mayo Clinic. https://www.mayoclinic.org/tests-procedures/complete-blood-count/about/pac-20384919.
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    Currently, there are approximately 5,462 Medicare-certified RHCs. 
Applying the most recent data from

[[Page 62177]]

2021, 66 percent (3,605) of RHCs are designated as ``provider-based,'' 
which are owned and operated as an integral part of a hospital, nursing 
home, or home health agency.\810\ The remaining 34 percent (1,857) of 
RHCs are ``independent clinics'' and, though uncommon, may be owned 
and/or operated by a healthcare system. Therefore, we assume that at 
most, half of the independent clinics, for a total of 929 RHCs, would 
continue to provide H&H tests because it is less likely that they are a 
part of a healthcare system. As a result, we assume that 4,534 (3,605 
provider-based RHCs + 929 independent clinics) RHCs will continue to 
refer patients to a fully certified laboratory rather than directly 
provide the H&H test. Because the regulatory requirements at Sec.  
491.9 States that RHCs must provide H&H lab tests on-site, RHCs must 
have and maintain the appropriate equipment to perform these tests, 
even if the equipment is not utilized. There are variations in the H&H 
testing equipment RHCs may use; however, we note that the average cost 
of an H&H meter or analyzer costs approximately $1,200 for the system 
and is replaced on average every 3 years. The systems also have an 
approximate $100 annual maintenance fee. We estimate that over the next 
3 years, 4,534 RHCs will each save approximately $1,500. This would 
result in a total annual savings of $2,267,000 ((4,534 RHCs that 
typically refer patients to a fully certified laboratory x $1,500)/3). 
After 3 years, the RHC program would save a total of $6,801,000 (4,534 
x $1,500).
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    \810\ Gale, J.A., Croll, Z., Croom, J., Munk, L., & Jonk, Y. 
(2022). Community Characteristics and Financial and Operational 
Performance of Rural Health Clinics in the United States: A 
Chartbook. University of Southern Maine, Muskie School of Public 
Service, Maine Rural Health Research Center. https://digitalcommons.usm.maine.edu/cgi/viewcontent.cgi?article=1016&context=clinics.
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8. Clinical Laboratory Fee Schedule
    In section III.D. of this proposed rule, we outline statutory 
revisions to the data reporting period and phase-in of payment 
reductions under the CLFS. In accordance with section 502 of the 
FCAOEA, 2024, we are proposing certain conforming changes to the data 
reporting and payment requirements in our regulations at 42 CFR part 
414, subpart G. Specifically, for CDLTs that are not ADLTs, we are 
proposing to update certain definitions and revise Sec.  414.504(a)(1) 
to indicate that initially, data reporting begins January 1, 2017, and 
is required every 3 years beginning January 2025. Section 502(b) of the 
FCAOEA, 2024 delays the next data reporting period under the CLFS for 
CDLTs that are not ADLTs by 1 year, that is, it requires the next data 
reporting period for these tests to take place during the period of 
January 1, 2025, through March 31, 2025. Subsequently, the next private 
payor rate-based CLFS update for these tests will be effective January 
1, 2026, instead of January 1, 2025. In addition, we are proposing 
conforming changes to our requirements for the phase-in of payment 
reductions to reflect section 502(a) of the FCAOEA, 2024. Specifically, 
we are proposing to revise Sec.  414.507(d) to indicate that for CY 
2024, payment may not be reduced by more than 0.0 percent as compared 
to the amount established for CY 2023, and for CYs 2025 through 2027, 
payment may not be reduced by more than 15 percent as compared to the 
amount established for the preceding year.
    We recognize that private payor rates for CDLTs paid on the CLFS 
and the volumes paid at each rate for each test, which are used to 
determine the weighted medians of private payor rates for the CLFS 
payment rates, have changed since the first data collection period 
(January 1, 2016, through June 30, 2016) and data reporting period 
(January 1, 2017, through March 31, 2017). In addition, as outlined in 
section III.D. of this proposed rule, in the CY 2019 PFS final rule (83 
FR 59671 through 59676), we amended the definition of applicable 
laboratory to include hospital outreach laboratories that bill Medicare 
Part B using the CMS-1450 14x Type of Bill. As such, the FCAOEA, 2024 
amendments to the data reporting period will delay using updated 
private payor rate data to set revised CLFS payment rates for CDLTs 
that are not ADLTs.
    Due to unforeseen changes in private payor rates due to shifts in 
market-based pricing for laboratory tests and the unpredictable nature 
of test volumes and their impact on calculating updated CLFS payment 
rates based on the weighted median of private payor rates, it is 
uncertain whether the delay in data reporting will result in a 
measurable budgetary impact. In other words, to assess the impact of 
delayed reporting and subsequent implementation of updated CLFS rates, 
we will need to calculate weighted medians of private payor rates based 
on new data and compare the revised rates to the current rates. As 
such, we believe that we will only know the impact of the delay in data 
reporting after collecting actual updated applicable information from 
applicable laboratories and calculating the updated CLFS rates.
    Regarding the proposed conforming changes to our requirements for 
the phase-in of payment reductions, we note that for CYs 2025 through 
2027, payment may not be reduced by more than 15 percent as compared to 
the amount established for the preceding year. Based on data reported 
in the 2017 data collection period, we estimate 14.8 percent (191) of 
tests on the CLFS may be subject to the full 15 percent phase-in 
reduction in CY 2025.
9. Effects of Proposals Relating to the Medicare Diabetes Prevention 
Program Expanded Model
a. Effects on Beneficiaries
    We are proposing to modify certain Medicare Diabetes Prevention 
Program (MDPP) expanded model policies to: (1) align MDPP terminology 
and definitions with the proposed 2024 Centers for Disease Control and 
Prevention (CDC) Diabetes Prevention Recognition Program (DPRP) 
Standard \811\ definitions for ``in-person with a distance learning 
component,'' ``combination with an online component,'' and ``online''; 
(2) remove the MDPP bridge payment; (3) provide a more effective option 
for a beneficiary to self-report their weight in an MDPP distance 
learning session, by submitting 2 photos; (4) facilitate Medicare 
Administrative Contractors (MACs) in processing claims for a MDPP make-
up session held on the same day as a regularly scheduled session by 
requiring use of an existing HCPCS modifier; and (5) align current rule 
language with previous rulemaking.
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    \811\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
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    MDPP is a non-pharmacological behavioral intervention consisting of 
up to 22 sessions using a CDC approved National Diabetes Prevention 
Program (National DPP) curriculum.\812\ CDC administers a national 
quality assurance program recognizing eligible organizations that 
furnish the National DPP through its evidence based DPRP Standards, 
which are updated every three years. The 2024 CDC DPRP Standards 
replace the 2021 CDC DPRP Standards in June 2024.\813\
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    \812\ https://www.cdc.gov/diabetes/prevention/resources/curriculum.html.
    \813\ Centers for Disease Control and Prevention Diabetes 
Prevention Recognition Program. Standards and Operating Procedures. 
Requirements for CDC Recognition. June 2024. https://nationaldppcsc.cdc.gov/s/article/DPRP-Standards-and-Operating-Procedures.
---------------------------------------------------------------------------

    The Calendar Year (CY) 2021 PFS final rule allowed virtual delivery 
of MDPP during the COVID-19 Public

[[Page 62178]]

Health Emergency (PHE) (85 FR 84830). Improvements to MDPP in the 
Calendar Year 2024 final rule included a simplified payment structure 
to allow for fee-for-service (FFS) payments for beneficiary attendance, 
while retaining the performance-based payments for diabetes risk 
reduction (that is, weight loss) (88 FR 79241). This policy also 
extended certain PHE flexibilities including the option to deliver some 
or all MDPP sessions via distance learning, until December 31, 2027 (88 
FR 79241). Another PHE flexibility extended through December 31, 2027, 
at 42 CFR 410.79(e)(3)(iii), is for MDPP suppliers to obtain weight 
measurements for beneficiaries using one of the following options: (1) 
via digital technology, such as scales that transmit weights securely 
via wireless or cellular transmission; or (2) via self-reported weight 
measurements from the at-home digital scale of the MDPP beneficiary.
    The 2024 CDC DPRP Standards were proposed after the CY 2024 PFS was 
finalized. To align with 2024 CDC DPRP Standards, we are proposing to 
update the MDPP definition for ``online'' delivery to align with the 
proposed 2024 CDC DPRP definition. We are also proposing to add terms 
and definitions for CDC's new modalities including ``in-person with a 
distance learning component'' and ``combination with an online 
component'' and to remove the existing ``combination'' term and 
definition. Lastly, we are specifying that MDPP make-up sessions must 
be provided in-person or via distance learning delivery, as required by 
the CY 2024 PFS final rule.\4\
    Furthermore, the MDPP bridge payment (G9880), which is a payment 
made to the subsequent supplier for the first session when a 
beneficiary switches MDPP suppliers, is no longer necessary in MDPP's 
CY 2024 FFS payment structure and may increase risk for fraud, waste, 
or abuse. We are proposing to remove the bridge payment from the MDPP 
CY 2025 Fee Schedule. In addition, we have identified a more effective 
option for a beneficiary to self-report their weight in an MDPP 
distance learning session. We have also identified the need to require 
suppliers to use Current Procedural Terminology (CPT) Modifier 79 to 
allow Medicare Administrative Contractors (MACs) to identify a claim 
for an MDPP make-up session held on the same day as a regularly 
scheduled session. Finally, we are proposing to align current rule 
language with previous rulemaking pertaining to MDPP terminology, 
requirements, and payment structure.
    All the proposed changes for MDPP in CY 2025 are conforming or 
administrative and expected to have a modest impact on beneficiaries' 
access to MDPP services. Aligning with 2024 CDC DPRP Standards for MDPP 
delivery modes may help expand beneficiary access by streamlining data 
submission for MDPP suppliers and increasing the number of MDPP 
eligible organizations that enroll in Medicare as MDPP suppliers. 
Additionally, allowing for MDPP make-up sessions to be scheduled on the 
same day as regularly scheduled sessions would increase flexibility for 
both MDPP suppliers and beneficiaries and may help expand access for 
beneficiaries with transportation and other scheduling issues that 
prevent scheduling sessions more than one day a week or month. 
Increased flexibility in scheduling MDPP sessions may help to address a 
lack of MDPP suppliers in certain communities and challenges related to 
beneficiary logistics concerning course attendance.
    Additionally, we are proposing to provide a more effective option 
to beneficiaries to self-report weight for a MDPP distance learning 
session, by allowing beneficiaries to submit 2 (two) photos to capture 
both the beneficiary weight on the digital scale and the beneficiary 
visible in their home. Current MDPP supplier standards at Sec.  424.205 
require beneficiary weight to be reported at each MDPP session 
attended. This proposed change would help to address concerns voiced by 
MDPP suppliers who have reported that many of their beneficiaries are 
unable to take a picture while standing on their home scales due to 
risk of injury and physical health limitations. This new flexibility 
may promote more consistent collection of weight for MDPP sessions.
    Lastly, we do not expect removing the MDPP bridge payment to have 
an impact on beneficiary access. This payment for the first session 
attended with a new supplier when a beneficiary switches MDPP suppliers 
is not necessary in MDPP's CY 2024 FFS payment structure that includes 
payment for every session attended and historically has been submitted 
by few MDPP suppliers.
    Overall, these modifications address MDPP supplier and beneficiary 
needs based upon available monitoring and evaluation data received to 
date, feedback from Medicare Advantage plans and existing MDPP 
suppliers, and feedback from beneficiary focus groups. The changes are 
also in response to comments from interested parties made through 
public comments in response to prior rulemaking.
b. Effects on the Market
    We anticipate that the conforming and administrative changes 
proposed in this rulemaking are likely to result in modest increases of 
MDPP suppliers and beneficiary access to the set of MDPP services. We 
anticipate that this would assist in contributing to a reduction of the 
incidence of diabetes among eligible Medicare beneficiaries. As of 
April 2024, there are approximately 810 in-person organizations 
nationally that are eligible to become MDPP suppliers based on their 
preliminary or full CDC Diabetes DPRP status. However, only 36 percent 
of these eligible in-person organizations are participating in 
MDPP.\814\ Aligning with CDC DPRP delivery modes, particularly adding 
the new ``in-person with a distance learning component'' mode, is 
expected to help increase recruitment of new DPRP organization as MDPP 
suppliers, who currently would need to obtain both in-person and 
distance learning CDC DPRP recognition to deliver sessions via both 
modalities. Furthermore, only about one-third of MDPP suppliers have 
submitted MDPP-related claims.\815\ Our proposed change to remove the 
MDPP bridge payment would help to further simplify the payment 
structure, which is expected to have a positive impact on supplier 
claim submissions. While requiring MDPP suppliers to add a modifier to 
indicate that a claim is for a MDPP same day make-up session does add 
complexity because we have proposed to use an existing CPT modifier in 
use and recognized by the MACs, we expect this addition to require 
minimal changes in claim processing systems. Additionally, this 
modifier is only to be used for same day make-up sessions, which are 
only allowed once per week, and, while an important tool to increase 
access for beneficiaries with barriers to participation in MDPP, are 
not expected to be used for most session attendance claims. In summary, 
we believe that having more flexibility in how the set of MDPP services 
are delivered would make MDPP more accessible to beneficiaries, 
particularly those who live in rural areas or in communities with gaps 
in MDPP supplier locations.
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    \814\ Centers for Disease Control and Prevention. Diabetes 
Prevention Recognition Program Application. Registry of All 
Recognized Organizations. https://dprp.cdc.gov/Registry.
    \815\ Unpublished MDPP monitoring data. 2023.
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c. Payment for MDPP Services
    Regulations at Sec.  414.84 specify that MDPP suppliers may be 
eligible to receive payments for furnishing MDPP services and meeting 
performance

[[Page 62179]]

targets related to beneficiary weight loss and attendance. We 
anticipate that the proposed change to the MDPP payment structure would 
have minimal impact on total payment for MDPP services. A smaller 
proportion of MDPP suppliers, only 9.8 percent since the start of the 
program through April 2024, have submitted claims for the MDPP bridge 
payment, with an even smaller proportion of 2.7 percent having received 
payment for a bridge payment claim. According to CDC DPRP data, less 
than 1 percent of MDPP sessions are same day make-up sessions.\816\ The 
total maximum payment per beneficiary for MDPP of $768 would remain 
unchanged by our proposals.
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    \816\ Diabetes Prevention Recognition Program. Unpublished data. 
April 2024.
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d. Effects on the Medicare Program
(a) Estimated 10-Year Impact of MDPP
    The changes proposed this year for implementation in the CY PFS 
2025 are expected to have no impact on Medicare spending.
10. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    As outlined in section III.F.2 of this proposed rule, we are 
proposing to permanently allow periodic assessments to be furnished via 
audio-only communication when two-way audio-video communications 
technology is not available to the beneficiary, to the extent that it 
is authorized by SAMHSA and DEA at the time the service is furnished 
and all other applicable requirements are met. We are also proposing to 
allow the OTP intake add-on code to be furnished via two-way audio-
video communications technology when billed for the initiation of 
treatment with methadone to the extent that the use of audio-video 
telecommunications technology to initiate treatment with methadone is 
authorized by DEA and SAMHSA at the time the service is furnished, an 
OTP determines that an adequate evaluation of the patient can be 
accomplished via a via an audio-visual telehealth platform, and all 
other applicable requirements are met. We believe the Part B cost 
impact of these flexibilities for the use of telecommunications will be 
minimal because we do not expect that these flexibilities will 
significantly increase the frequency with which medically necessary 
intake activities and periodic assessments are furnished, and since the 
payment rate for these services will be the same regardless of if an 
OTP furnishes these services via telecommunications or in-person.
    In section III.F.3 of this proposed rule, CMS is proposing to 
update the payment rate for intake activities (HCPCS code G2076) by 
adding in the value of the non-facility rate for SDOH risk assessments 
described by HCPCS code G0136 (Administration of a standardized, 
evidence-based Social Determinants of Health Risk Assessment, 5-15 
minutes, not more often than every 6 months). We believe updating the 
payment amount for intake activities with an addition of HCPCS code 
G0136 would serve as a reasonable proxy to reflect the value and 
resources required by new SAMHSA standards for initial assessment 
service activities at Sec.  8.12(f)(4)(i) that OTPs are required to 
provide, including an assessment to identify a patient's unmet HRSNs or 
the need for harm reduction intervention and recovery support services 
that are critical to the treatment of an OUD. Currently, the CY 2024 
payment rate for the intake add-on code (G0276) is $201.73 and adding 
the value of a crosswalk to the CY 2024 non-facility rate of $18.66 
would result in a payment rate of approximately $220.39. The payment 
rate would also continue to be updated annually by the percentage 
increase in the Medicare Economic Index (MEI) and the Geographic 
Adjustment Factor (GAF) as codified in Sec.  410.67(d)(4)(ii) through 
(iii). According to historical claims data for intake activities (HCPCS 
code G2076) furnished by OTPs from the beginning of CY 2020 through the 
end of CY 2023, the number of claims for intake activities is low. Due 
to low utilization of the intake activities add-on code (HCPCS code 
G2076), CMS estimates that an increase in the add-on payment amount to 
HCPCS code G2076 by $18.66 per claim would still result in a negligible 
cost to the Medicare program. Lastly, in section III.F.4 of this 
proposed rule, we are proposing to establish payment for new opioid 
agonist and antagonist medications that were recently approved by the 
FDA. We proposed to include a new add-on code to the bundled payment 
for a new opioid overdose reversal product, nalmefene hydrochloride 
nasal spray product (Opvee[supreg]), which includes one carton of two, 
2.7 mg nasal sprays of nalmefene. We proposed to price the drug 
component of this add-on code for nalmefene according to the ASP 
payment methodology set forth in section 1847A, except that the payment 
amount shall be ASP + 0. The non-drug component of this add-on code 
would also include overdose education furnished in conjunction with 
nalmefene, and it would be updated annually by the percentage increase 
in the MEI and GAFs consistent with other opioid antagonist medications 
in Sec.  410.67(d)(4)(ii) through (iii). We are limiting Medicare 
payment to OTPs for nalmefene to one add-on code every 30 days, 
however, we will allow exceptions to this limit in the case where the 
beneficiary overdoses and uses the initial supply of nalmefene 
dispensed by the OTP, to the extent that it is medically reasonable and 
necessary to furnish additional doses of nalmefene. We are also 
proposing payment for the weekly formulation of the new extended-
release injectable buprenorphine product Brixadi[supreg], via a new 
weekly bundled payment code that includes a drug and non-drug 
component. We proposed to price the drug component consistent with our 
payment methodology for implantable and injectable medications codified 
Sec.  410.67(d)(2)(i)(A), and we proposed to limit the payment amount 
to 100-percent of ASP and to use a crosswalk to the weekly 
Brixadi[supreg] formulation described by HCPCS code J0577 (Injection, 
buprenorphine extended release (brixadi), less than or equal to 7 days 
of therapy). The non-drug component (individual and group therapy, SUD 
counseling, toxicology testing) would also include administration of an 
injection based on CPT code 96372 (Therapeutic, prophylactic, or 
diagnostic injection (specify substance or drug); subcutaneous or 
intramuscular); updated annually by the percentage increase in MEI and 
GAFs. CMS is further proposing to update the drug-component of the 
existing HCPCS code (G2069) for monthly injectable buprenorphine to 
include the monthly formulation of Brixadi[supreg] based on a crosswalk 
to HCPCS code J0578 (Injection, buprenorphine extended release 
(brixadi), greater than 7 days and up to 28 days of therapy). We 
proposed to continue to use the existing payment methodology for both 
the drug and non-drug component of G2069 after averaging in payment for 
the monthly formulation of Brixadi[supreg]. Since the proposed payment 
methodology for the new add-on code for Opvee[supreg] (GOTP1), the 
weekly bundled payment for weekly Brixadi[supreg] (GOTP2), and the 
update to the monthly bundled payment for injectable buprenorphine 
(HCPCS code G2069) is based on comparable and existing drugs billed 
under the Medicare OTP benefit, and assuming an OTP may provide these 
new drugs to a Medicare beneficiary in lieu of the comparable

[[Page 62180]]

and existing drugs under the Medicare OTP benefit (e.g., Opvee[supreg] 
instead of Narcan[supreg] or Kloxxado[supreg], or the weekly or monthly 
formulation of Brixadi[supreg] instead of Sublocade[supreg]), then CMS 
estimates the financial impacts of these new drugs would be negligible.
11. Medicare Shared Savings Program
a. General Impacts
    As of January 1, 2024, 10.8 million Medicare beneficiaries receive 
care from a health care provider in one of the 480 ACOs participating 
in the Shared Savings Program, one of the largest value-based care 
programs in the country. The Shared Savings Program proposed policies 
in this proposed rule would advance Medicare's value-based care 
strategy of growth, alignment, and equity, with many proposals 
supporting more than one of these goals. The proposed policies in this 
proposed rule are designed, in part, to further improve the quality of 
care furnished by ACOs by revising the quality performance standard and 
reporting requirements, broaden program participation particularly in 
underserved communities, and promote the continued integrity and 
fairness of Shared Savings Program financial calculations.
    As described in section III.G.7.b of this proposed rule, under the 
benchmarking methodology for agreement periods beginning on January 1, 
2024, and in subsequent years, CMS calculates two adjustments in 
establishing the historical benchmark, a regional adjustment (refer to 
Sec.  425.656) and a prior savings adjustment (refer to Sec.  425.658). 
We determine which adjustment is applied to the benchmark, either the 
regional adjustment, prior savings adjustment, or no adjustment (refer 
to Sec.  425.652(a)(8) and (c)). One of the changes to the Shared 
Savings Program financial methodology finalized with the CY 2024 PFS 
final rule (see 88 FR 79185 through 79195, see also 88 FR 79494 and 
79495) was to mitigate the impact of the negative regional adjustment 
on the benchmark for ACOs in agreement periods beginning on January 1, 
2024, and in subsequent years. We explained our belief that this change 
would further encourage continued participation among high-cost ACOs 
that serve medically complex beneficiaries by eliminating the potential 
of a lower benchmark due to an overall negative regional adjustment, 
and may also encourage ACOs serving such populations that may have 
otherwise been discouraged from participating in the Shared Savings 
Program by the prospect of a lower benchmark to join (see 88 FR 79188, 
see also 88 FR 79494 and 79495). Under this approach, an ACO with an 
overall negative regional adjustment that was not eligible for a prior 
savings adjustment would ultimately receive no adjustment, upward or 
downward, to its benchmark (see Sec.  425.652(a)(8)(iii) and see also 
88 FR 79190). The proposed Health Equity Benchmark Adjustment (HEBA) 
described in section III.G.7.b of this proposed rule would add a third 
avenue for ACOs to receive a positive adjustment to their historical 
benchmark, and would be most impactful for new ACOs serving medically 
complex, high-cost populations in underserved communities.
    We combined an analysis of the impact of the HEBA on currently 
participating ACOs with the projected impact of HEBA on new ACOs not 
yet participating in the Shared Savings Program, to generate an overall 
impact estimate of the HEBA. The HEBA would likely have a limited 
impact on currently participating ACOs. Only about 20 percent of the 
456 ACOs participating in performance year 2023 were estimated to have 
a proportion of assigned beneficiaries who were enrolled in the 
Medicare Part D LIS or dually eligible for Medicare and Medicaid equal 
to or greater than 20 percent. That 20 percent threshold would have to 
be met for an ACO to be eligible for the HEBA under the HEBA proposal 
(as discussed in section III.G.7.b. of this proposed rule, and 
specified in proposed Sec.  425.662(b)(3)). Of that 20 percent of ACOs 
participating in performance year 2023 that were estimated to have a 
proportion of assigned beneficiaries who were enrolled in the Medicare 
Part D LIS or dually eligible for Medicare and Medicaid equal to or 
greater than 20 percent, only about one quarter of such ACOs were 
estimated to not already be eligible for a higher benchmark adjustment 
from either a positive regional adjustment or a prior savings 
adjustment. That is, about 5 percent of ACOs participating in 
performance year 2023 were estimated to benefit from the proposed HEBA 
policy at rebasing (median effect about 1 percent increase to the 
benchmark), because an ACO would receive the proposed HEBA only if the 
HEBA adjustment were higher than the existing ``higher of'' adjustment 
method (see discussion in section III.G.7.b of this proposed rule, and 
proposed Sec. Sec.  425.652(a)(8)(ii)(B)(1) and 425.662(c)). The 
proposed HEBA is projected to increase program spending for existing 
ACOs by about $140 million over 10 years.
    The number of ACOs that would be incentivized to participate in the 
Shared Savings Program by the HEBA is uncertain. Changes to the Shared 
Savings Program finalized in the CY 2023 CY 2024 PFS final rules were 
already projected to increase program participation among ACOs with 
higher spending and provide more opportunities for improving care and 
reducing spending (see 87 FR 70191 through 70196, and 88 FR 79494 and 
79495). Therefore, we can reasonably estimate that at least some new 
ACOs may join and succeed in the Shared Savings Program regardless of 
the benefit afforded to them by the proposed HEBA (if finalized). 
Savings to the Shared Savings Program are expected to grow to the 
extent that the HEBA were to cause new, high-spending ACOs to 
participate--that is, ACOs serving populations with risk-adjusted 
spending that is significantly higher than corresponding regional 
benchmark spending at baseline. We project in the 2034 performance 
year, the proposed HEBA would likely increase program participation by 
25 additional ACOs (but our estimates of increased program 
participation range from 0 to 100 additional ACOs), as compared to 
program participation today, and on net increase Federal Medicare 
program savings by $460 million over the 2025-2034 period because of 
this new participation.
    The estimated impact of the proposed HEBA, accounting for both its 
impact on currently participating ACOs that are assumed to renew their 
participation in the Shared Savings Program over the next 5 years and 
new ACOs that are expected to participate in the program for the first 
time over the next 10 years, is shown in Table 132. Mean Shared Savings 
Program spending is expected to be reduced by $320 million over the 
next ten years as a result of the HEBA, if finalized. However, 
uncertainty regarding the number of high spending ACOs that would 
participate in response to a HEBA, combined with uncertainty regarding 
high spending ACOs' savings potential, results in a wide range of 
potential impacts in total over that 10 year period, from $2.3 billion 
in net savings at the 10th percentile (that is, only 10 percent of 
stochastic trials reduced Federal spending by a greater magnitude than 
$2.3 billion) to $1.2 billion in net spending at the 90th percentile.

[[Page 62181]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.178

    For the proposed calculation methodology to account for the impact 
of improper payments in recalculating expenditures and payment amounts 
used in Shared Savings Program financial calculations, upon reopening a 
payment determination pursuant to Sec.  425.315(a) (described in 
section III.G.7.c of this proposed rule), some ACOs would selectively 
elect to request reopening for a prior performance year. As a result, 
we project at least some degree of higher program spending for 
increased shared savings payments (or reduced loss recoupments) in 
cases for which CMS decides to reopen the payment determination and 
issue a revised initial determination to account for the impact of 
improper payments. However, because reopening would not be limited to 
adjusting performance year and benchmark year expenditures for ACO 
assigned beneficiaries but would also impact other potentially 
offsetting calculations including regional and national expenditure 
trends used to update ACO benchmarks, and because, in addition to the 
reopening, CMS would also adjust the historical benchmark calculated 
for a potential subsequent agreement period, the frequency of requests, 
and the net impact of any given request, are likely to be limited. The 
proposed reopening policy is projected to increase program spending by 
$60 million in total over the 2025 to 2034 period, ranging from $30 
million at the 10th percentile to $90 million at the 90th percentile, 
as shown in Table 133.
[GRAPHIC] [TIFF OMITTED] TP31JY24.179

    The proposed methodology for excluding payment amounts for HCPCS 
and CPT codes exhibiting SAHS billing activity, as described in section 
III.G.7.d of this proposed rule, is anticipated to be utilized only in 
rare and extreme cases where a number of criteria are satisfied, 
including that the level of billing represents a significant claims 
increase representing a deviation from historical utilization trends 
that is unexpected and not clearly attributable

[[Page 62182]]

to reasonably explained changes in policy or the supply or demand for 
covered items or services during a limited time period. Even in cases 
where CMS may apply the adjustment to Shared Savings Program 
calculations for SAHS billing activity (if finalized), for CY 2024 or 
subsequent calendar years, there is no expectation that it would 
necessarily increase or decrease overall shared savings or shared 
losses because the policy would be applied systematically across all 
ACOs in the Shared Savings Program in a method that adjusts both 
performance year and benchmark year expenditures for ACO assigned 
beneficiaries and regional and national expenditures used in benchmark 
calculations. However, this policy would have the benefit of reducing 
potential costs generated by selective reopening requests under the 
reopening proposal, because it would prevent extreme cases of SAHS 
billing activity from injecting variation in the distribution of ACO 
shared savings and loss calculations which could lead to an elevated 
number of selective reopening requests from ACOs predicting that 
reopening would improve their financial outcome. For this reason, 
without the proposal to adjust Shared Savings Program calculations for 
SAHS billing activity during CY 2024 or subsequent calendar years, the 
estimated impact shown in Table 133 would have included between $100 to 
$300 million in additional projected spending from selective reopening 
requests.
    We estimate that there would be no additional program expenditures 
stemming from the implementation of the prepaid shared savings payment 
option, which we proposed to provide eligible ACOs with additional cash 
flow to encourage their investment in activities that could potentially 
reduce costs for the Medicare program and beneficiaries and improve the 
quality of care furnished to their assigned beneficiaries. Any risk of 
higher program spending as a result of finalization of our prepaid 
shared savings proposal would be fully mitigated by the fact that 
eligibility would be limited to ACOs that CMS estimates are most likely 
to earn shared savings, and any prepaid shared savings payments an ACO 
receives would have to be repaid to CMS. CMS would be protected by the 
ACOs' repayment mechanisms in the event that an ACO does not earn 
shared savings or cannot otherwise repay the amount owed to CMS. On the 
other hand, there is a high degree of uncertainty regarding whether (a) 
a meaningful number of ACOs would choose this option given the 
requirements for how prepayments must be spent, and (b) the potential 
impact (if any) that participation in this option would have on the 
cost of care.
    As to this uncertainty, our analysis assumed that up to 30 ACOs 
would opt to receive prepaid shared savings per year (with the 
probability distribution skewed toward zero participants), with a 33 
percent chance that ACOs receiving prepaid shared savings would respond 
by reducing spending for assigned beneficiaries by between 0 to 2 
percentage points (with the probability distribution skewed toward zero 
impact) as compared to their current spending on assigned 
beneficiaries.\817\ This projection accounts for annual prepaid shared 
savings (offset by eventual recoupments and/or repayments) of roughly 
$2 million per ACO participating in the payment option. The associated 
impact on ACO spending was projected to be nominal. Both at the mean 
and at the 90th percentile the projected net impacts on Medicare 
spending round to zero. At the 10th percentile (the optimistic end of 
the range), we project small net savings of $20 million in total to the 
Medicare Program over 10 years.
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    \817\ The assumptions allow for a limited possibility that 
performance by ACOs receiving prepaid shared savings could generate 
shared savings comparable to the savings generated by certain ACOs 
in the ACO Investment Model. Abt Associates, Evaluation of the 
Accountable Care Organization Investment Model, Final Report 
(September 2020), available at https://www.cms.gov/priorities/innovation/data-and-reports/2020/aim-final-annrpt.
[GRAPHIC] [TIFF OMITTED] TP31JY24.180

    The remaining proposed changes to the Shared Savings Program 
regulations are not estimated to have an impact on program spending at 
the aggregate level. These proposed changes include requiring Shared 
Savings Program ACOs to report the APP Plus quality measure set 
beginning in performance year 2025, that would incrementally grow to 
comprise of 11 measures, consisting of the 6 measures in the existing 
APP quality measure set and 5 newly proposed measures from the Adult 
Universal Foundation measure set that would be incrementally 
incorporated

[[Page 62183]]

into the APP Plus quality measure set over performance years 2025 
through 2028; focusing the collection types available to Shared Savings 
Program ACOs for reporting the APP Plus quality measure set to all 
payer/all patient eCQMs and Medicare CQMs; requiring Shared Savings 
Program ACOs that report the APP Plus quality measure set to report on 
all measures in the APP Plus quality measure set, as applicable; 
establishing a Complex Organization Adjustment for Virtual Groups and 
APM Entities, including Shared Savings Program ACOs, when reporting 
eCQMs; scoring Medicare CQMs using flat benchmarks in their first 2 
performance periods in MIPS; and promoting the adoption of eCQMs by 
extending the eCQM reporting incentive. Additional proposed changes 
include permitting continued participation by ACOs whose number of 
assigned beneficiaries falls below 5,000 during their agreement period; 
ensuring clarity of provisions on application procedures; revisions to 
the definition of primary care services under Sec.  425.400(c) for 
purposes of beneficiary assignment; refining advance investment payment 
policies; providing clarity and consistency in provisions of the Shared 
Savings Program regulations on calculation of the ACO risk score growth 
cap in risk adjusting the benchmark each performance year and the 
regional risk score growth cap in calculating the regional component of 
the three-way blended benchmark update factor; and modifying 
beneficiary notification requirements.
    The combined impacts for all Shared Savings Program proposals are 
shown in Table 135.
[GRAPHIC] [TIFF OMITTED] TP31JY24.181

b. Compliance With Requirements of Section 1899(i)(3) of the Act
    Certain policies, including both existing policies and the proposed 
new policies described in this proposed rule, rely upon the authority 
granted in section 1899(i)(3) of the Act to use other payment models 
that the Secretary determines will improve the quality and efficiency 
of items and services furnished under the Medicare program, and that do 
not result in program expenditures greater than those that would result 
under the statutory payment model. The following proposals require the 
use of our authority under section 1899(i) of the Act: the proposal to 
allow ACOs to receive prepaid shared savings as described in section 
III.G.5 of this proposed rule; the proposal to use a calculation 
methodology to account for the impact of improper payments in 
recalculating expenditures and payment amounts for certain Shared 
Savings Program financial calculations, upon reopening an ACO's payment 
determination and issuing a revised initial determination pursuant to 
Sec.  425.315(a) as described in section III.G.7.c of this proposed 
rule; the proposal to use a methodology for certain Shared Savings 
Program calculations to mitigate the impact of SAHS billing activity 
occurring in CY 2024 or subsequent calendar years, as described in 
section III.G.7.d of this proposed rule; and the proposed technical 
changes to the provision describing how we calculate the weights 
applied when capping growth in regional risk scores as part of the 
regional component of the three-way blended benchmark update factor, as 
described in section III.G.7.f of this proposed rule. When considered 
together these proposed changes to the Shared Savings Program's payment 
methodology are expected to improve the quality and efficiency of items 
and services furnished under the Medicare program by improving the 
ability for ACOs to sustain effective participation particularly in 
serving medically complex, high-cost populations in underserved 
communities, and promoting integrity and fairness and ensuring the 
accuracy of Shared Savings Program financial calculations. These 
proposed changes are not expected to result in a situation in which the 
payment methodology under the Shared Savings Program, including all 
policies proposed to be adopted under the authority of section 1899(i) 
of the Act, results in more spending under the program than would have 
resulted under the statutory payment methodology in section 1899(d) of 
the Act.
    In the CY 2023 PFS final rule, we estimated that the projected 
impact of the payment methodology that incorporates all policies 
finalized by that final rule would result in $4.9 billion in greater 
program savings compared to a hypothetical baseline payment methodology 
that excluded the policies that required section 1899(i)(3) of the Act 
authority (see 87 FR 70195 and 70196). The marginal impact of the 
proposed changes in the CY 2024 PFS final rule were estimated to lower 
net spending by $330 million over the subsequent ten-year period for 
all new policies combined, including the cap an ACO's regional service 
area risk score growth, the addition of a new third step to the 
beneficiary assignment methodology, and the revised approach

[[Page 62184]]

to identify the assignable beneficiary population (88 FR 79496). The 
marginal impact of the proposed changes in this proposed rule are 
estimated to lower net spending by an additional $260 million in total 
through 2034. Although the provisions in this proposed rule that 
require section 1899(i) of the Act authority are estimated to increase 
spending by only $60 million over 10 years, the cumulative impact of 
all policies (including those in this proposed rule) are estimated to 
result in more than $4.9 billion in greater program savings compared to 
a hypothetical baseline payment methodology that excludes the policies 
that require section 1899(i)(3) of the Act authority. Therefore, we 
estimate that the implementation of the proposals made in this proposed 
rule would not be greater than those that would result under the 
statutory payment model, consistent with the requirements of section 
1899(i)(3)(B) of the Act.
    We will continue to reexamine this projection in the future to 
ensure that the requirement under section 1899(i)(3)(B) of the Act that 
an alternative payment model not result in additional program 
expenditures continues to be satisfied. Additional Shared Savings 
Program data beginning to accumulate after the end of the COVID-19 
public health emergency, along with emerging information on the 
characteristics of new entrants in the Shared Savings Program for 
agreement periods beginning on January 1, 2024 and January 1, 2025, are 
anticipated to gradually improve our ability to reevaluate program 
impacts in a comprehensive fashion. In the event that we later 
determine that the payment model that includes policies established 
under section 1899(i)(3) of the Act no longer meets this requirement, 
we would undertake additional notice and comment rulemaking to make 
adjustments to the payment model to assure continued compliance with 
the statutory requirements.
12. Medicare Part B Payment for Preventive Services
    In section III.H.2. of this proposed rule, based on the proposals 
in section III.M of this proposed rule, we propose to clarify that a 
physician's order is no longer required for the administration of a 
hepatitis B vaccine in Part B, which would facilitate roster billing by 
mass immunizers for hepatitis B vaccine administration. We also propose 
that payment for hepatitis B vaccines and their administration be made 
at 100 of reasonable cost in RHCs and FQHCs, separate from the FQHC PPS 
or the RHC All-Inclusive Rate (AIR) methodology, in order to streamline 
payment for all Part B vaccines in those settings. We believe that 
Medicare spending impacts from both of these proposals will be 
negligible, as hepatitis B vaccines are already available to all 
Medicare enrollees under either Part B or Part D. While we believe that 
there will be an uptake of hepatitis B vaccines under Part B as shifted 
from Part D, we believe that this impact on the Part B program will be 
negligible for several reasons, including the fact that a portion of 
current beneficiaries have already received the hepatitis B vaccine 
through either Part B or Part D, and since a significant number of 
individuals will likely receive this vaccine by the time they are 
Medicare age due to current CDC recommendations (please see section 
III.M of this proposed rule for more information).
    In section III.H.3. of this proposed rule, we propose a fee 
schedule for Drugs Covered as Additional Preventive Services (DCAPS), 
per section 1833(a)(1)(W)(ii) of the Act. We also propose payment 
limits for supply and administration fees for DCAPS drugs that are 
similar to those fees for drugs paid under the ASP payment methodology 
set forth in section 1847A of the Act, and we propose payment limits 
for DCAPS drugs and any supply and administration fees in RHCs and 
FQHCs according to this same fee schedule. We believe impacts from 
these proposed policies will be minimal as well. While no drugs are 
currently covered as DCAPS, DCAPS drugs are likely to be covered under 
Part D before coverage under the Part B additional preventive services 
benefit would commence.
13. Impact of Provisions for Medicare Prescription Drug Inflation 
Rebate Program
    We are proposing regulations in section III.I. to codify existing 
policies established in program guidance as well as revised and new 
policies to implement the Medicare Part B Drug Inflation Rebate 
Program, including the requirement for manufacturers to pay rebates for 
certain single source drugs and biological products with prices that 
increase faster than the rate of inflation; criteria for the 
identification of Part B rebatable drugs; computation of the 
beneficiary coinsurance adjustment for Part B rebatable drugs; 
determination of the rebate amount for Part B rebatable drugs; 
reduction of the rebate amount for Part B rebatable drugs in shortage 
and when there is a severe supply chain disruption; provision of 
reports to each manufacturer of a Part B rebatable drug; and 
establishment of enforcement provisions via civil money penalties.
    Additionally, we are proposing regulations in section III.I. to 
codify existing policies established in program guidance as well as 
revised and new policies to implement the Medicare Part D Drug 
Inflation Rebate Program, including the requirement for manufacturers 
to pay rebates for certain Part D drugs and biological products; 
criteria for the identification of Part D rebatable drugs; 
determination of the rebate amount for Part D rebatable drugs; 
reduction of the rebate amount for shortages and when there is a severe 
supply chain disruption or likely shortage; provision of reports to 
each manufacturer of a Part D rebatable drug; and establishment of 
enforcement provisions via civil money penalties.
    We do not expect these proposals to have a material impact on 
inflation rebates. The majority of proposals codify existing guidance. 
Proposed new policies or changes to existing policies in guidance are 
technical provisions that we do not expect to have a material impact on 
the calculation of total rebates in aggregate.
    As discussed in section III.I. of this proposed rule, for Part D 
drug inflation rebates, we are proposing to implement section 1860D-14B 
(b)(1)(B) of the Act which requires the Secretary to exclude 340B units 
from the total number of units used to calculate the total rebate 
amount owed by a manufacturer, beginning on January 1, 2026. For the 
first three quarters of 2026, we are proposing use an estimation policy 
that would remove a percentage of units from the total number of units 
used to calculate the total rebate amount to remove 340B units from 
Part D drug inflation rebate calculations. That percentage would be 
equal to the total number of units purchased under the 340B Drug 
Pricing Program for an NDC-9, divided by the number of total units sold 
of that NDC-9.
    CMS does not currently have data on 340B claims for the Part D 
program or at the drug level in general, which prevents CMS from 
quantifying the impact of this provision. While we expect that the 
exclusion of 340B units from Part D inflation rebates will reduce the 
amount of rebates collected through this program, the magnitude of this 
reduction is unknown due to the lack of data on 340B claims for the 
Part D program. The use of a temporary estimation policy will allow CMS 
to implement the exclusion of 340B units from Part D inflation rebates 
by January 2026. It also alleviates the burden from interested parties 
to modify existing

[[Page 62185]]

processes to provide 340B claims information.
14. Expand Colorectal Cancer Screening
    In section III.K. of this rulemaking we propose to update and 
expand coverage for CRC screening by (1) removing coverage for the 
barium enema procedure in regulations at Sec.  410.37, (2) adding 
coverage for the CT colonography procedure in regulations at Sec.  
410.37, and (3) expanding a ``complete colorectal cancer screening'' in 
Sec.  410.37(k) to include a follow-on screening colonoscopy after a 
Medicare covered blood-based biomarker CRC screening test (described 
and authorized in NCD 210.3) returns a positive result.
    We do not anticipate our proposal to remove coverage for the barium 
enema procedure to result in a significant financial impact on the 
Medicare program. An internal claims analysis found that Medicare Fee 
for Service only paid 62 claims for the screening barium enema 
procedure in calendar year 2021 and only 72 claims for the screening 
barium enema procedure in calendar year 2022.
    We do not anticipate our proposal to add coverage for the CTC 
procedure for CRC screening to result in a significant financial impact 
on the Medicare program. CTC could be an appropriate option for 
patients and clinicians who seek a direct visualization procedure as a 
first step in CRC screening that is less invasive and less burdensome 
on the patient (including those who are medically fragile or have 
complex or usual anatomy) compared to Screening Colonoscopy. We expect 
that patients will most often choose CTC as an alternative to 
colonoscopy for CRC screening and that future increased utilization of 
CTC will be balanced, in part, by avoided screening colonoscopies. Our 
goal is that the patient and their clinician make the most appropriate 
choice in CRC screening, which includes considerations of the risks, 
burdens and tradeoffs for each covered test or procedure. We expect 
that utilization of CTC for CRC screening will be modest, especially 
considering that CTC requires bowel preparation and travel to an 
outpatient clinical services site (similar to a colonoscopy) and also 
considering the availability of non-invasive stool-based tests that can 
be administered at home and mailed to a lab. A 2015 study titled 
``Medicare cost of colorectal cancer screening: CT colonography vs. 
optical colonoscopy'' concluded that CTC is 29 percent less expensive 
than colonoscopy (accounting for related procedures) for the Medicare 
population in the base scenario. Although the CTC cost advantage is 
increased or reduced under alternative scenarios, it is always 
positive.\818\
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    \818\ Pyenson, B., Pickhardt, P.J., Sawhney, T.G. et al. 
Medicare cost of colorectal cancer screening: CT colonography vs. 
optical colonoscopy. Abdom Imaging 40, 2966-2976 (2015). https://doi.org/10.1007/s00261-015-0538-1.
---------------------------------------------------------------------------

    We do not anticipate our proposal for expanding a ``complete 
colorectal cancer screening'' in Sec.  410.37(k) to include a follow-on 
screening colonoscopy after a Medicare covered blood-based biomarker 
CRC screening test returns a positive result to produce a significant 
financial impact on the Medicare program. We expect that patients will 
choose either a stool-based test or a blood-based biomarker test for a 
non-invasive first option in CRC screening and that patients who choose 
a blood-based biomarker test within the context of a complete 
colorectal cancer screening under our proposal will be offset, in part, 
by the avoided utilization of a stool-based test.
    In conclusion, we anticipate that our proposal to update and expand 
coverage for CRC screening will result in some additional utilization, 
but that additional utilization will be balanced, in part or in whole, 
by avoided utilization of alternative types of tests as well as 
benefits and savings resulting from increased prevention and early 
detection (allowing for less invasive and more effective treatment).
15. Requirement for Electronic Prescribing for Controlled Substances 
for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD 
Plan
    In section III.L of this proposed rule, we propose one update to 
the CMS EPCS Program. We are proposing that prescriptions written for a 
beneficiary in a LTC facility would not be included in determining 
compliance under the CMS EPCS Program until January 1, 2028, and that 
compliance actions against prescribers who do not meet the compliance 
threshold based on prescriptions written for a beneficiary in a LTC 
facility would commence on or after January 1, 2028. Without this 
provision, if we keep the existing date of January 1, 2025, as in the 
current regulatory text at Sec.  423.160(a)(5) for the CMS EPCS 
Program, we estimate at least 6,800 prescribers would become non-
compliant due to CMS including prescriptions written for beneficiaries 
in LTC in the CMS EPCS Program compliance threshold calculation. This 
estimate is based on data from calendar year 2022 and is prior to 
considering emergency and disaster exceptions and waivers, which could 
reduce these numbers. This proposal, should we finalize it, would allow 
prescribers additional time to adopt the new e-prescribing standard, 
NCPDP SCRIPT standard version 2023011, and utilize EPCS. Additionally, 
this proposal would prevent an increased number of prescribers from 
potentially applying for a waiver for circumstances beyond their 
control due to difficulty of reliably conducting EPCS for beneficiaries 
in LTC facilities by the current deadline of January 1, 2025.
    We do not believe this proposal would cause additional costs as we 
are only extending the deadline by which we would include prescriptions 
written for patients in LTC facilities in the CMS EPCS Program 
compliance threshold calculation and not modifying the requirement to 
become compliant. We also note that beneficiaries in LTC facilities may 
not receive the full benefits of EPCS, which we describe in the CY 2022 
PFS final (86 FR 65362), until a later date, but we believe the delay 
is necessary due to the logistical challenges of prescribers 
electronically prescribing controlled substances prescriptions for 
beneficiaries in LTC facilities.
    We seek public comments on our impact assumptions.
16. Expand Hepatitis B Vaccine Coverage
    In section III.M. of this rulemaking, we propose to expand 
Hepatitis B vaccine coverage by revising our regulatory definition for 
intermediate risk groups by adding a new paragraph to include 
individuals who have not previously received a completed hepatitis B 
vaccination series or whose vaccination history is unknown (Sec.  
410.63(a)(2)).
    Hepatitis B vaccine is currently covered under Medicare Part B for 
enrollees who are at intermediate or high risk of contracting hepatitis 
B virus, and, for Part D enrollees who do not fall into those 
categories the vaccine may be covered under Medicare Part D.\819\ In 
2021, about 51 million of 65 million Medicare beneficiaries were 
enrolled in Part D and 21,629 received the vaccine. In 2019, Part B 
covered 300,000 doses of hepatitis B vaccine for beneficiaries who were 
at high or

[[Page 62186]]

intermediate risk for the disease.\820\ Since the vaccine has been 
available for several decades, we are not able to determine how many 
Medicare beneficiaries have already received the vaccine.
---------------------------------------------------------------------------

    \819\ Sayed, BA, Finegold, K, Ashok, K, Schutz, S, De Lew, N, 
Sheingold, S, Sommers, BD. Inflation Reduction Act Research Series: 
Medicare Part D Enrollee Savings from Elimination of Vaccine Cost-
Sharing. (Issue Brief No. HP-2023-05). Office of the Assistant 
Secretary for Planning and Evaluation, U.S. Department of Health and 
Human Services. September 2023. Retrieved from https://aspe.hhs.gov/sites/default/files/documents/407d41b6534e7af6702eb280b3945d00/aspe-ira-vaccine-part-d.pdf.
    \820\ Medpac 2021. Report to the Congress: Medicare and the 
Health Care Delivery System. Chapter 7. Medicare vaccine coverage 
and payment. Retrieved from https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/default-document-library/jun21_ch7_medpac_report_to_congress_sec.pdf.
---------------------------------------------------------------------------

    Overall vaccination rates among adults, including older adults, are 
generally low.821 822 A Centers for Disease Control and 
Prevention (CDC) analysis of data from the National Health Interview 
Survey found that fewer than half of all adults (less than 45 percent) 
received age-appropriate recommended vaccinations in 2019.\823\ An 
estimated 20 percent of adults aged >=60 years have been vaccinated 
against hepatitis B; and approximately 34 percent of adults aged >=19 
years have been vaccinated against hepatitis B.\824\ We do not 
anticipate our proposal to result in significant economic impact on the 
Medicare program.
---------------------------------------------------------------------------

    \821\ CDC. (2022, February 17). Vaccination Coverage among 
Adults in the United States, National Health Interview Survey, 2019-
2020. Centers for Disease Control and Prevention. Retrieved February 
27, 2023, from https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/pubs-resources/vaccination-coverage-adults-2019-2020.html.
    \822\ Gellin, B.G., Shen, A.K., Fish, R., Zettle, M.A., Uscher-
Pines, L., & Ringel, J.S. (2016). The National Adult Immunization 
Plan: Strengthening Adult Immunization Through Coordinated Action. 
American journal of preventive medicine, 51(6), 1079-1083. https://doi.org/10.1016/j.amepre.2016.04.014.
    \823\ CDC. (2022, February 17). Vaccination Coverage among 
Adults in the United States, National Health Interview Survey, 2019-
2020. Centers for Disease Control and Prevention. Retrieved February 
27, 2023, from https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/pubs-resources/vaccination-coverage-adults-2019-2020.html.
    \824\ CDC. 2023. Vaccination Coverage among Adults in the United 
States, National Health Interview Survey, 2021. Retrieved from 
https://www.cdc.gov/vaccines/imz-managers/coverage/adultvaxview/
pubs-resources/vaccination-coverage-adults-
2021.html#:~:text=Hepatitis%20B%20vaccination%20coverage%20in,and%20O
ther%20(40.2%25)%20adults.
---------------------------------------------------------------------------

    As of January 1, 2023, the Inflation Reduction Act (IRA) eliminated 
out-of-pocket costs for vaccines covered under Medicare Part D that are 
recommended by the Advisory Committee on Immunization Practices 
(ACIP).\825\ Before the Inflation Reduction Act (IRA), beneficiaries 
incurred out of pocket costs for Part D vaccines. While we would expect 
that after the IRA, more beneficiaries would receive covered vaccines 
because of eliminating out of pocket costs, existing research shows 
that cost-sharing is only one factor among other determinants. Trust in 
vaccines, access to health care, health literacy, perceived risk, 
socio-demographic factors and awareness of vaccine recommendations, all 
shape whether individuals obtain a recommended vaccine.\826\ If the 
number of people receiving the hepatitis B vaccine under Part D is any 
indication, we assume that even by increasing access, there will not be 
immediate or significant change in the number of covered hepatitis B 
vaccines paid under Medicare Part B. For these reasons, we do not 
anticipate that expanding the definition of intermediate risk for 
hepatitis B vaccine will result in a significant financial impact to 
the Medicare Program.
---------------------------------------------------------------------------

    \825\ Sayed, BA, et al. 2023. Inflation Reduction Act Research 
Series.
    \826\ Sayed, BA, et al. 2023. Inflation Reduction Act Research 
Series.
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17. Low Titer O+ Whole Blood Transfusion Therapy During Ground 
Ambulance Transport
    As discussed in section III.N of this proposed rule, we propose to 
modify the definition of ALS2 at Sec.  414.605 by adding the 
administration of low titer O+ whole blood transfusion therapy (WBT) to 
the list of ALS2 procedures as a new number 8. We would also reflect 
this change in the Medicare Benefit Policy Manual, Chapter 10, 
Ambulance Services, section 30.1.1, Definition of Ground Ambulance 
Services. Under this proposal, a ground ambulance transport that 
provides WBT would itself constitute an ALS2-level transport.
    We believe that many ground ambulance transports providing WBT 
already qualify for ALS2 payment, given that patients requiring such 
transfusions are generally critically injured or ill and often 
suffering from cardio-respiratory failure and/or shock and are 
therefore likely to receive one or more procedures currently listed as 
ALS procedures in the definition of ALS2, such as endotracheal 
intubation, central venous line, chest decompression, and placement of 
an intraosseous line. For impact analysis, for ground ambulance 
transports that provide WBT only and currently do not qualify for ALS2 
payment, we are assuming that these transports are reported as ALS1 
(advanced life support, level 1) emergencies.
    In order to help identify the number of ground ambulance transports 
that could potentially be affected by this proposal, we analyzed 
inpatient hospital claims related to multiple-trauma that started with 
an ALS1 emergency ambulance transport and also included a blood 
transfusion done in the hospital. The inpatient admissions were 
identified by DRG code ``813'' and diagnosis code of ``24,'' the 
ambulance transport is identified by HCPCS ``A0427,'' and the blood 
transfusion administered to these patients in the hospital setting is 
identified by the presence of covered charges, patient liability 
amounts, and replacement units for blood.
    Since payments vary for urban, rural, and super-rural ground 
ambulance transports, we calculated the average Medicare payment amount 
for ALS2 (HCPCS A0433) and ALS1 (HCPCS A0427) over the last several 
years. The average payment differential over calendar years 2019 and 
2023 is estimated to be roughly $162 per transport. It is difficult to 
make an assumption for the number of transports that will be impacted 
by this proposal, but the potential number over the last several years, 
based on an analysis of actual experience, is very few. Even if all of 
these ALS1 emergency transports shifted to being ALS2 transports, which 
is very unlikely, the impact would be negligible.
18. Updates to the Quality Payment Program
    In this section of this proposed rule, we estimated the overall and 
incremental impacts of the Quality Payment Program policies. We 
estimated participation, final scores, and payment adjustment for 
eligible clinicians participating through traditional MIPS, MVPs, and 
the Advanced APMs. We also presented the incremental impacts to the 
number of expected Qualified Participants (QPs) and associated APM 
Incentive Payments that result from our policies relative to a baseline 
model that reflects the status quo in the absence of any modifications 
to the previously finalized policies.
A. Overall MIPS Modeling Approach and Data Assessment
(1) MIPS Modeling Approach
    For this proposed rule, we used a similar modeling approach as the 
CY 2024 PFS final rule (88 FR 79504 through 79506). We created two MIPS 
RIA models: a baseline and proposed policy model. Our baseline model 
includes previously finalized policies that will be in effect for the 
CY 2024 performance period/2026 MIPS payment year in the absence of any 
of the newly proposed policies in this proposed rule. Examples of 
previously finalized policies included in the baseline model include: 
updated QP

[[Page 62187]]

and partial QP thresholds, and the previously finalized list of MVPs.
    The proposed policies model builds off the baseline model and 
incorporates the MIPS policies for the CY 2025 performance period/2027 
MIPS payment year included in this proposed rule. By comparing the 
baseline model to the proposed policies model, we are able to estimate 
the incremental impact of the specific policies in this proposed rule.
    Our modeling approach utilizes the same scoring engine that is used 
to determine MIPS payment adjustments. This modeling approach enables 
our model to align as much as possible with actual MIPS scoring and 
minimizes differences between our projections and policy 
implementation. These limitations of our model are discussed later in 
this RIA.
(2) Data Used To Estimate Future MIPS Performance
    In the CY 2024 PFS final rule (88 FR 79504), we explained our 
decision to use CY 2022 performance period submissions data. We noted 
that using CY 2022 performance data presents the most current data and 
aligns our participation, final scoring, and payment adjustment 
analysis around the same common data set. CY 2022 performance data were 
the most recently available data in time for us to construct our 
simulation model for this proposed rule and for the same reasons 
discussed in the CY 2024 PFS final rule (88 FR 79504), we are 
considering it to construct the baseline and proposed policies model in 
this proposed rule. As more data becomes available, we will assess the 
feasibility and validity of that data for use in RIA simulations.
b. APM Incentive Payments to QPs in Advanced APMs and Other Payer 
Advanced APMs
    For payment years from 2019 through 2025, through the Medicare 
Option, eligible clinicians who have a sufficient percentage of their 
Medicare Part B payments for covered professional services or Medicare 
patients through Advanced APMs will be QPs for the applicable QP 
Performance Period for a year and the corresponding payment year. In 
payment years 2019 through 2024 these QPs will receive a lump-sum APM 
Incentive Payment equal to 5 percent of their estimated aggregate paid 
amounts for covered professional services furnished during the calendar 
year immediately preceding the payment year. In payment year 2025, QPs 
will receive a lump-sum APM Incentive Payment equal to 3.5 percent 
payment of their estimated aggregate paid amounts for covered 
professional services furnished during CY 2024. Beginning in payment 
year 2021, in addition to the Medicare Option, eligible clinicians may 
become QPs through the All-Payer Combination Option. The All-Payer 
Combination Option allows eligible clinicians to become QPs by meeting 
the QP payment amount or patient count threshold through a pair of 
calculations that assess a combination of both Medicare Part B covered 
professional services furnished or patients through Advanced APMs and 
services furnished or patients through Other Payer Advanced APMs. 
Eligible clinicians who become QPs for a year are not subject to MIPS 
reporting requirements and payment adjustments. Eligible clinicians who 
do not become QPs but meet a lower threshold to become Partial QPs for 
the year may elect to report to MIPS and, if they elect to report, will 
then be scored under MIPS and receive a MIPS payment adjustment. 
Partial QPs are not eligible to receive the APM Incentive Payment.
    If an eligible clinician does not attain either QP or Partial QP 
status, and is not excluded from MIPS on another basis, the eligible 
clinician will be subject to the MIPS reporting requirements and will 
receive the corresponding MIPS payment adjustment.
    Beginning in payment year 2026, there are two separate PFS CFs--one 
for eligible clinicians who are QPs for the year (the qualifying APM 
CF), and the other for all non-QP eligible clinicians and other 
suppliers paid under the PFS (the non-qualifying APM CF). The update to 
the qualifying APM CF for a year is 0.75 percent, while the update to 
the non-qualifying APM CF for a year is 0.25 percent.
    In addition, the thresholds to achieve QP status beginning in the 
2025 QP Performance Period will increase to 75 percent for the payment 
amount method, and 50 percent for the patient count method. Overall, we 
estimated that for the 2025 QP Performance Period between 339,561 and 
436,579 eligible clinicians will become QPs, and therefore be excluded 
from MIPS reporting requirements and payment adjustments.
    In section IV.A.4.k.(2) of this proposed rule, we propose to modify 
the definition of ``attribution-eligible beneficiary'' to include any 
beneficiary who has received a covered professional service furnished 
by the eligible clinician (NPI) for whom we are making the QP 
determination. By no longer specifying evaluation and management (E/M) 
services as the default attribution basis, we also would eliminate the 
need to develop customized attribution bases for Advanced APMs that do 
not use E/M services as the basis for attribution. Therefore, our 
proposal would standardize the attribution methodology for QP 
determinations by making covered professional services the basis for 
attribution across all Advanced APMs.
    We projected the number of eligible clinicians who will be QPs, and 
thus excluded from MIPS, using several sources of information. First, 
the projections are anchored in the most recently available public 
information on Advanced APMs. The projections reflect Advanced APMs 
that will be operating during the 2025 QP Performance Period, as well 
as some Advanced APMs anticipated to be operational during the 2025 QP 
Performance Period. The projections also reflect an estimated number of 
eligible clinicians that will attain QP status through the All-Payer 
Combination Option. The following APMs are expected to be Advanced APMs 
for the 2025 QP Performance Period:
     Bundled Payments for Care Improvement Advanced Model;
     ACO REACH Model (formerly Global and Professional Direct 
Contracting) Model;
     Kidney Care Choices Model (Comprehensive Kidney Care 
Contracting Options, Professional Option and Global Option);
     Maryland Total Cost of Care Model (Care Redesign Program; 
Maryland Primary Care Program);
     Medicare Shared Savings Program (Level E of the BASIC 
Track and the ENHANCED Track); and
     Enhancing Oncology Model (EOM); and
     Primary Care First (PCF) Model.
    We used the Participation Lists and Affiliated Practitioner Lists, 
as applicable, (see Sec.  414.1425(a) for information on the APM 
Participant Lists and QP determinations) for the 2023 QP performance 
period third snapshot QP determination date to estimate the number of 
QPs, total Part B paid amounts for covered professional services, and 
the aggregate total of APM Incentive Payments for the 2025 QP 
Performance Period. We examined the extent to which Advanced APM 
participants will meet the QP Thresholds of having at least 75 percent 
of their Part B covered professional services or at least 50 percent of 
their Medicare beneficiaries furnished Part B covered professional 
services through the APM Entity.

[[Page 62188]]

c. Estimated Number of MIPS Eligible Clinicians in the CY 2025 
Performance Period/2027 MIPS Payment Year
(1) Initial Population of Clinicians Included in the RIA Baseline and 
Proposed Policies Models
    For this proposed rule, we applied the same assumptions as in the 
CY 2024 PFS final rule (88 FR 79505) to estimate our initial population 
of clinicians based on CY 2022 performance period/2024 MIPS payment 
year data.
    We used the same CY 2022 final reconciled eligibility determination 
file described in the CY 2024 PFS final rule (88 FR 79505). This file 
reconciles eligibility from two determination periods and aligns with 
the CY 2022 performance period submissions data on which we based this 
model. Our analysis included 1,820,899 clinicians with PFS claims in 
this initial population. This initial population of clinicians was used 
to determine eligibility using the methodology described in the 
following sections.
(2) Estimated Number of MIPS Eligible Clinicians After Applying 
Eligibility Assumptions
(a) Methods and Assumptions Used To Estimate Eligibility
    After identifying the clinician population with PFS claims we 
applied the same eligibility assumptions and determination process 
described in the CY 2024 PFS final rule (88 FR 79505). We are not 
proposing any modifications to MIPS eligibility requirements and the 
same eligibility assumptions apply to both the baseline and final 
policies model.
    For our RIA model, we established the ``required eligibility'' 
category, which means the clinician exceeds the low-volume threshold in 
all 3 criteria and is subject to a MIPS payment adjustment. We base 
this estimate on the CY 2022 performance period data described in this 
section of this proposed rule, which includes the three low volume 
criteria. Within this category we divide clinicians into two groups- 
clinicians who report data and clinicians who do not report data.
    Our next two eligibility assumptions concern clinicians and groups 
who may participate in MIPS but are not required to participate. First, 
we estimate group eligibility. These are the clinicians who have a 
group submission and their group exceeds the low-volume threshold in 
all 3 criteria. Next, we apply our opt-in eligibility assumptions. 
Individuals or groups who exceed the low-volume threshold in 1 
criterion but not all 3 may elect to opt-in. Based on the CY 2022 data 
we determine which individuals opted-in to MIPS and for the purposes of 
our model estimate that these clinicians will continue to opt-in to 
MIPS.
    After applying the process outlined in this section of this 
proposed rule, we next estimate the number of ``Potentially MIPS 
Eligible'' clinicians. These clinicians are not included in our total 
number of MIPS eligible clinicians. These are clinicians who are not 
MIPS eligible individually but who may either opt-in because they 
exceed the low volume threshold in at least one criterion but not all 
three or who could report as part of a group which exceeds all three 
low volume criteria.
    Finally, we estimate the number of clinicians who are neither MIPS 
eligible nor potentially MIPS eligible. First, we estimate the number 
of MIPS eligible clinicians who are below all three low-volume criteria 
(both as an individual and as a group) again using the CY 2022 
performance period data as described in this section of this proposed 
rule.
    Next, we estimate the number of QPs (not MIPS eligible). In section 
VII.E.17.b. of this proposed rule, we estimated a range of QPs. For the 
purposes of our RIA population, we estimate a specific number of QPs. 
This is because it is necessary to establish a specific population of 
clinicians to use to simulate the impacts of our final policies on 
participation, final scores, and payment adjustments. Finally, we 
estimate the number of clinicians who are excluded for other reasons 
including that they are a non-eligible clinician type or newly enrolled 
in Medicare.
    After applying these assumptions to our initial population, we 
estimate 686,645 MIPS eligible clinicians with $5.5 billion in allowed 
charges. However, this number may be as high as 1,270,806 MIPS eligible 
clinicians and $7 billion allowed charges if all potentially MIPS 
eligible \827\ clinicians either opt-in or report as a group. This is 
an unlikely scenario but it establishes the full range of possible MIPS 
eligible clinicians in our initial population.
---------------------------------------------------------------------------

    \827\ We define potentially MIPS eligible clinicians as those 
clinicians who are not required to participate in 13MIPS but may 
either opt-in or join a group that exceeds the low-volume threshold 
in all three criteria.
---------------------------------------------------------------------------

(b) MIPS Eligibility Estimates
    Eligibility among many clinicians is contingent on submission to 
MIPS as a group or election to opt-in: therefore, we would not know the 
number of MIPS eligible clinicians who submit until the submission 
period for the CY 2023 performance period is closed. For the remaining 
analysis, we use the estimated population of 686,645 MIPS eligible 
clinicians described in previously in this section of this proposed 
rule. Table 136 summarizes our eligibility estimates for the proposed 
policies model after applying our assumptions discussed in this section 
of this proposed rule.

[[Page 62189]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.182

d. Modeling Approach and Methods for MIPs Value Pathways (MVPs) and 
Traditional MIPS
(1) Summary of Approach
    In this proposed rule, we present several proposals which impact 
the measures and activities, the performance category scores, final 
score calculation, and the MIPS payment adjustment of MIPS eligible 
clinicians. We outline these changes in more detail in section 
VII.E.17.d.(3). Of this proposed rule as we describe our methodology to 
estimate MIPS payment adjustments for the CY 2025 performance period/
2027 MIPS payment year. We then present the impact of the proposed 
policies in the CY 2025 performance period/2027 MIPS payment year and 
compare select metrics to the baseline model. By comparing the baseline 
model to the policies model, we are able to estimate

[[Page 62190]]

the incremental impact of the policies for the CY 2025 performance 
period/2027 MIPS payment year.
    MIPS eligible clinician's final scores are calculated based on the 
clinician's performance on measures and activities under the four MIPS 
performance categories: quality, cost, improvement activities, and 
Promoting Interoperability. MIPS eligible clinicians can participate in 
the four MIPS performance categories as an individual, group, virtual 
group, APM Entity, clinicians participating in MIPS through the APM 
Performance Pathway (APP), or through an MVP. MIPS APM participants can 
participate in the APP as an individual, group, virtual group, APM 
Entity and are only scored on three MIPS performance categories: 
quality, improvement activities, and Promoting Interoperability. Our 
simulation applies the proposed and previously finalized policies to 
the existing MIPS scoring engine.
    In the CY 2022 PFS final rule (86 FR 65394 through 65397), we 
finalized policies at Sec.  414.1365 for implementing MIPS Value 
Pathways beginning in the CY 2023 performance period/2025 MIPS payment 
year. We incorporate MVP participation and scoring rules in this RIA 
where applicable as described in the following section.
(2) Methodology To Assess Impact for MIPS Value Pathways
(a) MVP Participant Assumptions
    At Sec.  414.1365(b), we require MVP Participants (which can be a 
group, individual, subgroup, or APM entity) to register prior to 
submitting an MVP. We assessed whether to use CY 2024 MVP registration 
data to estimate MVP participation but elected to again use the 
approach described in the CY 2024 PFS final rule (88 FR 79507) for two 
reasons. First, we do not presently have MVP scoring data, thus do not 
know the information of MVP registrants that may submit MVP data to 
MIPS. Secondly, our model is based on CY 2022 performance data. This 
data does not contain MVP scores and reconciliation between multiple 
years introduces uncertainty and complexity into our model. As MVP 
scoring data becomes available in the future, we will reassess our 
methodology for estimating MVP participation and final scores.
    We assume for purposes of this model, that MVP Participants are 
MIPS eligible individual clinicians or groups that submit the required 
MVP measures. For the baseline model, we used the measures from the 16 
MVPs finalized in the CY 2024 PFS final rule Appendix 3 (88 FR 79978 
through 80047).
    In section IV.A.4.a. and Appendix 3 of this proposed rule, we 
propose modifications to 7 existing MVPs and proposed 6 new MVPs. The 6 
new proposed MVPs are:

 Complete Ophthalmologic Care
 Dermatological Care
 Gastroenterology Care
 Optimal Care for Patients with Urologic Conditions
 Pulmonology Care
 Surgical Care

    For the proposed policies model, we incorporated the measure 
revisions for the existing MVPs described in Appendix 3 of this 
proposed rule. Due to data availability, we are unable to simulate 
scores for the following measures: 487, 488, 489, 490, 492, 493, 496, 
497, 502, 503, 504, 505, ABG44, PIMSH13, UREQA10, 485, 486, 487, 488, 
489, 490, 492, 493, 495, 496, 497, 499, 500, 501, 502, 503, 504, 505, 
AAD16, AAD17, AAD18, ABG44, GIQIC26, IA_PM_XX, IRIS61, MSK6, MSK7, 
MSK8, MSK9, MUC2023-141, MUC2023-161, MUC2023-162, MUC2023-190, 
MUC2023-211, PIMSH13, UREQA10.
    For these MVP Participants, we calculate both an MVP and a 
traditional MIPS score and take the highest score consistent with the 
existing scoring hierarchy which was finalized in the CY 2023 PFS final 
rule (86 FR 65537).
    Our MVP Participant assumptions have limitations: the measure list 
used to simulate MVP participation does not align completely with what 
is proposed in section IV.A.4.a. of this proposed rule, we are not 
incorporating subgroups due to a lack of data, not all of the assumed 
participants may elect to register for an MVP, and we may have 
additional clinicians or groups register for an MVP. However, we 
believe this is a reasonable approach to simulate the impact of MVPs 
and we sought comment on this assumption but did not receive any 
feedback.
(b) MVP Scoring Methods and Assumptions
    We simulate an MVP score using the same data sources as we did for 
traditional MIPS. We scored according to Sec.  414.1365(d) and (e) 
using the MVP reporting requirements listed in Sec.  414.1365(c) with 
one exception. We did not restrict the improvement activities to the 
activities listed in the MVP inventory. We believed this would lower 
our estimated MVP score as clinicians and groups were not required to 
select from a limited inventory in the CY 2022 performance period (upon 
which our model is based). Therefore, we scored any improvement 
activities the MVP Participants submitted in 2022 as if those 
improvement activities are in the MVP inventory. Additionally, in 
section IV.A.4.b.(1)(b) of this proposed rule, we proposed to score all 
available population health measures for a clinician participating in 
an MVP and select the highest scoring of those measures for use in 
determining their category score. We incorporated this proposal into 
our simulation.
(3) Methodology To Assess Impact for Traditional MIPS
    To estimate the impact of the policies on MIPS eligible clinicians, 
we generally used the CY 2022 performance period's data, including data 
submitted or calculated for the quality, cost, improvement activities, 
and Promoting Interoperability performance categories.
    We supplemented this information with the most recent data 
available for CAHPS for MIPS and CAHPS for ACOs, administrative claims 
data for the new quality performance category measures, and other data 
sets. We calculated a hypothetical final score for the CY 2025 
performance period/2027 MIPS payment year for the baseline and policies 
scoring models for each MIPS eligible clinician using score estimates 
for quality, cost, Promoting Interoperability, and improvement 
activities performance categories, and the application of our final 
scoring policies.
(a) Methodology To Estimate the Quality Performance Category Score
    We used the CY 2024 PFS final rule final policies model as the 
starting point of our baseline model. Since there are no previously 
finalized policies impacting the quality performance category that were 
not already included in the CY 2024 PFS final rule policies model, we 
did not make any modifications to the quality performance category and 
the baseline model is identical to the CY 2024 PFS final rules policies 
model with respect to the quality category.
    Our proposed policies model incorporates the following proposals 
from this proposed rule as outlined in section IV.A.4.e.(1) of this 
proposed rule:
    In section IV.A.4.f.(1)(b)(i) of this proposed rule, to facilitate 
fairer scoring, we propose to remove the scoring cap and change the 
benchmarking approach for certain topped out measures applicable to 
clinicians facing both limited measure choice and limited scoring 
opportunities. We did not simulate the addition of quality measures 
described in section IV.A.4.e.(1)(d)(i) since we use

[[Page 62191]]

existing quality measure data from the CY 2022 performance period which 
does not include new measures. We do not simulate the removal of 
quality measures described in section IV.A.4.e.(1)(d)(ii) since we 
cannot predict how clinician behavior and measure selection would 
change in response.
(b) Methodology To Estimate the Cost Performance Category Score
    We estimated the cost performance category score using a 
methodology similar to the methodology described in the CY 2024 PFS 
final rule (88 FR 79508) for the baseline and the proposed policies RIA 
models with the modifications described below.
    For this proposed rule, the baseline policies RIA model used the 
same methodology as the final policies RIA model in the CY 2024 PFS 
final rule (88 FR 79508). The proposed policies RIA model incorporated 
and implemented the following changes:
     In section IV.A.4.e.(2)(a) of this proposed rule, we are 
proposing to adopt 6 new episode-based cost measures and modify 2 
existing episode-based cost measures . We incorporated measure test 
data with the specifications for the new and modified measures.
     In section IV.A.4.f.(1)(d) of this proposed rule, we are 
proposing to modify our cost scoring methodology. The median cost for a 
measure would be assigned achievement points equal to 10 percent of the 
performance threshold (7.5 in the CY 2024 performance period/CY 2026 
payment year). The cut-offs for benchmark ranges would be calculated as 
standard deviations from the median. This proposal is incorporated into 
our model based on the specifications explained in section 
IV.A.4.f.(1)(d)(ii)(B) of this proposed rule.
(c) Methodology To Estimate the Promoting Interoperability Performance 
Category Score
    We estimated Promoting Interoperability performance category score 
by using the same methodology that we used in the CY 2024 PFS final 
rule (88 FR 79508). We did not incorporate any changes to this category 
in our model. In section IV.A.4.e.(4)(f) of this proposed rule, we are 
proposing minimum criteria for a qualifying data submission for the 
Promoting Interoperability performance category. We conducted an 
analysis of this proposal and determined that the impact on final 
scores and payment adjustments was negligible and therefore did not 
incorporate it into our model.
(d) Methodology To Estimate the Improvement Activities Performance 
Category Score
    For the baseline and policies model we used the same method to 
estimate the improvement activities performance category score as 
described in the CY 2024 PFS final rule (88 FR 79508) including 
alignment with the clarification provided regarding IA automatic 
weighting for APM participants (88 FR 79366).
    In section IV.A.4.e.(3)(b)(IV) of this proposed rule, we proposed 
to remove weighting of improvement activities. We conducted an analysis 
of this proposal and determined that the impact on final scores and 
payment adjustments was negligible and therefore did not incorporate it 
into our model.
(e) Methodology To Estimate the Complex Patient Bonus Points
    For the baseline and policies RIA model, we used the previously 
established method to calculate the complex patient bonus as described 
in the CY 2022 PFS final rule (86 FR 64996).
(f) Methodology To Estimate the Final Score
    We are not proposing any changes for how we calculated the MIPS 
final score. Our baseline and policies RIA models assigned a final 
score for each TIN/NPI by multiplying each estimated performance 
category score by the corresponding performance category weight, adding 
the products together, multiplying the sum by 100 points, adding the 
complex patient bonus, and capping at 100 points.
    For both models, after adding any applicable bonus for complex 
patients, we reset any final scores that exceeded 100 points to equal 
100 points. For MIPS eligible clinicians who were assigned a weight of 
zero percent for any performance category, we redistributed the weights 
according to Sec.  414.1380(c).
    For the purposes of this model, if a MIPS eligible clinician was 
approved for reweighting of one or more performance category to zero 
percent of their final score, and the category's weight redistributed 
to other performance category(ies), for the CY 2022 performance period/
2024 MIPS payment year (which was the data source used in our model) in 
accordance with our reweighting policies under Sec.  414.1380(c)(2), 
then we continue to apply that reweighting in our model by assigning 
them a neutral score equal to the performance threshold if all 
categories were reweighted or assigning the applicable weights to the 
categories which were reweighted. Although it is unlikely (but 
possible) that the exact same clinicians would apply for and receive 
reweighting in both the CY 2022 performance period/2024 MIPS payment 
year (which our data is based on) and the CY 2025 performance period/
2027 MIPS payment year (which we are simulating), we believe that this 
assumption accurately reflects future clinician behavior for two 
reasons. First, while the exact same clinicians may not receive 
reweighting 2 years in a row, we believe that this assumption allows us 
to quantify the impact of the reweighting on a population level. In 
other words, even if the same clinicians do not apply for and receive 
reweighting 2 years in a row, the absolute number of reweighting and 
the characteristic of practices who receive reweighting is likely to 
remain similar. Secondly, if we were to not assign reweighting to those 
clinicians, many of them would receive a very low final score because 
they did not submit data for one or more performance categories during 
the year in which they received reweighting. We do not believe that it 
is realistic to assume that, in the absence of reweighting, those 
clinicians would continue to not submit data. For these reasons, 
clinicians who received reweighting in the CY 2022 performance period/
2024 MIPS payment year also are approved for reweighting in the CY 2025 
performance period/2027 MIPS payment year. These clinicians are 
assigned a score of the performance threshold (75) in our model because 
this corresponds with a neutral (0 percent) payment adjustment.
(g) Methodology To Estimate the MIPS Payment Adjustment
    For the baseline and proposed policies RIA models, we applied the 
hierarchy as finalized in the CY 2022 PFS final rule (86 FR 65536 
through 65537) to determine which final score should be used for the 
payment adjustment for each MIPS eligible clinician when more than one 
final score is available. We then calculated the parameters of an 
exchange function in accordance with the statutory requirements related 
to the linear sliding scale, budget neutrality, and minimum and maximum 
adjustment percentages.
    For the baseline model, we applied the performance threshold of 75 
points finalized in the CY 2024 PFS final rule (88 FR 79373). In 
section IV.A.4.g.(2)(c) of this proposed rule, we are proposing to 
again set the performance threshold at 75. Therefore, for both the 
baseline and final policies models we used a

[[Page 62192]]

performance threshold of 75 to calculate the exchange function used for 
MIPS payment adjustments. We note that the results of this exchange are 
not identical between the baseline and final policies model. This is 
because the scaling factor used to determine positive adjustments is 
dependent on the total dollar amount of negative payment adjustments 
and those adjustments differ as final scores are not identical between 
both models. For both the baseline and policies models, we used these 
resulting parameters to estimate the positive or negative MIPS payment 
adjustment based on the estimated final score and the allowed charges 
for covered professional services furnished by the MIPS eligible 
clinician.
(4) Simulation Results and Projected Impact to MIPS Eligible Clinicians
    Based on the methodology described in the preceding sections we 
created a baseline and proposed policies simulation. Using this 
simulation, we estimate the impact of the policies proposed.
(a) Impact to Clinician Eligibility
    In section VII.E.17.c.(2) of this proposed rule, we noted that we 
are not proposing any modification to clinician eligibility and 
therefore there is no difference in the total number of MIPS eligible 
clinicians between our models.
(b) Impact to Clinician's Final Scores
    Table 137 shows the median final score by practice size and the 
percentage of MIPS eligible clinicians of each practice size with a 
positive or neutral or negative adjustment.
[GRAPHIC] [TIFF OMITTED] TP31JY24.183

    The median final score is 82.20 in our baseline model and 86.42 in 
our proposed policies model. There is an increase in the number of 
clinicians receiving a positive payment adjustment for all practice 
sizes and an increase in the median final score for all practice sizes 
except for solo practitioners.\828\ We project that 69.93 percent of 
MIPS eligible clinicians will receive a positive adjustment in our 
baseline model and 77.51 percent of MIPS eligible clinicians will 
receive a positive adjustment in our proposed policies model. This 
increase is largely due to our proposed change to the cost scoring 
methodology discussed in section IV.A.4.f.(1)(d)(ii)(B) of this 
proposed rule. Table 138 shows the median cost score for MIPS eligible 
clinicians who are scored on the cost performance category for our 
baseline and final policies model. There is a substantial difference in 
median cost scores between our two models. This is true across all 
practice sizes. The median cost category score is 59.16 in our baseline 
model and 73.85 in our proposed policies model.
---------------------------------------------------------------------------

    \828\ See section VII.E.17.d.(b)(b)(i) of this proposed rule for 
a discussion of the performance of solo practitioners specifically.

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

[[Page 62193]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.184

    Figure 6 shows the distribution of final scores for all MIPS 
eligible clinicians. Note that there are a relatively large number of 
MIPS eligible clinicians with a final score of 75. As stated in section 
VII.E.17.d.(3)(f) of this proposed rule MIPS eligible clinicians whom 
we approved for reweighting of all MIPS performance categories in 
accordance with our reweighting policies at Sec.  414.1380(c)(2) are 
assigned a final score of exactly the performance threshold (75). 
Overall, the distribution is skewed to the right indicating that 
clinicians tend to receive final scores on the higher end of the 
distribution with many final scores clustered near the performance 
threshold of 75. Our proposed policies have the effect of shifting 
final scores to the right. Many clinicians with final scores just below 
the performance threshold in the baseline model see their scores 
increased to a value just above the performance threshold in the 
proposed policies model.
[GRAPHIC] [TIFF OMITTED] TP31JY24.185

(i) Impact to Small and Solo Practices
    18,867 MIPS eligible clinicians or 2.7 percent of all MIPS eligible 
clinicians are solo practitioners in both the baseline and final 
policies models. The median final score for solo practitioners is 
exactly equal to the performance threshold in both the baseline and 
final policies model although the portion of solo practitioners 
receiving a positive adjustment is higher in the proposed policies 
model than in the baseline model. As stated in section 
VII.E.17.d.(3)(f) of this proposed rule, clinicians receiving 
reweighting under our policies at Sec.  414.1380(c)(2) are assigned a 
final score exactly equal to the performance threshold if we approved 
for reweighting of all MIPS performance categories.

[[Page 62194]]

    Section VII.E.17.d.(3)(f) of this proposed rule, clinicians 
receiving reweighting under our policies at Sec.  414.1380(c)(2) are 
assigned a final score exactly equal to the performance threshold if we 
approved for reweighting of all MIPS performance categories.
    These practitioners have a lower median final score than other 
practice sizes. This is largely due to the fact that many of these solo 
practitioners do not submit data to MIPS despite being MIPS eligible 
clinicians. Our analysis indicates that 49.45 percent of solo 
practitioners submit data to MIPS compared to 93.68 percent of all 
clinicians. The median final score in our baseline and proposed 
policies model is 75.00 for all solo practitioners, but for solo 
practitioners who submit data the median final score is 84.35 in the 
baseline and 87.03 in the proposed policies model. These findings 
indicate that the lower final scores among solo practitioners is likely 
due to not reporting data to MIPS. Figure 7 shows the distribution of 
final scores for solo practitioners as a box plot. While the median 
final score is 75 in both models, the bottom quartile increases from 
17.52 to 22.33 between the baseline and proposed policies model. Figure 
8 shows the final score distribution for all practice sizes. The first 
quartile of final scores is 75 in the baseline model and 77.45 in the 
proposed policies model. The range between Q1 and Q3 is significantly 
narrower for all practice sizes than it is for solo practitioners. 
Figure 9 shows the distribution of final scores for solo practitioners 
who submit data to MIPS. This distribution is much closer to the 
distribution of final scores in the overall population with the first 
quartile at 73.45 in the baseline and 75.00 in the proposed policies 
model. This is similar to the median final score for all practice sizes 
which is 86.42. This indicates that, while many solo practitioners do 
not submit data to MIPS, those who do submit data perform similarly or 
better than the overall population of MIPS eligible clinicians. This is 
further evidence that the main factor causing low final scores among 
solo practitioners is the high proportion who do not submit data.
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[[Page 62195]]


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[[Page 62196]]


[GRAPHIC] [TIFF OMITTED] TP31JY24.188

    Small practices, defined as groups with a range between 2 and 15 
clinicians, have a median final score of 81.79 in the baseline and 
86.02 in the proposed policies model. This is similar but slightly 
lower than the median final score for all practice sizes of 86.42. 
Among small practices who submit data the median final score is 89.81 
in the proposed policies model (and 86.83 in the baseline). This is 
significantly higher than the median final score for all clinicians who 
submit data which is 87.53. This indicates that small practices perform 
similarly to other practice sizes although a slightly larger proportion 
of small practices do not submit data. Table 141 shows the percentage 
of clinicians by practice size who either do or do not submit data to 
MIPS and the corresponding median final score. Note that the median 
final score for clinicians who do not submit data is 75 for all 
practice sizes except for solo practitioners. This indicates that many 
clinicians belonging to small, medium, or large practices (but not solo 
practitioners) who do not submit data to MIPS have been approved for 
reweighting of all of their MIPS performance categories under our 
policies at Sec.  414.1380(c)(2). In contrast, many solo practitioners 
who do not submit data do so despite not being eligible for application 
of our reweighting policies or not applying for reweighting under those 
policies.
    A large majority of all practice sizes except solo practitioners 
submit data to MIPS. It is possible that the small percentage of MIPS 
eligible clinicians in those practice sizes who do not submit data to 
MIPS are primarily MIPS eligible clinicians who have received 
reweighting under our policies at Sec.  414.1380(c)(2). It should be 
noted that median final scores increase for solo and small 
practitioners between our baseline and proposed policies model 
indicating that the net effect of our proposed policies is an increase 
in their final scores.

[[Page 62197]]

[GRAPHIC] [TIFF OMITTED] TP31JY24.189

(ii) Impact to Rural Providers
    In our data we assign rural practitioners a special status. 
Analysis of this group of clinicians indicates that their final scores 
are similar to the overall population of MIPS Eligible Clinicians 
across all practice sizes. Table 140 shows the median final score and 
the percentage of eligible clinicians with a positive or neutral or 
negative adjustment by practice size.
[GRAPHIC] [TIFF OMITTED] TP31JY24.190

    The median final score for all rural practitioners is 81.29 in our 
baseline model and 85.41 in our proposed policies model. This is 
slightly lower than the median final score for all practitioners which 
is 82.20 in our baseline model and 86.42 in our proposed policies 
model. However, the median final score is identical for solo 
practitioners and higher for small and medium practices. Large rural 
providers have a slightly lower median final score compared to large 
practices generally. The lower overall median final scores for rural 
practitioners are driven by large rural practices who perform slightly 
worse than other practice sizes and when compared to large practices 
generally. It should be noted that median final scores increase for 
rural providers of all practice sizes between our baseline and proposed 
policies model indicating that the net effect of our proposed policies 
is an increase in their final scores.

[[Page 62198]]

(iii) Impact to Safety Net Providers
(a) Updated Definition of Safety Net Providers
    In the CY 2023 PFS final rule (87 FR 70094), we finalized our 
complex patient bonus methodology. This bonus is composed of two 
distinct calculations which are added together: Medical Complexity and 
Social Risk. Medical Complexity is determined based on a MIPS eligible 
clinicians Hierarchical Conditions Categories risk score and social 
risk is determined based on the proportion of a MIPS eligible 
clinicians Medicare patient population who are dually eligible for both 
Medicare and Medicaid.
    In the CY 2024 PFS final rule (88 FR 79513), we compared the 
performance of clinicians who received the complex patient bonus with 
our overall population. As we further developed our model, we decided 
to adopt a more precise definition of safety net providers. We believe 
that by narrowing our definition of safety net providers to the top 20 
percent (80th percentile) of social risk we can identify the providers 
who are caring for the largest proportion of low-income or otherwise 
socially vulnerable individuals.
    Table 143 shows the final score estimates for safety net providers 
under this new definition. Safety net provers have higher median final 
scores than the overall population of MIPS eligible clinicians across 
all practice sizes with the exception of small and solo practitioners. 
When our analysis is restricted to providers who submit data to MIPS 
this discrepancy disappears and small and solo safety net providers who 
submit data have higher median final scores than the overall population 
of small and solo MIPS eligible clinicians who submit data. However, 
only 43.65 percent of solo and 72.90 percent of small safety net 
providers submit data compared to 49.45 percent and 79.46 percent of 
the overall population of solo and small MIPS eligible clinicians 
respectively. These results are shown in Table 141. This indicates that 
the lower scores among small and solo safety net practitioners is 
likely due to a larger number of these practitioners not submitting 
data. It should be noted that median final scores increase for solo and 
small safety net providers between our baseline and proposed policies 
model indicating that the net effect of our proposed policies is an 
increase in their final scores.
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[[Page 62199]]


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(c) Impact to MIPS Eligible Clinicians' Payment Adjustments
    We are not proposing an increase in the performance threshold in 
this proposed rule. However, payment adjustments differ between the 
baseline and final policies model. This is because our proposed 
policies increase final scores of MIPS eligible clinicians \829\ and 
therefore a larger proportion of MIPS eligible clinicians receive a 
final score greater than the performance threshold and thus a positive 
payment adjustment. The parameters of the exchange function used to 
determine payment adjustments depends on the final score distribution 
of MIPS eligible clinicians. As the proportion of MIPS eligible 
clinicians receiving a negative payment adjustment decreases the budget 
neutral funds available for redistribution also decrease. In the 
baseline model we project redistributing $517 million and in the 
proposed policies model we project redistributing $458 million. This 
decrease means that the scaling factor for positive adjustments is 
reduced.
---------------------------------------------------------------------------

    \829\ This increase is largely due to the change in our cost 
performance category scoring policies discussed in section 
IV.A.4.f.(1)(d)(ii)(B) of this proposed rule.

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

[[Page 62200]]

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    We also report the median positive and negative payment adjustments 
by practice size in Table 143.
[GRAPHIC] [TIFF OMITTED] TP31JY24.194

    For all practices sizes except for solo practitioners the median 
negative payment adjustment increases in magnitude. This is because 
many MIPS eligible clinician's final scores are clustered near the 
performance

[[Page 62201]]

threshold. An increase in median final scores will cause many of those 
clinicians who have a minor negative adjustment to meet or exceed the 
performance threshold and therefore be removed from the population of 
clinicians with a negative adjustment. The remaining population of MIPS 
eligible clinicians with negative adjustments are more likely to have 
negative payment adjustments higher in magnitude. In contrast to other 
practice sizes. fewer solo practitioners with negative payment 
adjustments have a final score near the performance threshold and an 
increase in the final score of these MIPS eligible clinicians will 
reduce the size of their negative payment adjustment but is less likely 
to shift their final scores above the performance threshold in the 
manner described earlier. As discussed in section VII.E.17.d.(4)(b)(i) 
of this proposed rule, this is largely because many of these solo 
practitioners do not submit data to MIPS despite being MIPS eligible 
clinicians. Our analysis indicates that 49.45 percent of solo 
practitioners submit data to MIPS in our proposed policies model 
compared to 93.70 percent of all MIPS eligible clinicians. In Table 
144, we report the proportion of MIPS eligible clinicians who either 
did or did not submit data with the maximum negative adjustment (-9 
percent).
[GRAPHIC] [TIFF OMITTED] TP31JY24.195

    Across all practice sizes the proportion of clinicians who do not 
submit data who receive the max negative payment adjustment decreased 
between the baseline and proposed policies model. A larger proportion 
of solo practitioners (2.26 percent) who submit data receive the 
maximum negative adjustment.
    The median positive adjustment for solo practitioners is 1.55 
percent which is higher than the median positive adjustment for all 
practice sizes overall. This indicates that, while many solo 
practitioners do not submit data to MIPS, those solo practitioners who 
do report data to MIPS and receive a positive adjustment receive a 
similar median adjustment to other practice sizes.
e. Additional Impacts From Outside Payment Adjustments
(1) Burden Overall
    In addition to policies affecting payment adjustments, we are 
proposing several policies that have an impact on burden in the CY 2025 
performance period/2027 MIPS payment year. In section V.B.8. of this 
proposed rule, we outline estimates of the costs of data collection 
that include both the effect of proposed policy updates and adjustments 
due to the use of updated data sources. For each proposed provision 
included in this proposed rule that impacts our estimate of collection 
burden, we summarize the incremental burden in Table 145. We also 
provide proposed additional burden discussions that we are not able to 
quantify.

[[Page 62202]]

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(2) Additional Impacts to Clinicians
(a) Impact on Third Party Intermediaries
    In section IV.A.4.j.(1)(b). of this rulemaking, we are proposing 
that as part of the Consumer Assessment of Healthcare Providers & 
Systems (CAHPS) vendor registration process, in addition to the 
previously established registration requirements, CAHPS vendors would 
provide information on the range of costs for their services beginning 
with the CY 2026 performance period/2028 MIPS payment year. We 
recognize that there may be additional minimal burden associated with 
the proposed cost information requirement for the CAHPS vendor 
registration. However, we assume that this information is brief and 
readily available to vendors completing the registration process. We 
are unable to quantify the additional impact for the proposed CAHPS 
vendor cost requirement.
(b) Modifications to the Improvement Activities Inventory
    As discussed in section IV.A.4.e.(3)(b)(iii). of this proposed 
rule, we are proposing changes to the improvement activities inventory 
for the CY 2025 performance period/2027 MIPS payment year and future 
years as follows: adding two new improvement activities; modifying two 
existing improvement activity; and removing eight previously adopted 
improvement activities. We refer readers to Appendix 2 of this proposed 
rule for further details. We do not expect these changes to the 
improvement activities inventory to affect our currently approved 
information collection burden for the number of estimated respondents. 
Most of the improvement activities in the Inventory remain unchanged 
for the CY 2025 performance period/2027 MIPS payment year. We refer 
readers to section IV.A.4.e.(3)(b)(iii). of this proposed rule for 
additional information on changes to the improvement activities 
Inventory.
(c) Modifications to Improvement Activities Scoring and Reporting 
Policies
    As discussed in section IV.A.4.e.(3)(b)(iv)., we are proposing two 
scoring and reporting policy changes for the improvement activities 
performance category effective for the CY 2025 performance period/2027 
MIPS payment year and subsequent years. As noted in section V.B.8.h., 
we established our currently approved estimate that it will take a 
computer analyst 5 minutes to log in and manually attest that 
improvement activities were completed in the CY 2019 PFS final rule (83 
FR 60016). In the CY 2024 PFS final rule (88 FR 79454 and 79455), this 
estimate included scenarios where participants might submit 1, 2, 3, or 
4 activities for the improvement activities category, based on medium- 
or high-weighted

[[Page 62203]]

activities and any additional weighting scenarios such as for MIPs 
Value Pathways (MVP) Participants. We believe this proposal would 
decrease burden for MIPS participants who previously reported medium-
weighted activities. As MIPS participants who previously only reported 
high weighted activities would have the same attestation requirements 
under this proposal, we propose to continue our currently approve 
estimates of 5 minutes to log in and attest that improvement activities 
are completed. We expect reduced reporting burden for clinicians who 
previously reported at least one medium-weighted activity; however, we 
are unable to estimate the aggregated impact of this proposal given the 
current weighting and scoring rules that affect the number of 
activities each clinician submits to receive full credit for the 
improvement activities performance category.
(d) MVP Maintenance Process
    In section VII.E.17.e.(2)(d). of this proposed rule, we are 
proposing a modification to the MVP maintenance webinar process 
previously finalized in the CY 2022 PFS final rule (86 FR 65410) and 
modified in the CY 2023 PFS final rule (87 FR 70037). We communicated 
that if we identified any potentially feasible and appropriate 
submitted maintenance recommendations, we would host a public facing 
webinar open to interested parties and the general public through which 
they could offer their feedback on the potential maintenance updates we 
have identified.
    Due to the low volume of submitted maintenance recommendations in 
past years, we are proposing to provide us more flexibility in how we 
communicate maintenance recommendations prior to proposing them in 
rulemaking. Allowing flexibility in communicating recommendations 
through alternative webinar formats or other public communication 
channels would offer similar opportunities for public review and 
feedback as a live public webinar. For example, in lieu of a live 
webinar, we could choose to communicate submitted maintenance 
recommendations via a pre-recorded webinar, which will encourage 
interested parties to submit their feedback on the submitted 
recommendations in writing by email before maintenance updates are 
formally proposed in rulemaking.
    As with the CY 2023 PFS final rule (87 FR 70210 through 70211), we 
acknowledge that there is administrative burden associated with the 
monitoring and review of the candidate MVPs. We are uncertain on the 
number of interested parties and members of the general public that 
will submit their recommendations for potential revisions to 
established MVPs for an applicable performance period. We are also 
uncertain if CMS will host a public webinar, webinar alternative, or 
other communications based on the review of the recommendations. In 
summary, we are unable to quantify the impact associated with the 
proposed changes to the MVP development and maintenance process.
(e) Reweighting Performance Categories When Data Is Not Submitted Due 
to Reasons Outside the Clinician's Control
    In section IV.A.4.i.(2) of this rulemaking, we are proposing to 
adopt a new reweighting policy at 42 CFR 414.1380(c)(2)(i)(A)(10) and 
(c)(2)(i)(C)(12). Specifically, we are proposing that, beginning with 
the CY 2024 performance period/2026 MIPS payment year, we may reweight 
one or more of the performance categories (specifically, quality, 
improvement activities, or Promoting Interoperability), where we 
determine, based on information submitted to us on or before November 
1st of the year preceding the relevant MIPS payment year, that data for 
a MIPS eligible clinician are inaccessible or unable to be submitted 
due to circumstances outside of the control of the clinician because 
the MIPS eligible clinician delegated submission of the data to their 
third party intermediary, evidenced by a written agreement between the 
MIPS eligible clinician and third party intermediary, and the third 
party intermediary did not submit the data for the performance 
category(ies) on behalf of the MIPS eligible clinician in accordance 
with applicable deadlines. We also are proposing that, to determine 
whether to apply reweighting to the affected performance category(ies), 
we will consider: whether the MIPS eligible clinician knew or had 
reason to know of the issue with its third party intermediary's 
submission of the clinician's data for the performance category(ies); 
whether the MIPS eligible clinician took reasonable efforts to correct 
the issue; and whether the issue between the MIPS eligible clinician 
and their third party intermediary caused no data to be submitted for 
the performance category(ies) in accordance with applicable deadlines. 
More details on this proposed reweighting policy are provided in 
section V.B.8.g.(2) of this proposed rule.
    Because this is a new policy and we believe these occurrences would 
be rare based on our experience, we are unable to estimate the number 
of clinicians, groups, or third party intermediaries that may apply for 
reweighting based on this policy. Similarly, the extent and source of 
documentation provided to us for each event may vary considerably. 
Therefore, we are not proposing any changes to our currently approved 
burden estimates as a result of this proposal.
(f) Advanced Primary Care Management
    As discussed in section II.G.2. of this proposed rule, we are 
proposing to adopt specific coding and payment policies for advanced 
primary care management (APCM) services for use by practitioners who 
are providing services under this specific model of ``advanced primary 
care,'' beginning January 1, 2025. These services would be furnished 
under the direction of a physician or other qualified health care 
professional who is responsible for all primary care (e.g., physicians 
and non-physician practitioner, including nurse practitioner, physician 
assistant, certified nurse midwife and clinical nurse specialist), and 
serve as the continuing focal point for all needed health care 
services, during a calendar month. We are proposing three new APCM 
codes that would recognize the resources involved in furnishing 
ongoing, beneficiary-centered care management services under the broad 
model of advanced primary care without paying for each activity 
separately while allowing for flexibility in addressing patient needs. 
APCM payment would incorporate several specific, existing care 
management and communication technology-based services into a bundle 
and require reporting the Value in Primary Care MVP beginning in the CY 
2025 performance period/2027 MIPS payment year. Billing practitioners 
who are not MIPS eligible clinicians (as defined at 42 CFR 414.1305) 
would not be required to report the MVP in order to furnish and bill 
for APCM services. As discussed in section V.B.8.e.(7)(a) of this 
proposed rule, we are unable to estimate the effect of this proposal on 
MVP submissions and registrations for the CY 2025 performance period/
2027 MIPS payment year as the codes are newly proposed. Specifically, 
we are unable to determine how many additional clinicians or practices 
would submit the Value in Primary Care MVP measures for the CY 2025 
performance period/2027 MIPS payment year above our current estimates. 
Similarly, we cannot assess what participation levels clinicians or 
practices who might use these APCM codes, if finalized, have reported 
MIPS in the past (for example,

[[Page 62204]]

eligibility requirements and special statuses, participation at the 
individual, group, virtual group, or Alternative Payment Model (APM) 
Entity level, or reporting via traditional MIPS, the APM Performance 
Pathway (APP), or MVPs), or if they will be MIPS eligible clinicians in 
future years. For MIPS eligible clinicians who move from reporting 
traditional MIPS to MVPs, we expect a decrease in overall program 
burden due to the reduced number of measures required for reporting the 
quality performance category. We will update these assumptions for MVP 
quality performance category reporting and MVP registration as more 
information is available.
(g) Mandatory Subgroup Registration
    As summarized in section IV.A.3.c.(1). we established a voluntary 
subgroup participation option for clinicians choosing to report an MVP 
beginning in the CY 2023 performance period/2025 MIPS payment year. We 
finalized a mandatory subgroup reporting requirement for multispecialty 
groups choosing to report as an MVP Participant beginning in the CY 
2026 performance period/2028 MIPS payment year (Sec.  414.1305; 86 FR 
65394 through 65397). Beginning with the CY 2026 performance period/
2028 MIPS payment year, a single specialty group may continue to submit 
data for an MVP at the group level, and a multispecialty group must 
form subgroups to report an MVP. Under the existing subgroup reporting 
policies, a group could place clinicians providing similar scope of 
care into one or more subgroups for reporting a relevant MVP. Each 
clinician may participate in one subgroup per tax identification number 
(TIN). The remaining clinicians under the group TIN not part of a 
subgroup could participate as individuals to report an MVP or 
traditional MIPS. The entire group TIN (including the clinicians that 
are part of the subgroup) could also submit data as a group in 
traditional MIPS. We note section IV.A.3.d. includes a Request for 
Information (RFI) to obtain feedback on what guidance/parameters are 
needed for multispecialty groups to place clinicians into subgroups for 
reporting an MVP relevant to the scope of care provided. Absent 
available submission data on MVP and subgroup reporting as discussed in 
section V.B.8.e.(7)(a)(ii), we are unable to estimate the effect of 
this established policy on reporting for the CY 2026 performance 
period/2028 MIPS payment year.
(h) APM Performance Pathway Plus Quality Measure Set
    In section IV.A.4.c.(2). of this proposed rule, we are proposing to 
establish the APP Plus quality measure set beginning in the CY 2025 
performance period/2027 MIPS payment year. As described in section 
V.B.8.a.(4)., clinicians reporting the proposed APP Plus quality 
measure set would report via one of the available collection types per 
measure: eight measures for the CY 2025 performance period/2027 MIPS 
payment year; nine measures for the CY 2026 and 2027 performance 
periods/2028 and 2029 MIPS payment years; and eleven measures for the 
CY 2028 performance period/2030 MIPS payment period. For the available 
collection types per measure, please see Tables 55, 56, and 57 in 
section IV.A.4.c.(3)(f).
    In section V.B.8.a.(4). of this proposed rule, we compare the 
quality performance category burden for MIPS eligible clinicians who 
elect to report the proposed APP Plus quality measure set compared to 
the current APP quality measure set, traditional MIPS, and MVPs. We 
focus these analyses on quality measures required for MIPS eligible 
clinicians under the eCQM, CQM/QCDR, and Medicare Part B claims 
collection types. We note, these assumptions for actively submitting to 
assess clinician burden may differ from MIPS scoring policy. In that 
comparison, we assume MIPS eligible clinicians incur no burden for 
reporting the two administrative claims quality measures currently 
required under the APP quality measure set. Additionally, burden 
estimates for the CAHPS for MIPS registration and patient reporting are 
provided in the CAHPS for MIPS PRA package under OMB control number 
0938-1222 (CMS-10450); we do not assume that MIPS eligible clinicians 
incur additional reporting burden for reporting the CAHPS for MIPS 
quality measure under the current APP quality measure set. Therefore, 
MIPS eligible, clinicians reporting the proposed APP Plus quality 
measure set beginning in the CY 2025 performance period/2027 MIPS 
payment year would need to actively submit performance data for more 
quality measures than clinicians reporting via MVPs or the APP. 
Compared to clinicians reporting via traditional MIPS, clinicians 
reporting the proposed APP Plus quality measure set would actively 
submit performance data for fewer quality measures for the CY 2025 
performance period/2027 MIPS payment year; the same number of quality 
measures for the CY 2026 and 2027 performance periods/2028 and 2029 
MIPS payment years, and more measures for the CY 2028 performance 
period/2030 MIPS payment year.
    As noted in the CY 2021 PFS final rule, one goal of the APP quality 
measure set was to reduce the reduce the burden of reporting quality 
measures twice; once to MIPS and once to their APMs; therefore, 
clinicians reporting the APP and APP Plus who are require by their APMs 
to submit the same measure sets incur limited additional burden (88 FR 
84862). We assume that all Shared Savings Program ACOs will report the 
APP via the APP Plus measure set for the CY 2025 performance period/
2027 MIPS payment year. Per section 1899(e) of the Act, submissions 
received from eligible clinicians in ACOs are not included in burden 
estimates for this proposed rule because quality data submissions to 
fulfill requirements of the Shared Savings Program are not subject to 
the PRA. As the APP Plus is a new and optional quality measure set for 
non-Shared Savings Program ACOs with greater reporting burden than the 
current APP quality measure set and APM specific requirements may vary, 
we are unable to estimate how many individual MIPS eligible clinicians, 
groups, or APM Entities would submit quality measures via the APP Plus 
at this time. Our burden estimates currently assume MIPS eligible 
clinicians in non-Shared Savings ACO APM Entities will participate 
through traditional MIPS or MVPs, submitting as an individual or group 
rather than as an APM Entity. We will update these estimates and 
assumptions as additional data are available.
i. Assumptions & Limitations
    In our MIPS eligible clinician assumptions, we assumed that 
clinicians who elected to opt-in for the CY 2022 Quality Payment 
Program and submitted data will continue to elect to opt-in for the CY 
2025 performance period/2027 MIPS payment year.
    As discussed in section V.B.8. of this proposed rule, we are unable 
to predict which specific MIPS eligible clinicians would receive 
reweighting for one or more performance categories under policies at 
Sec.  414.1380(c)(2) in the CY 2025 performance period/2027 MIPS 
payment rear. On this basis, we assume that those MIPS eligible 
clinicians for whom we approved reweighting of one or more performance 
categories under our policies are representative of the number and 
attributes of MIPS eligible clinicians who will receive reweighting 
under these policies in the future.
    In addition to the limitations described throughout the methodology

[[Page 62205]]

sections, to the extent that there are year-to-year changes in the data 
submission, volume, and mix of services provided by MIPS eligible 
clinicians, the actual impact on total Medicare revenues will be 
different from those shown in Table 137.

F. Alternatives Considered

    This proposed rule contains a range of policies, including some 
proposals related to specific statutory provisions. The preceding 
preamble provides descriptions of the statutory provisions that are 
addressed, identifies those policies when we exercise agency 
discretion, presents rationale for our policies, and, where relevant, 
alternatives that were considered. For purposes of the payment impact 
on PFS services of the policies contained in this proposed rule, we 
present above the estimated impact on total allowed charges by 
specialty.
1. Alternatives Considered Related to Strategies for Improving Global 
Surgery Payment Accuracy
    As discussed previously and in section II.G. of this proposed rule, 
beginning for services furnished in 2025, we are proposing to broaden 
the applicability of the transfer of care modifiers for the 90-day 
global packages. We are proposing to require the use of the appropriate 
transfer of care modifier (modifier -54, -55, or -56) for all 90-day 
global surgical packages in any case when a practitioner (or another 
within the same group practice) expects to furnish only a portion of a 
global package (including but not limited to when there is a formal, 
documented transfer of care as under current policy or an informal, 
non-documented but expected, transfer of care). Practitioners billing 
for a global package procedure code with modifier -54 and other 
practitioners in the same group practice as that practitioner would 
still be able to bill during the global period for any separately 
identifiable E/M services they furnish to the patient that are 
unrelated to the global package procedure. Additionally, we are 
proposing a global surgical add-on code, HCPCS code GPOC1, which we 
expect will be billed during the postoperative period of 90 days 
following the procedure. We expect that this code will be billed once 
during that timeframe when the patient is seen for an office/outpatient 
(O/O) evaluation and management (E/M) visit that is related to the 
recent surgical procedure. We believe that this code will be billed by 
a physician or practitioner who is seeing the patient for a visit 
during the post-operative period and did not furnish the surgical 
procedure.
    As we were developing this proposal, we analyzed a few different 
policy options to best achieve our goal of improving the payment 
accuracy of the global packages. We considered whether to propose to 
revalue the 10 and 90-day global packages on the PFS utilizing our 
findings and data under the MACRA requirement to improve payment 
accuracy on the fee schedule, however we are precluded from doing so 
under MACRA. We also considered revaluing services specifically 
included in the RAND study,\830\ which looked at claims for which 
reporting of follow up visits was requested. We also considered 
proposing requiring separate billing, which would result in separate 
payments for the procedures and post operative visits in global 
packages, based on our current research and analysis of how 
practitioners may be furnishing care described by global packages. We 
considered this alternative policy as an initial step towards more 
accurately paying for global packages, specifically for services 
including high utilization global packages discussed in the RAND study. 
We also considered proposing revisions to all global surgical packages 
in a phased approach starting with the subset of packages described 
above and gradually revising other global packages over time, to manage 
payment predictability and stability within the PFS, rec.
---------------------------------------------------------------------------

    \830\ Using Claims-Based Estimates of Post-Operative Visits to 
Revalue Procedures with 10- and 90-Day Global Periods; Updated 
Results Using Calendar Year 2019 Data.
---------------------------------------------------------------------------

2. Alternatives Considered Related to the Supervision of Outpatient 
Therapy Services in Private Practices
    As discussed in section II.H of this proposed rule, we are 
proposing to allow for the general supervision of occupational therapy 
assistants (OTAs) and physical therapist assistants (PTAs), by OT's and 
PT's in private practice (OTPPs and PTPPs, respectively) who are 
enrolled as suppliers in Medicare. Currently, and since 2005, OTPPs and 
PTPPs are required to provide direct supervision of their OTAs and PTAs 
which requires the OTPP/PTPP to be immediately available to furnish 
assistance and direction throughout the performance of the procedure in 
the office suite or in the patient's home when Medicare patients are 
treated in order to bill for therapy services furnished by their 
supervised OTAs and PTAs.
    In developing our proposal to allow for general supervision in 
these private practice settings, we considered the possibility of 
allowing for virtual direct supervision by the OTPP/PTPP instead, as we 
have included OTPPs/PTPPs as ``supervising practitioners'' in the 
application of our virtual direct supervision policy since October 6, 
2021, which is now extended through CY 2024. Due to the private 
practice direct supervision regulatory requirement, when using virtual 
direct supervision, this means (per our clarification in the CY 2021 
PFS final rule (85 FR 84539)) that the OTPP or PTPP could meet the 
virtual direct supervision requirement by being immediately available 
to engage via audio/video technology (excluding audio-only), and would 
not require real-time presence or observation of the service via 
interactive audio and video technology throughout the performance of 
the service.
    However, if this alternative policy were selected, it would leave 
the direct supervision requirement in place for OTPPs and PTPPs and 
they'd still have to be immediately available to engage via audio/video 
technology and ensure their availability to do so. On the other hand, 
with general supervision, the OTPP's/PTPP's physical or virtual 
presence is not required when the OTA/PTA furnishes services, although 
the services continue to be furnished under their overall direction and 
control allowing the OTPP/PTPP, for example, to provide an evaluative 
service in the office while the OTA/PTA is off-site furnishing therapy 
services in a patient's home.
3. Alternatives Considered for the Quality Payment Program
    For purposes of the payment impact on the Quality Payment Program, 
we view the performance threshold as a critical factor affecting the 
distribution of payment adjustments. In section IV.A.4.g.(2)(c) of this 
proposed rule, we proposed to set the performance threshold to 75 
points for the CY 2025 MIPS performance period/CY 2027 MIPS payment 
year. Eighty-six (86) is a possible alternative value (mean of the CY 
2019 performance period/2021 MIPS payment year) which we did not 
propose. To assess this alternative value, we ran a separate RIA model 
with a performance threshold of 86. This model has the same mean and 
median final score as our proposed policies RIA model since the 
alternative performance threshold which we are assessing in this model 
does not change the final score. In our analysis of the alternative 
performance threshold of 86, which we considered but did not propose, 
55.98 percent of MIPS eligible clinicians who

[[Page 62206]]

submitted data would receive a negative payment adjustment in the 
baseline and 45.08 percent of MIPS eligible clinicians who submit data 
would receive a negative adjustment in the proposed policies model.
    We also reported the findings for the baseline RIA model which 
describes the impact for the CY 2025 performance period/2027 MIPS 
payment year if this proposal is not finalized. The baseline RIA model 
has a median final score of 82.20. We estimated that $517 million would 
be redistributed based on the budget neutrality requirement in the 
baseline model. The baseline includes a maximum payment adjustment of 
2.98 percent and 22.84 percent of MIPS eligible clinicians would 
receive a negative payment adjustment.

G. Impact on Beneficiaries

1. Medicare Shared Savings Program Provisions
    As noted previously in this proposed rule, the proposed HEBA would 
mainly provide upwards adjustments to benchmarks for--and likely draw 
increased participation from--new ACOs with particular focus on 
coordinating care for beneficiaries in underserved communities. New 
ACOs of this type are therefore projected to ultimately increase 
assignment to the Shared Savings Program by roughly 500,000 
beneficiaries per year, ranging from 50,000 to 1.0 million at the low 
and high ends of this projection range.
    ACOs have been found to perform better on certain patient-
experience and performance measures than physician groups participating 
in the MIPS. In performance year 2022, ACOs had a higher average 
performance on quality measures they are required to report in order to 
share in savings compared to other similarly sized clinician groups not 
in the Shared Savings Program.\831\ This includes statistically 
significant higher performance for quality measures related to diabetes 
and blood pressure control; breast cancer and colorectal cancer 
screening; tobacco screening and smoking cessation; and depression 
screening and follow-up.\832\ We anticipate that ACOs will continue to 
improve the quality of care for their Medicare fee-for-service 
beneficiaries through the reporting of Medicare CQMs, and that ACOs 
will continue to improve the quality of care for their all payer/all 
patient population through the reporting of eCQMs.
---------------------------------------------------------------------------

    \831\ CMS, Press Release, ``Medicare Shared Savings Program 
Saves Medicare More Than $1.8 Billion in 2022 and Continues to 
Deliver High-quality Care'' (August 24, 2023). Available at https://www.cms.gov/newsroom/press-releases/medicare-shared-savings-program-saves-medicare-more-18-billion-2022-and-continues-deliver-high.
    \832\ Id.
---------------------------------------------------------------------------

    Increased participation in the Shared Savings Program will extend 
ACO care coordination and quality improvement to segments of the 
beneficiary population that potentially have more to benefit from care 
management.
2. Quality Payment Program
    There are several changes in this proposed rule that are expected 
to have a positive effect on beneficiaries. In general, we believe that 
many of these changes, including the MVP and subgroup provisions, if 
finalized, will lead to meaningful feedback to beneficiaries on the 
type and scope of care provided by clinicians. Additionally, 
beneficiaries could use the publicly reported information on clinician 
performance in subgroups to identify and choose clinicians in 
multispecialty groups relevant to their care needs. Consequently, we 
anticipate the policies in this proposed rule would improve the quality 
and value of care provided to Medicare beneficiaries. For example, 
several of the new quality measures include patient-reported outcome-
based measures, which could be used to help patients make more informed 
decisions about treatment options. Patient-reported outcome-based 
measures provide information on a patient's health status from the 
patient's point of view and could also provide valuable insights on 
factors such as quality of life, functional status, and overall disease 
experience, which would not otherwise be available through routine 
clinical data collection. Patient-reported outcome-based measured are 
factors frequently of interest to patients when making decisions about 
treatment.

H. Estimating Regulatory Familiarization Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this rulemaking, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assumed that the total number of unique 
commenters on this year's proposed rule will be the number of reviewers 
of last year's proposed rule. We acknowledged that this assumption may 
understate or overstate the costs of reviewing this rulemaking. It is 
possible that not all commenters will review this year's proposed rule 
in detail, and it is also possible that some reviewers will choose not 
to comment on the proposed rule. For these reasons we believe that the 
number of commenters will be a fair estimate of the number of reviewers 
of this year's proposed rule.
    We also recognized that different types of entities are in many 
cases affected by mutually exclusive sections of this proposed rule, 
and therefore for the purposes of our estimate we assume that each 
reviewer reads approximately 50 percent of the rulemaking.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rulemaking is $123.06, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it would take approximately 8.0 hours 
for the staff to review half of this proposed rule. For each facility 
that reviews the rule, the estimated cost is $984.48 (8.0 hours x 
$123.06). Therefore, we estimated that the total cost of reviewing this 
regulation is 21,677,265 ($984.48 x 22,019 reviewers on this year's 
proposed rule).
    As for the Medicare Diabetes Prevention Program, given that we 
tried to align this rulemaking as much as possible with the CDC DPRP 
Standards, there should be minimal regulatory familiarization costs. 
This rulemaking impacts only enrolled MDPP suppliers and eligible 
beneficiaries who have started the MDPP program or are interested in 
enrolling in MDPP.

I. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf), in Tables 146 through 148 (Accounting 
Statements), we have prepared an accounting statement. This estimate 
includes growth in incurred benefits from CY 2024 to CY 2025 based on 
the FY 2025 President's Budget baseline.

[[Page 62207]]

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[GRAPHIC] [TIFF OMITTED] TP31JY24.198

[GRAPHIC] [TIFF OMITTED] TP31JY24.199

J. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provided an initial Regulatory Flexibility Analysis. 
The previous analysis, together with the preceding portion of this 
preamble, provides an RIA. In accordance with the provisions of 
Executive Order 12866, this regulation was reviewed by the Office of 
Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on June 25, 2024.

List of Subjects

42 CFR Part 401

    Claims, Freedom of information, Health facilities, Medicare, 
Privacy.

42 CFR Part 405

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

42 CFR Part 410

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

42 CFR Part 411

    Diseases, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 414

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

42 CFR Part 423

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

42 CFR Part 424

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

42 CFR Part 425

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

42 CFR Part 427

    Administrative practice and procedure, Biologics, Inflation 
rebates, Medicare, Prescription drugs.

42 CFR Part 428

    Administrative practice and procedure, Biologics, Inflation 
rebates, Medicare, Prescription drugs.

42 CFR Part 491

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements, Rural areas.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

[[Page 62208]]

PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS

0
1. The authority citation for part 401 is revised to read as follows:

    Authority:  42 U.S.C. 1302, 1395hh, 1395w-5, and 1395kk-2.

0
2. Section 401.305 is amended by revising paragraphs (b)(1) 
introductory text and (b)(2) introductory text and adding paragraph 
(b)(3) to read as follows:


Sec.  401.305  Requirements for reporting and returning of 
overpayments.

* * * * *
    (b) * * *
    (1) Except as provided in paragraphs (b)(2) and (3) of this 
section, a person who has received an overpayment must report and 
return the overpayment by the later of either of the following:
* * * * *
    (2) The deadline for returning overpayments will be suspended (or 
will continue to be suspended following the completion of a timely, 
good faith investigation in accordance with paragraph (b)(3) of this 
section) when any of the following occurs:
* * * * *
    (3)(i) The deadline for reporting and returning overpayments will 
be suspended when both of the following occurs:
    (A) A person has identified an overpayment but has not yet 
completed a good-faith investigation to determine the existence of 
related overpayments that may arise from the same or similar cause or 
reason as the initially identified overpayment; and
    (B) The person conducts a timely, good-faith investigation to 
determine whether related overpayments exist.
    (ii) If the conditions of paragraph (b)(3)(i) of this section are 
satisfied, the deadline for reporting and returning the initially 
identified overpayment and related overpayments that arise from the 
same or similar cause or reason as the initially identified overpayment 
will remain suspended until the earlier of:
    (A) The date that the investigation of related overpayments has 
concluded and the aggregate amount of the initially identified 
overpayments and related overpayments is calculated; or
    (B) The date that is 180 days after the date on which the initial 
identified overpayment was identified.
* * * * *

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

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

    Authority:  42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).

0
4. Section 405.2410 is amended by revising paragraphs (c)(1) and (2) to 
read as follows:


Sec.  405.2410  Application of Part B deductible and coinsurance.

* * * * *
    (c) * * *
    (1) For RHCs, the coinsurance amount is determined as described in 
paragraph (b)(1) of this section; or
    (2) For FQHCs, the coinsurance amount is 20 percent of the lesser 
of--
    (i) The FQHC's actual charge; or
    (ii) The payment determined under Sec.  405.2462(j)(2).
0
5. Section 405.2462 is amended by--
0
a. In paragraphs (f) heading, (f)(1) introductory text, (f)(2), and 
(g)(1)(ii), removing ``grandfathered'' and adding in its place 
``historically excepted''; and
0
b. Revising and republishing paragraph (j).
    The revisions and republications read as follows:


Sec.  405.2462  Payment for RHC and FQHC services.

* * * * *
    (j) Payment amount for intensive outpatient services. (1) An RHC is 
paid the payment rate determined under Sec.  419.21(a) of this chapter 
for services described under Sec.  410.44 of this chapter. There are no 
adjustments to this rate.
    (i) If the deductible has been fully met by the beneficiary prior 
to the RHC service, Medicare pays eighty (80) percent of the payment 
amount determined under this paragraph (j)(1).
    (ii) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, Medicare pays eighty (80) percent of the 
difference between the remaining deductible and the payment amount 
determined under this paragraph (j)(1); or
    (iii) If the deductible has not been fully met by the beneficiary 
prior to the RHC service, no payment is made to the RHC if the 
deductible is equal to or exceeds the payment amount determined under 
this paragraph (j)(1).
    (2) FQHCs are paid the payment rate determined under Sec.  
419.21(a) of this chapter for services described under Sec.  410.44 of 
this chapter. There are no adjustments to this rate, except that 
historically excepted tribal FQHCs are paid pursuant to paragraph 
(j)(2)(ii) of this section.
    (i) Medicare pays eighty (80) percent of the lesser of the FQHC's 
actual charge or the payment rate determined under paragraph (j)(1)(ii) 
of this section; or
    (ii) Medicare pays eighty (80) percent of the lesser of a 
historically excepted tribal FQHC's actual charge or the amount 
described under paragraphs (f)(2) and (3) of this section.
    (iii) No deductible is applicable to FQHC services.
0
 6. Section 405.2463 is amended by--
0
a. Revising paragraph (b)(3) introductory text;
0
b. In paragraph (c)(4) introductory text, removing ``grandfathered'' 
and adding in its place ``historically excepted''.
    The revision reads as follows:


Sec.  405.2463  What constitutes a visit.

* * * * *
    (b) * * *
    (3) Visit-Mental health. A mental health visit is a face-to-face 
encounter or an encounter furnished using interactive, real-time, audio 
and video telecommunications technology or audio-only interactions in 
cases where the patient is not capable of, or does not consent to, the 
use of video technology for the purposes of diagnosis, evaluation or 
treatment of a mental health disorder, including an in-person mental 
health service, beginning January 1, 2026, furnished within 6 months 
prior to the furnishing of the telecommunications service and that an 
in-person mental health service (without the use of telecommunications 
technology) must be provided at least every 12 months while the 
beneficiary is receiving services furnished via telecommunications 
technology for diagnosis, evaluation, or treatment of mental health 
disorders, unless, for a particular 12-month period, the physician or 
practitioner and patient agree that the risks and burdens outweigh the 
benefits associated with furnishing the in-person item or service, and 
the practitioner documents the reasons for this decision in the 
patient's medical record, between an RHC or FQHC patient and one of the 
following:
* * * * *
0
7. Section 405.2464 is amended by revising paragraphs (c) and (d) and 
adding paragraphs (g) and (h) to read as follows:


Sec.  405.2464  Payment rate.

* * * * *
    (c) Payment for care coordination services. RHCs and FQHCs are paid 
for the non-face-to-face care management work involved in coordinating 
care.
    (1) For Chronic Care Management (CCM) services furnished between 
January 1, 2016, and December 31, 2017, payment to RHCs and FQHCs is 
based on the physician fee schedule national non-facility payment rate.
    (2) For psychiatric collaborative care model (CoCM) services 
furnished on or

[[Page 62209]]

after January 1, 2018, payment is based on the average of the national 
non-facility PFS payment rate set for each psychiatric CoCM service and 
updated annually based on the PFS amounts.
    (3) For CCM and general Behavioral Health Integration (BHI) 
services furnished between January 1, 2018, and December 31, 2020, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM and general BHI service and updated 
annually based on the PFS amounts.
    (4) For CCM, general BHI, and Principal Care Management (PCM) 
services furnished between January 1, 2021, and December 31, 2022, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM, general BHI, and PCM service and updated 
annually based on the PFS amounts.
    (5) For CCM, general BHI, PCM, Chronic Pain Management (CPM) 
services furnished between January 1, 2023, and December 31, 2023, 
payment is based on the average of the national non-facility PFS 
payment rate set for each CCM, general BHI, PCM and CPM service and 
updated annually based on the PFS amounts.
    (6) For CCM, general BHI, PCM, CPM, Remote Physiologic Monitoring 
(RPM), Remote Therapeutic Monitoring (RTM), Community Health 
Integration (CHI), Principal Illness Navigation (PIN), and PIN--Peer 
Support services furnished between January 1, 2024, and December 31, 
2024, the payment amount is based on a weighted average of each CCM, 
general BHI, PCM, CPM, RPM, RTM, CHI, PIN, and PIN--Peer Support 
service using the most recently available PFS utilization data.
    (7) For CCM, general BHI, PCM, CPM, RPM, RTM, CHI, PIN, PIN--Peer 
Support, and Advance Primary Care Management services furnished on or 
after January 1, 2025, payment is based on the PFS national non-
facility payment rate.
    (d) Payment for FQHCs that are authorized to bill as historically 
excepted tribal FQHCs. Historically excepted tribal FQHCs are paid at 
the outpatient per visit rate for Medicare as set annually by the 
Indian Health Service for each beneficiary visit for covered services. 
There are no adjustments to this rate.
* * * * *
    (g) Payment for non-behavioral health telecommunication technology 
services. For an encounter furnished using interactive, real-time, 
audio and video telecommunications technology or for certain audio-only 
interactions in cases where the patient is not capable of, or does not 
consent to, the use of video technology services that are not described 
in Sec.  405.2463(b)(3), payment to RHCs and FQHCs are subject to the 
national average payment rates for comparable services under the 
physician fee schedule (PFS) and costs associated with these services 
shall not be used in determining payments under the RHC all-inclusive 
rate or the FQHC prospective payment system.
    (h) Payment for drugs covered as additional preventive services 
(DCAPS). For drugs covered as additional preventive services, as 
defined at Sec.  410.64 of this subchapter, and for the administration 
and supplying fees for those drugs, payment to RHCs or FQHCs is 100 
percent of the Medicare payment amount per Sec.  405.2410(b) and Sec.  
410.152(l)(11) of this chapter, subject to the payment limitations 
described at Sec.  410.152(o) of this chapter.
0
8. Section 405.2466 is amended by revising paragraph (b)(1)(iv) to read 
as follows:


Sec.  405.2466  Annual reconciliation.

* * * * *
    (b) * * *
    (1) * * *
    (iv) For RHCs and FQHCs, payment for pneumococcal, influenza, 
hepatitis B and COVID-19 vaccine and their administration is 100 
percent of Medicare reasonable cost.
* * * * *


Sec.  405.2469  [Amended]

0
9. Section 405.2469 is amended in paragraph (a)(2) by removing 
``grandfathered'' and adding in its place ``historically excepted''.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

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

    Authority:  42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.

0
11. Section 410.26 is amended by revising paragraph (a)(2) to read as 
follows:


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

    (a) * * *
    (2) Direct supervision means, except as provided in paragraphs 
(a)(2)(i) and (ii) of this section, the level of supervision by the 
physician (or other practitioner) of auxiliary personnel as defined in 
Sec.  410.32(b)(3)(ii). For the following services furnished after 
December 31, 2025, the presence of the physician (or other 
practitioner) required for direct supervision shall include virtual 
presence through audio/video real-time communications technology 
(excluding audio-only):
    (i) Services furnished incident to a physician of other 
practitioner's service provided by auxiliary personnel employed by the 
billing practitioner and working under their direct supervision and for 
which the underlying Healthcare Common Procedure Coding System (HCPCS) 
code has been assigned a PC/TC indicator of `5'.
    (ii) Office or other outpatient visits for the evaluation and 
management of an established patient that may not require the presence 
of a physician or other qualified health care practitioner.
* * * * *
0
12. Section 410.30 is amended by revising paragraph (a) to read as 
follows:


Sec.  410.30  Prescription drugs used in immunosuppressive therapy.

    (a) Scope. Payment may be made for prescription drugs used in 
immunosuppressive therapy that meet one of the following conditions:
    (1) The drug has been approved for marketing by the FDA and--
    (i) The approved labeling includes an indication for preventing or 
treating the rejection of a transplanted organ or tissue; or
    (ii) The approved labeling includes the indication for use in 
conjunction with immunosuppressive drugs to prevent or treat rejection 
of a transplanted organ or tissue.
    (2) The drug has been approved for marketing by FDA and determined 
by a Medicare Administrative Contractor (MAC) (in accordance with part 
421, subpart C, of this chapter), in processing a Medicare claim, to be 
reasonable and necessary for the specific purpose of preventing or 
treating the rejection of a patient's transplanted organ or tissue, or 
for use in conjunction with immunosuppressive drugs for the purpose of 
preventing or treating the rejection of a patient's transplanted organ 
or tissue. (In making these determinations, the MACs may consider 
factors such as authoritative drug compendia, current medical 
literature, recognized standards of medical practice, and professional 
medical publications.)
    (3) The drug is a compounded formulation with active ingredients 
derived only from a drug described in paragraph (a)(1) or (2) of this 
section and is orally or enterally administered.
* * * * *
0
13. Section 410.32 is amended by revising paragraph (b)(3)(ii) to read 
as follows:

[[Page 62210]]

Sec.  410.32  Diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests: Conditions.

* * * * *
    (b) * * *
    (3) * * *
    (ii) Direct supervision in the office setting means that the 
physician (or other supervising practitioner) must be present in the 
office suite and immediately available to furnish assistance and 
direction throughout the performance of the service. It does not mean 
that the physician (or other supervising practitioner) must be present 
in the room when the service is performed. Through December 31, 2025, 
the presence of the physician (or other practitioner) includes virtual 
presence through audio/video real-time communications technology 
(excluding audio-only).
* * * * *
0
14. Section 410.37 is amended by--
0
a. In paragraph (a)(1)(iv), removing the text ``barium enemas'' and 
adding in its place ``computed tomography colonography'';
0
b. Revising paragraph (a)(4);
0
c. In paragraph (e)(2), removing the text ``barium enema'' and adding 
in its place ``computed tomography colonography'';
0
d. In paragraph (g)(2), removing the text ``barium enema'' and adding 
in its place ``computed tomography colonography'';
0
e. Revising paragraphs (h), (i), and (k).
    The revisions read as follows:


Sec.  410.37  Colorectal cancer screening tests: Conditions for and 
limitations on coverage.

* * * * *
    (a) * * *
    (4) Screening computed tomography colonography means a test that 
uses X-rays and computers to produce images of the entire colon 
(including image processing and a physician's interpretation of the 
results of the procedure).
* * * * *
    (h) Conditions for coverage of screening computed tomography 
colonography. Medicare Part B pays for a screening computed tomography 
colonography if it is ordered in writing by the beneficiary's attending 
physician who is a doctor of medicine or osteopathy (as defined in 
section 1861(r)(1) of the Act); or by a physician assistant, nurse 
practitioner, or clinical nurse specialist (as defined in section 
1861(aa)(5) of the Act).
    (i) Limitations on coverage of screening computed tomography 
colonography. (1) In the case of an individual age 45 or over who is 
not at high risk of colorectal cancer, payment may be made for a 
screening computed tomography colonography performed after at least 59 
months have passed following the month in which the last screening 
computed tomography colonography or 47 months have passed following the 
month in which the last screening flexible sigmoidoscopy or screening 
colonoscopy was performed.
    (2) In the case of an individual who is at high risk for colorectal 
cancer, payment may be made for a screening computed tomography 
colonography performed after at least 23 months have passed following 
the month in which the last screening computed tomography colonography 
or the last screening colonoscopy was performed.
* * * * *
    (k) A complete colorectal cancer screening. Effective January 1, 
2025, colorectal cancer screening tests include a follow-on screening 
colonoscopy after a Medicare covered non-invasive stool-based 
colorectal cancer screening test or blood-based biomarker colorectal 
cancer screening test returns a positive result. The instance of the 
follow-on screening colonoscopy in the context of a complete colorectal 
cancer screening must not apply to the frequency limitations for 
colorectal cancer screening.
0
15. Section 410.59 is amended by revising paragraphs (a)(3)(ii) and 
(c)(2) to read as follows:


Sec.  410.59  Outpatient occupational therapy services: Conditions.

    (a) * * *
    (3) * * *
    (ii) By, or under the general supervision (or as specified 
otherwise) of, an occupational therapist in private practice as 
described in paragraph (c) of this section; or
* * * * *
    (c) * * *
    (2) Supervision of occupational therapy services. Except as 
otherwise provided in this paragraph (c)(2), occupational therapy 
services are performed by, or under the general supervision of, an 
occupational therapist in private practice. All services not performed 
personally by the therapist must be performed by employees of the 
practice, generally supervised by the therapist, and included in the 
fee for the therapist's services. Occupational therapy services may be 
performed by an occupational therapy assistant under the general 
supervision of the occupational therapist in private practice; services 
performed by an unenrolled occupational therapist must be under the 
direct supervision of the occupational therapist.
* * * * *
0
16. Section 410.60 is amended by revising paragraphs (a)(3)(ii) and 
(c)(2) to read as follows:


Sec.  410.60  Outpatient physical therapy services: Conditions.

    (a) * * *
    (3) * * *
    (ii) By, or under the general supervision (or as specified 
otherwise) of, a physical therapist in private practice as described in 
paragraph (c) of this section; or
* * * * *
    (c) * * *
    (2) Supervision of physical therapy services. Except as otherwise 
provided in this paragraph (c)(2), physical therapy services are 
performed by, or under the general supervision of, a physical therapist 
in private practice. All services not performed personally by the 
therapist must be performed by employees of the practice, generally 
supervised by the therapist, and included in the fee for the 
therapist's services. Physical therapy services may be performed by a 
physical therapist assistant under the general supervision of the 
physical therapist in private practice; services performed by an 
unenrolled physical therapist must be under the direct supervision of 
the physical therapist.
* * * * *
0
17. Section 410.63 is amended by--
0
a. Revising paragraph (a) introductory text;
0
b. Removing the word ``and'' at the end of paragraph (a)(2)(ii);
0
c. Removing the period at the end of paragraph (a)(2)(iii) and adding 
in its place ``; and'';
0
d. Adding paragraph (a)(2)(iv); and
0
e. Revising paragraphs (b) and (c)(1).
    The revisions and addition read as follows:


Sec.  410.63  Hepatitis B vaccine and blood clotting factors: 
Conditions.

* * * * *
    (a) Hepatitis B vaccine: Conditions. Effective January 1, 2025, 
hepatitis B vaccinations are reasonable and necessary for the 
prevention of illness for those individuals who are at high or 
intermediate risk of contracting hepatitis B as listed in paragraphs 
(a)(1) through (3) of this section:
* * * * *
    (2) * * *
    (iv) Individuals who have not previously received a completed 
hepatitis B vaccination series or whose

[[Page 62211]]

previous vaccination history is unknown.
* * * * *
    (b) Blood clotting factors: Conditions. Effective July 18, 1984, 
blood clotting factors that are self-administered and control bleeding 
for hemophilia patients competent to use these factors without medical 
or other supervision, and items related to the administration of those 
factors. The amount of clotting factors covered under this provision is 
determined by the carrier based on the historical utilization pattern 
or profile developed by the carrier for each patient, and based on 
consideration of the need for a reasonable reserve supply to be kept in 
the home in the event of emergency or unforeseen circumstance.
    (c) * * *
    (1) Effective January 1, 2005, a furnishing fee of $0.14 per unit 
of clotting factor is paid to entities that furnish blood clotting 
factors, as described in paragraph (b) of this section, unless the 
costs associated with furnishing the clotting factor are paid through 
another payment system, for example, hospitals that furnish clotting 
factor to patients during a Part A covered inpatient hospital stay, or 
practitioners that furnish clotting factor to patients in an outpatient 
setting and are paid for under the Physician Fee Schedule.
* * * * *
0
18. Section 410.67 is amended in paragraph (b), in the definition of 
``Opioid use disorder treatment service,'' by revising paragraphs (vi) 
and (vii) to read as follows:


Sec.  410.67  Medicare coverage and payment of Opioid use disorder 
treatment services furnished by Opioid treatment programs.

* * * * *
    (b) * * *
    Opioid use disorder treatment service * * *
    (vi) Intake activities, including initial medical examination 
services required under Sec.  8.12(f)(2) of this title and initial 
assessment services required under Sec.  8.12(f)(4) of this title.
    (A) For intake activities furnished via communications technology, 
the following flexibilities apply:
    (1) Services to initiate treatment with buprenorphine may be 
furnished via two-way interactive audio-video communication technology, 
as clinically appropriate, and in compliance with all applicable 
requirements. In cases where audio-video communications technology is 
not available to the beneficiary, services to initiate treatment with 
buprenorphine may be furnished using audio-only telephone calls if all 
other applicable requirements are met.
    (2) Services to initiate treatment with methadone may be furnished 
via two-way interactive audio-video communication technology, as 
clinically appropriate, and in compliance with all applicable 
requirements, if an OTP determines that an adequate evaluation of the 
patient can be accomplished through audio-video communication 
technology.
    (B) [Reserved]
    (vii) Periodic assessment services required under Sec.  8.12(f)(4) 
of this title, that are furnished during a face-to-face encounter, 
including services furnished via two-way interactive audio-video 
communication technology, as clinically appropriate, and in compliance 
with all applicable requirements. In cases where a beneficiary does not 
have access to two-way audio-video communications technology, periodic 
assessments can be furnished using audio-only telephone calls if all 
other applicable requirements are met.
* * * * *
0
19. Section 410.78 is amended by revising paragraph (a)(3) read as 
follows:


Sec.  410.78  Telehealth services.

    (a) * * *
    (3) Interactive telecommunications system means, except as 
otherwise provided in this paragraph (a)(3), 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. Interactive 
telecommunications system may also include two-way, real-time audio-
only communication technology for any telehealth service furnished to a 
patient in their home if the distant site physician or practitioner is 
technically capable of using an interactive telecommunications system 
as defined in the previous sentence, but the patient is not capable of, 
or does not consent to, the use of video technology. The following 
modifiers must be appended to a claim for telehealth services furnished 
using two-way, real-time audio-only communication technology to verify 
that the conditions set forth in the prior sentence have been met:
    (i) Current Procedural Terminology (CPT) modifier ``93''; and
    (ii) For rural health clinics (RHCs) and federally qualified health 
centers (FQHCs), Medicare modifier ``FQ''.
* * * * *
0
20. Section 410.79 is amended by--
0
a. In paragraph (b):
0
i. Removing the definition of ``Combination delivery'';
0
ii. Adding the definitions of ``Combination with an online component,'' 
``In-person with a distance learning component,'' and ``Online'' in 
alphabetical order;
0
iii. Removing the definition of ``Online delivery''; and
0
iv. Revising the definition of ``Set of MDPP services''; and
0
b. Revising paragraphs (d)(1) introductory text, (e)(3)(iii)(C), 
(e)(3)(iv)(F)(3), and (e)(3)(v)(F)(2).
    The additions and revisions read as follows:


Sec.  410.79  Medicare Diabetes Prevention Program expanded model: 
Conditions of coverage.

* * * * *
    (b) * * *
    Combination with an online component refers to sessions that are 
delivered as a combination of online (non-live) with in-person or 
distance learning.
* * * * *
    In-person with a distance learning component refers to DPP sessions 
that are delivered in person by trained Coaches where participants have 
the option of attending sessions via MDPP distance learning.
* * * * *
    Online means sessions that are delivered 100 percent through the 
internet via phone, tablet, or laptop in an asynchronous (non-live) 
classroom where participants are experiencing the content on their own 
time without a live (including non-artificial intelligence (AI)) Coach 
teaching the content. These sessions must be furnished in a manner 
consistent with the DPRP Standards for online sessions. Live Coach 
interaction must be offered to each participant during weeks when the 
participant has engaged with content. Emails and text messages can 
count toward the requirement for live Coach interaction if there is bi-
directional communication between the Coach and participant. Chat bots 
and AI forums do not count as live Coach interaction.
* * * * *
    Set of MDPP services means the series of MDPP sessions, composed of 
core sessions and core maintenance sessions, and subject to paragraph 
(c)(3) of this section offered over the course of the MDPP services 
period.
* * * * *
    (d) * * *
    (1) An MDPP supplier may offer a make-up session to an MDPP 
beneficiary who missed a regularly scheduled session. MDPP make-up 
sessions may only use in-person or distance learning delivery. If an 
MDPP

[[Page 62212]]

supplier offers one or more make-up sessions to an MDPP beneficiary, 
each such session must be furnished in accordance with the following 
requirements:
* * * * *
    (e) * * *
    (3) * * *
    (iii) * * *
    (C) Self-reported weight measurements from the at-home digital 
scale of the MDPP beneficiary. Self-reported weights must be obtained 
during live, synchronous online video technology, such as video 
chatting or video conferencing, wherein the MDPP Coach observes the 
beneficiary weighing themselves and views the weight indicated on the 
at-home digital scale, or the MDPP supplier receives 2 (two) date-
stamped photos or a video recording of the beneficiary's weight, with 
the beneficiary visible on the scale, submitted by the MDPP beneficiary 
to the MDPP supplier. Photo or video must clearly document the weight 
of the MDPP beneficiary as it appears on their digital scale on the 
date associated with the billable MDPP session. If choosing to submit 2 
photos, one photo must show the beneficiary's weight on the digital 
scale, the second photo must show the beneficiary visible in their 
home, and both photos must be date-stamped.
* * * * *
    (iv) * * *
    (F) * * *
    (3) No more than 12 virtual sessions offered monthly during the 
ongoing maintenance session intervals, months 13 through 24 for 
beneficiaries enrolled before January 1, 2022.
* * * * *
    (v) * * *
    (F) * * *
    (2) For an MDPP beneficiary who began receiving the Set of MDPP 
services on or after January 1, 2021, has suspended services during an 
applicable 1135 waiver event, the MDPP supplier must use the baseline 
weight recorded at the beneficiary's first core session.
* * * * *
0
21. Section 410.152 is amended by adding paragraph (o) to read as 
follows:


Sec.  410.152  Amounts of payment.

* * * * *
    (o) Amount of payment: Drugs covered as additional preventive 
services (DCAPS). For a drug covered as an additional preventive 
service, as defined at Sec.  410.64, payment must be made as follows:
    (1) Payment for a drug covered as an additional preventive service, 
per section 1861(a)(1)(W)(ii) of the Act and paragraphs (l)(11) of this 
section and Sec.  410.160(b)(13), is 100 percent of the lesser of--
    (i) The actual charge on the claim for program benefits; or
    (ii) The amount determined under the fee schedule as described in 
paragraph (o)(3) of this section.
    (2) Payment for the supplying or administration of a drug covered 
as an additional preventive service per section 1861(a)(1)(W)(ii) of 
the Act and paragraphs (l)(11) of this section and Sec.  
410.160(b)(13), is 100 percent of the lesser of--
    (i) The actual charge on the claim for program benefits; or
    (ii) The amount determined under the fee schedule as described in 
paragraph (o)(4) of this section.
    (3) The payment limit for a drug covered as an additional 
preventive service, as defined at Sec.  410.64, appears on the DCAPS 
fee schedule and is determined as follows:
    (i) If Average Sales Price (ASP) data is available for the drug, 
consistent with part 414, subpart J, of this chapter, then the payment 
limit is determined using the methodology set forth in section 1847A of 
the Act and according to the provisions in part 414, subpart K, of this 
chapter.
    (ii) If ASP data is not available, then the payment limit is 
determined according to an average of the most recently published 
National Average Drug Acquisition Cost (NADAC) prices for the drug.
    (iii) If ASP data and NADAC prices are not available, then the 
payment limit is determined according to an average of the most 
recently published pharmaceutical pricing data for the drug as included 
in the Federal Supply Schedule (FSS), as managed by the Department of 
Veterans Affairs per 48 CFR part 38.
    (iv) If ASP data, NADAC prices, and FSS pharmaceutical prices are 
not available, then the payment limit is the invoice price determined 
by the MAC.
    (4) The payment limits for supplying and administering a drug 
covered as an additional preventive service, as defined at Sec.  
410.64, appear on the DCAPS fee schedule and are determined as follows:
    (i) For a drug that is supplied by a pharmacy, the payment limit 
for a supplying fee is as follows:
    (A) For the first prescription that the pharmacy provides to a 
beneficiary in a 30-day period for a drug covered as an additional 
preventive service, $24.
    (B) For all subsequent prescriptions that the pharmacy provides to 
a beneficiary in a 30-day period for a drug covered as an additional 
preventive service, $16.
    (ii) For a drug that is administered by a physician or a non-
physician practitioner, the payment limit for administration is set in 
accordance with part 414, subpart B, of this chapter. This fee is not 
subject to the Part B deductible, per Sec.  410.160(b)(13). This fee is 
equal to 100 percent of the Medicare payment amount established under 
the applicable payment methodology, per paragraph (l)(11) of this 
section.

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

0
22. The authority citation for part 411 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, 
and 1395nn.

0
23. Section 411.15 is amended by revising paragraph (i)(3)(i)(A) to 
read as follows:


Sec.  411.15  Particular services excluded from coverage.

* * * * *
    (i) * * *
    (3) * * *
    (i) * * *
    (A) Dental or oral examination performed as part of a comprehensive 
workup prior to, and medically necessary diagnostic and treatment 
services to eliminate an oral or dental infection prior to, or 
contemporaneously with, the following Medicare-covered services: organ 
transplant, hematopoietic stem cell transplant, bone marrow transplant, 
cardiac valve replacement, valvuloplasty procedures, chemotherapy when 
used in the treatment of cancer, chimeric antigen receptor (CAR) T-cell 
therapy when used in the treatment of cancer, administration of high-
dose bone-modifying agents (antiresorptive therapy) when used in the 
treatment of cancer, and dialysis services in the treatment of end 
stage renal disease.
* * * * *

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

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

    Authority:  42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).

0
25. Section 414.84 is amended by--
0
a. In paragraph (a), removing the definition of ``Bridge payment'';
0
b. Revising paragraphs (b)(1) introductory text and (b)(2) introductory 
text;
0
c. Adding paragraph (c)(4);
0
d. Removing paragraph (d);

[[Page 62213]]

0
e. Redesignating paragraph (e) as paragraph (d); and
0
f. Revising newly redesignated paragraph (d).
    The revisions and addition read as follows:


Sec.  414.84  Payment for MDPP services.

* * * * *
    (b) * * *
    (1) Performance Goal 1: Achieves the required minimum 5-percent 
weight loss. CMS makes a performance payment to an MDPP supplier for an 
MDPP beneficiary who achieves the required minimum weight loss as 
measured in-person or during a distance learning session during a core 
session or core maintenance session furnished by that supplier. The 
amount of this performance payment is determined as follows:
* * * * *
    (2) Performance Goal 2: Achieves 9-percent weight loss. CMS makes a 
performance payment to an MDPP supplier for an MDPP beneficiary who 
achieves at least a 9-percent weight loss as measured in-person or in a 
distance learning session during a core session or core maintenance 
session furnished by that supplier. The amount of this performance 
payment is determined as follows:
* * * * *
    (c) * * *
    (4) Current Procedural Terminology (CPT) Modifier 79 (repeat 
services by same physician) must be appended to any claim for G9886 or 
G9887 to identify a MDPP make-up session that was held on the same day 
as a regularly scheduled MDPP session.
    (d) Updating performance payments and attendance payments. The 
performance payments and attendance payments will be adjusted each 
calendar year by the percent change in the Consumer Price Index for All 
Urban Consumers (CPI-U) (U.S. city average) for the 12-month period 
ending June 30th of the year preceding the update year. The percent 
change update will be calculated based on the level of precision of the 
index as published by the Bureau of Labor Statistics (BLS) and applied 
based on one decimal place of precision. The annual MDPP services 
payment update will be published by CMS transmittal.
0
26. Section 414.502 is amended by revising the definitions of ``Data 
collection period'' and ``Data reporting period'' to read as follows:


Sec.  414.502  Definitions.

* * * * *
    Data collection period is the 6 months from January 1 through June 
30, during which applicable information is collected and that precedes 
the data reporting period, except that for the data reporting period of 
January 1, 2025, through March 31, 2025, the data collection period is 
January 1, 2019, through June 30, 2019.
    Data reporting period is the 3-month period, January 1 through 
March 31, during which a reporting entity reports applicable 
information to CMS and that follows the preceding data collection 
period, except that for the data collection period of January 1, 2019, 
through June 30, 2019, the data reporting period is January 1, 2025, 
through March 31, 2025.
* * * * *


Sec.  414.504  [Amended]

0
27. Section 414.504 is amended in paragraph (a)(1) by removing the 
reference ``January 1, 2024'' and adding in its place the reference 
``January 1, 2025''.
0
28. Section 414.507 is amended by revising paragraphs (d) introductory 
text and (d)(7) and adding paragraph (d)(10) to read as follows:


Sec.  414.507  Payment for clinical diagnostic laboratory tests.

* * * * *
    (d) Phase-in of payment reductions. For years 2018 through 2027, 
the payment rates established under this section for each CDLT that is 
not a new ADLT or new CDLT, may not be reduced by more than the 
following amounts for--
* * * * *
    (7) 2024--0.0 percent of the payment rate established in 2023.
* * * * *
    (10) 2027--15 percent of the payment rate established in 2026.
* * * * *
0
29. Section 414.605 is amended in the definition of ``Advanced life 
support, level 2 (ALS2)'' by adding paragraph (8) to read as follows:


Sec.  414.605  Definitions.

* * * * *
    Advanced life support, level 2 (ALS2) * * *
    (8) Administration of low titer O+ whole blood transfusion.
* * * * *
0
30. Section 414.902 is amended by revising the definition ``Refundable 
single-dose container or single-use package drug'' to read as follows:


Sec.  414.902  Definitions.

* * * * *
    Refundable single-dose container or single-use package drug, as 
used in this subpart:
    (1) Means a single source drug or biological or a biosimilar 
biological product for which payment is made under this part and is--
    (i) Furnished from a single-dose container or single-use package 
based on Food and Drug Administration (FDA)-approved labeling or 
product information; or
    (ii) Furnished from an ampule for which product labeling does not 
have discard statement or language indicating if the container is 
single-dose container, single-use package, multiple-dose container, or 
single-patient-use container; or
    (iii) Furnished from a container with a total labeled volume of 2 
mL or less for which product labeling does not have language indicating 
if the container is single-dose container, single-use package, 
multiple-dose container, or single-patient-use container.
    (2) And excludes--
    (i) A drug that is a therapeutic radiopharmaceutical, a diagnostic 
radiopharmaceutical, or an imaging agent as identified in the drug's 
FDA-approved labeling.
    (ii) A drug for which the FDA-approved labeling for any National 
Drug Code assigned to a billing and payment code of such drug requires 
filtration during the drug preparation process, prior to dilution and 
administration and that any unused portion of such drug after the 
filtration process be discarded after the completion of such filtration 
process.
    (iii) A drug approved or licensed by the FDA on or after November 
15, 2021, until the last day of the sixth full quarter for which the 
drug has been marketed (as reported to CMS) for the first National Drug 
Code assigned to the billing and payment code of such drug.
    (iv) A drug approved or licensed by FDA on or after November 15, 
2021 and for which the date of first sale as reported to CMS does not 
adequately approximate the date of first payment under Part B due to an 
applicable national coverage determination, until the last day of the 
sixth full quarter for which the drug has been covered and paid under 
Medicare Part B for the first National Drug Code assigned to the 
billing and payment code of such drug.
* * * * *
0
31. Section 414.904 is amended by adding paragraph (e)(6) and revising 
paragraph (i) to read as follows:


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

* * * * *
    (e) * * *

[[Page 62214]]

    (6) Radiopharmaceuticals furnished in settings other than the 
hospital outpatient department. Medicare administrative contractors 
must determine payment limits for radiopharmaceuticals based on any 
methodology used to determine payment limits for radiopharmaceuticals 
in place on or prior to November 2003. Such methodology may include, 
but is not limited to, the use of invoice-based pricing.
* * * * *
    (i) Manufacturer's average sales price (ASP) data not available 
prior to the publication deadline for quarterly payment limits. For 
circumstances in which manufacturer's ASP data is not available prior 
to the publication deadline for quarterly payment limits as described 
in this section, payment limit must be determined as follows:
    (1) For a multiple source drug (as defined in Sec.  414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, National Drug Codes 
(NDCs) associated with a billing and payment code for that drug for a 
given quarter, the payment limit for the given quarter is calculated 
using only NDCs for that drug with positive manufacturer's ASP data, 
except in circumstances described in paragraph (i)(1)(iii) of this 
section.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs associated with a billing and payment 
code for that drug for a given quarter, the payment limit for the given 
quarter is calculated by carrying over all positive manufacturer's ASP 
data from the most recently available previous quarter with positive 
manufacturer's ASP data for at least one NDC until at least one NDC for 
the drug has positive manufacturer's ASP data for a quarter.
    (iii) In circumstances in which manufacturer's ASP data is not 
available and the unavailability of the manufacturer's ASP data results 
in a significant change in the ASP payment limit compared to the 
previous quarter, the payment limit is calculated by carrying over the 
most recent available ASP data for the individual NDC(s), adjusted by 
the weighted average of the change in the manufacturer's ASP data for 
the NDCs that were reported for both the most recently available 
previous quarter and the current quarter.
    (2) For a single source drug, excluding biosimilar biological 
products (both as defined in Sec.  414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, NDCs associated with a 
billing and payment code for that drug for a given quarter, the payment 
limit for the given quarter is calculated using only NDCs for that drug 
with positive manufacturer's ASP data.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs associated with a billing and payment 
code for that drug for a given quarter, the payment limit for the given 
quarter is the lesser of the following until at least one NDC for the 
drug has positive manufacturer's ASP data for a quarter:
    (A) 106 percent of the volume-weighted average of the most recent 
available positive manufacturer's ASP data from a previous quarter in 
which at least one NDC for the drug has positive manufacturer's ASP 
data for the quarter. If the payment limit from such quarter was based 
on 106 percent of the wholesale acquisition cost because of the 
application of paragraph (d)(1) of this section, that payment limit is 
carried over; or
    (B) 106 percent of the wholesale acquisition cost. If there is more 
than one WAC per billing unit for the drug, the payment limit is set 
using the lowest WAC per billing unit.
    (3) For a biosimilar biological product (as defined in Sec.  
414.902)--
    (i) In circumstances in which negative or zero manufacturer's ASP 
data is reported for one or more, but not all, NDCs for a given 
quarter, the payment limit for the given quarter is calculated using 
only NDCs with positive manufacturer's ASP data.
    (ii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs for a given quarter, and other 
biosimilars referencing the same reference product report positive ASP 
data for the given quarter, the payment limit for the given quarter is 
the sum of the following until at least one NDC for the drug has 
positive manufacturer's ASP data for a quarter:
    (A) the volume-weighted average of the ASP data from all other 
biosimilars of the same reference product; and
    (B) Either:
    (1) If the biosimilar is not a qualifying biosimilar (as both are 
defined at Sec.  414.902), 6 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter; or
    (2) If the biosimilar is a qualifying biosimilar (as both are 
defined at Sec.  414.902), 8 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter.
    (iii) In circumstances in which negative or zero manufacturer's ASP 
data is reported for all NDCs for a given quarter and either no other 
biosimilars have been approved for the same reference product or no 
other biosimilars of the same reference product report positive 
manufacturer's ASP data for the given quarter, the payment limit for 
the given quarter is the sum of the following until at least one NDC 
for the drug has positive manufacturer's ASP data for a quarter:
    (A) The volume-weighted average of the most recent available 
positive manufacturer's ASP data from a previous quarter; and
    (B) Either:
    (1) If the biosimilar is not a qualifying biosimilar (as both are 
defined at Sec.  414.902), 6 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter; or
    (2) If the biosimilar is a qualifying biosimilar (as both are 
defined at Sec.  414.902), 8 percent of the amount determined under 
section 1847A(b)(4) of the Act for the reference biological product (as 
defined in Sec.  414.902) for the given quarter.
* * * * *
0
32. Section 414.1001 is amended by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (b);
0
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c), 
respectively;
0
d. In newly redesignated paragraph (b)(2), removing ``(c)(1)'' and 
adding in its place ``(b)(1)''.
    The revision reads as follows:


Sec.  414.1001  Basis of payment.

    (a) Supplying fees. Beginning in CY 2006--
    (1) A supplying fee of $24 is paid to a pharmacy (no more often 
than once every 30 days) for the first prescription of drugs and 
biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 
1861(s)(2)(T) of the Act, that the pharmacy provided to a beneficiary, 
except as provided in paragraph (a)(2) of this section.
    (2) A supplying fee of $50 is paid to pharmacy for the initial 
supplied prescription of drugs and biologicals described in section 
1861(s)(2)(J) of the Act, that the pharmacy provided to a patient 
during the first 30-day period following a transplant.
    (3) A supplying fee of $16 is paid to a pharmacy (no more often 
than once every 30 days) for each prescription following the first 
prescription (as

[[Page 62215]]

specified in paragraphs (a)(1) and (2) of this section) of drugs and 
biologicals described in sections 1861(s)(2)(J), 1861(s)(2)(Q), and 
1861(s)(2)(T) of the Act, that the pharmacy provided to a beneficiary.
    (4) A separate supplying fee is paid to a pharmacy for each 
prescription of drugs and biologicals described in sections 
1861(s)(2)(J), 1861(s)(2)(Q), and 1861(s)(2)(T) of the Act.
* * * * *
0
33. Section 414.1305 is amended in the definition of ``Attribution-
eligible beneficiary'' by revising paragraph (6) to read as follows:


Sec.  414.1305  Definitions.

* * * * *
    Attribution-eligible beneficiary * * *
    (6) Has a minimum of one claim for any covered professional service 
furnished by an eligible clinician who is on the Participation List for 
an Advanced APM Entity at any determination date during the QP 
Performance Period.
* * * * *
0
34. Section 414.1325 is amended by adding paragraphs (a)(1)(i) through 
(iii) and (f) to read as follows:


Sec.  414.1325  Data submission requirements.

    (a) * * *
    (1) * * *
    (i) For the quality performance category, a data submission must 
include numerator and denominator data for at least one MIPS quality 
measure from the final list of MIPS quality measures.
    (ii) For the improvement activities performance category, a data 
submission must include a response of ``yes'' for at least one activity 
in the MIPS improvement activities inventory.
    (iii) For the Promoting Interoperability performance category, a 
data submission must include all of the following elements:
    (A) Performance data, including any claim of an applicable 
exclusion, for the measures in each objective, as specified by CMS;
    (B) Required attestation statements, as specified by CMS;
    (C) CMS EHR Certification ID (CEHRT ID) from the Certified Health 
IT Product List (CHPL); and
    (D) The start date and end date for the applicable performance 
period as set forth in Sec.  414.1320.
* * * * *
    (f) Treatment of multiple data submissions. (1) For multiple data 
submissions received in the quality and improvement activities 
performance categories in accordance with paragraphs (a)(1)(i) and (ii) 
of this section for an individual MIPS eligible clinician, group, 
subgroup, or virtual group from submitters in multiple organizations 
(for example, qualified registry, practice administrator, or EHR 
vendor), CMS will calculate and score each submission received and 
assign the highest of the scores. For multiple data submissions 
received for an individual MIPS eligible clinician, group, subgroup, or 
virtual group from one or multiple submitters in the same organization, 
CMS will score the most recent submission.
    (2) For multiple data submissions received for the Promoting 
Interoperability performance category, CMS will calculate a score for 
each data submission received and assign the highest of the scores.
0
35. Section 414.1330 is amended by adding paragraph (c) to read as 
follows.


Sec.  414.1330  Quality performance category.

* * * * *
    (c)(1) CMS uses the following criteria to determine the removal of 
a quality measure:
    (i) If the Secretary determines that the quality measure is no 
longer meaningful, such as measures that are topped out.
    (ii) If a measure steward is no longer able to maintain the quality 
measure.
    (iii) If the quality measure reached extremely topped out status.
    (iv) If the quality measure does not meet case minimum and 
reporting volumes required for benchmarking after being in the program 
for 2 consecutive CY performance periods.
    (v) If the quality measure is duplicative.
    (vi) If the quality measure is not updated to reflect current 
clinical guidelines, which are not reflective of a clinician's scope of 
practice.
    (vii) If the quality measure is a process measure.
    (viii) If the quality measure addresses a measurement gap.
    (ix) If the quality measure is a patient-reported outcome.
    (x) If the quality measure is not available for MIPS quality 
reporting by or on behalf of all MIPS eligible clinicians.
    (xi) The robustness of the quality measure.
    (xii) Consideration of the quality measure in developing MIPS Value 
Pathways (MVPs).
    (2) A quality measure that otherwise meets the criteria for removal 
in paragraph (c)(1) of this section may nonetheless be retained based 
on the following considerations:
    (i) Whether the removal of the process measure impacts the number 
of measures available for a specific specialty.
    (ii) Whether the quality measure addresses a priority area.
    (iii) Whether the quality measure promotes positive outcomes in 
patients.
    (iv) Whether the quality measure is designated as high priority or 
not.
    (v) Whether the quality measure has reached extremely topped out 
status.
    (vi) Evaluation of the quality measure's performance data.
0
36. Section 414.1335 is amended by revising paragraph (a) introductory 
text and adding paragraph (b) to read as follows.


Sec.  414.1335  Data submission criteria for the quality performance 
category.

    (a) Criteria. Except as provided in paragraph (b) of this section, 
a MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity must submit data on MIPS quality measures in one of the 
following manners, as applicable:
* * * * *
    (b) Special rule for the APM Performance Pathway (APP) Plus measure 
set. A MIPS eligible clinician, group, or APM Entity that reports the 
APP Plus measure set via the APP must report on all measures included 
in the APP Plus measure set, except for administrative claims-based 
quality measures as provided in Sec.  414.1325(a)(2)(i).
0
37. Section 414.1340 is amended by revising paragraphs (a)(4), (b)(4), 
(d) introductory text, and (d)(1) to read as follows:


Sec.  414.1340  Data completeness criteria for the quality performance 
category.

    (a) * * *
    (4) At least 75 percent of the MIPS eligible clinician, group, 
virtual group, subgroup, and APM Entity's patients that meet the 
measure's denominator criteria, regardless of payer for MIPS payment 
years 2026, 2027, 2028, 2029, and 2030.
    (b) * * *
    (4) At least 75 percent of the applicable Medicare Part B patients 
seen during the performance period to which the measure applies for 
MIPS payment years 2026, 2027, 2028, 2029, and 2030.
* * * * *
    (d) APM Entities, specifically Medicare Shared Savings Program 
Accountable Care Organizations that meet reporting requirements under 
the APP, submitting quality measure data on Medicare CQMs must submit 
data on:
    (1) At least 75 percent of the applicable beneficiaries eligible 
for the Medicare CQM, as defined at Sec.  425.20 of this chapter, who 
meet the measure's

[[Page 62216]]

denominator criteria for MIPS payment years 2026, 2027, 2028, 2029, and 
2030.
* * * * *
0
38. Section 414.1350 is amended by adding paragraph (e) to read as 
follows:


Sec.  414.1350  Cost performance category.

* * * * *
    (e) Cost measure removal criteria. CMS may remove a cost measure 
from MIPS based on one or more of the following factors, provided 
however CMS may retain a cost measure that meets one or more of the 
following factors if CMS determines the benefit of retaining the 
measure outweighs the benefit of removing it.
    (1) It is not feasible to implement the measure specifications.
    (2) A measure steward is no longer able to maintain the cost 
measure.
    (3) The implementation costs or negative unintended consequences 
associated with a cost measure outweigh the benefit of its continued 
use in the MIPS cost performance category.
    (4) The measure specifications do not reflect current clinical 
practice or guidelines.
    (5) The availability of a more applicable measure, including a 
measure that applies across settings, applies across populations, or is 
more proximal in time to desired patient outcomes for the particular 
topic.
0
39. Section 414.1355 is amended by adding paragraph (d) to read as 
follows:


Sec.  414.1355  Improvement activities performance category.

* * * * *
    (d) CMS may remove an improvement activity from MIPS based on one 
or more of the following factors, provided however CMS may retain an 
improvement activity that meets one or more of the following factors if 
CMS determines the benefit of retaining the activity outweighs the 
benefit of removing it:
    (1) Factor 1: Activity is duplicative of another activity.
    (2) Factor 2: There is an alternative activity with a stronger 
relationship to quality care or improvements in clinical practice.
    (3) Factor 3: Activity does not align with current clinical 
guidelines or practice.
    (4) Factor 4: Activity does not align with at least one meaningful 
measures area.
    (5) Factor 5: Activity does not align with the quality, cost, or 
Promoting Interoperability performance categories.
    (6) Factor 6: There have been no attestations of the activity for 3 
consecutive years.
    (7) Factor 7: Activity is obsolete.
0
40. Section 414.1365 is amended by revising paragraphs (b)(2)(i), 
(c)(3)(i) and (ii), (c)(4)(i)(A), (d)(3)(i)(A) introductory text, 
(d)(3)(i)(A)(1), (d)(3)(ii) introductory text, (d)(3)(ii)(A), and 
(d)(3)(iii) to read as follows:


Sec.  414.1365  MIPS Value Pathways.

* * * * *
    (b) * * *
    (2) * * *
    (i) For the CY 2023 through 2024 performance periods/2025 through 
2026 MIPS payment years, each MVP Participant must select an MVP, one 
population health measure included in the MVP, and any outcomes-based 
administrative claims measure on which the MVP Participant intends to 
be scored. Beginning in the CY 2025 performance period/2027 MIPS 
payment year, each MVP Participant must select an MVP and any outcomes-
based administrative claims measure on which the MVP Participant 
intends to be scored.
* * * * *
    (c) * * *
    (3) * * *
    (i) For the CY 2023 and 2024 performance periods/2025 through 2026 
MIPS payment years:
    (A) Two medium-weighted improvement activities.
    (B) One high-weighted improvement activity.
    (C) Participation in a certified or recognized patient-centered 
medical home (PCMH) or comparable specialty practice, as described at 
Sec.  414.1380(b)(3)(ii).
    (ii) Beginning in the CY 2025 performance period/2027 MIPS payment 
year:
    (A) One improvement activity.
    (B) Participation in a certified or recognized patient-centered 
medical home (PCMH) or comparable specialty practice, as described at 
Sec.  414.1380(b)(3)(ii).
* * * * *
    (4) * * *
    (i) * * *
    (A) An MVP Participant that is a subgroup is required to submit its 
affiliated group's data for the Promoting Interoperability performance 
category.
* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (A) Population health measures. Except as provided in paragraph 
(d)(3)(i)(A)(1) of this section, for the CY 2023 through 2024 
performance periods/2025 through 2026 MIPS payment years, each selected 
population health measure that does not have a benchmark or meet the 
case minimum requirement is excluded from the MVP participant's total 
measure achievement points and total available measure achievement 
points. Beginning in the CY 2025 performance period/2027 MIPS payment 
year, except as provided in paragraph (d)(3)(i)(A)(1), the highest 
score of all applicable and available population health measures will 
be used. If no population health measure has a benchmark or meet the 
case minimum requirement, each such measure is excluded from the MVP 
participant's total measure achievement points and total available 
measure achievement points.
    (1) For the CY 2023 through 2024 performance periods/2025 through 
2026 MIPS payment years, a subgroup is scored on each selected 
population health measure based on its affiliated group score, if 
available. Beginning in the CY 2025 performance period/2027 MIPS 
payment year, a subgroup is scored on the highest scoring of all 
available population health measures based on its affiliated group 
score, if available. If the subgroup's affiliated group score is not 
available, each such measure is excluded from the subgroup's total 
measure achievement points and total available measure achievement 
points.
* * * * *
    (ii) Cost performance category. The cost performance category score 
is calculated for an MVP Participant using the methodology at Sec.  
414.1380(b)(2) and the cost measures included in the MVP that they 
select and report.
    (A) A subgroup is scored on each cost measure included in the MVP 
that it selects and reports based on its affiliated group score for 
each such measure, if available. If the subgroup's affiliated group 
score is not available for a measure, the measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2).
* * * * *
    (iii) Improvement activities performance category. In the CY 2023 
through 2024 performance periods/2025 through 2026 MIPS payment years, 
the improvement activities performance category score is calculated 
based on the submission of high- and medium-weighted improvement 
activities. MVP Participants will receive 20 points for each medium-
weighted improvement activity and 40 points for each high-weighted 
improvement activity required under Sec.  414.1360 on which data is 
submitted in accordance with Sec.  414.1325 or for participation in a

[[Page 62217]]

certified or recognized patient-centered medical home (PCMH) or 
comparable specialty practice, as described at Sec.  
414.1380(b)(3)(ii). Beginning in the CY 2025 performance period/2027 
MIPS payment year, MVP Participants will receive 40 points for each 
improvement activity required under Sec.  414.1360 on which data is 
submitted in accordance with Sec.  414.1325 or for participation in a 
certified or recognized PCMH or comparable specialty practice, as 
described at Sec.  414.1380(b)(3)(ii).
* * * * *
0
41. Section 414.1367 is amended by revising paragraph (c)(1) 
introductory text and adding paragraph (c)(1)(iii) to read as follows:


Sec.  414.1367  APM performance pathway.

* * * * *
    (c) * * *
    (1) Quality. Except as provided in paragraphs (c)(1)(i) and (ii) of 
this section, the quality performance category score is calculated for 
a MIPS eligible clinician, group, or APM Entity group in accordance 
with Sec.  414.1380(b)(1) based on the quality measure set applicable 
to the MIPS eligible clinician, group, or APM Entity group under 
paragraph (c)(1)(iii) of this section and established by CMS through 
rulemaking for a MIPS payment year.
* * * * *
    (iii)(A) For performance periods beginning prior to CY 2025 and 
MIPS payment years beginning prior to 2027, a MIPS eligible clinician, 
group, or APM Entity group must report the APM Performance Pathway 
quality measure set.
    (B) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, a MIPS eligible clinician, group, or APM Entity group may choose 
to report either the APM Performance Pathway quality measure set or the 
APP Plus quality measure set.
* * * * *
0
42. Section 414.1380 is amended by --
0
a. Revising paragraph (b)(1)(ii) introductory text;
0
b. Adding paragraphs (b)(1)(ii)(E) and (F);
0
c. Revising paragraph (b)(1)(iv)(B);
0
d. Adding paragraph (b)(1)(iv)(C);
0
e. Revising paragraph (b)(1)(vii) introductory text;
0
f. Adding paragraph (b)(1)(vii)(C);
0
g. Revising paragraph (b)(2) introductory text;
0
h. Adding paragraphs (b)(2)(i)(A) and (B) and (b)(2)(v)(B);
0
i. Revising paragraph (b)(3) introductory text; and
0
j. Adding paragraphs (c)(2)(i)(A)(10) and (c)(2)(i)(C)(12).
    The revisions and additions read as follows:


Sec.  414.1380  Scoring.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Benchmarks. Except as provided in paragraphs (b)(1)(ii)(B) 
through (F) of this section, benchmarks will be based on performance by 
collection type, from all available sources, including MIPS eligible 
clinicians and APMs, to the extent feasible, during the applicable 
baseline or performance period.
* * * * *
    (E) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, CMS will publish a list in the Federal Register of topped out 
measures determined to be impacted by limited measure choice. Measures 
included on the list are scored from 1 to 10 measure achievement points 
according to defined topped out measure benchmarks calculated from 
performance data in the baseline period in which a performance rate in 
the 97th percentile corresponds to 7.5 measure achievement points.
    (F) Beginning in the CY 2025 performance period/2027 MIPS payment 
year, measures of the Medicare CQM collection type use flat benchmarks 
for their first two performance periods in MIPS.
* * * * *
    (iv) * * *
    (B) Beginning with the 2021 MIPS payment year, except as provided 
for in paragraph (b)(1)(iv)(C) of this section, each measure (except 
for measures in the CMS Web Interface) for which the benchmark for the 
applicable collection type is identified as topped out for 2 or more 
consecutive years receives no more than 7 measure achievement points in 
the second consecutive year it is identified as topped out, and beyond.
    (C) Beginning with the CY 2025 performance period/2027 MIPS payment 
year, measures impacted by limited measure choice as specified in 
paragraph (b)(1)(ii)(E) of this section are not subject to the 7 
measure achievement point cap specified in paragraph (b)(1)(iv)(B) of 
this section.
* * * * *
    (vii) Quality performance category score. A MIPS eligible 
clinician's quality performance category score is the sum of all the 
measure achievement points assigned for the measures required for the 
quality performance category criteria plus the measure bonus points in 
paragraph (b)(1)(v) of this section and Complex Organization Adjustment 
in paragraph (b)(1)(vii)(C) of this section. The sum is divided by the 
sum of total available measure achievement points. The improvement 
percent score in paragraph (b)(1)(vi) of this section is added to that 
result. The quality performance category score cannot exceed 100 
percentage points.
* * * * *
    (C) Beginning in the CY 2025 performance period/2027 MIPS payment 
year, a Virtual Group and an APM Entity receives one measure 
achievement point for each eCQM submitted that meets the case minimum 
requirement at paragraph (b)(1)(iii) of this section and the data 
completeness requirement at Sec.  414.1340. Each measure may not exceed 
10 measure achievement points. The total adjustment to the Virtual 
Group or APM Entity's quality performance category score under this 
paragraph (b)(1)(vii)(C) may not exceed 10 percent of the total 
available measure achievement points.
    (2) Cost performance category. For each cost measure attributed to 
a MIPS eligible clinician, the clinician receives one to ten 
achievement points based on the clinician's performance on the measure 
during the performance period compared to the measure's benchmark. 
Achievement points are awarded based on which benchmark range the MIPS 
eligible clinician's performance on the measure is in. CMS assigns 
partial points based on where the MIPS eligible clinician's performance 
falls between the top and bottom of the benchmark ranges.
    (i) * * *
    (A) For the 2019 through 2025 MIPS payment years, CMS determines 
cost measure benchmark ranges based on linear percentile distributions.
    (B) Beginning with the 2026 MIPS payment year, for each cost 
measure, CMS determines 10 benchmark ranges based on the median cost of 
all MIPS eligible clinicians attributed the measure, plus or minus 
standard deviations. CMS awards achievement points based on which 
benchmark range a MIPS eligible clinician's average cost for a cost 
measure corresponds. Additionally, CMS awards achievement points 
equivalent to 10 percent of the performance threshold for a MIPS 
eligible clinician whose average cost attributed under a cost measure 
is equal to the median cost for all MIPS eligible clinicians attributed 
the measure.
* * * * *
    (v) * * *
    (B) Beginning with the 2027 MIPS payment year, if data used to 
calculate a score for a cost measure are impacted by significant 
changes or errors affecting the performance period, such that

[[Page 62218]]

calculating the cost measure score would lead to misleading or 
inaccurate results, then the affected cost measure is excluded from the 
MIPS eligible clinician's or group's cost performance category score. 
For purposes of this paragraph (b)(2)(v)(B), ``significant changes or 
errors'' are changes or errors external to the care provided, and that 
CMS determines may lead to misleading or inaccurate results that 
negatively impact the measure's ability to reliably assess performance. 
Significant changes or errors include, but are not limited to, rapid or 
unprecedented changes to service utilization, the inadvertent omission 
of codes or inclusion of codes, or changes to clinical guidelines or 
measure specifications. CMS will empirically assess the affected cost 
measure to determine the extent to which the changes or errors impact 
the calculation of a cost measure score such that calculating the cost 
measure score would lead to misleading or inaccurate results that 
negatively impact the measure's ability to reliably assess performance.
    (3) Improvement activities performance category. Subject to 
paragraphs (b)(3)(i) and (ii) of this section, the improvement 
activities performance category score equals the total points for all 
submitted improvement activities divided by 40 points, multiplied by 
100 percent. In the CY 2023 through 2024 performance periods/2025 
through 2026 MIPS payment years, MIPS eligible clinicians (except for 
non-patient facing MIPS eligible clinicians, small practices, and 
practices located in rural areas and geographic HPSAs) receive 10 
points for each medium-weighted improvement activity and 20 points for 
each high-weighted improvement activity required under Sec.  414.1360 
on which data is submitted in accordance with Sec.  414.1325. Non-
patient facing MIPS eligible clinicians, small practices, and practices 
located in rural areas and geographic HPSAs receive 20 points for each 
medium-weighted improvement activity and 40 points for each high-
weighted improvement activity required under Sec.  414.1360 on which 
data is submitted in accordance with Sec.  414.1325. Beginning in the 
CY 2025 performance period/2027 MIPS payment year, MIPS eligible 
clinicians (except for non-patient facing MIPS eligible clinicians, 
small practices, and practices located in rural areas and geographic 
HPSAs) receive 20 points for each improvement activity required under 
Sec.  414.1360 on which data is submitted in accordance with Sec.  
414.1325. Non-patient facing MIPS eligible clinicians, small practices, 
and practices located in rural areas and geographic HPSAs receive 40 
points for each improvement activity required under Sec.  414.1360 on 
which data is submitted in accordance with Sec.  414.1325.
* * * * *
    (c) * * *
    (2) * * *
    (i) * * *
    (A) * * *
    (10) Beginning with the 2026 MIPS payment year, for the quality and 
improvement activities performance categories, CMS determines, based on 
documentation provided to the agency on or before November 1st of the 
year preceding the relevant MIPS payment year, that data for a MIPS 
eligible clinician are inaccessible or unable to be submitted due to 
circumstances outside of the control of the clinician because the MIPS 
eligible clinician delegated submission of the data to their third 
party intermediary, evidenced by a written agreement between the MIPS 
eligible clinician and third party intermediary, and the third party 
intermediary did not submit the data for the performance category(ies) 
on behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. To determine whether to apply reweighting to the affected 
performance category(ies), CMS will consider: whether the MIPS eligible 
clinician knew or had reason to know of the issue with its third party 
intermediary's submission of the clinician's data for the performance 
category(ies); whether the MIPS eligible clinician took reasonable 
efforts to correct the issue; and whether the issue between the MIPS 
eligible clinician and their third party intermediary caused no data to 
be submitted for the performance category(ies) in accordance with 
applicable deadlines.
* * * * *
    (C) * * *
    (12) Beginning with the 2026 MIPS payment year, CMS determines, 
based on documentation provided to the agency on or before November 1st 
of the year preceding the relevant MIPS payment year, that data for a 
MIPS eligible clinician are inaccessible or unable to be submitted due 
to circumstances outside of the control of the clinician because the 
MIPS eligible clinician delegated submission of the data to their third 
party intermediary, evidenced by a written agreement between the MIPS 
eligible clinician and third party intermediary, and the third party 
intermediary did not submit the data for the performance category on 
behalf of the MIPS eligible clinician in accordance with applicable 
deadlines. To determine whether to apply reweighting to the Promoting 
Interoperability performance category, CMS will consider: whether the 
MIPS eligible clinician knew or had reason to know of the issue with 
its third party intermediary's submission of the clinician's data for 
the performance category; whether the MIPS eligible clinician took 
reasonable efforts to correct the issue; and whether the issue between 
the MIPS eligible clinician and their third party intermediary caused 
no data to be submitted for the performance category in accordance with 
applicable deadlines.
* * * * *
0
43. Section 414.1405 is amended by adding paragraph (b)(10) and 
revising paragraph (g) to read as follows:


Sec.  414.1405  Payment.

* * * * *
    (b) * * *
    (10) Pursuant to the methodology established at paragraph (g)(2) of 
this section:
    (i) The performance threshold for the 2027 MIPS payment year is 75 
points. The prior period used to determine the performance threshold is 
the 2019 MIPS payment year.
    (ii) [Reserved]
* * * * *
    (g) Performance threshold methodology. (1) For each of the 2024, 
2025, and 2026 MIPS payment years, the performance threshold is the 
mean of the final scores for all MIPS eligible clinicians from a prior 
period as specified under paragraph (b)(9) of this section.
    (2) For each of the 2027, 2028, and 2029 MIPS payment years, the 
performance threshold is the mean of the final scores for all MIPS 
eligible clinicians from a prior period as specified under paragraph 
(b)(10) of this section.
0
44. Section 414.1430 is amended by--
0
a. Revising paragraph (a)(1)(v);
0
b. Adding paragraph (a)(1)(vi);
0
c. Revising paragraph (a)(2)(v);
0
d. Adding paragraph (a)(2)(vi);
0
e. Revising paragraph (a)(3)(v);
0
f. Adding paragraph (a)(3)(vi);
0
g. Revising paragraph (a)(4)(v);
0
h. Adding paragraph (a)(4)(vi); and
0
i. Revising paragraphs (b)(1)(i)(A) and (B), (b)(2)(i)(A) and (B), 
(b)(3)(i)(A) and (B), and (b)(4)(i)(A) and (B).
    The revisions and additions read as follows:


Sec.  414.1430  Qualifying APM participant determination: QP and 
partial QP thresholds.

    (a) * * *

[[Page 62219]]

    (1) * * *
    (v) 2026: 50 percent.
    (vi) 2027 and later: 75 percent.
    (2) * * *
    (v) 2026: 40 percent.
    (vi) 2027 and later: 50 percent.
    (3) * * *
    (v) 2026: 35 percent.
    (vi) 2027 and later: 50 percent.
    (4) * * *
    (v) 2026: 25 percent.
    (vi) 2027 and later: 35 percent.
    (b) * * *
    (1) * * *
    (i) * * *
    (A) 2021 through 2026: 50 percent.
    (B) 2027 and later: 75 percent.
* * * * *
    (2) * * *
    (i) * * *
    (A) 2021 through 2026: 40 percent.
    (B) 2027 and later: 50 percent.
* * * * *
    (3) * * *
    (i) * * *
    (A) 2021 through 2026: 35 percent.
    (B) 2027 and later: 50 percent.
* * * * *
    (4) * * *
    (i) * * *
    (A) 2021 through 2026: 25 percent.
    (B) 2027 and later: 35 percent.
* * * * *
0
45. Section 414.1450 is amended by revising paragraph (a)(1)(i) and the 
first sentence of paragraph (b)(1) to read as follows:


Sec.  414.1450  APM incentive payment.

    (a) * * *
    (1) * * *
    (i) For payment years 2019 through 2026, CMS makes a lump sum 
payment to QPs in the amount described in paragraph (b) of this section 
in the manner described in paragraphs (d) and (e) of this section.
* * * * *
    (b) * * *
    (1) For payment years 2019 through 2024, the amount of the APM 
Incentive Payment is equal to 5 percent, with respect to payment year 
2025, 3.5 percent, or with respect to payment year 2026, 1.88 percent 
of the estimated aggregate payments for covered professional services 
as defined in section 1848(k)(3)(A) of the Act furnished during the 
calendar year immediately preceding the payment year. * * *
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

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

    Authority: 42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, 
and 1395hh.

0
47. Section 423.160 is amended by revising paragraph (a)(5) 
introductory text to read as follows:


Sec.  423.160  Standards for electronic prescribing.

    (a) * * *
    (5) Beginning on January 1, 2021, prescribers must, except in the 
circumstances described in paragraphs (a)(5)(i) through (iii) of this 
section, conduct prescribing for at least 70 percent of their Schedule 
II, III, IV, and V controlled substances that are Part D drugs 
electronically using the applicable standards in paragraph (b) of this 
section, subject to the exemption in paragraph (a)(3)(iii) of this 
section. Prescriptions written for a beneficiary in a long-term care 
facility will not be included in determining compliance until January 
1, 2028. Compliance actions against prescribers who do not meet the 
compliance threshold based on prescriptions written for a beneficiary 
in a long-term care facility will commence on or after January 1, 2028. 
Compliance actions against prescribers who do not meet the compliance 
threshold based on other prescriptions will commence on or after 
January 1, 2023. Prescribers will be exempt from this requirement in 
the following situations:
* * * * *

PART 424--CONDITIONS FOR MEDICARE PAYMENT

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

    Authority:  42 U.S.C. 1302 and 1395hh.

0
49. Section 424.24 is amended by revising paragraphs (c) heading, 
(c)(1)(i), and (c)(3)(ii) and adding paragraph (c)(5) to read as 
follows:


Sec.  424.24  Requirements for medical and other health services 
furnished by providers under Medicare Part B.

* * * * *
    (c) Outpatient physical therapy, occupational therapy, and speech-
language pathology services--
    (1) * * *
    (i) The individual needs, or needed, physical therapy, occupational 
therapy, or speech-language pathology services.
* * * * *
    (3) * * *
    (ii) If the plan of treatment is established by a physical 
therapist, occupational therapist, or speech-language pathologist, the 
certification must be signed by a physician or by a nurse practitioner, 
clinical nurse specialist, or physician assistant who has knowledge of 
the case, except as specified in paragraph (c)(5) of this section.
* * * * *
    (5) Treatment plan. If the plan of treatment is established by a 
physical therapist, occupational therapist, or speech-language 
pathologist, and there is a written order or referral from the 
individual's physician, nurse practitioner (NP), physician assistant 
(PA), or clinical nurse specialist (CNS) in the patient's record and 
the therapist has documented evidence that the plan of care has been 
delivered to the physician, NP, PA, or CNS within 30 days of completion 
of the initial evaluation, the certification does not need to be signed 
by a physician, NP, CNS, or PA who has knowledge of the case. If there 
is no written order or referral from the individual's physician, NP, 
CNS, or PA, in the patient's record, the therapist must obtain the 
signature of the physician, NP, PA, or CNS on the plan of treatment in 
accordance with paragraph (c)(3) of this section. No references to an 
order or referral in this subsection shall be construed to require an 
order or referral for outpatient physical therapy, occupational 
therapy, or speech-language pathology services.
* * * * *
0
50. Section 424.205 is amended by revising paragraphs (c)(10), 
(f)(1)(ii), (f)(2)(i), and (f)(5) to read as follows:


Sec.  424.205  Requirements for Medicare Diabetes Prevention Program 
suppliers.

* * * * *
    (c) * * *
    (10) Except as allowed under paragraph (d)(8) of this section, the 
MDPP supplier must offer an MDPP beneficiary no fewer than all of the 
following:
    (i) 16 in-person or distance learning core sessions no more 
frequently than weekly for the first 6 months of the MDPP services 
period, which begins on the date of attendance at the first such core 
session.
    (ii) 1 in-person or distance learning core maintenance session each 
month during months 7 through 12 (6 months total) of the MDPP services 
period.
* * * * *
    (f) * * *
    (1) * * *
    (ii) Basic beneficiary information for each MDPP beneficiary in 
attendance, including but not limited to beneficiary name, Medicare 
Beneficiary Identifier (MBI), and age.
* * * * *
    (2) * * *
    (i) Documentation of the type of session (in-person or distance 
learning).
* * * * *

[[Page 62220]]

    (5) The MDPP supplier's records must include an attestation from 
the MDPP supplier that, as applicable, the MDPP beneficiary for which 
it is submitting a claim--
    (i) Has achieved the required minimum 5-percent weight loss as 
measured in accordance with Sec.  410.79(e)(3)(iii) of this chapter 
during a core session or core maintenance session furnished by that 
supplier, if the claim submitted is for a performance payment under 
Sec.  414.84(b)(1) of this chapter.
    (ii) Has achieved the required minimum 5-percent weight loss as 
measured in-person during a core session or core maintenance session 
furnished by that supplier, if the claim submitted is for a performance 
payment under Sec.  414.84(b)(1) of this chapter.
    (iii) Has achieved at least a 9-percent weight loss percentage as 
measured in accordance with Sec.  410.79(e)(3)(iii) of this chapter 
during a core session or core maintenance session furnished by that 
supplier, if the claim submitted is for a performance payment under 
Sec.  414.84(b)(2) of this chapter.
    (iv) Has achieved at least a 9-percent weight loss percentage as 
measured in-person during a core session or core maintenance session 
furnished by that supplier, if the claim submitted is for a performance 
payment under Sec.  414.84(b)(2) of this chapter.
* * * * *

PART 425--MEDICARE SHARED SAVINGS PROGRAM

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

    Authority: 42 U.S.C. 1302, 1306, 1395hh, and 1395jjj.

0
52. Section 425.100 is amended by adding paragraph (e) to read as 
follows:


Sec.  425.100  General.

* * * * *
    (e) An ACO is eligible to receive prepaid shared savings if it 
meets the criteria under Sec.  425.640(b).
0
53. Section 425.110 is amended by revising paragraph (b)(2) to read as 
follows:


Sec.  425.110  Number of ACO professionals and beneficiaries.

* * * * *
    (b) * * *
    (2) For performance years starting before January 1, 2025, if the 
ACO's assigned population is not at least 5,000 by the end of the 
performance year specified by CMS in its request for a corrective 
action plan (CAP), CMS terminates the participation agreement and the 
ACO is not eligible to share in savings for that performance year.
* * * * *
0
54. Section 425.202 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  425.202  Application procedures.

    (a) * * *
    (3) An ACO that seeks to participate in the Shared Savings Program 
must agree that CMS can share a copy of their application with the 
Antitrust Agencies.
* * * * *
0
55. Section 425.204 is amended by--
0
a. Revising paragraphs (f)(1) and (f)(3) introductory text;
0
b. In paragraphs (f)(3)(iv), (f)(4)(iv)(A), and (f)(6)(ii) introductory 
text, removing the phrase ``any shared losses incurred'' and adding in 
its place the phrase ``any shared losses incurred and prepaid shared 
savings determined to be owed'';
0
c. In paragraphs (f)(5) and (f)(6)(iv)(A), removing the phrase ``shared 
losses owed'' and adding in its place the phrase ``shared losses owed 
or prepaid shared savings determined to be owed'';
0
d. In paragraph (f)(6)(iii), removing the phrase ``shared losses'' and 
adding in its place the phrase ``shared losses or prepaid shared 
savings determined to be owed''; and
0
e. In paragraph (f)(6)(iv)(C), removing the phrase ``owe any shared 
losses'' and adding in its place the phrase ``owe any shared losses or 
prepaid shared savings''.
    The revisions read as follows:


Sec.  425.204  Content of the application.

* * * * *
    (f) * * *
    (1) An ACO must have the ability to repay all shared losses for 
which it may be liable under a two-sided model and any prepaid shared 
savings determined to be owed.
* * * * *
    (3) An ACO that will participate under a two-sided model of the 
Shared Savings Program must submit for CMS approval documentation that 
it is capable of repaying shared losses that it may incur during its 
agreement period, including details supporting the adequacy of the 
repayment mechanism. If the ACO will receive prepaid shared savings, 
the repayment mechanism must also support repayment of prepaid shared 
savings in accordance with Sec.  425.640.
* * * * *
0
56. Section 425.224 is amended by revising paragraph (a)(3) to read as 
follows:


Sec.  425.224  Application procedures for renewing ACOs and re-entering 
ACOs.

    (a) * * *
    (3) An ACO that seeks to enter a new participation agreement under 
the Shared Savings Program must agree that CMS can share a copy of its 
application with the Antitrust Agencies.
* * * * *
0
57. Section 425.304 is amended by adding paragraph (d) to read as 
follows:


Sec.  425.304  Beneficiary incentives.

* * * * *
    (d) Application of the CMS-sponsored model patient incentives safe 
harbor. CMS has determined that the Federal anti-kickback statute safe 
harbor for CMS-sponsored model patient incentives (Sec.  
1001.952(ii)(2) of this title) is available to protect remuneration 
furnished in the prepaid shared savings option of the Shared Savings 
Program in the form of direct beneficiary services that meets all safe 
harbor requirements set forth in Sec.  1001.952(ii) of this title.
0
58. Section 425.308 is amended by adding paragraph (b)(10) to read as 
follows:


Sec.  425.308  Public reporting and transparency.

* * * * *
    (b) * * *
    (10) Information updated annually about the ACO's use of prepaid 
shared savings under Sec.  425.640, for each performance year, 
including the following:
    (i) Total amount of any prepaid shared savings received from CMS.
    (ii) The ACO's spend plan.
    (iii) An itemization of how prepaid shared savings were spent 
during the year, including expenditure categories, the dollar amounts 
spent on the various categories, information about which groups of 
beneficiaries received direct beneficiary services that were purchased 
with prepaid shared savings and investments that were made in the ACO 
with prepaid shared savings, how these direct beneficiary services were 
provided to beneficiaries and how the direct beneficiary services and 
investments supported the care of beneficiaries, any changes to the 
spend plan as submitted under Sec.  425.640(d)(2) (if applicable), and 
such other information as may be specified by CMS.
* * * * *
0
59. Section 425.312 is amended by revising paragraphs (a)(2)(iii) and 
(a)(2)(v)(A) to read as follows:


Sec.  425.312  Beneficiary notifications.

    (a) * * *
    (2) * * *

[[Page 62221]]

    (iii) In the case of an ACO that has selected preliminary 
prospective assignment with retrospective reconciliation, by the ACO or 
ACO participant providing each beneficiary who received at least one 
primary care service during the assignment window or applicable 
expanded window for assignment (as defined in Sec.  425.20) from a 
physician who is an ACO professional in the ACO and who is a primary 
care physician as defined under Sec.  425.20 or who has one of the 
primary specialty designations included in Sec.  425.402(c), a FQHC or 
RHC that is part of the ACO, or an ACO professional in the ACO whom the 
beneficiary designated as responsible for coordinating their overall 
care under Sec.  425.402(e) with a standardized written notice at least 
once during an agreement period in the form and manner specified by 
CMS. The standardized written notice must be furnished to all of these 
beneficiaries prior to or at the first primary care service visit 
during the first performance year in which the beneficiary receives a 
primary care service from an ACO participant.
* * * * *
    (v) * * *
    (A) The follow-up communication must occur no later than 180 days 
from the date the standardized written notice was provided.
* * * * *
0
60. Section 425.315 is amended by revising paragraph (a)(4) and adding 
paragraph (b) to read as follows:


Sec.  425.315  Reopening determinations of ACO shared savings or shared 
losses to correct financial reconciliation calculations.

    (a) * * *
    (4) CMS has the sole discretion to determine whether to reopen a 
payment determination under this section.
    (b) Reopening requests. An ACO may request a reopening in a form 
and manner specified by CMS and consistent with the timeframes for a 
reopening specified in paragraphs (a)(1)(i) and (ii) of this section.
0
61. Section 425.316 is amended by adding paragraph (f) to read as 
follows:


Sec.  425.316  Monitoring of ACOs.

* * * * *
    (f) Monitoring ACO eligibility for and use of prepaid shared 
savings. (1) CMS monitors an ACO that receives prepaid shared savings 
pursuant to Sec.  425.640 to ensure ACO compliance with Sec.  
425.640(e) and to determine whether it would be appropriate to withhold 
or terminate an ACO's prepaid shared savings under Sec.  425.640(h).
    (2) If CMS determines that an ACO receiving prepaid shared savings 
is using the funds for a prohibited use under Sec.  425.640(e)(2), 
fails to spend the funding in accordance with Sec.  425.640(e)(1)(i) 
and (ii), or spends more than 50 percent of the estimated annual 
payment amount on staffing and healthcare infrastructure CMS:
    (i) Will require the ACO to reallocate the funding as permitted by 
Sec.  425.640(e) and submit an updated spend plan demonstrating the 
reallocation by a deadline specified by CMS.
    (ii) May take compliance action as specified in Sec. Sec.  425.216, 
425.218, and 425.640(h)(1).
    (3) If an ACO fails to reallocate prepaid shared savings it 
received as described in paragraph (f)(2)(i) of this section by a 
deadline specified by CMS, the ACO must repay all prepaid shared 
savings it received and may be subject to compliance action as 
specified in Sec. Sec.  425.216 and 425.218. CMS will provide written 
notification to the ACO of the amount due and the ACO must pay such 
amount no later than 90 days after the receipt of such notification.
0
62. Section 425.400 is amended by revising paragraph (c)(1)(viii) 
introductory text and adding paragraph (c)(1)(ix) to read as follows:


Sec.  425.400  General.

* * * * *
    (c) * * *
    (1) * * *
    (viii) For the performance year starting on January 1, 2024, as 
follows:
* * * * *
    (ix) For the performance year starting on January 1, 2025, and 
subsequent performance years as follows:
    (A) CPT codes:
    (1) 96160 and 96161 (codes for administration of health risk 
assessment).
    (2) 96202 and 96203 (codes for caregiver behavior management 
training).
    (3) 97550, 97551, and 97552 (codes for caregiver training 
services).
    (4) 99201 through 99215 (codes for office or other outpatient visit 
for the evaluation and management of a patient).
    (5) 99304 through 99318 (codes for professional services furnished 
in a nursing facility; professional services or services reported on an 
FQHC or RHC claim identified by these codes are excluded when furnished 
in a skilled nursing facility (SNF)).
    (6) 99319 through 99340 (codes for patient domiciliary, rest home, 
or custodial care visit).
    (7) 99341 through 99350 (codes for evaluation and management 
services furnished in a patient's home).
    (8) 99354 and 99355 (add-on codes, for prolonged evaluation and 
management or psychotherapy services beyond the typical service time of 
the primary procedure; when the base code is also a primary care 
service code under this paragraph (c)(1)(ix)).
    (9) 99406 and 99407 (codes for smoking and tobacco-use cessation 
counseling services).
    (10) 99421, 99422, and 99423 (codes for online digital evaluation 
and management).
    (11) 99424, 99425, 99426, and 99427 (codes for principal care 
management services).
    (12) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care 
management).
    (13) 99439 (code for non-complex chronic care management).
    (14) 99446, 99447, 99448, 99449, 99451, 99452 (codes for 
interprofessional consultation services).
    (15) 99483 (code for assessment of and care planning for patients 
with cognitive impairment).
    (16) 99484, 99492, 99493 and 99494 (codes for behavioral health 
integration services).
    (17) 99495 and 99496 (codes for transitional care management 
services).
    (18) 99497 and 99498 (codes for advance care planning; services 
identified by these codes furnished in an inpatient setting are 
excluded).
    (19) 9X091 (code for virtual check-in).
    (B) HCPCS codes:
    (1) G0019 and G0022 (codes for community health integration 
services).
    (2) G0023 and G0024 (codes for principal illness navigation 
services).
    (3) G0101 (code for cervical or vaginal cancer screening).
    (4) G0136 (code for social determinants of health risk assessment 
services).
    (5) G0317, G0318, and G2212 (codes for prolonged office or other 
outpatient visit for the evaluation and management of a patient).
    (6) G0402 (code for the Welcome to Medicare visit).
    (7) G0438 and G0439 (codes for the annual wellness visits).
    (8) G0442 (code for alcohol misuse screening service).
    (9) G0443 (code for alcohol misuse counseling service).
    (10) G0444 (code for annual depression screening service).
    (11) G0463 (code for services furnished in electing teaching 
amendment (ETA) hospitals).
    (12) G0506 (code for chronic care management).
    (13) G2010 (code for the remote evaluation of patient video/
images).
    (14) G2012 and G2252 (codes for virtual check-in).
    (15) G2058 (code for non-complex chronic care management).

[[Page 62222]]

    (16) G2064 and G2065 (codes for principal care management 
services).
    (17) G2086, G2087, and G2088 (codes for office-based opioid use 
disorder services).
    (18) G2211 (code for visit complexity inherent to evaluation and 
management services add-on).
    (19) G2214 (code for psychiatric collaborative care model).
    (20) G3002 and G3003 (codes for chronic pain management).
    (21) GCDRA and GCDRM (codes for cardiovascular risk assessment and 
risk management services).
    (22) GCTB1 and GCTB2 (codes for individual behavior management/
modification caregiver training services).
    (23) GCTD1, GCTD2, and GCTD3 (codes for direct care caregiver 
training services).
    (24) GFCI1 (code for post-discharge telephonic follow-up contacts 
intervention).
    (25) GPCM1, GPCM2, and GPCM3 (codes for advanced primary care 
management services).
    (26) GSPI1 (code for safety planning interventions when the base 
code is also a primary care service code under this paragraph 
(c)(1)(ix)).
    (C) Primary care service codes include any CPT code identified by 
CMS that directly replaces a CPT code specified in paragraph 
(c)(1)(ix)(A) of this section or a HCPCS code specified in paragraph 
(c)(1)(ix)(B) of this section, when the assignment window or expanded 
window for assignment (as defined in Sec.  425.20) for a benchmark or 
performance year includes any day on or after the effective date of the 
replacement code for payment purposes under FFS Medicare.
* * * * *
0
63. Section 425.402 is amended by revising paragraph (e)(2)(ii) 
introductory text and adding paragraph (e)(2)(iii) to read as follows:


Sec.  425.402  Basic assignment methodology.

* * * * *
    (e) * * *
    (2) * * *
    (ii) For performance years starting on January 1, 2019, through 
2024:
* * * * *
    (iii) For performance year 2025 and subsequent performance years:
    (A) The beneficiary meets the eligibility criteria established at 
Sec.  425.401(a) and must not be excluded by the criteria at Sec.  
425.401(b). The exclusion criteria at Sec.  425.401(b) apply for 
purposes of determining beneficiary eligibility for alignment to an ACO 
based on the beneficiary's designation of an ACO professional as 
responsible for coordinating their overall care under paragraph (e) of 
this section, regardless of the ACO's assignment methodology selection 
under Sec.  425.226(a)(1).
    (B) The beneficiary must have designated an ACO professional as 
responsible for coordinating their overall care.
    (C) If a beneficiary has designated a provider or supplier outside 
the ACO as responsible for coordinating their overall care, the 
beneficiary is not added under the assignment methodology in paragraph 
(b) of this section to the ACO's list of assigned beneficiaries for a 
12-month performance year.
    (D) The beneficiary is not assigned to an entity participating in a 
model tested or expanded under section 1115A of the Act under which 
claims-based assignment is based solely on:
    (1) Claims for primary care and/or other services related to 
treatment of one or more specific diseases or conditions targeted by 
the model; or
    (2) Claims for services other than primary care services, and for 
which there has been a determination by the Secretary that waiver of 
the requirement in section 1899(c)(2)(B) of the Act is necessary solely 
for purposes of testing the model.
* * * * *
0
64. Section 425.508 is amended by revising paragraph (b) and adding 
paragraph (c) to read as follows:


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

* * * * *
    (b) For performance years beginning in 2021-2024. ACOs must submit 
the quality data via the APM Performance Pathway (APP) established 
under Sec.  414.1367 of this chapter to satisfactorily report on behalf 
of the eligible clinicians who bill under the TIN of an ACO participant 
for purposes of the MIPS Quality performance category of the Quality 
Payment Program.
    (c) For performance years beginning on or after January 1, 2025. 
ACOs must submit the quality data via the APM Performance Pathway (APP) 
on the quality measures contained in the APP Plus quality measure set 
established under Sec.  414.1367 of this chapter to satisfactorily 
report on behalf of the eligible clinicians who bill under the TIN of 
an ACO participant for purposes of the MIPS Quality performance 
category of the Quality Payment Program.
0
65. Section 425.510 is amended by revising the section heading and 
paragraph (b) to read as follows:


Sec.  425.510  Application of the APM Performance Pathway (APP) quality 
measure set or the APP Plus quality measure set (as applicable) to 
Shared Savings Program ACOs for performance years beginning on or after 
January 1, 2021.

* * * * *
    (b) Quality reporting. (1) For performance years beginning in 2021-
2024, ACOs must report quality data on the APP quality measure set 
established under Sec.  414.1367 of this chapter, according to the 
method of submission established by CMS.
    (2) For performance years beginning on or after January 1, 2025, 
ACOs must report quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this chapter, according to the 
method of submission established by CMS.
* * * * *
0
66. Section 425.512 is amended by--
0
a. Revising paragraphs (a)(2)(iii), (a)(5)(i) introductory text, 
(a)(5)(i)(A) introductory text, (a)(5)(i)(B), (a)(5)(ii), 
(a)(5)(iii)(B), and (a)(7);
0
b. Revising and republishing paragraph (b);
0
c. In paragraph (c)(3) introductory text, removing the phrase ``via the 
APP'' and adding in its place the phrase ``on the APP quality measure 
set or the APP Plus quality measure set (as applicable)'';
0
d. In paragraph (c)(3)(iii), removing the phrase ``and subsequent 
performance years'' after ``For performance year 2024''; and
0
e. Adding paragraph (c)(3)(iv).
    The revisions, republication, and addition read as follows:


Sec.  425.512  Determining the ACO quality performance standard for 
performance years beginning on or after January 1, 2021.

    (a) * * *
    (2) * * *
    (iii) For performance year 2025 and subsequent performance years, 
if the ACO reports the APP Plus quality measure set and meets the data 
completeness requirement at Sec.  414.1340 of this subchapter on all 
eCQMs/Medicare CQMs, and the CAHPS for MIPS survey (except as specified 
in Sec.  414.1380(b)(1)(vii)(B) of this subchapter), and receives a 
MIPS Quality performance category score under Sec.  414.1380(b)(1) of 
this subchapter, for the applicable performance year.
* * * * *
    (5) * * *
    (i) Except as specified in paragraphs (a)(2) and (7) of this 
section, CMS designates the quality performance standard as:
    (A) For performance year 2024, the ACO reporting quality data on 
the APP

[[Page 62223]]

quality measure set established under Sec.  414.1367 of this 
subchapter, according to the method of submission established by CMS 
and--
* * * * *
    (B) For performance year 2025 and subsequent performance years, the 
ACO reporting quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this subchapter, according to the 
method of submission established by CMS and--
    (1) Achieving a health equity adjusted quality performance score 
that is equivalent to or higher than the 40th percentile across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring; or
    (2) If the ACO reports all of the eCQMs in the APP Plus quality 
measure set applicable for a performance year, meeting the data 
completeness requirement at Sec.  414.1340 of this subchapter for all 
eCQMs, and achieving a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP Plus quality measure 
set and a quality performance score equivalent to or higher than the 
40th percentile of the performance benchmark on at least one of the 
remaining measures in the APP Plus quality measure set.
    (ii) CMS designates an alternative quality performance standard for 
an ACO that does not meet the criteria described in paragraph (a)(2) or 
(a)(5)(i) of this section as the following:
    (A) For performance year 2024, the ACO reports quality data on the 
APP quality measure set established under Sec.  414.1367 of this 
subchapter according to the method of submission established by CMS and 
achieves a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP quality measure set.
    (B) For performance year 2025 and subsequent performance years, the 
ACO reports quality data on the APP Plus quality measure set 
established under Sec.  414.1367 of this subchapter according to the 
method of submission established by CMS and achieves a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the four outcome measures 
in the APP Plus quality measure set.
    (iii) * * *
    (B) For performance year 2025 and subsequent performance years, the 
ACO does not report any of the eCQMs/Medicare CQMs in the APP Plus 
quality measure set and does not administer a CAHPS for MIPS survey 
(except as specified in Sec.  414.1380(b)(1)(vii)(B) of this 
subchapter).
* * * * *
    (7) Facility-based scoring. CMS will use the higher of the ACO's 
health equity adjusted quality performance score or the equivalent of 
the 40th percentile MIPS Quality performance category score across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year 
when--
    (i) For performance year 2024, if an ACO reports all of the 
required measures, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for each measure in the APP quality measure 
set and receiving a MIPS Quality performance category score as 
described at Sec.  414.1380(b)(1) of this subchapter and the ACO meets 
either of the following:
    (A) The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A) of this subchapter.
    (B) At least one of the eCQMs/MIPS CQMs/Medicare CQMs does not have 
a benchmark as described at Sec.  414.1380(b)(1)(i)(A) of this 
subchapter.
    (ii) For performance year 2025 and subsequent performance years, if 
an ACO reports all of the required measures in the APP Plus quality 
measure set, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for each measure in the APP Plus quality 
measure set, and receiving a MIPS Quality performance category score as 
described at Sec.  414.1380(b)(1) of this subchapter, for the relevant 
performance year, and the ACO meets either of the following:
    (A) The ACO's total available measure achievement points used to 
calculate the ACO's MIPS Quality performance category score are reduced 
under Sec.  414.1380(b)(1)(vii)(A) of this subchapter.
    (B) At least one of the eCQMs/Medicare CQMs does not have a 
benchmark as described at Sec.  414.1380(b)(1)(i)(A) of this 
subchapter.
    (b) Calculation of ACO's health equity adjusted quality performance 
score for performance year 2023 and subsequent performance years--(1) 
For performance year 2023. For an ACO that reports the three eCQMs/MIPS 
CQMs in the APP quality measure set, meeting the data completeness 
requirement at Sec.  414.1340 of this subchapter for all three eCQMs/
MIPS CQMs, and administers the CAHPS for MIPS survey, CMS calculates 
the ACO's health equity adjusted quality performance score as the sum 
of the ACO's MIPS Quality performance category score for all measures 
in the APP quality measure set and the ACO's health equity adjustment 
bonus points calculated in accordance with paragraph (b)(4) of this 
section. The sum of these values may not exceed 100 percent.
    (2) For performance year 2024. For an ACO that reports the three 
eCQMs/MIPS CQMs/Medicare CQMs in the APP quality measure set, meeting 
the data completeness requirement at Sec.  414.1340 of this subchapter 
for all three eCQMs/MIPS CQMs/Medicare CQMs, and administers the CAHPS 
for MIPS survey (except as specified in Sec.  414.1380(b)(1)(vii)(B) of 
this subchapter), CMS calculates the ACO's health equity adjusted 
quality performance score as the sum of the ACO's MIPS Quality 
performance category score for all measures in the APP quality measure 
set and the ACO's health equity adjustment bonus points calculated in 
accordance with paragraph (b)(4) of this section. The sum of these 
values may not exceed 100 percent.
    (3) For performance year 2025 and subsequent performance years. For 
an ACO that reports all of the eCQMs/Medicare CQMs in the APP Plus 
quality measure set, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for all of the eCQMs/Medicare CQMs, and 
administers the CAHPS for MIPS survey (except as specified in Sec.  
414.1380(b)(1)(vii)(B) of this subchapter), CMS calculates the ACO's 
health equity adjusted quality performance score as the sum of the 
ACO's MIPS Quality performance category score for all measures in the 
APP Plus quality measure set and the ACO's health equity adjustment 
bonus points calculated in accordance with paragraph (b)(4) of this 
section. The sum of these values may not exceed 100 percent.
    (4) Calculation of ACO's health equity adjustment bonus points. CMS 
calculates the ACO's health equity adjustment bonus points as follows:
    (i) For each measure in the APP quality measure set, CMS groups an 
ACO's performance into the top, middle, or bottom third of ACO measure 
performers by reporting mechanism.
    (ii) CMS assigns values to the ACO for its performance on each 
measure as follows:
    (A) Values of four, two, or zero for each measure for which the 
ACO's performance places it in the top, middle, or bottom third of ACO 
measure performers, respectively.

[[Page 62224]]

    (B) Values of zero for each measure that CMS does not evaluate 
because the measure is unscored or the ACO does not meet the case 
minimum or the minimum sample size for the measure.
    (iii) CMS sums the values assigned to the ACO according to 
paragraph (b)(4)(ii) of this section, to calculate the ACO's measure 
performance scaler.
    (iv) CMS calculates an underserved multiplier for the ACO.
    (A)(1) CMS determines the proportion ranging from zero to one of 
the ACO's assigned beneficiary population for the performance year that 
is considered underserved based on the highest of either of the 
following:
    (i) The proportion of the ACO's assigned beneficiaries residing in 
a census block group with an Area Deprivation Index (ADI) national 
percentile rank of at least 85. An ACO's assigned beneficiaries without 
an available numeric ADI national percentile rank are excluded from the 
calculation of the proportion of the ACO's assigned beneficiaries 
residing in a census block group with an ADI national percentile rank 
of at least 85.
    (ii) The proportion of the ACO's assigned beneficiaries who are 
enrolled in the Medicare Part D low-income subsidy (LIS); or are dually 
eligible for Medicare and Medicaid.
    (2) CMS calculates the proportions specified in paragraph 
(b)(4)(iv)(A)(1)(ii) of this section as follows:
    (i) For performance year 2023, the proportion of the ACO's assigned 
beneficiaries who are enrolled in the Medicare Part D LIS or are dually 
eligible for Medicare and Medicaid divided by the total number of the 
ACO's assigned beneficiaries' person years.
    (ii) For performance year 2024 and subsequent performance years, 
the proportion of the ACO's assigned beneficiaries with any months 
enrolled in LIS or dually eligible for Medicare and Medicaid divided by 
the total number of the ACO's assigned beneficiaries.
    (B) If the proportion determined in accordance with paragraph 
(b)(4)(iv)(A) of this section is lower than 20 percent, the ACO is 
ineligible for health equity adjustment bonus points.
    (v) Except as specified in paragraph (b)(4)(iv)(B) of this section, 
CMS calculates the ACO's health equity adjustment bonus points as the 
product of the measure performance scaler determined under paragraph 
(b)(4)(iii) of this section and the underserved multiplier determined 
under paragraph (b)(4)(iv) of this section. If the product of these 
values is greater than 10, the value of the ACO's health equity 
adjustment bonus points is set equal to 10.
    (5) Use of ACO's health equity adjusted quality performance score. 
The ACO's health equity adjusted quality performance score, determined 
in accordance with paragraphs (b)(1) through (4) of this section, is 
used as follows:
    (i) In determining whether the ACO meets the quality performance 
standard as specified under paragraphs (a)(4)(i)(A), (a)(5)(i)(A)(1), 
(a)(5)(i)(B), and (a)(7) of this section.
    (ii) In determining the final sharing rate for calculating shared 
savings payments under the BASIC track in accordance with Sec.  
425.605(d), and under the ENHANCED track in accordance with Sec.  
425.610(d), for an ACO that meets the alternative quality performance 
standard by meeting the criteria specified in paragraph (a)(4)(ii) or 
(a)(5)(ii) of this section.
    (iii) In determining the shared loss rate for calculating shared 
losses under the ENHANCED track in accordance with Sec.  425.610(f), 
for an ACO that meets the quality performance standard established in 
paragraphs (a)(2), (a)(4)(i), and (a)(5)(i) of this section or the 
alternative quality performance standard established in paragraph 
(a)(4)(ii) or (a)(5)(ii) of this section.
    (iv) In determining the quality performance score for an ACO 
affected by extreme and uncontrollable circumstances as described in 
paragraphs (c)(3)(ii) through (iv) of this section.
    (c) * * *
    (3) * * *
    (iv) For performance year 2025 and subsequent performance years, if 
the ACO reports the APP Plus quality measure set and meets the data 
completeness requirement at Sec.  414.1340 of this subchapter and 
receives a MIPS Quality performance category score under Sec.  
414.1380(b)(1) of this subchapter, CMS will use the higher of the ACO's 
health equity adjusted quality performance score or the equivalent of 
the 40th percentile MIPS Quality performance category score across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year.
* * * * *
0
67. Section 425.601 is amended by revising paragraph (a)(9) 
introductory text and adding paragraphs (a)(9)(iii) and (iv) to read as 
follows:


Sec.  425.601  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on or after July 1, 2019, and before 
January 1, 2024.

    (a) * * *
    (9) For the second and each subsequent performance year during the 
term of the agreement period, the ACO's benchmark is adjusted for the 
following, as applicable: For the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), for a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), for a change to the 
beneficiary assignment methodology specified in subpart E of this part, 
for changes in values used in benchmark calculations as a result of 
issuance of a revised initial determination under Sec.  425.315, and 
for changes in values used in benchmark calculations as a result of the 
performance year being affected by significant, anomalous, and highly 
suspect billing under Sec.  425.672. To adjust the benchmark, CMS does 
the following:
* * * * *
    (iii) Recalculates benchmark year expenditures to account for the 
impact of improper payments, for the benchmark year corresponding to a 
performance year for which CMS issued a revised initial determination 
under Sec.  425.315. In recalculating expenditures for the benchmark 
year, CMS applies the calculation methodology applied in recalculating 
expenditures for the corresponding performance year in accordance with 
Sec.  425.674.
    (iv) Recalculates expenditures used in Shared Savings Program 
benchmark calculations under this section, to exclude the same HCPCS or 
CPT codes identified as displaying significant, anomalous, and highly 
suspect billing patterns in calculation of performance year 
expenditures, in accordance with Sec.  425.672.
* * * * *
0
68. Section 425.605 is amended by revising paragraph (a)(1)(ii)(C) to 
read as follows:


Sec.  425.605  Calculation of shared savings and losses under the BASIC 
track.

    (a) * * *
    (1) * * *
    (ii) * * *
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(1)(ii)(A) of this section and the aggregate growth in 
prospective hierarchical condition category (HCC) risk scores for 
purposes of paragraph (a)(1)(ii)(B) of this section is calculated by 
taking a weighted average of the growth in demographic risk scores or

[[Page 62225]]

prospective HCC risk scores, as applicable, across the populations 
described in paragraph (a)(2) of this section. When calculating the 
weighted average growth in demographic risk scores or prospective HCC 
risk scores, as applicable, the weight applied to the growth in risk 
scores (expressed as a ratio of the ACO's performance year risk score 
to the ACO's BY3 risk score) for each Medicare enrollment type is equal 
to the product of the ACO's historical benchmark expenditures, adjusted 
in accordance with Sec.  425.652(a)(8), for that enrollment type and 
the ACO's performance year assigned beneficiary person years for that 
enrollment type.
* * * * *
0
69. Section 425.610 is amended by revising paragraph (a)(2)(ii)(C) to 
read as follows:


Sec.  425.610  Calculation of shared savings and losses under the 
ENHANCED track.

    (a) * * *
    (2) * * *
    (ii) * * *
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(2)(ii)(A) of this section and the aggregate growth in 
prospective HCC risk scores for purposes of paragraph (a)(2)(ii)(B) of 
this section is calculated by taking a weighted average of the growth 
in demographic risk scores or prospective HCC risk scores, as 
applicable, across the populations described in paragraph (a)(3) of 
this section. When calculating the weighted average growth in 
demographic risk scores or prospective HCC risk scores, as applicable, 
the weight applied to the growth in risk scores (expressed as a ratio 
of the ACO's performance year risk score to the ACO's BY3 risk score) 
for each Medicare enrollment type is equal to the product of the ACO's 
historical benchmark expenditures, adjusted in accordance with Sec.  
425.652(a)(8), for that enrollment type and the ACO's performance year 
assigned beneficiary person years for that enrollment type.
* * * * *
0
70. Section 425.630 is amended by--
0
a. In paragraph (g)(3), removing the phrase ``paragraphs (g)(4) of this 
section'' and adding in its place the phrase ``paragraphs (g)(4) 
through (6) of this section'';
0
b. Redesignating paragraph (g)(5) as paragraph (g)(7);
0
c. Adding new paragraph (g)(5) and paragraph (g)(6);
0
d. In paragraph (h)(1)(ii), removing ``or'' at the end of the 
paragraph;
0
e. In paragraph (h)(1)(iii), removing the period at the end of 
paragraph and adding ``; or'' in its place; and
0
f. Adding paragraph (h)(1)(iv).
    The additions read as follows:


Sec.  425.630  Option to receive advance investment payments.

* * * * *
    (g) * * *
    (5) If an ACO notifies CMS that it no longer wants to participate 
in the advance investment payment option but does want to continue its 
participation in the Shared Savings Program, the ACO must repay all 
outstanding advance investment payments it received. CMS will provide 
written notice to the ACO of the amount due and the ACO must pay such 
amount no later than 90 days after the receipt of such notification.
    (6) If CMS terminates the participation agreement of an ACO that 
has an outstanding balance of advance investment payments owed to CMS, 
the ACO must repay any outstanding advance investment payments it 
received. CMS will provide written notification to the ACO of the 
amount due and the ACO must pay such amount no later than 90 days after 
the receipt of such notification.
* * * * *
    (h) * * *
    (1) * * *
    (iv) Voluntarily terminates payments of advance investment payments 
but continues its participation in the Shared Savings Program.
* * * * *
0
71. Section 425.640 is added to read as follows:


Sec.  425.640  Option to receive prepaid shared savings.

    (a) Purpose. Prepaid shared savings provide an additional cash flow 
option to ACOs with a history of earning shared savings that will 
encourage their investment in activities that reduce costs for the 
Medicare program and beneficiaries and improve the quality of care 
provided to their assigned beneficiaries.
    (b) Eligibility. An ACO is eligible to receive prepaid shared 
savings in an agreement period as specified in this section if CMS 
determines that all of the following criteria are met:
    (1) The ACO is a renewing ACO as defined under Sec.  425.20 
entering an agreement period beginning on January 1, 2026, or in 
subsequent years.
    (2) The ACO must have received a shared savings payment for the 
most recent performance year that:
    (i) Occurred prior to the agreement period for which the ACO has 
applied to receive prepaid shared savings; and
    (ii) CMS has conducted financial reconciliation.
    (3) The ACO must have a positive prior savings adjustment for the 
agreement period for which the ACO has applied to receive prepaid 
shared savings as calculated pursuant to Sec.  425.658.
    (4) The ACO does not have any outstanding shared losses or advance 
investment payments that have not yet been repaid to CMS after 
reconciliation for the most recent performance year for which CMS 
completed financial reconciliation.
    (5) If the ACO received prepaid shared savings in the current 
agreement period or a prior agreement period, the ACO must have fully 
repaid the amount of prepaid shared savings received through the most 
recent performance year for which CMS has completed financial 
reconciliation.
    (6) The ACO is participating in Levels C through E of the BASIC 
track or the ENHANCED track during the agreement period in which it 
would receive prepaid shared savings.
    (7) The ACO has in place an adequate repayment mechanism in 
accordance with Sec.  425.204(f) that can be used to recoup outstanding 
prepaid shared savings.
    (8) During the agreement period immediately preceding the agreement 
period in which the ACO would receive prepaid shared savings, the ACO:
    (i) Met the quality performance standard as specified under Sec.  
425.512; and
    (ii) Has not been determined by CMS to have avoided at-risk 
beneficiaries as specified under Sec.  425.316(b)(2).
    (c) Application procedure. To obtain a determination regarding 
whether an ACO may receive prepaid shared savings, the ACO must submit 
to CMS a complete supplemental application with its application to 
renew for a new agreement period in the Shared Savings Program 
(submitted pursuant to Sec.  425.202) in the form and manner and by a 
deadline specified by CMS.
    (d) Application contents and review--(1) General. An ACO must 
submit to CMS supplemental application information sufficient for CMS 
to determine whether the ACO is eligible to receive prepaid shared 
savings. In addition, the ACO must submit a proposed spend plan as part 
of the supplemental application information.
    (2) Spend plan. The ACO's spend plan must:
    (i) Describe how an ACO receiving prepaid shared savings will spend 
the payments during the first performance year in which it will receive 
prepaid shared savings. The spend plan must be updated annually for 
each performance year of the agreement period during which the ACO 
receives prepaid shared savings.

[[Page 62226]]

    (ii) Identify the categories of items and services that will be 
purchased and investments that will be made in the ACO with prepaid 
shared savings (consistent with the allowable uses under paragraph (e) 
of this section), the dollar amounts to be spent on such categories, 
information about which groups of beneficiaries the ACO expects to 
receive direct beneficiary services that will be purchased with prepaid 
shared savings, how direct beneficiary services will be distributed to 
beneficiaries and how such services support the care of beneficiaries, 
descriptions of the investments that will be made in the ACO with 
prepaid shared savings, and such other information as may be specified 
by CMS.
    (iii) Include an attestation that the ACO will not discriminate on 
the basis of race, color, religion, sex, national origin, disability, 
or age with respect to their use of prepaid shared savings.
    (iv) Include the ACO's communication strategy for notifying CMS and 
any impacted beneficiaries if an ACO will no longer be providing any 
direct beneficiary services that had previously been provided by the 
ACO using prepaid shared savings.
    (3) CMS review. CMS will review the supplemental application 
information to determine whether an ACO meets the eligibility criteria 
and other requirements necessary to receive prepaid shared savings and 
will approve or deny the ACO's prepaid shared savings application 
accordingly. CMS may review an ACO's spend plan at any time and require 
the ACO to modify its spend plan to comply with the requirements of 
this paragraph (d) and paragraph (e) of this section.
    (e) Use and management of prepaid shared savings--(1) Allowable 
uses. An ACO must use prepaid shared savings to improve the quality and 
efficiency of items and services furnished to beneficiaries by 
investing in staffing, healthcare infrastructure, and direct 
beneficiary services. Expenditures of prepaid shared savings must 
comply with paragraph (e)(2) of this section, the beneficiary incentive 
provision at Sec.  425.304(a), (b), and (d), and all other applicable 
laws and regulations.
    (i) An ACO may spend up to 50 percent of its estimated annual 
prepaid shared savings on staffing and healthcare infrastructure in 
each performance year.
    (ii) An ACO may spend up to 100 percent, but not less than 50 
percent, of its estimated annual prepaid shared savings on direct 
beneficiary services in each performance year.
    (2) Prohibited uses. An ACO may not use prepaid shared savings for 
any expense other than those allowed under paragraph (e)(1) of this 
section. Prohibited uses include the following--
    (i) Management company or parent company profit;
    (ii) Performance bonuses;
    (iii) Provision of medical services covered by Medicare;
    (iv) Cash or cash equivalent payments to patients;
    (v) Items or activities unrelated to ACO operations or care of 
beneficiaries; and
    (vi) In the case of an ACO participating in Levels C through E of 
the BASIC track or the ENHANCED track, the repayment of any shared 
losses incurred as specified in a written notice in accordance with 
Sec.  425.605(e)(2) or Sec.  425.610(h)(2), respectively.
    (3) Duration for spending payments. An ACO must spend all prepaid 
shared savings in the agreement period in which they are received. An 
ACO must repay to CMS any unspent funds remaining at the end of each 
agreement period. Any unspent funds received for a performance year 
must be reallocated in the spend plan for the ACO's next performance 
year. When reallocated in the spend plan for the next performance year, 
the total unspent funds in each category must be reallocated within 
their originally indicated category specified in accordance with 
paragraph (d)(2) of this section. If an ACO fails to spend a majority 
of the prepaid shared savings they receive in a performance year, CMS 
may withhold future quarterly payments until the ACO spends the funding 
they have already received and reports this spending to CMS through an 
updated spend plan.
    (f) Payment & payment methodology. An ACO determined eligible 
pursuant to paragraph (b) of this section receives quarterly prepaid 
shared savings payments equal to the maximum quarterly payment amount 
calculated pursuant to the methodology specified in paragraphs (f)(2) 
through (4) of this section unless the ACO elects to receive a lesser 
amount pursuant to paragraph (f)(6) of this section. CMS notifies in 
writing each ACO of its determination of the amount of prepaid shared 
savings and the notice will inform the ACO of its right to request 
reconsideration review in accordance with the procedures specified in 
subpart I of this part. If CMS does not make any prepaid shared savings 
payment, the notice will specify the reason(s) why and inform the ACO 
of its right to request reconsideration review in accordance with the 
procedures specified in subpart I.
    (1) Frequency of payments. An ACO will receive quarterly prepaid 
shared savings payments for the entirety of the ACO's agreement period 
unless the payment is withheld or terminated pursuant to paragraph (h) 
of this section. If an ACO's quarterly payment is withheld or 
terminated pursuant to paragraph (h), the ACO will not receive 
additional or catch-up payments if quarterly prepaid shared savings 
payments are later resumed.
    (2) Calculating the prepaid shared savings multiplier. (i) 
Calculate total per capita savings or losses for each performance year 
that constitutes BY1 and BY2 of the agreement period in which the ACO 
receives prepaid shared savings. Per capita savings or losses will be 
set to zero for a performance year if the ACO was not reconciled for 
the performance year.
    (ii) Take the simple average of the per capita savings or losses 
calculated in paragraph (f)(2)(i) of this section, including values of 
zero, if applicable.
    (iii) Apply a proration factor to account for any upward growth in 
the ACO's assigned population in BY1 and BY2 of the agreement period in 
which the ACO receives prepaid shared savings as compared to the size 
of the assigned population when the ACO was reconciled for the 
corresponding performance years in its prior agreement period.
    (iv) Adjust the pro-rated average per capita amount computed in 
paragraph (f)(2)(iii) of this section by multiplying by 50 percent.
    (v) The prepaid shared savings multiplier is the lesser of the 
following:
    (A) Two-thirds of the pro-rated, adjusted average per capita amount 
computed in paragraph (f)(2)(iv) of this section.
    (B) 5 percent of national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service program in BY2 for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY2 using data from the CMS Office of the Actuary and 
expressed as a single value by taking a person-year weighted average of 
the Medicare enrollment type-specific values.
    (3) Recalculation of the prepaid shared savings multiplier during 
an agreement period. For the first performance year during the term of 
the agreement period in which the ACO receives prepaid shared savings, 
the ACO's prepaid shared savings multiplier is recalculated for changes 
in per capita shared savings or losses for the performance years used 
in the

[[Page 62227]]

calculation of the prepaid shared savings multiplier as a result of 
issuance of a revised initial determination under Sec.  425.315. For 
the second and each subsequent performance year during the term of the 
agreement period in which the ACO receives prepaid shared savings, the 
ACO's prepaid shared savings multiplier is recalculated for the 
following, as applicable: For the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), for a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), for a change to the 
beneficiary assignment methodology specified in subpart E of this part, 
and for changes in per capita shared savings or losses for the 
performance years used in the calculation of the prepaid shared savings 
multiplier as a result of issuance of a revised initial determination 
under Sec.  425.315. To recalculate the prepaid shared savings 
multiplier, CMS does the following:
    (i) Takes into account changes to the ACO's savings or losses for a 
performance year for either of the 2 years that constitute BY1 and BY2 
of the agreement period for which the ACO receives prepaid shared 
savings under paragraph (f)(2)(i) of this section, including values of 
zero, if applicable, as a result of issuance of a revised initial 
determination under Sec.  425.315, when calculating the simple average 
of the per capita savings or losses calculated in paragraph (f)(2)(ii) 
of this section.
    (ii) Redetermines the proration factor used in calculating the 
prepaid shared savings multiplier under paragraph (f)(2)(iii) of this 
section to account for changes in the ACO's assigned beneficiary 
population in the benchmark years of the ACO's agreement period in 
which the ACO receives prepaid shared savings due to the addition and 
removal of ACO participants or ACO providers/suppliers in accordance 
with Sec.  425.118(b), a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), or changes to the 
beneficiary assignment methodology under subpart E of this part.
    (4) Calculating the maximum quarterly payment amount. For each 
quarter for each performance year, the maximum quarterly prepaid shared 
savings amount is equal to the product of one-fourth of the prepaid 
shared savings multiplier calculated in paragraph (f)(2)(v) of this 
section or recalculated according to paragraph (f)(3) of this section 
and the ACO's performance year assigned beneficiary person years 
calculated from the ACO's most recent assignment list.
    (5) Estimated annual payment amount calculation methodology. For 
the purposes of determining the amount of prepaid shared savings 
permitted to be allocated to the uses specified in paragraph (e) of 
this section during each performance year, the estimated annual prepaid 
shared savings amount can be calculated by multiplying the first 
quarterly payment amount the ACO receives in each performance year by 
four. If an ACO's maximum quarterly payments decrease over the 
performance year, the ACO will not be subject to compliance action 
solely because it spent more than 50 percent of the actual annual 
amount of prepaid shared savings it received during that PY on staffing 
and healthcare infrastructure, as long as it did not spend more than 50 
percent of the originally estimated annual maximum prepaid shared 
savings amount on staffing and healthcare infrastructure.
    (6) ACO selection of quarterly payment amount. An ACO may request a 
smaller quarterly payment amount from CMS in a form and manner and by a 
deadline specified by CMS.
    (g) Recoupment and recovery of prepaid shared savings; notice of 
bankruptcy. (1) CMS will recoup prepaid shared savings made to an ACO 
from any shared savings the ACO earns until CMS has recouped in full 
the amount of prepaid shared savings made to the ACO. CMS will carry 
forward any remaining balance owed to subsequent performance year(s) in 
which the ACO achieves shared savings.
    (2) If the amount of shared savings earned by the ACO is revised 
upward by CMS for any reason, CMS will reduce the redetermined amount 
of shared savings by the amount of prepaid shared savings made to the 
ACO as of the date of the redetermination. If the amount of shared 
savings earned by the ACO is revised downward by CMS for any reason, 
the ACO will not receive a refund of any portion of the prepaid shared 
savings previously recouped or otherwise repaid, and any prepaid shared 
savings that are now outstanding due to the revision in earned shared 
savings must be repaid to CMS upon request.
    (3) If an ACO has an outstanding balance of prepaid shared savings 
after the calculation of shared savings or losses for the final 
performance year of an agreement period in which an ACO receives 
prepaid shared savings, the ACO must repay any outstanding amount of 
prepaid shared savings it received in full upon request from CMS. CMS 
will provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
notification. If the ACO fails to repay any outstanding amount of 
prepaid shared savings within 90 days of that written notification, CMS 
will recoup any outstanding balance of prepaid shared savings from the 
ACO's repayment mechanism established under Sec.  425.204(f). CMS may 
also recover any outstanding amount of prepaid shared savings owed by 
recouping from any future shared savings the ACO may be eligible to 
receive in a subsequent agreement period.
    (4) Except as provided in paragraph (g)(4)(ii) of this section, if 
an ACO or CMS terminates the ACOs participation agreement during the 
agreement period in which it received prepaid shared savings, the ACO 
must repay all outstanding prepaid shared savings it received in full 
upon request from CMS.
    (i) CMS will provide written notification to the ACO of the amount 
due and the ACO must pay such amount no later than 90 days after the 
receipt of notification. If the ACO fails to repay within 90 days, CMS 
will recoup any outstanding balance from the ACO's repayment mechanism 
established under Sec.  425.204(f).
    (ii) If the ACO terminates its current participation agreement 
under Sec.  425.220 and immediately enters a new agreement period to 
continue its participation in the program, CMS may recover the amount 
owed by recouping from any future shared savings the ACO may be 
eligible to receive in subsequent agreement periods.
    (5)(i) If an ACO has filed a bankruptcy petition, whether voluntary 
or involuntary, the ACO must provide written notice of the bankruptcy 
to CMS and to the U.S. Attorney's Office in the district where the 
bankruptcy was filed, unless final payment for the agreement period has 
been made by either CMS or the ACO and all administrative or judicial 
review proceedings relating to any payments under the Shared Savings 
Program have been fully and finally resolved.
    (ii) The notice of bankruptcy must be sent by certified mail no 
later than 5 days after the petition has been filed and must contain a 
copy of the filed bankruptcy petition (including its docket number). 
The notice to CMS must be addressed to the CMS Office of Financial 
Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 
21244 or such other address as may be specified on the CMS website for 
purposes of receiving such notices.
    (h) Withholding or termination of prepaid shared savings--(1) 
General.

[[Page 62228]]

Except as provided in paragraph (h)(2) of this section, CMS may 
withhold or terminate an ACO's prepaid shared savings during an 
agreement period if--
    (i) The ACO fails to comply with the requirements of this section;
    (ii) The ACO meets any of the grounds for ACO termination set forth 
in Sec.  425.218(b);
    (iii) The ACO fails to earn sufficient shared savings in a 
performance year to repay the prepaid shared savings they received 
during that performance year;
    (iv) CMS determines that the ACO is not expected to earn shared 
savings in a performance year during the agreement period in which the 
ACO received prepaid shared savings based on a rolling 12-month window 
of beneficiary claims data or year to date beneficiary claims data;
    (v) The ACO falls below 5,000 assigned beneficiaries;
    (vi) The ACO fails to spend the majority of prepaid shared savings 
they receive in a performance year; or
    (vii) The ACO requests that CMS withhold a future quarterly prepaid 
shared savings payment.
    (2) Eligibility sanction. CMS must terminate an ACO's prepaid 
shared savings if--
    (i) The ACO fails to maintain an adequate repayment mechanism in 
accordance with Sec.  425.204(f); or
    (ii) The ACO fails to meet the quality performance standard as 
specified under Sec.  425.512 or is subject to a pre-termination action 
after CMS determined the ACO avoided at-risk beneficiaries as specified 
under Sec.  425.316(b)(2).
    (3) No additional payments. If CMS withholds or terminates a 
quarterly payment pursuant to this paragraph (h), the ACO will not 
receive additional or catch-up payments if quarterly payments of 
prepaid shared savings are later resumed.
    (4) No pre-termination actions. CMS may immediately terminate an 
ACO's prepaid shared savings under paragraphs (h)(1) and (2) of this 
section without taking any of the pre-termination actions set forth in 
Sec.  425.216.
    (i) Reporting information on prepaid shared savings. The ACO must 
report information on its receipt of and use of prepaid shared savings, 
as follows:
    (1) The ACO must publicly report information about the ACO's use of 
prepaid shared savings for each performance year, in accordance with 
Sec.  425.308(b)(10).
    (2) In a form and manner and by a deadline specified by CMS, the 
ACO must report to CMS the same information it is required to publicly 
report under Sec.  425.308(b)(10).


Sec.  425.650  [Amended]

0
72. Section 425.650 is amended in paragraph (a) by removing the 
reference ``425.660'' and adding in its place the reference 
``425.662''.
0
73. Section 425.652 is amended by--
0
a. Revising paragraph (a)(8) and paragraph (a)(9) introductory text;
0
b. Redesignating paragraphs (a)(9)(v) and (vi) as paragraphs (a)(9)(vi) 
and (vii), respectively;
0
c. Adding new paragraph (a)(9)(v);
0
d. Revising newly redesignated paragraph (a)(9)(vi); and
0
e. Adding paragraphs (a)(9)(viii) and (ix).
    The revisions and additions read as follows:


Sec.  425.652  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on January 1, 2024, and in subsequent 
years.

    (a) * * *
    (8) Adjusts the historical benchmark, if applicable:
    (i) For agreement periods beginning on January 1, 2024, except as 
provided in paragraph (a)(8)(i)(C) of this section, CMS adjusts the 
historical benchmark based on the ACO's regional service area 
expenditures (as specified under Sec.  425.656), or for savings 
generated by the ACO, if any, in the 3 most recent years prior to the 
start of the agreement period (as specified under Sec.  425.658). CMS 
does all of the following to determine the adjustment, if any, applied 
to the historical benchmark:
    (A) Computes the regional adjustment in accordance with Sec.  
425.656 and the prior savings adjustment in accordance with Sec.  
425.658.
    (B) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i), and the regional adjustment, expressed as 
a single value as described in Sec.  425.656(d), is positive, the ACO 
will receive an adjustment to its benchmark equal to the positive 
regional adjustment amount. The adjustment will be calculated as 
described in Sec.  425.656(c) and applied separately to the following 
populations of beneficiaries: ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, and aged/non-dual eligible 
Medicare and Medicaid beneficiaries.
    (C) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i), and the regional adjustment, expressed as 
a single value as described in Sec.  425.656(d), is negative or zero, 
the ACO will not receive an adjustment to its benchmark.
    (D) If an ACO is eligible to receive a prior savings adjustment and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is positive, the ACO will receive an adjustment to 
its benchmark equal to the higher of the following:
    (1) The positive regional adjustment amount. The adjustment will be 
calculated as described in Sec.  425.656(c) and applied separately to 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (2) The prior savings adjustment. The adjustment will be calculated 
as described in Sec.  425.658(c) and applied as a flat dollar amount to 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (E) If an ACO is eligible to receive a prior savings adjustment and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is negative or zero, the ACO will receive an 
adjustment to its benchmark equal to the prior savings adjustment. The 
adjustment will be calculated as described in Sec.  425.658(c) and 
applied as a flat dollar amount to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    (ii) For agreement periods beginning on January 1, 2025, and in 
subsequent years, except as provided in paragraph (a)(8)(ii)(B)(2) of 
this section, CMS adjusts the historical benchmark based on the ACO's 
regional service area expenditures (as specified under Sec.  425.656), 
for savings generated by the ACO, if any, in the 3 most recent years 
prior to the start of the agreement period (as specified under Sec.  
425.658), or to account for the ACO serving higher proportions of 
underserved beneficiaries (as specified in Sec.  425.662). CMS does all 
of the following to determine the adjustment, if any, applied to the 
historical benchmark:
    (A) Computes the regional adjustment in accordance with Sec.  
425.656, the prior savings adjustment in accordance with Sec.  425.658, 
and the health equity benchmark adjustment (HEBA) in accordance with 
Sec.  425.662.
    (B) Compares the regional adjustment, expressed as a single value 
as described in Sec.  425.656(d), the per capita prior savings 
adjustment determined in Sec.  425.658(c), if any, and the HEBA

[[Page 62229]]

determined in Sec.  425.662(b), if any, to determine the adjustment 
applied to the historical benchmark.
    (1) The ACO will receive the highest of the positive adjustments 
for which it is eligible. The adjustment will be calculated as 
described in Sec.  425.656(c), Sec.  425.658(c), or Sec.  425.662(b), 
respectively, and applied separately to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    (2) If an ACO is not eligible to receive a prior savings adjustment 
under Sec.  425.658(b)(3)(i) or the HEBA under Sec.  425.662(b)(3), and 
the regional adjustment, expressed as a single value as described in 
Sec.  425.656(d), is negative or zero, the ACO will not receive an 
adjustment to its benchmark.
    (9) For the first performance year during the term of the agreement 
period, the ACO's benchmark is adjusted for the following, as 
applicable: For changes in values used in benchmark calculations in 
accordance with Sec.  425.316(b)(2)(ii)(B) or (C) due to compliance 
action to address avoidance of at-risk beneficiaries or as a result of 
issuance of a revised initial determination under Sec.  425.315, and 
for changes in values used in benchmark calculations as a result of the 
performance year being affected by significant, anomalous, and highly 
suspect billing under Sec.  425.672. For the second and each subsequent 
performance year during the term of the agreement period, the ACO's 
benchmark is adjusted for the following, as applicable: For the 
addition and removal of ACO participants or ACO providers/suppliers in 
accordance with Sec.  425.118(b), for a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.226(a)(1), for a 
change to the beneficiary assignment methodology specified in subpart E 
of this part, for a change in the CMS-HCC risk adjustment methodology 
used to calculate prospective HCC risk scores under Sec.  425.659, for 
changes in values used in benchmark calculations in accordance with 
Sec.  425.316(b)(2)(ii)(B) or (C) due to compliance action to address 
avoidance of at-risk beneficiaries or as a result of issuance of a 
revised initial determination under Sec.  425.315, and for changes in 
values used in benchmark calculations as a result of the performance 
year being affected by significant, anomalous, and highly suspect 
billing under Sec.  425.672. To adjust the benchmark, CMS does the 
following:
* * * * *
    (v) Redetermines the HEBA scaler used in calculating the HEBA under 
Sec.  425.662(b)(2) to account for changes in the ACO's regional 
adjustment or prior savings adjustment in accordance with paragraphs 
(a)(9)(ii) through (iv) of this section.
    (vi) In accordance with paragraph (a)(8) of this section, CMS 
redetermines the adjustment to the historical benchmark based on the 
redetermined regional adjustment (as specified under Sec.  425.656), 
the prior savings adjustment (as specified under Sec.  425.658), or the 
HEBA (as specified under Sec.  425.662) if applicable.
* * * * *
    (viii) Recalculates benchmark year expenditures to account for the 
impact of improper payments, for the benchmark year corresponding to a 
performance year for which CMS issued a revised initial determination 
under Sec.  425.315. In recalculating expenditures for the benchmark 
year, CMS applies the calculation methodology applied in recalculating 
expenditures for the corresponding performance year in accordance with 
Sec.  425.674.
    (ix) Recalculates expenditures used in Shared Savings Program 
benchmark calculations under this section, and as applicable under 
Sec. Sec.  425.654 through 425.662, to exclude the same HCPCS or CPT 
codes identified as displaying significant, anomalous, and highly 
suspect billing patterns in calculation of performance year 
expenditures, in accordance with Sec.  425.672.
* * * * *
0
74. Section 425.655 is amended by revising paragraph (d)(2) to read as 
follows:


Sec.  425.655  Calculating the regional risk score growth cap 
adjustment factor.

* * * * *
    (d) * * *
    (2) Determines the aggregate growth in regional risk scores by 
calculating a weighted average of the growth in regional prospective 
HCC risk scores or demographic risk scores, as applicable, across the 
populations described in paragraph (d)(1) of this section. When 
calculating the weighted average growth in prospective HCC risk scores 
or demographic risk scores, as applicable, the weight applied to the 
growth in risk scores for each Medicare enrollment type is equal to the 
product of the ACO's historical benchmark expenditures, adjusted in 
accordance with Sec.  425.652(a)(8), for that enrollment type and the 
ACO's performance year assigned beneficiary person years for that 
enrollment type.
* * * * *
0
75. Section 425.658 by revising paragraph (d) to read as follows:


Sec.  425.658  Calculating the prior savings adjustment to the 
historical benchmark.

* * * * *
    (d) Applicability of the prior savings adjustment. CMS compares the 
per capita prior savings adjustment determined in paragraph (c)(1) of 
this section with the regional adjustment, expressed as a single value 
as described in Sec.  425.656(d), and the HEBA as determined in Sec.  
425.662(b), if any, to determine the adjustment, if any, that will be 
applied to the ACO's benchmark in accordance with Sec.  425.652(a)(8).
* * * * *
0
76. Section 425.662 is added to read as follows:


Sec.  425.662  Calculating the health equity adjustment to the 
historical benchmark.

    (a) General. For agreement periods beginning on January 1, 2025, 
and in subsequent years, CMS calculates a health equity adjustment to 
the historical benchmark (HEBA) to account for ACOs serving higher 
proportions of underserved beneficiaries.
    (b) Calculation of the health equity benchmark adjustment. To 
calculate the adjustment described in paragraph (a) of this section, 
CMS does all of the following:
    (1) Calculates the weighted average of the ACO's third benchmark 
year (BY3) national per capita expenditure amounts across the following 
populations of beneficiaries, where the weights are the ACO's BY3 
proportion of assigned beneficiaries for that enrollment type:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) Calculates the HEBA scaler as the difference between 5 percent 
of the national per capita expenditure amount, expressed as single 
value as calculated in paragraph (b)(1) of this section, and the higher 
of: the regional adjustment, expressed as a single value as described 
in Sec.  425.656(d); the per capita prior savings adjustment determined 
in Sec.  425.658(c); or no adjustment, in the case where the regional 
adjustment is negative and the ACO is not eligible for the prior 
savings adjustment under Sec.  425.658(b)(3)(i).
    (3) Determines the ACO's eligibility for the HEBA based on the 
proportion of the ACO's assigned beneficiaries for the performance year 
who are enrolled in the Medicare Part D low-income subsidy (LIS) or 
dually eligible for Medicare and Medicaid. An ACO is

[[Page 62230]]

only eligible for the HEBA if this proportion is greater than or equal 
to 20 percent. An ACO with a proportion less than 20 percent is 
ineligible to receive a HEBA.
    (4) Calculates the HEBA. If the ACO is eligible for the HEBA as 
determined in paragraph (b)(3) of this section, the HEBA is equal to 
the product of the HEBA scaler calculated in paragraph (b)(2) of this 
section and the proportion of the ACO's assigned beneficiaries for the 
performance year who are enrolled in the Medicare Part D LIS or dually 
eligible for Medicare and Medicaid.
    (c) Applicability of the HEBA. CMS compares the HEBA determined in 
paragraph (b)(4) of this section with the regional adjustment, 
expressed as a single value as described in Sec.  425.656(d), and the 
per capita prior savings adjustment determined in Sec.  425.658(c), if 
any, to determine the adjustment, if any, that will be applied to the 
ACO's benchmark in accordance with Sec.  425.652(a)(8)(ii).


Sec.  Sec.  425.664  through 425.669 [Added and Reserved]

0
77. Sections 425.664 through 425.669 are added and reserved.
0
78. Section 425.672 is added to read as follows:


Sec.  425.672  Adjustments to mitigate the impact of significant, 
anomalous, and highly suspect billing activity on Shared Savings 
Program financial calculations involving calendar year 2024 or 
subsequent calendar years.

    (a) General. This section describes adjustments CMS may make to 
Shared Savings Program calculations to mitigate the impact of 
significant, anomalous, and highly suspect billing activity occurring 
in calendar year 2024 or subsequent calendar years.
    (b) Significant, anomalous, and highly suspect billing activity for 
a HCPCS or CPT code impacting Shared Savings Program calculations. CMS, 
at its sole discretion, may determine that the billing of one or more 
specified HCPCS or CPT codes represents significant, anomalous, and 
highly suspect billing activity for a calendar year that warrants 
adjustment to calculations made under this part.
    (c) Applicability of adjustments to performance year and benchmark 
year calculations. Notwithstanding any other provision in this part, 
CMS adjusts the following Shared Savings Program calculations, as 
applicable, to exclude all Medicare Parts A and B fee-for-service 
payment amounts on claims for the specified claim types associated with 
a HCPCS or CPT code identified pursuant to paragraph (b) of this 
section for the periods identified in paragraph (d) of this section:
    (1) Calculation of Medicare Parts A and B fee-for-service 
expenditures for an ACO's assigned beneficiaries for all purposes 
including the following: Establishing, adjusting, updating, and 
resetting the ACO's historical benchmark and determining performance 
year expenditures.
    (2) Calculation of fee-for-service expenditures for assignable 
beneficiaries as used in determining county-level fee-for-service 
expenditures and national Medicare fee-for-service expenditures, 
including the following calculations:
    (i) Determining average county fee-for-service expenditures based 
on expenditures for the assignable population of beneficiaries in each 
county in the ACO's regional service area according to Sec. Sec.  
425.601(c) and 425.654(a) for purposes of calculating the ACO's 
regional fee-for-service expenditures.
    (ii) Determining the 99th percentile of national Medicare fee-for-
service expenditures for assignable beneficiaries for purposes of the 
following:
    (A) Truncating assigned beneficiary expenditures used in 
calculating benchmark expenditures under Sec. Sec.  425.601(a)(4) and 
425.652(a)(4), and performance year expenditures under Sec. Sec.  
425.605(a)(3) and 425.610(a)(4).
    (B) Truncating expenditures for assignable beneficiaries in each 
county for purposes of determining county fee-for-service expenditures 
according to Sec. Sec.  425.601(c)(3) and 425.654(a)(3).
    (C) Truncating expenditures for assignable beneficiaries for 
purposes of determining truncated national per capita fee-for service 
expenditures for purposes of calculating the ACPT according to Sec.  
425.660(b)(3).
    (iii) Determining truncated national per capita fee-for-service 
Medicare expenditures for assignable beneficiaries for purposes of 
calculating the ACPT according to Sec.  425.660(b)(3).
    (iv) Determining national per capita expenditures for Parts A and B 
services under the original Medicare fee-for-service program for 
assignable beneficiaries for purposes of capping the regional 
adjustment to the ACO's historical benchmark according to Sec. Sec.  
425.601(a)(8)(ii)(C) and 425.656(c)(3), capping the prior savings 
adjustment according to Sec.  425.658(c)(1)(ii), capping the prepaid 
shared savings multiplier according to Sec.  425.640(f)(2)(v), and 
calculating the HEBA scaler according to Sec.  425.662(b)(2).
    (v) Determining national growth rates that are used as part of the 
blended growth rates used to trend forward BY1 and BY2 expenditures to 
BY3 according to Sec. Sec.  425.601(a)(5)(ii) and 425.652(a)(5)(ii) and 
as part of the blended growth rates used to update the benchmark 
according to Sec. Sec.  425.601(b)(2) and 425.652(b)(2)(i).
    (3) Calculation of Medicare Parts A and B fee-for-service revenue 
of ACO participants for purposes of calculating the ACO's loss 
recoupment limit under the BASIC track as specified in Sec.  
425.605(d).
    (4) Calculation of total Medicare Parts A and B fee-for-service 
revenue of ACO participants and total Medicare Parts A and B fee-for-
service expenditures for the ACO's assigned beneficiaries for purposes 
of identifying whether an ACO is a high revenue ACO or low revenue ACO, 
as defined under Sec.  425.20, determining an ACO's eligibility to 
receive advance investment payments according to Sec.  425.630, and 
determining whether an ACO qualifies for a shared savings payment under 
Sec.  425.605(h).
    (5) Calculation or recalculation of the amount of the ACO's 
repayment mechanism arrangement according to Sec.  425.204(f)(4).
    (d) Periods of adjustment. CMS adjusts the Shared Savings Program 
calculations identified in paragraph (c) of this section for 
significant, anomalous, and highly suspect billing activity identified 
for calendar year 2024 or subsequent calendar years as follows:
    (1) The calendar year for which the significant, anomalous, and 
highly suspect billing activity was identified pursuant to paragraph 
(b) of this section, when it is either a performance year or a 
benchmark year.
    (2) The 3 most recent years prior to the start of the ACO's 
agreement period used in establishing the historical benchmark, when 
such a benchmark is used to reconcile the ACO for a performance year 
adjusted in accordance with paragraph (d)(1) of this section.
    (e) Adjustments for growth rates used in calculating the ACPT. In 
addition to adjustments described in paragraph (c) of this section, CMS 
makes adjustments for payments associated with a HCPCS or CPT code 
identified pursuant to paragraph (b) of this section for any calendar 
year corresponding to BY3 in projecting per capita growth in Parts A 
and B fee-for-service expenditures, according to Sec.  425.660(b)(1), 
for purposes of calculating the ACPT for agreement periods beginning on 
January 1, 2024, and in subsequent years.
0
79. Section 425.674 is added to read as follows:

[[Page 62231]]

Sec.  425.674  Accounting for the impact of improper payments on Shared 
Savings Program financial calculations.

    (a) General rule. Upon the reopening of an initial determination 
pursuant to Sec.  425.315(a)(4), CMS will use the methodology specified 
in this section to account for the impact of improper payments when:
    (1) Determining savings or losses for the relevant performance year 
in accordance with Sec.  425.315 in order to issue a revised initial 
determination.
    (2) Adjusting the benchmark by recalculating benchmark year 
expenditures under Sec. Sec.  425.601(a)(9)(iii) and 
425.652(a)(9)(viii) in the event that CMS recalculates a payment 
determination and issues a revised initial determination for the 
corresponding performance year in a prior agreement period, in 
accordance with paragraph (a)(1) of this section.
    (b) Improper payment. For the purpose of this section, improper 
payment includes:
    (1) An amount associated with a demanded overpayment determination.
    (2) An amount identified in a settlement agreement or judgment, 
pursuant to conduct by individuals or entities performing functions or 
services related to an ACO's activities, less any penalties or damages.
    (c) Accounting for improper payments. To adjust Medicare Parts A 
and B fee-for-service expenditures for improper payments CMS does the 
following:
    (1) Identify each Shared Savings Program expenditure calculation 
for a performance year or benchmark year, as calculated according to 
the standard methodology described in this subpart and expressed as a 
per capita dollar amount, that will be adjusted for the impact of 
improper payments.
    (2) Determine each specific population of Medicare fee-for-service 
beneficiaries used to calculate the expenditure amount identified in 
paragraph (c)(1) of this section. The populations relevant for a 
specific expenditure calculation may include:
    (i) The population of beneficiaries assigned to the ACO for 
calculating the ACO's performance year or benchmark year expenditures.
    (ii) The population of assignable beneficiaries in each county in 
the ACO's regional service area for calculating county-level 
expenditures.
    (iii) The national population of assignable beneficiaries for 
calculating national assignable expenditures.
    (iv) The national population of Medicare fee-for-service 
beneficiaries for calculating national expenditures.
    (3) Determine the per capita amount of improper payments for the 
performance year or benchmark year included in the per capita Medicare 
Parts A and B fee-for-service expenditure amount for a population 
identified in paragraph (c)(2) of this section in accordance with 
paragraph (d) of this section for all providers or suppliers with 
identified improper payments.
    (4) Subtract the per capita amount determined in paragraph (c)(3) 
of this section from the expenditure calculation identified in 
paragraph (c)(1) of this section for the population identified in 
paragraph (c)(2) of this section for each of the following populations 
of beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (5) If applicable, CMS will do the following to adjust regional 
expenditures for improper payments:
    (i) Adjust county-level fee-for-service expenditures determined 
under paragraph (c)(4) of this section, for each county in the ACO's 
regional service area, for severity and case mix of assignable 
beneficiaries in the county using prospective HCC risk scores. This 
calculation is made for each of the populations of beneficiaries 
identified in paragraphs (c)(4)(i) through (iv) of this section.
    (ii) Weight the risk adjusted county-level fee-for-service 
expenditures determined under paragraph (c)(5)(i) of this section 
according to the ACO's proportion of assigned beneficiaries in the 
county, determined in accordance with Sec.  425.601(d)(1), Sec.  
425.603(f)(1), or Sec.  425.654(b)(1), as applicable, for each of the 
populations of beneficiaries identified in paragraphs (c)(4)(i) through 
(iv) of this section.
    (iii) Aggregate the values determined in paragraph (c)(5)(ii) of 
this section for each of the populations of beneficiaries identified in 
paragraphs (c)(4)(i) through (iv) of this section across all counties 
within the ACO's regional service area.
    (d) Determining the per capita amount of improper payments. CMS may 
use one or more of the following approaches to determine the per capita 
amount that will be used to adjust expenditure calculations identified 
in paragraph (c)(1) of this section:
    (1) Calculate aggregate improper payments attributable to a 
population identified in paragraph (c)(2) of this section for each 
provider or supplier that had improper payments.
    (i) For improper payments associated with specific claims, CMS will 
do the following:
    (A) For improper payments to a provider or supplier that correspond 
to payment amounts on claims or line items that were used in a Shared 
Savings Program calculation identified in paragraph (c)(1) of this 
section, and subsequently adjusted after the 3-month claims run out 
period, CMS will sum the improper payment amounts across all such 
claims or line items with dates of service during the period used to 
calculate performance year or benchmark year expenditures for the 
population identified in paragraph (c)(2) of this section.
    (B) In the event CMS determines it is necessary to account for the 
impact of improper payments on Shared Savings Program financial 
calculations by adjusting the payment amounts for a specific HCPCS or 
CPT code billed by the provider or supplier for the population 
identified in paragraph (c)(2) of this section, CMS will do the 
following--
    (1) Identify the applicable claims or line items with dates of 
service during the period used to calculate performance year or 
benchmark year expenditures processed before the end of the applicable 
3-month claims run out period;
    (2) Sum the claim or line item payment amounts, on the claims or 
line items identified in paragraph (d)(1)(i)(B)(1) of this section; and
    (3) If applicable, multiply the sum calculated in paragraph 
(d)(1)(i)(B)(2) of this section by a scaling factor to compute the 
payment differential between the HCPCS or CPT code that was improperly 
billed and a CMS-identified alternate code.
    (ii) For aggregate improper payment amounts that are not linked to 
specific claims or line items, CMS will calculate the amount 
attributable to the population identified in paragraph (c)(2) of this 
section by applying a proration factor to the aggregate improper 
payment amount identified for that provider or supplier. CMS calculates 
the proration factor as follows:
    (A) The denominator of the proration factor is total Medicare Parts 
A and B claim or line item payment amounts to the provider or supplier 
for all fee-for-service beneficiaries on claims of specified claim 
types for the time period associated with the aggregate improper 
payment amount identified for the provider or supplier that were made 
before the end of the applicable 3-month claims run out period.
    (B) The numerator of the proration factor is the portion of the 
total from the

[[Page 62232]]

denominator, in paragraph (d)(1)(ii)(A) of this section, that CMS 
determines is attributable to the population identified in paragraph 
(c)(2) of this section with dates of service during the period used to 
calculate expenditures for the applicable performance year or benchmark 
year.
    (2) Sum the amounts calculated pursuant to paragraph (d)(1) of this 
section attributable to a population identified in paragraph (c)(2) of 
this section across all providers or suppliers that had identified 
improper payments.
    (3) Take the lesser of the following two values--
    (i) The sum from paragraph (d)(2) of this section; or
    (ii) Total Medicare Parts A and B claim or line item payment 
amounts to all providers or suppliers that had improper payments for 
the population identified in paragraph (c)(2) of this section on claims 
of specified claim types with dates of service within the performance 
year or benchmark year made before the end of the applicable 3-month 
claims run out period.
    (4) Express the lesser-of amount from paragraph (d)(3) of this 
section as a per capita value by dividing by the total beneficiary 
person years in the population identified in paragraph (c)(2) of this 
section for the applicable performance year or the benchmark year.
0
80. Part 427 is added to read as follows:

PART 427--MEDICARE PART B DRUG INFLATION REBATE PROGRAM

Subpart A--General Provisions
Sec.
427.10 Basis and scope.
427.20 Definitions.
Subpart B--Determination of Part B Rebatable Drugs
427.100 Definitions.
427.101 Identification of Part B rebatable drugs.
Subpart C--Coinsurance Adjustment and Adjusted Medicare Payment for 
Part B Rebatable Drugs With Price Increases Faster Than Inflation
427.200 Definitions.
427.201 Computation of beneficiary coinsurance and adjusted Medicare 
Payment for Part B rebatable drugs with price increases faster than 
inflation.
Subpart D--Determination of the Rebate Amount for Part B Rebatable 
Drugs
427.300 Definitions.
427.301 Calculation of the total Part B rebate amount to be paid by 
manufacturers.
427.302 Calculation of the per unit Part B drug rebate amount.
427.303 Determination of total number of billing units.
427.304 Adjustments for changes to billing and payment codes.
Subpart E--Reducing the Rebate Amount for Part B Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption
427.400 Definitions.
427.401 Reducing the rebate amount for Part B rebatable drugs 
currently in shortage.
427.402 Reducing the rebate amount for certain Part B rebatable 
drugs when there is a severe supply chain disruption.
Subpart F--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments
427.500 Definitions.
427.501 Rebate Reports and reconciliation.
427.502 Rebate Reports for applicable calendar quarters in calendar 
years 2023 and 2024.
427.503 Suggestion of Error.
427.504 Manufacturer access to Rebate Reports.
427.505 Deadline and process for payment of rebate amount.
Subpart G--Enforcement of Manufacturer Payment of Rebate Amounts
427.600 Civil money penalty notice and appeals procedures.

    Authority: 42 U.S.C. 1395w-3a(i), 1302, and 1395hh.

Subpart A--General Provisions


Sec.  427.10  Basis and scope.

    (a) Basis. This part implements section 1847A(i) of the Social 
Security Act (``the Act'').
    (b) Scope. This part sets forth the requirements of the Medicare 
Part B Drug Inflation Rebate Program, which requires, for each calendar 
quarter, manufacturers to pay rebates for certain single source drugs 
and biological products with prices that increase faster than the rate 
of inflation.
    (c) Severability. Were any provision of this part to be held 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, such provisions would be severable from this part and the 
invalidity or unenforceability would not affect the remainder thereof 
or any other part of this subchapter or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.


Sec.  427.20  Definitions.

    As used in this part, the following definitions apply:
    Allowed charges means the amount that is inclusive of the 
beneficiary coinsurance and Medicare payment for the covered Part B 
item or service.
    Applicable calendar quarter means a calendar quarter (January 1 to 
March 31, April 1 to June 30, July 1 to September 30, or October 1 to 
December 31) in which an inflation rebate is applied, starting with 
January 1, 2023.
    Applicable threshold means the amount calculated in accordance with 
Sec.  427.101(c)(2).
    Average sales price (ASP) means the manufacturer's price for a 
quarter for a drug represented by a particular 11-digit National Drug 
Code (NDC-11) calculated in accordance with Sec.  414.804 of this 
chapter.
    Benchmark period Consumer Price Index for All Urban Consumers (CPI-
U) means the CPI-U identified in Sec.  427.302(e).
    Billing and payment code means the specific code used to classify 
and report a drug or biological for purposes of Medicare Part B 
payment. A Healthcare Common Procedure Coding System (HCPCS) code, as 
established by CMS, is an example of a billing and payment code used to 
describe a drug or biological and for which CMS publishes a payment 
amount.
    Billing unit means the identifiable quantity of a drug or 
biological product associated with a billing and payment code (for 
example, a HCPCS code), as established by CMS.
    Biosimilar biological product has the meaning set forth in section 
1847A(c)(6)(H) of the Act.
    CPI-U means the monthly Consumer Price Index for All Urban 
Consumers (United States city average) index level for all items from 
the Bureau of Labor Statistics.
    Food and Drug Administration (FDA) application means, for the 
purposes of calculating the Part B rebate amount, a New Drug 
Application (NDA) or Biologics License Application (BLA) approved by 
the FDA.
    Final action claim means a non-rejected claim for which a Medicare 
payment has been made, and for which all disputes and adjustments have 
been resolved.
    First marketed date means the earliest date of first sale of any 
NDC-11 within a billing and payment code among all products and package 
sizes under the same FDA application. The first marketed date will be 
identified using ASP data reported by NDC-11 to CMS by a manufacturer 
as required under sections 1927(b)(3)(A)(iii)(I) and 1847A(f)(2) of the 
Act, if available.
    Grouped billing and payment code, for the purposes of Part B rebate 
calculations, means a billing and payment code, such as a HCPCS code, 
other than a Not Otherwise Classified (NOC) code, that typically 
contains multiple drug products approved under multiple NDAs or BLAs 
and may be

[[Page 62233]]

inclusive of, but are not limited to, multiple source billing codes.
    Inflation-adjusted payment amount means the amount calculated in 
Sec.  427.302(g).
    Manufacturer has the meaning set forth in section 1847A(c)(6)(A) of 
the Act.
    National Drug Code (NDC) means the unique identifying prescription 
drug product number that is listed with FDA identifying the product and 
package size and type.
    Not Otherwise Classified (NOC) code means a billing and payment 
code, including an unclassified, unspecified, or unlisted code, for 
drugs and biological products for which no specific billing and payment 
code is assigned.
    Part B rebatable drug means, subject to the exclusions described in 
Sec.  427.101(b), a single source drug or biological product, including 
a biosimilar biological product but excluding a qualifying biosimilar 
biological product, for which payment is made under Part B.
    Payment amount benchmark quarter means the calendar quarter 
identified in Sec.  427.302(c).
    Payment amount in the payment amount benchmark quarter means the 
amount identified in Sec.  427.302(d).
    Rebate period CPI-U means the CPI-U identified in Sec.  427.302(f).
    Single source drug or biological product has the meaning set forth 
in section 1847A(c)(6)(D) of the Act.
    Specified amount refers to the amount identified in Sec.  
427.302(b).
    Subsequently approved drug means a drug first approved or licensed 
by the FDA after December 1, 2020.
    Unit means, with respect to a Part B rebatable drug, with respect 
to each National Drug Code (including package size) associated with a 
drug or biological, the lowest identifiable quantity (such as a capsule 
or tablet, milligram of molecules, or grams) of the drug or biological 
that is dispensed, exclusive of any diluent without reference to volume 
measures pertaining to liquids as reported under section 1847A(b)(2)(B) 
of the Act.

Subpart B--Determination of Part B Rebatable Drugs


Sec.  427.100  Definitions.

    As used in this subpart, the following definitions apply:
    EUA Declaration refers to the March 27, 2020, Emergency Use 
Authorization (EUA) Declaration for Drugs and Biological Products under 
section 564 of the Food, Drug, and Cosmetic (FD&C) Act.
    Individual who uses such a drug or biological means a unique 
Medicare Part B beneficiary who was furnished the Part B drug or 
biological that was covered under Part B during the applicable calendar 
quarter, identified using final action claims data with dates of 
service during the calendar year described in Sec.  427.101(b)(6) and 
with allowed charges greater than zero.


Sec.  427.101  Identification of Part B rebatable drugs.

    (a) Determination of Part B rebatable drugs. (1) For each 
applicable calendar quarter, CMS will:
    (i) Identify single source drugs or biological products, including 
biosimilar biological products, covered under Part B; and
    (ii) Identify the applicable billing and payment code for each drug 
or biological product identified in paragraph (a)(1)(i) of this 
section.
    (2) For a drug or biological product identified under paragraph 
(a)(1) of this section, CMS will determine whether the drug or 
biological product meets the exclusion criteria described in paragraph 
(b) or (c) of this section as of the first day of the applicable 
calendar quarter.
    (3) To determine whether a drug or biological product is a Part B 
rebatable drug under this section, CMS will use the most recent 
available data submitted to CMS by manufacturers pursuant to section 
1927(b)(3)(A)(iii) of the Act or section 1847A(f)(2), as applicable, 
and other available data, including but not limited to information 
available at FDA.gov and information in drug pricing compendia, as 
applicable.
    (b) Excluded product categories. The following categories of 
products are not considered Part B rebatable drugs:
    (1) Qualifying biosimilar biological products. Biological products 
as defined under section 1847A(b)(8)(B)(iii) of the Act.
    (2) Products with historically excepted grouped billing and payment 
codes. Single source drugs or biological products that were within the 
same billing and payment code as of October 1, 2003, and which, as 
required under section 1847A(c)(6)(C)(ii) of the Act, are treated as 
multiple source drugs.
    (3) Products billed under a NOC code. A drug or biological product 
billed under a NOC code.
    (4) Radiopharmaceutical drugs and biological products. A separately 
payable radiopharmaceutical drug or biological product not paid under 
section 1847A of the Act.
    (5) Skin substitutes. A product included within the suite of 
cellular- and tissue-based products that aid wound healing.
    (6) Drugs with average total allowed charges under the applicable 
threshold. Drugs and biological products for which the Medicare Part B 
average total allowed charges for a year per individual that uses such 
drug or biological are below the applicable threshold, as described in 
paragraph (c) of this section.
    (7) Certain vaccines and other products. The following products:
    (i) The vaccines described in section 1861(s)(10) of the Act, which 
includes the influenza, pneumococcal, hepatitis B, and COVID-19 
vaccines.
    (ii) Monoclonal antibodies used for treatment or post-exposure 
prophylaxis of COVID-19 that are covered and paid for under section 
1861(s)(10) of the Act. This exclusion will apply to applicable 
quarters until the end of the calendar year in which the EUA 
Declaration ends.
    (iii) Monoclonal antibodies that are used for pre-exposure 
prophylaxis of COVID-19 that are covered and paid for under section 
1861(s)(10) of the Act. This exclusion will apply to applicable 
calendar quarters even after the year in which the EUA Declaration 
ends, as long as after the EUA Declaration is terminated, these 
products have an FDA-approved application or license.
    (8) Generic drugs. Part B drugs approved under an Abbreviated New 
Drug Application (ANDA) submitted under section 505(j) of the Federal 
Food, Drug, and Cosmetic Act (FD&C Act).
    (c) Drugs and biological products with average total allowed 
charges below the applicable threshold. For each applicable calendar 
quarter, CMS will identify drugs and biological products with Part B 
average total allowed charges for a year per individual that uses such 
a drug or biological product that are below the applicable threshold in 
accordance with the calculations described in this section. Such drugs 
and biological products are not considered Part B rebatable drugs and 
will be excluded from the identification of Part B rebatable drugs in 
paragraph (a) of this section.
    (1) Average total allowed charges for a year per individual. For 
each drug or biological that is identified in accordance with paragraph 
(a) of this section, CMS will calculate average total allowed charges 
for a year per individual as follows:
    (i) For single source drugs and biological products assigned to 
only one billing and payment code, CMS will sum the allowed charges 
from final action claims greater than $0 and divide the summed amount 
by the number of

[[Page 62234]]

individuals who use such a drug or biological with allowed charges for 
this billing and payment code.
    (ii) For single source drugs and biological products assigned to 
more than one billing and payment code, CMS will sum the allowed 
charges from final action claims greater than $0 for all billing and 
payment codes and divide the summed amount by the number of individuals 
who use such a drug or biological with allowed charges for these 
billing and payment codes.
    (iii) For single source drugs and biological products previously 
crosswalked to a grouped billing and payment code:
    (A) If crosswalked to a grouped billing and payment code during the 
full year, CMS will calculate the average total allowed charges per 
individual per year for the drug using allowed charges and the number 
of individuals who used the drug or biological product based on claims 
for the previously grouped billing and payment code during the year.
    (B) If crosswalked to a grouped billing and payment code and later 
assigned to a unique billing and payment code for part of the year, CMS 
will calculate average total allowed charges per individual per year 
by:
    (1) Summing the total allowed charges billed under the unique 
billing and payment code for the drug with dates of service on or after 
the Medicare effective date for this unique billing and payment code 
and identifying the individuals on those claims.
    (2) Summing the total allowed charges on claims billed under the 
previously grouped billing and payment code and identifying individuals 
with claims prior to the unique billing and payment code's effective 
date.
    (3) Summing the total allowed charges as determined in paragraphs 
(c)(1)(iii)(B)(1) and (2) of this section and dividing by the total 
number of individuals, de-duplicated for individuals identified under 
paragraphs (c)(1)(iii)(B)(1) and (2).
    (2) Applicable threshold. CMS will calculate the applicable 
threshold for an applicable calendar quarter as follows:
    (i) For applicable calendar quarters in 2023, the applicable 
threshold is equal to $100.
    (ii) For applicable calendar quarters in 2024, the applicable 
threshold is equal to $100 increased by the percentage increase in the 
CPI-U for the 12-month period ending with June of 2023.
    (iii) For applicable calendar quarters in each subsequent calendar 
year, the applicable threshold is equal to the unrounded applicable 
threshold calculated for the prior calendar year increased by the 
percentage increase in the CPI-U for the 12-month period ending with 
June of the previous year.
    (iv) If the resulting amount under paragraphs (c)(2)(i) through 
(iii) of this section is not a multiple of $10, CMS will round that 
amount to the nearest multiple of $10.
    (3) Application of the applicable threshold at the billing and 
payment code level. For each applicable calendar quarter, CMS will 
apply the exclusion of drugs and biological products identified in 
paragraph (c)(1) of this section, with average total allowed charges 
for a year per individual less than the applicable threshold described 
in paragraph (c)(2) of this section, to applicable billing and payment 
codes as follows:
    (i) For single source drugs or biological products assigned to a 
unique billing and payment code, CMS will exclude the assigned billing 
and payment code for an applicable calendar quarter if the average 
total allowed charges for a year per individual are less than the 
applicable threshold.
    (ii) For a single source drug or biological product that is 
assigned to more than one billing and payment code during a year, CMS 
will exclude all such assigned billing and payment codes for an 
applicable calendar quarter.
    (4) Definition of year. For purposes of the calculations described 
in this section, a year is defined as the 4 consecutive calendar 
quarters beginning 6 calendar quarters before the applicable calendar 
quarter. CMS will use final action claims from the Medicare fee-for-
service claims repository where separate payment was allowed for the 
applicable billing and payment code for dates of service within a year 
to calculate Part B average total allowed charges for that year.

Subpart C--Coinsurance Adjustment and Adjusted Medicare Payment for 
Part B Rebatable Drugs With Price Increases Faster Than Inflation


Sec.  427.200  Definitions.

    As used in this subpart, inflation-adjusted beneficiary coinsurance 
means the coinsurance adjustment as calculated in accordance with this 
subpart.


Sec.  427.201  Computation of beneficiary coinsurance and adjusted 
Medicare payment for Part B rebatable drugs with price increases faster 
than inflation.

    (a) Methodology. CMS must use the methodology set forth in this 
section to calculate the inflation-adjusted beneficiary coinsurance and 
associated adjusted Medicare payment percentage for Part B rebatable 
drugs as set forth in Sec. Sec.  410.152(m), 419.41(e), and 
489.30(b)(6) of this chapter.
    (b) Calculation of inflation-adjusted beneficiary coinsurance. To 
calculate the inflation-adjusted beneficiary coinsurance for Part B 
rebatable drugs with respect to a calendar quarter, CMS compares the 
payment amount, as described in paragraph (b)(3) of this section, to 
the inflation-adjusted payment amount for the applicable calendar 
quarter.
    (1) If the payment amount exceeds the inflation-adjusted payment 
amount, the inflation-adjusted beneficiary coinsurance is calculated by 
multiplying the inflation-adjusted payment amount by 0.20.
    (2) If the inflation-adjusted payment amount does not exceed the 
payment amount, the adjustment to the beneficiary coinsurance described 
in paragraph (b)(1) of this section is not applied.
    (3) CMS will use the published payment amount in quarterly pricing 
files published by CMS as the payment amount in this determination.
    (c) Exclusions. Any drug that is excluded from Part B rebatable 
drugs in accordance with Sec.  427.101(b) is not subject to inflation-
adjusted beneficiary coinsurance.

Subpart D--Determination of the Rebate Amount for Part B Rebatable 
Drugs


Sec.  427.300  Definitions.

    As used in this subpart, the following definitions apply:
    340B Program is the program under section 340B of the Public Health 
Service (PHS) Act.
    Refundable single-dose container or single-use package drug has the 
meaning set forth in Sec.  414.902 of this chapter.


Sec.  427.301  Calculation of the total Part B rebate amount to be paid 
by manufacturers.

    (a) Total rebate. Subject to paragraph (b) of this section, the 
total rebate amount to be paid for a Part B rebatable drug, as 
identified under Sec.  427.101, for an applicable calendar quarter is 
equal to the product of the per unit Part B rebate amount of such drug, 
as determined under Sec.  427.302, and the billing units of the Part B 
rebatable drug furnished during the applicable calendar quarter, as 
identified in accordance with Sec.  427.303. The rebate amount may be 
reduced in accordance with subpart E of this part or adjusted in 
accordance with subpart F of this part.
    (b) Apportionment of the Part B rebate amount. CMS will identify 
billing and

[[Page 62235]]

payment codes for which multiple manufacturers report ASP, in 
accordance with sections 1927(b)(3) and 1847A(f) of the Act, for NDCs 
assigned to the billing and payment code. CMS will calculate the rebate 
amount owed by each manufacturer by:
    (1) Determining the total billing units sold for each NDC assigned 
to the billing and payment code, by multiplying the number of units 
reported by a manufacturer in ASP data submissions at the NDC-11 
package level by the number of billing units per NDC-11 reporting unit.
    (2) Summing the individual manufacturer's total billing units sold 
during the applicable calendar quarter (for all NDCs of the 
manufacturer assigned to the billing and payment code).
    (3) Summing all manufacturers' total billing units sold during the 
applicable calendar quarter for all NDCs of the Part B rebatable drug 
assigned to the billing and payment code.
    (4) Dividing the resulting amount from paragraph (b)(2) of this 
section by the resulting amount from paragraph (b)(3) of this section.
    (5) Multiplying the resulting amount from paragraph (b)(4) of this 
section by the total rebate amount as determined under paragraph (a) of 
this section.


Sec.  427.302  Calculation of the per unit Part B drug rebate amount.

    (a) Formula for calculating the per unit Part B rebate amount. CMS 
will calculate the per unit Part B rebate amount for a Part B rebatable 
drug and applicable calendar quarter by determining the amount by which 
the specified amount, as calculated in accordance with paragraph (b) of 
this section, exceeds the inflation-adjusted payment amount, as 
calculated in accordance with paragraph (g) of this section.
    (b) Identification of the specified amount for the applicable 
calendar quarter. For each applicable calendar quarter, subject to 
paragraph (b)(2) of this section, the specified amount is equal to the 
amount determined in accordance with section 1847A(i)(3)(A)(ii)(I)(aa) 
or (bb) of the Act, as applicable, for the calendar quarter.
    (1) The first applicable calendar quarter for a Part B rebatable 
drug will be the earliest applicable calendar quarter that follows the 
payment amount benchmark quarter identified in paragraphs (c)(1) 
through (5) of this section.
    (2) If all NDCs in the billing and payment code have neither 
manufacturer-reported ASP nor Wholesale Acquisition Cost (WAC) price 
data available for the applicable calendar quarter, CMS will use WAC 
price data from other public sources, if available, to calculate 106 
percent of WAC, which will serve as the specified amount.
    (c) Identification of the payment amount benchmark quarter. For 
each Part B rebatable drug, CMS will identify the applicable payment 
amount benchmark quarter using the earliest first marketed date of any 
NDC ever marketed under any FDA application under which any NDCs that 
have ever been assigned to the billing and payment code as of the 
applicable calendar quarter have been marketed, as set forth in 
paragraphs (c)(1) through (3) of this section, as applicable, subject 
to paragraphs (c)(4) and (5) of this section:
    (1) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, and with a first marketed date on or 
before December 1, 2020, the payment amount benchmark quarter is the 
calendar quarter beginning July 1, 2021.
    (2) For a Part B rebatable drug first approved or licensed by the 
FDA after December 1, 2020, the payment amount benchmark quarter is the 
third full calendar quarter after a drug's first marketed date.
    (3) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, but with a first marketed date after 
December 1, 2020, the payment amount benchmark quarter is the third 
full calendar quarter after a drug's first marketed date.
    (4) Notwithstanding paragraph (c)(3) of this section, for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, the payment 
amount benchmark quarter is the third full calendar quarter after the 
Part B rebatable drug is assigned a billing and payment code other than 
a NOC code.
    (5) For a Part B rebatable drug that is a selected drug (as defined 
in section 1192(c) of the Act) with respect to a price applicability 
period (as defined in section 1191(b)(2) of the Act), in the case such 
Part B rebatable drug is no longer considered to be a selected drug, 
for each applicable quarter beginning after the price applicability 
period with respect to such drug, the payment amount benchmark quarter 
is the calendar quarter beginning January 1 of the last year during 
such price applicability period with respect to such selected drug.
    (d) Identification of the payment amount in the payment amount 
benchmark quarter. CMS will identify the payment amount in the payment 
amount benchmark quarter using the published payment limit for the 
billing and payment code for the applicable payment amount benchmark 
quarter identified in accordance with paragraph (c) of this section.
    (1) For a Part B rebatable drug, subject to paragraphs (d)(1)(i) 
and (ii) of this section and except as provided in paragraph (d)(2) of 
this section, CMS will identify the payment amount in the payment 
amount benchmark quarter using the published payment limit for the 
billing and payment code for the applicable payment amount benchmark 
quarter determined in accordance with section 1847A of the Act.
    (i) If a published payment limit is not available for the 
applicable payment amount benchmark quarter, CMS will use the lower of 
106 percent of manufacturer-reported ASP or 106 percent of 
manufacturer-reported WAC.
    (ii) If neither a published payment limit nor manufacturer-reported 
ASP or WAC data are available, CMS will use WAC data from other public 
sources to calculate 106 percent of WAC, which, solely for the purposes 
of this section, CMS will consider to be the payment amount for the 
payment amount benchmark quarter.
    (2) For a Part B rebatable drug previously billed under a grouped 
billing and payment code during the payment amount benchmark quarter 
and later billed under a unique billing and payment code, CMS will use 
the grouped billing and payment code payment limit as the payment 
amount in the payment amount benchmark quarter.
    (e) Identification of the benchmark period CPI-U. For each Part B 
rebatable drug, CMS will identify the applicable benchmark period CPI-U 
at the billing and payment code level as set forth in paragraphs (e)(1) 
and (2) of this section, subject to paragraphs (e)(3) through (5) of 
this section:
    (1) For a Part B rebatable drug first approved or licensed by the 
FDA on or before December 1, 2020, and with a first marketed date on or 
before December 1, 2020, the benchmark period CPI-U is the CPI-U for 
January 2021.
    (2) For a Part B rebatable drug first approved or licensed by the 
FDA after December 1, 2020, the benchmark period CPI-U is the CPI-U for 
the first month of the first full calendar quarter after a drug's first 
marketed date.
    (3) Notwithstanding paragraph (e)(2) of this section, for a Part B 
rebatable drug first approved or licensed by FDA on or before December 
1, 2020, and with

[[Page 62236]]

a first marketed date after December 1, 2020, the benchmark period CPI-
U is the CPI-U for the first month of the third full calendar quarter 
after a drug's first marketed date.
    (4) Notwithstanding paragraph (e)(3) of this section, for a Part B 
rebatable drug that was billed under a NOC code during the calendar 
quarter beginning July 1, 2021, or the third full calendar quarter 
after such drug's first marketed date, whichever is later, the 
benchmark period CPI-U is the CPI-U for the first month of the third 
full calendar quarter after the Part B rebatable drug is assigned a 
billing and payment code other than a NOC code.
    (5) Notwithstanding paragraph (e)(4) of this section, for a Part B 
rebatable drug that is a selected drug (as defined in section 1192(c) 
of the Act) with respect to a price applicability period (as defined in 
section 1191(b)(2) of the Act), in the case such Part B rebatable drug 
is no longer considered to be a selected drug, the benchmark period 
CPI-U is the CPI-U for the July of the year preceding the last year 
during such price applicability period.
    (f) Identification of the rebate period CPI-U. For each Part B 
rebatable drug by billing and payment code, CMS will identify and use 
the greater of the benchmark period CPI-U index level or the CPI-U 
index level for the first month of the calendar quarter that is two 
calendar quarters before the applicable calendar quarter in which the 
Part B rebatable drug is furnished.
    (g) Determination of inflation-adjusted payment amount. For each 
applicable calendar quarter and for each Part B rebatable drug by 
billing and payment code, CMS will calculate the inflation-adjusted 
payment amount by dividing the rebate period CPI-U by the benchmark 
period CPI-U and then multiplying the quotient by the payment amount in 
the payment amount benchmark quarter, determined in accordance with 
paragraph (d) of this section.


Sec.  427.303  Determination of total number of billing units.

    (a) General. For each Part B rebatable drug, CMS will determine the 
total number of billing units of the billing and payment code subject 
to a rebate in the applicable calendar quarter using final action 
Medicare fee-for-service claims for which Medicare payment was allowed 
and greater than zero.
    (b) Total billing units. Using final action claims in the Medicare 
fee-for-service claims repository, at least 3 months after the end of 
the applicable calendar quarter, CMS will determine the total number of 
billing units for a Part B rebatable drug in an applicable calendar 
quarter by identifying separately payable claim lines for such billing 
and payment code for dates of service in that applicable calendar 
quarter and excluding the following billing units in claim lines as 
applicable:
    (1) Billing units of drugs acquired through the 340B Program. CMS 
will exclude billing units acquired under the 340B Program as 
identified through--
    (i) Separately payable billing units in claim lines for 
professional claims with dates of service during 2023 and 2024 from 
suppliers that are associated with covered entities listed by the 
Health Resources and Services Administration (HRSA) 340B Office of 
Pharmacy Affairs Information System as participating in the 340B 
Program. CMS will use National Provider Identifiers and/or Medicare 
Provider Numbers to identify these suppliers and the claims submitted 
with such identifiers;
    (ii) Separately payable billing units in claim lines for 
institutional claims that are billed with the ``JG'' or ``TB'' 
modifiers for claims with dates of service through December 31, 2024; 
and
    (iii) Separately payable billing units in claim lines billed with 
the ``TB'' modifier for claims with dates of service on or after 
January 1, 2025.
    (2) Billing units with a rebate under section 1927 of the Social 
Security Act. Subject to paragraph (b)(2)(i) of this section, CMS will 
exclude billing units from claims with dates of service during a month 
within an applicable calendar quarter if the units are furnished to a 
dually eligible Medicare beneficiary who has Medicaid coverage that may 
provide cost-sharing assistance.
    (i) CMS will not exclude billing units from claims when the 
Medicare beneficiary has Medicaid coverage that does not include cost-
sharing assistance, including Specified Low-Income Medicare 
Beneficiaries (SLMB), Qualified Disabled and Working Individuals 
(QDWI), and Qualifying Individuals (QI) beneficiaries.
    (ii) [Reserved]
    (3) Billing units that are packaged into the payment amount for an 
item or service and are not separately payable. CMS will exclude 
billing units that are packaged into the payment amount for an item or 
service and are not separately payable.
    (4) Billing units when a drug is no longer a Part B rebatable drug. 
In situations where a Part B rebatable drug that is a single source 
drug becomes a multiple source drug during an applicable calendar 
quarter, CMS will:
    (i) Determine if such drug has become a multiple source drug by 
reviewing FDA's most recent publication of ``Approved Drug Products 
with Therapeutic Equivalence Evaluations'' (commonly known as the 
Orange Book) for a drug that is that is rated as therapeutically 
equivalent to such drug; and,
    (ii) If a therapeutically equivalent drug is identified in 
accordance with paragraph (b)(4)(i) of this section, determine if the 
therapeutically equivalent drug was sold or marketed during the 
applicable calendar quarter; and
    (iii) Exclude billing units of such drug furnished on and after the 
first day of the calendar month in which the therapeutically equivalent 
drug was first sold or marketed during the applicable calendar quarter.
    (5) Billing units subject to discarded drug refunds. CMS will 
exclude billing units of discarded refundable single-dose container or 
single-use package drugs for which a refund has been paid in accordance 
with Sec.  414.940 of this chapter from the calculation of rebate 
amounts. For applicable calendar quarters beginning on or after January 
1, 2024, these billing units will be excluded as part of the 
reconciliation process described at Sec.  427.501(d).


Sec.  427.304  Adjustments for changes to billing and payment codes.

    (a) Changes in billing unit dose description. If there has been a 
change to the dose description for a Part B rebatable drug (causing a 
new billing and payment code to be assigned), CMS will calculate a 
conversion factor based on the ratio of the billing unit dose 
description for the current billing and payment code to the billing 
unit dose description for the prior billing and payment code. CMS will 
apply the conversion factor to the payment amount in the payment amount 
benchmark quarter, as described in Sec.  427.302(d), before applying 
the percentage by which the rebate period CPI-U for the calendar 
quarter exceeds the benchmark period CPI-U.
    (b) Instances when a new billing and payment code is assigned. If a 
new billing and payment code is assigned for a Part B rebatable drug, 
CMS will use the payment amount in the payment amount benchmark 
quarter, the payment amount benchmark quarter, and the benchmark 
quarter CPI-U of the prior billing and payment code to calculate the 
per unit Part B rebate amount under Sec.  427.302.
    (c) Documentation. CMS will maintain a crosswalk reflecting the 
changes in billing and payment codes and dose descriptions as 
applicable.

[[Page 62237]]

Subpart E--Reducing the Rebate Amount for Part B Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption


Sec.  427.400  Definitions.

    As used in this subpart, the following definitions apply:
    Currently in shortage means that at least one NDC-10 assigned to 
the billing and payment code of a Part B rebatable drug with the status 
``currently in shortage'' is on a shortage list maintained by the FDA 
under section 506E of the FD&C Act.
    Drug shortage or shortage means a period of time when the demand or 
projected demand for the drug within the United States exceeds the 
supply of the drug (see section 506C(h)(2) of the FD&C Act).
    Natural disaster means any natural catastrophe, including, but not 
limited to any of the following: hurricane, tornado, storm, high water, 
wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought, or regardless of cause, any 
fire, flood, or explosion.
    Other unique or unexpected event means any exogenous, unpredictable 
event outside of a manufacturer's control, including, but not limited 
to, a geopolitical disruption, pandemic, or act of terror.
    Plasma-derived product means a licensed biological product that is 
derived from human whole blood or plasma, as indicated on the approved 
product labeling.
    Severe supply chain disruption means a change in production or 
distribution that is reasonably likely to lead to a significant 
reduction in the U.S. supply of a Part B rebatable biosimilar 
biological product by a manufacturer and significantly affects the 
ability of the manufacturer of the biosimilar biological product to 
fill orders or meet expected demand for its product in the United 
States for at least 90 days. This definition does not include 
interruptions in manufacturing due to matters such as routine 
maintenance, manufacturing quality issues, or insignificant changes 
made in the manufacturing process for the drug.


Sec.  427.401  Reducing the rebate amount for Part B rebatable drugs 
currently in shortage.

    (a) General. As required under section 1847A(i)(3)(G)(i) of the 
Act, CMS will reduce the total rebate amount calculated under Sec.  
427.301(a), if any is owed, for a Part B rebatable drug that is 
currently in shortage, as defined in Sec.  427.400, at any point during 
the applicable calendar quarter.
    (b) Calculation of the reduced rebate amount. (1) For each 
applicable calendar quarter beginning on or after January 1, 2023, the 
reduced total rebate amount for a Part B rebatable drug currently in 
shortage will be calculated using the following formula:
Equation 1 to Paragraph (b)(1)
Reduced Total Rebate Amount = the total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the applicable calendar quarter) 
added to the total rebate amount multiplied by (1 minus percentage of 
time drug was currently in shortage during the applicable calendar 
quarter)

    (2) For purposes of paragraph (b)(1) of this section, the 
applicable percent reduction is:
    (i) For a Part B rebatable drug that is a plasma-derived product:
    (A) 75 percent for the first 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (B) 50 percent for the second 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (C) 25 percent for each subsequent applicable calendar quarter such 
drug is currently in shortage.
    (ii) For a Part B rebatable drug that is not a plasma-derived 
product:
    (A) 25 percent for the first 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (B) 10 percent for the second 4 consecutive applicable calendar 
quarters such drug is currently in shortage.
    (C) 2 percent for each subsequent applicable calendar quarter such 
drug is currently in shortage.
    (3) For purposes of paragraph (b)(1) of this section, the 
percentage of time the drug is currently in shortage during the 
applicable calendar quarter is equal to the number of days such drug is 
currently in shortage in an applicable calendar quarter, divided by the 
total number of days in the applicable calendar quarter.
    (c) Application of reduction. CMS will apply a reduction of the 
rebate amount as determined under paragraph (b) of this section to all 
the NDCs under the relevant billing and payment code.


Sec.  427.402  Reducing the rebate amount for certain Part B rebatable 
drugs when there is a severe supply chain disruption.

    (a) General. As required under section 1847A(i)(3)(G)(ii) of the 
Act, CMS will reduce the total rebate amount calculated under Sec.  
427.301(a), if any is owed, for a Part B rebatable biosimilar 
biological product when CMS determines there is a severe supply chain 
disruption during the applicable calendar quarter such as that caused 
by a natural disaster or other unique or unexpected event.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria described in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
owed by the manufacturer for a Part B rebatable biosimilar biological 
product by 75 percent for the quarter in which the event occurred and 
the 3 subsequent applicable calendar quarters.
    (2) Extension of reduction. If CMS determines a severe supply chain 
disruption continues into a fifth applicable calendar quarter as 
described in paragraph (c)(5) of this section, then CMS will reduce the 
total rebate amount owed by the manufacturer for a Part B rebatable 
biosimilar biological product by 75 percent for that fifth quarter and 
an additional 3 consecutive applicable calendar quarters.
    (3) Application of reduction. If CMS determines there is a severe 
supply chain disruption for an NDC-11 assigned to a billing and payment 
code, CMS will apply any reduction of the rebate amount as described in 
paragraphs (b)(1) and (2) of this section to all the NDCs under the 
relevant billing and payment code.
    (4) Limitation on rebate reductions. CMS will not apply multiple 
rebate reductions for the same Part B rebatable drug and applicable 
calendar quarter.
    (i) If a manufacturer believes there are multiple events causing 
severe supply chain disruptions during the same 4 applicable calendar 
quarters for the same Part B rebatable biosimilar biological product 
and submits multiple rebate reduction requests for the same product, 
CMS will grant no more than 1 rebate reduction under paragraph (b)(1) 
or (2) of this section for that product for those consecutive 
applicable calendar quarters.
    (ii) If CMS grants a rebate reduction request under this section, 
and the Part B rebatable biosimilar biological product subject to the 
reduction is currently in shortage during the same four applicable 
calendar quarters as the ones for which the severe supply chain 
disruption reduction request was granted, CMS will reduce the rebate 
amount as described in paragraph (b)(1) of this section and will not 
grant a reduction under Sec.  427.401 during those applicable calendar 
quarters.

[[Page 62238]]

    (iii) If a Part B rebatable biosimilar biological product that is 
currently in shortage experiences a severe supply chain disruption, CMS 
will reduce the rebate amount as described in paragraph (b)(1) of this 
section and will not grant a reduction under Sec.  427.401 during those 
applicable calendar quarters.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to Part B rebatable biosimilar biological 
products for which a manufacturer submits a rebate reduction request 
under this section.
    (2) Timing. For a natural disaster or other unique or unexpected 
event occurring on or after August 2, 2024, that the manufacturer 
believes caused a severe supply chain disruption, the manufacturer must 
submit the rebate reduction request within 60 calendar days from the 
first day that the natural disaster or other unique or unexpected event 
occurred or began in order to receive consideration for a reduction in 
the rebate amount owed in accordance with paragraph (b)(1) of this 
section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed in accordance 
with paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria described in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that the severe supply chain disruption directly 
affects the manufacturer itself, a supplier of an ingredient or 
packaging, a contract manufacturer, or a method of shipping or 
distribution that the manufacturer uses to make or distribute the Part 
B rebatable biosimilar biological product(s), such as a change in the 
production or distribution of the Part B rebatable biosimilar 
biological product(s) that is reasonably likely to lead to a 
significant reduction in the U.S. supply of product and significantly 
affects the manufacturer's ability to fill orders or meet expected 
demand for the Part B rebatable biosimilar biological product(s) for at 
least 90 days;
    (ii) Information about when the manufacturer expects supply of the 
Part B rebatable biosimilar biological product(s) to meet expected 
demand;
    (iii) Evidence that the natural disaster or other unique or 
unexpected event caused the severe supply chain disruption, including 
when the natural disaster or other unique or unexpected event occurred 
or began occurring, and the expected or actual duration of the severe 
supply chain disruption; and
    (iv) Evidence of the manufacturer's physical presence related to 
manufacturing the Part B rebatable biosimilar biological product(s) in 
a geographic area where a natural disaster or other unique or 
unexpected event occurred. If the manufacturer is not physically 
present in a geographic area where a natural disaster or other unique 
or unexpected event occurred, but believes there is a severe supply 
chain disruption caused by a natural disaster or other unique or 
unexpected event that affects the manufacturer's Part B rebatable 
biosimilar biological product(s), the information and supporting 
documentation may include evidence of the impact of the natural 
disaster or other unique or unexpected event on the supply chain of the 
Part B rebatable drug or biosimilar, on a supplier of an ingredient or 
packaging, or method of shipping or distribution that the manufacturer 
uses.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the rebate amount owed if a 
manufacturer submits to CMS a request in writing for an eligible drug, 
in accordance with the timing specified in paragraph (c)(2) of this 
section, demonstrating that:
    (i) A severe supply chain disruption has occurred during the 
applicable calendar quarter;
    (ii) The severe supply chain disruption directly affects the 
manufacturer itself, a contract manufacturer, a supplier of an 
ingredient or packaging, or a method of shipping or distribution that 
the manufacturer uses in a significant capacity to make or distribute 
the Part B rebatable biosimilar biological product; and
    (iii) The severe supply chain disruption was caused by a natural 
disaster or other unique or unexpected event.
    (5) Rebate reduction extensions. If CMS determines that a Part B 
rebatable biosimilar biological product that received a reduction of 
the rebate amount under paragraph (b)(1) of this section continues to 
be affected by a severe supply chain disruption, CMS will grant a 
single extension of the reduction for 4 additional consecutive 
applicable calendar quarters and reduce the rebate amount owed in 
accordance with paragraph (b)(2) of this section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the Part B rebatable biosimilar 
biological product continues to be affected by the severe supply chain 
disruption during the fifth through eighth applicable calendar 
quarters.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the fifth 
applicable calendar quarter to receive consideration for a reduction in 
the rebate amount owed, if any, in accordance with paragraph (b)(2) of 
this section.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable calendar quarter that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria in paragraph (c)(4) of this section or that is incomplete or 
untimely based on the requirements of this paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria in paragraph (c)(5) of this section, that is 
incomplete or untimely based on the requirements of paragraph (c)(5), 
or if a reduction under paragraph (b)(1) of this section was not 
provided for such biosimilar biological product.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction that the submitter indicates is a trade 
secret or confidential commercial or financial information will be 
protected from disclosure if CMS determines the information meets the 
requirements set forth under Exemptions 3 and/or 4 in 5 U.S.C. 552.

Subpart F--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments


Sec.  427.500  Definitions.

    As used in this subpart, date of receipt is the calendar day 
following the day on which a report of a rebate amount (as set forth in 
Sec. Sec.  427.501(b) through (d) and 427.502(c)) is made available to 
the manufacturer of a Part B rebatable drug by CMS.


Sec.  427.501  Rebate Reports and reconciliation.

    (a) General. This section applies to Part B rebatable drugs for all 
applicable calendar quarters except as otherwise

[[Page 62239]]

set forth in Sec.  427.502 regarding the applicable calendar quarters 
in calendar years 2023 and 2024.
    (b) Preliminary Rebate Report. A Preliminary Rebate Report will be 
provided to each manufacturer of a Part B rebatable drug at least 1 
month prior to the issuance of the Rebate Report as set forth in 
paragraph (c) of this section for an applicable calendar quarter.
    (1) The Preliminary Rebate Report for each Part B rebatable drug 
will include the following information:
    (i) The NDC(s) and billing and payment codes for the Part B 
rebatable drug as defined under Sec.  427.20.
    (ii) Total number of billing units as specified in Sec.  427.303.
    (iii) Payment amount in the payment amount benchmark quarter as 
specified in Sec.  427.302(d).
    (iv) Applicable calendar quarter specified amount as specified in 
Sec.  427.302(b).
    (v) Applicable benchmark period and rebate period CPI-Us as 
specified in Sec.  427.302(e) and (f).
    (vi) Inflation-adjusted payment amount as specified in Sec.  
427.302(g).
    (vii) The amount, if any, by which the specified amount as 
described in Sec.  427.302(b) exceeds the inflation-adjusted payment 
amount as described in Sec.  427.302(g) for the Part B rebatable drug 
for the applicable calendar quarter as determined under Sec.  427.302.
    (viii) Any applied reductions as described in Sec. Sec.  427.401 
and 427.402.
    (ix) Rebate amount due as specified in Sec.  427.301(a).
    (2) [Reserved]
    (c) Rebate Report. A Rebate Report will be provided to each 
manufacturer of a Part B rebatable drug no later than 6 months after 
the end of each applicable calendar quarter.
    (1) The Rebate Report will include the information specified in 
paragraph (b)(1) of this section, with the inclusion of any revisions 
to such information resulting from CMS' review of a Suggestion of Error 
as set forth in Sec.  427.503, if applicable, and any CMS-determined 
recalculations from paragraph (d)(2) of this section.
    (2) The Rebate Report is the invoice of a manufacturer's rebate 
amount due as calculated in Sec.  427.301, if any, for a Part B 
rebatable drug for an applicable calendar quarter.
    (d) Reconciliation of the rebate amount. CMS will perform 
reconciliation of a rebate amount provided in a Rebate Report specified 
in paragraph (c) of this section for an applicable calendar quarter in 
the following circumstances:
    (1) Regular reconciliation. Except as otherwise described in Sec.  
427.502, CMS will perform one regular reconciliation of the rebate 
amount within 12 months of the date of receipt of the Rebate Report 
specified in paragraph (c) of this section for each applicable calendar 
quarter in order to include revisions to the information used to 
calculate the rebate amount as specified in paragraph (b)(1) of this 
section.
    (i) Preliminary reconciliation. At least 1 month prior to the 
issuance of a report with the reconciled rebate amount specified in 
paragraph (d)(1)(ii) of this section, CMS will conduct a preliminary 
reconciliation of a rebate amount for an applicable calendar quarter 
specified in paragraph (d)(3) of this section based on the information 
specified in this paragraph (b)(1)(i) and paragraphs (d)(1)(ii) through 
(ix) of this section and provide the information specified in this 
paragraph (b)(1)(i) and paragraphs (d)(1)(ii) through (ix) to the 
manufacturer of a Part B rebatable drug for the applicable calendar 
quarter, if applicable:
    (A) Updated total number of rebatable units, as specified in Sec.  
427.303.
    (B) Payment amount in the payment amount benchmark quarter, as 
specified in Sec.  427.302(d) if any inputs are restated within the 
reconciliation run-out period.
    (C) Applicable calendar quarter specified amount as specified in 
Sec.  427.302(b), if any inputs are restated within the reconciliation 
run-out period.
    (D) The excess amount by which the specified amount exceeds the 
inflation-adjusted payment amount as specified in Sec.  427.302, if any 
inputs are restated within the reconciliation run-out period.
    (E) Reconciled total rebate amount as specified in Sec.  
427.301(a).
    (F) The difference between the total rebate amount due as specified 
on the Rebate Report set forth in paragraph (c) of this section and the 
reconciled rebate amount as set forth in this paragraph (d)(1)(i).
    (ii) Report with reconciled rebate amount. With the inclusion of 
any additional revisions to such information resulting from CMS' review 
of a Suggestion of Error as set forth in Sec.  427.503, if applicable, 
a report with the reconciled rebate amount will be provided to each 
manufacturer of a Part B rebatable drug within 12 months after the 
issuance of the Rebate Report described in paragraph (c) of this 
section.
    (2) CMS identification of error and manufacturer misreporting. CMS 
may recalculate a rebate amount and provide the manufacturer of a Part 
B rebatable drug a report with a reconciled rebate amount when:
    (i) CMS identifies an agency error in the information specified in 
paragraphs (c) and (d)(1) of this section, including reporting system 
or coding errors, not later than 3 years from the date of receipt by a 
manufacturer of a reconciled rebate amount for the applicable calendar 
quarter; or
    (ii) CMS determines at any time that the information used by CMS to 
calculate the rebate amount was inaccurate due to manufacturer 
misreporting.
    (3) Impact of reconciliation on rebate amount. A reconciliation as 
set forth in this paragraph (d) could result in an increase, decrease, 
or no change to the rebate amount as calculated in Sec.  427.301 owed 
by a manufacturer for the applicable calendar quarter for the Part B 
rebatable drug.
    (i) A report with a reconciled rebate amount that is an increase to 
the rebate amount is the invoice for such additional amount due on the 
manufacturer's rebate amount as set forth in Sec.  427.301 for a Part B 
rebatable drug for an applicable calendar quarter.
    (ii) [Reserved]
    (4) Drugs included in a reconciliation. A drug covered under Part B 
that does not meet the requirements of a rebatable drug specified in 
subpart B for an applicable period will not be included in a 
reconciliation under this paragraph (d).


Sec.  427.502  Rebate Reports for applicable calendar quarters in 
calendar years 2023 and 2024.

    (a) Transition rule for reporting. Section 1847A(i)(1)(C) of the 
Act allows CMS to delay the timeframe for reporting the information and 
rebate amount described in Sec.  427.501(c) for applicable calendar 
quarters in calendar years 2023 and 2024 until not later than September 
30, 2025.
    (b) Rebate Report information for applicable calendar quarters in 
calendar years 2023 and 2024. The Rebate Reports for applicable 
calendar quarters in calendar years 2023 and 2024 will include the 
information described in Sec.  427.501(b)(1).
    (c) Rebate Report procedures for applicable calendar quarters in 
calendar years 2023 and 2024. Rebate amounts for the applicable 
calendar quarters in calendar year 2023 and 2024 will be reported as 
follows:
    (1) The four applicable calendar quarters in calendar year 2023 
will be consolidated into a single report and manufacturers will 
receive a single Preliminary Rebate Report followed by a single Rebate 
Report.

[[Page 62240]]

    (i) Discarded drug units for which a refund has been paid will be 
removed from the total number of billing units in the single 
Preliminary Rebate Report for the applicable calendar quarters in 
calendar year 2023.
    (ii) For this single Preliminary Rebate Report for the applicable 
calendar quarters in calendar year 2023, the Suggestion of Error period 
as described in Sec.  427.503 will be 30 calendar days.
    (iii) No regular reconciliation of the rebate amount as described 
in Sec.  427.501(d)(1) will be conducted for the rebate amount in the 
single Rebate Report for the applicable calendar quarters in calendar 
year 2023.
    (2) The four applicable calendar quarters in calendar year 2024 
will be consolidated into a single report and manufacturers will 
receive a single Preliminary Rebate Report followed by a single Rebate 
Report.
    (i) For this single Preliminary Rebate Report for the applicable 
calendar quarters in calendar year 2024, the Suggestion of Error period 
as described in Sec.  427.503 will be 30 calendar days.
    (ii) Nine months after issuance of the single Rebate Report, CMS 
will perform one regular reconciliation for the applicable calendar 
quarters in calendar year 2024 in order to include revisions to the 
information used, specified in Sec.  427.501(b)(1), to calculate the 
rebate amount. Such reconciliation will be as described in Sec.  
427.501(d) inclusive of a preliminary reconciliation and a report with 
the reconciled rebate amount.
    (iii) The Suggestion of Error period for the preliminary 
reconciliation for the applicable calendar quarters in calendar year 
2024 will be 10 calendar days.


Sec.  427.503  Suggestion of Error.

    (a) General. The manufacturer of a Part B rebatable drug may submit 
a Suggestion of Error about the information in their Preliminary Rebate 
Report and the report detailing the preliminary reconciliation of the 
rebate amount to CMS, for its discretionary consideration, if the 
manufacturer believes that there is a mathematical error or errors to 
be corrected before the Rebate Report or a subsequent reconciliation of 
the rebate amount, as applicable, is finalized.
    (1) Section 1847A(i)(8) of the Act precludes administrative or 
judicial review on the determination of units as set forth in Sec.  
427.303, the determination of whether a drug is a Part B rebatable drug 
as set forth inSec.  427.101, and the calculation of the rebate amount 
as set forth in Sec.  427.301, inclusive of any reconciled rebate 
amount.
    (2) [Reserved]
    (b) Process of submission. Subject to the scope and timing 
requirements specified in paragraphs (a) and (c) of this section, 
manufacturers may submit the Suggestion of Error and provide supporting 
documentation (if applicable).
    (c) Timing. Except as specified in Sec.  427.502 for applicable 
calendar quarters in calendar year 2023 and 2024, a manufacturer must 
submit its Suggestion of Error for the applicable calendar quarter 
within 10 calendar days from the date of receipt of a Preliminary 
Rebate Report or a preliminary reconciliation of a rebate amount using 
the method and process established by CMS in paragraph (b) of this 
section.
    (d) Notice. (1) CMS will include any revisions to the calculation 
of the rebate amount, if determined necessary by CMS based on the 
Suggestion of Error submitted under this section prior to issuance of 
the Rebate Report as set forth in Sec.  427.501(c) or Sec.  427.502(c) 
as well as any report of reconciled rebate amount as set forth in Sec.  
427.501(d) or Sec.  427.502(c)(2)(ii).
    (2) CMS will notify the manufacturer whether CMS revised its 
calculation of the rebate amount based on the Suggestion of Error.


Sec.  427.504  Manufacturer access to Rebate Reports.

    (a) General. CMS will establish a method and process for a 
manufacturer of the Part B rebatable drug to:
    (1) Access the manufacturer's Rebate Report as set forth in 
Sec. Sec.  427.501 and 427.502, including any report of reconciled 
rebate amount as set forth in Sec. Sec.  427.501(d) and 
427.502(c)(2)(ii);
    (2) Submit a Suggestion of Error as set forth in Sec. Sec.  
427.502(c)(1)(ii) and (c)(2)(i) and 427.503; and
    (3) Pay a rebate amount as set forth in Sec.  427.505.
    (b) [Reserved]


Sec.  427.505  Deadline and process for payment of rebate amount.

    (a) Rebate amounts owed by a manufacturer. For a rebate amount owed 
by a manufacturer, payment is due no later than 11:59 p.m. Pacific Time 
(PT) on the 30th calendar day after the date of receipt of information 
regarding the rebate amount on--
    (1) A Rebate Report specified in Sec.  427.501(c) or Sec.  
427.502(c)(1) or (2); or
    (2) A report of a reconciled rebate amount specified in Sec.  
427.501(d) or Sec.  427.502(c)(2)(ii).
    (b) Failure to pay a rebate amount. Failure to pay a rebate amount 
due timely and in full may result in an enforcement action as described 
in subpart G of this part.
    (c) Refund to the manufacturer. If a reconciled rebate amount for 
an applicable calendar quarter as specified in Sec.  427.501(d) or 
Sec.  427.502(c)(2)(ii) is less than what the manufacturer paid for 
that applicable calendar quarter, CMS will initiate the process to 
provide a refund equal to the excess amount paid within 60 days of the 
date of receipt of the report with such reconciled rebate amount.

Subpart G--Enforcement of Manufacturer Payment of Rebate Amounts


Sec.  427.600  Civil money penalty notice and appeals procedures.

    (a) General. CMS may impose a civil money penalty on a manufacturer 
that fails to pay the rebate amount set forth in Sec.  427.301(a) on a 
Part B rebatable drug identified at Sec.  427.101, by the payment 
deadline as set forth in Sec.  427.505(a) for such drug for such 
applicable calendar quarter.
    (b) Determination of the civil money penalty amount. CMS may impose 
a civil money penalty for each failure by a manufacturer to provide an 
inflation rebate for an applicable calendar quarter equal to 125 
percent of the rebate amount determined in Sec.  427.301(a).
    (1) The civil money penalty is in addition to the rebate amount 
due.
    (2) If a reconciled rebate amount as set forth in Sec.  427.501(d) 
or Sec.  427.502(c)(2)(ii) results in an increase to the rebate amount 
due, a separate civil money penalty may be imposed for the failure by a 
manufacturer to provide an inflation rebate for the applicable quarter 
for the increase to the rebate amount due.
    (c) Notice of imposition of civil money penalties. If CMS makes a 
determination to impose a civil money penalty described in paragraph 
(b) of this section, CMS will send a written notice of its decision to 
impose a civil money penalty to include the following:
    (1) A description of the basis for the determination.
    (2) The basis for the penalty.
    (3) The amount of the penalty.
    (4) The date the penalty is due.
    (5) The manufacturer's right to a hearing as specified in paragraph 
(e)(3) of this section.
    (6) Information about where to file the request for a hearing.
    (d) Collection. (1) A manufacturer must pay the civil money penalty 
in full within 60 calendar days after the date of the notice of 
imposition of a civil money penalty from CMS under paragraph (c) of 
this section.
    (2) In the event a manufacturer requests a hearing, pursuant to 42 
CFR

[[Page 62241]]

part 423, subpart T, the manufacturer must pay the amount in full 
within 60 calendar days after the date of a final decision by the 
Departmental Appeal Board, to uphold, in whole or in part, the civil 
money penalty.
    (3) If the 60th calendar day described in paragraphs (d)(1) and (2) 
of this section is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day.
    (e) Appeal procedures for civil money penalties. Section 
1128A(c)(2) of the Act provides that CMS may not collect a civil money 
penalty until the affected party has had notice and the opportunity for 
a hearing.
    (1) Manufacturers may appeal the following determinations:
    (i) A CMS determination that the rebate amount was not paid by the 
applicable payment deadline as described in Sec.  427.505.
    (ii) The calculation of the amount of the civil money penalty.
    (2) The notice provided to a manufacturer if CMS decides to impose 
a civil money penalty is paragraph (c) of this section.
    (3) A manufacturer has a right to a hearing following a decision by 
CMS to impose a civil money penalty following the administrative appeal 
process and procedures established in 42 CFR part 423, subpart T.
    (f) Other applicable provisions. The provisions of section 1128A of 
the Act (except subsections (a) and (b) of section 1128A of the Act) 
apply to civil money penalties under this section to the same extent 
that they apply to a civil money penalty or procedures under section 
1128A of the Act.
    (g) Bankruptcy. In the event that a manufacturer declares 
bankruptcy, as described in title 11 of the United States Code, and as 
a result of the bankruptcy, fails to pay either the full rebate amount 
owed or the total sum of civil money penalties imposed, the Government 
reserves the right to file a proof of claim with the bankruptcy court 
to recover the unpaid amount of the rebates and civil money penalties 
owed by the manufacturer.
0
81. Part 428 is added to read as follows:

PART 428--MEDICARE PART D DRUG INFLATION REBATE PROGRAM

Subpart A--General Provisions
Sec.
428.10 Basis and scope.
428.20 Definitions.
Subpart B--Determination of Part D Rebatable Drugs
428.100 Definitions.
428.101 Identification of Part D rebatable drugs.
Subpart C--Determination of the Rebate Amount for Part D Rebatable 
Drugs
428.200 Definitions.
428.201 Calculation of the total rebate amount to be paid by 
manufacturers.
428.202 Calculation of the per unit Part D drug rebate amount.
428.203 Determination of the total number of units dispensed under 
Part D.
428.204 Treatment of new formulations of Part D rebatable drugs.
Subpart D--Reducing the Rebate Amount for Part D Rebatable Drugs in 
Shortage and When There is a Severe Supply Chain Disruption or Likely 
Shortage
428.300 Definitions.
428.301 Reducing the rebate amount for Part D rebatable drugs 
currently in shortage.
428.302 Reducing the rebate amount for certain Part D rebatable 
drugs when there is a severe supply chain disruption.
428.303 Reducing the rebate amount for generic Part D rebatable 
drugs likely to be in shortage.
Subpart E--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments
428.400 Definitions.
428.401 Rebate Reports and reconciliation.
428.402 Rebate Reports for applicable periods beginning October 1, 
2022, and October 1, 2023.
428.403 Suggestion of Error.
428.404 Manufacturer access to Rebate Reports.
428.405 Deadline and process for payment of rebate amount.
Subpart F--Enforcement of Manufacturer Payment of Rebate Amounts
428.500 Civil money penalty notice and appeals procedures.

    Authority:  42 U.S.C. 1395w-114b, 1302, and 1395hh.

Subpart A--General Provisions


Sec.  428.10  Basis and scope.

    (a) Basis. This part implements section 1860D-14B of the Social 
Security Act (``the Act'').
    (b) Scope. This part sets forth the requirements of the Medicare 
Part D Drug Inflation Rebate Program, which requires, for each 12-month 
applicable period, manufacturers to pay rebates for certain drugs and 
biological products with prices that increase faster than the rate of 
inflation.
    (c) Severability. Were any provision of this part to be held 
invalid or unenforceable by its terms, or as applied to any person or 
circumstance, such provisions would be severable from this part and the 
invalidity or unenforceability would not affect the remainder thereof 
or any other part of this subchapter or the application of such 
provision to other persons not similarly situated or to other, 
dissimilar circumstances.


Sec.  428.20  Definitions.

    As used in this part, the following definitions apply:
    Annual manufacturer price (AnMP) refers to the amount calculated in 
Sec.  428.202(b).
    Applicable period means a 12-month period beginning with October 1 
of a year (beginning with October 1, 2022).
    Applicable period Consumer Price Index for All Urban Consumers 
(CPI-U) means, with respect to an applicable period, the CPI-U for the 
first month of such applicable period (that is, October).
    Applicable threshold means the amount calculated in accordance with 
Sec.  428.101(b)(2).
    Average manufacturer price (AMP) means the average price paid to 
the manufacturer for the drug by wholesalers for drugs distributed to 
retail community pharmacies and retail community pharmacies that 
purchase drugs directly from the manufacturer, calculated in accordance 
with Sec.  447.504 of this chapter.
    Benchmark period CPI-U means the CPI-U identified in Sec.  
428.202(e).
    Benchmark period manufacturer price refers to the amount calculated 
in Sec.  428.202(d).
    Covered Part D Drug has the meaning set forth in section 1860D-2(e) 
of the Act and Sec.  423.100 of this chapter.
    CPI-U means the monthly Consumer Price Index for All Urban 
Consumers (United States city average) index level for all items from 
the Bureau of Labor Statistics.
    First marketed date means the date that a manufacturer is required 
to report for a Part D rebatable drug as its ``market date'' under 
section 1927(b)(3)(A)(v) of the Act.
    Inflation-adjusted payment amount means the amount calculated in 
Sec.  428.202(f).
    Manufacturer has the meaning set forth in section 1927(k)(5) of the 
Act.
    National Drug Code (NDC) means the unique identifying prescription 
drug product number that is listed with FDA identifying the product and 
package size and type.
    Part D rebatable drug means, subject to the exclusion described in 
Sec.  428.101(b), a drug or biological that is a covered Part D drug 
that, as of the first day of the applicable period, is:
    (1) A drug approved under a New Drug Application (NDA) under 
section 505(c) of the Federal Food, Drug, and Cosmetic (FD&C) Act;
    (2) A generic drug approved under an Abbreviated New Drug 
Application

[[Page 62242]]

(ANDA) under section 505(j) of the FD&C Act (``section 505(j) ANDA''), 
in the case where:
    (i) The reference listed drug approved under an NDA under section 
505(c) of the FD&C Act, including any authorized generic drug as 
defined in section 505(t)(3) of the FD&C Act, is not being marketed, as 
identified in the Food and Drug Administration's (FDA) NDC Directory;
    (ii) There is no other drug approved under section 505(j) of the 
FD&C Act that is rated as therapeutically equivalent in FDA's most 
recent publication of ``Approved Drug Products with Therapeutic 
Equivalence Evaluations'' (commonly known as the Orange Book), and that 
is being marketed, as identified in FDA's NDC Directory;
    (iii) The manufacturer is not a ``first applicant'' during the 
``180-day exclusivity period,'' as those terms are defined in section 
505(j)(5)(B)(iv) of the FD&C Act; and
    (iv) The manufacturer is not a ``first approved applicant'' for a 
competitive generic therapy, as that term is defined in section 
505(j)(5)(B)(v) of the FD&C Act; or
    (3) A biological licensed under section 351 of the Public Health 
Service (PHS) Act, including a biosimilar.
    Payment amount benchmark period means the period identified in 
Sec.  428.202(c).
    Subsequently approved drug means a Part D rebatable drug first 
approved or licensed by the FDA after October 1, 2021.
    Unit means, with respect to a Part D rebatable drug, the lowest 
dispensable amount (such as a capsule or tablet, milligram of 
molecules, or grams) of the Part D rebatable drug, as reported under 
section 1927 of the Act.

Subpart B--Determination of Part D Rebatable Drugs


Sec.  428.100  Definitions.

    As used in this subpart, the following definitions apply:
    Individual who uses such a drug or biological means a unique 
Medicare Part D beneficiary who was dispensed the Part D drug or 
biological that was covered by their Part D plan sponsor during the 
applicable period, identified using Prescription Drug Event (PDE) data 
with dates of service during the applicable period and with gross 
covered prescription drug costs greater than zero.
    Gross covered prescription drug costs has the meaning set forth in 
Sec.  423.308 of this chapter.


Sec.  428.101  Identification of Part D rebatable drugs.

    (a) Determination of Part D rebatable drugs. (1) For each 
applicable period, CMS will use PDE data to identify all covered Part D 
drugs.
    (2) CMS will match the covered Part D drugs identified in the PDE 
data with application numbers using FDA sources to determine whether 
each covered Part D drug is a drug or biological approved under an NDA 
under section 505(c) of the FD&C Act, approved under an ANDA under 
section 505(j) of the FD&C Act, or licensed under a Biologics License 
Application (BLA) under section 351 of the PHS Act, as of the first day 
of the applicable period.
    (3) For a covered Part D drug identified in the PDE that is 
approved under an ANDA under section 505(j) of the FD&C Act, CMS will 
determine whether such drug meets the criteria in section 1860D-
14B(g)(1)(C)(ii) of the Act as of the first day of the applicable 
period as follows:
    (i) To determine whether the reference listed drug or an authorized 
generic of the reference listed drug is being marketed, as required 
under section 1860D-14B(g)(1)(C)(ii)(I) of the Act, CMS will use FDA's 
NDC Directory, including historical information from NDC Directory 
files such as discontinued, delisted, and expired listings, provided by 
the FDA or published on the FDA website.
    (ii) To determine whether another drug has been approved under an 
ANDA that is therapeutically equivalent to the Part D rebatable drug 
identified in this paragraph (a)(3), CMS will use FDA's Orange Book. To 
determine if this therapeutically equivalent drug is being marketed, as 
required under section 1860D-14B(g)(1)(C)(ii)(II) of the Act, CMS will 
use FDA's NDC Directory, including historical information from NDC 
Directory files, such as discontinued, delisted, and expired listings, 
provided by the FDA or published on the FDA website.
    (iii) To determine whether the manufacturer of the drug identified 
in this paragraph (a)(3) is a first applicant during the 180-day 
exclusivity period, or whether the manufacturer of this drug is a first 
approved applicant for a competitive generic drug therapy, CMS will 
refer to publicly available FDA sources such as the Orange Book and may 
consult with FDA for technical assistance as needed.
    (b) Drugs and biologicals with average annual total cost below the 
applicable threshold. For each applicable period, CMS will identify 
drugs and biologicals with average annual total costs under Part D for 
such applicable period, per individual who uses such drug or 
biological, that are below the applicable threshold in accordance with 
the steps described in this paragraph (b). Such drugs and biologicals 
are not considered Part D rebatable drugs and will be excluded from the 
identification of Part D rebatable drugs in paragraph (a) of this 
section.
    (1) Average annual total cost. For each drug or biological that is 
identified in accordance with paragraph (a) of this section, CMS will 
calculate average annual total costs under Part D per individual who 
uses such drug or biological by dividing the gross covered prescription 
drug costs for the drug or biological by the number of individuals who 
use such drug or biological in the applicable period.
    (2) Applicable threshold. CMS will calculate the applicable 
threshold for an applicable period as follows:
    (i) For the applicable period beginning October 1, 2022, the 
applicable threshold is equal to $100.
    (ii) For the applicable period beginning October 1, 2023, the 
applicable threshold is equal to $100 increased by the percentage 
increase in CPI-U for the 12-month period beginning October 1, 2023.
    (iii) For subsequent applicable periods, the applicable threshold 
is equal to the applicable threshold for the prior applicable period 
increased by the percentage increase in the CPI-U for the 12-month 
period beginning with October of the previous period.
    (iv) If the resulting amount under paragraph (b)(2)(ii) or (iii) of 
this section is not a multiple of $10, CMS will round that amount to 
the nearest multiple of $10.

Subpart C--Determination of the Rebate Amount for Part D Rebatable 
Drugs


Sec.  428.200  Definitions.

    As used in this subpart, the following definitions apply:
    340B Program is the program under section 340B of the PHS Act.
    Line extension has the meaning set forth in Sec.  447.502 of this 
chapter.
    New formulation has the meaning set forth in Sec.  447.502 of this 
chapter.
    Oral solid dosage form has the meaning set forth in Sec.  447.502 
of this chapter.


Sec.  428.201  Calculation of the total rebate amount to be paid by 
manufacturers.

    (a) Total rebate. (1) Subject to paragraph (b) of this section, the 
total rebate amount to be paid by a manufacturer for a Part D rebatable 
drug, as identified under Sec.  428.101, for an applicable period is 
equal to:

[[Page 62243]]

    (i) The product of the per unit Part D rebate amount of such drug, 
as determined under Sec.  428.202(a), and the total number of units 
dispensed of such drug under Part D, as determined under Sec.  428.203; 
or
    (ii) In the case of a Part D rebatable drug that is a line 
extension of a Part D rebatable drug that is an oral solid dosage form, 
the amount specified in Sec.  428.204.
    (2) The rebate amount may be reduced in accordance with subpart D 
of this part or adjusted in accordance with subpart E of this part.
    (b) Drugs and biologicals excluded from Part D rebate calculations. 
CMS will exclude from the Part D drug inflation rebate calculations 
described in this subpart--
    (1) Drugs and biologicals that meet the definition of a Part D 
rebatable drug but whose manufacturers do not have an agreement in 
effect with the HHS Secretary under section 1927 of the Act at any 
point during the applicable period, as determined by CMS through 
consultation with Medicaid Drug Rebate Program staff and review of the 
Medicaid Drug Programs system.
    (2) Drugs and biologicals that meet the definition of a Part D 
rebatable drug but, for the entire duration of the applicable period, 
are excluded from the definition of covered outpatient drugs as defined 
in section 1927(k)(2)-(4) of the Act and Sec.  447.502 of this chapter, 
as determined by CMS through consultation with Medicaid Drug Rebate 
Program staff and review of the Medicaid Drug Programs system.


Sec.  428.202  Calculation of the per unit Part D drug rebate amount.

    (a) Formula for calculating the per unit Part D rebate amount. CMS 
will calculate the per unit Part D drug inflation rebate amount for a 
Part D rebatable drug and applicable period by determining the amount 
by which the AnMP for the Part D rebatable drug, as calculated in 
accordance with paragraph (b) of this section, exceeds the inflation-
adjusted payment amount, as calculated in accordance with paragraph (f) 
of this section.
    (b) Calculation of the AnMP for the applicable period. Subject to 
paragraph (g) of this section, CMS will calculate the AnMP for a Part D 
rebatable drug using the AMP reported by a manufacturer under sections 
1927(b)(3)(A)(i) and (ii) of the Act for each calendar quarter of the 
applicable period and units reported by a manufacturer under section 
1927(b)(3)(A)(iv) of the Act for each month of the applicable period.
    (1) CMS will calculate the AnMP for a Part D rebatable drug as the 
sum of the following:
    (i) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning October of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning October of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (ii) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning January of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning January of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (iii) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning April of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (iv) The product of--
    (A) The AMP for the Part D rebatable drug reported for the calendar 
quarter beginning July of the applicable period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July of the applicable period divided by the sum of the 
monthly units reported for the 4 calendar quarters in the applicable 
period.
    (2) The first applicable period for a Part D rebatable drug will be 
the earliest applicable period that follows the payment amount 
benchmark period identified in paragraphs (c)(1) through (4) of this 
section.
    (c) Identification of the payment amount benchmark period. For each 
Part D rebatable drug, CMS will identify the payment amount benchmark 
period using the date of FDA approval or licensure or the first 
marketed date as set forth in paragraphs (c)(1) and (2) of this 
section, subject to paragraphs (c)(3) through (5) of this section:
    (1) For a Part D rebatable drug first approved or licensed by the 
FDA on or before October 1, 2021, the payment amount benchmark period 
is the period beginning on January 1, 2021, and ending on September 30, 
2021;
    (2) For a subsequently approved drug, the payment amount benchmark 
period is the first calendar year beginning after the drug's first 
marketed date;
    (3) Notwithstanding paragraph (c)(2) of this section, for a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, for which there are no quarters during the period 
beginning on January 1, 2021, and ending on September 30, 2021, for 
which AMP has been reported under section 1927(b)(3) of the Act, the 
payment amount benchmark period is the first calendar year no earlier 
than calendar year 2021 in which such drug has at least 1 quarter of 
AMP reported;
    (4) Notwithstanding paragraph (c)(3) of this section, for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under section 1927(b)(3) of the Act, the 
payment amount benchmark period is the first calendar year in which 
such drug has at least 1 quarter of AMP reported; and
    (5) Notwithstanding paragraph (c)(4) of this section, for a Part D 
rebatable drug that is a selected drug (as defined in section 1192(c) 
of the Act) with respect to a price applicability period (as defined in 
section 1191(b)(2) of the Act), in the case such Part D rebatable drug 
is no longer considered to be a selected drug, for each applicable 
period beginning after the price applicability period with respect to 
such drug, the payment amount benchmark period is the last calendar 
year of such price applicability period with respect to such selected 
drug.
    (d) Calculation of benchmark period manufacturer price. Subject to 
paragraph (g) of this section, CMS will calculate the benchmark period 
manufacturer price for a Part D rebatable drug using the AMP reported 
by a manufacturer under sections 1927(b)(3)(A)(i) and (ii) of the Act 
for each calendar quarter of the payment amount benchmark period and 
the monthly units reported by a manufacturer under section 
1927(b)(3)(A)(iv) of the Act during the payment amount benchmark 
period.
    (1) For a Part D rebatable drug with a payment amount benchmark 
period identified under paragraph (c)(1) of this section, CMS will 
calculate the benchmark period manufacturer price as the sum of the 
following:
    (i) The product of--
    (A) The AMP reported for the calendar quarter beginning January 
2021; and

[[Page 62244]]

    (B) The sum of the monthly units reported for the calendar quarter 
beginning January 2021 divided by the sum of the monthly units reported 
for the 3 quarters of the payment amount benchmark period.
    (ii) The product of--
    (A) The AMP reported for the calendar quarter beginning April 2021; 
and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April 2021 divided by the sum of the monthly units reported 
for the 3 quarters of the payment amount benchmark period.
    (iii) The product of--
    (A) The AMP reported for the calendar quarter beginning July 2021; 
and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July 2021 divided by the sum of the units reported for the 3 
quarters of the payment amount benchmark period.
    (2) For a Part D rebatable drug with a payment amount benchmark 
period identified under paragraphs (c)(2) through (5) of this section, 
CMS will calculate the benchmark period manufacturer price as the sum 
of the following:
    (i) The product of--
    (A) The AMP reported for the calendar quarter beginning January of 
the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning January of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (ii) The product of--
    (A) The AMP reported for the calendar quarter beginning April of 
the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning April of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (iii) The product of--
    (A) The AMP reported for the calendar quarter beginning July of the 
payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning July of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (iv) The product of--
    (A) The AMP reported for the calendar quarter beginning in October 
of the payment amount benchmark period; and
    (B) The sum of the monthly units reported for the calendar quarter 
beginning October of the payment amount benchmark period divided by the 
sum of the monthly units reported for the 4 quarters of the payment 
amount benchmark period.
    (e) Identification of the benchmark period CPI-U. For each Part D 
rebatable drug, CMS will identify the benchmark period CPI-U as set 
forth in paragraphs (e)(1) and (2) of this section, subject to 
paragraphs (e)(3) through (5) of this section:
    (1) For a Part D rebatable drug first approved or licensed by the 
FDA on or before October 1, 2021, the benchmark period CPI-U is the 
CPI-U for January 2021.
    (2) For a subsequently approved drug, the benchmark period CPI-U is 
the CPI-U for January of the first calendar year beginning after a 
drug's first marketed date.
    (3) Notwithstanding paragraph (e)(2) of this section, for a Part D 
rebatable drug first approved or licensed by the FDA on or before 
October 1, 2021, for which there are no quarters during the period 
beginning on January 1, 2021, and ending on September 30, 2021, for 
which AMP has been reported under section 1927(b)(3) of the Act, the 
benchmark period CPI-U is the CPI-U for January of the payment amount 
benchmark period identified under paragraph (c)(3) of this section.
    (4) Notwithstanding paragraph (e)(3) of this section, for a 
subsequently approved drug for which there are no quarters during the 
first calendar year beginning after the drug's first marketed date for 
which AMP has been reported under section 1927(b)(3) of the Act, the 
benchmark period CPI-U is the CPI-U for January of the payment amount 
benchmark period identified under paragraph (c)(4) of this section.
    (5) Notwithstanding paragraph (e)(5) of this section, for a drug 
that is a selected drug (as defined in section 1192(c) of the Act) with 
respect to a price applicability period (as defined in section 
1191(b)(2) of the Act), in the case such Part D rebatable drug is no 
longer considered to be a selected drug, the benchmark period CPI-U is 
the CPI-U for January of the last calendar year of such price 
applicability period.
    (f) Calculation of inflation-adjusted payment amount. For an 
applicable period for each Part D rebatable drug, CMS will calculate 
the inflation-adjusted payment amount by dividing the applicable period 
CPI-U by the benchmark period CPI-U and then multiplying the quotient 
by the benchmark period manufacturer price.
    (g) Situations in which manufacturers do not report units under 
section 1927(b)(3)(A)(iv) of the Act. For the purpose of calculating 
the AnMP in accordance with paragraph (b) of this section and the 
benchmark period manufacturer price in accordance with paragraph (d) of 
this section--
    (1) If there is 1 or more quarter(s) in the payment amount 
benchmark period or applicable period for which a manufacturer has not 
reported units under section 1927(b)(3)(A)(iv) of the Act but has 
reported AMP under sections 1927(b)(3)(A)(i) and (ii) of the Act, CMS 
will calculate the benchmark period manufacturer price or AnMP, as 
applicable, using data only from quarter(s) with units. Quarter(s) in 
the payment amount benchmark period or applicable period for which a 
manufacturer has not reported units under section 1927(b)(3)(A)(iv) of 
the Act will be excluded from the calculation.
    (2) If there are no quarters of the payment amount benchmark period 
or applicable period for which a manufacturer has reported units under 
section 1927(b)(3)(A)(iv) of the Act, but the manufacturer but has 
reported AMP, under sections 1927(b)(3)(A)(i) and (ii) of the Act for 
at least 1 quarter of such period, CMS will use the average of the AMP 
over the calendar quarters of the payment amount benchmark period or 
applicable period for which AMP is reported to calculate the benchmark 
period manufacturer price or AnMP, respectively.


Sec.  428.203  Determination of the total number of units dispensed 
under Part D.

    (a) General. For each Part D rebatable drug, CMS will determine the 
total number of units as follows:
    (1) Use of PDE data to determine total units dispensed. To 
determine the total number of units of each Part D rebatable drug 
dispensed under Part D and covered by Part D plan sponsors during an 
applicable period, CMS will use the quantity dispensed reported on the 
PDE record for each Part D rebatable drug with gross covered 
prescription drug costs greater than zero.
    (2) Crosswalk to AMP units. CMS will crosswalk the information from 
the PDE record to database(s) that includes the unit type (for example, 
each, capsule) for the Part D rebatable drug, matching on the NDC of 
the Part D rebatable drug. If the unit type obtained from such database 
does not match the AMP unit type reported by a manufacturer to the

[[Page 62245]]

Medicaid Drug Programs system, CMS will convert the total units 
reported on the PDE to the AMP units reported.
    (b) Removal of certain units. CMS will exclude certain units from 
the total number of units dispensed of a Part D rebatable drug, with 
respect to an applicable period, as follows:
    (1) Removal of units when a generic drug is no longer a Part D 
rebatable drug. To determine whether a generic drug that meets the 
definition of a Part D rebatable drug on the first day of an applicable 
period ceases to meet such definition later in the applicable period, 
CMS will--
    (i) Review FDA's NDC Directory, including historical information 
from NDC Directory files such as discontinued, delisted, and expired 
listings provided by the FDA or published on the FDA website to 
determine whether the reference listed drug or an authorized generic of 
the reference listed drug is being marketed;
    (ii) Review the most recent version of the downloadable FDA Orange 
Book to determine whether another drug has been approved under a 
section 505(j) ANDA that is therapeutically equivalent to such generic 
drug. If CMS determines that FDA has approved such a therapeutically 
equivalent drug under a section 505(j) ANDA, CMS will then: use the 
FDA's NDC Directory, including historical information from NDC 
Directory files such as discontinued, delisted, and expired listings 
provided by the FDA or published on the FDA website to determine the 
marketing status of such therapeutically equivalent drug and whether, 
during the applicable period, the therapeutically equivalent drug was 
marketed; and
    (iii) Exclude from the total number of units determined under 
paragraph (a) of this section any units dispensed on or after the first 
day of the calendar month that a generic drug no longer meets the 
definition of a Part D rebatable drug.
    (2) Exclusion of units acquired through the 340B Program. (i) For 
the applicable period beginning October 1, 2025, and subsequent 
applicable periods, CMS will exclude from the total number of units 
determined under paragraph (a) of this section units for which a 
manufacturer provided a discount under the 340B Program (``340B 
units'') as follows:
    (A) For the applicable period beginning October 1, 2025, 340B units 
will be excluded from the total number of units dispensed for claims 
with a date of service on or after January 1, 2026.
    (B) For the applicable period beginning October 1, 2026, and 
applicable periods thereafter, 340B units will be excluded from the 
total number of units dispensed.
    (ii) To determine the total number of such units for which a 
manufacturer provided a discount under the 340B Program, CMS will use 
data reflecting the total number of units of a Part D rebatable drug 
for which a discount was provided under the 340B Program and that were 
dispensed during the applicable period.


Sec.  428.204  Treatment of new formulations of Part D rebatable drugs.

    In the case of a Part D rebatable drug that is a line extension of 
a Part D rebatable drug that is an oral solid dosage form, the rebate 
amount for an applicable period is equal to the amount computed under 
Sec.  428.201(a) for such new drug or, if greater, the alternative 
total rebate amount. CMS will determine the alternative total rebate 
amount for such new formulations according to the following:
    (a) Identification of the initial drug. The initial drug that CMS 
will use to calculate the inflation rebate amount ratio is the initial 
drug identified in accordance with Sec.  447.509(a)(4)(iii)(B) of this 
chapter for the last quarter of the applicable period or, if an initial 
drug was not identified in the last quarter, the initial drug 
identified for a quarter most recently in that applicable period.
    (b) Calculation of the inflation rebate amount ratio. The inflation 
rebate amount ratio is equal to the per unit Part D drug inflation 
rebate amount for the initial drug, as calculated in Sec.  428.202(a), 
divided by the AnMP for that initial drug for the applicable period.
    (c) Calculation of the alternative total rebate amount. The 
alternative total rebate amount is equal to the product of all of the 
following:
    (1) The AnMP for the applicable period, as calculated in Sec.  
428.202(b), of the Part D rebatable drug that is a line extension of a 
Part D rebatable drug that is an oral solid dosage form.
    (2) The inflation rebate amount ratio as determined in paragraph 
(b) of this section.
    (3) The total number of units dispensed under Part D identified in 
Sec.  428.203.

Subpart D--Reducing the Rebate Amount for Part D Rebatable Drugs in 
Shortage and When There Is a Severe Supply Chain Disruption or 
Likely Shortage


Sec.  428.300  Definitions.

    As used in this subpart, the following definitions apply:
    Biosimilar has the meaning set forth in section 351(i) of the PHS 
Act.
    Currently in shortage means that at least one NDC-10 of a Part D 
rebatable drug with the status ``currently in shortage'' is on a 
shortage list maintained by the FDA under section 506E of the FD&C Act.
    Drug shortage or shortage means a period of time when the demand or 
projected demand for the drug within the United States exceeds the 
supply of the drug (see section 506C(h)(2) of the FD&C Act).
    Generic Part D rebatable drug means a generic drug approved under 
an ANDA under section 505(j) of the FD&C Act that meets the sole source 
criteria specified in Sec.  428.101(a)(3).
    Likely to be in shortage means that a generic Part D rebatable drug 
is likely to be described as currently in shortage during a subsequent 
applicable period without such rebate reduction.
    Natural disaster means any natural catastrophe, including, but not 
limited to any of the following: hurricane, tornado, storm, high water, 
wind-driven water, tidal wave, tsunami, earthquake, volcanic eruption, 
landslide, mudslide, snowstorm, or drought, or regardless of cause, any 
fire, flood, or explosion.
    Other unique or unexpected event means any exogenous, unpredictable 
event outside of a manufacturer's control, including, but not limited 
to, a geopolitical disruption, pandemic, or act of terror.
    Plasma-derived product means a licensed biological product that is 
derived from human whole blood or plasma, as indicated on the approved 
product labeling.
    Severe supply chain disruption means a change in production or 
distribution that is reasonably likely to lead to a significant 
reduction in the U.S. supply of a generic Part D rebatable drug or 
biosimilar by a manufacturer and significantly affects the ability of 
the manufacturer of the generic drug or biosimilar to fill orders or 
meet expected demand for its product in the United States for at least 
90 days. This definition does not include interruptions in 
manufacturing due to matters such as routine maintenance, manufacturing 
quality issues, or insignificant changes made in the manufacturing 
process for the drug.


Sec.  428.301  Reducing the rebate amount for Part D rebatable drugs 
currently in shortage.

    (a) General. As required under section 1860D-14B(b)(1)(C)(i) of the 
Act, CMS will reduce the total rebate amount calculated under Sec.  
428.201(a), if any is owed, for a Part D rebatable drug that is 
currently in shortage, as defined in

[[Page 62246]]

Sec.  428.300, at any point during the applicable period.
    (b) Calculation of the reduced rebate amount. (1) For each 
applicable period beginning on or after October 1, 2022, the reduced 
rebate amount for a Part D rebatable drug currently in shortage will be 
calculated using the following formula:
Equation 1 to Paragraph (b)(1)
Reduced Total Rebate Amount = the total rebate amount multiplied by (1 
minus applicable percent reduction) multiplied by (percentage of time 
drug was currently in shortage during the applicable period) added to 
the total rebate amount multiplied by (1 minus percentage of time drug 
was currently in shortage during the applicable period)

    (2) For purposes of paragraph (b)(1) of this section, the 
applicable percent reduction is:
    (i) For a Part D rebatable drug that is a generic drug or plasma-
derived product:
    (A) 75 percent for the first applicable period such drug is 
currently in shortage.
    (B) 50 percent for the second applicable period such drug is 
currently in shortage.
    (C) 25 percent for each subsequent period such drug is currently in 
shortage.
    (ii) For a Part D rebatable drug that is not a generic drug or 
plasma-derived product:
    (A) 25 percent for the first applicable period such drug is 
currently in shortage.
    (B) 10 percent for the second applicable period such drug is 
currently in shortage.
    (C) 2 percent for each subsequent applicable period such drug is 
currently in shortage.
    (3) For purposes of paragraph (b)(1) of this section, the 
percentage of time the drug is currently in shortage during the 
applicable period is equal to the number of days such drug is currently 
in shortage in an applicable period, divided by the total number of 
days in the applicable period.
    (c) Application of reduction. CMS will apply a reduction of the 
rebate amount as determined under paragraph (b) of this section to the 
Part D rebatable drug at the NDC-9 level.


Sec.  428.302  Reducing the rebate amount for certain Part D rebatable 
drugs when there is a severe supply chain disruption.

    (a) General. As required under section 1860D-14B(b)(1)(C)(ii) of 
the Act, CMS will reduce the total rebate amount calculated under Sec.  
428.201(a), if any is owed, for a generic Part D rebatable drug or 
biosimilar when CMS determines there is a severe supply chain 
disruption, as defined in Sec.  428.300, during the applicable period 
such as that caused by a natural disaster or other unique or unexpected 
event.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria described in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
owed by the manufacturer for a generic Part D rebatable drug or 
biosimilar by 75 percent for an applicable period.
    (2) Extension of reduction. If CMS determines a severe supply chain 
disruption continues into a second consecutive applicable period as 
described in paragraph (c)(5) of this section, then CMS will reduce the 
total rebate amount owed by the manufacturer for a generic Part D 
rebatable drug or biosimilar by 75 percent for that second applicable 
period.
    (3) Application of reduction. If CMS determines there is a severe 
supply chain disruption for an NDC-11, CMS will apply any reduction of 
the rebate amount as described in paragraphs (b)(1) and (2) of this 
section to a Part D rebatable drug at the NDC-9 level.
    (4) Limitation on rebate reductions. CMS will not apply multiple 
rebate reductions for the same Part D rebatable drug and applicable 
period.
    (i) If a manufacturer believes there are multiple events causing 
severe supply chain disruptions during the same applicable period for 
the same generic Part D rebatable drug or biosimilar and submits 
multiple rebate reduction requests for the same drug or biosimilar, CMS 
will grant no more than 1 rebate reduction under paragraph (b)(1) or 
(2) of this section for that product for the applicable period.
    (ii) If CMS grants a rebate reduction request under this section 
and the generic Part D rebatable drug or biosimilar subject to the 
reduction is currently in shortage during the same applicable period as 
the one for which the severe supply chain disruption reduction request 
was granted, CMS will reduce the rebate amount as described in 
paragraph (b)(1) of this section and will not grant a reduction under 
Sec.  428.301 during that applicable period.
    (iii) If a generic Part D rebatable drug or biosimilar that is 
currently in shortage experiences a severe supply chain disruption, CMS 
will reduce the rebate amount as described in paragraph (b)(1) of this 
section, and will not grant a reduction under Sec.  428.301 during that 
applicable period.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to Part D rebatable drugs and biosimilars 
for which a manufacturer submits a rebate reduction request under this 
section.
    (2) Timing. For a natural disaster or other unique or unexpected 
event occurring on or after August 2, 2024 that the manufacturer 
believes caused a severe supply chain disruption, the manufacturer must 
submit the rebate reduction request within 60 calendar days from the 
first day that the natural disaster or other unique or unexpected event 
occurred or began to receive consideration for a reduction in the 
rebate amount owed in accordance with paragraph (b)(1) of this section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed in accordance 
with paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria described in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that the severe supply chain disruption directly 
affects the manufacturer itself, a supplier of an ingredient or 
packaging, a contract manufacturer, or a method of shipping or 
distribution that the manufacturer uses to make or distribute the 
generic Part D rebatable drug(s) or biosimilar(s), such as a change in 
the production or distribution of the generic Part D rebatable drug(s) 
or biosimilar(s) that is reasonably likely to lead to a significant 
reduction in the U.S. supply of product and significantly affects the 
manufacturer's ability to fill orders or meet expected demand for the 
generic Part D rebatable drug(s) or biosimilar(s) for at least 90 days;
    (ii) Information about when the manufacturer expects supply of the 
generic Part D rebatable drug(s) or biosimilar(s) to meet expected 
demand;
    (iii) Evidence that the natural disaster or other unique or 
unexpected event caused the severe supply chain disruption, including 
when the natural disaster or other unique or unexpected event occurred 
or began occurring, and the expected or actual duration of the severe 
supply chain disruption; and
    (iv) Evidence of the manufacturer's physical presence related to 
manufacturing the generic Part D rebatable drug(s) or biosimilar(s) in 
a

[[Page 62247]]

geographic area where a natural disaster or other unique or unexpected 
event occurred. If the manufacturer is not physically present in a 
geographic area where a natural disaster or other unique or unexpected 
event occurred, but believes there is a severe supply chain disruption 
caused by a natural disaster or other unique or unexpected event that 
affects the manufacturer's generic Part D rebatable drug(s) or 
biosimilar(s), the information and supporting documentation may include 
evidence of the impact of the natural disaster or other unique or 
unexpected event on the supply chain of the generic Part D rebatable 
drug or biosimilar, on a supplier of an ingredient or packaging, or 
method of shipping or distribution that the manufacturer uses.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the rebate amount owed if a 
manufacturer submits to CMS a request in writing for an eligible drug, 
in accordance with the timing specified in paragraph (c)(2) of this 
section, demonstrating that:
    (i) A severe supply chain disruption has occurred during the 
applicable period;
    (ii) The severe supply chain disruption directly affects the 
manufacturer itself, a contract manufacturer, a supplier of an 
ingredient or packaging, or a method of shipping or distribution that 
the manufacturer uses in a significant capacity to make or distribute 
the generic Part D rebatable drug or biosimilar; and
    (iii) The severe supply chain disruption was caused by a natural 
disaster or other unique or unexpected event.
    (5) Rebate reduction extensions. If CMS determines that a generic 
Part D rebatable drug or biosimilar that received a reduction of the 
rebate amount under paragraph (b)(1) of this section continues to be 
affected by the severe supply chain disruption, CMS will grant a single 
extension of the reduction for 1 additional consecutive applicable 
period and reduce the rebate amount owed in accordance with paragraph 
(b)(2) of this section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the generic Part D rebatable drug or 
biosimilar continues to be affected by the severe supply chain 
disruption during the second applicable period.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the second 
consecutive applicable period to receive consideration for a reduction 
in the rebate amount owed, if any, in accordance with paragraph (b)(2) 
of this section, except for when the initial request is made less than 
60 calendar days before the end of an applicable period such that the 
initial rebate reduction is applied to the next applicable period 
rather than the applicable period in which the event that caused the 
severe supply chain disruption occurred or began. In these cases, the 
rebate reduction extension request must be submitted at least 60 
calendar days prior to the end of the applicable period in which the 
initial reduction under paragraph (b)(1) of this section is applied.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable period that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria in paragraph (c)(4) of this section or that is incomplete or 
untimely based on the requirements of this paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria in paragraph (c)(5) of this section, that is 
incomplete or untimely based on the requirements of paragraph (c)(5) of 
this section, or if a reduction under paragraph (b)(1) of this section 
was not provided for such generic Part D rebatable drug or biosimilar.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction request that the submitter indicates is 
a trade secret or confidential commercial or financial information will 
be protected from disclosure if CMS determines the information meets 
the requirements set forth under Exemption 3 or Exemption 4 in 5 U.S.C. 
552.


Sec.  428.303  Reducing the rebate amount for generic Part D rebatable 
drugs likely to be in shortage.

    (a) General. As required under section 1860D-14B(b)(1)(C)(iii) of 
the Act, CMS will reduce the total rebate amount calculated under Sec.  
428.201, if any is owed, for a generic Part D rebatable drug when CMS 
determines that the generic Part D rebatable drug is likely to be in 
shortage, as defined in Sec.  428.300.
    (b) Calculation of the reduced rebate amount--(1) Initial 
reduction. If CMS determines the criteria described in paragraph (c)(4) 
of this section are met, then CMS will reduce the total rebate amount 
owed by the manufacturer for a generic Part D rebatable drug by 75 
percent for an applicable period.
    (2) Extension of reduction. If CMS determines the generic Part D 
rebatable drug is likely to be in shortage in a second applicable 
period as described in paragraph (c)(5) of this section, then CMS will 
reduce the total rebate amount owed by the manufacturer for a generic 
Part D rebatable drug by 75 percent for a second consecutive applicable 
period.
    (3) Application of reduction. If CMS determines that an NDC-11 is 
likely to be in shortage, CMS will apply any reduction of the rebate 
amount as described in paragraphs (b)(1) and (2) of this section to the 
generic Part D rebatable drug at the NDC-9 level.
    (4) Limitation on rebate reductions. If CMS grants a rebate 
reduction request under this section, and the generic Part D rebatable 
drug subject to the reduction is currently in shortage during the same 
applicable period as the one for which the request was granted, CMS 
will reduce the rebate amount as described in paragraph (b)(1) of this 
section and will not grant a reduction under Sec.  428.301 during that 
applicable period.
    (c) Eligibility for a rebate reduction--(1) Eligible drug. Subject 
to paragraph (b)(3) of this section, eligibility for a rebate reduction 
under this section is limited to generic Part D rebatable drugs for 
which a manufacturer submits a rebate reduction request under this 
section.
    (2) Timing. The manufacturer must submit the rebate reduction 
request before the start of the next applicable period in which the 
manufacturer believes the generic Part D rebatable drug is likely to be 
in shortage to receive consideration for a reduction in the rebate 
amount owed in accordance with paragraph (b)(1) of this section.
    (3) Required elements of a rebate reduction request. To receive 
consideration for a reduction in the rebate amount owed in accordance 
with paragraph (b)(1) of this section, the manufacturer must submit to 
CMS information and supporting documentation to substantiate the 
evaluation criteria described in paragraph (c)(4) of this section. Such 
information and supporting documentation include the following:
    (i) Evidence that demonstrates a generic Part D rebatable drug is 
likely to be in shortage, including anticipated cause(s) of the 
shortage and information about why the manufacturer believes

[[Page 62248]]

the generic Part D rebatable drug is likely to be in shortage; and
    (ii) Evidence of the anticipated start date and duration of the 
potential drug shortage, the actions the manufacturer is taking to 
avoid the potential drug shortage, and how the reduction of the rebate 
amount would reduce the likelihood of the drug appearing on an FDA 
shortage list.
    (4) Evaluation criteria. In accordance with paragraph (b)(1) of 
this section, CMS will grant a reduction in the rebate amount owed if a 
manufacturer submits to CMS a request in writing for an eligible drug, 
in accordance with the timing specified in paragraph (c)(2) of this 
section, demonstrating that:
    (i) The generic Part D rebatable drug is likely to be in shortage;
    (ii) The manufacturer is taking actions to avoid the potential drug 
shortage; and
    (iii) The reduction of the rebate amount would reduce the 
likelihood of the drug appearing on an FDA shortage list.
    (5) Rebate reduction extensions. If CMS determines that a generic 
Part D rebatable drug that received a reduction of the rebate amount 
under paragraph (b)(1) of this section continues to be affected by the 
potential drug shortage, CMS will grant a single extension of the 
reduction for 1 additional consecutive applicable period and reduce the 
rebate amount owed in accordance with paragraph (b)(2) of this section.
    (i) To receive consideration for a rebate reduction extension, a 
manufacturer must submit a request with updated or new information and 
supporting documentation on why the generic Part D rebatable drug 
continues to be affected by the potential drug shortage during the 
second applicable period.
    (ii) A manufacturer must submit the rebate reduction extension 
request at least 60 calendar days before the start of the second 
consecutive applicable period in which the manufacturer believes the 
generic Part D rebatable drug is likely to be in shortage to receive 
consideration for a reduction in the rebate amount owed, if any, in 
accordance with paragraph (b)(2) of this section.
    (6) Decision to grant or deny a request. CMS will review rebate 
reduction requests and rebate reduction extension requests within 60 
calendar days of receipt of all documentation, if feasible, beginning 
with the applicable period that begins on October 1, 2024.
    (i) CMS will deny a rebate reduction request that does not meet the 
criteria in paragraph (c)(4) of this section or that is incomplete or 
untimely based on the requirements of this paragraph (c).
    (ii) CMS will deny a rebate reduction extension request that does 
not meet the criteria in paragraph (c)(5) of this section, that is 
incomplete or untimely based on the requirements of paragraph (c)(5) of 
this section, or if a reduction under paragraph (b)(1) of this section 
was not provided for such generic Part D rebatable drug.
    (iii) CMS' decisions to deny a request are final and will not be 
subject to an appeals process.
    (7) Public disclosure of information. CMS will keep confidential, 
to the extent allowable under law, any requests for a rebate reduction, 
including supporting documentation. Information provided as part of a 
request for a rebate reduction that the submitter indicates is a trade 
secret or confidential commercial or financial information will be 
protected from disclosure if CMS determines the information meets the 
requirements set forth under Exemption 3 or Exemption 4 in 5 U.S.C. 
552.

Subpart E--Reports of Rebate Amounts, Reconciliation, Suggestion of 
Error, and Payments


Sec.  428.400  Definitions.

    For the purposes of this subpart, date of receipt is the calendar 
day following the day in which a report of a rebate amount (as set 
forth in Sec. Sec.  428.401(b), (c), and (d) and 428.402(b) and (c)) is 
made available to the manufacturer of a Part D rebatable drug by CMS.


Sec.  428.401  Rebate Reports and reconciliation.

    (a) General. This section applies to Part D rebatable drugs for all 
applicable periods except as otherwise set forth in Sec.  428.402 for 
the applicable periods beginning October 1, 2022, and October 1, 2023.
    (b) Preliminary Rebate Report. A Preliminary Rebate Report will be 
provided to each manufacturer of a Part D rebatable drug at least 1 
month prior to the issuance of the Rebate Report as set forth in 
paragraph (c) of this section for an applicable period.
    (1) The Preliminary Rebate Report for each Part D rebatable drug 
will include the following information:
    (i) The NDC(s) for the Part D rebatable drug as defined under Sec.  
428.20;
    (ii) The total number of units dispensed under Part D for the Part 
D rebatable drug for the applicable period as determined under Sec.  
428.203;
    (iii) The benchmark period manufacturer price as described in Sec.  
428.202(d).
    (iv) The AnMP for the Part D rebatable drug for the applicable 
period as determined in Sec.  428.202(b);
    (v) The amount, if any, of the excess AnMP for the Part D rebatable 
drug for the applicable period as set forth under Sec.  428.202(a);
    (vi) The benchmark period and applicable period CPI-Us as set forth 
in Sec. Sec.  428.202(e) and 428.20, respectively;
    (vii) Inflation-adjusted payment amount as set forth in Sec.  
428.202(f);
    (viii) Any applied reductions described in Sec. Sec.  428.301, 
428.302, and 428.303; and
    (ix) Rebate amount due as set forth in Sec.  428.201(a).
    (2) If the Part D rebatable drug is a line extension, the 
Preliminary Rebate Report will also include the following information 
described in Sec.  428.204:
    (i) The NDC for the initial drug;
    (ii) The inflation rebate amount ratio for the initial drug; and
    (iii) The alternative total rebate amount.
    (c) Rebate Report. A Rebate Report will be provided to each 
manufacturer of a Part D rebatable drug no later than 9 months after 
the end of each applicable period.
    (1) The Rebate Report will include the information described in 
paragraphs (b)(1) and (2) of this section, if applicable, with the 
inclusion of any revisions to such information resulting from CMS' 
review of a Suggestion of Error as set forth in Sec.  428.403, if 
applicable, and any CMS-determined recalculations from paragraph (d)(2) 
of this section.
    (2) The Rebate Report is the invoice of a manufacturer's rebate 
amount due as calculated in Sec.  428.201(a), if any, for a Part D 
rebatable drug for an applicable period.
    (d) Reconciliation of the rebate amount. CMS will perform 
reconciliation of the rebate amount provided in a Rebate Report 
specified in paragraph (c) of this section for an applicable period in 
the following circumstances:
    (1) Regular reconciliation. Except as otherwise described in Sec.  
428.402, CMS will perform a reconciliation of the rebate amount within 
12 months of the date of receipt of the Rebate Report for an applicable 
period and a second reconciliation approximately 24 months thereafter 
to include revisions to the information used to calculate the rebate 
amount as specified in paragraph (c)(1) of this section.
    (i) Preliminary reconciliation. At least 1 month prior to the 
issuance of a report with the reconciled rebate amount for an 
applicable period specified in paragraph (d)(1)(ii) of this section, 
CMS will conduct a preliminary reconciliation of the rebate amount for 
an applicable period based on the

[[Page 62249]]

information specified in paragraphs (d)(1)(i)(A) through (G) of this 
section, and CMS will provide the information specified in paragraphs 
(d)(1)(i)(A) through (G) to the manufacturer of a Part D rebatable drug 
for the applicable period, if applicable:
    (A) Updated total number of rebatable units, including updates 
submitted by a prescription drug plan (PDP) or Medicare Advantage 
Prescription Drug (MA-PD) plan sponsor and updates to 340B units (as 
applicable to the dates of service and applicable periods specified in 
Sec.  428.203(b)(2)(i)(A) and (B)), or units otherwise excluded as 
specified in Sec.  428.203(b);
    (B) Inflation-adjusted payment amount as specified in Sec.  
428.202(f) if any inputs are restated within the reconciliation run-out 
period;
    (C) Updated benchmark period manufacturer price as specified in 
Sec.  428.202(d);
    (D) The excess amount by which the AnMP exceeds the inflation-
adjusted payment amount for the applicable period as specified in Sec.  
428.202(a), using the most recent AMP (if any inputs are restated 
within the reconciliation run-out period);
    (E) Updated data on line extension calculations, including the 
initial drug identified as set forth in Sec.  447.509(a)(4)(iii)(B) of 
this chapter, the inflation rebate amount ratio, and the alternative 
total rebate amount as set forth in Sec.  428.204 if any inputs are 
restated within the reconciliation run-out period;
    (F) Reconciled rebate amount as specified in Sec.  428.201(a); and
    (G) The difference between the total rebate amount due as specified 
on the Rebate Report set forth in paragraph (c) of this section and the 
reconciled rebate amount as set forth in this paragraph (d)(1)(i).
    (ii) Report with a reconciled rebate amount. With the inclusion of 
any additional revisions to such information resulting from CMS' review 
of a Suggestion of Error as set forth in Sec.  428.403, if applicable, 
a report with the reconciled rebate amount will be provided to each 
manufacturer of a Part D rebatable drug within 12 months and 36 months 
after the issuance of the Rebate Report described in paragraph (c) of 
this section.
    (2) CMS identification of an error or manufacturer misreporting. 
CMS may recalculate a rebate amount and provide the manufacturer of a 
Part D rebatable drug a report with a reconciled rebate amount when:
    (i) CMS identifies an error in the information specified in 
paragraphs (c) and (d)(1) of this section, including reporting system 
or coding errors, not later than 5 years from the date of receipt by a 
manufacturer of a reconciled rebate amount for the applicable period; 
or
    (ii) CMS determines at any time that the information used by CMS to 
calculate the rebate amount was inaccurate due to manufacturer 
misreporting.
    (3) Impact of reconciliation on rebate amount. A reconciliation as 
set forth in this paragraph (d) could result in an increase, decrease, 
or no change to the rebate amount as calculated under Sec.  428.201(a) 
owed by a manufacturer for the applicable period for the Part D 
rebatable drug.
    (i) A report with a reconciled rebate amount that is an increase to 
the rebate amount is the invoice for such additional amount due on the 
manufacturer's rebate amount as set forth in Sec.  428.201 for a Part D 
rebatable drug for an applicable period.
    (ii) [Reserved]
    (4) Drugs included in a reconciliation. A drug covered under Part D 
that does not meet the requirements of a rebatable drug specified in 
Sec.  428.101 for an applicable period will not be included in a 
reconciliation under this paragraph (d).


Sec.  428.402  Rebate Reports for applicable periods beginning October 
1, 2022, and October 1, 2023.

    (a) Transition rule for reporting. Section 1860D-14B(a)(3) of the 
Act allows CMS to delay the timeframe for reporting the information and 
rebate amount described in Sec.  428.401 for the applicable periods 
beginning October 1, 2022, and October 1, 2023, until not later than 
December 31, 2025.
    (b) Rebate Report information for applicable periods beginning 
October 1, 2022, and October 1, 2023. The Rebate Reports for the 
applicable periods beginning October 1, 2022, and October 1, 2023, will 
include the information described in Sec.  428.401(b)(1).
    (c) Rebate Report procedures for applicable periods beginning 
October 1, 2022, and October 1, 2023. Rebate amounts for the applicable 
periods beginning October 1, 2022, and October 1, 2023, will be 
reported as follows:
    (1) The Rebate Report for the applicable period beginning October 
1, 2022, will be issued no later than December 31, 2025. The 
Preliminary Rebate Report for such applicable period will be issued at 
least 1 month prior to the Rebate Report.
    (i) For this single Preliminary Rebate Report for the applicable 
period, the Suggestion of Error period as described in Sec.  428.403 
will be 30 calendar days.
    (ii) The rebate amount will be reconciled 21 months after the 
Rebate Report specified in paragraph (b)(1) of this section is issued 
to include the information specified in Sec.  428.401(d)(1)(i)(A) 
through (G).
    (iii) The Suggestion of Error period for the reconciliation 
described in paragraph (b)(1)(ii) of this section will be 10 calendar 
days.
    (2) The Rebate Report for the applicable period beginning October 
1, 2023, will be issued no later than December 31, 2025. The 
Preliminary Rebate Report for such applicable period will be issued at 
least 1 month prior to the Rebate Report.
    (i) For this single Preliminary Rebate Report for the applicable 
period, the Suggestion of Error period as described in Sec.  428.403 
will be 30 calendar days.
    (ii) The rebate amount will be reconciled 9 months after the Rebate 
Report and 33 months after the Rebate Report specified in paragraph 
(b)(2) of this section is issued to include the information specified 
in Sec.  428.401(d)(1)(i)(A) through (G).


Sec.  428.403  Suggestion of Error.

    (a) General. Manufacturers of Part D rebatable drugs may submit a 
Suggestion of Error about the information in their Preliminary Rebate 
Report and the report detailing the preliminary reconciliation of the 
rebate amount to CMS, for its discretionary consideration, if the 
manufacturer believes that there is a mathematical error or errors to 
be corrected before the Rebate Report or a subsequent reconciliation, 
as applicable, is finalized.
    (1) Section 1860D-14B(f) of the Act precludes administrative or 
judicial review on the determination of units as set forth in Sec.  
428.203, the determination of whether a drug is a Part D rebatable drug 
as set forth in Sec.  428.101, and the calculation of the rebate amount 
as set forth in Sec.  428.201(a) inclusive of any reconciled rebate 
amount.
    (2) [Reserved]
    (b) Process of submission. Subject to the scope and timing 
requirements specified in paragraphs (a) and (c) of this section, 
manufacturers may submit the Suggestion of Error and provide supporting 
documentation (if applicable).
    (c) Timing. Except as specified in Sec.  428.402 for the applicable 
periods beginning on October 1, 2022, and October 1, 2023, a 
manufacturer must submit its Suggestion of Error for the applicable 
period within 10 calendar days from the date of receipt of a 
Preliminary Rebate Report or a preliminary reconciliation of a rebate

[[Page 62250]]

amount using the method and process established by CMS in paragraph (b) 
of this section.
    (d) Notice. (1) CMS will include any revisions to the calculation 
of the rebate amount, if determined necessary by CMS based on the 
Suggestion of Error submitted under this section prior to issuance of 
the Rebate Report as set forth in Sec.  428.401(c) or Sec.  428.402(c) 
as well as any report of a reconciled rebate amount as set forth in 
Sec.  428.401(d) or Sec.  428.402(c)(1)(ii) and (c)(2)(ii).
    (2) CMS will notify the manufacturer whether CMS revised its 
calculation of the rebate amount based on the Suggestion of Error.


Sec.  428.404  Manufacturer access to Rebate Reports.

    (a) General. CMS will establish a method and process for a 
manufacturer of the Part D rebatable drug to:
    (1) Access the Rebate Report as set forth in Sec. Sec.  428.401 and 
428.402, including any report of a reconciled rebate amount as set 
forth in Sec. Sec.  428.401 and 428.402;
    (2) Submit a Suggestion of Error as set forth in Sec. Sec.  
428.402(c) and 428.403; and
    (3) Pay a rebate amount as set forth in Sec.  428.405.
    (b) [Reserved]


Sec.  428.405  Deadline and process for payment of rebate amount.

    (a) Rebate amounts owed by a manufacturer. For payment of a rebate 
amount owed by a manufacturer:
    (1) Upon receipt of a rebate amount, payment is due no later than 
11:59 p.m. Pacific Time (PT) on the 30 calendar days after the date of 
receipt of information regarding the rebate amount on--
    (i) A Rebate Report specified in Sec.  428.401(c) or Sec.  428.402; 
or
    (ii) A report of a reconciled rebate amount specified in Sec.  
428.401(d) or Sec.  428.402.
    (2) Failure to pay a rebate amount due timely and in full may 
result in an enforcement action as described in subpart F of this part.
    (b) Refund to the manufacturer. If a reconciled rebate amount for 
an applicable period as specified in Sec.  428.401(d) or Sec.  428.402 
is less than what the manufacturer paid for that applicable period, CMS 
will initiate the process to provide a refund equal to the excess 
amount paid within 60 days of the date of receipt of the report with 
such reconciled rebate amount.

Subpart F--Enforcement of Manufacturer Payment of Rebate Amounts


Sec.  428.500  Civil money penalty notice and appeals procedures.

    (a) General. CMS may impose a civil money penalty on a manufacturer 
that fails to pay the rebate amount set forth in Sec.  428.201(a) on a 
Part D rebatable drug defined at Sec.  428.20, by the payment deadline 
as set forth in section Sec.  428.405(a) for such drug for such 
applicable period.
    (b) Determination of the civil money penalty amount. CMS may impose 
a civil money penalty for each failure by a manufacturer to provide an 
applicable inflation rebate equal to 125 percent of the rebate amount 
determined in Sec.  428.201(a).
    (1) The civil money penalty is in addition to the rebate amount 
due.
    (2) If a reconciled rebate amount as set forth in Sec.  428.401(d) 
or Sec.  428.402(c)(1)(ii) or (c)(2)(ii) results in an increase to the 
rebate amount due, a separate civil money penalty may be imposed for 
the failure by a manufacturer to provide an inflation rebate for the 
applicable period for the increase to the rebate amount due.
    (c) Notice of imposition of civil money penalties. If CMS makes a 
determination to impose a civil money penalty described in paragraph 
(b) of this section, CMS will send a written notice of its decision to 
impose a civil money penalty to include the following:
    (1) A description of the basis for the determination.
    (2) The basis for the penalty.
    (3) The amount of the penalty.
    (4) The date the penalty is due.
    (5) The manufacturer's right to a hearing as specified in paragraph 
(e) of this section.
    (6) Information about where to file the request for a hearing.
    (d) Collection. (1) A manufacturer must pay the civil money penalty 
in full within 60 calendar days after the date of the notice of 
imposition of a civil money penalty from CMS under paragraph (c) of 
this section.
    (2) In the event a manufacturer requests a hearing, pursuant to 42 
CFR part 423, subpart T, the manufacturer must pay the amount in full 
within 60 calendar days after the date of a final decision by the 
Departmental Appeal Board, to uphold, in whole or in part, the civil 
money penalty.
    (3) If the 60th calendar day described in paragraphs (d)(1) and (2) 
of this section is a weekend or a Federal holiday, then the timeframe 
is extended until the end of the next business day.
    (e) Appeal procedures for civil money penalties. Section 
1128A(c)(2) of the Act provides that CMS may not collect a civil money 
penalty until the affected party has had notice and the opportunity for 
a hearing.
    (1) Manufacturers may appeal the following determinations:
    (i) A CMS determination that the rebate amount was not paid by the 
applicable payment deadline as described in Sec.  428.405.
    (ii) The calculation of the amount of the civil money penalty.
    (2) The notice provided to a manufacturer if CMS decides to impose 
a civil money penalty is described in paragraph (c) of this section.
    (3) A manufacturer has a right to a hearing following a decision by 
CMS to impose a civil money penalty following the administrative appeal 
process and procedures established in 42 CFR part 423, subpart T.
    (f) Other applicable provisions. The provisions of section 1128A of 
the Act (except subsections (a) and (b) of section 1128A of the Act) 
apply to civil money penalties under this section to the same extent 
that they apply to a civil money penalty or procedures under section 
1128A of the Act.
    (g) Bankruptcy. In the event that a manufacturer declares 
bankruptcy, as described in title 11 of the United States Code, and as 
a result of the bankruptcy, fails to pay either the full rebate amount 
owed or the total sum of civil money penalties imposed, the government 
reserves the right to file a proof of claim with the bankruptcy court 
to recover the unpaid amount of the rebates and civil money penalties 
owed by the manufacturer.

PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES

0
82. The authority citation for part 491 continues to read as follows:

    Authority: 42 U.S.C. 263a and 1302.

0
83. Section 491.9 by--
0
a. Adding paragraphs (a)(2)(i) and (ii);
0
b. Removing paragraph (c)(2)(ii);
0
c. Redesignating paragraphs (c)(2)(iii) through (vi) as paragraphs 
(c)(2)(ii) through (v), respectively; and
0
d. Revising newly designated paragraph (c)(2)(v).
    The additions and revisions read as follows:


Sec.  491.9  Provision of services.

    (a) * * *
    (2) * * *
    (i) The clinic or center must provide primary care services.
    (ii) The clinic is not a rehabilitation agency or a facility 
primarily for the care and treatment of mental diseases.
* * * * *

[[Page 62251]]

    (c) * * *
    (2) * * *
    (v) Collection of patient specimens for transmittal to a certified 
laboratory for culturing.
* * * * *

Xavier Becerra,
Secretary, Department of Health and Human Services.

    Note: The following Appendices will not appear in the Code of 
Federal Regulations.

Appendix 1: MIPS Quality Measures

    Note:  Except as otherwise noted in this proposed rule, 
previously finalized measures and specialty measure sets will 
continue to apply for the CY 2025 performance period/2027 MIPS 
payment year and future years. Previously finalized measures and 
specialty measure sets are in the CY 2017 through CY 2024 PFS final 
rules: 81 FR 77558 through 77816, 82 FR 53966 through 54174, 83 FR 
60097 through 60285, 84 FR 63205 through 63513, 85 FR 85045 through 
85369, 86 FR 65687 through 65968, 87 FR 70250 through 70633, and 88 
FR 79556 through 79964. In addition, electronic clinical quality 
measures (eCQMs) that are endorsed by a Consensus-Based Entity (CBE) 
are shown in Table A of this Appendix as follows: CBE #/eCQM CBE #.

Table Group A: New MIPS Quality Measures Proposed for the CY 2025 
Performance Period/2027 MIPS Payment Year and Future Years

    Note:  In the CY 2024 PFS final rule, measure Q494: Excessive 
Radiation Dose or Inadequate Image Quality for Diagnostic Computed 
Tomography (CT) in Adults (Clinician Level), was finalized with a 1-
year delay to the CY 2025 performance period (88 FR 79556 through 
79560) and does not have a new measure table in this proposed rule.

BILLING CODE P
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[FR Doc. 2024-14828 Filed 7-10-24; 4:15 pm]
BILLING CODE C