[Federal Register Volume 90, Number 134 (Wednesday, July 16, 2025)]
[Proposed Rules]
[Pages 32352-33261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-13271]
[[Page 32351]]
Vol. 90
Wednesday,
No. 134
July 16, 2025
Part III
Book 2 of 2 Books
Pages 32351-33262
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, et al.
Medicare and Medicaid Programs; CY 2026 Payment Policies Under the
Physician Fee Schedule and Other Changes to Part B Payment and Coverage
Policies; Medicare Shared Savings Program Requirements; and Medicare
Prescription Drug Inflation Rebate Program; Proposed Rule
Federal Register / Vol. 90 , No. 134 / Wednesday, July 16, 2025 /
Proposed Rules
[[Page 32352]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 414, 424, 425, 427, 428, 495, and 512
[CMS-1832-P]
RIN 0938-AV50
Medicare and Medicaid Programs; CY 2026 Payment Policies Under
the Physician Fee Schedule and Other Changes to Part B Payment and
Coverage Policies; Medicare Shared Savings Program Requirements; and
Medicare Prescription Drug Inflation Rebate Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
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 establishment of new policies for: the
Medicare Prescription Drug Inflation Rebate Program under the Inflation
Reduction Act of 2022; the Ambulatory Specialty Model; updates to the
Medicare Diabetes Prevention Program expanded model; updates to drugs
and biological products paid under Part B; Medicare Shared Savings
Program requirements; updates to the Quality Payment Program; updates
to policies for Rural Health Clinics and Federally Qualified Health
Centers update to the Ambulance Fee Schedule regulations; codification
of the Inflation Reduction Act and Consolidated Appropriations Act,
2023 provisions; updates to the Medicare Promoting Interoperability
Program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on September 12,
2025.
ADDRESSES: In commenting, please refer to file code CMS-1832-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 http://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-1832-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-1832-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. For all questions related to reporting a service on a claim,
please contact your Medicare Administrative Contractor.
Michael Soracoe, Morgan Kitzmiller, or
[email protected], for issues related to
practice expense, work RVUs, conversion factor, and PFS specialty-
specific impacts.
Hannah Ahn, or [email protected], for issues
related to potentially misvalued services under the PFS.
Julie Rauch, or [email protected], for
issues related to Malpractice RVUs.
Morgan Kitzmiller, Terry Simananda, or
[email protected] for issues related to
Geographic Practice Cost Indices.
Mikayla Murphy, or [email protected], for
issues related to direct supervision using two-way audio/video
communication technology, telehealth, and other services involving
communications technology.
Erick Carrera, or [email protected], for
issues related to office/outpatient evaluation and management visit
inherent complexity add-on and Digital Mental Health Treatment
services.
Maya Peterson, Terry Simananda, or
[email protected], for issues related to payment
for advanced primary care management services.
Sarah Leipnik, or [email protected], for
issues related to global surgery payment accuracy.
Pamela West, or [email protected], for
issues related to outpatient therapy services and KX modifier
thresholds.
Michelle Cruse, Erick Carrera, Zehra Hussain, or Hannah Ahn
[email protected], for issues related to dental
services inextricably linked to other covered medical services.
Zehra Hussain, or [email protected], for
issues related to payment of skin substitutes.
Laura Kennedy, (410) 786-3377, 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.
Allison Cipro, (667) 414-0758, for issues related to Medicare
Diabetes Prevention Program.
Sabrina Ahmed, (410) 786-7499, or [email protected],
for issues related to the Medicare Shared Savings Program (Shared
Savings Program) quality performance standard and other quality
reporting requirements.
Janae James, (410) 786-0801, or [email protected],
for issues related to Shared Savings Program beneficiary assignment and
benchmarking methodology and shared losses mitigation.
Kari Vandegrift, (410) 786-4008, or
[email protected], for issues related to Shared Savings
Program participation options, and ACO participant and SNF affiliate
change of ownership requirements.
Elisabeth Daniel, (667) 290-8793, for issues related to the
Medicare Prescription Drug Inflation Rebate Program.
Benjamin Picillo or Genevieve Kehoe,
[email protected], or 1-844-711-2664 (Option 4) for
issues related to the Ambulatory Specialty Model.
Amy Gruber, (410) 786-1542, for issues related to Ambulance
Extender provisions.
Kati Moore, (410) 786-5471, for inquiries related to the Merit-
based Incentive Payment System (MIPS) track of the Quality Payment
Program (QPP).
Trevey Davis, (667) 290-8527, for inquiries related to the Advanced
Alternative Payment Models (APMs) track of QPP.
Jessica Warren, (410) 786-7519, and Lisa Marie Gomez, (410) 786-
1175, for inquiries related to the Medicare Promoting Interoperability
Program.
Lisa Parker, (410) 786-4949, or [email protected], for issues
related to FQHC payments.
Michele Franklin, (410) 786-9226, or [email protected], for issues
related to RHC payments.
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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
2026 PFS proposed rule, refer to item CMS-1832-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].
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this rule may be found at https://www.regulations.gov/.
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.
Deregulation Request for Information (RFI):
On January 31, 2025, President Trump issued Executive Order (EO)
14192 ``Unleashing Prosperity Through Deregulation,'' which states the
Administration policy to significantly reduce the private expenditures
required to comply with Federal regulations to secure America's
economic prosperity and national security and the highest possible
quality of life for each citizen. We would like public input on
approaches and opportunities to streamline regulations and reduce
administrative burdens on providers, suppliers, beneficiaries, and
other stakeholders participating in the Medicare program. CMS has made
available a Request for Information (RFI) at: https://www.federalregister.gov/documents/2025/04/11/2025-06316/request-for-information-deregulation. Please submit all comments in response to
this request for information through the provided weblink.
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 Full-Year Continuing Appropriations
and Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025), 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 proposed rule includes proposals regarding other
Medicare payment policies described in sections III. and IV.
This rulemaking proposes to update policies for the Medicare
Prescription Drug Inflation Rebate Program codified or finalized at
parts 427 and 428 consistent with sections 1847A(i) and 1860D-14B of
the Social Security Act (the Act). With respect to the Medicare Part B
Drug Inflation Rebate Program, this rulemaking proposes to describe the
identification of payment amount benchmark quarter in certain instances
and the calculation for the Part B rebate amount in such instances.
With respect to the Medicare Part D Drug Inflation Rebate Program, this
rulemaking proposes to clarify the calculation of a Part D rebate
amount, and proposes a methodology for removal of units for a Part D
rebatable drug for which a manufacturer provides a discount under the
340B Program, as well as the establishment of a 340B data repository
for Part D claims.
This rulemaking proposes to modify policies for the Shared Savings
Program, which is a voluntary program that started in 2012. The program
allows healthcare providers to form or participate in Accountable Care
Organizations (ACOs), to be held accountable for the quality and total
cost of care for an assigned population of Medicare fee-for-service
(FFS) beneficiaries.
B. Summary of the Key Provisions
Section 1848 of 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 2026 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, 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.)
Outpatient Therapy Services and KX Modifier Thresholds
(section II.H.)
Advancing Access to Behavioral Health Services (section
II.I.)
Provisions 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.)
Strategies for Improving Global Surgery Payment Accuracy
(section II.L.)
Determination of Malpractice Relative Value Units (RVUs)
(section II.M.)
Geographic Practice Cost Indices (GPCIs) (section II.N.)
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.)
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Ambulatory Specialty Model (ASM) (section III.C.)
Medicare Diabetes Prevention Program (MDPP) (section
III.D.)
Medicare Prescription Drug Inflation Rebate Program
(section III.E.)
Medicare Shared Savings Program (section III.F.)
Changes to the Regulations Associated with the Ambulance
Fee Schedule (section III.G.)
Updates to the Quality Payment Program and Medicare
Promoting Interoperability Program (section IV.)
Collection of Information Requirements (section V.)
Responses to Comments (section VI.)
Regulatory Impact Analysis (section VII.)
C. Summary of Costs and Benefits
Based on our estimates, the Office of Information and Regulatory
Affairs in the Office of Management and Budget has determined that this
proposed rule is economically significant under section 3(f)(1) of
Executive Order 12866. As required by section 1848(d)(1)(A) of the Act,
beginning in 2026, there will be two separate conversion factors (CFs):
one for items and services furnished by a qualifying APM participant as
defined in section 1833(z)(2) of the Act (referred to as the qualifying
APM conversion factor) and another for other items and services
(referred to as the nonqualifying APM conversion factor), equal to the
respective conversion factor for the previous year (or, for CY 2026,
equal to the single conversion factor for CY 2025) multiplied by the
update established under section 1848(d)(20) of the Act for such
respective conversion factor for such year. Under these proposals, the
2026 qualifying APM conversion factor represents a projected increase
of $0.39 (1.2 percent) from the current conversion factor of $32.3465.
Similarly, the 2026 nonqualifying APM conversion factor represents a
projected increase of $0.23 (0.7 percent) from the current conversion
factor of $32.3465.
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 expenses, 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) )/Specialty Society
Relative Value Scale (RVS) Update Committee (referred to as the RUC)
and those provided in response to public comment periods. For a
detailed explanation of the direct PE methodology, including examples,
we referred 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 have stated that 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 is developed based entirely on
the PPIS data, except as noted in this section.
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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 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 2026 PFS proposed rule PE/HR'' on the
CMS website under downloads for the CY 2026 PFS proposed rule at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
For CY 2026, we have incorporated the available utilization data
for one new specialty, Epileptologists, which we recognized effective
July 1, 2024 through our established process. We are proposing to use
proxy PE/HR values from Neurology for this new specialty, as there are
no PPIS data for this specialty.
These updates are reflected in the ``CY 2026 PFS proposed rule PE/
HR'' file available on the CMS website under the supporting data files
for the CY 2026 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 generally 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. We note, too, that in
this proposed rule we are proposing a modification in the allocation of
indirect PE, described in detail below.
(4) Services With Technical Components and Professional Components
Diagnostic services are generally comprised of two components: a
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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 2026 PFS
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This
file contains a table that illustrates the calculation of PE RVUs as
described in this 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.
The full list of expected specialty assignments is included in the
CY 2026 public use files, which are available on the CMS website under
downloads for the CY 2026 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
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).
We note that for CY 2026, we are proposing a change to the
methodology so that when work RVUs are used to
[[Page 32357]]
allocate indirect PE to the facility RVUs, they are assigned at one-
half the amount allocated to the nonfacility PE RVUs for that same
service. This proposed change is detailed later in this section.
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 as the denominator and Step
13 as the numerator, calculate the specialty specific indirect PE
scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the sum of steps
5 and 17 to the 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 4120-01-P
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BILLING CODE 4120-01-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
[[Page 32359]]
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 provides details in which the
modifiers are applied.
[GRAPHIC] [TIFF OMITTED] TP16JY25.006
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.
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 imaging equipment, for which we use a 90 percent assumption
as required by section 1848(b)(4)(C) of the Act.
[[Page 32360]]
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] TP16JY25.007
We are not proposing any changes to the equipment interest rates
for CY 2026.
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 2017-based 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 and 10 and the recalibration
of the relativity adjustment in step 18 until the
[[Page 32361]]
public had an opportunity to comment on the rebased and revised 2017-
based 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 had elapsed since the last rebasing and
revision of the MEI in CY 2014, we believed that delaying the
implementation of the finalized 2017-based 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 comments in the CY
2023 PFS proposed rule on when and how to best incorporate the 2017-
based 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 2017-based 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 comments 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 2017-based 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 CY 2025 PFS rulemaking (89 FR 97722), we stated that in light of
the AMA's current data collection efforts and because the
methodological and data source changes to the 2017-based 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 continued to believe
that delaying the implementation of the finalized 2017-based MEI cost
share weights for the RVUs was 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 and CY
2025. 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 recommended to us to pause consideration of
other sources for the MEI until the AMA's efforts to collect practice
cost data from physician practices concluded, although a few commenters
recommended that we implement the MEI for PFS ratesetting as soon as
possible. We stated that 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 were ongoing. We stated that 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 were not proposing to update
the data underlying the MEI cost weights at that time.
At the time of publication of this proposed rule, the AMA has
concluded their data collection efforts and, in early 2025, submitted
data from its Physician Practice Information (PPI) and Clinician
Practice Information (CPI) Surveys to CMS for us to consider
implementing the PE/HR data and cost shares in PFS ratesetting for CY
2026. We appreciate the AMA's data collection efforts, and recognize
the significant efforts required to develop the survey and collect the
data. We have prioritized review of the submitted information during
the first part of this year based on our longstanding interest in the
value of updated practice expense information. At this time, however,
we have substantive concerns about the accuracy and suitability of the
PPI and CPI Survey data as an immediate replacement for the current PE/
HR data and cost shares for use in CY 2026 PFS ratesetting. Due to
overarching concerns with the data as described below and our
previously described policy goal to balance PFS payment stability and
predictability with incorporating new data through routine updates to
the MEI, we are not proposing to implement the PE/HR or cost shares
from the AMA's survey data at this time. Instead, we propose to
maintain the current PE/HR and 2006-based MEI cost shares for CY 2026
PFS ratesetting.
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 2026 direct PE input public use files, which are
available on the CMS website under downloads for the CY 2026 PFS
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-fafor-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,
[[Page 32362]]
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 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 2026, 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 2026 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 1,300 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
[[Page 32363]]
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 2026, we are proposing to update the price of 35 supplies
and seven equipment items in response to the public submission of
invoices following the publication of the CY 2025 PFS final rule. The
42 supply and equipment items with proposed updated prices are listed
in the valuation of specific codes section of the preamble under Table
6, CY 2026 Invoices Received for Existing Direct PE Inputs.
We received a series of invoices associated with the SD339 supply
prior to our February 10th submission deadline and are proposing to
update its pricing accordingly for CY 2026, as detailed in Table 6, CY
2026 Invoices Received for Existing Direct PE Inputs. We later received
additional invoices associated with this supply several months
following our February 10th deadline which arrived too late to be
included in the proposed updated pricing for this supply as shown in
Table 6. Consistent with our previously finalized policy associated
with the February 10th deadline (79 FR 67608), we will review these
invoices during the comment period following the publication of this CY
2026 PFS proposed rule for potential inclusion in the final rule.
We are not proposing to update the price of another eight supplies
and one equipment item, which were the subject of public submission of
invoices. Our reasons for not proposing updates to these prices are
detailed below, and we are soliciting additional information from
interested parties for assistance in pricing these supplies:
Radiation treatment vault (ER056): We received pricing
information associated with the radiation treatment vault from an
interested party. However, this pricing information contained numerous
costs associated with building construction which would not be included
on a traditional invoice, such as surveying, plumbing and HVAC
expenses, drywall packaging, and the installation of electrical
equipment. As we previously stated in the CY 2021 PFS final rule about
similar costs associated with proton beam treatment delivery services,
the expenses associated with constructing new office facilities fall
outside of our direct PE methodology and would be more accurately
classified as a form of building maintenance or office rent under
indirect PE (85 FR 84626). We do not agree that construction costs
should be included as a form of direct PE because they are not
individually allocable to a particular patient for a particular
service. Therefore, we do not believe that it would serve the interests
of relativity to include these building construction costs for the
radiation treatment vault as a type of direct PE expense. In the
absence of other pricing information associated with the radiation
treatment vault, or pricing of the vault absent these building
construction costs, we are proposing to maintain its current price of
$773,104.
Congo red kits (SA110) and UltraView Universal DAB
Detection Kit (SL488): We received three invoices from interested
parties requesting an increase in the price of the SA110 supply from
$6.80 to $20.12 and another three invoices from interested parties
requesting an increase in the price of the SL488 equipment from $12.28
to $41.26. In both cases, we do not understand how the typical price of
these supplies could be increasing by such a large amount, tripling the
current price in both cases, given that the price of both supplies was
recently updated. Both the SA110 supply and the SL488 supply had their
prices updated in the CY 2024 PFS final rule, with the SA110 supply
increasing from $6.16 to $6.80 and the SL488 supply increasing from
$9.70 to $12.28 (88 FR 78966 through 78967). We do not believe that the
typical price for these supplies would increase to such a great degree
given that their pricing was already recently updated for CY 2024;
therefore, we are not proposing to update.
Catheter, balloon, rectal pressure (SD017); catheter,
pressure, urodynamic (SD027); and transducer dome (pressure) (SD125):
We received one invoice from interested parties for each of these three
supplies. Interested parties requested an increase in the price of the
SD017 supply from $35.89 to $74.00, an increase in the price of the
SD027 supply from $19.35 to $86.80, and an increase in the price of the
SD125 supply from $3.58 to 17.32. However, in each of these three
cases, it was unclear if the item on the invoice matched the supply
item in question. The invoice for the SD017 supply listed a ``Abdominal
Sensor Catheter'', the invoice for the SD027 supply listed a ``Single
Sensor Catheter'', and the invoice for the SD125 supply listed a
``transducer cartridge with luer lock''. Given the differences between
the names of the items in question, and the significant increases in
requested pricing, we are not proposing to update the pricing of these
three supplies as we cannot verify that the invoices refer to the same
supply items.
Electrode, surface (SD062): We received one invoice from
interested parties requesting a decrease in the price of the SD062
supply from $1.58 to $0.34. The invoice appeared to state that there
are 10 copies of 10 packs of 3 electrodes which, when dividing the
total price of $103 by 300 electrodes, results in a price of $0.34 per
electrode. We do not believe that the interested parties intended to
submit an invoice resulting in a 78 percent decrease in pricing for the
SD062 supply, and we are not convinced that we have correctly
understood the unit quantity for this item. As a result, we are not
proposing to change the pricing of the SD062 supply at this time.
Biohazard specimen transport bag (SM008): We received one
invoice from interested parties requesting an increase in the price of
the SM008 supply from $0.087 to $0.750, an increase of more than 750
percent. However, when we reviewed the invoice, we determined that it
referred to a different type of disposal bag than the biohazard
specimen transport bag described by the SM008 supply, which explained
the disparity in the pricing. We are therefore not proposing to update
the pricing of the SM008 supply.
Wipes, lens cleaning (per wipe) (Kimwipe) (SM027): We
received one invoice from interested parties requesting an increase in
the price of the SM027 supply from $0.04 to $0.33, an increase of
approximately 700 percent. However, when we reviewed the supply in
question, we found that lens cleaning wipes were readily available for
purchase at the current price of $0.04 per wipe. We are therefore not
proposing to update the pricing of the SM027 supply.
(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 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 will consider
any invoices received after February 10th or outside of the public
comment
[[Page 32364]]
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].
(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 in
the CY 2024 final rule 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 proposed to implement the supply pack pricing
update and associated revisions as recommended by the RUC's workgroup
(89 FR 97726 through 97727). We proposed 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
also proposed to delete the ``pack, drapes, laparotomy (chest-
abdomen)'' (SA046) supply entirely. The updated prices for these supply
packs were listed in the valuation of specific codes section of the
preamble under Table 6, CY 2025 Invoices Received for Existing Direct
PE Inputs (89 FR 97852).
In accordance with the RUC workgroup's recommendations, we also
proposed to create 8 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
proposed 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 percent (for example, 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 new supply pack component items were listed in the valuation of
specific codes section of the preamble under Table 8, CY 2025 New
Invoices (89 FR 97853).
We also proposed the following additional supply substitutions
based on the recommendations of the RUC workgroup. We proposed 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 proposed 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 proposed to remove
the deleted SA046 supply pack and replace it with 2 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
proposed to remove the deleted SA046 supply pack without replacing it
with anything for CPT code 22526; the RUC workgroup did not make a
recommendation on what to do with CPT code 27278, which also previously
contained the SA046 supply pack. Therefore, we also proposed 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.
In the comments on the CY 2025 PFS proposed rule (89 FR 97727
through 97729), several commenters supported the proposed supply pack
pricing update as recommended by the RUC workgroup, however they
indicated concern over the proposed decrease in the price of the
urology cystoscopy visit pack (SA058) from $113.70 to $37.63.
Commenters stated that the proposed pricing reduction in the SA058
supply could result in drastic payment rate cuts for physicians
performing cystoscopy services in the office setting. Commenters
requested that CMS either delay the pricing update or phase-in the
supply pack changes over a four-year period like it has done for other
PE changes with significant redistributive effects, allowing
independent urology practices to better prepare for the negative
financial impact this change will have.
[[Page 32365]]
After considering these comments, we agreed that the use of a
phased-in transition period would be appropriate to allow practitioners
to adjust to the updated pricing of these supplies. During our previous
supply and equipment pricing update in the CY 2019 PFS final rule, we
finalized a policy to phase in any updated pricing that we established
during the 4-year transition period for very commonly used supplies and
equipment, such as sterile gloves (SB024) or exam tables (EF023), even
if invoices were provided as part of the formal review of a code family
(83 FR 59475). Based on this previously established policy, we
finalized the use of a pricing transition for three supply packs in
Table 4:
[GRAPHIC] [TIFF OMITTED] TP16JY25.008
Following the same pattern as our previous supply/equipment and
clinical labor pricing updates, 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 2025, one-third of the difference between the CY 2025 price and
the final price is implemented for CY 2026, and one-half of the
difference between the CY 2026 price and the final price is implemented
for CY 2027, with the new direct PE prices fully implemented for CY
2028. For the other proposed supply packs, the cystoscopy drapes pack
(SA045) is only included in 7 HCPCS codes and the ocular photodynamic
therapy pack (SA049) is only included in a single HCPCS code which do
not meet these criteria established in previous rulemaking and
described above. We therefore finalized each of them at their updated
pricing for CY 2025 as proposed in the proposed rule. We believe that
the use of this pricing transition will minimize any potential
disruptive effects during the 4-year transition period that could be
caused by other sudden shifts in RVUs due to the high number of
services that make use of these very common supply packs.
Several commenters also stated that although five incomplete packs
would have their pricing updated in the proposed rule, mathematical
errors still remained for a number of additional supply packs.
Commenters stated that only 3 of the 18 affirmed packs were priced
correctly to match their components and provided tables showing the
pricing of an additional 15 packs that needed mathematical correction
by deconstructing the packs to determine the correct price through
summing their individual components. Commenters requested that CMS
initiate a correction of the packs pricing such that the sum of the
individual components match the price of the corresponding pack as
detailed in Table 5:
[GRAPHIC] [TIFF OMITTED] TP16JY25.009
While we shared the concerns of the commenters regarding the need
for accuracy in the pricing of these supply packs, we had reservations
about their potential for pricing disruptions. Ten of these supply
packs are included in the direct PE inputs for at least 100 HCPCS
codes, and three of the packs are included in more than 1000 HCPCS
codes. Many of these pricing updates would lead to drastic changes in
pricing for these supply packs which are
[[Page 32366]]
included in hundreds of HCPCS codes, such as the SA051 pelvic exam pack
decreasing in price from $20.16 to $2.81 (-86 percent) and the SA048
minimum multi-specialty visit pack decreasing in price from $5.02 to
$1.98 (-61 percent). We were particularly concerned that these changes
in supply pack pricing could lead to significant shifts in the overall
PE RVU for affected HCPCS codes, without these proposed rates appearing
in the proposed rule or allowing any opportunity for public comment.
Therefore, we did not finalize pricing updates for these additional
15 supply packs as requested by commenters. We anticipated returning to
this subject in future rulemaking to allow any changes in associated
pricing for HCPCS codes to appear in the proposed rule and provide an
opportunity for the public to comment. Should these supply pack pricing
updates be proposed in future rulemaking, we anticipated that we might
propose the same pricing transition described above due to the number
of potentially affected HCPCS codes. We finalized all of the other
supply pack pricing changes as proposed, with the exception of the
4[dash]year pricing transition for three supply packs as described
above.
For CY 2026, we are proposing to continue implementing the supply
pack pricing update and associated revisions as previously recommended
by the RUC's workgroup. We are proposing to update the price of the 15
supply packs detailed in Table 5 which were received too late in CY
2025 to allow for proposed pricing or public comment. In the case of
the surgical instruments cleaning pack (SA043), the moderate sedation
pack (SA044) and the small ortho drapes pack (SA081), the proposed
pricing update is modest enough that we are proposing these supplies
move immediately to their final prices for CY 2026.
For the 12 other supply packs, we are proposing that they be
incorporated into the muti-year supply pack pricing transition
finalized in CY 2025 rulemaking. Rather than having two separate 4-year
pricing transitions associated with supply packs, we are proposing that
these 12 additional supply packs fold into the previous pricing
transition using the same methodology, such that one-third of the
difference between the CY 2025 price and the final price is implemented
for CY 2026, and one-half of the difference between the CY 2026 price
and the final price is implemented for CY 2027, with the new direct PE
prices fully implemented for CY 2028 (89 FR 97728). With the inclusion
of the SA042, SA058, and SA082 supply packs which began their pricing
transition last year for CY 2025, we are proposing the total supply
pack pricing update detailed in Table 6:
[GRAPHIC] [TIFF OMITTED] TP16JY25.010
This table also includes the hydrophilic guidewire (SD089) supply
which we are proposing to transition in pricing over three years given
its inclusion in approximately 100 HCPCS codes. We continue to believe
that the use of this pricing transition will minimize any potential
disruptive effects during the transition period that could be caused by
other sudden shifts in RVUs due to the high number of services that
make use of these very common supply items.
c. Technical Corrections To Direct PE Input Database and Supporting
Files
Following the publication of the CY 2025 PFS final rule, we
received a request from the RUC to remove all equipment items priced
below $500 from the CMS ratesetting database. The RUC stated that since
CMS has defined that medical equipment must be at least $500 and all
equipment inputs under $500 are considered indirect expense, the 11
current equipment items under this threshold should no longer be listed
as equipment. The RUC requested that CMS remove these items from its
equipment list and from the specific HCPCS codes to conform to the
definition of direct medical equipment and to ensure that the rule
remains consistently applied.
We appreciate the RUC bringing this topic to our attention.
However, we are not proposing to remove these 11 equipment items that
fall under the $500 threshold from the CMS ratesetting database. These
equipment items have historically been included as direct PE inputs in
their respective HCPCS codes for the last two decades and, given the
very small valuation associated with their use (such as the ED004
digital
[[Page 32367]]
camera priced at approximately 0.06 cents per minute of use), we do not
believe that it is necessary to remove them from the database. We
believe that it better serves relativity by continuing to maintain
these equipment items due to their historical inclusion in their
associated HCPCS codes, as opposed to the removal of long-standing
direct PE inputs which may cause unnecessary confusion and lead to
concern that the valuation of these services would be negatively
impacted. We are soliciting comments on whether to maintain or remove
these equipment items.
We also received a request from the RUC to update the names of
several supplies and equipment items in the CMS ratesetting database.
The RUC stated that these naming changes would remove specific product
or brand names and more accurately describe the items in question. We
agree with the RUC and we are proposing naming changes for the
following supplies and equipment items:
EQ392: We are proposing to rename the ``heart failure
patient physiologic monitoring equipment package'' to ``patient
physiologic monitoring equipment package''.
ER089: We are proposing to rename the ``IMRT Accelerator''
to ``Radiation Treatment Delivery Linear Accelerator''.
SD253: We are proposing to rename the ``atherectomy device
(Spectronetics laser or Fox Hollow)'' supply to ``atherectomy device''.
SD254: We are proposing to rename the ``covered stent
(VIABAHN, Gore)'' to ``covered stent (VIABAHN)''.
We received a separate request from the RUC for a technical
correction involving CPT code 65780 (Ocular surface reconstruction;
amniotic membrane transplantation, multiple layers). The RUC stated
that there was a potential issue with the intraservice work time for
CPT code 65780, which was recommended by the RUC with 35 minutes of
work time and finalized by CMS with no work time refinements. However,
CPT code 65780 was listed with 25 minutes of intraservice work time in
the work time public use file issued with the CY 2025 PFS final rule;
the RUC questioned whether this was a potential technical error. We
have reviewed CPT code 65780 and concluded that the intraservice work
time was unintentionally listed with the incorrect work time of 25
minutes; we are proposing to correct this to the intended work time of
35 minutes. We note that the total work time of 192 minutes was listed
correctly for CPT code 65780 and does not require a technical
correction.
We also received a request from the RUC for a technical correction
involving CPT code 15851 (Removal of sutures or staples requiring
anesthesia (that is, general anesthesia, moderate sedation)). The RUC
stated that CPT code 15851 continued to receive PE RVUs in the
nonfacility setting despite no longer having any direct PE inputs
following its review at the January 2022 RUC meeting. Since CMS
finalized the RUC's recommended lack of direct PE inputs for CPT code
15851 in the CY 2023 PFS final rule, the RUC questioned whether this
was a potential technical error. We have reviewed CPT code 15851 and
concluded that the continued assignment of PE RVUs in the nonfacility
setting is an unintended technical error; we are proposing to correct
this code by removing the nonfacility PE RVUs for CY 2026.
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
[[Page 32368]]
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 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 may affect or factor into PE calculations. 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 currently relies on AMA PPIS data, which we have
maintained represented the best aggregated available source of
information at the time of its implementation. 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. 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 practitioner 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 the CY 2024 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 through 78843.
In responding to our RFI, the AMA RUC provided a set of responses,
which many other commenters echoed in separate 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 stated that it expects analysis, reporting, and
documentation to be completed by the end of CY 2024 and would share
data with CMS when results become available.
Some commenters did not recommend that CMS defer significant
changes until the AMA PPIS results become available. These commenters
stated that reliance on the PPIS updates may not improve the accuracy
and stability of the PE methodology because of the survey design,
possible implementation challenges, and a possible lack of transparency
or granularity in resulting datasets. Other commenters stated that
dependence on the PPIS or survey data in general, due to timing and
frequency constraints, may continue to jeopardize independent practice
and discourage fair competition among suppliers and providers of
services paid under the PFS. These commenters assert that if current
trends continue, it will result in far fewer independent practices and
more consolidation before the availability of updated survey data,
undermining the sampling methodology of any survey and the general
goals of our PE methodology updates.
As we stated in the CY 2025 proposed rule (89 FR 61614), 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 also requested general information from the public on ways
that CMS may continue work to improve the stability and predictability
of any future updates. Specifically, we
[[Page 32369]]
requested feedback from interested parties regarding scheduled,
recurring updates to PE inputs for supply and equipment costs. We
stated that 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 stated that more
frequent updates may have the unintended consequence of
disproportionate effects of various supplies and equipment that have
newly updated costs.
Further, we solicited feedback in the CY 2025 proposed rule RFI (89
FR 61614) on possible mechanisms to establish a balance whereby our
methodology would account for inflation and deflation in supply and
equipment costs. We stated that 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. We stated that there
remains a diversity of perspectives among interested parties about such
effects. We sought 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.
In response to our CY 2025 proposed rule RFI (89 FR 97737),
numerous commenters expressed concerns regarding CMS's current PE
methodology, particularly highlighting its perceived inadequacies in
accommodating modern medical technologies and services, such as
Software as a Service (SaaS) and artificial intelligence (AI). These
commenters stated that there is a need for CMS to revise its PE
methodology to better reflect the actual costs of running medical
practices today, which includes more frequent updates and the
incorporation of direct costs for software and innovative technologies.
Many also supported the AMA's PPIS efforts to ensure updated and
accurate data informs PE calculations. Commenters urged CMS to
collaborate closely with medical associations and incorporate broad
stakeholder feedback without increasing reporting burdens, particularly
for smaller practices.
We note that we have an ongoing 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 will
continue to study possible alternatives and have included analysis of
the updated PPI and CPI Survey data in this proposed rule, as part of
our ongoing work.
As previously stated above and discussed in sections II.N. and VI.
of this proposed rule, we acknowledge that, at the time of publication
of this proposed rule, the AMA concluded their data collection efforts
and has submitted the data to CMS for us to consider implementing the
PE/HR data and cost shares in PFS ratesetting for CY 2026. In the
current system, accurate measurement of the indirect to direct PE ratio
and the PE/HR for each specialty is critical to ensure that allocated
indirect PE RVUs (and therefore total PE RVUs) accurately estimate
service-level PE as defined by PFS ratesetting steps described above.
Because the PE methodology is budget neutral, inaccuracies in the PE/HR
data for some specialties can significantly impact the overall pool of
PE available to distribute across all services, and therefore overall
valuation and payment.
We appreciate the AMA's PPI and CPI Survey data collection efforts,
and recognize the significant costs incurred to collect the data.
However, our initial review of the new data raises substantive concerns
about their accuracy, utility, and suitability as an immediate
replacement for the current PE/HR data and cost shares for use in
allocating nearly $91 billion in payments across PFS services. These
concerns relate to issues including:
Low Response Rates and Representativeness: A primary
concern is the low response rate of the surveys. The 2024 PPI Survey
had a response rate of 3 to 7 percent, depending on whether practices
that did not click through the invitation email link were counted as
non-respondents. The CPI Survey had a slightly higher response rate
between 7 to 9 percent. In comparison, the 2008 PPIS had a response
rate of 12 percent. Low response rates raise concerns as to whether
responding practices are systematically different from sampled
practices that did not or could not respond. Additionally, in response
to lower-than-expected response rates, the AMA allowed 102 practices to
volunteer to participate in the survey. Although most of these
volunteer practices did not complete the survey, allowing practices to
volunteer data adds to concerns about the representativeness of the
data.
Additionally, the 2008 PE/HR estimates were based on the
observations (about half of responses) that had no missing expense
data, whereas the 2024 PE/HR estimates and the shares are based on
observations that had at least some non-missing data where the missing
data was imputed as described in the Survey Methods Report (Step 6).\1\
It should be noted that some expense categories were reported more
consistently by survey respondents. For example, 97 percent of the
respondents reported compensation (physician work) compared to only 69
percent that were able to report non-billable drugs (direct expense
under supplies) and information technology (indirect expense).
Similarly, many survey respondents were not able to separately report
expenses for qualified health providers (QHPs). Nearly 40 percent of
the responses used in the calculation of the PE/HR estimates reported
that they had nurse practitioners or physician assistants in their
practice, but only 27 percent were able to separately report non-
physician compensation expenses.
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\1\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf.
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Small Sample Sizes and Sampling Variation: Due in part to
the low response rates, the number of respondents was small for many
specialties included in the 2024 PPI and CPI data. For example, the PE/
HR measures for Vascular Surgery are based upon responses from only 20
practices. Moreover, the PPI and CPI survey estimates give more weight
to responses from practice types that would otherwise be under-
represented in the sample, relative to the population of all eligible
practices in a given specialty. For example, such an adjustment would
be applied if the sample contained a higher proportion of facility-
based practices than there are in the full population of practices in a
given specialty. Applying such weights generally results in estimates
that are less precise than an unweighted sample of a given size. One
way to quantify this is via the effective sample size, which estimates
the sample size from an unweighted sample that would be required to
produce survey estimates that are as precise as those from the weighted
sample. The effective sample size can be estimated as the ratio of the
sample size to the design effect, which is reported in the PPI/CPI
Methods Reports.2 3 For Vascular Surgery, the
[[Page 32370]]
reported design effect is 1.82, meaning that the 20 observations
correspond to an effective sample size of only 11 (calculated as
11.0=20/1.82). For 12 of 18 broad specialty groupings reported in the
2024 PPI Survey, the effective sample size is less than 18.0 and for
four of these specialties the effective sample size is less than 10.0.
Similarly, in the CPI Survey data, the effective sample sizes are also
small, with all but one below 20.0, and as low as 6.2 for Oral Surgery.
Not including practices that volunteered, only 327 sampled practices
completed the 2024 PPI Survey compared to 3,088 anticipated
completions.
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\2\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf.
\3\ https://www.ama-assn.org/system/files/cpi-survey-methods-report-main-report.pdf.
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The low sample sizes contribute to substantial statistical
uncertainty regarding the true specialty-level PE/HR measures. Figure
A-B1 illustrates the 95 percent confidence intervals for direct and
indirect PE/HR as reported in the 2024 PPI/CPI Surveys. The large
points represent the new PE/HR estimates, the bars indicate the
confidence intervals, and the smaller points show the current PE/HR
estimates used in PFS ratesetting from the 2008 PPIS. The 2024 CPI and
PPI Survey confidence intervals are so broad that they cover most of
the original 2008 PPI PE/HR values in nominal dollars (that is, not
adjusted for inflation). Therefore, in most cases, the new data are
unable to establish statistically significant changes from the status
quo, especially since the old PE/HR measures were themselves estimated
with substantial levels of statistical uncertainty. Even so, the new
PE/HR estimates differ enough from the old ones that many specialty-
level impacts of adopting the new data are quite large. When translated
into RVUs, the PE/HR standard errors for specialties such as
Cardiology, Pathology, Ophthalmology, and Vascular Surgery correspond
to a wide range of payments for services provided by those specialties
meaning that the new data are compatible with a wide range of specialty
impacts for many specialties.
Lack of Comparability to Previous Survey Data: The 2024
PPI and CPI Survey data groups specialties in a considerably different
way from the current structure, with 29 specialty groupings compared to
51 in the 2008 data. We found that using the 2008 PE/HR data averaged
within the 2024 PPI Survey specialty groupings would lead to large
specialty-level impacts in some cases, further complicating comparisons
between the old and new data and indicating that the new 2024 specialty
groupings is impactful on redistribution among the PFS alone. We refer
readers to section VI. of this proposed rule for discussion of the
impacts of the 2024 PPI Survey specialty groupings on PFS ratesetting.
It is also unclear why some specialties were collapsed into relatively
broad groups for the purposes of data collection and reporting while
others were not.
Potential Measurement Error: We are concerned that sampled
practices were not able to accurately report the data necessary to
respond to the PPI and CPI Surveys. For example, the survey contractor
found that practices frequently had challenges reporting the number of
physicians working in the practice. One may expect that the number of
physicians in a practice is relatively easier for practices to measure
than some of the specific costs integral to reporting PE/HR. However,
the contractor noted that--prior to an adjustment--their estimate of
the total number of physicians was nearly three times as large as the
number of physicians in their sampling frame which ``indicated a large
potential for measurement error in this estimate.'' \4\ Also, because
information on the number of physicians in each practice was available
from external data which were obtained before survey data were
collected, to inform the survey design, we believe it is likely that
the number of physicians was highlighted as having high potential
measurement error because it was possible to compare this measure
against external data. Moreover, some responding practices reported
that it took more than 40 hours to complete the survey, which suggests
that the required data are not readily captured by their accounting
systems and therefore may not be fully reliable.
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\4\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf.
---------------------------------------------------------------------------
Thus, we are left with doubts about not just the amount of data
collected, but its quality as well.
Missing and Incomplete Data Submission: The PPI Survey
summary data was submitted to CMS in January 2025 and the CPI Survey
summary data in February 2025. These initial submissions were missing
from many of the elements required to analyze the data and determine
their usability in our PE methodology. We inquired about these elements
and have since received some additional information, but some of the
information was not available due to the survey contract concluding,
such as estimates based solely on the survey responses that had no
missing expense data or the impact of the trims and edits of the data
described in the PPI Survey Methods Report. Additionally, some data is
completely missing from the submission, therefore we had to utilize old
PE/HR data in analyses for specialties such as Independent Diagnostic
Testing Facilities (IDTFs) when developing models to incorporate the
data. Additionally, the American Occupational Therapists Association
(AOTA) requested the continued crosswalk of PE/HR data from Physical
Therapy to Occupational Therapy because the CPI respondents may have
indirectly reported the salaries of occupational therapy assistants
with provider compensation rather than including their salaries in
clinical staff compensation.
Additionally, there is summary data provided from the PPI Survey
\5\ that are not provided for the CPI Survey.\6\ For example, the PPI
Survey summary data include two lines--``MEI shares'' and ``All
[specialties]''--that could presumably be used to establish the share
of total RVUs that should be attributed to work, practice expense, and
malpractice, but we do not believe that they reflect the specialties'
data from the CPI Survey, even though those specialties are included in
PFS ratesetting, account for a significant portion of the PFS PE RVU
pool, and draw from the same pool of RVUs as the PPI Survey
specialties. Similarly, we do not have the corresponding CPI Survey
specialty weighting information provided to CMS for the PPI Survey
specialties, therefore, we have limited information to develop an
approach for calculating shares for all CMS specialties accounted for
in both the PPI and CPI Surveys.
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\5\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf.
\6\ https://www.ama-assn.org/system/files/table-1-results-from-cpi-final.pdf.
---------------------------------------------------------------------------
In an effort to incorporate PPI and CPI Survey specialties' data
despite the lack of analogous summary data, we developed possible
methods to weight the data for all CMS specialties in a cohesive manner
for use in the PFS PE methodology such as estimates of total RVUs and
total service time by specialty used for CY 2026 PFS ratesetting. We
refer readers to section VI. of this proposed rule for discussion of
the different weighting methodologies and their resulting shares of
work, PE, and MP.
Overall, the small sample sizes and the apparent presence of high
levels of measurement error in data elements that could be compared to
external estimates suggest that specialty-level PE/HR measures may be
challenging to measure reliably through voluntary surveys alone. We
note that the
[[Page 32371]]
interested parties may concur with this assertion based on the Methods
Report, which states considerations for future data collection efforts
that may forego the survey structure and rely on other practice expense
sources such as tax returns. We believe that a more efficient and
transparent system that could be updated on a regular basis may be
possible using available administrative data (such as Medicare claims;
hospital cost reports; publicly-reported tax information such as from
IRS Form 990; and data collected by other agencies, such as the Census
Bureau's Service Annual Survey (SAS)) to the fullest extent possible
and relying on survey data only to fill gaps only where available data
do not exist. An alternative to collecting any survey data would be to
modify the PE allocation system so that it only relies only on data
that can be measured accurately and on an on-going basis. For example,
if there are components of indirect PE that are not captured in
administrative data, those expense categories could potentially be re-
classified as direct costs and accounted for in a manner similar to how
direct costs are currently considered.
Beyond the use of the data in our PE methodology, we need
information on the total share of PFS payments that should be allocated
for work, PE, and MP. Data collected in the 2024 PPI and CPI Surveys
could be used for this purpose, as well as potentially be considered in
a construction of the MEI in the future; however, there still remain
underlying concerns with the sample representativeness for these
purposes. The AMA has asserted that shares derived from data collected
from the Service Annual Survey (SAS) for the 2017-based MEI miss many
physicians who work in facility settings and thereby understate the
percent of total PFS payments that should be allocated to physician
work. The data needed to derive the three component shares (work, PE,
and MP) are more aggregated than the specialty-level PE/HR data
required for the PE methodology, so we have fewer concerns with the
small sample sizes for this application. However, we continue to have
similar concerns with the data related to measurement error and sample
representativeness for purposes of the shares.
BILLING CODE 4120-01-P
[[Page 32372]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.011
BILLING CODE 4120-01-C
At the time of the publication of this proposed rule, we continue
to conduct ongoing analyses on the potential impact of the AMA's PPI
and CPI Survey data on PFS ratesetting. Due to overarching concerns
with the data described above and our previously described policy goal
to balance PFS payment stability and predictability with incorporating
new data through routine updates to the MEI, we reiterate that we are
not proposing to implement the PE/HR data or cost shares from the AMA's
survey data at this time, and are proposing instead to maintain the
current PE/HR data and cost shares for CY 2026 PFS ratesetting. At the
same time, we remain focused on proposals that reflect evolutions in
practice, including the site of service payment differential discussed
below, while we continue to hold strong interest in specialty-level
practice expense updates. Consequently, we intend to work with
interested parties, including the AMA, to understand whether and how
such data should be used in PFS ratesetting in future rulemaking.
c. Updates to Practice Expense (PE) Methodology--Site of Service
Payment Differential
While we are not proposing to incorporate the PPI and CPI Survey
data into PFS ratesetting for CY 2026, we are proposing a significant
refinement to our PE methodology to better reflect trends in physician
practice settings. As detailed in the description of the
[[Page 32373]]
practice expense methodology above, many services have a site of
service payment differential between the facility (F) and nonfacility
(NF) settings under the PFS. Services furnished in the nonfacility
setting, such as a physician's office, include the physician work RVUs,
direct costs for supplies, clinical staff, and equipment, and indirect
costs allocated based on the direct costs and the greater of either the
clinical labor costs or the physician work RVUs. In the facility
setting, the payment rate includes physician work RVUs and the indirect
practice expense allocated based on the physician work RVU. The direct
costs in the facility setting are paid under a different payment system
than the PFS, such as the OPPS. Indirect costs allocated to services
furnished in the facility setting are meant to reflect the typical
costs associated with practice expenses in that setting of care.
In the decades since implementing the PE methodology, there have
been significant transformations to the landscape of the healthcare
delivery system in the United States, particularly regarding physician
practice patterns. Historically, private practice was the dominant
model for physicians, offering them autonomy, flexibility, and the
opportunity to build independent practices. Specifically, in 1988,
approximately 72 percent of physicians were full or part owners in
their practice.\7\ This percentage had dropped to 35.4 percent by 2024,
representing a 52 percent decrease, with a corresponding rise in
physicians in hospital-owned practices and physicians employed directly
by a hospital. The percentage of physicians in hospital-owned practices
has increased by over 47 percent, from 23.4 percent in 2012 to 34.5
percent in 2024. Similarly, 12.2 percent of physicians were employed
directly by a hospital (or contracted directly with a hospital) in
2024, up from 5.6 percent in 2012.\8\ In their June 2025 Report to
Congress,\9\ MedPAC notes that there are 9 specialties where 60 percent
of the clinicians who billed Medicare furnished 90 percent or more of
their services in the facility setting. These trends indicate a steady
decline in the percentage of physicians working in private practice,
with a corresponding rise in physician employment by hospitals; and
growth in the percentage of physicians who practice exclusively, or
almost exclusively, in the facility setting. When the PFS was
established, the methodology for allocating indirect practice expense
was based in part on an assumption that the physician maintained an
office-based practice even when also practicing in a facility setting.
In that context, the PE methodology has allocated the same amount of
indirect costs per work RVU, without regard to setting of care.
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\7\ Kane CK. Emmons, DW. New data on physician practice
arrangements: private practice remains strong despite shifts toward
hospital employment. Chicago (IL): American Medical Association;
2013. Policy Research Perspective 2013-2.
\8\ Kane CK. Physician Practice Characteristics in 2024: Private
Practices Account for Less Than Half of Physicians in Most
Specialties. American Medical Association.
\9\ MedPAC. (2025). June 2025 Report to the Congress: Medicare
Payment Policy. Chapter 1 Reforming physician fee schedule updates
and improving the accuracy of relative payment rates. https://www.medpac.gov/wp-content/uploads/2025/06/Jun25_MedPAC_Report_To_Congress_SEC.pdf.
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We note that, in the AMA's comment letter on the CY 2023 PFS
proposed rule,\10\ they stated that physician practices maintain some
indirect practice expense costs for physicians who are solely facility-
based such as coding, billing, and scheduling. We acknowledge that
these indirect costs should be accounted for in PFS payment through PE
RVUs, but we believe that allocating the same amount of indirect
practice expense based on work RVUs in both settings may overstate the
range of indirect costs incurred by facility-based physicians if it is
now less likely that they would maintain an office-based practice
separate from their facility practice. In a 2018 report developed under
contract with CMS, RAND noted that ``operating from the perspective of
paying for the `typical' instance of a procedure, these analyses
suggest that the current system could be improved by shifting more of
the allocation of PE RVUs to the physician office setting''.\11\ As
MedPAC notes in their June 2025 report, ``In cases when clinicians
practice exclusively or almost exclusively in a facility, or where a
facility is financing indirect PE for clinicians, payment to both
entities for indirect PE costs may be duplicative and unnecessary''.
While the relative relationship between the PE allocated to services
furnished in a facility and nonfacility setting may have been more
reflective of the actual expenses incurred by physicians when the PE
methodology was originally established, maintenance of that element of
the methodology in the face of changing practice patterns likely
represents an imbalance of the practice expense allocated to the
facility relative to the nonfacility. Within the PFS relative value
system, any overstatement of practice expenses in the facility setting
would affect the allocation of indirect costs in the nonfacility
setting. This dynamic, in which relative resources involved in
furnishing PFS services may not be adequately reflected in facility and
nonfacility settings, has the potential to contribute to broader
undesirable financial incentives toward higher-priced settings of care,
like hospitals, and away from more efficient settings, like physician
offices.\12\ \13\ \14\ This could result in unnecessary costs for
payers and beneficiaries, and obstacles to physicians and other
professionals operating independent practices.
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\10\ https://downloads.regulations.gov/CMS-2023-0121-2694/attachment_1.pdf.
\11\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.
``Practice Expense Methodology and Data Collection Research and
Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html.
\12\ https://pmc.ncbi.nlm.nih.gov/articles/PMC4191490/
#:~:text=Using%20generally%20accepted%20accounting%20practices,to%20m
ore%20intense%20resource%20use.
\13\ https://healthcostinstitute.org/hcci-originals-dropdown/all-hcci-reports/shifting-care-office-to-outpatient.
\14\ https://www.bcbs.com/dA/392da3b5a7/fileAsset/BHI%20Issue%20Brief%20December_121323_SiteNeutral.pdf.
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We share MedPAC's concerns regarding the potential for duplicative
payment under the current PE methodology for allocating indirect costs
for physicians practicing in the facility setting. Allocating the same
amount of indirect PE per work RVU for services furnished in the
facility setting as the nonfacility setting may no longer reflect
contemporary physician practice trends. As we noted above, data
suggests that fewer than half of physicians currently own their
practices, but the underlying assumption embedded in the PFS payment
methodology presumed that physicians generally maintained office
practices (and incurred associated indirect costs) even when they
furnished care in facility settings. For these reasons, for each
service valued in the facility setting under the PFS, we are proposing
to reduce the portion of the facility PE RVUs allocated based on work
RVUs to half the amount allocated to nonfacility PE RVUs beginning in
CY 2026. This proposed change would occur in step 8 of the PE RVU
Methodology described earlier in this section, in which indirect
allocators (direct costs, clinical labor, and work RVUs) are assigned.
For example, the work RVU for CPT code 33533 (Coronary artery bypass,
using arterial graft(s); single arterial graft) is 33.75. For CY 2025,
using the full work RVU as an indirect allocator, CPT code 33533 had
approximately 12 indirect PE RVUs. Under this proposed change to the
[[Page 32374]]
methodology, where we would reduce the portion of the facility PE RVUs
allocated based on work RVUs to half the amount allocated to
nonfacility PE RVUs, CPT code 33533 would have approximately 7.2
indirect PE RVUs.
We note that this proposed change to the indirect cost allocation
methodology is intended to better recognize the relative resources
involved in furnishing services paid under the PFS in facility and
nonfacility settings. We compare this proposed change to our current
methodology, which functionally presumes approximately equal indirect
costs incurred by physicians across sites of service. This presumption
was initially made in the context of most practitioners maintaining
office practices independent of the facilities in which they provided
care, and as we discussed above, appears to be inconsistent with
contemporary trends in physician practice. We understand from the AMA's
comment letter on the CY 2023 PFS proposed rule noted above that
physician practices may incur some indirect PE costs (such as coding,
billing, and scheduling) for physicians who are facility-based. To
better inform our consideration of how to account for any such costs in
the PE RVU methodology, we are seeking comment on the specific types
and magnitude of indirect PE costs incurred that are attributable to
physicians who practice in part or exclusively in a facility setting,
and any variables that affect whether and to what extent a practice
would incur them. We are also seeking comments on whether our proposal
to reduce the portion of the facility PE RVUs allocated based on work
RVUs to half the amount allocated to nonfacility PE RVUs is an
appropriate reduction or whether we should consider a different
percentage reduction for CY 2026 or in future years. While our proposed
change to the methodology represents a starting point to correcting
potential historic distortions in the allocation of indirect PE costs
across settings of care, we intend to further examine our methodology
and consider additional refinements based upon public comments received
and any studies or data sources identified. We are seeking comments on
whether there are additional data sources that might help identify a
more precise site of service difference in the allocation of indirect
PE RVUs. We believe the implementation of this proposal would more
accurately account for the resource costs involved in physicians
furnishing care across all settings and correct potential distortions
in the allocation of indirect PE under our current methodology. We
refer readers to section VI. of this proposed rule for discussion of
the impacts of this proposal on CY 2026 PFS ratesetting.
We are specifically soliciting comments on whether and how this
proposed policy should apply to codes with MMM global periods
(maternity services) and how it could specifically impact access to
maternity services, given our understanding that many of the patient
encounters across those services occur in the office setting. As we
noted in the CY 2024 PFS final rule (88 FR 78949), maternity services
are unique within the PFS in that they are the only global codes that
provide a single payment for almost 12 months of services, which
include a relatively large number of E/M visits performed along with
delivery services and imaging; and were valued using a building-block
methodology as opposed to the magnitude estimation method. Given that
the work RVUs for maternity services encompass significant care during
this lengthy period that may be furnished in the nonfacility setting,
we are soliciting comment on whether we should include these services
in our proposed policy to reduce the allocation of PE based on work in
the facility setting.
We welcome comments on all aspects of this proposal, including ways
to improve the allocation of facility and nonfacility PE RVUs in the
future. We also seek comments on alternative approaches to improving
the allocation of indirect PE as outlined in Chapter 1 of MedPAC's June
2025 Report to the Congress (pages 27 through 33).
d. Use of OPPS Data for PFS Ratesetting
For several kinds of PFS services, we are proposing to deviate from
the use of the AMA survey data, and instead utilize data from
auditable, routinely updated hospital data to either set relative or
absolute rates, especially for technical services paid under the PFS.
This approach promotes price transparency across settings, offers more
predictable ratesetting outcomes, and limits the influence of
anecdotal/survey data. We refer readers to sections II.E.24 and II.E.30
of this proposed rule for specific proposals related to radiation
treatment delivery and superficial radiation therapy services and
remote patient monitoring and remote therapeutic monitoring services
respectively and section II.K of this proposed rule for specific
proposals related to skin substitutes. Although we are proposing
different methodologies for use of OPPS data based on service type, we
are seeking comment on whether it would be preferable to adopt a single
methodology, such as a scaler and how such a methodology would account
for differences in practice expenses between services, such as services
with extensive clinical staff time versus services where the valuation
is primarily driven by the equipment costs.
6. Payment for Services in Urgent Care Centers
In the CY 2025 PFS proposed rule (89 FR 61746 through 61747), we
sought comment on urgent care centers, noting that interested parties
describe 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 stated that we were 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 response to our CY 2025 PFS proposed rule (89 FR 61746 through
61747) question about whether the current ``Urgent Care Facility''
Place of Service code (POS 20) adequately identify and define the scope
of services furnished in such settings other than the existing place of
service codes,, commenters stated that the current place of service
(POS) definitions are inadequately differentiated, especially if CMS
wishes to encourage proliferation of the type of urgent care centers
that can provide suitable alternatives to EDs, noting that POS 11
generally refers to physician offices that provide diagnostic and
therapeutic care in an office setting, by appointment, typically during
regular business hours; POS 17 generally refers to clinics that are
attached to retail operations, such as pharmacies, grocery stores or
big box stores, and provide low-acuity primary and preventive health
care, such as vaccinations; and POS 20 refers to Urgent Care Facilities
but does not adequately differentiate between those that offer services
more akin to the typical general practitioner's office and those that
offer enhanced diagnostic and therapeutic services and extended
[[Page 32375]]
hours. They recommended that the creation of a new POS code describing
``enhanced''' urgent care centers that offer specific diagnostic and
therapeutic services and that operate outside typical business hours
could fill this need. In response to our CY 2025 PFS proposed rule (89
FR 61746 through 61747) question about whether the current ``Urgent
Care Facility'' Place of Service code (POS 20) adequately identify and
define the scope of services furnished in such settings other than the
existing code set and valuation, they stated that Medicare's fee-for-
service payment systems do not recognize and adequately value services
furnished in Urgent Care Clinics (UCCs) and stated that while there is
some overlap in the types of professional services furnished in UCCs
and physician offices, UCCs that operate for extended hours and that
have enhanced diagnostic and therapeutic capabilities incur additional
costs to provide these services.
In recent months, an interested party has requested that for CY
2026, we consider adopting a new Place of Service code for ``enhanced''
urgent care centers as well as create a new add-on G-code to describe
the resource costs involved when practitioners furnish certain services
in enhanced urgent care centers that offer extended hours and certain
diagnostic and therapeutic services. The interested party suggested the
following descriptor: ``Visit complexity inherent to evaluation and
management associated with medical care services that serve as the
immediate focal point for all needed urgent, non-emergent health care
services and/or with urgent, non-emergent medical care services that
are related to diagnosis and treatment of an unscheduled, ambulatory
patient's urgent, non-emergent conditions. (Add-on code, list
separately in addition to office/outpatient evaluation and management
visits, new or established)'' and recommended that it be valued based
on a crosswalk to 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) and made billable with all
levels of office/outpatient E/M visits for both new and established
patients when services are furnished in an enhanced urgent care center.
We are seeking comments from the public regarding whether separate
coding and payment is needed for evaluation and management visits
furnished at urgent care centers, including whether or not an add-on
code would be appropriate or if a new set of visit codes would be more
practical We note that the process for requesting new place of service
codes or modification of existing place of service codes is described
on the CMS website at https://www.cms.gov/medicare/coding-billing/place-of-service-codes/process-requesting-new-codes-modification-existing-codes. Additionally, as discussed in Section II.B of this
proposed rule, many PFS services have a site of service payment
differential between the facility and nonfacility settings under the
PFS. Services furnished in the nonfacility setting, such as a
physician's office, include direct costs for supplies, clinical staff,
and equipment, the physician work RVU and indirect practice expense
allocated based on the direct costs and the physician work RVU. In the
facility setting, the payment rate includes physician work and the
indirect practice expense allocated based on physician work. The direct
costs in the facility setting are paid under a different payment system
other than the PFS, such as the OPPS. PE allocated to services
furnished in the facility setting is meant to reflect typical costs
associated with practice expenses in that setting of care. We note that
we are proposing a change in our PE RVU methodology to better recognize
variations in indirect costs between facility and nonfacility settings
of care in section II.B of this rule. We note here that we are likewise
interested in understanding how practice costs, including but not
limited to indirect costs, may vary among different nonfacility
settings of care. We are also interested in receiving feedback
regarding how either the code set, or the PE methodology might be
improved to better recognize the relative resources involved in
furnishing services across these kinds of settings.
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 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
(PMVC) under the PFS, using the same criteria used to identify PMVC,
and to make appropriate adjustments.
As outlined 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)/Specialty Society Relative Value Scale (RVS)
Update Committee (referred to as the 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 practice expense (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'
[[Page 32376]]
services, stating 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 PMVC as specified in section 1848(c)(2)(K)(ii) of the Act, and
we intend to continue our work examining PMVC in these areas over the
upcoming years. As part of our current process, we identify PMVC 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 PMVC for review.
Through our public nomination process for PMVC 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
PMVC as well. Individuals and groups may submit codes for review under
the PMVC 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 e-mailbox 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 PMVC review and Five-
Year Review process, we have reviewed over 1,700 PMVC 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 PMVC 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 PMVC that have not been reviewed since the implementation of the
PFS (so-called ``Harvard-valued codes'' \15\). In the CY 2009 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,
[[Page 32377]]
low intensity codes. In the fourth Five-Year Review of Work RVUs
published in a separate notice (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 PMVC 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 PMVC that have or will be reviewed and revised as
appropriate in future rulemaking.
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\15\ 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 2026 Identification and Review of Potentially Misvalued Services
In the CY 2012 PFS final rule with comment period (76 FR 73058
through 73059), we finalized a process for the public to nominate PMVC.
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 PMVC 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 PMVC 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
PMVC 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 PMVC. The public has the opportunity to comment on these and all
other proposed PMVC. In each year's final rule, we finalize our list of
PMVC.
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 PMVC by
February 10th and we display these nominations on our public website
(https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices?DLSort=2&DLEntries=10&DLPage=1&DLSortDir=descending), 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 PMVC initiative. For CY 2026, we received 11 requests
concerning various codes as PMVC. The nominations are as follows:
(1) Maxillofacial Prosthetic Services (CPT codes 21076, 21077,
21079, 21080, 21081, 21082, 21083, 21084, 21085, 21086, 21087)
An interested party nominated CPT codes 21076 (Impression and
custom preparation; surgical obturator prosthesis), 21077 (Impression
and custom preparation; orbital prosthesis), 21079 (Impression and
custom preparation; interim obturator prosthesis), 21080 (Impression
and custom preparation; definitive obturator prosthesis), 21081
(Impression and custom preparation; mandibular resection prosthesis),
21082 (Impression and custom preparation; palatal augmentation
prosthesis), 21083 (Impression and custom preparation; palatal lift
prosthesis), 21084 (Impression and custom preparation; speech aid
prosthesis), 21085 (Impression and custom preparation; oral surgical
splint), 21086 (Impression and custom preparation; auricular
prosthesis), and 21087 (Impression and custom preparation; nasal
prosthesis) as potentially misvalued based on what they believe to be
missing, outdated, and undervalued practice expense inputs. The
nominator stated that these misvalued PE inputs (equipment, supplies,
and clinical staff time) result in inadequate payment rates to
clinicians who furnish these services, which limits patient access to
necessary care. The nominator indicated that the physician work values
remain accurate for all of the nominated codes.
According to the nominator, maxillofacial prosthodontists provide
specialized rehabilitation care for patients with compromised oral and
facial anatomy due to conditions such as cancer, trauma, or congenital
defects, addressing both physical and psychological challenges
experienced by such patients. Custom prosthetic obturators are medical
devices that restore vital oral functions in cancer patients with
palatal defects. These implant-retained devices are prescribed based on
the location of the defect: maxillary obturators for hard palate
issues, pharyngeal obturators for soft palate problems, or a
combination for both. The primary purpose of the intraoral prostheses
is to enable patients to speak, eat, and swallow more naturally. The
nominator stated that these implants can improve patients' quality of
life and may eliminate the need for feeding tubes.
The nominator is concerned that CMS payment rates for maxillofacial
prosthetic services, which were last reviewed in 1995, are outdated. In
particular, the nominator stated that CPT codes 21080 and 21081 have
undergone significant changes since the development of their PE values
in the mid-1990s. At that time, mandibular reconstruction was rare, and
removable prostheses were used to align the jaw. Microvascular
reconstruction and virtual surgical planning have since transformed the
procedures described by CPT codes 21080 and 21081, allowing precise
prosthetic rehabilitation during surgery and improving oral function,
speech, and quality of life. The nominator asserted that the PE inputs
for CPT codes 21080 and 21081 did not account for these advancements,
which did not exist in 1995 when the codes were valued. Furthermore,
they stated that when these maxillofacial prosthetic services
[[Page 32378]]
were valued in 1995, CMS used inaccurate inputs, which they believe did
not account for the appropriate clinical staff time and materials
required for prostheses. They stated that changes in clinical staff
time, supplies, and equipment require the direct PE inputs to be
updated.
The nominator stated that significant technological advancements
have also occurred for extraoral prostheses, such as orbital (CPT code
21077), auricular (CPT code 21086), and nasal prostheses (CPT code
21087). For orbital prostheses, hand sculpting and painting remain
time-intensive tasks, with limited use of 3D technology. In auricular
prostheses, 3D technology has significantly improved the waxing
process. For nasal prostheses, preoperative scanning now helps to shape
the prosthesis, leading to better cosmetic outcomes. All extraoral
prostheses (for example, orbital, auricular, and nasal) now commonly
use 3D technology, craniofacial implants, and color-matching devices,
which were not standard in the 1990s. The nominator asserted that the
practice expense inputs for these codes fail to account for these
advancements.
Additionally, the nominator asserts that there are other instances
where the nominated codes fail to reflect the significant technological
advancements in treatment delivery since 1995. The nominator requested
an update to the PE inputs for all of the nominated codes, stating that
the dental x-ray (ER071), valued at $128,020.91, has been replaced by
various pieces of capital equipment. For example, they listed a ``CMS
Planmeca CBCT Imaging'' system, which costs $163,767.66, and stated
that this takes the place of the x-ray unit, highlighting a notable
price difference between the x-ray machine and the CT. Furthermore,
they provided a lengthy list of additional equipment (e.g., 3D printer)
that is not accounted for in the PE inputs for all of the nominated
codes, underscoring the extensive modernization in service delivery
since 1995.
To support their nomination, the nominator included information on
what they believe to be more accurate PE inputs, including invoices for
supplies and equipment. For items where invoices paid were unavailable,
price quotes from a supplier were included. In addition, their
appendices included recommendations for deleting and adding supplies,
equipment, and clinical staff time. For more information, we refer
readers to the submitted nomination, which is posted in the public use
files for this proposed rule available on our public website under PFS
Federal Regulation Notices at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
Although the nomination stated that the work RVUs are accurate as
currently valued, because these codes have not been reviewed in the
last 30 years, we believe it is appropriate to examine both PE and work
inputs. Given the technological advancements the nominator described,
there may also be resulting changes in the physician work involved in
performing these services, and therefore, a comprehensive review of
both practice expense and work values would be appropriate. While we
are not proposing to nominate these codes as potentially misvalued, we
welcome public comments and recommendations, including those from the
RUC, to better understand these codes, particularly regarding typical
direct PE inputs and work values.
(2) Supervision of Preparation and Provision of Antigens for
Allergen Immunotherapy (CPT codes 95145, 95146, 95147, 95148, 95149).
An interested party nominated the professional supervision of
preparation and provision of stinging insect venom for allergen
immunotherapy described by CPT codes 95145 (Professional services for
the supervision of preparation and provision of antigens for allergen
immunotherapy (specify number of doses); single stinging insect venom),
95146 (Professional services for the supervision of preparation and
provision of antigens for allergen immunotherapy (specify number of
doses); 2 single stinging insect venoms), 95147 (Professional services
for the supervision of preparation and provision of antigens for
allergen immunotherapy (specify number of doses); 3 single stinging
insect venoms), 95148 (Professional services for the supervision of
preparation and provision of antigens for allergen immunotherapy
(specify number of doses); 4 single stinging insect venoms), and 95149
(Professional services for the supervision of preparation and provision
of antigens for allergen immunotherapy (specify number of doses); 5
single stinging insect venoms) as potentially misvalued, stating that
the current payment rates for these CPT codes do not accurately reflect
the practice expenses required for these procedures. The nominator
indicated that the cost to manufacture venom therapy has drastically
increased since the last time these codes were reviewed by the RUC in
2001, citing higher labor and raw material costs.
Venom immunotherapy, used for treating insect stings, involves
extracting venom from various stinging insects like honeybees and
wasps. According to the nominator, the manufacturing process is labor-
intensive, requiring 520 staff hours to manually extract venom from
130,000 insects per batch, along with substantial equipment investment.
The final product is packaged in single, five, or twelve-dose vials for
medical use. For more information, we refer readers to the submitted
nomination, which is posted in the public use files for this proposed
rule available on our public website under PFS Federal Regulation
Notices at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
The nominator stated that before 1995, venom products were paid
under product-specific HCPCS J-codes, but due to infrequent use and
limited budget impact on the Medicare trust funds, CMS retired the J-
codes and instead bundled venom products within CPT codes 95145, 95146,
95147, 95148, and 95149. According to the nominator, current payment
rates for these codes are based on the Harvard valuation and have not
been surveyed by the RUC since February 2001. The nominator stated that
when surveyed in 2001, the PE inputs for these codes only accounted for
swab-pad, antigen, syringe, and gloves. In contrast, the nominator
indicated that CPT code 95165 (Professional services for the
supervision of preparation and provision of antigens for allergen
immunotherapy; single or multiple antigens (specify number of doses),
which was more recently reviewed in 2016 and shares similar PE inputs
as the nominated codes, includes additional items such as a surgical
cap, gown, mask, alcohol, paper towel, and vial transport envelope. The
nominator stated that, according to the 2019 standards for allergen
extract compounding under USP Chapter 797,\16\ the procedures described
by CPT codes 95145, 95146, 95147, 95148, and 95149 require additional
supplies and practice expenses, such as sterile powder-free gloves,
face mask, hair net/beard net, gown/sterile garb, isopropyl alcohol,
paper towel, sterile empty vials, and albumin saline, in addition to
the allergenic extract. The nominator stated that these standards also
mandate significantly more annual training for providers, including
competency observation, media fill test, gloved fingertip test, and
corrective actions. Furthermore, the nominator asserted
[[Page 32379]]
that the overall cost of venom therapy has increased substantially and
submitted invoices to support this statement.
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\16\ https://college.acaai.org/wp-content/uploads/2021/01/Section-21-USP-Compounding-Allergenic-Extracts.pdf.
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At this time, we are not proposing the CPT codes submitted by the
nominator as potentially misvalued. CPT codes 95145-95149 are typically
billed in conjunction with CPT codes 95115 and 95117. We note that the
nominator has listed PE inputs that are also included in the inputs for
CPT codes 95115 and 95117 and these same inputs may overlap with inputs
included in CPT codes 95145-95149. While the PE inputs that overlap
between CPT codes 95145-95149 and 95115 and 95117 may contain the
necessary elements, we are seeking feedback regarding these overlapping
PE inputs in relation to billing frequencies and the possibility of
duplicative payment. Specifically, we request comments on whether these
inputs overlap and what potential adjustments should be made to avoid
duplicative payment. We request comments regarding the standard minutes
for clinical activity code CA008 (Perform regulatory mandated quality
assurance activity (pre-service)) and the standard unit measurement for
supply code SH004 (albumin saline). Additionally, we seek input
regarding the establishment of clinical activity codes for two specific
procedures requested by the nominator: cleaning and disinfecting the
compounding area, and sterile preparation of compounds.
Furthermore, anomalies were identified related to the clinical
activities described by CA021 (Perform procedure/service--NOT directly
related to physician work time). Specifically, the typical times
associated with these activities in the RUC database are as follows:
2.3 minutes for CPT code 95145, 3.3 minutes for CPT code 95146, 2.3
minutes for CPT code 95147, 3.3 minutes for CPT code 95148, and 4.3
minutes for CPT code 95149. The nominator has requested 10 minutes for
all of the nominated CPT codes without providing any justification for
this time. Regarding the clinical labor direct inputs (L037D), we seek
comments on several aspects of dosage preparation, including but not
limited to: the typical number of dosages, the time required for
preparation, the number of vials or dosages that can be prepared from
each vial, and the total time needed for preparation of these vials and
dosages. Additionally, we seek information about the derivation of the
2.3-minute time. This information would help inform the appropriate
time for both clinical labor activities.
We received several invoices for mixed and single venom prices from
the nominator; however, we are unable to determine the number of
individual venoms in the mixed venom preparations. Specifically, supply
codes SH009 (antigen, venom) and SH010 (antigen, venom, tri-vespid) are
currently priced at $35.58 and $69.21 respectively, with prices last
updated in the CY 2024 PFS final rule (88 FR 78967). The nominator
stated that the venom cost has increased to $481.50 for a 5-dose wasp
venom as of April 1, 2024, and submitted invoices to support this claim
to update the current price. Since we are unsure whether these invoices
are for mixed or single venom prices, we welcome additional invoices
and comments regarding the methodology for calculating venom prices
using mixture invoices. We welcome feedback to gain a broader
understanding of these codes, including how standards of practice have
evolved over time, as this information can help identify related coding
issues.
(3) Electronic analysis of implanted neurostimulator pulse
generator/transmitter (CPT codes 95970, 95976, 95977).
CPT codes 95970 (Electronic analysis of implanted neurostimulator
pulse generator/transmitter (eg, contact group[s], interleaving,
amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet
mode, dose lockout, patient selectable parameters, responsive
neurostimulation, detection algorithms, closed loop parameters, and
passive parameters) by physician or other qualified health care
professional; with brain, cranial nerve, spinal cord, peripheral nerve,
or sacral nerve, neurostimulator pulse generator/transmitter, without
programming), 95976 (Electronic analysis of implanted neurostimulator
pulse generator/transmitter (eg, contact group[s], interleaving,
amplitude, pulse width, frequency [Hz], on/off cycling, burst, magnet
mode, dose lockout, patient selectable parameters, responsive
neurostimulation, detection algorithms, closed loop parameters, and
passive parameters) by physician or other qualified health care
professional; with simple cranial nerve neurostimulator pulse
generator/transmitter programming by physician or other qualified
health care professional), and 95977 (Electronic analysis of implanted
neurostimulator pulse generator/transmitter (eg, contact group[s],
interleaving, amplitude, pulse width, frequency [Hz], on/off cycling,
burst, magnet mode, dose lockout, patient selectable parameters,
responsive neurostimulation, detection algorithms, closed loop
parameters, and passive parameters) by physician or other qualified
health care professional; with complex cranial nerve neurostimulator
pulse generator/transmitter programming by physician or other qualified
health care professional) were nominated as potentially misvalued for
two reasons identified by the nominator: there has been a significant
shift in the clinical specialties utilizing these codes, and the PE
inputs currently assigned to these codes may not accurately reflect the
costs associated with analyzing and programming the hypoglossal nerve
stimulation (HGNS) system.
The nominator stated that, from 2017 to 2023, there has been a
significant change in the clinical specialties that utilize these codes
in the non-facility setting. According to the nominator, while CPT
codes 95970, 95976, and 95977 were primarily billed by neurologists
when last surveyed by the RUC in 2017, the usage of these codes has
shifted away from neurologists toward sleep specialists. The nominator
asserted that this shift necessitates changes to the work RVUs and PE
inputs for these codes. In addition, the nominator stated that many
sleep specialists believe CPT codes 95970, 95976, and 95977 do not
appropriately reflect the practice expenses involved in furnishing
these services. According to the nominator, a survey conducted among
several high-volume sleep specialists (the details of which the
nominator did not share with CMS) showed unanimous agreement that these
codes do not accurately reflect the practice expense inputs. These
three codes currently have 0 minutes of clinical staff time included in
the direct PE inputs. However, the nominator stated that based on the
survey results the typical clinical staff time spent for patient care
was 35 minutes for CPT code 95970, 37 minutes for CPT code 95976, and
46 minutes for CPT code 95977. The nominator stated that CPT codes
95970, 95976, and 95977 should reflect the same clinical staff time as
similar analysis and programming procedures, such as CPT codes 93150
(Therapy activation of implanted phrenic nerve stimulator system,
including all interrogation and programming), 93151 (Interrogation and
programming (minimum one parameter) of implanted phrenic nerve
stimulator system), and 93153 (Interrogation without programming of
implanted phrenic nerve stimulator system). The nominator stated that
these codes more accurately account for the clinical staff time.
We appreciate the nominator sharing their survey results from high-
volume
[[Page 32380]]
sleep specialists, which may indicate potential inaccuracies in the
direct PE inputs for CPT codes 95970, 95976, and 95977. Our review of
the submitted information, however, reveals a lack of survey details
(for example, sampling methods, data collection procedures), so it is
difficult to understand the context of the information provided by the
nominator and identify potential biases of this survey. While we
acknowledge potential changes in the specialties utilizing these codes,
and sleep medicine's Medicare specialty percentage has grown over time,
neurology remains the dominant billing practitioner type. For these
reasons, we are not proposing to consider these codes as potentially
misvalued. We are, however, seeking comments and additional information
on the information provided by the nominator. This includes any
analysis or studies demonstrating that one or more of these codes meet
the criteria listed in section II.C.3 of this proposed rule, under
``Identification and Review of Potential Misvalued Services,''
particularly regarding changes in practice expense inputs for service
delivery.
(4) Excimer laser treatment for psoriasis (CPT codes 96920, 96921,
96922).
An interested party nominated 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) as
potentially misvalued, due to the CPT Editorial Panel's recent
modifications to the code descriptor and allegedly inaccurate data used
by CMS in valuing these services.
According to the nominator, the misvaluation of these codes creates
a significant healthcare access barrier by reducing payment for excimer
laser therapy, which disproportionately impacts vulnerable populations
while potentially increasing overall healthcare costs. The nominator
stated that the low payment rates for these codes make it financially
unfeasible for dermatologists to offer this FDA-approved treatment,
effectively making it unavailable to Medicare beneficiaries despite its
proven effectiveness and potential cost savings.
We discussed our review of these codes and our rationale for
finalizing the current work RVUs and direct PE extensively in the CY
2025 PFS final rule (89 FR 97797 through 97801). We stated that we
disagreed with the RUC recommended work RVUs for CPT codes 96920,
96921, and 96922 of 1.00, 1.07, and 1.32. 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 96921 and 96922, with the largest
treatment area, the total times had not changed since first implemented
more than 20 years ago. At the time we also believed that, since the
two components of work are time and intensity, absent an obvious or
explicitly stated rationale for why the relative intensity of a given
procedure had increased, significant decreases in time should be
reflected in decreases to work RVUs. We noted that our proposed work
RVU of 0.83 maintained the intensity associated with the 2002 review of
CPT code 96920, which we believed to be more appropriate than the
significant increase in intensity that results from the RUC-recommended
work RVU of 1.00 which nearly doubled the current intensity of the code
(89 FR 97797). We had no evidence to indicate that the intensity of CPT
code 96920 had increased to this degree given how the surveyed work
time had substantially decreased.
For CY 2026, the nominator raised two issues related to these
codes. First, according to the nominator, a coding change by the CPT
Editorial Panel that was released in 2024 and effective January 1,
2025, modified the code descriptor from ``Laser treatment for
inflammatory skin disease(psoriasis)'' to ``Excimer laser treatment for
psoriasis.'' We remind readers that, in April 2022, the RUC referred
CPT codes 96920, 96921, and 96922 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, and
those expanded indications could reflect changes in physician work as
compared to the codes' current descriptors. The coding change
application was subsequently withdrawn from the September 2022 CPT
Editorial Panel 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
2023 RUC meeting without any revisions to their code descriptors. We
note that, according to the CPT Editorial Panel and the RUC's publicly
available meeting notes, since the descriptors for CPT codes 96920,
96921, and 96922 were established in 2002, psoriasis is the only
approved indication and use for this treatment modality.\17\
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\17\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf.
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While the nominator is working with the CPT Editorial Panel again
to expand the indications for excimer laser treatment beyond psoriasis
to include other inflammatory skin conditions, they stated that they
believe establishing a temporary G-code for interim coverage is
necessary and therefore requested that CMS create coding to more
accurately reflect the clinically appropriate use of the excimer laser.
The nominator states that this would ensure patients with skin
conditions other than psoriasis can access excimer laser treatments
without delay.
To provide more evidence as to the accuracy of including non-
psoriasis inflammatory skin diseases in the code definition, the
nominator provided a data compendium supporting the excimer laser's
versatility and key studies demonstrating positive outcomes for
conditions like vitiligo, atopic dermatitis, leukoderma, and alopecia
areata. Reviewing these submitted studies, the nominator stated that
sufficient clinical evidence exists to support expanding coverage for
excimer laser treatment beyond just psoriasis. The nominator requested
that CMS create additional coding to describe the expanded indications
for the excimer laser treatment, because the nominator believes that
the standard CPT process is time-consuming and could leave many
patients without adequate care in the interim; thus, implementing a
temporary G-code would ensure continued access to this essential
therapy for these patients.
Second, the nominator provided additional invoices and data
detailing PE costs related to the excimer laser devices. The nominator
claimed that their own analysis relies on real-world data (which was
not shared with CMS) and shows that CMS has overestimated the
utilization rate of excimer lasers. Using their own survey, they found
that on average, dermatologists perform 244 excimer laser treatments
per device annually, with each treatment requiring approximately 38 to
46 minutes of excimer laser use. This amounts to nearly 15,000 minutes
of total utilization per year, resulting in an effective utilization
rate of 10 percent, rather than the 50 percent rate currently used by
CMS. As stated in section II.B. of this proposed rule, we currently use
an equipment utilization rate
[[Page 32381]]
assumption of 50 percent for most equipment, with the exception of
expensive diagnostic imaging equipment, for which we use a 90 percent
assumption as required by section 1848(b)(4)(C) of the Act.
Based on their real-world device utilization data, the nominator
calculated the direct PE cost using CMS' standard equipment formula.
The calculated equipment costs are $99.88 for CPT code 96920, $105.14
for CPT code 96921, and $120.91 for CPT code 96922. The nominator also
stated that CMS currently assumes a maintenance cost of $7,560 for
excimer lasers, based on a 5% maintenance rate applied to a purchase
price of $151,200. However, the nominator stated that excimer lasers
are technical devices with substantially higher maintenance costs.
According to the nominator, the annual service cost for the excimer
laser is $30,000, and they claimed that a laser chamber replacement
service costs $44,000; however, as discussed in section II.B. of this
proposed rule, we finalized a 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 stated that this estimate
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. 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. Therefore, we remind readers that we do not believe voluntary
submissions regarding the maintenance costs of individual equipment
items would be an appropriate methodology for determining costs.
Moreover, the nominator asserted that CMS currently does not
include the costs of consumable gas (code EQ154) and the optical
delivery system (code EQ155) in the direct practice expense cost for
these services. Based on our review of the January 2012 RUC
recommendations submitted to CMS, it appears that these equipment items
were removed by RUC PE Subcommittee for CY 2013. The requestor stated
that the gas cylinder (EQ154) costs $6,300 (excluding labor and
shipping costs), and the optical delivery system (EQ155) costs $7,429;
however, no supporting invoices or evidence of the typicality of the
equipment items' usage for these services were provided to support the
equipment items' reintegration into the codes' direct practice expense.
Based on this information, the nominator recommended creating a G-
code for excimer laser treatment of inflammatory skin diseases.
Furthermore, they requested to include their own real-world data on
excimer laser utilization rates in the practice expense calculation,
adjust the maintenance cost in the practice expense calculation to
reflect the actual cost of maintaining excimer laser devices, and
reinstate the costs of consumable gas (code EQ154) and the optical
delivery system (code EQ155) in the practice expense calculation.
We appreciate the detailed information submitted by the nominator.
However, we continue to disagree that CPT codes 96920, 96921, and 96922
are potentially misvalued. We note that the CPT code change request was
withdrawn from the AMA in September 2022 due to insufficient supporting
literature for expanded indications. Additionally, according to RUC's
publicly available meeting notes, psoriasis is the only approved
indication and use for this treatment modality since the descriptors
for CPT codes 96920, 96921, and 96922 were established in 2002. When
the codes were resurveyed in April 2023, no descriptor revisions were
made, as the available 2021 Medicare claims data indicated that the
typical patient was being treated for psoriasis (96920, psoriasis =
79.3 percent).\18\ Additionally, there have been numerous CPT Editorial
Panel applications and actions since the withdrawn application at the
September 2022 meeting,\19\ including a February 2025 action.\20\
However, at the time of drafting this proposed rule, the request for
expanded indications does not appear to have been re-submitted or
revisited by the specialty societies. We are seeking comments on
whether creating a new HCPCS G-code that is not condition-specific
would improve payment accuracy for this technology when used to treat
conditions other than psoriasis. We are also seeking information
regarding possible barriers to coding changes undertaken through the
CPT Editorial Panel process. We are seeking information regarding the
nominator's assertion that equipment items EQ154 and EQ155 are
necessary and typical for these services, and invoices to support the
nominator's asserted purchase prices, so as to provide a comprehensive
understanding of the overall costs associated with these services. We
note that, effective for January 1, 2027, based on the publicly
available Summary of CPT Editorial Panel Actions from the February 2025
meeting,\21\ the codes' descriptors will change from ``Excimer laser
treatment for psoriasis'' to ``Laser treatment for psoriasis,'' absent
subsequent CPT Editorial Panel actions. Therefore, we believe it is
important for comments to support the typicality of these equipment
items regardless of the type of laser used for these services.
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\18\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf.
\19\ https://www.ama-assn.org/system/files/september-2022-cpt-summary-panel-actions.pdf.
\20\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf.
\21\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf.
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(5) Optical coherence tomography (OCT) of retina (CPT code 0605T).
CPT code 0605T (Optical coherence tomography (OCT) of retina,
remote, patient-initiated image capture and transmission to a remote
surveillance center, unilateral or bilateral; remote surveillance
center technical support, data analyses and reports, with a minimum of
8 daily recordings, each 30 days) was submitted as potentially
misvalued. This code is a temporary CPT category III code and is
assigned procedure status ``C'' (contractor priced) under the PFS. The
nominator generally expressed concern that the initial pricing by the
contractor was inaccurate and did not appropriately consider the cost
of the OCT device when provided by the independent diagnostic testing
facility (IDTF). The nominator requested that CMS revise the valuation
of this code to properly account for the cost of the OCT imaging device
used to provide this remote diagnostic retinal monitoring service.
The nominator stated that remote OCT allows for better management
of patients with neovascular age-related macular degeneration (NV-AMD)
and improved management has been shown to result in reduction in
treatments.\22\ \23\ According to the nominator, one of the Medicare
Administrative Contractors who priced the service did not
[[Page 32382]]
appropriately consider the cost of the OCT device provided by the IDTF,
resulting in an inadequate payment rate that did not cover the direct
operating costs. The nominator asserted that this code is misvalued
because the contractor established its value by crosswalking to the
valuation for remote physiological monitoring (RPM) CPT code 99454
(Remote monitoring of physiologic parameter(s) (eg, weight, blood
pressure, pulse oximetry, respiratory flow rate), initial; device(s)
supply with daily recording(s) or programmed alert(s) transmission,
each 30 days). The nominator stated that CPT code 99454 represents a
distinct type of service and falls under a different benefit category
than remote OCT. The nominator asserted that while remote OCT is a
diagnostic service that is provided by an IDTF, CPT code 99454 is an E/
M service that is not permitted to be furnished by IDTFs. In addition,
the device used to furnish remote OCT performs retinal imaging
comparable to that performed in the physician office, has a useful life
of 5 years, and costs $40,000. The nominator provided an invoice to
support this claim. In contrast, the nominator indicated that the
device used in the service described by CPT code 99454 captures simple
physiologic data and costs $1,000. The nominator provided a device
equipment cost per month of $666.67 for the device used to furnish
remote OCT. Using the device cost calculation, the nominator estimated
an unadjusted rate of $632.22 by following CMS' valuation methodology.
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\22\ Holekamp, Nancy M., et al. ``Prospective trial of Home OCT
guided management of treatment experienced nAMD patients.'' RETINA
(2022): 10-1097.
\23\ Heier, Jeffrey S., et al. ``Clinical Use of Home OCT Data
to Manage Neovascular Age-Related Macular Degeneration.'' Journal of
VitreoRetinal Diseases (2024): 24741264241302858.
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Overall, the nominator stated that CPT code 99454 is not an
accurate crosswalk for remote OCT and recommended that CMS revise the
valuation of CPT code 0605T to properly account for the higher cost of
the OCT imaging device used to provide this remote diagnostic retinal
monitoring service. The nominator stated that due to the current
undervaluation, the prescribing physicians and their patients in need
of remote monitoring of a treatable sight-threatening retinal disease
do not have access to this service.
We are not proposing CPT code 0605T as potentially misvalued at
this time. We note that the nominator submitted a single invoice in
support of its assertions, which may not be reflective of typical
costs, and we encourage interested parties to provide additional
information. including invoices for the OCT devices. Also, we welcome
comments on whether this code should be nationally priced and what
inputs should be used if we were to set a national rate for this
service.
(6) Mechanical separation of plasma from blood (CPT code 36514).
An interested party nominated CPT code 36514 (Therapeutic
apheresis; for plasma pheresis) as potentially misvalued for two PE-
related reasons. The first concern involves the assigned clinical labor
code, L056A (RN/OCN), which the nominator states undervalues the
therapeutic apheresis nurse's operating wage cost. The second concern
relates to the equipment code, EQ084 (cell separator system),
specifically its price and equipment utilization rate.
The nominator presented differences in therapeutic plasmapheresis
or plasma exchange (TPE) procedure payments between settings, with 50
percent to 75 percent of the 100,000 annual TPE procedures occurring in
hospital outpatient settings. The nominator stated that the payment
differential is substantial: under the Hospital OPPS, the average CY
2025 Medicare payment rate for TPE performed in a hospital outpatient
department is $1,639.28, excluding compensation for the supervising
physician. In contrast, under the PFS, the average CY 2025 Medicare
payment rate for the same procedure performed in a non-facility setting
is $663.43. According to the nominator, the differences in payment
rates have forced patients to receive treatment in more expensive
hospital outpatient settings, as physicians cannot financially sustain
the costs of performing TPE services in non-facility settings under the
current payment rates. The nominator asserted that this payment
structure not only limits patient access to care but also results in
higher overall costs to the Medicare program, as procedures are
channeled to the more expensive hospital outpatient setting where
payment rates are nearly 2.5 times higher than non-facility rates.
The nominator stated that TPE is a complex extracorporeal blood
therapy procedure used to treat patients with serious hematological,
oncologic, neurological, rheumatologic, cardiac and autoimmune
disorders. Therapeutic apheresis nurses performing this procedure
require extensive specialized training to independently handle patients
with a wide spectrum of serious illnesses and comorbidities. They must
be trained and highly skilled in evaluating patients and managing
clinical issues and adverse events that commonly arise during the
procedure, particularly in patients with comorbid anemia, renal
failure, cardiovascular disease, serum protein abnormalities or other
risk factors.\24\ Their key responsibilities include advanced vascular
access, continuous management of the extracorporeal circuit,
troubleshooting, patient assessment to manage adverse events, and
medication administration. The nominator emphasized that therapeutic
apheresis nurses' training and skill level are distinct from nurses
collecting blood products from healthy donors.
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\24\ Chhibber V and King KE. Management of the therapeutic
apheresis patient (Chapter 12). In: Apheresis: Principles and
Practice, 3rd Edition. Bethesda, MD: AABB Press, 2010.
---------------------------------------------------------------------------
The nominator summarized the wide range of median annual and hourly
base salaries ($92,525 to nearly $125,000) for ``Apheresis Nurse'' or
``Apheresis RN'' positions identified across four leading online
employment recruiting firms. According to the nominator, this
variability likely stems from the differing mixes of higher-paid
therapeutic apheresis nurse job postings versus lower-paid postings for
nurses collecting blood products from healthy donors at community blood
centers across these firms. Based on the listed position openings, the
nominator found that the rate per minute for a therapeutic apheresis
nurse, inclusive of benefits, likely ranges between $1.30 and $1.50 per
minute, well over 60 percent higher than the $0.81 per minute valuation
currently assigned to CPT code 36514 with the L056A labor code. Also,
the nominator claimed that in order to accurately assess therapeutic
apheresis nurse wages, other surveys could be employed focusing on
nurses performing therapeutic procedures while excluding those working
in blood/plasma collection centers from healthy volunteer donors, as
the latter typically receive lower compensation despite using similar
equipment.
The nominator proposes that CMS collaborate with the Department of
Labor (DOL) to accurately assess therapeutic apheresis nurse salaries
and establish a new clinical labor code with appropriate per-minute
rates. This would replace the current L056A labor code used for CPT
code 36514, which the nominator asserts undervalues these specialized
nurses' wages and benefits. The new code would specifically exclude
non-patient-facing nurses who perform blood product collection,
ensuring more accurate compensation for this specialized role.
According to the nominator, the current Medicare payment rate for
CPT code 36514 in the non-facility setting fails to adequately account
for direct PE costs. First, based on fourth quarter 2024 U.S. sales
data, the nominator
[[Page 32383]]
requested updating the CMS Equipment File price for the cell separator
system equipment code (EQ084) from $81,656.40 to $93,321.35, reflecting
current market conditions. According to the nominator, the current rate
of 0.5 for equipment code EQ084 implies that facilities perform 426
procedures per year per device; however, data from major hospitals,
including the three largest-volume hospitals in the U.S., demonstrates
that facilities average only 181 procedures per year per device,
suggesting a more accurate utilization rate of 0.21. This discrepancy
can significantly impact on the calculated costs and subsequent payment
rates for equipment code EQ084.
After reviewing the nominator's submission, we do not believe that
we have enough information to evaluate whether CPT code 36514 is
potentially misvalued, and thus we are not proposing the code as
potentially misvalued at this time. To assist us in further considering
whether CPT code 36514 is potentially misvalued, we are seeking
information on the direct practice expense inputs, particularly
regarding the clinical labor code L056A and equipment code EQ084.
Specifically, we seek comments on whether to establish a new
therapeutic apheresis nurse clinical labor code in the non-facility
setting. Also, we seek invoices and other associated information that
could be used to update to the cell separator system equipment code
EQ084 to reflect current market costs. We do not believe an update to
the equipment utilization rate is necessary. We disagree with the
nominator that an equipment utilization rate of 21 percent would be
typical for the cell separator system. As we stated previously, we
currently use an equipment utilization rate assumption of 50 percent
for most equipment, with the exception of expensive diagnostic imaging
equipment, for which we use a 90 percent assumption as required by
section 1848(b)(4)(C) of the Act. As we discussed in the CY 2021 PFS
final rule, it would distort relativity to assign a utilization rate of
21 percent for the cell separator system equipment, as this would have
the same effect as doubling the overall price of the equipment (85 FR
84629).
(7) Remote interrogation device evaluation (CPT code 93296).
An interested party nominated CPT code 93296 (Interrogation device
evaluation(s) (remote), up to 90 days; single, dual, or multiple lead
pacemaker system, leadless pacemaker system, or implantable
defibrillator system, remote data acquisition(s), receipt of
transmissions and technician review, technical support and distribution
of results) as potentially misvalued, because the service has
experienced substantial changes in PE. The nominator emphasized that
the current direct practice expense inputs do not accurately represent
either the current standard of care or the actual resources required to
provide the service, necessitating an urgent review of the code's
resource input valuations.
CPT code 93296 is a technical component-only code describing remote
monitoring of cardiac devices over 90 days. The nominator stated that
this service enables healthcare providers to remotely evaluate
implanted cardiac defibrillators and pacemakers, review device data,
communicate with patients, and share findings with physicians. The
monitoring helps prevent emergencies and reduces hospitalizations
through early intervention and timely device adjustments. According to
the nominator, the code's direct costs, last reviewed by RUC in 2016
and implemented in 2018, no longer reflect current service delivery
requirements because technological advancements and expanded monitoring
protocols have significantly increased service complexity and resource
requirements.
According to the nominator, the service delivery for CPT code 93296
has evolved significantly, requiring enhanced organizational
infrastructure and specialized clinical expertise. Modern service
delivery involves complex data management, with each transmission
requiring 32 distinct tasks \25\ for complete patient care. The
increased service complexity stems from advanced technology
requirements, expanded patient monitoring needs, and more frequent
device interrogation, shifting from quarterly to more regular
intervals. These changes have created a notable disparity between
current resource costs and existing valuations, necessitating updated
mechanisms for data management and prioritization.
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\25\ Aileen M. Ferrick et al,. 2023 HRS/EHRA/APHRS/LAHRS Expert
Consensus Statement on Practical Management of the Remote Device
Clinic (2023), http://www.hrsonline.org/guideance/clinical-resources/2023-hrsehraaphrslahrs-expert-consensus-statement-practical-management-remote-device-clinic?gad_source=1&gclid=Cj0KCQiAkoe9BhDYARIsAH85cDOusU-vRRcEnwoXzUmN2COkX0_DiRVHuOM8cYMf8riBNXW-KrFagnAaAs5NEALw_wcB.
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According to the nominator, the direct cost inputs for clinical
labor and equipment do not reflect the current direct costs required to
furnish the services. The nominator stated that the total direct cost
of $25.84 (including clinical labor and equipment) exceeds the CY 2025
national non-facility PFS payment rate of $19.41. They stated that the
current valuations do not reflect modern clinical staffing needs and
equipment requirements for this pacemaker interrogation system service,
despite similar updates being approved for comparable diagnostic
services. To assess resource requirements, the nominator conducted an
independent study among IDTFs, using standardized data collection and a
volume-weighted analysis of 2023 service data. The nominator claimed
that their findings demonstrate a significant disparity between current
valuations and actual service delivery costs, supporting the need for
comprehensive input review.
The study of IDTFs conducted by the nominator revealed that CPT
code 93296 requires 83.66 minutes of non-physician clinical labor time,
significantly more than CMS' current value of 28 minutes. This time
encompasses eleven distinct tasks, from patient enrollment to quality
assurance, with the most time-intensive activities being data review
and analysis (25.25 minutes) and unscheduled alert management (21.84
minutes).
[[Page 32384]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.012
Furthermore, the nominator stated that while the valuation for CPT
code 93296 is currently based on electrodiagnostic technologists
(L037A) at $0.44 per minute, the service is typically performed by
cardiovascular technicians (L038B), who receive $0.60 per minute. Thus,
the nominator believes that updating both the time and clinical staff
classification is needed for accurate service valuation and consistency
with other implantable device monitoring services.
Finally, the nominator requested two updates to the equipment costs
for CPT code 93296. First, they recommended adjusting the equipment
usage time to align with the updated clinical labor time for remote
interrogation device evaluation. Second, they recommended changing the
assigned equipment code from ``pacemaker interrogation, system''
(EQ320) priced at $123,250 to ``pacemaker follow-up system'' (EQ198)
priced at $279,453. We note that no invoices were submitted to support
these prices. The nominator believes that these changes would align the
equipment valuation with actual costs and match similar CMS-approved
device monitoring services.
Overall, the nominator stated that a review of CPT code 93296
current inputs reveals significant undervaluation in several key areas.
According to the nominator, the existing resource costs for clinical
labor times, labor types, and equipment costs do not adequately reflect
the current service requirements. Based on the submitted information,
however, we are not currently proposing to nominate this code as
potentially misvalued. We request that the nominator submit a complete
report detailing associated direct practice expense input assessment
data to enable us to more fully consider whether the code is
potentially misvalued. Additionally, we welcome comments, including any
analysis or studies from the broader medical community, including the
RUC, regarding whether this service has experienced substantial changes
in practice expenses since its last review.
(8) Fine Needle Aspiration (FNA) (CPT codes 10021, 10004, 10005, 10006)
An interested party requested that CMS reconsider CPT codes 10021
(Fine needle aspiration biopsy, without imaging guidance; first
lesion), 10004 (Fine needle aspiration biopsy, without imaging
guidance; each additional lesion), 10005 (Fine needle aspiration
biopsy, including ultrasound guidance; first lesion) and 10006 (Fine
needle aspiration biopsy, including ultrasound guidance; each
additional lesion) for nomination as potentially misvalued, citing
significant undervaluation since 2019. The nominator submitted a
request to CMS for the reevaluation of these codes, stating that the
payment changes have created a concerning cascade of negative
consequences impacting the care of patients with thyroid nodules and
cancer. Specifically, the nominator questions the fundamental basis of
CMS' 2019 work RVU reductions for FNA procedures. While the RUC
recommended work RVUs of 1.20 for CPT code 10021 and 1.63 for CPT code
10005, CMS instead implemented lower values of 1.03 and 1.46,
respectively. The nominator strongly disagreed with CMS' methodology,
particularly its comparison to CPT code 36440 (neonatal blood
transfusion). The nominator argued that this crosswalk comparison is
inappropriate because the neonatal procedure represents a fundamentally
different type of service with distinct work intensity levels, requires
different expertise, is rarely billed to Medicare, and serves an
entirely different patient population than FNA procedures.
The nominator further emphasized that when the work RVU for CPT
code 10005 was reduced by 10.5 percent
[[Page 32385]]
(from 1.94 to 1.46), it triggered a much larger 35.7 percent drop in
payment. This substantial decrease has forced a significant shift in
where these procedures are performed, moving from office-based settings
to hospital facilities. Using claims data, the nominator stated that
there has been a shift in the site of service for FNA procedures
between 2018 and 2023; the percentage of procedures performed in
facility settings increased from 52.06 percent in 2018 to 57.05 percent
in 2023. Conversely, services performed in office settings declined
from 47.05 percent in 2018 to 42.40 percent in 2023. The nominator
claimed that this shift in performance of FNA from the office setting
to hospital outpatient departments resulted in Medicare paying 524
percent more for the same procedure. With an additional cost of $584.92
per procedure at facility locations, the nominator claimed that this
shift has resulted in increased Medicare expenses of $4.17 million.
Beyond the financial implications, the nominator stated that the
low valuation of this code family has resulted in a shift to facility
settings raising Medicare costs, reducing access, and reducing quality
of care. According to the nominator, most concerning is the long-term
impact on medical education, as new endocrinologists and surgeons are
now avoiding learning FNA procedures altogether. Furthermore, the
nominator referenced a study,\26\ which discusses the potentially
negative consequences of code devaluation on patient care and
healthcare spending. Overall, to address these issues, the nominator
specifically requested that CMS restore the work RVU values to those
originally recommended by the RUC in 2019, stating that CMS' previous
crosswalk to neonatal transfusion described by CPT code 36440 (Push
transfusion, blood, 2 years or younger) was inappropriate given the
significant differences in work intensity levels and required expertise
between the procedures.
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\26\ THYROID Volume 34 Number 11, 2024 https://doi.org/10.1089/thy.2024.0442 Eldeiry, et al. ``Impact of Changes in Fine Needle
Aspiration Biopsy Reimbursement on Clinical Care of Patients with
Thyroid Nodules in the United States''.
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We appreciate the comprehensive information provided by the
nominator, including their reference to recent research and detailed
trend analysis. However, we note that these codes have undergone
multiple recent reviews. Our review of these codes and our rationale
for finalizing the current values are extensively discussed in the CY
2019 PFS final rule (83 FR 59517) and CY 2021 PFS final rule (85 FR
84599). Furthermore, this code family was previously nominated two
times as potentially misvalued and discussed in the CY 2020 PFS final
rule (84 FR 62625) and CY 2025 PFS final rule (89 FR 97743). For more
information, we encourage the nominator to reference the discussions in
previous rulemaking. We maintain our position and are not proposing
this code family as potentially misvalued. We acknowledge the shift in
site of service for FNA procedures between 2018 and 2023. While we do
not currently consider these changes substantial enough to warrant
immediate revaluation, we will continue to monitor the site-of-service
trends closely. Should these patterns persist or accelerate, a new
survey in the future may be necessary to accurately reflect these
changes in practice patterns. We welcome public comments and
recommendations, including those from the RUC, regarding whether these
codes should be re-reviewed in light of the information submitted by
the nominator.
(9) Nasal Sinus Irrigation (CPT Codes 31000 and 31002)
An interested party nominated CPT codes 31000 (Lavage by
cannulation; maxillary sinus (antrum puncture or natural ostium)), and
31002 (Lavage by cannulation; sphenoid sinus) as potentially misvalued.
The interested party expressed concern that these codes are undervalued
due to missing pricing data for essential lavage supplies and stated
that they are not currently priced in the non-facility setting.
Regarding both codes, the interested party identified two issues.
They stated that this procedure uses the Cyclone[supreg] sinonasal
suction and irrigation system, and requires additional tools, staff
time and supplies. For CPT code 31000, the interested party stated that
while the current PE supplies are valued at $33.68, this amount should
be $333.68, reflecting a $300 increase to include the Cyclone device
cost. Similarly, for CPT code 31002, the interested party proposed
increasing the supply price from $26.74 to $326.74 to incorporate the
Cyclone device cost. To support this claim, the interested party has
provided seven paid invoices demonstrating the actual cost of the
system.
The interested party also claimed that both codes do not have non-
facility RVUs, but are primarily performed in non-facility settings.
According to the AMA's RUC database's procedure volume data, CPT code
31002 is performed in the non-facility setting 81.4 percent of the time
and CPT code 31000 is reported 77.2 percent of the time in the non-
facility setting.\27\
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\27\ AMA RBRVS DataManager. American Medical Association. (2025,
January 15). https://www.ama-assn.org/.
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The interested party emphasized that these misvaluations have real-
world implications for patient care. The current valuations may limit
physicians' ability to provide these services in both facility and non-
facility settings, potentially affecting patient access to care,
particularly for those who can only receive treatment in physician
offices. Thus, the interested party requested a revaluation of the PE
components for both codes and the establishment of non-facility PE
inputs for these services.
Although we are not currently proposing to designate these codes
as potentially misvalued, we acknowledge the interested party's
concerns about their current valuation. Specifically, these concerns
could stem from missing pricing data and observed changes in the
typical site of service and dominant specialty since the last
valuation. We note that CPT code 31000 is typically performed in the
non-facility setting but question whether the Cyclone device is either
typically used or necessary for the performance of this procedure. We
note that CPT code 31002 does not have non-facility PE inputs, however
it seems to typically be performed in the office setting with the
dominant specialty listed as Allergy/Immunology and not Otolaryngology.
We also question whether the Cyclone device is either typically used or
necessary for the performance of this procedure. We believe that both
codes would require a comprehensive review to address these potential
changes in typical site of service and dominant specialty, as well as
PE valuation. We welcome public comments regarding these issues
concerning CPT codes 31000 and 31002. Interested parties are encouraged
to submit relevant documentation, such as invoices or other evidence
that demonstrates the typical resource costs for providing these
services.
(10) Portable X-Ray Services (HCPCS Codes R0070, R0075)
In the CY 2025 PFS final rule, we acknowledged that several
portable x-ray (PXR) suppliers and trade organizations continue to
express longstanding concerns with how payment is established for
transportation services related to PXR as described by HCPCS codes
R0070 and R0075 (89 FR 97809). We also noted interested parties'
request for greater consistency in the pricing of these services (89 FR
97809 through 97810).
[[Page 32386]]
We suggested that interested parties may best engage with the MACs on
these issues by appropriately reporting cost data in the MAC requested
format. We also recognized that we should maintain consistency in
pricing these services that are more indicative of changes in costs
that occur yearly. In this proposed rule, we are seeking comments on
whether we should assign national pricing under the PFS for PXR
transportation services; specifically, for HCPCS code R0070
(Transportation of portable x-ray equipment and personnel to home or
nursing home, per trip to facility or location, one patient seen) and
HCPCS code R0075 (Transportation of portable x-ray equipment and
personnel to home or nursing home, per trip to facility or location,
more than one patient seen). We believe that national pricing would be
conducive to ensuring consistency in payment rates across localities
and also create payment stability for these services.
To nationally price HCPCS codes R0070 and R0075, we could use
reference codes that have only PE values and no work RVUs because these
codes describe only the transportation services associated with PXR.
Since these codes are currently paid using contractor pricing, we could
also analyze the average MAC payment for them to inform national
pricing. For example, we observed that HCPCS code R0070 was priced
between $215 to 230 per service while HCPCS code R0075 was priced
between $80 to 90 per service. Using these valuations could help to
inform us of potential crosswalk codes in order to maintain consistency
with the rates currently being paid. By converting the dollar payment
for HCPCS codes R0070 and R0075 from Medicare Part B claims data into
RVUs through the usage of our current conversion factor under the PFS,
we identified potential crosswalk codes. For HCPCS code R0070, we could
use a crosswalk to CPT code 93243 (External electrocardiographic
recording for more than 48 hours up to 7 days by continuous rhythm
recording and storage; scanning analysis with report), which has a
total national non-facility payment rate of $226.43 for CY 2025, and
for HCPCS code R0075, we could use a crosswalk to CPT code 92582
(Conditioning play audiometry), which has a total national non-facility
payment rate of $86.69 for CY 2025.
We welcome comments from the public on whether we should consider
national pricing for HCPCS codes R0070 and R0075, as well as whether
these potential crosswalk codes would appropriately value these
services, and any other factors we should consider.
(11) Cryoablation Therapy To Treat Postoperative Pain
An interested party requested we establish a code to describe the
additional intraoperative time required by the surgeon to perform
adjunctive cryoablation therapy for postoperative pain management.
According to the interested party, intraoperative cryoablation therapy
is performed as a supplemental procedure alongside primary surgical
procedures to provide postoperative pain relief for up to 60 days. The
therapy works by freezing nerves near the surgical site without causing
permanent damage, temporarily blocking pain signals during the
patient's recovery period. The interested party stated that this
procedure requires an additional 20-30 minutes of intraoperative time
for the surgeon beyond the primary surgical procedure. The interested
party referenced clinical evidence highlighting the use of
intraoperative cryoablation to reduce the need for opioids in
postsurgical patients, as well as recent guideline
recommendations.28 29
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\28\ Miller DL, Hutchins J, Ferguson MA, Barhoush Y, Achter E,
Kuckelman JP. Intercostal Nerve Cryoablation During Lobectomy for
Postsurgical Pain: A Safe and Cost-Effective Intervention. Pain
Ther. 2025 Feb;14(1):317-328. doi: 10.1007/s40122-024-00694-3.
\29\ Dunning J, Burdett C, Child A, Davies C, Eastwood D,
Goodacre T, Haecker FM, Kendall S, Kolvekar S, MacMahon L, Marven S,
Murray S, Naidu B, Pandya B, Redmond K, Coonar A. The pectus care
guidelines: best practice consensus guidelines from the joint
specialist societies SCTS/MF/CWIG/BOA/BAPS for the treatment of
patients with pectus abnormalities. Eur J Cardiothorac Surg. 2024
66(1):ezae166.
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Currently, there is no specific code to account for the additional
physician work associated with intraoperative cryoablation therapy.
According to the nomination letter, we included the Cryo Nerve Block
Therapy (CryoNB) on the list of devices eligible for temporary
additional payments under the Non-Opioids Prevent Addiction in the
Nation (NOPAIN) Act \30\ in the CY 2025 OPPS final rule (89 FR 94353
through 94354). However, the interested party stated barriers still
exist for physician adoption mainly because there is currently no code
to account for the 20-30 additional minutes of physician work
associated with the intraoperative administration and delivery of
cryoablation therapy.
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\30\ CY 2025 OPPS Final Rule, 89 Fed. Reg. 93912, 94354 (Nov.
27, 2024) (CMS specifically affirmed that ``the CryoNB System meets
the statutory requirements and should be paid separately under this
provision.'')
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Also, the interested party stated that many practitioners
incorrectly interpret Medicare's anesthesia rules as prohibiting
payment for extra professional services when the same surgeon provides
ancillary cryoablation therapy.\31\ According to the nominator, while
CMS typically do not allow separate payments for anesthesia services
when the same physician performs both the surgical procedure and
anesthesia, this limitation does not apply to cryoablation therapy for
postoperative pain management.\32\ However, according to the interested
party, ongoing confusion regarding this policy's application creates an
unnecessary barrier to cryoablation procedures that could reduce or
replace opioid use for Medicare beneficiaries.
---------------------------------------------------------------------------
\31\ See Medicare NCCI 2024 Coding Policy Manual, Chapter 13,
pgs. 6-7 (revised Jan. 1, 2025), available at: https://www.cms.gov/files/document/13-chapter13-ncci-medicare-policy-manual-2025finalcleanpdf.pdf.
\32\ AHA Coding Clinic[supreg], Q3 2024 vol. 11, no. 3
(effective with discharges Aug. 1, 2024).
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The interested party stated that establishment of a G-code for
physician work associated with intraoperative cryoablation therapy for
postoperative pain would facilitate greater access for patients who
require or prefer non-opioid alternatives for pain relief. The
interested party further stated that such a G-code would help promote
patient access to this alternative to opioids by clarifying that
Medicare anesthesia rules do not apply to cryoablation for
postoperative pain when furnished by the same surgeon. We are seeking
public comments on whether a new G-code is needed to account for the
additional intraoperative time required to perform cryoablation
therapy, including service elements and valuation of work and practice
expense, including potential crosswalk codes.
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
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.
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
[[Page 32387]]
from the Medicare Telehealth Services List in accordance with section
1834(m)(4)(F)(ii) of the Act (42 CFR 410.78(f)). This process provides
the public with an ongoing opportunity to submit requests for adding
services, which are then reviewed and assigned to categories
established through notice and comment rulemaking. Under the process we
established beginning in CY 2003, we evaluated whether a service should
be assigned to the Medicare Telehealth Services List and designated as
Category 1: Services similar to professional consultations, office
visits, and office psychiatry services currently on the Medicare
Telehealth Services List or Category 2: Services that were not similar
to those on the current Medicare Telehealth Services List.
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 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. The 5-step process review criteria
are set forth in the CY 2024 PFS final rule (88 FR 78861 through
78866), includes the following steps: (1) Determine whether the service
is separately payable under the PFS; (2) Determine whether the service
is subject to the provisions of section 1834(m) of the Act; (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);
(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; and (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. Rather than categorizing a
service as ``Category 1'', ``Category 2,'' or ``Category 3,'' each
service is now assigned a ``permanent'' or ``provisional'' status. A
service is assigned a ``provisional'' status if it meets steps 1, 2,
and 3 of our review process, and, if while there is not enough evidence
to demonstrate that the service is of clinical benefit, there is enough
evidence to suggest that further study may demonstrate such benefit.
b. Proposal To Modify the Medicare Telehealth Services List and Review
Process
Section 1834(m)(4)(F)(ii) of the Act requires that the Secretary
establish a process that provides, on an annual basis, for the addition
or deletion of services to the definition of telehealth services for
which payment can be made when furnished via telehealth under the
conditions specified in section 1834(m) of the Act. As specified at
Sec. [thinsp]410.78(f), except for a temporary policy that was limited
to the PHE for COVID-19, we make changes to the list of Medicare
telehealth services through the annual PFS rulemaking process. Our
current 5-step review process reflects the stepwise method by which we
consider requests to add services to, remove services from, or change
the status of, services on the Medicare Telehealth Services List,
beginning with the CY 2025 Medicare Telehealth Services List (88 FR
78861 through 78871).
We are proposing, beginning for the CY 2026 Medicare Telehealth
Services List, to revise the 5-step review process for reviewing
requests to the Medicare Telehealth Services List. Based on feedback
from interested parties, we believe that we need to simplify our
telehealth list review process by focusing our review on whether the
service can be furnished using an interactive telecommunications
system. The current 5-step review process has proven to be unclear for
requestors. Interested parties, including requestors, have emphasized
that it is difficult to ascertain the level of clinical evidence needed
for a service with a provisional designation to be redesignated
permanent. Additionally, for new services or services with low
utilization, interested parties have had a difficult time providing
peer-reviewed evidence applicable to the service and/or the Medicare
beneficiary patient population. Lastly, based on feedback from
interested parties and our own internal review, the 5-step process
insufficiently accounts for the vital role of professional judgment
exercised by physicians and other practitioners. We continue to believe
that physicians and other practitioners, given their in-depth knowledge
of their beneficiaries' clinical needs, are best positioned to exercise
their professional judgment in determining whether a service can be
safely furnished via telehealth and whether furnishing a service via
telehealth will provide clinical benefit justifying its use.
We therefore are proposing to remove Step 4 (Consider whether the
service elements of the requested service map to the service elements
of services on the list that has a permanent status described in
previous final rulemaking) and 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) from our review criteria and retain Steps 1
through 3 (detailed below). Under this proposal, services on the
Medicare Telehealth Services List would no longer be designated
``permanent'' or ``provisional''. All services listed or added on the
Medicare Telehealth Services List would be considered included on a
permanent basis. Note, CMS would still reserve the right to remove
services included on the Medicare Telehealth Services List based on
internal review or feedback received from interested parties in
accordance with section 1834(m)(4)(F)(ii) of the Act (42 CFR
410.78(f)). If finalized, all codes currently on the list (provisional
or permanent) will remain on the Medicare Telehealth Services List.
Because CMS has already determined that services with a ``provisional''
designation satisfy the standards represented in Steps 1 through 3 in
prior rulemaking cycles, we do not believe further review would be
required to justify their inclusion on the Medicare Telehealth Services
List under the revised process. We continue to request information from
interested parties about service(s) that may be appropriate for
addition to or deletion from the list of Medicare telehealth services
and their effects on beneficiary access, safety, and quality of care.
[[Page 32388]]
We are proposing to retain Steps 1 through 3 and eliminate Steps 4
through 5 because we believe that the standards represented in Steps 1
through 3 alone are sufficient guardrails to ensure that only services
separately payable under the PFS, subject to the provisions of section
1834(m) of the Act, and capable of being furnished using an interactive
telecommunications system are considered Medicare telehealth services.
For additional information, these steps are further discussed in the CY
2024 PFS final rule (88 FR 78861 through 78866). We do not believe
Steps 4 through 5 are necessary, because as discussed above, we believe
the complex professional judgment of the physician or practitioner is
sufficient to ensure a service can be safely furnished via telehealth
and that the service will be clinically beneficial to the beneficiary.
We believe that the determination to utilize the complex professional
judgment of the physician or practitioner will better allow
practitioners to determine if telehealth is appropriate for that
specific Medicare beneficiary and that specific clinical scenario.
We expect that physicians and other practitioners would consider
the entirety of the circumstances, including the clinical profile and
needs of the beneficiary, to determine the appropriate modality for
furnishing the service. This specification is similar to the
requirements set forth for the process by which CMS updates the list of
covered surgical procedures in Medicare when furnished within an
ambulatory surgical center (ASC) (also called the ASC covered
procedures list (CPL)), which were established in the 2021 OPPS Final
Rule (85 FR 86148 through 86149). In addition, this specification is
similar to our policy regarding the in-person visit requirements for
telehealth behavioral health services (``. . . the practitioner is not
precluded from scheduling in-person visits at a more frequent interval,
should such visit be determined to be clinically appropriate or
preferred by the patient'' (86 FR 65057)) and for audio-only telehealth
services (``practitioners should always use their clinical judgment in
deciding to furnish services via telehealth, including in the patient's
home, to ensure that appropriate care is being delivered; including
scheduling in-person care as needed'' (89 FR 97761)). We strive to
balance the goals of increasing practitioner and patient choice of
service modality with the consideration of patient safety for all
Medicare beneficiaries. Notably, the addition of a service to the
Medicare Telehealth Services List does not mean that it is appropriate
to be furnished via telehealth to every Medicare beneficiary in every
clinical scenario--as always, the physician or practitioner should use
his or her complex professional judgment to determine the appropriate
service modality on a case-by-case basis. As technology advances and
more services may be safely furnished via telehealth and paid under the
PFS, it is increasingly important for physicians or practitioners to
exercise their professional judgment in determining the generally
appropriate service modality for their patients to receive a service.
We believe our proposal to remove steps 4 through 5 of the 5-step
review process would expand and build upon our intent to simplify and
reduce the administrative burden of submission and review of services
to the Medicare Telehealth Services List. We believe our proposed
policy would allow patients and physicians or practitioners to
determine the most appropriate service modality for an individual
patient while continuing to ensure patient safety. As discussed above,
physicians and other practitioners are best positioned to make patient-
specific service modality determinations. Physicians and other
practitioners have the greatest familiarity with and understanding of
the needs of their individual patients and will use their complex
professional judgment to determine whether a service can be safely
furnished via telehealth, given their patients' clinical profiles and
needs, among other essential considerations.
We believe physicians and other practitioners would consider
important safety factors when determining the appropriate service
modality for their specific beneficiaries. We continue to encourage the
review and use of clinical practice guidelines, peer-reviewed
literature, and similar materials that illustrate the typical setting
of care, population of beneficiaries, and clinical scenarios that
practitioners would encounter when furnishing the Medicare Telehealth
service using only interactive, two-way audio-video communications
technology or two-way, real-time audio-only communication technology
for services furnished to a patient in their home, as permitted in
accordance with 42 CFR 410.78(a)(3). We are proposing to refine the
regulatory process for adding services to or deleting services from the
Medicare Telehealth Services List by removing Steps 4 and 5 and
maintaining the current Steps 1 through 3. The steps are listed in
detail below:
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. 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 physician or 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 physician or 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. Services that fall outside the
definition of telehealth 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-
[[Page 32389]]
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.
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 physician or 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.
Additionally, we are proposing to simplify our Medicare Telehealth
Services List review process by removing the distinction between
provisional and permanent services and focusing our review on whether
the service can be furnished using an interactive, two-way audio-video
telecommunications system. We are seeking comments on our proposal to
refine the Medicare Telehealth Services List review process. We also
invite comments regarding safety and/or quality concerns. We would like
to re-emphasize that a service's presence on the Medicare telehealth
list does not indicate that CMS believes that telehealth may be
appropriate in all circumstances; instead, we rely on physicians and
other practitioners to use their professional judgment to make
appropriate determinations based on the needs of the individual
patient.
c. Requests To Add Services to the Medicare Telehealth Services List
for CY 2026
We received several requests to add various services to the
Medicare Telehealth Services List, effective for CY 2026, some of which
we believe would meet the proposed revised criteria for being added to
the Medicare Telehealth Services List. That is, we reviewed these
services and found that they would meet the criteria of the 3-step
process proposed in section D(1)(b). The requested services are listed
in Table 8.
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
2026, requests to add services to the Medicare Telehealth Services List
must have been submitted to and received by CMS by February 10, 2025.
Consistent with the deadline for our receipt of code valuation
recommendations from the AMA RUC and other interested parties (83 FR
59491) and with the process set forth in prior calendar years, for CY
2027, requests to add services to the Medicare Telehealth Services List
must be submitted to and received by CMS by February 10, 2026. The
deadline for each request to add a service to the Medicare Telehealth
Services List must include 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.
[[Page 32390]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.013
The following is a discussion of the requests received for the
addition of services to the Medicare Telehealth Services List:
(1) Multiple-Family Group Psychotherapy
We received a request to add CPT code 90849 (Multiple-Family Group
Psychotherapy) to the Medicare Telehealth Services List. This code
describes the provision of psychotherapy to multiple adult or
adolescent patients and their family members simultaneously. This code
was requested to be added in the CY 2022 PFS Final Rule, but we did not
add it to the Medicare Telehealth Services List at the time because
these services were not separately payable and had a restricted payment
status, indicating that claims must be adjudicated on a case-by-case
basis when furnished in-person 86 FR 65052. In the CY 2023 PFS Final
Rule, we finalized a change in the procedure status indicator for CPT
code 90849, which is now assigned an A for active status meaning that
the service is now separately payable under the PFS. Based on our
review, we believe this service now meets step 1 of our review process
because it is currently assigned status indicator A, meets step 2 of
our review process because it is a service ordinarily furnished with
the furnishing practitioner and patient in the same location and
therefore is subject to the provisions of section 1834(m) of the Act,
and meets step 3 because that all elements of this service may be
furnished using an interactive telecommunications system as defined in
Sec. 410.78(a)(3). Therefore, we are proposing to add this service to
the Medicare Telehealth Services List. We welcome public comments on
this proposal.
(2) Group Behavioral Counseling for Obesity
We received a request to add CPT code G0473 (Face-to-face
behavioral counseling for obesity, group (2-10), 30 minutes) to the
Medicare Telehealth Services List. This code includes a 30-minute group
session that consists of a dietary assessment, counseling, and
behavioral therapy, as well as one face-to-face visit per week for each
week for the first month, one face-to-face visit every other week for
months two through six, and one face-to-face visit per month for months
seven through twelve (if an individual loses 3kg in the first six
months). Based on our review, we believe this service meets step 1 of
our review process because it is currently assigned status indicator A,
meets step 2 of our review process because it is a service ordinarily
furnished with the furnishing practitioner and patient in the same
location and therefore is subject to the provisions of section 1834(m)
of the Act, and meets step 3 because that all elements of this service
may be furnished using an interactive telecommunications system as
defined in 410.78(a)(3). Therefore, we propose to add this service to
the Medicare Telehealth Services List. We welcome public comments on
this proposal.
(3) Infectious Disease Add-On
We received a request to add CPT code G0545 (Visit complexity
inherent to hospital inpatient or observation care
[[Page 32391]]
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) to the Medicare Telehealth Services List.
This code can include service elements such as disease transmission
risk assessment and mitigation, public health investigation and
analysis, and complex antimicrobial therapy counseling. Based on our
review, we believe this service meets step 1 of our review process
because it is currently assigned status indicator A (meaning that the
service is separately payable under the PFS), meets step 2 of our
review process because it is a service ordinarily furnished with the
furnishing practitioner and patient in the same location and therefore
is subject to the provisions of section 1834(m) of the Act, and meets
step 3 because that all elements of this service may be furnished using
an interactive telecommunications system as defined in 410.78(a)(3).
Therefore, we propose to add this service to the Medicare Telehealth
Services List. We welcome public comments on this proposal.
(4) Auditory Osseointegrated Sound Processor
We received a request to add CPT codes 92622 (Diagnostic analysis,
programming, and verification of an auditory osseointegrated sound
processor, any type; first 60 minutes) and 92623 (Diagnostic analysis,
programming, and verification of an auditory osseointegrated sound
processor, any type; each additional 15 minutes (List separately in
addition to code for primary procedure)) to the Medicare Telehealth
Services List. Based on our review, we believe these services meet step
1 of our review process because they are currently assigned status
indicator A (meaning that the service is separately payable under the
PFS), meet step 2 of our review process because they are services
ordinarily furnished with the furnishing practitioner and patient in
the same location and therefore subject to the provisions of section
1834(m) of the Act, and meet step 3 because that all elements of these
services may be furnished using an interactive telecommunications
system as defined in 410.78(a)(3). Therefore, we propose to add these
services to the Medicare Telehealth Services List. We welcome public
comments on this proposal.
(5) Dialysis
We received a request to add dialysis procedures described by CPT
codes 90935 (Hemodialysis procedure with single evaluation by a
physician or other qualified health care professional), 90937
(Hemodialysis procedure requiring repeated evaluation(s) with or
without substantial revision of dialysis prescription), 90945 (Dialysis
procedure other than hemodialysis (for example, peritoneal dialysis,
hemofiltration, or other continuous renal replacement therapies), with
single evaluation by a physician or other qualified health care
professional), and 90947 (Dialysis procedure other than hemodialysis
(for example, peritoneal dialysis, hemofiltration, or other continuous
renal replacement therapies) requiring repeated evaluations by a
physician or other qualified health care professional, with or without
substantial revision of dialysis prescription) to the Medicare
Telehealth Services List. These codes describe reviewing medical
records, obtaining an interval history, performing an expanded problem
focused or detailed physical examination, formulating and/or revising
diagnosis and treatment plan(s) (moderate or high complexity medical
decision-making), and discussing diagnosis and treatment. On either a
single or two or more visits, the practitioner assesses the patient and
response so far to dialysis, writes and/or reviews orders, and
supervises dialysis.
We are not proposing to add these services to the Medicare
Telehealth Services List at this time, as we do not believe that we
have enough information to determine if these services meet step 3 of
the Medicare Telehealth review process. It is not clear under what
clinical circumstances this service could be furnished via telehealth
and how all service elements would be performed when furnished via
telehealth. We seek comments on whether the elements of the service are
capable of being delivered via an interactive telecommunication system
as required for Medicare telehealth services under Sec.
[thinsp]410.78(a)(3). We also seek comments regarding the service
elements clinical staff at the originating site are performing and how
these patient interactions compare to service elements that the
professional may be furnishing via telehealth. When adding ESRD-related
services (CPT codes 90963-90966, 90967-90970) to the Medicare
Telehealth Service list in the CY 2015 (80 FR 41783) and CY 2017 (81 FR
80194) final rules with comment period, we noted the clinical
examination of the access site must still be furnished face-to-face
``hands-on'' (without the use of an interactive telecommunications
system) by a physician, CNS, NP, or PA. We seek comment to see if this
requirement would also be appropriate for CPT codes 90935, 90937,
90945, and 90947 or if any other service elements need to be furnished
``hands-on.'' At this time, we require more information to determine
whether this requirement of a ``hands-on'' clinical examination by a
physician, CNS, NP, or PA would inhibit furnishing these services via
telehealth, or if a practitioner at the originating site could perform
this requirement.
(6) Home INR Monitoring
We received a request to add Home INR Monitoring (HCPCS code G0248)
to the Medicare Telehealth Services List for CY 2026. This service, as
described by HCPCS code G0248, encompasses a face-to-face demonstration
of the use and care of the INR monitor, obtaining at least one blood
sample, providing instructions for reporting home INR test results, and
documenting the patient's ability to perform testing and report
results. In response to this request for the CY 2025 PFS proposed rule,
commenters explained in detail that the interaction with the patient
described by this service is generally delivered by individuals
considered to be clinical staff and not a physician or practitioner as
defined under section 1834(m)(4) of the Act. ``Clinical staff'' means
someone who is supervised by a physician or other qualified health care
professional and is allowed by law, regulation, and facility policy to
perform or assist in a specialized professional service but does not
individually report that professional service. After reviewing these
comments and receiving additional information from interested parties,
especially those that reminded us that the patient interactions for
this service typically occur with clinical staff, it is clear that this
is not a service that is generally furnished via a telecommunications
system by a physician or a practitioner, as defined under section
1834(m)(4) of the Act, but rather is a technical part of a service
delivered by clinical staff employed or otherwise providing services
for a supplier. Indeed, the patient interaction portion of the service
is valued under the PFS as typically involving the clinical staff of a
supplier rather than the professional work of a physician or
practitioner. Furthermore, there is no restriction on billing for this
service and a physician/practitioner visit code on
[[Page 32392]]
the same day, which suggests that the interaction between the clinical
staff and the patient described by this service is severable from the
kind of professional service that falls under the scope of section
1834(m) of the Act. We understand that before the broad adoption of
telecommunications technology for patient interactions nearly 6 years
ago, these interactions may have typically taken place in person, and
we considered the request to add this service to the telehealth list in
that context. However, the interaction described explicitly by the code
does not indicate an interaction between the patient and a physician or
other practitioner. Because such an interaction falls outside the scope
of the definition of Medicare telehealth service, it does not meet step
2 of our review process. Therefore, we are not proposing adding HCPCS
code G0248 to the Medicare list of telehealth services. We welcome
public comments on this proposal.
(7) Telemedicine E/M Services
We received a request to add the telemedicine E/M services (CPT
codes 98000-98015) to the Medicare Telehealth Services List. These
services do not satisfy the criteria under Step 1 of our process.
Specifically, they are not separately payable under the Medicare PFS,
as they are currently assigned status indicator I (Not valid for
Medicare purposes). Given that these services are not separately
payable when furnished in person, they likewise will not be separately
payable when furnished via telehealth. Therefore, this service does not
meet Step 1 of our review process. We are not proposing to add them to
the Medicare list of telehealth services. We welcome public comments on
this proposal.
(8) Clarification on DMHT/RPM/RTM
We have received a number of questions regarding Digital Mental
Health Treatment (DMHT), Remote Physiologic Monitoring (RPM), and
Remote Therapeutic Monitoring (RTM) services and the applicability of
the telehealth rules. We would like to clarify that these services,
which are inherently non-face-to-face, do not meet the definitions of
1834(m) of the Act, fall outside the scope of the definition of
Medicare telehealth service, and do not meet step 2 of our review
process. These services are not subject to section 1834(m) of the Act.
(9) Services Requested To Be Transitioned From Provisional to Permanent
We received a number of submissions requesting for services on the
Medicare Telehealth Services List designated as ``provisional'' to be
designated as ``permanent.'' If our proposal to eliminate these
designations is finalized, these codes will remain on the Medicare
Telehealth Services List. If not, rather than selectively adjudicating
only those services for which we received requests for potential
permanent status, we believe 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 proposing to not making
determinations to recategorize provisional codes as permanent at this
time. For CY 2026, we propose to revise the Medicare Telehealth
Services criteria. We propose to remove steps 4 and 5 from the review
process. Using these revised criteria, we propose to add 5 new codes to
the Medicare Telehealth Services list that are not on the CY 2025
Medicare Telehealth Services list. After consideration of the
priorities discussed above, we believe that these proposed policies
will increase the flexibility for physicians or other practitioners to
exercise their complex professional judgment, factoring in patient
safety considerations, and for flexibility for patients to choose the
modality of care in which to receive services. The services we propose
adding to the Medicare Telehealth Services List are listed in Table A-
D2.
(10) Deleted Services
In section II.I. of this proposed rule, we proposed to delete HCPCS
code G0136. This code is currently on the Medicare Telehealth Services
List, so it will also be deleted from the list if finalized.
[GRAPHIC] [TIFF OMITTED] TP16JY25.014
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 physicians and other practitioners may furnish the service via
telehealth. These include a limitation of one subsequent hospital care
service furnished through telehealth every three 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 FR 73318), 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 these patients' potential acuity and
complexity.
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,
[[Page 32393]]
2023 (upon expiration of the PHE), through enforcement discretion
during the remainder of CY 2023 and notice-and-comment rulemaking for
CY 2024 and CY 2025, Medicare telehealth frequency limitations were
suspended for CY 2025 (89 FR 97758 through 97760) for certain
subsequent inpatient visits, subsequent NF visits, and critical care
consultations.
In the CY 2024 (88 FR 78877) and CY 2025 PFS final rules (89 FR
97758 through 97760), we solicited comments from interested parties on
how physicians and other 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 those final rules, 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 physicians and other practitioners should be
allowed to use their professional 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. Some
commenters did not support removing these frequency limitations, citing
patient acuity and safety. However, our analysis of claims data from
2020 to 2023 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, if the frequency limits were in place, they would be
met or exceeded very often or for many beneficiaries. Claims data from
2020 to 2023 suggest that less than five percent of beneficiaries who
received one or more of these services (subsequent care services in
inpatient and nursing facility settings, and critical care
consultations) received them as telehealth services. In addition, we
have solicited comments on this policy for two years and have received
overwhelming support for continuing this flexibility, with minimal
commenters not supporting the removal of frequency limitations.
We believe that physicians and other practitioners, who have the
greatest familiarity and insight into the needs of individual
beneficiaries, can use their complex professional judgment to determine
whether they can safely furnish a service via telehealth, given the
entirety of the circumstances, including the clinical profile and needs
of the beneficiary, to determine the appropriate service modality. We
strive to balance the goals of increasing physician or practitioner and
patient choice of service modality with consideration of patient safety
for all Medicare beneficiaries. As technology advances and more
services may be safely furnished via telehealth and paid under the PFS,
it is increasingly important for physicians and other practitioners to
exercise their professional judgment in determining the generally
appropriate service modality for their patients to receive a service.
Notably, the removal of these frequency limitations does not mean that
these services are appropriate to be furnished via telehealth to every
Medicare beneficiary in every clinical scenario--as always, the
physician or practitioner should use his or her complex professional
judgment to determine the appropriate service modality on a case-by-
case basis.
We are proposing to permanently remove frequency limitations on
furnishing these services via telehealth 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 seeking comments on these proposals, specifically additional
information regarding potential concerns about patient safety and
quality of care.
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
[[Page 32394]]
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 and extended
thereafter, direct supervision has historically required 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 has not historically been
interpreted as 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 and extended thereafter, we have
historically established this ``immediate availability'' requirement to
mean in-person, physical, not virtual, availability (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.
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), CY 2024 PFS final rule (88 FR 78878), and CY 2025
PFS Final rule (89 FR 97764) subsequently extended these policies
through December 31, 2025.
In the CY 2024 PFS proposed rule, we solicited comments on whether
we should consider extending the definition of direct supervision to
permit virtual presence beyond December 31, 2024. Specifically, we
stated we were interested in input from interested parties on potential
patient safety or quality concerns when direct supervision occurs
virtually; for instance, if virtual direct supervision of certain types
of services 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 stated 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 (88 FR
52302). 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 were 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
acknowledged the utilization of this flexibility and recognize that
many practitioners have stressed the importance of maintaining it. This
flexibility has been available and widely utilized since the beginning
of the PHE, and we recognized that it may enhance patient access.
In the CY 2025 PFS final rule (89 FR 97763), we acknowledged the
utilization of this flexibility and stated we recognized that many
practitioners have stressed the importance of maintaining it but were
seeking additional information regarding potential patient safety and
quality of care concerns. 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 stated that we
believed 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 finalized the revision of 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 services described by CPT code 99211
(office and 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 response to overwhelming support and requests to extend this
policy permanently for a wider set of services than the ones that were
finalized in the CY 2025 PFS Final Rule, we are proposing to continue
to build on this incremental approach to allow certain services to be
furnished under direct supervision that allows ``immediate
availability'' of the supervising practitioner using audio/video real-
time communications technology (excluding audio-only). We are proposing
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), for
all services described under Sec. 410.26, except for services that
have a global surgery indicator of 010 or 090. This information can be
found in the PFS PPRVU public use file (https://www.cms.gov/medicare/payment/fee-schedules/physician/pfs-relative-value-files). These global
surgery indicators are defined in IOM Pub. 100-04, chapter 23, section
50.6 as 010 ``Minor procedure with preoperative relative values on the
day of the procedure and postoperative relative values during a 10-day
postoperative period included in the fee schedule amount; evaluation
and management services on the day of the procedure and during this 10-
day postoperative period generally not payable'' and 090 ``Major
surgery with a 1-day preoperative period and 90-day postoperative
period included in the fee schedule payment amount.'' The
[[Page 32395]]
purpose of excluding these services is to ensure the quality of care
and patient safety, and in particular, the ability of the supervising
practitioner to intervene if complications arise, particularly in
complex, high-risk instances where unexpected or adverse events may
occur or for procedures that may be riskier or more intense where a
patient's clinical status can quickly change. For such services, in-
person supervision would be necessary to allow for rapid on-site
decision-making in the event of an adverse clinical situation.
We would like to note that, similar to our guidance above regarding
Medicare Telehealth services, our proposed definition of direct
supervision (allowing ``immediate availability'' of the supervising
practitioner using audio/video real-time communications technology
(excluding audio-only) for all services described under Sec. 410.26,
except for services that have a global surgery indicator of 010 or
090), does not mean that it is appropriate to allow virtual presence
for every service for every Medicare beneficiary in every clinical
scenario. As always, the physician or practitioner should use his or
her complex professional judgment to determine the appropriate
supervision modality on a case-by-case basis.
We are proposing to revise the regulation at Sec. 410.26(a)(2) to
state that the presence of the physician (or other practitioner)
required for direct supervision may include virtual presence through
audio/video real-time communications technology (excluding audio-only)
for services without a 010 or 090 global surgery indicator.
We are proposing to revise the regulations at Sec.
410.32(b)(3)(ii) to state that the presence of the physician (or other
practitioner) may include virtual presence through audio/video real-
time communications technology (excluding audio-only) for services
without a 010 or 090 global surgery indicator.
We note that because to the definition of direct supervision
applicable to cardiac, pulmonary, and intensive cardiac rehabilitation
services relies on the definition of direct supervision set forth at
Sec. 410.32(b)(3)(ii), the definition of direct supervision for these
services would similarly be modified to include virtual presence
through audio/video real-time communications technology (excluding
audio-only) for services without a 010 or 090 global surgery indicator.
We are seeking comment on applying this definition to the applicable
services under Sec. 410.32 and the applicable cardiac, pulmonary, and
intensive cardiac rehabilitation services.
We are seeking comment on whether 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), for all services described under Sec. 410.26,
except for services that have a 000, 010, or 090 global surgery
indicator. For each of these proposals, we are also seeking additional
information regarding potential concerns about patient safety and
quality of care for services that have a 000 global surgery indicator
and if it is necessary to exclude these services from allowing the
presence of the physician (or other practitioner) to include virtual
presence through audio/video real-time communications technology
(excluding audio-only). Global surgery indicator 000 is defined in IOM
Pub. 100-04, chapter 23, section 50.6 as ``Endoscopic or minor
procedure with related preoperative and postoperative relative values
on the day of the procedure only included in the fee schedule payment
amount; evaluation and management services on the day of the procedure
generally not payable''. We believe that these services, which have no
minimum postoperative period, do not have the same potential patient
safety risk that services with a 010 or 090 global surgery indicator
may have. We are seeking comments on these proposals.
b. Proposed Changes to Teaching Physicians' Billing for Services
Involving Residents With Virtual Presence
As discussed in the CY 2025 PFS final rule (89 FR 97764 through
97765), in the CY 2021 PFS final rule (85 FR 84577 through 84585), we
established a policy that after the end of the PHE for COVID-19,
teaching physicians may meet the requirements set forth at Sec.
1842(b)(7)(A)(i)(I) 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 OMB-
defined metropolitan statistical areas (MSAs). We made this location
distinction consistent with our longstanding interest in increasing
beneficiary access to Medicare-covered services in rural areas. We
noted that this policy provides 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 to be paid for the service under the
PFS, in locations that were within an MSA. This policy applied to all
services, regardless of whether the patient was co-located with the
resident or for services provided 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 reviewing the public comments, we finalized a temporary
policy that allowed the teaching physician to have a virtual presence
in all teaching settings, but 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.
[[Page 32396]]
As stated in the CY 2025 PFS final rule (89 FR 97765), we were
concerned that an abrupt transition to our pre-PHE policy may present a
barrier to access to many services. We also understood that teaching
physicians 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 comments 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 2025 PFS final rule (89 FR 97764 through
97765), 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 transition back to our pre-PHE policy, which would maintain the
rural exception established in the CY 2021 PFS final rule recognizing
the unique challenges and importance of expanding medical education
opportunities in rural settings. We are not proposing to extend 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 through December 31, 2025, 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). As always, 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.
As discussed in earlier in this proposed rule, we are concerned
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
in accordance with section 1842(b)(7)(A)(i)(I) of the Act. Therefore,
we now believe that permitting Medicare payment to continue for this
PHE flexibility is no longer necessary. This proposal to not extend our
current policy to allow teaching physicians to have a virtual presence
for services furnished virtually aligns with our statutory obligations
under section 1842(b)(7)(A)(i)(I) of the Act, which requires teaching
physicians to provide appropriate oversight and personal involvement in
resident-furnished services for which Medicare payment is sought.
Under this proposal, for services provided within MSAs, physicians
must maintain physical presence during critical portions of all
resident-furnished services to qualify for Medicare payment, not just
in-person services, ensuring consistent oversight standards.
Documentation requirements remain rigorous, with medical records
needing to clearly demonstrate the teaching physician's physical
presence during key service portions. However, as we discussed earlier
in this proposed rule, recognizing the unique challenges faced by rural
healthcare providers, we maintain flexibility for services provided
outside MSAs. In these rural settings, teaching physicians may continue
utilizing audio/video real-time communications technology to fulfill
the presence requirement, provided they maintain active, real-time
observation and participation in the service. This geographical
distinction aligns with our longstanding commitment to enhancing
Medicare beneficiary access to covered services in rural areas.
The proposed to not extend flexibilities for virtual services would
not impact teaching physicians' ability to provide virtual supervision
of residents for educational purposes. Teaching physicians retain the
discretion to provide greater involvement in resident-furnished
services and may determine when virtual presence is appropriate based
on the specific services and the experience level of the residents
involved.
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 percentage increase in the MEI for CY 2026 is 2.7 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 2026 based on historical data through the second quarter of
2025. Therefore, for CY 2026, the proposed payment amount for HCPCS
code Q3014 (Telehealth originating site facility fee) is $31.85. Table
10 shows the Medicare telehealth originating site facility fee and the
corresponding MEI percentage increase for each applicable time period.
[[Page 32397]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.015
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 comments 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 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
[[Page 32398]]
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, regarding 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
a. Background
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 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
[[Page 32399]]
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 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 adjusted work RVUs to account for significant changes
in time, we 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 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
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 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 employed to identify potential values that
reconcile the RUC-recommended 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 19 contains a list of codes and
descriptors for which we are proposing work RVUs for CY 2026; this
includes all codes for which we received RUC recommendations by
February 10, 2025. The proposed work RVUs, work time and other payment
information for all CY 2026 payable codes are available on the CMS
website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/index.html).
b. Proposed Efficiency Adjustment
(1) Background
CMS has historically relied on survey data provided by the American
Medical Association (AMA)/Specialty Society Relative Value Scale (RVS)
Update Committee (referred to as the RUC) to estimate practitioner
time, work intensity, and practice expense for the purpose of
establishing RVUs for the codes used for payment under the PFS. As
described in section II.C. of this proposed rule, CMS regularly
revalues codes as part of its potentially misvalued codes initiative,
as required by section 1848(c)(2)(K) of the Act, using RUC survey data
that shows clinicians' estimates of how long a particular service takes
to complete. In the CY 2025 PFS final rule, we summarized public
comments that we had received expressing concerns with using RUC data
as a source of valuation and identifying a need for empirical data in
the context of valuing advanced primary care management services (89 FR
97898). In response to these comments, we indicated that we were open
to alternative recommendations for how to price these and other
services, and that we would consider all options presented to us with a
preference for information with empirical evidence behind it. We also
reminded commenters that we do not exclusively rely on RUC
recommendations and can
[[Page 32400]]
receive data and recommendations from other outside sources as well.
The limits of survey data are in part based on the nature of the
surveys. There have been longstanding concerns about the use of surveys
that have low response rates, low total number of responses, and a
large range in responses, all of which may undermine the accuracy of
recommendations relying on survey data.\33\ For example, a Government
Accountability Office (GAO) Report found that the median number of
responses to surveys administered by the RUC for payment year 2015 was
52, the median response rate was only 2.2 percent, and 23 of the 231
surveys had under 30 respondents. Another study conducted compared
operative times in the National Surgical Quality Improvement Project to
RUC survey times, adjusted for patient variables, and found a wide
variation in the median RVU per hour ratio for 11 surgical specialties,
with the highest specialties overreporting (via RUC values) by 27 and
23 minutes per case. All surgical specialties showed overreporting in
RUC survey times compared to operative times. This resulted in high RVU
per hour payments for surgeons in those specialties.\34\
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\33\ https://www.gao.gov/products/gao-15-434.
\34\ Uppal, S., Barber, E.L., Reynolds, R.K., Rice, L.W., &
Spencer, R J. 2019. Discrepancies created by surgeon self-reported
operative time and its impact on procedure relative value units
(RVUs) and reimbursement. Gynecologic Oncology, 154, 14. https://doi.org/10.1016/j.ygyno.2019.04.039.
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With such low response rates, we are concerned that those
practitioners who respond to the RUC surveys may be fundamentally
different than those clinicians who do not respond to the surveys.
Widely read journals, such as the Journal for the American Medical
Association, specify that for submitting authors, ``survey studies
should have sufficient response rates (generally greater than or equal
to 60%), and appropriate characterization of nonresponders to ensure
that nonresponse bias does not threaten the validity of the findings.''
\35\ The GAO report noted that the RUC has undertaken steps to mitigate
the effects of possible biases; however, the report goes on to describe
the potential conflicts of interest survey respondents may have, as
those that serve Medicare beneficiaries would benefit from an increase
in the relative values for the services they perform.\36\ Another
component of these surveys is the selection of another service code
that is similar to the service in question. Since there are so many
procedure, radiology, and diagnostic test codes, the selection of a
high-valued service for potential comparisons, either by the specialty
society administering the survey, or by respondents, could further bias
results. Additionally, RUC surveys contain clinical vignettes, and
expert reviewers have raised concerns that these clinical vignettes are
not typical and thus may lead to biased recommendations that usually
overinflate time spent on the service.\37\ And as detailed in section
II.B. of this proposed rule, we further articulate the particular
challenges of using the recently completed PPI survey data, including
the quality of the data, sampling variation, and lack of comparability
to previous survey data--similar challenges that we have experienced
over time with surveys estimating the time and work intensity of
individual services, used to establish the work RVUs. CMS has
historically had to rely on survey data due to a lack of other more
reliable sources of information, but in recent years many new methods
to identify empiric inputs used in valuation have been developed.\38\
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\35\ Journal of the American Medical Association, Instructions
for Authors. Available from: https://jamanetwork.com/journals/jama/pages/instructions-for-authors.
\36\ https://www.gao.gov/products/gao-15-434.
\37\ Zuckerman, S., K. Merrell, R. Berenson, et al. 2016.
Collecting empirical physician time data: Piloting an approach for
validating work relative value units. Report prepared for the
Centers for Medicare & Medicaid Services. Washington, DC: The Urban
Institute. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Collecting-Empirical-Physician-Time-Data-Urban-Report.pdf.
\38\ National Academies for Sciences, Engineering, and Math.
Improving Primary Care Valuation Processes to Inform the Physician
Fee Schedule. Available from: https://nap.nationalacademies.org/catalog/29069/improving-primary-care-valuation-processes-to-inform-the-physician-fee-schedule.
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In the CY 2024 PFS proposed rule (88 FR 78975 through 78982), we
requested comments on how we may evaluate E/M services more regularly
and comprehensively. We raised specific questions for commenters to
consider, including whether the methods used by the RUC and CMS were
appropriate to accurately value E/M and other HCPCS codes, and we
requested that commenters provide specific recommendations on improving
data collection and making better evidence-based and more accurate
payments for E/M and other services. In response, as we summarized in
the CY 2024 PFS final rule (88 FR 78977), commenters stated that the
methods used do not lead to accurate valuation and that the problems
lie with the nature of E/M services and the PFS's budget neutrality
adjustment. They stated that the resources used in furnishing the work
portion of E/M services are primarily a function of the time the
clinician spends with the patient and, therefore, are not amenable to
efficiency gains and that the valuation process is not responsive to
efficiency gains, leading to passive devaluation of E/M services under
the constraints of budget neutrality. At the time, we responded that we
recognized that there are opportunities to improve how all services are
valued and better account for resource variation for different types of
care under the PFS.
For several years, we have been concerned about not accounting for
the efficiencies gained in work RVUs for non-time-based services. As we
discuss below, non-time-based codes, such as codes describing
procedures, radiology services, and diagnostic tests, should become
more efficient as they become more common, professionals gain more
experience, technology is improved, and other operational improvements
(including but not limited to enhancements in procedural workflows) are
implemented. We would highlight, however, that there are often many
years between a code's introduction and revaluation within the RUC
process, with only a few hundred out of the more than 9,000 codes paid
under the PFS considered for revaluation annually by the RUC. While
there is significant variability in how often codes are reviewed by the
RUC, on average, CMS estimates that there are 25.49 years since a code
valuation has been reviewed by the RUC (this includes 5382 out of 9970
codes which were never reviewed). When we exclude from the average
those codes that have never been reviewed, the average is 17.69 years
since the last review of a code by the RUC. We note that these numbers
weight each code equally and the PFS itself is heavily weighted by
utilization towards a much smaller number of often utilized codes.
Furthermore, even when a code is reviewed by the RUC, 2 to 3 years
usually pass between when the survey data was collected and its use by
CMS in setting rates becomes effective. In the intervening years
without revaluation, we are most likely overvaluing codes by not
accounting for these efficiencies gained in the valuation of work RVUs
for non-time-based services. And even when recommendations have been
submitted by the RUC to CMS as potentially misvalued codes from 2009 to
2025, the RUC only recommended a decrease in the physician time and
resources for the codes 39 percent of the time.\39\
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\39\ American Medical Association. ``AMA/Specialty Society RVS
Update Committee: An Overview of the RUC Process.'' Available from:
https://www.ama-assn.org/system/files/ruc-update-booklet.pdf.
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[[Page 32401]]
Studies have demonstrated that CMS continues to overvalue non-time-
based services. In a pilot project for CMS conducted by the Urban
Institute in 2016,\40\ which compared data obtained from electronic
health records and direct observation, the ratios of fee schedule time
to empirical time were often inflated, with the largest discrepancies
in imaging and other test interpretations. In the study, the median
ratio of PFS time to empiric intraservice physician time for CT and MRI
scans was 2.13, for noninvasive cardiac testing was 4.00, and for
mammography was 1.67. Another study compared estimated procedure time
from anesthesia claims and the PFS time, and found that the mean
estimated procedure time was 27 percent lower than the time used for
PFS valuation.\41\ Expert reviewers have attributed some of the
discrepancies to automation and personnel substitution that has become
prevalent in the time between when CMS adopted many codes and when
those codes are revalued.\42\ MedPAC, in their 2018 recommendations to
Congress, recommended three options to offset these historic
distortions, including passive devaluation: (1) an automatic reduction
to the prices of new services and services with high growth rates; (2)
an extension of the annual numeric target for CMS to reduce the prices
of overpriced services; and (3) an across-the-board reduction to all
fee schedule services other than ambulatory E&M services.\43\ For
reasons we will further describe below in this section, we are
proposing a modified version of this third option for procedures,
radiology, and diagnostic tests.
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\40\ Zuckerman, S., K. Merrell, R. Berenson, et al. 2016.
Collecting empirical physician time data: Piloting an approach for
validating work relative value units. Report prepared for the
Centers for Medicare & Medicaid Services. Washington, DC: The Urban
Institute.https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Collecting-Empirical-Physician-Time-Data-Urban-Report.pdf.
\41\ Crespin, Daniel, Teague Ruder, Andrew Mulcahy, Ateev
Mehotra. ``Variation in Estimated Surgical Procedure Times Across
Patient Characteristics and Surgeon Specialties.'' JAMA Surg. 2022
May 1;157(5):e220099. doi: 10.1001/jamasurg.2022.0099.
\42\ Zuckerman et al, 2016.
\43\ MedPAC Report to Congress, 2018. Chapter 3: Rebalancing
Medicare's Physician Fee Schedule Toward Ambulatory Evaluation and
Management Services.'' Available from: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun18_ch3_medpacreport_sec.pdf.
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Section 1848(c)(2)(B)(ii)(I) of the Act provides that the Secretary
shall, to the extent he determines to be necessary, adjust the number
of RVUs to take into account changes in medical practice. We believe
that many of the efficiency gains that historically may not have been
fully reflected in the valuation of work RVUs for non-time-based
services represent or have been caused by changes in medical practice,
as described in further detail below. To take into account changes in
medical practice and better reflect the resources involved in
furnishing services paid under the PFS, we are proposing to establish
an efficiency adjustment to the work RVUs, as well as corresponding
updates to the intraservice portion of physician time inputs for non-
time-based services. Our initial proposed approach is designed to be
conservative in nature, as we are concerned about making too many
changes at once to the current methodology. In the future, we may
consider making additional corresponding updates to the direct PE
inputs for clinical labor and equipment costs. Our proposal is based on
our assumption that both the intraservice portion of physician time and
the work intensity (including mental effort, technical effort, physical
effort, and risk of patient complications) would decrease as the
practitioner develops expertise in performing the specific service. As
expertise develops, learning leads to enhanced familiarity with the
various aspects of a service, variations in the anatomy of each
patient, and confidence in the practitioner's own ability to handle
unexpected challenges that arise.
For example, one cross-specialty observational study found that
increased surgical experience was associated with significant
reductions in operative time for coronary artery bypass grafting, total
knee replacement, and bilateral reduction mammoplasty.\44\ While this
expertise in part develops as a practitioner accumulates years of
experience following the culmination of training, it also accumulates
across the entire health system with the creation of a new procedure or
service that practitioners must grow accustomed to. Furthermore,
changes in medical practice such as enhancements in operational
workflows and technology advancements after the introduction of a new
procedure or service can further reduce the risk associated with the
service and increase efficiencies. When a new surgical technique is
introduced, operational workflows and procedures are based on previous
experience with a similar service, which may not directly translate to
the new procedure. These workflows generally evolve over time as
experience grows, and tend to result in improvements, which make the
service more efficient. This is consistent with systematic reviews
demonstrating that with increased case volume and years of expertise,
surgeons demonstrate decreased risk of poor outcomes.\45\ Other studies
have found that with increased experience performing new procedures,
clinicians demonstrate increased operational efficiency and decreased
time. For example, one systematic review found that for clinicians
newly introduced to robotic thoracic surgery, a reduction in operating
time based on the increasing number of cases performed.\46\ Another
study concluded that for robotic thoracic procedures, the hourly
productivity increase for experienced and proficient surgeons ranged
from 11.4 work relative value units/hour (+26%) for lobectomy to 17.0
work relative value units/hour (+50%) for segmentectomy.\47\ These
changes in practitioner experience, operational workflows, and new
technologies in totality represent large-scale, system-wide changes in
medical practice as described in section 1848(c)(2)(B)(ii)(I) of the
Act that may not have been previously accounted for in the valuation of
non-time based codes. Given the relative infrequency of service
revaluation under the PFS and the limitations of reliance on survey
data, we are concerned that the RVUs we have established for codes paid
under the PFS may not reflect these efficiencies accrued as
practitioners gain experience, operational workflows improve, and new
technology is adopted.
---------------------------------------------------------------------------
\44\ Maruthappu, Mahiben, Antoine Duclos, Stuart Lipsitz, Dennis
Orgill, Matthew Carty. ``Surgical Learning Curves and Operational
Efficiency: A Cross-Specialty Observational Study.'' BMJ Open. 2015
Mar 13;5(3):e006679.
\45\ https://pubmed.ncbi.nlm.nih.gov/25072442/.
\46\ Power, Alexandra, Desmond D'Souza, Susan Moffatt-Bruce,
Robert Merritt, Peter Kneuertz. ``Defining the Learning Curve of
Robotic Thoracic Surgery: What Does it Take? Surg Endosc. 2019
Dec;33(12):3880-3888. doi: 10.1007/s00464-019-07035-y. Epub 2019 Aug
2.
\47\ https://pubmed.ncbi.nlm.nih.gov/37562675/.
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(2) Proposed Methodology for the Efficiency Adjustment
To calculate the efficiency adjustment, we propose using the
Medicare Economic Index (MEI) productivity adjustment. The MEI is a
measure of inflation faced by physicians with respect to their practice
costs and general wage levels, and includes inputs used in furnishing
physicians' services such as physician's own time, non-physician
employees' compensation, rents, medical equipment, and more. Every
year, the CMS Office of the
[[Page 32402]]
Actuary (OACT) subtracts the MEI productivity adjustment from the MEI
percent change moving average to calculate the final MEI update. The
MEI productivity adjustment used for the final MEI update reflects the
most recent historical estimate of the 10-year moving average growth of
private nonfarm business total factor productivity, as calculated by
the Bureau of Labor Statistics.\48\ Every year, the productivity
adjustment for the final MEI update is calculated by OACT based on
historical data. For example, in 2026 the productivity adjustment for
the final MEI update will reflect historical data through 2024. OACT
incorporates a 10-year moving average to minimize yearly fluctuations
in productivity associated with normal business cycles. The
productivity adjustment to be applied to the proposed MEI percent
change moving average for CY 2026 is listed in Table 11 (0.8 percent),
and it will be updated for the final rule based on the most up to date
data. The MEI productivity adjustment is substantively similar to the
productivity adjustment required for the hospital inpatient prospective
payment system (IPPS) and outpatient prospective payment system (OPPS)
at sections 1886(b)(3)(B)(xi)(II) and 1833(t)(3)(F)(i) of the Act,
respectively. The main difference is that the MEI productivity
adjustment reflects historical data at the time of the CY update and
the OPPS and IPPS productivity adjustments reflect a forecast to
correspond to the FY update.
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\48\ 87 FR 69709.
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For CY 2026, we are proposing to apply the efficiency adjustment
using a look-back period of 5 years. We considered a couple initial
look-back periods. As previously described, despite the efforts to
update valuation, many codes have never been revalued, and even for
codes that have been revalued, there is, on average, more than 17 years
since revaluation recommendations submitted by the RUC. Thus, using a
look-back period of 17 years would help to account for the average
amount of time that has elapsed since the last revaluation. However,
using a look-back period of 17 years may be imprecise because, even
when a code has been reviewed by the RUC, historic reliance on survey
data may have skewed results and not properly accounted for
efficiencies in the physician time and work RVU. We are also proposing
to apply the efficiency adjustment to the codes that the RUC and CMS
have reviewed within the look-back period of 5 years, including codes
being proposed for revaluation this year, as many of the challenges
discussed previously in this section, namely reliance on survey data,
still apply. We realize that adjusting for the efficiencies gained
would be a change in our payment methodology, and so as an initial
conservative approach, we are proposing a look-back of 5 years. This
represents our intended cadence for updating the efficiency adjustment
(3 years), plus an additional 2 years, since it has historically taken
about 2 years to make changes to PFS valuation after we receive new
recommendations from the RUC.
We recognize that over time, there may be variation in the
efficiencies accrued service-by-service (for example, the previously
cited research has identified that efficiencies have been gained more
in minor procedures and radiology services than in major inpatient
procedures). But because PFS intraservice time is higher than empirical
intraservice time on average for studied non-time based
services,49 50 we believe that applying the efficiency
adjustment to non-time-based services more broadly, instead of applying
it only to certain services that may be more likely to accrue
efficiency gains, may help to improve the overall accuracy of our
valuation of these services under the PFS. Furthermore, a look-back
period of 5 years is not intended to account for the full magnitude of
previously unaccounted for efficiency gains in services paid under the
PFS, and we may consider making refinements to the efficiency
adjustment in future rulemaking to better account for these gains. To
implement this efficiency adjustment, we propose to decrease the work
RVUs and make corresponding changes to the intraservice physician time
for codes describing non-time-based services by a factor equal to the
MEI productivity adjustment, equivalent to if this factor had been
applied every year over the past 5 years.
---------------------------------------------------------------------------
\49\ Zuckerman et al, 2016.
\50\ Crespin, Daniel, Teague Ruder, Andrew Mulcahy, Ateev
Mehotra. ``Variation in Estimated Surgical Procedure Times Across
Patient Characteristics and Surgeon Specialties.'' JAMA Surg. 2022
May 1;157(5):e220099. doi: 10.1001/jamasurg.2022.0099.
---------------------------------------------------------------------------
This methodology would yield a proposed efficiency adjustment of
2.5 percent, a downward (negative) adjustment for certain codes, for CY
2026. Given the 5-year look back period, the formula sums all
productivity adjustments included in the final MEI updates from CY
2022-CY 2026. The CY 2026 productivity adjustment will be updated for
the CY 2026 final rule to reflect more recent historical data from the
Bureau of Labor Statistics.
[GRAPHIC] [TIFF OMITTED] TP16JY25.016
Using the methodology described above, we have included Table A-E2,
which outlines examples of two different CPT codes that would be
subject to the proposed efficiency adjustment. Table 12 is intended
only as an illustrative example. For more information on the impacts of
this proposed policy, see the Regulatory Impact Analysis in section
VII.C.2.c. of this proposed rule.
[[Page 32403]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.017
We solicit comments on the initial look-back period and the use of
the MEI productivity adjustment percentage values for calculation of
the efficiency adjustment for 2026. We seek comments on whether
adjustments should be made in future rulemaking to also adjust the
direct PE inputs for clinical labor and equipment time that correspond
with the physician time inputs.
If finalized for CY 2026, we propose to apply the efficiency
adjustment to the intraservice portion of physician time and work RVUs
every 3 years. This timing would imply that the next efficiency
adjustment after CY 2026 would be calculated and applied in CY 2029 PFS
rulemaking, reflecting efficiency gains measured from 2027 through
2029. We are proposing to update and apply the proposed efficiency
adjustment with a cadence of every 3 years to align with the other
updates under the PFS, including updates to the Geographic Practice
Cost Index (GPCI) and Malpractice (MP) RVUs, to allow for streamlining
so that interested parties can expect updates on a similar timeframe.
We also seek comments as to whether or not efficiencies stop accruing
for services after a predefined number of years.
We are proposing to apply this efficiency adjustment to non-time-
based services that we expect to accrue efficiencies over time. We are
proposing to apply the adjustment to all codes except time-based codes,
including but not limited to, E/M visits, care management services,
behavioral health services, services on the CMS telehealth list, and
maternity codes with a global period of MMM. This adjustment would
apply to all codes that are assigned a procedure status of A (active),
B (bundled), C (contractor/carrier priced code), I (not valid for
Medicare purposes), N (noncovered service by Medicare), R (restricted
coverage), and T (injections), and are not otherwise excluded. Included
code families represent the procedures, diagnostic tests, and radiology
services that CMS expects to accrue efficiencies over time as changes
in medical practice occur, including changes in clinician expertise,
workflows, and technology. We seek comments on the codes expected to
accrue efficiencies over time. The full descriptions of these
indicators can be found in the Medicare Claims Processing Manual,
Chapter 23 at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c23.pdf. Additionally, a list of the codes we
are proposing to apply this adjustment to can be found under the
Downloads section posted with this proposed rule at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
Finally, we understand that accruing efficiencies does not apply
equally to all services, and that efficiencies gained over time may
often apply more to services that take less time to perform.
Efficiencies gained in services that could be performed many times per
day such as cataract extractions, skin biopsies, and CT scans, allow
the practitioner to perform more of those services in a given day. We
seek comments on whether and how we should consider additional
efficiencies for services that require less time to perform.
Additionally, we seek comments on whether the introduction of new
artificial intelligence has or will lead to otherwise unaccounted for
efficiencies gained in specific services.
Going forward, we also propose that the public may submit
nominations via the ``Potentially Misvalued Codes'' process, as
described in section II.C. of this proposed rule, if they believe the
efficiency adjustment will lead to inaccurate physician time and work
RVUs for a particular code. Nominations submitted should include
supporting information. For the reasons discussed previously in this
section, we propose that CMS will place greater emphasis on ``empiric''
supporting information for the codes nominated, to avoid the
limitations of using survey data. Proposed examples of empiric data may
include electronic health record logs, operating room logs, and time-
motion data and should be robust enough to achieve a high degree of
assuredness as to accuracy and be inclusive of multiple types of
practices (for example, inclusive of academic, health centers, and
private practices wherever possible). We solicit comments on what kinds
of data CMS should consider as valid, reliable, empiric information for
this purpose.
3. Methodology for the Direct PE Inputs To Develop PE RVUs
a. Background
On an annual basis, the RUC provides us with recommendations
regarding PE inputs for new, revised, and potentially misvalued codes.
We review the RUC-recommended direct PE inputs on a code-by-code basis.
Like our review of recommended work RVUs, our review of recommended
direct PE inputs generally includes, but is not limited to, a review of
information provided by the RUC, HCPAC, and other public commenters,
medical literature, and comparative databases, as well as a comparison
with other codes within the PFS, and consultation with physicians and
health care professionals within CMS and the Federal Government, as
well as Medicare claims data. We also assess the methodology and data
used to develop the recommendations submitted to us by the RUC and
other public commenters and the rationale for the recommendations. When
we determine that the RUC's recommendations appropriately estimate the
direct PE inputs (clinical labor, disposable supplies, and medical
equipment) required for the typical service, are consistent with the
principles of relativity, and reflect our payment policies, we use
those direct PE inputs to value a service. If not, we refine the
recommended PE inputs to better reflect our estimate of the PE
resources required for the service. We also confirm whether CPT codes
should have facility and/or nonfacility direct PE inputs and refine the
inputs accordingly.
Our review and refinement of 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 20 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
[[Page 32404]]
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 20 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 2026 are displayed in the
CY 2026 direct PE input files, available on the CMS website under the
downloads for the CY 2026 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 2026 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, in that rule 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
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 2026 we received invoices for several new supply and
equipment items. Tables 20 and 21 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
[[Page 32405]]
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 20 and 21 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 may 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
2026 are available on the CMS website under downloads for the CY 2026
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
referred 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 (DRA) (Pub. L. 109-171, enacted on February 8,
2006) 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) of the Act, 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
referred readers to the CY 2007 PFS final rule with comment period (71
FR 69659 through 69662).
For CY 2026, 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 2026, we are proposing to include the following services on the
list of codes to which the OPPS cap applies: CPT codes 0598T (Real-time
fluorescence wound imaging with clinical darkness, to identify location
of bacterial wound pathogens and measure wound size, per session; first
anatomic site (e.g., lower extremity, right leg), 0599T (Real-time
fluorescence wound imaging with clinical darkness, to identify location
of bacterial wound pathogens and measure wound size, per session; each
additional anatomic site (e.g., upper extremity, left leg) (List
separately in addition to code for primary procedure)), 0944T (3D
contour simulation of target liver lesion(s) and margin(s) for image-
guided percutaneous microwave ablation), 0946T (Orthopedic implant
movement analysis using paired computed tomography (CT) examination of
the target structure, including data acquisition, data preparation and
transmission, interpretation and report (including CT scan of the joint
or extremity performed with paired views)), 0961T (Shortwave infrared
radiation imaging, surgical pathology specimen, to assist gross
examination for lymph node localization in fibroadipose tissue, per
specimen (List separately in addition to code for primary procedure)),
0972T (Assistive algorithmic classification of burn healing (i.e.,
healing or nonhealing) by noninvasive multispectral imaging, including
system set-up and acquisition, selection, and transmission of images,
with automated generation of report), 0984T (Intravascular imaging of
extracranial cerebral vessels using optical coherence tomography (OCT)
during diagnostic evaluation and/or therapeutic intervention, including
all associated radiological supervision,
[[Page 32406]]
interpretation, and report; initial vessel (List separately in addition
to code for primary procedure)), 0985T (Intravascular imaging of
extracranial cerebral vessels using optical coherence tomography (OCT)
during diagnostic evaluation and/or therapeutic intervention, including
all associated radiological supervision, interpretation, and report;
each additional vessel (List separately in addition to code for primary
procedure)), 0986T (Intravascular imaging of intracranial cerebral
vessels using optical coherence tomography (OCT) during diagnostic
evaluation and/or therapeutic intervention, including all associated
radiological supervision, interpretation, and report; initial vessel
(List separately in addition to code for primary procedure)), 0987T
(Intravascular imaging of intracranial cerebral vessels using optical
coherence tomography (OCT) during diagnostic evaluation and/or
therapeutic intervention, including all associated radiological
supervision, interpretation, and report; each additional vessel (List
separately in addition to code for primary procedure)), 70XX1 (Computed
tomographic angiography (CTA), head and neck, with contrast
material(s), including noncontrast images, when performed, and image
postprocessing), 70XX2 (Computed tomographic (CT) cerebral perfusion
analysis with contrast material(s), including image postprocessing
performed with concurrent CT or CT angiography of the same anatomy
(List separately in addition to code for primary procedure)), 70XX3
(Computed tomographic (CT) cerebral perfusion analysis with contrast
material(s), including image postprocessing performed without
concurrent CT or CT angiography of the same anatomy), and 77X09
(Surface radiation therapy; superficial or orthovoltage, image
guidance, ultrasound for placement of radiation therapy fields for
treatment of cutaneous tumors, per course of treatment (List separately
in addition to the 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.
4. Valuation of Specific Codes for CY 2026
(1) Tympanostomy (CPT Code 0583T)
In the CY 2025 PFS final rule (89 FR 97745 through 97746), we
reviewed Category III CPT code 0583T (Tympanostomy (requiring insertion
of ventilating tube), using an automated tube delivery system,
iontophoresis local anesthesia) as potentially misvalued. We considered
whether to establish national payment for CPT code 0583T, which is used
to report tympanostomy using the TULA system, or whether to create a
device-agnostic G-code which could be used to report tympanostomies
using the TULA or other devices. We stated that CPT code 69433
(Tympanostomy (requiring insertion of ventilating tube), local or
topical anesthesia) might serve as a sufficient base code, adequately
describing most of the surgeon's work and facility resources. In
response to comments supporting the latter approach, we established
separate payment for HCPCS code G0561 (Tympanostomy with local or
topical anesthesia and insertion of a ventilating tube when performed
with tympanostomy tube delivery device, unilateral (List separately in
addition to 69433) (Do not use in conjunction with 0583T)) to be billed
with CPT code 69433 in order to describe the additional resource costs
associated with using the innovative tympanostomy tube delivery devices
and/or systems falling under emerging technology and services
categories and finalized contractor pricing for CY 2025.
We have received input from interested parties expressing gratitude
for the creation of HCPCS code G0561 but also continuing to request
that CMS establish national pricing for CPT code 0583T. In response, we
are seeking comments on whether to nationally price both codes, and
what inputs for physician work, time, and direct practice expense would
most accurately capture the resource costs associated with performing
both procedures. For example, in response to a similar request for
comment in CY 2025 PFS rulemaking, commenters recommended a direct
crosswalk to the values associated with CPT code 31295 (Nasal/sinus
endoscopy, surgical, with dilation (e.g., balloon dilation); maxillary
sinus ostium, transnasal or via canine fossa) which they stated was
similar to CPT code 0583T with respect to the intensity and
invasiveness of the procedure, preparation time for the procedure, and
total time to complete the surgery. We are seeking comments on whether
interested parties continue to believe CPT code 31295 would be an
accurate comparison or whether there are other services that CMS should
consider.
(2) Temporary Female Intraurethral Valve-Pump (CPT Codes 0596T and
0597T)
For the CY 2025 PFS final rule (89 FR 97710), we reviewed CPT codes
0596T (Temporary female intraurethral valve-pump (i.e., voiding
prosthesis); initial insertion, including urethral measurement) and
0597T (Temporary female intraurethral valve-pump (that is, voiding
prosthesis); initial insertion, replacement) as potentially misvalued.
We added pricing for 3 new supplies related to these services: (1)
inFlow Measuring Device, (2) inflow Valve Pump Device, and (3) inFlow
Activator Kit. The RUC reviewed and surveyed these codes as potentially
misvalued for the January 2025 meeting and stated that they would flag
for the RAW in 3 years.
We are proposing the RUC-recommended work RVU of 2.43 for CPT code
0596T and the RUC-recommended work RVU of 1.05 for CPT code 0597T.
We are proposing the RUC-recommended direct PE inputs for both CPT
codes without refinement.
(3) Limb Lengthening-Shortening--Femur (CPT Codes 27465, 27466, 27468,
and 27XX0)
The CPT Editorial Panel created a new Category I code, CPT code
27XX0 (Osteotomy(ies), femur, unilateral, with insertion of an
externally controlled intramedullary lengthening device, including
iliotibial band release when performed, imaging, alignment assessments,
computations of adjustment schedules, and management of the
intramedullary lengthening device) in May 2024. This code describes
femur lengthening using the insertion of an externally controlled
intramedullary lengthening device, including imaging. CPT code 27XX0
and the other codes within this code family, including CPT codes 27465
(Osteoplasty, femur; shortening (excluding 64876), 27466 (Osteoplasty,
femur; lengthening), and 27468 (Osteoplasty, femur; combined,
lengthening and shortening with femoral segment transfer), were
surveyed during the September 2024 RUC Meeting.
We are proposing the RUC-recommended work RVUs of 26.65, 21.13, and
22.65 for CPT codes 27XX0, 27465, and 27466, respectively. We are also
proposing the direct PE inputs for CPT codes 27XX0, 27465, and 27466
without refinement.
However, for CPT code 27468, we disagree with the RUC's
recommendation to contractor price this code. We believe CPT code 27468
is valued appropriately and should not be paid under contractor pricing
based on the results of ten surveys. We are instead proposing to
maintain the current work RVU and direct PE inputs for CPT code 27468
for CY 2026.
[[Page 32407]]
(4) Limb Lengthening-Shortening--Tibia (CPT Codes 27715 and 27XX1)
The CPT Editorial Panel created a new Category I code, CPT code
27XX1, (Osteotomy(ies), tibia, including fibula when performed,
unilateral, with insertion of an externally controlled intramedullary
lengthening device, including imaging, alignment assessments,
computations of adjustment schedules, and management of the
intramedullary lengthening device) in May 2024. This code describes
tibia lengthening using the insertion of an externally controlled
intramedullary lengthening device, including imaging. CPT codes 27XX1
and 27715 (Osteoplasty, tibia and fibula, lengthening or shortening)
were surveyed for the September 2024 RUC Meeting.
We are proposing the RUC-recommended work RVU of 28.00 for CPT code
27XX1 and the work RVU of 22.50 for CPT 27715. We are also proposing
the direct PE inputs for CPT codes 27XX1 and 27715 without refinement.
(5) Arthrodesis Great Toe (CPT Codes 28750 and 28755)
At the April 2024 Relativity Assessment Workgroup (RAW), the RAW
identified CPT code 28750 (Arthrodesis, great toe; metatarsophalangeal
joint) on the ``different performing specialty from survey screen,''
where the top specialty performing over 50 percent of the Medicare
claims did not survey the service or the top two specialties did not
survey the service. The RAW noted that when this service was last
valued in 1995, podiatry, which now performs over half of the volume
for this service, was not involved in the survey. CPT code 28755
(Arthrodesis, great toe; interphalangeal joint) which was valued by the
Harvard Studies and never surveyed by the RUC, was added as part of the
code family. CPT codes 28750 and 28755, were surveyed at the January
2025 AMA RUC meeting.
We are proposing the RUC-recommended work RVU of 8.75 for CPT code
28750.
We disagree with the RUC-recommended work RVU of 7.50 for CPT code
28755 and we are instead proposing a work RVU of 6.76. The RUC-
recommended valuation would place it above the median range when
compared to other 90-day global codes with similar work times and the
current time and work values. We are proposing a work RVU of 6.76 for
CPT code 28755 based on a direct crosswalk to CPT code 28122 (Partial
excision (craterization, saucerization, sequestrectomy, or
diaphysectomy) bone (for example, osteomyelitis or bossing); tarsal or
metatarsal bone, except talus or calcaneus). CPT code 28122 shares the
same intraservice work time of 45 minutes as compared with CPT code
28755, it has a very similar total time (230 minutes as compared with
234 minutes), and both of these codes also contain four postoperative
office visits in their global periods. We are supporting this proposed
work RVU of 6.76 with the total time ratio for CPT code 28755, which
calculates at a work RVU of 6.64 (the total time is increasing from 172
minutes to 234 minutes for an increase of 36 percent, which results in
a work RVU of 6.64 when multiplied with the current work RVU of 4.88
for CPT code 28755). Our proposed work RVU of 6.76 is further supported
by a pair of other 90-day global codes with similar work time values,
with a lower bracket of CPT code 26785 (Open treatment of
interphalangeal joint dislocation, includes internal fixation, when
performed, single) at a work RVU of 6.60 and an upper bracket of CPT
code 56620 (Vulvectomy simple; partial) at an RVU of 7.53.
We are proposing the RUC-recommended direct PE inputs for all of
the codes in this family.
(6) Closure Left Atrial Appendage With Endocardial Implant (CPT Code
33340)
The Relativity Assessment Workgroup (RAW) reviewed CPT code 33340
(Percutaneous transcatheter closure of the left atrial appendage with
endocardial implant, including fluoroscopy, transseptal puncture,
catheter placement(s), left atrial angiography, left atrial appendage
angiography, when performed, and radiological supervision and
interpretation) in 2023 as part of the new technology/service screen.
Around that same time, specialty societies asserted that this service
was undergoing rapid change. Therefore, the RAW recommended specialty
societies conduct a survey for the April 2024 RUC meeting.
We are proposing the RUC-recommended work RVU of 10.25 for CPT code
33340. We are also proposing the RUC-recommended direct PE inputs for
CPT code 33340 without refinement.
(7) Thoracic Branch Endograft Services (CPT Codes 33880, 33881, 33883,
33886, 33XX2, and 35XX1)
At the September 2024 CPT Editorial Panel meeting, CPT approved
endovascular repair of thoracic aortic aneurysms (TEVAR) coding
changes. CPT deleted three codes describing the procedure and replaced
them with two new codes and four revised codes in the TEVAR family.
These revisions update the TEVAR code family to more accurately
describe the current practice and current coding standards. The new
codes are CPT code 33XX2 (Endovascular repair of the thoracic aorta by
deployment of a branched endograft multipiece system involving an
aorto-aortic tube device with a fenestration for the left subclavian
artery stentgraft(s) and all aortic tube endograft extension(s) placed
from the level of the left common carotid artery to the celiac artery,
including preprocedure sizing and device selection, all target zone
angioplasty, all nonselective catheterization(s) and left subclavian
artery selective catheterization(s), all associated radiological
supervision and interpretation), CPT code 35XX1 (Bypass graft, with
other than vein; carotid-contralateral carotid), CPT code 33880
(Endovascular repair of descending thoracic aorta (e.g., aneurysm,
pseudoaneurysm, dissection, penetrating ulcer, intramural hematoma, or
traumatic disruption); involving coverage of left subclavian artery
origin, initial endoprosthesis plus descending thoracic aortic
extension(s), if required, to level of celiac artery origin,
radiological supervision and interpretation), CPT code 33881 (by
deployment of an aorto-aortic tube endograft not involving coverage of
the left subclavian artery origin and all endograft extension(s) placed
from the level of the left subclavian carotid artery to the celiac
artery), CPT code 33883 (Proximal extension prosthesis(s) not involving
coverage of the left subclavian artery origin, delayed placement after
endovascular repair of the thoracic aorta, including preprocedure
sizing and device selection, nonselective catheterization(s), all
associated radiological supervision and interpretation, and treatment
zone angioplasty/stenting, when performed), and CPT code 33886 (Distal
extension prosthesis(s) from the level of the left subclavian artery to
the celiac artery, delayed placement after endovascular repair of
descending thoracic aorta, including preprocedure sizing and device
selection, all nonselective catheterization(s), all associated
radiological supervision and interpretation). The new codes in this
code family were surveyed at the January 2025 AMA RUC meeting.
The RUC surveyed this code family and there were overall decreases
in the work times. The RUC-recommended work RVUs do not appear to fully
[[Page 32408]]
account for these decreases. Although we do not believe 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 reviewed the RUC recommendations and found them to be high,
relative to other codes with the same or similar times. Based on a
search of similarly timed codes in the RUC database, the RUC-
recommended values exceed the work RVUs for five of the six codes.
We disagree with the RUC recommended work RVU of 30.00 for CPT code
33880 and we are instead proposing a work RVU of 27.00. This valuation
was higher than nearly all of the other 90-day global codes with
similar time values. We found that the RUC-recommended work RVU does
not maintain relativity with other 90-day global period codes with an
intraservice time of 120 minutes and similar total time around 546
minutes. We are instead proposing a direct crosswalk to CPT code 32672
(Thoracoscopy, surgical; with resection-plication for emphysematous
lung (bullous or non-bullous) for lung volume reduction (LVRS),
unilateral includes any pleural procedure, when performed) at the
previously mentioned work RVU of 27.00. CPT code 32672 shares the same
intraservice work time of 120 minutes as compared with CPT code 33880,
it has a similar total time (567 minutes as compared with 546 minutes),
and both of these codes each have two postoperative office visits in
their global periods. We are supporting this proposed work RVU of 27.00
with a pair of other 90-day global codes with similar work time values,
with a lower bracket of CPT code 43820 (Gastrojejunostomy; without
vagotomy) at a work RVU of 22.53 and an upper bracket of CPT code 34702
(Endovascular repair of infrarenal aorta by deployment of an aorto-
aortic tube endograft including pre-procedure sizing and device
selection, all nonselective catheterization(s), all associated
radiological supervision and interpretation, all endograft extension(s)
placed in the aorta from the level of the renal arteries to the aortic
bifurcation, and all angioplasty/stenting performed from the level of
the renal arteries to the aortic bifurcation; for rupture including
temporary aortic and/or iliac balloon occlusion, when performed (for
example, for aneurysm, pseudoaneurysm, dissection, penetrating ulcer,
traumatic disruption)) with a work RVU of 36.00.
We disagree with the RUC recommended work RVU of 26.75 for CPT code
33881 and we are instead proposing a work RVU of 22.53. The RUC's
recommended work RVUs do not match the surveyed drops in work time
(from 200 minutes to 110 minutes for CPT code 33881) and we are
therefore selecting a crosswalk code that more accurately captures this
decrease in the surveyed times. CPT code 43820 has a slightly higher
intraservice work time of 120 minutes as compared with CPT code 33881
which has 110 minutes, it has a very similar total time (545 minutes as
compared with 506 minutes), and three postoperative office visits as
compared to CPT code 33881 which has two postoperative office visits in
the global period. We are supporting this proposed work RVU of 22.53
with a pair of other 90-day global codes with similar work time values,
with a lower bracket of CPT code 34707 at a work RVU of 22.28 and an
upper bracket of CPT code 43880 at an RVU of 27.18.
We disagree with the RUC recommended work RVU of 39.00 for CPT code
33XX2 and we are instead proposing a work RVU of 35.00. 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 180
minutes and similar total time around 621 minutes. We are proposing a
work RVU of 35.00 for CPT code 33XX2 based on a direct crosswalk to CPT
code 33390 (Valvuloplasty, aortic valve, open, with cardiopulmonary
bypass; simple (i.e., valvotomy, debridement, debulking, and/or simple
commissural resuspension)). There were several recently reviewed codes
in the RUC database search that have the exact same intraservice time
with higher total times and a lower work RVU. CPT code 33390 shares the
same intraservice work time of 180 minutes as compared with CPT code
33880, it has a very similar total time (621 minutes as compared with
622 minutes), and both of these codes also contain two postoperative
office visits in their global periods. We are supporting this proposed
work RVU with a pair of other 90-day global codes with similar work
time values, with a lower bracket of CPT code 33647 (Repair of atrial
septal defect and ventricular septal defect, with direct or patch
closure) at a work RVU of 33.00 and an upper bracket of CPT code 35216
(Repair blood vessel, direct; intrathoracic, without bypass) at an RVU
of 35.00.
We disagree with the RUC recommended work RVU of 24.25 for CPT code
33883 and we are instead proposing a work RVU of 19.91. 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 90
minutes and similar total time around 486 minutes. We are proposing a
work RVU of 19.91 for CPT code 33883 based on a direct crosswalk to CPT
code 44320 (Colostomy or skin level cecostomy).
The RUC-recommended work RVUs do not match the surveyed drops in
work time (from 120 minutes to 90 minutes) for CPT code 33883 and we
are therefore selecting a crosswalk code that more accurately captures
this decrease in the surveyed times. CPT code 44320 shares the same
intraservice work time of 90 minutes as compared with CPT code 33883,
it has a slightly higher total time (507 minutes as compared with 486
minutes), and three postoperative office visits as compared to two post
operative office visits for CPT code 33883 in the global period. We are
supporting this proposed work RVU of 19.91 with a pair of other 90-day
global codes with similar work time values, with a lower bracket of CPT
code 33267 (Exclusion of left atrial appendage, open, any method (for
example, excision, isolation via stapling, oversewing, ligation,
plication, clip)) at a work RVU of 18.50 and an upper bracket of CPT
code 43611 (Excision, local; malignant tumor of stomach) at an RVU of
20.38.
We disagreed with the RUC recommended work RVU of 23.50 for CPT
code 33886 and we are instead proposing a work RVU of 19.91. 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 90
minutes and similar total time around 486 minutes. We are proposing a
work RVU of 19.91 for CPT code 33886 based on a direct crosswalk to CPT
code 44320. The RUC-recommended work RVUs do not match the surveyed
drops in work time (from 100 minutes to 90 minutes) for CPT code 33886
and we are therefore selecting a crosswalk code that more accurately
captures this decrease in the surveyed times. CPT code 44320 shares the
same intraservice work time of 90 minutes as compared with CPT codes
33886, it has a slightly higher total time (507 minutes as compared
with 486 minutes), and three postoperative office visits as compared to
two post operative office visits for CPT code 33886 in the global
period. We are supporting this proposed work RVU of 19.91 with a pair
of other 90-day global codes with
[[Page 32409]]
similar work time values, with a lower bracket of CPT code 33267 at a
work RVU of 18.50 and an upper bracket of CPT code 43611 at an RVU of
20.38.
We disagree with the RUC recommended work RVU of 27.40 for CPT code
35XX1 and we are instead proposing a work RVU of 23.53. 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 150
minutes and similar total time around 486 minutes. Furthermore, we note
that there was a decrease in the intraservice time by 23 minutes and
the intraservice time ratio for this code suggests that the RUC-
recommendation is too high. We are proposing a work RVU of 23.53 for
CPT code 35XX1 based on a direct crosswalk to CPT code 32669
(Thoracoscopy, surgical; with removal of a single lung segment
(segmentectomy)). We note that CPT code 35XX1 was also valued by the
RUC using a crosswalk code to maintain relativity within the family.
The RUC's recommended work RVUs do not reflect surveyed drops in
work time (from 173 minutes to 150 minutes) for CPT code 35XX1and we
are therefore selecting a crosswalk code that more accurately captures
this decrease in the surveyed times. CPT code 32669 shares the same
intraservice work time of 150 minutes as compared with CPT code 35XX1,
it has a slightly higher total time (502 minutes as compared with 486
minutes), and both of these codes also contain two postoperative office
visits in their global periods. We are supporting this proposed work
RVU of 23.53 with a pair of other 090-day global codes with similar
work time values, with a lower bracket of CPT code 22612 (Arthrodesis,
posterior or posterolateral technique, single interspace; lumbar (with
lateral transverse technique, when performed)) at a work RVU of 23.53
and an upper bracket of CPT code 35666 (Bypass graft, with other than
vein; femoral-anterior tibial, posterior tibial, or peroneal artery) at
an RVU of 23.66.
We are proposing the RUC-recommended direct PE inputs for all the
codes in this family.
(8) Lower Extremity Revascularization (CPT Codes 37XX1, 37X02, 37X03,
37X04, 37X05, 37X06, 37X07, 37X08, 37X09, 37X10, 37X11, 37X12, 37X13,
37X14, 37X15, 37X16, 37X17, 37X18, 37X19, 37X20, 37X21, 37X22, 37X23,
37X24, 37X25, 37X26, 37X27, 37X28, 37X29, 37X30, 37X31, 37X32, 37X33,
37X34, 37X35, 37X36, 37X37, 37X38, 37X39, 37X40, 37X41, 37X42, 37X43,
37X44, 37X45, and 37X46)
In October 2018, three CPT codes (37225, 37227, and 37229) were
flagged by the Relativity Assessment Workgroup for high-cost supplies
review, leading to a series of significant changes in the lower
extremity revascularization (LER) code family. After multiple reviews
and discussions between 2018 and 2024, the CPT Editorial Panel
ultimately created four new subsections and 46 new codes to replace the
existing 16 codes (CPT codes 37220-37235) for LER services. According
to the RUC, this comprehensive update was driven by technological
advances, changes in practice settings, and the need to better
differentiate between a stenosis (i.e. a straightforward lesion) and an
occlusion (that is, a complex lesion) procedures. These codes were
surveyed for the September 2024 RUC meeting and recommendations
submitted to CMS for consideration in the CY 2026 PFS proposed rule.
See table 13 for a summary of the codes, and their long descriptors.
According to the RUC, not all codes received a full survey from
participants. Eleven selected core codes had complete survey responses
from all respondents, while the remaining 35 codes underwent an
abbreviated survey process. The 35 abbreviated survey codes were split
into two groups and survey respondents only received one of those two
groups along with the 11 core codes. There were two notable changes
made to the abbreviated survey. First, survey respondents were provided
with one of the anchor codes as a comparator instead of using a
reference service list; second, survey respondents were only asked one
question per abbreviated code in the intensity/complexity section.
Therefore, respondents did not complete all elements of the abbreviated
survey, as some elements were pre-populated. We note that this method
could potentially introduce inaccuracies and bias in the survey
outcomes.
For CY 2026, we are proposing the RUC-recommended work RVUs for all
46 CPT codes. However, we have concerns about the survey data,
specifically regarding the small sample size and large variations in
responses. We encourage commenters to submit additional data for our
consideration in determining the valuation of work and direct PE inputs
for these CPT codes. Table 13 also shows the proposed work RVUs for the
46 CPT codes:
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[GRAPHIC] [TIFF OMITTED] TP16JY25.018
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[GRAPHIC] [TIFF OMITTED] TP16JY25.019
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[GRAPHIC] [TIFF OMITTED] TP16JY25.020
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[GRAPHIC] [TIFF OMITTED] TP16JY25.021
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[GRAPHIC] [TIFF OMITTED] TP16JY25.022
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[GRAPHIC] [TIFF OMITTED] TP16JY25.023
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[GRAPHIC] [TIFF OMITTED] TP16JY25.024
We are proposing the RUC-recommended PE inputs for all 46 CPT
codes, with several revisions to address discrepancies found in the
documentation. Regarding the drug-coated balloon (SD382), which is
priced at $2,343.33, the RUC recommendations show inconsistent quantity
allocations across different code sets. The RUC documentation specifies
two units for the initial vessel and one unit for additional vessels in
CPT codes 37X10--37X13 and 37X18--37X21. However, for CPT codes 37X14--
37X15 and 37X22--37X23, only one unit is listed for the initial vessel.
Furthermore, CPT codes 37X16--37X17 and 37X24--37X26 have no quantity
values specified at all. To address these inconsistencies, we propose
updating the initial vessel quantities to one unit of the SD382 drug-
coated balloon for CPT codes 37X10, 37X12, 37X18, and 37X20, while
maintaining one unit for additional vessels.
The RUC recommends a quantity of two for supply code SD379 (drug
eluting stent, tibial) for four CPT codes in the tibial and peroneal
vascular territory, CPT codes 37X33, 37X34, 37X41, and 37X42. The RUC-
recommended quantity exceeds the number of units of supply code SD266
(stent, self-expanding 2-5 mm XPERT (Abbott)) currently used in CPT
code 37230, 37234, 37231, and 37235, respectively. We are proposing to
reduce the quantity from two to one for supply code SD379 (drug eluting
stent, tibial) in each of the four CPT codes 37X33, 37X34, 37X41, and
37X42.
For this code family, the RUC recommended 34 minutes of equipment
time for the Professional PACS Workstation (ED053). We believe this
recommendation contains an unintended technical error regarding the
equipment time. Therefore, we propose using the standard equipment
formula for the professional PACS workstation, which calculates
equipment minutes as the sum of intraservice work time plus half of the
preservice work time.
While we are proposing the listed refinements above, we are seeking
comments on whether we should create G-codes to describe the use of
high-cost supplies. Alternatively, we are seeking comments on whether
we could use the Hospital Outpatient Prospective Payment System (OPPS)
mean unit cost data (MUC) to accurately price these services and their
supplies based on how these supplies are paid for in the hospital
setting. We seek comments on whether there is additional information we
should consider in establishing proposed payments for these services.
(9) Irreversible Electroporation of Tumors (CPT Codes 4001X and 5XX11)
At the September 2024 CPT Editorial Panel Meeting, two new CPT
codes were created for reporting percutaneous irreversible
electroporation ablation of one or more tumors: CPT codes 4001X
(Ablation, irreversible electroporation, liver, 1 or more tumors,
including imaging guidance, percutaneous) and 5XX11 (Ablation,
irreversible electroporation, prostate, 1 or more tumors, including
imaging guidance, percutaneous). These new CPT codes were surveyed at
the January 2025 AMA RUC meeting. For CY 2026, we are proposing the
RUC-recommended work RVUs of 9.41 for CPT code 4001X and 13.50 for CPT
code 5XX11.
We are proposing the following refinements to the direct PE inputs
for CPT code 4001X. We disagree with the RUC recommendation to use the
standard 90-day global pre-service clinical labor times in the Facility
setting for CPT code 4001X since this is a 0-day global procedure. We
do not agree that it would serve the interests of relativity to use the
90-day global clinical labor standard times for a 0-day global service.
Therefore, we are proposing the standard 000/010 global day extensive
pre-service clinical labor times in the Facility setting, resulting in
[[Page 32417]]
the following changes: the minutes associated with CA002 (Coordinate
pre-surgery services (including test results)) are reduced from 20
minutes to 10 minutes; the minutes associated with CA003 (Schedule
space and equipment in facility) are reduced from 8 minutes to 5
minutes; the minutes associated with CA004 (Provide pre-service
education/obtain consent) are reduced from 20 minutes to 7 minutes; and
the minutes associated with CA005 (Complete pre-procedure phone calls
and prescription) are reduced from 7 minutes to 3 minutes.
We are proposing the RUC-recommended direct PE inputs for CPT code
5XX11 without refinement.
(10) Endoscopic Sleeve Gastroplasty (CPT Code 4XX04)
In September 2024, CPT approved the addition of a new code to
report transoral gastric restrictive procedures using an endosurgical
approach. CPT code 4XX04 (Gastric restrictive procedure, transoral,
endoscopic sleeve gastroplasty (ESG), including argon plasma
coagulation, when performed) was surveyed for the January 2025 RUC
meeting.
The RUC-recommended a direct crosswalk to CPT 36832 (Revision,
open, arteriovenous fistula; without thrombectomy, autogenous or
nonautogenous dialysis graft (separate procedure)) with a work RVU of
13.50. During the RUC prefacilitation meeting, 1 unit of CPT code 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 a moderate level of medical
decision making) was removed from the postoperative period, and 20
minutes of work time was added into the immediate post-service time.
The RUC also revised the global period of CPT code 4XX04 to reduce the
work and time value of CPT code 99238 (Hospital inpatient or
observation discharge day management; 30 minutes or less on the date of
the encounter) to half of the original value. We believe the RUC
partially applied the 23-hr policy when it applied the policy to the
immediate postservice time but not to the work RVU. The 23-hour policy
established in the CY 2011 PFS final rule (75 FR 73226) applies to
services that are typically performed in the outpatient setting and
require a hospital stay of less than 24 hours. We discussed in the CY
2011 PFS final rule that we believe the value of these codes should not
reflect work that is typically associated with an inpatient service. We
believe the 23-hour policy in its entirety should be applied to CPT
code 4XX04, which includes the work RVUs along with the immediate post
service time. Following the valuation methodology we established for
the 23 hour policy in the CY 2011 PFS final rule (75 FR 73226), we are
proposing a work RVU of 12.56 for CPT code 4XX04. The steps are as
follows:
Step (1): The RUC appropriately reduced the hospital discharge
day management service included in the global period from 1 to 0.5;
therefore, we will skip this step.
Step (2): 13.50-1.39 ** = 12.11
Step (3): 12.11 + (20 minutes x 0.0224) *** = 12.56 RVUs
* Value associated with \1/2\ hospital day discharge management
service.
** Value associated with an inpatient hospital visit, CPT Code
99232.
*** Value associated with the reallocated intraservice time
multiplied by the postservice intensity of the 23-hour stay code.
We are proposing the RUC-recommended direct PE inputs for CPT code
4XX04 without refinement.
(11) Transurethral Robotic-Assisted Resection of Prostate (CPT Codes
52500, 52601, 52630, 52648, 52649, and 52XX1)
In May 2024, the CPT Editorial Panel created a new CPT code to
report transurethral robotic-assisted waterjet resection of the
prostate, including ultrasound guidance: CPT code 52XX1 (Transurethral
robotic-assisted waterjet resection of prostate, including
intraoperative planning, ultrasound guidance, control of postoperative
bleeding, complete, including vasectomy, meatotomy, cystourethroscopy,
urethral calibration and/or dilation, and internal urethrotomy, when
performed). CPT code 52XX1 was surveyed for the September 2024 RUC
meeting along with the existing codes in this code family: CPT code
52500 (Transurethral resection of bladder neck (separate procedure)),
CPT code 52601 (Transurethral electrosurgical resection of prostate,
including control of postoperative bleeding, complete (vasectomy,
meatotomy, cystourethroscopy, urethral calibration and/or dilation, and
internal urethrotomy are included)), CPT code 52630 (Transurethral
resection; residual or regrowth of obstructive prostate tissue
including control of postoperative bleeding, complete (vasectomy,
meatotomy, cystourethroscopy, urethral calibration and/or dilation, and
internal urethrotomy are included)), CPT code 52648 (Laser vaporization
of prostate, including control of postoperative bleeding, complete
(vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or
dilation, internal urethrotomy and transurethral resection of prostate
are included if performed)), and CPT code 52649 (Laser enucleation of
the prostate with morcellation, including control of postoperative
bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral
calibration and/or dilation, internal urethrotomy and transurethral
resection of prostate are included if performed)). For CY 2026, the
RUC-recommended a work RVU of 6.00 for CPT code 52500, a work RVU of
10.25 for CPT code 52XX1, a work RVU of 10.00 for CPT code 52601, a
work RVU of 6.55 for CPT code 52630, a work RVU of 10.05 for CPT code
52648, and a work RVU of 14.56 for CPT code 52649.
We are proposing the RUC-recommended work RVU of 6.00 for CPT code
52500, the work RVU of 10.25 for CPT code 52XX1, the work RVU of 10.00
for CPT code 52601, the work RVU of 6.55 for CPT code 52630, and the
work RVU of 10.05 for CPT code 52648.
We note that the RUC will be placing CPT code 52XX1 on the New
Technology/New Services list and CPT code 52XX1 will be re-reviewed by
the RUC in 3 years to ensure correct valuation, patient population, and
utilization assumptions. Also, we received external input suggesting
the RVU for CPT code 52XX1 should be higher than the RUC recommendation
of 10.25 and that an RVU of 14.56 (same as the RUC recommendation for
CPT code 52649) would be more appropriate. However, given the survey
times and comparisons to similarly timed codes with similar intensity,
an RVU of 14.56 for CPT code 52XX1 would not be accurate. The RUC's
valuation for CPT code 52XX1 is typical for a procedure code with the
same work time values (that is, 60 minutes intra-service time and 234
minutes of total time). With all of these considerations, we believe
that proposing a work RVU of 10.25 for CPT code 52XX1 maintains
relativity with the other CPT codes in this family.
For CPT code 52649, we disagree with the RUC-recommended work RVU
of 14.56 and we are proposing an RVU of 13.00 instead, based on a
crosswalk to CPT code 53500 (Urethrolysis, transvaginal, secondary,
open, including cystourethroscopy (for example, postsurgical
obstruction, scarring)). We believe the RUC-recommended work RVU of
14.56 is too high and should be lowered due to the decrease in
intraservice time of 30 minutes (from 120 minutes to 90 minutes), and
the decrease in total time by 16 minutes (from 279 minutes to 263
[[Page 32418]]
minutes). An RVU of 13.00 for CPT code 52649 is supported by the range
of CPT code 64912 (Nerve repair; with nerve allograft, each nerve,
first strand (cable)) with an RVU of 12.00, the same intraservice time
and 272 minutes of total time, and by CPT code 15730 (Midface flap
(that is, zygomaticofacial flap) with preservation of vascular
pedicle(s)) with an RVU of 13.50, the same intraservice time and 255.5
minutes of total time.
We are proposing the RUC-recommended direct PE inputs for CPT codes
52500, 52XX1, 52601, 52630, and 52649 without refinement. For CPT code
52648, we are proposing to remove the 6 minutes of clinical labor time
for CA021 (Perform procedures/services--NOT directly related to
physician work time). Therefore, the equipment time reported under
EF031 (table, power) has also been reduced by 6 minutes (from 95
minutes to 89 minutes) to reflect the removal of clinical labor
activity CA021 from CPT code 52648. We note that CPT code 52648 is
performed in the facility setting only and the standard is 0 minutes
for CA021 in the facility. Also, supply item SL036 (cup, biopsy-
specimen sterile 4oz) was reported as a non-facility PE input for CPT
code 52648. Since CPT code 52648 is only performed in the facility
setting, we believe inclusion of supply item SD036 as a non-facility PE
input was unintentional and therefore proposing to remove.
(12) Cystourethroscopy (CPT Code 52XX2)
At the September 2024 CPT Editorial Panel Meeting, CPT code 0619T
(Cystourethroscopy with transurethral anterior prostate commissurotomy
and drug delivery, including transrectal ultrasound and fluoroscopy,
when performed) was deleted and replaced with CPT code 52XX2, which
describes an endoscopic procedure for the management of benign
prostatic enlargement that entails using both a non-medication-coated
and a medication-coated balloon to open the prostatic urethra. CPT code
52XX2 (Cystourethroscopy with initial transurethral anterior prostate
commissurotomy with a non-drug-coated balloon catheter followed by
therapeutic drug delivery into the prostate by a drug-coated balloon
catheter, including transrectal ultrasound and fluoroscopy, when
performed) was surveyed at the January 2025 AMA RUC meeting.
We are proposing the RUC-recommended work RVU of 3.62 for CPT code
52XX2. For direct PE, we are proposing to refine the clinical labor
associated with clinical activity CA023 (Monitor patient following
procedure/service, no multitasking) to 0 minutes for CPT code 52XX2. We
note that the RUC-recommended a direct crosswalk of most clinical labor
times for CPT code 52XX2 based on reference CPT code 52441
(Cystourethroscopy, with insertion of permanent adjustable
transprostatic implant; single implant), however, the PE Summary of
Recommendations for CPT code 52XX2 only describes patient monitoring
activities done while multi-tasking and does not describe any no-
multitasking (1:1) patient monitoring time (clinical activity code
CA023) like it was described in the PE SOR for CPT code 52441, reviewed
for CY 2020 PFS rulemaking. We are therefore proposing to remove this
clinical labor time.
We also disagree with the RUC-recommended 40 minutes for the
clinical labor associated with clinical activity CA025 (Clean scope)
and are proposing to refine CA025 to the standard 30 minutes for a
flexible scope. We would like to note that, while the PE SOR for CPT
code 52XX2 did not justify non-standard times for clinical activities
CA016 (Prepare, set-up and start IV, initial positioning and monitoring
of patient) and CA017 (Sedate/apply anesthesia) of 2 minutes, we are
not proposing to refine these clinical activity times because there was
a robust explanation of these non-standard times in the PE SOR for CPT
code 52441, which is a clinically similar endoscopy code requiring
positioning and anesthetic activities that warrant the non-standard
times for CPT codes 52441 and 52XX2.
For medical supplies, we are proposing to remove the SM022
(sanitizing cloth-wipe (patient)) supply because there are five of
these cloth wipes included in the SA058 supply (pack, urology
cystoscopy visit).
For equipment times, we are proposing to refine the time for the
ES031 (scope video system (monitor, processor, digital capture, cart,
printer, LED light)) and ES018 (fiberscope, flexible, cystoscopy)
equipment items to account for the clinical labor times that should be
included in the standard scope systems and scope equipment formulas. We
disagree with the RUC-recommended 64 minutes for ES031 and ES018, and
we are proposing to refine ES031 to 52 minutes and ES018 to 79 minutes
in accordance with our standard equipment time formulas for scopes and
scope video systems. We are proposing all other direct PE inputs for
CPT code 52XX2.
(13) Prostate Biopsy Services (CPT Codes 55705, 55706, 5XX00, 5XX01,
5XX02, 5XX03, 5XX04, 5XX07, 5XX08, 5XX09, 5XX10, and 76872)
At the April 2022 Relativity Assessment Workgroup (RAW), prostate
biopsy services were reviewed and identified as services performed by
the same physician on the same date of service 75 percent of the time
or more. As a result of that review, the RAW requested action plans for
September 2022 to determine if specific code bundling solutions should
occur for CPT codes 55700 (Biopsy, prostate; needle or punch, single or
multiple, any approach) and CPT code 76872 (Ultrasound, transrectal;).
The RAW referred that issue to the CPT Editorial Panel for revision of
descriptors and for clarity in reporting CPT code 55700 with CPT code
76872. At the May 2024 CPT Editorial Panel meeting, CPT deleted
existing CPT code 55700, revised CPT codes 55705 (Biopsy, prostate; any
approach, non-imaging-guided) and 76872 and added 9 new codes that
clarify reporting for prostate biopsies and the imaging procedures that
accompany them.
CPT codes 55705, 55706 (Biopsies, prostate, needle, transperineal,
stereotactic template guided saturation sampling, including imaging
guidance), 5XX00 (Biopsy, prostate, transrectal, ultrasound-guided
(i.e., sextant), ultrasound-localized), 5XX01 (Biopsy, prostate,
transrectal, ultrasound-guided (i.e., sextant) with MRI-fusion
guidance), 5XX02 (Biopsy, prostate, transperineal, ultrasound-guided
(i.e., sextant), ultrasound-localized), 5XX03 (Biopsy, prostate,
transperineal, ultrasound-guided (i.e., sextant) with MRI-fusion
guidance), 5XX04 (Biopsy, prostate, transrectal, MRI-ultrasound-fusion
guided, targeted lesion(s) only), 5XX07 (Biopsy, prostate,
transperineal, MRI-ultrasound-fusion guided, targeted lesion(s) only,
first targeted lesion), 5XX08 (Biopsy, prostate, in-bore CT- or MRI-
guided (i.e., sextant), with biopsy of additional targeted lesion(s),
first targeted lesion), 5XX09 (Biopsy, prostate, in-bore CT- or MRI-
guided targeted lesion(s) only, first targeted lesion), and 5XX10
(Biopsy, prostate, each additional, MRI-ultrasound fusion or in-bore
CT- or MRI-guided targeted lesion (List separately in addition to code
for primary procedure)), and 76872 were surveyed at the September 2024
RUC meeting.
We are proposing the RUC-recommended work RVUs for all twelve CPT
codes in this family. We are proposing a work RVU of 1.93 for CPT code
55705, a work RVU of 4.27 for CPT
[[Page 32419]]
code 55706, a work RVU of 2.63 for CPT code 5XX00, a work RVU of 3.39
for CPT code 5XX01, a work RVU of 3.23 for CPT code 5XX02, a work RVU
of 3.81 for CPT code 5XX03, a work RVU of 2.61 for CPT code 5XX04, a
work RVU of 3.10 for CPT code 5XX07, a work RVU of 4.00 for CPT code
5XX08, a work RVU of 3.62 for CPT code 5XX09, a work RVU of 1.05 for
CPT code 5XX10, and a work RVU of 0.67 for CPT code 76872.
We are proposing the RUC-recommended direct PE inputs for all of
the codes in this family.
(14) Laparoscopic Prostatectomy (CPT Codes 55840, 55842, 55845, 55866,
55867, 558X1, and 558X2)
In April 2023, the RUC's Relativity Assessment Workgroup identified
CPT codes 38571 (Laparoscopy, surgical; with bilateral total pelvic
lymphadenectomy) and 55866 (Laparoscopy, surgical prostatectomy,
retropubic radical, including nerve sparing, includes robotic
assistance, when performed) as typically reported together 75 percent
or more based on 2021 Medicare claims data and referred them to the CPT
Editorial Panel to possibly develop a code bundling solution. In May
2024, the CPT Editorial Panel created two new codes to report
laparoscopic prostatectomy with lymph node biopsy(ies) (limited pelvic
lymphadenectomy) and with bilateral pelvic lymphadenectomy, including
external iliac, hypogastric, and obturator nodes, respectively: CPT
code 558X1 (Laparoscopy, surgical prostatectomy, retropubic radical,
including nerve sparing, includes robotic assistance, when performed;
with lymph node biopsy(ies) (limited pelvic lymphadenectomy) and 558X2
((Laparoscopy, surgical prostatectomy, retropubic radical, including
nerve sparing, includes robotic assistance, when performed; with
bilateral pelvic lymphadenectomy, including external iliac,
hypogastric, and obturator nodes). These new codes were surveyed along
with the rest of the family, CPT code 55840 (Prostatectomy, retropubic
radical, with or without nerve sparing), 55842 (Prostatectomy,
retropubic radical, with or without nerve sparing; with lymph :node
biopsy(s) (limited pelvic lymphadenectomy)), 55845 (Prostatectomy,
retropubic radical, with or without nerve sparing; with bilateral
pelvic lymphadenectomy, including external iliac, hypogastric, and
obturator nodes), 55866 (Laparoscopy, surgical prostatectomy,
retropubic radical, including nerve sparing, includes robotic
assistance, when performed), and 55867 (Laparoscopy, surgical
prostatectomy, simple subtotal (including control of postoperative
bleeding, vasectomy, meatotomy, urethral calibration and/or dilation,
and internal urethrotomy), includes robotic assistance, when performed)
at the September 2024 RUC meeting.
We are proposing the RUC's recommended work RVU for five of the six
codes in the Laparoscopic Prostatectomy family. We are proposing a work
RVU of 21.36 for CPT code 55840, a work RVU of 21.36 for CPT code
55842, a work RVU of 25.18 for CPT code 55845, a work RVU of 22.46 for
CPT code 55866, a work RVU of 22.46 for CPT code 558X1, and a work RVU
of 19.53 for CPT code 55867.
We disagree with the RUC's recommended work RVU of 29.35 for CPT
code 558X2 and we are instead proposing a work RVU of 27.41 based on a
crosswalk to CPT code 50543 (Laparoscopy, surgical; partial
nephrectomy). The RUC's recommended work RVU of 29.35 is based on a
crosswalk to CPT code 27059 (Radical resection of tumor (for example,
sarcoma), soft tissue of pelvis and hip area; 5 cm or greater).
However, CPT code 27059 is a procedure typically performed on an
inpatient basis, with nearly 200 minutes of additional total time
higher than the surveyed work time for CPT code 558X2 (608 minutes as
compared with 434 minutes), due to the inclusion of five inpatient
office visits in its global period. CPT code 558X2 will typically be
performed on an outpatient basis and does not contain any inpatient
office visits in its global period, which leads us to believe that CPT
code 27059 is not the most accurate choice of CPT code for a valuation
crosswalk.
Instead, we believe that it is more accurate to propose a work RVU
of 27.41 for CPT code 558X2 based on the crosswalk to CPT code 50543.
This crosswalk code is another type of surgical laparoscopy which more
closely matches the intraservice work time (240 minutes against 230
minutes) and total work time (557 minutes against 434 minutes) of CPT
code 558X2. We also note that the intensity of CPT code 558X2 is
anomalously high in relation to the rest of this code family at the
RUC's recommended work RVU of 29.35, roughly 30-40 percent higher than
any of its peer codes. While we agree that CPT code 558X2 should have
the highest intensity amongst this group of codes, we believe that our
proposed work RVU of 27.41 reflects a more accurate intensity relative
to the rest of the family.
For the direct PE inputs, we are proposing to correct what appears
to be an error in the recommendations for CPT code 55867. The RUC-
recommended 106 minutes of clinical labor time for the CA039 (Post-
operative visits (total time)) activity based on two Level 4 office
visits included in the global period for CPT code 55867. However, this
CPT code instead contains one Level 3 and one Level 4 office visit
which sum to 89 minutes of clinical labor time, not 106 minutes. We are
proposing to make this correction to the CA039 clinical labor time for
CPT code 55867, which also carries over to the equipment time for the
power table (EF031) and the surgical light (EF014). We are proposing
the direct PE inputs as recommended by the RUC in all other cases for
this code family.
(15) Endovascular Therapy With Imaging (CPT Codes 61624, 61626, 75894,
and 75898)
In April 2022, the Relativity Assessment Workgroup (RAW) requested
action plans to evaluate potential code bundling solutions for the
following code pairs: CPT code 61624 (Transcatheter permanent occlusion
or embolization [for example, for tumor destruction, to achieve
hemostasis, to occlude a vascular malformation], percutaneous, any
method; central nervous system [intracranial, spinal cord]) and CPT
code 75894 (Transcatheter therapy, embolization, any method,
radiological supervision and interpretation), CPT code 61624 and CPT
code 75898 (Angiography through existing catheter for follow-up study
for transcatheter therapy, embolization or infusion, other than for
thrombolysis), 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])
and CPT code 75894, and CPT code 61626 and CPT code 75898. The RUC
reviewed these codes during the April 2024 RUC meeting. For CY 2026,
the RUC-recommended a work RVU of 20.00 for CPT code 61624, an RVU of
15.31 for CPT code 61626, an RVU of 2.25 for CPT code 75894, and an RVU
of 1.85 for CPT code 75898.
We are proposing the RUC-recommended work RVU of 2.25 for CPT code
75894 and work RVU of 1.85 for CPT code 75898. However, we have
concerns about the survey data due to the significant variations in
both work values and intraservice times reported by respondents. These
variations can suggest that the proposed RVU values at the 25th
percentile may not accurately
[[Page 32420]]
reflect the actual work involved in performing these services. As a
result, we are seeking public comments regarding the proposed work RVUs
for CPT codes 75894 and 75898.
We disagree with the RUC-recommended work RVUs for CPT codes 61624
and 61626. For CPT code 61624, we are proposing a work RVU of 17.06
instead of the RUC-recommended 20.00. This proposal is based on a
crosswalk to CPT code 49622 (Repair of parastomal hernia, any approach
(that is, open, laparoscopic, robotic), initial or recurrent, including
implantation of mesh or other prosthesis, when performed; incarcerated
or strangulated). This crosswalk is supported by a range of CPT code
33224 (Insertion of pacing electrode, cardiac venous system, for left
ventricular pacing, with attachment to previously placed pacemaker or
implantable defibrillator pulse generator (including revision of
pocket, removal, insertion, and/or replacement of existing generator))
with a work RVU of 9.04, 135 minutes intra-service time and 204 minutes
total time, and CPT code 93590 (Percutaneous transcatheter closure of
paravalvular leak; initial occlusion device, mitral valve.) with a work
RVU of 21.70, 135 minutes intraservice time and 223 minutes total time.
The intraservice time for CPT code 61624 decreased from 232 to 150
minutes, reducing by 82 minutes, and the total time decreased from 362
to 246 minutes, reducing by 116 minutes, which supports a lower RVU.
The lower work RVU proposal of 17.06 reflects the significant decreases
in both intraservice time and total time for CPT code 61624.
For CPT code 61626, we are proposing a work RVU of 13.46 instead of
the RUC-recommended work RVU of 15.31. This proposal is based on a
crosswalk to CPT code 49594 (Repair of anterior abdominal hernia[s]
[that is, epigastric, incisional, ventral, umbilical, spigelian], any
approach [that is, open, laparoscopic, robotic], initial, including
implantation of mesh or other prosthesis when performed, total length
of defect[s]; 3 cm to 10 cm, incarcerated or strangulated). This
crosswalk is supported by a range of CPT code 55881 (Ablation of
prostate tissue, transurethral, using thermal ultrasound, including
magnetic resonance imaging guidance for, and monitoring of, tissue
ablation) with a work RVU of 9.80, 120 minutes intra-service time and
202 minutes total time, and CPT code 93580 (Percutaneous transcatheter
closure of congenital interatrial communication (that is, Fontan
fenestration, atrial septal defect) with implant) with a work RVU of
17.97, 120 minutes intraservice time and 210 minutes total time. The
intraservice time for CPT code 61626 decreased by 53 minutes, and the
total time decreased by 90 minutes, which supports a lower RVU. The
lower work RVU proposal of 13.46 reflects the significant decreases in
both intraservice time and total time for CPT code 61626.
We are also proposing the RUC-recommended direct PE inputs for CPT
codes 61624, 75894, and 75898 without refinement. However, we disagree
with a few RUC-recommended direct PE inputs for CPT code 61626. We are
proposing to refine the clinical staff time for the CA011 activity
'Provide education/obtain consent' to the standard of 2 minutes for CPT
code 61626. Since no rationale was provided in the PE Summary of
Recommendations for extending clinical staff time beyond the standard 2
minutes for the CA011 activity, we believe 2 minutes is more
appropriate than the RUC-recommended 5 minutes. We are also proposing
to change the medical supply quantity of the SD172 (guidewire, cerebral
(Bentson)) supply from 1 to 0 because CPT code 61626 describes non-
central nervous system procedures, while SD172 is a cerebral guidewire;
thus, we believe this supply is not typically used in this service.
Additionally, regarding the clinical labor associated with CA024
(Clean room/equipment by clinical staff), we believe that the RUC's
recommendation of 3 minutes for CA024 was not properly accounted for in
one of the equipment time formula inputs. Therefore, we are proposing
an increase of 3 minutes to the equipment time for the angiography room
(EL011), which increases from 124 to 127 minutes for this code to
incorporate this missing time associated with the CA024 activity.
Lastly, for CPT code 61626, the equipment time for the professional
PACS workstation (ED053) should be half of the physician preservice
time plus the full physician intraservice time. We believe this was an
unintended error, and we are proposing 152 minutes after rounding up
from 151.5 minutes.
Although we are proposing the direct PE inputs for CPT codes 75894
and 75898 without refinement, we have concerns over one of the RUC-
recommended direct PE inputs, CA021 (Perform procedure/service--NOT
directly related to physician work time) as the involvement of
additional vascular interventional technologists remains unclear.
According to the RUC recommendation, CPT codes 61624 and 61626 should
not be reported in conjunction with CPT codes 75894 and 75898. And the
RUC's recommendation of 60 minutes of clinical labor time for CPT code
75894 and 45 minutes for CPT code 75898 associated with the CA021
activity did not include an adequate explanation for these activities
when CPT codes 75894 and 75898 are performed in the absence of CPT
codes 61624 and 61626. Thus, we are proposing the direct PE inputs as
recommended by the RUC; however, due to the concerns mentioned above,
we are seeking public comments regarding the recommended CA021 clinical
labor time of 60 minutes for CPT code 75894 and 45 minutes for CPT code
75898, specifically what intraservice clinical labor time would be
typical for these procedures.
(16) Guided High Intensity Focused Ultrasound (CPT Code 61715)
In September 2023, the CPT Editorial Panel created a new Category I
code to describe magnetic resonance image guided high intensity focused
ultrasound (MRgFUS) intracranial ablation for treatment of a severe
central tremor that is recalcitrant to other medical treatments for CY
2025 to replace the existing Category III code.
For CY 2025, we finalized the implementation of CPT code 61715
(Magnetic resonance image guided high intensity focused ultrasound
(MRgFUS), stereotactic ablation of target, intracranial, including
stereotactic navigation and frame placement, when performed) as a
global-only code with direct PE inputs in the facility setting only, as
recommended by the RUC. After implementation, an interested party
raised concerns about the lack of non-facility pricing for the new CPT
code 61715, which would result in an untenable non-facility payment
equal to the established facility payment. The interested party
expressed concerns about access to the service in the non-facility
setting given the facility payment rate and provided information about
the appropriateness of the service in the non-facility setting and the
payments set by the MACs for the predecessor code. The interested party
stated that the predecessor code, CPT code 0398T, was paid $9,750 in
the non-facility setting by one MAC, and for CY 2025, CPT code 61715 is
paid at $1,180 in the non-facility setting due to being set equal to
the facility payment, absent established non-facility PE RVUs. In an
effort to temporarily resolve this issue for CY 2025, we implemented
PC/TC splits for CPT code 61715, with contractor-pricing for the global
and technical components, which would restore MAC discretion in pricing
this
[[Page 32421]]
service, including in the non-facility setting.
For CY 2026, we are seeking comments on non-facility pricing of
this service to address the issue permanently. When considering
potential crosswalk or reference codes for proposed direct PE inputs in
the non-facility setting, we found all codes in the CPT code 615XX,
616XX, 617XX, and 618XX series are only valued in the facility setting
and therefore were not tenable crosswalk codes for the non-facility
direct PE. Additionally, there are MRI-guidance ultrasound ablation
Category III codes that could be commensurate for non-facility direct
PE, such as CPT code 0071T (Focused ultrasound ablation of uterine
leiomyomata, including MR guidance; total leiomyomata volume less than
200 cc of tissue), and the previous predecessor code of CPT code 61715,
CPT code 0398T, but they are/were contractor-priced under the PFS and
do not have direct PE inputs for consideration.
We considered the prostate tissue MRI-guided ultrasound ablation
codes, CPT codes 55881 (Ablation of prostate tissue, transurethral,
using thermal ultrasound, including magnetic resonance imaging guidance
for, and monitoring of, tissue ablation) and 55882 (Ablation of
prostate tissue, transurethral, using thermal ultrasound, including
magnetic resonance imaging guidance for, and monitoring of, tissue
ablation; with insertion of transurethral ultrasound transducer for
delivery of thermal ultrasound, including suprapubic tube placement and
placement of an endorectal cooling device, when performed) as possible
references because they are valued in the non-facility setting, but
they include very high-cost disposable supplies and equipment that are
specific to the CPT codes including SA136 (TULSA-PRO Disposable Kit)
and EQ410 (TULSA-PRO TDC Cart), as well as some other direct PE inputs
that may not be typical for CPT code 61715.
We also considered partial crosswalks of CPT codes for portions of
CPT code 61715, such as CPT codes 77372 (Radiation treatment delivery,
stereotactic radiosurgery (SRS), complete course of treatment of
cranial lesion(s) consisting of 1 session; linear accelerator based),
61800 (Application of stereotactic headframe for stereotactic
radiosurgery (List separately in addition to code for primary
procedure)), 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 61796 (Stereotactic radiosurgery (particle beam, gamma
ray, or linear accelerator); 1 simple cranial lesion), but these codes
have similar challenges related to the facility-only pricing and/or
direct PE inputs that would not be applicable to or typical for CPT
code 61715.
Given these challenges, we are seeking comments on appropriate non-
facility direct PE inputs (clinical labor, disposable supplies, and
medical equipment), and/or appropriate crosswalk codes for non-facility
direct PE inputs for CPT code 61715. We would also consider a non-
facility direct PE RVU crosswalk (in lieu of establishing specific non-
facility direct PE inputs) for CPT code 61715 if that PE RVU could be
substantiated by commenters. We note that we would not consider the
MACs' established payment for the predecessor CPT code 0398T,
particularly outlier payment rates, as substantiation for a PE RVU
crosswalk for CPT code 61715 because there was significant variation
among the MACs' payment for CPT code 0398T, some of which did not
establish payment in the non-facility. Additionally, the established
MAC payments do not differentiate between work, PE, and malpractice,
making it difficult to establish a reasonable PE RVU for CPT code 61715
based on MAC payment alone. We received a second letter from an
interested party stating that the previous non-facility payment rate
for CPT code 0398T was $9,750, but we note that this payment rate is a
significant outlier payment based on the reported range of payments
from the MACs in April 2022. The range of reported payments in the
facility setting reported by the MACs in April 2022 for CPT code 0398T
was $440.50 to $20,842.19, and $1,554.58 to $2,036.75 when the highest
and lowest outliers were removed. Of note, when the outliers were
removed from the range, the established payment by the MACs for CPT
code 0398T are commensurate with the established national facility
pricing of $1,180 for CPT code 61715. In April 2022, only one MAC
reported an established non-facility payment of $2,036.75, therefore,
we are unable to substantiate the interested parties' statement about a
non-facility payment of $9,750 and are seeking comments on any
additional information about the established MAC payments for CPT code
0398T that we could use to consider non-facility pricing for CPT code
61715.The second interested party requested contractor-pricing for CPT
code 61715 for CY 2026. We note that, in an effort to temporarily
resolve this issue for CY 2025, we implemented the PC/TC splits for CPT
code 61715, with contractor-pricing for the global and technical
components, to restore MAC discretion when it came to pricing this
service. Therefore, for CY 2026, we are seeking comments on national
pricing options in the non-facility setting to address it permanently.
We are also seeking comments in the form of clinical evidence to
support the appropriateness of this service in the non-facility setting
and the appropriateness of the established PC/TC split for CPT code
61715.
(17) Percutaneous Interlaminar Lumbar Decompression (CPT Codes 62XX0
and 62XX1)
In September 2024, CPT created two new Category I codes to replace
existing Category III code 0275T. CPT codes 62XX0 (Decompression,
percutaneous, with partial removal of the ligamentum flavum, including
laminotomy for access, epidurography, and imaging guidance (ie, CT or
fluoroscopy), bilateral; one insterspace, lumbar) and 61XX1
(Decompression, percutaneous, with partial removal of the ligamentum
flavum, including laminotomy for access, epidurography, and imaging
guidance (that is, CT or fluoroscopy), bilateral; additional
interspace(s), lumbar (List separately in addition to code for primary
procedure) were surveyed for the January 2025 RUC meeting. CPT code
62287 (Decompression percutaneous, of nucleus pulposus of
intervertebral disc, any method utilizing needle-based technique to
remove disc material under fluoroscopic imaging or other form of
indirect visualization, with discography and/or epidural injection(s)
at the treated level(s), when performed, single or multiple levels,
lumbar) was not surveyed as part of the code family due to low
utilization (approximately 100 claims in 2023 per the RUC). Specialty
societies stated that a code change application requesting the deletion
of CPT code 62287 will take place for the 2026 CPT cycle.
We are proposing the RUC-recommended work RVUs for both CPT code
62XX0 (8.00) and CPT code 62XX1 (4.25) without refinement. We are also
proposing the RUC-recommended direct PE inputs without refinement for
both CPT code 62XX0 and 62XX1.
(18) Percutaneous Decompression of Median Nerve (CPT Code 647XX)
In September 2024, the CPT Editorial Panel created a new CPT code
to report percutaneous decompression of the median nerve at the carpal
tunnel using ultrasound guidance and a balloon
[[Page 32422]]
dilation device while transecting the transcarpal ligament: CPT code
647XX (Decompression; median nerve at the carpal tunnel, percutaneous,
with intracarpal tunnel balloon dilation, including ultrasound
guidance). For CY 2026, the RUC-recommended a work RVU of 2.70 for CPT
code 647XX.
We are proposing the RUC-recommended work RVU of 2.70 for CPT code
647XX. We would like to note that CPT code 647XX is a new technology
procedure, previously reported with an unlisted code, and we received
external input suggesting the RVU should be 6.00, which is much higher
than the RUC recommendation. However, a review of similarly timed
procedures does not support an RVU greater than the RUC recommendation
of 2.70. The RUC's valuation for CPT code 647XX is very typical for a
procedure code with the same work time values (that is, 20 minutes
intra-service time and 57 minutes of total time) and has a typical
intensity for this kind of procedure.
We are proposing the RUC-recommended direct PE inputs for CPT code
647XX without refinement.
(19) Baroreflex Activation Therapy (CPT Codes 64XX5, 64XX6, 64XX7,
64XX8, 64XX9, 64X10, 93XX4, and 93XX5)
Baroreflex activation therapy (BAT) treats heart failure symptoms
and resistant hypertension by electrically stimulating carotid
baroreceptors within the carotid artery. The BAT modulation system
received FDA approval in August 2019, and the CPT Editorial Panel
approved conversion from a Category III code set to a Category I code
set at the September 2024 CPT Panel meeting through the creation of the
following CPT codes: 64XX5 (Initial open implantation of baroreflex
activation therapy (BAT) modulation system, including lead placement
onto the carotid sinus, lead tunnelling, connection to a pulse
generator placed in a distant subcutaneous pocket (that is, total
system), and intraoperative interrogation and programming), 64XX6
(Revision or replacement of baroreflex activation therapy (BAT)
modulation system, with intraoperative interrogation and programming;
lead only), 64XX7 (Revision or replacement of baroreflex activation
therapy (BAT) modulation system, with intraoperative interrogation and
programming; pulse generator only), 64XX8 (Removal of baroreflex
activation therapy (BAT) modulation system; total system, including
lead and pulse generator), 64XX9 (Removal of baroreflex activation
therapy (BAT) modulation system; total system, including lead and pulse
generator; lead only), 64X10 (Removal of baroreflex activation therapy
(BAT) modulation system; total system, including lead and pulse
generator; pulse generator only), 93XX5 (Interrogation device
evaluation (in person), carotid sinus baroreflex activation therapy
(BAT) modulation system including telemetric iterative communication
with the implantable device to monitor device diagnostics and
programmed therapy values, with interpretation and report (for example,
battery status, lead impedance, pulse amplitude, pulse width, therapy
frequency, pathway mode, burst mode, therapy start/stop times each
day); with programming, including optimization of tolerated therapeutic
level setting), and 93XX4 (Interrogation device evaluation (in person),
carotid sinus baroreflex activation therapy (BAT) modulation system
including telemetric iterative communication with the implantable
device to monitor device diagnostics and programmed therapy values,
with interpretation and report (for example, battery status, lead
impedance, pulse amplitude, pulse width, therapy frequency, pathway
mode, burst mode, therapy start/stop times each day); without
programming). This code family describes the implantation, replacement,
revision, removal and interrogation/programming of a BAT modulation
system and was surveyed for the January 2025 RUC meeting.
We are proposing the RUC's recommended work RVU for seven of the
eight codes in the Baroreflex Activation Therapy family. We are
proposing a work RVU of 11.00 for CPT code 64XX5, a work RVU of 11.30
for CPT code 64XX6, a work RVU of 8.01 for CPT code 64XX7, a work RVU
of 12.13 for CPT code 64XX8, a work RVU of 8.95 for CPT code 64XX9, a
work RVU of 8.23 for CPT code 64X10, and a work RVU of 0.90 for CPT
code 93XX5.
We disagree with the RUC's recommended work RVU of 0.79 for CPT
code 93XX4 and we are instead proposing a work RVU of 0.65 based on a
crosswalk to CPT code 93279 (Programming device evaluation (in person)
with iterative adjustment of the implantable device to test the
function of the device and select optimal permanent programmed values
with analysis, review and report by a physician or other qualified
health care professional; single lead pacemaker system or leadless
pacemaker system in one cardiac chamber), which was the top reference
code from the survey. We believe that it is more accurate to base the
work valuation for CPT code 93XX4 on this crosswalk to CPT code 93279
due to the close clinical similarity between the two procedures (both
of them cardiac device evaluations) which share the same intraservice
work time of 10 minutes and the same total work time of 22 minutes.
The RUC recommended the survey 25th percentile work RVU of 0.79 for
CPT code 93XX4, stating that CPT code 93XX4 has a higher estimated
intensity and complexity than the two key reference services (including
CPT code 93279). However, we do not agree that CPT code 93XX4 should be
valued at a higher work RVU based on the intensity for a clinically
similar device evaluation code like CPT code 93279. The RUC's
recommended work RVU of 0.79 results in an intensity for CPT code 93XX4
which is close to 40 percent higher than the intensity for peer CPT
code 93XX5. We do not believe that this results in an accurate
valuation for the two new codes given that CPT code 93XX4 describes
cases where the BAT device is working properly and does not require
adjustment, whereas CPT code 93XX5 describes cases where the BAT device
is working properly but requires additional device programming. We
believe that CPT code 93XX5 should have the higher intensity given the
additional device programming required in this code to achieve optimal
therapeutic levels for the BAT device. Therefore, we are proposing a
work RVU of 0.65 for CPT code 93XX4, which we believe reflects more
accurate relativity between CPT code 93XX4 and CPT code 93XX5.
We are proposing the direct PE inputs as recommended by the RUC for
CPT codes 64XX5-64X10. For CPT codes 93XX4 and 93XX5, we disagree with
the RUC- recommended use of the RN (L051A) clinical labor type. These
kinds of device evaluation procedures typically do not make use of RN
clinical labor; for example, reference codes 93279 and 93281, which
were used as a model for the direct PE inputs of these two new codes,
both use a combination of the RN/LPN/MTA blend (L037D) and Medical/
Technical Assistant (L026A) clinical labor types. Therefore, we are
proposing to refine the clinical labor for CPT codes 93XX4 and 93XX5
from RN (L051A) to the RN/LPN/MTA blend (L037D); we are proposing that
the numerical values for each clinical labor input will remain the
same, with only the staff type changing from L051A to L037D. We are
proposing the rest of the RUC-recommended PE inputs without refinement.
[[Page 32423]]
(20) Percutaneous Electrical Nerve Field Stimulation (CPT Code 64X11)
In September 2024, the CPT Editorial Panel created a new CPT code
to report percutaneous electrical nerve field stimulation of cranial
nerves: CPT code 64X11 (Percutaneous electrical nerve field
stimulation, cranial nerves, without implantation). For CY 2026, the
RUC-recommended a work RVU of 1.50 for CPT code 64X11.
We are proposing the RUC-recommended work RVU of 1.50 for CPT code
64X11, and the RUC-recommended direct PE inputs without refinement.
(21) Laminotomy--Repair of Disc Defect (CPT Code 6XX13)
In September 2024, the CPT Editorial Panel created a new add-on
code to report the repair of an annular defect by implantation of a
bone anchored annular closure device after a laminotomy
(hemilaminectomy): CPT code 6XX13 (Laminotomy (hemilaminectomy), with
decompression of nerve root(s), including partial facetectomy,
foraminotomy and/or excision of herniated intervertebral disc; with
repair of annular defect by implantation of bone anchored annular
closure device, including all imaging guidance, 1 interspace, lumbar
(List separately in addition to code for primary procedure)). CPT codes
63030 (Laminotomy (hemilaminectomy), with decompression of nerve
root(s), including partial facetectomy, foraminotomy and/or excision of
herniated intervertebral disc; 1 interspace, lumbar) and 63035
(Laminotomy (hemilaminectomy), with decompression of nerve root(s),
including partial facetectomy, foraminotomy and/or excision of
herniated intervertebral disc; each additional interspace, cervical or
lumbar (List separately in addition to code for primary procedure))
were identified as codes in the same family as CPT code 6XX13, but were
recently surveyed in 2022 and discussed in the CY 2023 PFS final rule
(87 FR 69495 through 64999). The specialty societies stated that the
work for these procedures is unchanged and distinct from the work of
the new code, and therefore only surveyed CPT code 6XX13.
For CY 2026, we are proposing the RUC-recommended work RVU of 2.50
for CPT code 6XX13. There are no direct PE inputs for CPT code 6XX13.
(22) Cerebral Perfusion & CT Angiography-Head & Neck (CPT Codes 70496,
70498, 70XX1, 70XX2, and 70XX3).
In May 2024, the CPT Editorial Panel created three new codes for
cerebral perfusion and CT angiography of the head and neck: CPT code
70XX1 (Computed tomographic angiography (CTA), head and neck, with
contrast material(s), including noncontrast images, when performed, and
image postprocessing), CPT code 70XX2 (Computed tomographic (CT)
cerebral perfusion analysis with contrast material(s), including image
postprocessing performed with concurrent CT or CT angiography of the
same anatomy (List separately in addition to code for primary
procedure)), and 70XX3 (Computed tomographic (CT) cerebral perfusion
analysis with contrast material(s), including image postprocessing
performed without concurrent CT or CT angiography of the same anatomy).
Codes 70XX1, 70XX2, and 70XX3 were surveyed for the September 2024 RUC
meeting, along with the existing standalone codes for CTA head and CTA
neck in this code family: CPT code 70496 (Computed tomographic
angiography, head, with contrast material(s), including noncontrast
images, if performed, and image postprocessing) and CPT code 70498
(Computed tomographic angiography, neck, with contrast material(s),
including noncontrast images, if performed, and image postprocessing).
We are proposing the RUC-recommended work RVU of 2.50 for CPT code
70XX1, the work RVU of 0.77 for CPT code 70XX2, the work RVU of 1.00
for CPT code 70XX3, and the work RVU of 1.75 for both CPT codes 70496
and 70498.
We are proposing the RUC-recommended direct PE inputs for CPT codes
70XX1, 70XX2, 70XX3, 70496, and 70498 without refinement.
(23) Coronary Atherosclerotic Plaque Assessment (CPT Code 75XX6)
In September 2024, the CPT Editorial Panel created new Category I
CPT code 75XX6 (Quantification and characterization of coronary
atherosclerotic plaque to assess severity of coronary disease, derived
from augmentative software analysis of the data set from a coronary
computed tomographic angiography, with interpretation and report by a
physician or other qualified health care professional) and deleted the
four existing Category III CPT codes associated with coronary
atherosclerotic plaque assessment.
We are proposing the RUC-recommended work RVU of 0.85 for CPT code
75XX6. For the direct PE inputs, these recommendations also include a
new supply item, Plaque Characterization Analysis Software, that lists
a per-patient fee of $1500 for the plaque data analysis summary
generated by the vendor. This RUC-recommended supply item accounts for
the overwhelming majority of this CPT code's PE valuation. We continue
to have concerns that software analysis fees are not well accounted for
in our direct PE methodology, as discussed for CPT code 75580
(Noninvasive estimate of coronary fractional flow reserve (FFR) derived
from augmentative software analysis of the data set from a coronary
computed tomography angiography, with interpretation and report by a
physician or other qualified health care professional) in our CY 2024
final rule (88 FR 78901); however, we recognize that the analysis
represents a significant part of the resource costs associated with
this procedure.
Similar to our previously finalized policy for CPT code 75580, we
are therefore proposing to identify a crosswalk code for CPT code 75XX6
based on the OPPS assignment for the current coding under which this
service is paid, Category III CPT code 0625T (Automated quantification
and characterization of coronary atherosclerotic plaque to assess
severity of coronary disease, using data from coronary computed
tomographic angiography; computerized analysis of data from coronary
computed tomographic angiography). We are proposing to crosswalk the PE
RVU for CPT code 75XX6 to the PE RVU for CPT code 77373 (Stereotactic
body radiation therapy, treatment delivery, per fraction to 1 or more
lesions, including image guidance, entire course not to exceed 5
fractions), which is a PE-only code with no work RVU and which closely
approximates the OPPS assignment previously employed by Category III
CPT code 0625T. As we have previously stated in rulemaking, we believe
that crosswalking the PE RVU for CPT code 75XX6 to a code with similar
resource costs (CPT code 77373) allows CMS to recognize that
practitioners are incurring resource costs for the purchase and ongoing
use of the software employed in CPT code 75XX6, which would not
typically be considered direct PE under our current methodology (86 FR
65038 and 65039).
[[Page 32424]]
(24) Use of the Relationship Between OPPS APC Relative Weights To
Establish PE RVUs for Radiation Oncology Treatment Delivery (CPT Codes
77387, 77402, 77407, 77412, and 77417), Superficial Radiation Treatment
(CPT Codes 77X05, 77X07, 77X08, and 77X09), and Proton Beam Treatment
Delivery (CPT Codes 77520, 77522, 77523, and 77525)
A. Background
We typically establish two separate PE RVUs for services that can
be furnished in either a nonfacility setting, such as a physician's
office, or a facility setting, such as a hospital. The nonfacility PE
RVUs reflect all the direct and indirect practice expenses involved in
furnishing a particular service when the entire service is furnished in
a nonfacility setting. The facility PE RVUs reflects the direct and
indirect practice expenses associated with furnishing a particular
service in a setting such as a hospital, where those facilities incur a
portion of the costs and receive a separate Medicare payment for the
service. The types of costs covered by the facility fee are comparable
to the PE costs incurred by physicians in non-facility settings, namely
direct and indirect costs. For certain services, such as radiation
treatment delivery services, the coding itself reflects differing types
of resources associated with furnishing the service--from coding
describing the technical aspects of the treatment delivery only, which
do not include any physician work, to codes that describe both the
physician work and the technical resources associated with that work.
The former services are valued through information on the direct
practice expenses, whereas the latter are valued through the resource
costs associated with the physician work and any applicable direct
practice expenses.
When services are furnished in the facility setting, such as a
Hospital Outpatient Department (HOPD) or an Ambulatory Surgical Center
(ASC), the total combined Medicare payment (made to the facility and
the professional) typically exceeds the Medicare payment made for the
same service when furnished in the physician office or other
nonfacility setting. This payment difference is largely based on
differences in statutory provisions that specify how payment amounts
are determined under the PFS and under facility payment systems, like
the Hospital Outpatient Prospective Payment System (OPPS). CMS has
received feedback from interested parties that the difference reflects
the greater costs that facilities incur than those incurred by
practitioners furnishing services in offices and other nonfacility
settings. For example, interested parties have indicated that hospitals
incur higher overhead costs because they maintain the capability to
furnish services 24 hours a day and 7 days per week, generally furnish
services to higher acuity patients than those who receive services in
physicians' offices, and have additional legal obligations such as
complying with the Emergency Medical Treatment and Labor Act (EMTALA).
Additionally, hospitals incur expenses to meet conditions of
participation and ASCs incur expenses to meet conditions for coverage
in order to participate in Medicare; many of these conditions are not
applicable in nonfacility settings.
While we receive recommendations from the RUC that include
information on resource costs, this information relies heavily on the
voluntary submission of information by individuals furnishing the
service. Furthermore, in the case of certain direct costs, such as the
price of high-cost disposable supplies and expensive capital equipment,
even voluntary information has been very difficult to obtain or
validate. Such incomplete, small sample, potentially biased or
inaccurate resource input costs may distort our valuation of the
nonfacility PE RVUs used in calculating PFS payment rates for
individual services. As MedPAC noted in their comment to the CY 2011
PFS proposed rule, ``using price information voluntarily submitted by
specialty societies, individual practitioners, suppliers, and product
developers might not result in objective and accurate prices because
each group has a financial stake in the process''. We have repeatedly
stated, such as in the CY 2018 final rule, that ``we do not believe
that very small numbers of voluntarily submitted invoices are likely to
reflect typical resource costs and create the potential for
overestimation of supply and equipment costs'' (82 FR 52998).In
addition to the difficulty we face in obtaining accurate information
about some of the direct PE inputs, the data used in the PFS PE
methodology can often be outdated. Although we received updated PPI
survey information from the AMA, we are not proposing to utilize this
new data in our practice expense methodology due to concerns we
identified in section II.B. of this proposed rule. We refer readers
there for further discussion.
Under the PFS, we strive to maintain relativity in a variety of
ways. For example, we typically review the work RVUs, physician time,
and direct PE inputs for all codes within families of codes. We also
routinely compare work RVUs across services with similar clinical
characteristics, global periods, etc. For direct PE inputs, we
routinely make standardized assumptions regarding the typical
involvement of clinical staff or use of medical equipment based on the
kind of service being furnished.
However, we also recognize that the utility of using the exact same
methodologies to establish and maintain appropriate relativity under
the PFS can be especially limited for services that are difficult to
compare to other PFS services. Radiation treatment delivery services
are a clear example of this dynamic. Generally, the PFS practice
expense methodology serves the purpose of using direct cost and
professional work data to assign relative value units to services. In
establishing nonfacility PE RVUs, these settings include physician
offices for a range of kinds of care and specialties as well as
independent clinics/suppliers. However, the costs for furnishing
radiation treatment delivery services in nonfacility settings (that is,
freestanding radiation therapy centers) include capital-intensive and
specialized resources that are difficult to compare to the kinds of
resources involved in furnishing most other kinds of services in other
nonfacility settings. For example, the sum of the current prices for
the equipment inputs used in the PE calculations for radiation
treatment delivery services (i.e., $3,000,966 for ER089 (IMRT
accelerator) and $773,104 for ER056 (radiation treatment vault)) is
well over twice the price of the next most expensive piece of equipment
($1,559,013 for EL008 (room, MR) used in furnishing other types of
services in other nonfacility settings. Furthermore, other inputs for
capital equipment over $1 million are utilized in a wide array of
services for multiple specialties, while the equipment inputs for
radiation treatment delivery services are more specialized in that they
are used in a small number of services and predominantly in radiation
oncology. We have long had difficulty understanding how best to
characterize the costs associated with architectural infrastructure
needs prompted by use of linear accelerators. In the CY 2016 PFS final
rule (80 FR 70953), we stated that we believe at least some portions of
the costs associated with the radiation treatment vault construction
are indirect PE under the established methodology. We most recently
noted this difficulty in CY 2021 PFS rulemaking when addressing our
inability to use the recommended direct PE inputs for proton beam
therapy services (85 FR
[[Page 32425]]
84625). We described difficulty using invoices provided, given that
they did not separately identify the direct PE inputs (that is, cost of
the equipment) from that of the infrastructure needs surrounding the
equipment. For the CY 2016 PFS final rule (80 FR 70954), technical PFS
rate setting concerns related to how costs were allocated to different
codes based on presumptions about costs of image guidance, prompted CMS
to maintain the HCPCS G-codes under the PFS in use for reporting
radiation treatment delivery services instead of newly introduced CPT
codes. (These HCPCS G codes, which mirrored the coding structure prior
to the newly introduced CPT codes, were developed for CY 2015 PFS
rulemaking in order to allow CMS to include the changes to radiation
treatment delivery services in the CY 2016 PFS proposed rule). At that
time, CMS adopted the new CPT codes for use under the OPPS, where
payment calculations did not suffer from the same problems. Since that
time, outpatient radiation therapy services have been reported to
Medicare using two different sets of HCPCS codes, depending on whether
the services are provided in a HOPD or in a nonfacility setting paid
under the PFS.
For CY 2026, the CPT Editorial Panel has again revised the codes
describing radiation treatment delivery services. This presents an
opportunity both to consider adopting CPT codes under the PFS and to
re-examine how to best assign relative value units to radiation
treatment delivery and superficial radiation treatment delivery
services under the PFS. If we were to utilize the RUC-recommended
direct PE inputs and new RUC PE survey data to value the new, newly
payable, and revised codes in these code families, valuation, and
ultimately payment, for these services would be subject to the
additional volatility associated with small sample surveys, the unique
dynamic of capital-intensive costs, and voluntarily submitted invoice
data.
We considered the RUC recommended PE inputs for the new, and
revised codes listed above in the context of the concerns we outlined
above. Specifically, we considered how PE is allocated for under the
standard methodologies and noted that radiation treatment delivery and
superficial radiation treatment services require long-term capital and
infrastructure investments more like facility costs than most other
services paid under the PFS. Therefore, we have determined that
identifying an alternative data source that is more routinely updated
and standardized would improve the accuracy of valuation for these
services.
One alternative data source that we have examined is the use of
OPPS cost data to develop PE RVUs. Under section 1848(c)(2)(N) of the
Act, we have authority to establish or adjust PE RVUs using cost,
charge, or other data from suppliers or providers of services. Under
contract with CMS, RAND Corporation (``RAND'') examined the feasibility
of using OPPS cost data in developing PE RVUs.51 52 RAND
noted that ``if OPPS-based costs were used to construct total PE RVUs,
the valuation process would also be streamlined by using a single data
source, thereby eliminating the valuation complexities posed by having
separate direct and indirect cost RVU pools.'' RAND identified a number
of methodological issues that would need to be resolved to utilize OPPS
cost data for all PFS services but found that the potential benefits
justified investments to further develop this option. RAND noted that
using OPPS data ``might not be appropriate for the entirety of services
in the MPFS and the advisability of using OPPS data should be evaluated
by categories of costs and/or services.'' Considering that the
resources involved in furnishing radiation treatment delivery and
superficial radiation treatment delivery services seem to be primarily
driven by capital costs that aren't as likely to vary greatly between
facilities like hospitals and free standing centers, and because the
billing codes for the services (both old and new) are already
stratified into professional and technical services, these services
have obvious characteristics that make use of OPPS data particularly
appropriate. Additionally, use of routinely updated, auditable, and
standardized cost data from hospital cost reports that is currently
used in setting rates under the OPPS offers the possibility of long-
term stable rates that many interested parties have long sought and
that may be helpful in maintaining access to care for capital-intensive
services. Consequently, we believe that using OPPS data in setting the
relative rates for these kinds of services represents the best source
for improved valuation of practice expense in free-standing radiation
centers.
---------------------------------------------------------------------------
\51\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al.
``Practice Expense Methodology and Data Collection Research and
Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html.
\52\ Burgette, Lane F., Joachim O. Hero, Jodi L. Liu, Catherine
C. Cohen, Barbara O. Wynn, Katie Merrell, et al. Practice Expense
Data Collection and Methodology.'' RAND Corporation, November 1,
2021. https://www.rand.org/pubs/research_reports/RRA1181-1.html.
---------------------------------------------------------------------------
We have long noted that data obtained from hospital cost reports is
regularly updated, auditable, and required to adhere to national
standards for reporting. For example, in the CY 2015 PFS final rule (79
FR 67569), we noted that ``routinely updated, auditable resource cost
information submitted contemporaneously by a wide array of providers
across the country is a valid reflection of ``relative'' resources and
could be useful to supplement the resource cost information developed
under our usual methodology based upon a typical case that are
developed with information from a small number of representative
practitioners for a small percentage of codes in any particular year''.
Under OPPS, services are grouped based on clinical characteristics
and resource costs into Ambulatory Payment Classifications (APCs). The
OPPS methodology utilizes charges from claims data and cost-to-charge
ratios developed from cost report data to establish the geometric mean
costs for each APC. APC payments are in turn based on the geometric
mean costs associated with the services within the APC.
While the costs involved in furnishing technical services in the
facility setting could generally be expected to be greater than or
equal to those of providing the same service in the nonfacility
setting, we believe that the relationship of the costs of services
within a code family under the PFS would likely mirror the relationship
of those costs of services under the OPPS. (The Ambulatory Surgical
Center (ASC) fee schedule, which relies on OPPS relative weights
multiplied by an ASC conversion factor, is an example of using the same
underlying data to establish relative values in two payment systems
while continuing to recognize differences in cost structure between
settings). For example, if ``service A'' is twice as costly under the
OPPS as ``service B'', it is reasonable to assume that the resource
costs of ``service A'' are twice as costly as ``service B'' under the
PFS. We would expect that the relationship between the resources
involved in furnishing services within the same code family under the
OPPS would be similar under the PFS. Given that the APC is the payment
unit under the OPPS, we believe that applying the relationship of the
APC relative weights to the codes within the Radiation Oncology
Treatment Delivery and Superficial Radiation Treatment code families is
the most accurate and transparent mechanism to translate the
[[Page 32426]]
relationship of the cost data under the OPPS to the PFS. This approach
would help to mitigate volatility in relativity among services that
would be attributable to small sample surveys, voluntarily submitted
invoice data, or PE allocation methodologies that are not designed
primarily for capital-intensive costs in architecture and medical
equipment as costly as linear accelerators. Therefore, we are proposing
to use this relationship between the relative weights of the OPPS APCs
to which the codes in these families are assigned to value the PE
portion of the Radiation Oncology Treatment Delivery and Superficial
Radiation Treatment code families. We are proposing to use the CY 2026
proposed OPPS APC relative weights and to update these in the final
rule based on the updated OPPS APC relative weights. The OPPS APC
relative weights can be found in ``Addendum B'' under ``OPPS Addenda''
under the most recent proposed or final rule listed at https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices. We are also proposing to value the MP
RVUs for the Radiation Oncology Treatment Delivery and Superficial
Radiation Treatment code families with our usual methodology for PE-
only services.
While we believe that the relationship between services within the
Radiation Oncology Treatment Delivery and Superficial Radiation
Treatment code families are well approximated by the relationship
between those services under the OPPS, we recognize that the RVUs for
these groups of services must reflect the resources involved in
furnishing services relative to other services paid under the PFS. As
such, the proposed PE RVUs for the Radiation Oncology Treatment
Delivery and Superficial Radiation Treatment code families, which are
based on the relationship of the relative weights of the OPPS APCs to
which these codes are assigned, were calculated using the portion of
total PE and MP RVUs accounted for by the volume and PE RVUs of these
families as they existed in CY 2025. In other words, we calculated the
RVUs for these codes so that the overall PE and MP RVUs for these
services represent the same share of total PE and MP RVUs in CY 2025
and CY 2026.
Under the PE methodology, the allocation of indirect PE for a given
family of services impacts the allocation of indirect PE for other
services furnished by the specialties that furnish that family of
services (``relevant specialties''). This results from specialty-
specific calculations that occur in steps 12 through 15, described in
section II.B. of this proposed rule, that are impacted by the size of
the pool of indirect allocators (that is, work RVUs and direct costs)
for each specialty. Since the codes in these families have historically
contained direct PE inputs, and have historically been allocated
indirect PE RVUs using the usual methodology, the proposed PE RVUs for
CY 2026 have been calculated in a manner that maintains the same effect
on the indirect allocation for other services had the PE RVUs been
calculated under the usual methodology. In other words, in calculating
the proposed PE RVUs for CY 2026, we approximated the direct costs for
these services and allocated indirect PE RVUs per the standard
methodology in order to both arrive at PE RVUs based on the proposal
described above and also maintain relativity with the PE RVUs across
the fee schedule. We have included those approximated direct costs in
the downloads section of our website to facilitate transparency. We
note that the direct PE input public use file does not include these
proxy inputs since they only serve the purpose of stabilizing the PE
allocated to other services. We seek comments on this aspect of the
methodology in particular, especially given our interest in
transparency in rate setting.
We are seeking comments on our proposal to use the relative
relationship between the proposed OPPS APC relative weights to
establish the PE RVUs for these code families.
We believe that this proposal will improve the accuracy of the
relative values established for these services and prevent reliance on
irregularly updated information for establishing and maintaining
payment for these services under the PFS. Additionally, we believe that
the alignment of coding, underlying cost data and billing units between
settings paid under the PFS and OPPS will have additional salutary
effects, especially in price transparency for patients and payers.
B. Radiation Oncology Treatment Delivery (CPT Codes 77387, 77402,
77407, 77412, and 77417)
At the September 2024 CPT Editorial Panel meeting, the Panel
approved the revision of CPT codes 77402, 77407 and 77412 to establish
a technique-agnostic family of codes and bundle imaging into the three
CPT codes, and the deletion of CPT codes 77385, 77386 and 77014. The
related guidelines and tables were all updated to reflect the
consolidated services for radiation oncology treatment delivery. These
services were subsequently reviewed by the RUC and a valuation
recommendation was submitted to CMS for inclusion in CY 2026
rulemaking. Please see Table 14 for the current and CY 2026 code
descriptors (where applicable) for the CPT codes in this family.
[[Page 32427]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.025
Although these CPT codes were established for CY 2015, CMS has not
used them for payment under the PFS. In October 2013, the CPT Editorial
Panel created CPT codes 77402, 77407, 77412, 77385, 77386 and 77387,
which were reviewed at the January 2014 RUC meeting for CY 2015.
Previously, radiation treatment delivery had been reported with 17 CPT
codes. CMS identified concerns with the packaging of Image-guided
Radiation Therapy (IGRT) into some of the delivery codes in the family
and not others. As a result, CMS created 17 HCPCS G-codes, to mirror
the existing codes (at the time), maintained CPT code 77014, and
established values that linked directly to the existing values/inputs
for the PFS. Table 15 includes the HCPCS G-codes and their long
descriptors.
[[Page 32428]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.026
Over the past several years, the Radiation Oncology community met
with CMS and CMMI to address the concerns identified by CMS in the 2015
code set as well as the possibility of creating an episode-based
alternative payment approach for radiation therapy services. The G-
codes were identified in a Relativity Assessment Workgroup (RAW) screen
(CMS/Other source with 2019 estimated Medicare utilization over
20,000). The RAW did not agree with the specialty societies' request to
maintain the current valuation. As a result, the CPT Editorial Panel
reviewed the radiation oncology delivery treatment family at the
September 2024 CPT meeting and established a technique-agnostic family
of codes and bundled imaging into all three services. The Panel
approved the revision of CPT codes 77402, 77407 and 77412 and the
deletion of 77385, 77386 and 77014. The specialty societies have also
requested that CMS delete the related G-codes, G6001 through G6017. As
stated previously, we have not recognized the radiation treatment
delivery CPT codes for payment under PFS and have instead used the G-
codes to describe these services, based primarily on concerns related
to how the conventional practice expense methodology applies to these
services. For CY 2026, we are proposing to delete the 17 G-codes and
recognize the newly revised CPT codes for payment under the PFS, in
conjunction with our proposal to utilize OPPS cost data to establish PE
RVUs, as previously described.
We are proposing the RUC-recommended work RVU of 0.70 for the
single code in the family that has a physician work component, CPT code
77387.
We are proposing to utilize the relationship between the proposed
OPPS APC relative weights for APCs 5621, 5622, and 5623 to inform the
valuation of PE-only CPT codes 77402, 77407, and 77412 when paid under
the PFS. As described above, we believe that the relationship between
the OPPS APC relative weights more accurately reflects the relative
resource costs associated with furnishing these services.
To facilitate the use of the relationship of the OPPS APC relative
weights to establish PE RVUs for radiation treatment delivery services,
we believe it is important to standardize the billing units and
bundling rules between the settings. That is, services in this code
family that describe technical costs and are not separately payable
under the OPPS will not be separately payable under the PFS, because
the associated costs are incorporated into the costs for separately
paid codes. As a result, the proposed PE RVUs for the
[[Page 32429]]
services in this code family, which are developed based on the
relationship of the APC relative weights to which services in this
family are assigned, include a redistribution of the PE RVUs from the
newly bundled services to the other services in that family, as
described below.
In an effort to align the relationship between the PFS payment for
this code family with the OPPS payment, we are proposing to assign
Procedure Status ``B'' to the technical component of CPT code 77387 to
maintain consistency with OPPS payment for this code, which is packaged
into payment for the treatment delivery codes, CPT codes 77402, 77407,
and 77412, and therefore is not separately payable under the OPPS. As
described in section II.B. of this proposed rule, typically, 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. In
the case of CPT code 77387, we are proposing that the PE and total RVU
for the global service will equal the PE and total RVU for the
professional component only because the technical component is not
separately payable under the PFS since the relative resources are
included in the valuation of another code (treatment delivery). We are
proposing to display CPT code 77387 in Addendum B with the professional
and technical components, where the technical component has non-payable
Procedure Status ``B,'' as well as the global service equal to the
payable professional component, We are also seeking comment on
strategies to mitigate billing confusion that could result from this
relatively novel circumstance where the technical component of a
service is bundled but the professional component is separately
reported. Specifically, we are seeking comments on whether displaying
the global service equal to the professional component is problematic,
and if it would be preferable to eliminate the global code and display
only the professional and technical components in Addendum B.
Similarly, for PE-only CPT code 77417 (Therapeutic radiology port
image(s)), we are proposing to assign Procedure Status ``B'' to align
with OPPS payment for this code, which is packaged into payment for the
treatment delivery codes, CPT codes 77402, 77407, and 77412 and
therefore would not be separately reportable under the PFS. Similarly,
of course, it is packaged under the OPPS.
C. Superficial Radiation Therapy (CPT Codes 77X05, 77X07, 77X08, and
77X09)
Superficial radiation therapy is currently provided using CPT code
77401 (Radiation treatment delivery, superficial and/or ortho voltage,
per day) in conjunction with CPT code 77280 (Therapeutic radiology
simulation-aided field setting; simple) and HCPCS code G6001
(Ultrasonic guidance for placement of radiation therapy fields).
In October 2020, HCPCS code G6001 was identified by the RAW via the
CMS/Other Medicare utilization over 20,000 screen. In January 2021, the
RUC recommended referring G6001 to CPT to develop new code(s) that
reflect the different process of care between the two specialties
(dermatology and radiation oncology). After a 2-year delay to allow
time for re-review, the CPT Editorial Panel created four codes and a
new subsection to report surface radiation therapy in September 2024.
These codes will replace CPT code 77401 and HCPCS code G6001 which were
scheduled for deletion by the CPT Editorial Panel and recommended for
deletion by CMS, respectively. This code family was surveyed for the
January 2025 RUC meeting.
The new codes are as follows:
77X05: Surface radiation therapy; superficial or
orthovoltage, treatment planning and simulation-aided field setting.
77X07: Surface radiation therapy, superficial, delivery,
<150 kV, per fraction (e.g., electronic brachytherapy).
77X08: Surface radiation therapy, orthovoltage, delivery,
150-500 kV, per fraction.
77X09: Surface radiation therapy, superficial or
orthovoltage, image guidance, ultrasound for placement of radiation
therapy fields for treatment of cutaneous tumors, per course of
treatment (List separately in addition to the code for primary
procedure).
We are proposing the RUC-recommended work RVU for the two codes in
the family that have a work RVU. We are proposing a work RVU of 0.77
for CPT code 77X05 and a work RVU of 0.30 for CPT code 77X09.
Similar to our approach for the radiation oncology treatment
delivery codes discussed above, we believe that using the relationship
between the relative weights of the OPPS APCs to which codes in this
family are assigned likely more accurately reflect the actual costs of
these services compared to use of direct PE input and PE allocation
methodologies. Therefore, similar to our proposal for radiation
treatment delivery services, we are proposing to use this relationship
to establish the RVUs for the PE portion of these services.
We are proposing to utilize the relationship between the proposed
OPPS APC assignments for APCs 5621 and 5732 to inform the valuation of
PE-only CPT codes 77X07 ((Surface radiation therapy, superficial,
delivery, <150 kV, per fraction (eg, electronic brachytherapy))) and
77X08 (Surface radiation therapy, orthovoltage, delivery,
150-500 kV, per fraction), and for the technical component
of CPT code 77X05 (Surface radiation therapy; superficial or
orthovoltage, treatment planning and simulation-aided field setting)
when paid under the PFS.
In an effort to align the relationship between the PFS payment for
this code family with the relationship of the OPPS information used to
develop the RVUs, we are proposing to assign Procedure Status ``B'' to
the technical component of CPT code 77X09 to align with OPPS of this
code whose costs are packaged into payment for the treatment delivery
CPT codes 77X07 and 77X08. We are proposing to display CPT code 77X09
in Addendum B with the professional and technical components, where the
technical component is non-payable Procedure Status ``B,'' as well as
the global service equal to the payable professional component, but are
seeking comment on strategies to mitigate possible billing confusion
that could result from this relatively novel circumstance where the
technical component of a service is bundled but the professional
component is separately reported. Specifically, we are seeking comments
on whether displaying the global service equal to the professional
component is problematic, and if it would be preferable to eliminate
the global service and display the professional and technical
components only in Addendum B.
[[Page 32430]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.027
D. Proton Beam Treatment Delivery (CPT Codes 77520, 77522, 77523, and
77525)
PFS payment amounts for proton beam treatment delivery services are
currently determined by local Medicare Administrative Contractors
(MACs). As discussed in CY 2021 rulemaking (85 FR 84625 through 84626),
we have not previously established RVUs for these services due to the
unique nature of the equipment costs associated with these services
compared to other capital costs addressed by our usual PE methodology.
Given the proposals described above to establish RVUs for the new and
revised CPT codes for Radiation Oncology and Superficial Radiation
Treatment Delivery Services, we are seeking comments on whether we
should adopt a similar approach to establish RVUs for
[[Page 32431]]
proton beam treatment delivery services. We note that these services
are assigned to APCs 5623 and 5625 under the OPPS with established
Medicare payment rates (unlike the contractor pricing in place for
these services under the PFS). We are specifically seeking comments on
how we might establish national pricing and total RVUs for these
services to maintain relativity within the PFS. For example, would
using the overall ratio between OPPS and PFS payment for radiation
oncology treatment services to establish initial year RVUs for proton
beam treatment delivery services accurately reflect the relative
resources involved in furnishing the services? Alternatively, would it
be more appropriate to consider the overall difference between the OPPS
and Medicare payment as currently determined by the MACs for these
services, or are there other alternative methods we should consider? We
welcome comments on this topic.
(25) Combination COVID-19 Vaccine Administration (CPT Codes 90480 and
9X16X)
In September 2024, the CPT Editorial Panel created a new add-on
code, 9X16X (each additional component administered (List separately in
addition to code for primary procedure)), to report when each
additional non-COVID vaccine component is administered with the COVID-
19 vaccine. CPT code 90480 (Immunization administration by
intramuscular injection of severe acute respiratory syndrome
coronavirus 2 (SAR CoV2) (coronavirus disease [COVID19]) vaccine; first
or only component of each vaccine administered) was revised as part of
this family of services.
We received RUC recommendations for CPT code 90480 that affirmed
the September 2023 work and PE RUC recommendations. We previously
established CPT code 90480 with a procedure status of ``X'' on the PFS
and the code is therefore not payable under the PFS. Payment for this
CPT code is also addressed under previously finalized policies
associated with the emergency use authorization declaration. We refer
readers back to the CY 2025 PFS final rule (89 FR 97710) for more
information on this previously finalized policy.
We also received RUC recommendations for add-on CPT code 9X16X. The
RUC recommendations for this CPT code do not include work or PE inputs
as the recommendations suggest that the work and PE is already included
in the administration base code and this add-on code is intended for
tracking purposes of the second vaccine.
We are proposing to maintain procedure status ``X'' for CPT code
90480 and assign procedure status ``X'' to CPT code 9X16X.
(26) Immunization Counseling (CPT Codes 90XX1, 90XX2, and 90XX3)
In May 2024, the CPT Editorial Panel created three new time-based
CPT codes 90XX1, 90XX2, and 90XX3 to report vaccine counseling
performed where a vaccine is not administered. CPT code 90XX1
(Immunization counseling by physician or other qualified health care
professional when immunization(s) is not administered by provider on
the same date of service; 3 minutes up to 10 minutes), CPT code 90XX2
(Immunization counseling by physician or other qualified health care
professional when immunization(s) is not administered by provider on
the same date of service; greater than 10 minutes up to 20 minutes) and
CPT code 90XX3 (Immunization counseling by physician or other qualified
health care professional when immunization(s) is not administered by
provider on the same date of service; greater than 20 minutes). These
services were surveyed and reviewed at the September 2024 RUC meeting.
In 2022, CMS created six new HCPCS codes so that Medicaid providers
could bill for stand-alone vaccine counseling, ``State Health Official
Letter #22-002 ``Medicaid and CHIP Coverage of Standalone Vaccine
Counseling''.\53\ The six HCPCS codes are:
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\53\ https://www.medicaid.gov/state-resource-center/downloads/stnd-vacc-cou-spec-hcpcs-codes.pdf.
---------------------------------------------------------------------------
G0310 (Immunization counseling by a physician or other qualified
health care professional when the vaccine(s) is not administered on the
same date of service, 5 to 15 mins time. (This code is used for
Medicaid billing purposes.))
G0311 (Immunization counseling by a physician or other qualified
health care professional when the vaccine(s) is not administered on the
same date of service, 16-30 mins time. (This code is used for Medicaid
billing purposes.))
G0312 (Immunization counseling by a physician or other qualified
health care professional when the vaccine(s) is not administered on the
same date of service for ages under 21, 5 to 15 mins time. (This code
is used for Medicaid billing purposes.))
G0313 Immunization counseling by a physician or other qualified
health care professional when the vaccine(s) is not administered on the
same date of service for ages under 21, 16-30 mins time. (This code is
used for Medicaid billing purposes.)
G0314 Immunization counseling by a physician or other qualified
health care professional for COVID-19, ages under 21, 16-30 mins time.
(This code is used for the Medicaid Early and Periodic Screening,
Diagnostic, and Treatment Benefit (EPSDT.)
G0315 Immunization counseling by a physician or other qualified
health care professional for COVID-19, ages under 21, 5-15 mins time.
(This code is used for the Medicaid Early and Periodic Screening,
Diagnostic, and Treatment Benefit (EPSDT.)
The RUC requested that CMS delete HCPCS codes G0310-G0313, and
replace them with the new CPT codes 90XX1, 90XX2, and 90XX3. However,
we are proposing to assign status indicator (``I'') to each of these
three services, as not valid for Medicare purposes. Medicare uses other
coding for reporting of, and payment for immunization counseling. We
are not proposing any work RVUs or PE RVUs for any of the three new CPT
codes.
(27) Colon Motility Services (CPT Codes 91XX1 and 91XX2)
In April 2023, the Relativity Assessment Workgroup (RAW) identified
CPT codes 91120 and 91122 as reported together 75 percent of the time
or more based on 2021 Medicare claims data. The RUC noted that these
services are reported together 95 percent of the time and recommended
that the specialty societies work with the CPT Editorial Panel to
develop a code bunding solution. In May 2024, the CPT Editorial Panel
created two new codes, CPT code 91XX1 (Rectal sensation, tone, and
compliance study (for example, barostat)) and CPT code 91XX2 (Anorectal
manometry, with rectal sensation and rectal balloon expulsion test,
when performed) to describe these services to replace CPT codes 91120
and 91122. The two new codes were surveyed for the September 2024 RUC
meeting.
For CY 2026, the RUC-recommended a work RVU of 3.05 for CPT code
91XX1 and 2.70 for CPT code 91XX2. We are proposing these RUC
recommendations without refinement.
For the direct PE inputs, we disagree with the RUC-recommended 17
minutes of clinical labor associated with CA013 (Prepare room,
equipment and supplies) for CPT code 91XX2.We are proposing a time of 2
minutes for CA013, which is the standard time for this PE input. We are
proposing the RUC recommendation of 17 minutes of clinical labor time
for CA013 for CPT code 91XX1 to account for a previous
[[Page 32432]]
input of 15 minutes to calibrate equipment in similar codes. We
recognize it is not typical to have different values for the same
clinical labor activity across a code family, and we welcome comments
as to the appropriateness of these refinements.
We disagree with the RUC-recommended 30 minutes of clinical labor
associated with CA024 (Clean room/equipment by clinical staff) for CPT
91XX1 as we believe this is unnecessarily long, and does not match
similar services. We are proposing a CA024 time of 10 minutes for both
codes (CPT 91XX1 and 91XX2) based off reference CPT code 45300
(Proctosigmoidoscopy, rigid; diagnostic, with or without collection of
specimen(s) by brushing or washing (separate procedure)).
We are also proposing to refine the SM015 supply (Enzymatic
detergent) to a quantity of 4 ounces for both codes, to match similar
inputs for similar services. We seek comment on the appropriateness of
this refinement, as we do not believe that 120 ounces of the SM015
supply would be typical or necessary given that no HCPCS code on the
entire PFS uses more than 8 ounces of this supply.
We are proposing all of the other RUC recommendations for direct PE
for CPT codes 91XX1 and 91XX2 without refinement.
(28) Dark Adaptation Diagnostic and Screening Services (CPT Codes 92284
and 922X1)
In 2023, the specialty societies prepared and submitted a Category
I Code Change Application to create CPT code 922X1 (Screening dark
adaptation measurement (for example, rod recovery intercept time), with
interpretation and report), which describes the screening test for
retinal and optic nerve disease. This code was created to differentiate
between diagnostic dark adaptation testing and screening testing that
has possibly been reported under CPT code 92284 (Diagnostic dark
adaptation examination (for example, rod and cone sensitivities, rod-
cone breakpoint), with interpretation and report). CPT also added a
parenthetical to CPT code 92284, to describe how the diagnostic dark
adaptation test is conducted in order to identify patients with macular
degeneration or inherited retinal diseases when they have symptomatic
visual loss without any identifiable cause or clinical examination.
CPT code 92XX1 describes a screening service that has not been
determined to be a preventive service under Section 1861 of the Social
Security Act and as such is not covered under Medicare. We are
proposing to assign status indicator (``N'') to this service, as a non-
covered service. We will list the RUC-recommended RVUs for display
purposes only.
In the CY 2023 PFS final rule we finalized a work RVU of 0.00 for
CPT code 92284 as proposed (87 FR 69513). The RUC had surveyed this
procedure in 2021, reviewed the survey results for the procedure and
recommended 1 minute of pre-service time, 3 minutes of intra-service
time, 1 minute of immediate post-service time, totaling 5 minutes, all
of which reduced the surveyed times. The RUC also recommended a work
RVU of 0.14. We disagreed with the RUC-recommended work RVU of 0.14 for
CPT code 92284. We found that the recommended work RVU did not
adequately reflect reductions in physician time, since the diagnostic
screening is usually completed during an E/M visit and largely consists
of interpreting machine generated results.
For this latest review of CPT code 92284 in CY 2026, we disagree
with the RUC-recommended work RVU of 0.32 and are proposing a work RVU
of 0.29 for CPT code 92284 based on reference to code CPT 92132
(Computerized ophthalmic diagnostic imaging (e.g., optical coherence
tomography [OCT]), anterior segment, with interpretation and report,
unilateral or bilateral), for which we finalized 0.29 work RVU in the
CY 2025 PFS. Our proposed work RVU is also supported by reference to
CPT code 71110 (Radiologic examination, ribs, bilateral; 3 views), with
a work RVU of 0.29. Both reference codes have intra-service work times
of 6 minutes and total times of 8 minutes. While the intra-service work
time of both reference codes is 1 minute less than the RUC-recommended
median survey time for CPT code 92284, they each have 1 minute for pre-
service and post-service times. We believe it is more appropriate to
use these reference codes than the RUC-recommended cross walk to CPT
92282 (Imaging of retina for detection or monitoring of disease; with
remote physician or other qualified health care professional
interpretation and report, unilateral or bilateral) with a work value
of 0.32 RVU because we believe the RUC-recommended intra-service work
time and work RVU are overstated relative to the current instar-service
work time and work RVU for CPT code 92284. Additionally, we also
searched for crosswalks to CPT codes the same intra-service time and a
range of similar pre-and post-service times and found that the
recommended work RVU of 0.32 fell near the top of this range, which
would not maintain relativity of the work values among the identified
CPT codes.
We are proposing the RUC-recommended direct PE inputs for CPT code
92284 without refinement.
(29) Coronary Therapeutic Services and Procedures (CPT Codes 92920,
92924, 92928, 92933, 92937, 92941, 92943, 92973, 92X01, 92X02, 93571,
and 93572)
In the CY 2013 PFS final rule (77 FR 69063 through 69064), we
reviewed 13 new codes to describe percutaneous coronary intervention
(PCI) services and assigned bundled status to all the add-on codes for
the additional branches off the major coronary arteries because we
believed that separately paying for branch-level stents may encourage
increased placement of stents. To bundle the work of each new add-on
code into its respective base code, we used the RUC-recommended
utilization crosswalk to determine what percentage of the base code
utilization would be billed with the add-on code, and added that
percentage of the RUC-recommended work RVU and physician time for the
add-on code to the RUC-recommended work RVU and physician time of the
base code.
In September 2022, the CPT Editorial Panel created one new Category
I CPT code for percutaneous coronary lithotripsy. The new add-on CPT
code 92972 (Percutaneous transluminal coronary lithotripsy) was
reviewed by the RUC on an interim basis for CY 2024 while the entire
PCI code family was referred to the CPT Editorial Panel for
restructuring. Subsequently, the code family was revised at the
February 2024 CPT Editorial Panel meeting, including the deletion of
the bundled add-on codes, and surveyed for the April 2024 RUC meeting.
The following is a list of the CPT codes and their long
descriptors: CPT codes 92920 (Percutaneous transluminal coronary
angioplasty, single major coronary artery and/or its branch(es)), 92924
(Percutaneous transluminal coronary atherectomy, with coronary
angioplasty when performed, single major coronary artery and/or its
branch(es)), 92928 (Percutaneous transcatheter placement of
intracoronary stent(s), with coronary angioplasty when performed,
single major coronary artery and/or its branch(es); one lesion
involving one or more coronary segments), 92933 (Percutaneous
transluminal coronary atherectomy, with intracoronary stent, with
coronary angioplasty when performed, single major coronary artery and/
or its branch(es)), 92937 (Percutaneous transluminal
[[Page 32433]]
revascularization of or through coronary artery bypass graft (internal
mammary, free arterial, venous), any combination of intracoronary
stent, atherectomy and angioplasty, including distal protection when
performed, single vessel major coronary artery and/its branches), 92941
(Percutaneous transluminal revascularization of acute total/subtotal
occlusion during acute myocardial infarction, any combination of
intracoronary stent, atherectomy and angioplasty, including aspiration
thrombectomy when performed, single major coronary artery and/or its
branches or single bypass graft and/or its subtended branches), 92943
(Percutaneous transluminal revascularization of chronic total
occlusion, single coronary artery, coronary artery branch, or coronary
artery bypass graft, and/or subtended major coronary artery branches of
the bypass graft any combination of intracoronary stent, atherectomy
and angioplasty; antegrade approach), 92973 (Percutaneous transluminal
coronary thrombectomy aspiration mechanical (List separately in
addition to code for primary procedure)), 92X01 (Percutaneous
transcatheter placement of intracoronary stent(s), with coronary
angioplasty when performed, single major coronary artery and/or its
branch(es); two or more distinct coronary lesions with two or more
coronary stents deployed in two or more coronary segments, or a
bifurcation lesion requiring angioplasty and/or stenting in both the
main artery and the side branch), 92X02 (Percutaneous transluminal
revascularization of chronic total occlusion, single coronary artery,
coronary artery branch, or coronary artery bypass graft, and/or
subtended major coronary artery branches of the bypass graft any
combination of intracoronary stent, atherectomy and angioplasty;
combined antegrade and retrograde approaches), 93571 (Intravascular
Doppler velocity and/or pressure derived coronary flow reserve
measurement (coronary vessel or graft) during coronary angiography
including pharmacologically induced stress, when performed; initial
vessel (List separately in addition to code for primary procedure)),
and 93572 (Intravascular Doppler velocity and/or pressure derived
coronary flow reserve measurement (coronary vessel or graft) during
coronary angiography including pharmacologically induced stress, when
performed; each additional vessel (List separately in addition to code
for primary procedure)).We are proposing the RUC-recommended work RVU
for all twelve codes in the family. We are proposing a work RVU of 8.35
for CPT code 92920, a work RVU of 10.13 for CPT code 92924, a work RVU
of 10.00 for CPT code 92928, a work RVU of 11.94 for CPT code 92933, a
work RVU of 11.30 for CPT code 92937, a work RVU of 12.72 for CPT code
92941, a work RVU of 13.69 for CPT code 92943, a work RVU of 1.75 for
CPT code 92973, a work RVU of 12.00 for CPT code 92X01, a work RVU of
15.00 for CPT code 92X02, a work RVU of 1.80 for CPT code 93571, and a
work RVU of 1.44 for CPT code 93572.
However, we note these work RVUs as recommended by the RUC set new
upper ranges for multiple codes in the RUC Database. For example, the
proposed work RVU of 12.00 for CPT code 92X01 sets a new upper range on
RUC Database searches for 000-day global codes with an intraservice
time of 75 minutes, with a previous maximum value of 10.25 work RVUs
for CPT code 49614 (Repair of anterior abdominal hernia(s) (that is,
epigastric, incisional, ventral, umbilical, spigelian), any approach
(that is, open, laparoscopic, robotic), recurrent, including
implantation of mesh or other prosthesis when performed, total length
of defect(s); less than 3 cm, incarcerated or strangulated), with the
same intraservice time and 165 minutes of total time. Similarly, we
shared in the RUC's difficulties finding major surgical procedures with
the 000-day global period with similar times to use as potential
reference or bracket codes.
The RUC did not recommend, and we are not proposing any direct PE
inputs for these facility-based services.
(30) RSV Monoclonal Antibody Administration (CPT Codes 96380 and 96381)
In September 2023, CPT created two Category I codes, 96380
(Administration of respiratory syncytial virus, monoclonal antibody,
seasonal dose by intramuscular injection, with counseling by physician
or other qualified health care professional) and 96381 ((Administration
of respiratory syncytial virus, monoclonal antibody, seasonal dose by
intramuscular injection) to report administration of respiratory
syncytial virus (RSV), monoclonal antibody and seasonal dose, with and
without counseling. These codes were effective October 6, 2023 for
immediate use. At the time, the RUC did an immediate review of these
codes and issued interim recommendations to CMS. The RUC reviewed these
codes again at the April 2024 RUC meeting.
We are proposing the RUC-recommended work RVU of 0.28 for CPT code
96380 and 0.17 for CPT code 96381.
We are proposing the RUC-recommended direct PE inputs without
refinement. (30) Remote Monitoring (CPT codes 98975, 98976, 98977,
98978, 98980, 98981, 98XX4, 98XX5, 98XX6, 98XX7, 99091, 99453, 99454,
99457, 99458, 99473, 99474, 99XX4, and 99XX5)
In September 2024, the Current Procedural Terminology (CPT)
Editorial Panel added one code and made code revisions to report remote
physiologic monitoring (RPM) device supply for 2 to 15 days and 16-30
days within a 30-day period to report RPM parameters; created one new
code and code revisions to report RPM treatment management services for
the first 10 minutes, first 20 minutes, and each additional 20 minutes
thereafter; added three remote therapeutic monitoring (RTM) device
supply codes to report respiratory, musculoskeletal and cognitive
behavioral therapy for 2 to 15 days and 16 to 30 days within a 30-day
period; created one new code and made code revisions to report RTM
treatment management services for the first 10 minutes, first 20
minutes, and each additional 20 minutes thereafter; and revised remote
monitoring guidelines.
Remote physiologic monitoring (RPM) represents the remote
monitoring of parameters such as weight, blood pressure, and pulse
oximetry to monitor a patient's condition and inform their management.
The remote physiologic monitoring code set currently includes CPT codes
99453, 99454, 99091, 99457, 99458, 99473, and 99474 (code descriptors
can be found in Table 17). For CY 2026, the CPT Editorial Panel created
two new RPM codes to describe RPM services that describe less than 16
days of data transmission per 30-day period and less than 20 minutes of
interactive communication per month: CPT codes 99XX4 and 99XX5. The CPT
Editorial Panel also made edits to specify the minimum days of data
transmission per 30-day period for CPT code 99454 (new code descriptors
and revised code descriptors can be found in Table 18). None of the RPM
codes (CPT codes 99091, 99474, 99XX5, 99457, and 99458) met the minimum
survey requirements established by the RUC for the January 2025 RUC
meeting. As a result, the RUC-recommended that CPT codes 99091, 99474,
99XX5, 99457, and 99458 be resurveyed after 1 year of utilization data
is available for this CPT 2026 code structure. All RPM codes are
expected to be reviewed at the January 2028 RUC meeting.
Remote therapeutic monitoring (RTM) represents the monitoring of
adherence
[[Page 32434]]
to at-home therapeutic interventions. RTM can be provided for a variety
of conditions, and there are distinct device supply codes that have
been created for three types of therapeutic monitoring: respiratory
system, cognitive behavioral therapy, and musculoskeletal system
monitoring. The remote therapeutic monitoring code set currently
includes CPT codes 98975, 98976, 98977, 98978, 98980, and 98981 (code
descriptors can be found in Table 17). For CY 2026, the CPT Editorial
Panel created four new RTM codes to describe RTM services that describe
less than 16 days of data transmission per 30-day period and less than
20 minutes of interactive communication per month: CPT codes 98XX4,
98XX5, and 98XX7. The CPT Editorial Panel also made edits to specify
the minimum days of data transmission per 30-day period for CPT codes
98976, 98977, and 98978 (new code descriptors and revised code
descriptors can be found in Table 18). All of the codes in the RTM
family are considered new technology (CPT codes 98975, 98XX4, 98976,
98XX5, 98977, 98XX7, 98XX7, 98980, and 98981) and will be placed on the
New Technology list to be reviewed after 3 years of data are available
(April 2030).
[GRAPHIC] [TIFF OMITTED] TP16JY25.028
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[GRAPHIC] [TIFF OMITTED] TP16JY25.029
[GRAPHIC] [TIFF OMITTED] TP16JY25.030
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[GRAPHIC] [TIFF OMITTED] TP16JY25.031
A. Valuation for Remote Physiologic Monitoring (RPM)
For CPT code 99091, we disagree with the RUC's recommendation of
0.70 work RVUs and are proposing to maintain the current work RVU of
1.10 and the corresponding physician time inputs. This code, as well as
the other RPM codes, did not meet the minimum survey requirements
established by the RUC for the January 2025 RUC meeting. The RPM coding
will be resurveyed after 1 year of utilization data is available for
this 2026 CPT code structure, and we look forward to reviewing the
additional data at that time to refine the valuation for this code more
accurately. The RUC did not recommend, and we are not proposing any
direct PE inputs for CPT code 99091.
For CPT code 99XX5, we disagree with the RUC's recommendation of
0.39 work RVUs and are proposing a work RVU of 0.31, with 10 minutes or
intra-service/total time. We disagree with the recommended value and
propose a work RVU of 0.31 for CPT code 99XX5 based on the total time
ratio between the 20 minutes of total time assigned to CPT code 99457
and the 10 minutes of total time assigned to CPT code 99XX5. This ratio
equals 50 percent, and 50 percent of the current work RVU of 0.61
rounds to a work RVU of 0.31. Although we do not believe that the
decrease in time described in the code descriptor must equate to a one-
to-one or linear decrease in the valuation of work RVUs, since the two
components of work are time and intensity, significant reductions in
time for codes with equivalent intensity should generally be reflected
in decreases to work RVUs. In the case of CPT code 99XX5, we believe it
would be more accurate to propose the total time ratio at a work RVU of
0.31 to account for these decreases in work time compared to CPT code
99457. We also propose using this time ratio with the current PE inputs
for CPT code 99457 for clinical staff time. We are proposing 5 minutes
of CA021 intra-service clinical labor time and 15 minutes of CA037
post-service clinical labor time for CPT code 99XX5.
For CPT code 99457, we disagree with the RUC's recommendation of
0.45 work RVUs and are proposing to maintain the current work RVU of
0.61, the current work time of 20 minutes, and the current direct PE
inputs. This code, as well as the other RPM codes, did not meet the
minimum survey requirements established by the RUC for the January 2025
RUC meeting. RPM coding will be resurveyed after 1 year of utilization
data is available for this 2026 CPT code structure, and we look forward
to reviewing the additional data at that time to refine the valuation
for this code more accurately. For CPT code 99458, we disagree with the
RUC's recommended direct PE inputs and are proposing to maintain the
current inputs. We are proposing the RUC-recommended work RVU of 0.61
for CPT code 99458, as this work RVU was reviewed by the RUC and
resulted in no recommended changes for CY 2026. Our proposal to
maintain current work RVUs and PE inputs is due to the lack of survey
data supporting changes to these codes' valuation, as none of the RPM
codes met the minimum survey requirements established by the RUC for
the January 2025 RUC meeting. We also believe it is important to
maintain relativity between RPM and RTM codes describing equivalent
amounts of treatment management time and effort.
For CPT code 99474, we are proposing the RUC-recommended work RVU
of 0.18 and direct PE inputs without refinement, as this code was
reviewed by the RUC and resulted in no recommended changes for CY 2026.
For CPT code 99473, which is a PE-only code, we are proposing the
RUC-recommended direct PE inputs without refinement, as this code was
reviewed by the RUC and resulted in no recommended changes for CY 2026.
For CPT code 99453, which is a PE-only code, we are proposing the
RUC-recommended PE inputs without refinement.
For the PE-only CPT codes 99XX4 and 99454, the RUC's
recommendations include a ``digital remote physiologic monitoring
device app,'' which is a per-click vendor fee that has not
traditionally been included as a form of direct PE. We understand that
as these technologies evolve, the issues involving the use of software
and other forms of digital tools become more difficult to account for
accurately in our standard PE methodology. We acknowledge that for CPT
codes 99XX4 and 99454, the overall payment rate is driven by practice
expense supply and equipment inputs rather than physician work or
clinical staff time We have concerns with the RUC-recommended PE inputs
for device supply and equipment, as these inputs are difficult to
accurately account for due to lack of substantive invoices and other
types of supportive data. As MedPAC noted in their comment to the CY
2011 PFS proposed rule, ``using price information voluntarily submitted
by specialty societies, individual practitioners, suppliers, and
product developers might not result in objective and accurate prices
because each group has a financial stake in the process''. We have
repeatedly stated, such as in the CY 2018 final rule, that ``we do not
believe that very small numbers of voluntarily submitted invoices are
likely to reflect typical resource costs and create the potential for
overestimation of supply and equipment costs'' (82 FR 52998). Given our
concerns with the RUC-recommended PE inputs and our inability to verify
the pricing for these inputs, we believe that using Hospital Outpatient
Prospective Payment System (OPPS) cost data to value CPT codes 99XX4
and 99454 may more accurately reflect the actual costs of these
technologies. We assume the costs incurred in furnishing these PE-only
[[Page 32437]]
codes would be the same across settings of care (physician office and
hospital outpatient), since these codes do not have any physician work
and only account for PE associated with device supply and data
transmission. Under section 1848(c)(2)(N) of the Act, we have authority
to establish or adjust PE RVUs using cost, charge, or other data from
suppliers or providers of services. We propose to use OPPS cost data to
establish the valuation for the practice expense portion of Remote
Physiologic Monitoring CPT codes 99XX4 and 99454. We believe that the
OPPS cost data is more accurate than the PE inputs recommended by the
RUC. OPPS practice expense data obtained from cost reports is regularly
updated, auditable, and required to adhere to national standards for
reporting. For example, in the CY 2015 PFS final rule (79 FR 67569), we
noted that ``routinely updated, auditable resource cost information
submitted contemporaneously by a wide array of providers across the
country is a valid reflection of ``relative'' resources and could be
useful to supplement the resource cost information developed under our
current methodology based upon a typical case that are developed with
information from a small number of representative practitioners for a
small percentage of codes in any particular year''. We are proposing to
utilize the OPPS total geometric mean cost for CPT code 99454 to inform
the valuation of CPT codes 99XX4 and 99454 when paid under the PFS. We
are proposing to calculate this value by dividing the OPPS Geometric
Mean Cost (GMC) for CPT code 99454, which is represented in a dollar
amount, by the estimated CY 2026 PFS conversion factor (CF), which
represents the dollar value of an RVU, in order to convert the GMC
dollar amount into RVUs. The resulting value will be our proposed PE
RVU for CPT codes 99XX4 and 99454. We are proposing the same valuation
for both CPT codes 99XX4 and 99454 since the device is supplied to the
beneficiary for the full 30-day period, regardless of the number of
days that data is transmitted.
We are seeking comments on these proposals.
B. Valuation for Remote Therapeutic Monitoring (RTM)
For CPT code 98XX7, we disagree with the RUC's recommendation of
0.66 work RVUs and are proposing a work RVU of 0.31, with 10 minutes or
intra-service/total time. We are proposing this work RVU for CPT code
98XX7 based on the total time ratio between CPT code 98980's time of 20
minutes and CPT code 98XX7's time of 10 minutes. This ratio equals 50
percent, and 50 percent of the current work RVU of 0.62 for CPT code
98980 equals a work RVU of 0.31 for CPT code 98XX7. Although we do not
believe that the decrease in time described in the code descriptor must
equate to a one-to-one or linear decrease in the valuation of work
RVUs, we believe that since the two components of work are time and
intensity, significant reductions in time for codes with equivalent
intensity should generally be reflected in decreases to work RVUs. In
the case of CPT code 98XX7, we believe it would be more accurate to
propose the total time ratio at a work RVU of 0.31 to account for these
decreases in work time compared to CPT code 98980. We are also
proposing using this time ratio with the current direct PE inputs for
CPT code 98980. We are proposing 5 minutes of CA021 intra-service
clinical labor time and 15 minutes of CA037 post-service clinical labor
time for CPT code 98XX7. We are proposing this clinical labor using the
RN/LPN/MTA (L037D) blend as this has historically been the typical
clinical labor type for remote therapeutic monitoring services.
For CPT code 98980, we disagree with the RUC's recommendation of
0.78 work RVUs and are proposing to maintain the current work RVU of
0.62, the current 20 minutes of intra-service/total work time, and the
current direct PE inputs. For CPT code 98981, we disagree with the
RUC's recommendation of 0.70 work RVUs and are proposing to maintain
the current work RVU of 0.61 and the current direct PE inputs; the RUC
recommended, and we are proposing to maintain the current 20 minutes of
intra-service/total work time. These proposals are due to wanting to
maintain relativity between RPM and RTM codes describing equivalent
amounts of treatment management time and effort. RTM coding will be
placed on the New Technology list to be reviewed after 3 years of data
are available for this CPT 2026 code structure, and we look forward to
reviewing the additional data at that time to refine the valuation for
this code more accurately.
For the PE-only CPT code 98975, the RUC's recommendations include a
``Remote musculoskeletal therapy monitoring program enrollment fee.''
We are not proposing a price for this input at this time as we believe
this type of fee has not traditionally been included as a form of
direct PE and would constitute forms of indirect PE under our
methodology. We understand that as the PE data age, these issues
involving the use of software and other forms of digital tools become
more complex. However, in general we believe that this type of cost is
most similar to indirect PE costs rather than direct costs, which must
be individually allocable to a particular patient for a particular
service. Additionally, we believe that indirect technology costs
associated with RTM are better accounted for in the data transmission
RTM codes (CPT codes 98XX5 and 98977, discussed below) that will also
be reported during the beneficiary's course of treatment. We look
forward to continuing to seek out new data sources to help in updating
the PE methodology. The RTM coding will be placed on the New Technology
list to be reviewed after 3 years of data are available for this 2026
CPT code structure, and we look forward to reviewing the additional
data at that time to refine the valuation for this code more
accurately. We are proposing to maintain the current direct PE inputs
for CPT code 98975.
For the PE-only CPT codes 98XX5 and 98977, the RUC's
recommendations include a ``Remote musculoskeletal therapy monitoring
monthly supply fee,'' which is a per-click vendor fee that has not
traditionally been included as a form of direct PE. We understand that
as these technologies evolve, the issues involving the use of software
and other forms of digital tools become more difficult to account for
accurately in our standard PE methodology. We acknowledge that for CPT
codes 98XX5 and 98977, the overall payment rate is driven by practice
expense supply and equipment inputs rather than physician work or
clinical staff time. We have concerns with the RUC-recommended PE
inputs for device supply and equipment, as these inputs are difficult
to accurately account for due to lack of substantive invoices and other
types of supportive data. As MedPAC noted in their comment to the CY
2011 PFS proposed rule, ``using price information voluntarily submitted
by specialty societies, individual practitioners, suppliers, and
product developers might not result in objective and accurate prices
because each group has a financial stake in the process''. We have
repeatedly stated, such as in the CY 2018 final rule, that ``we do not
believe that very small numbers of voluntarily submitted invoices are
likely to reflect typical resource costs and create the potential for
overestimation of supply and equipment costs'' (82 FR 52998). Given our
concerns with the RUC-recommended PE inputs and our inability to verify
the pricing for these inputs, we believe that using Hospital Outpatient
Prospective Payment System
[[Page 32438]]
(OPPS) cost data to value CPT codes 98XX5 and 98977 may more accurately
reflect the actual costs of these technologies as opposed to the PE
inputs as recommended by the AMA RUC. We assume the costs incurred in
furnishing these PE-only codes would be the same across settings of
care (physician office and hospital outpatient), since these codes do
not have any physician work and only account for PE associated with
device supply and data transmission. Under section 1848(c)(2)(N) of the
Act, we have authority to establish or adjust PE RVUs using cost,
charge, or other data from suppliers or providers of services. We
propose to use OPPS cost data to establish the valuation for the
practice expense portion of Remote Therapeutic Monitoring CPT codes
98XX5 and 98977. We believe that the OPPS cost data is more accurate
than the PE inputs recommended by the RUC. OPPS practice expense data
obtained from cost reports is regularly updated, auditable, and
required to adhere to national standards for reporting. For example, in
the CY 2015 PFS final rule (79 FR 67569), we noted that ``routinely
updated, auditable resource cost information submitted
contemporaneously by a wide array of providers across the country is a
valid reflection of ``relative'' resources and could be useful to
supplement the resource cost information developed under our current
methodology based upon a typical case that are developed with
information from a small number of representative practitioners for a
small percentage of codes in any particular year''. We are proposing to
utilize the OPPS total geometric mean cost for CPT code 98977 to inform
the valuation of CPT codes 98XX5 and 98977 when paid under the PFS. We
are proposing to calculate this value by dividing the OPPS Geometric
Mean Cost (GMC) for CPT code 98977, which is represented in a dollar
amount, by the estimated CY 2025 PFS conversion factor (CF), which
represents the dollar value of an RVU, in order to convert the GMC
dollar amount into RVUs. The resulting value will be our proposed PE
RVU for CPT codes 98XX5 and 98977. We are proposing the same valuation
for both CPT codes 98XX5 and 98977 since the device is supplied to the
beneficiary for the full 30-day period, regardless of the number of
days that data is transmitted.
We are also proposing to maintain the current clinical staff type
for the RTM codes (RN/LPN/MTA), as opposed to the RUC recommendation of
physical therapy assistant, since the dominant specialty type that
bills this code, family medicine, did not participate in the survey.
We are also soliciting comments specifically on data to support the
recommended PE inputs for this code, including invoices, additional
data, or evidence to support the position.
The RUC-recommended and we are proposing to contractor price the
PE-only CPT codes 98XX4 and 98976.
CPT codes 98XX6 and 98978 are PE-only codes. We are proposing to
contractor price CPT code 98XX6 and proposing to maintain contractor
pricing for CPT code 98978.
We are seeking comments on these proposals.
C. Comment Solicitation
We are seeking comments on whether there are differences in the
valuation of remote physiologic and remote therapeutic monitoring,
specifically whether the services have similar costs and/or practice
expense inputs. We are currently proposing similar valuations for what
we have historically viewed as similar remote monitoring services (for
example, RTM and RPM treatment management, RTM and RPM device supply,
RTM and RPM data transmission), but are interested in gaining more
information regarding any differences in work (in the case of timed
codes, if there are varying levels of intensity between remote
therapeutic vs. physiologic monitoring), clinical staff time, supplies,
equipment, etc. We are particularly interested in comments that include
data or evidence to support the position.
(31) Hearing Device Services (CPT Codes 9X01X, 9X02X, 9X03X, 9X04X,
9X07X, 9X08X, 9X09X, 9X10X, 9X11X, 9X12X, 9X13X, and 9X14X)
At the February 2024 CPT Editorial Panel meeting, 12 new Category I
codes were created to report hearing devices services (for example,
air-conduction hearing aids) including hearing aid candidacy
determination, hearing aid selection, hearing aid fitting, follow-up
after fitting, hearing aid verification, and assistive-device services.
The current CPT codes, 92590-92595, were recommended for deletion. CPT
codes 9X01X-9X14X were reviewed at the April 2024 RUC HCPAC meeting for
CY 2026.
The following is a list of the new CPT codes and their long
descriptors: CPT code 9X01X (Evaluation for hearing aid candidacy,
unilateral or bilateral, including review and integration of audiologic
function tests, assessment, and interpretation of hearing needs (for
example, speech-in-noise, suprathreshold hearing measures) discussion
of candidacy results, counseling on treatment options with report, and,
when performed, assessment of cognitive and communication status; first
30 minutes), CPT code 9X02X (Evaluation for hearing aid candidacy,
unilateral or bilateral, including review and integration of audiologic
function tests, assessment, and interpretation of hearing needs (for
example, speech-in-noise, suprathreshold hearing measures) discussion
of candidacy results, counseling on treatment options with report, and,
when performed, assessment of cognitive and communication status; each
additional 15 minutes), CPT code 9X03X (Hearing aid selection services,
unilateral or bilateral, including review of audiologic function tests
and hearing aid candidacy evaluation, assessment of visual and
dexterity limitations, and psychosocial factors, establishment of
device type, output requirements, signal processing strategies and
additional features, discussion of device recommendations with report;
first 30 minutes), CPT code 9X04X (Hearing aid selection services,
unilateral or bilateral, including review of audiologic function tests
and hearing aid candidacy evaluation, assessment of visual and
dexterity limitations, and psychosocial factors, establishment of
device type, output requirements, signal processing strategies and
additional features, discussion of device recommendations with report;
each additional 15 minutes), CPT code 9X07X (Hearing aid fitting
services, unilateral or bilateral, including device analysis,
programming, verification, counseling, orientation, and training, and,
when performed, hearing assistive device, supplemental technology
fitting services; first 60 minutes), CPT code 9X08X (Hearing aid
fitting services, unilateral or bilateral, including device analysis,
programming, verification, counseling, orientation, and training, and,
when performed, hearing assistive device, supplemental technology
fitting services; each additional 15 minutes), CPT code 9X09X (Hearing
aid post-fitting follow-up services, unilateral or bilateral, including
confirmation of physical fit, validation of patient benefit and
performance, sound quality of device, adjustment(s) (for example,
verification, programming adjustment(s), device connection(s), and
device training), as indicated, and, when performed, hearing assistive
device, supplemental technology fitting services; first 30 minutes),
CPT code 9X10X (Hearing aid post-fitting follow-
[[Page 32439]]
up services, unilateral or bilateral, including confirmation of
physical fit, validation of patient benefit and performance, sound
quality of device, adjustment(s) (for example, verification,
programming adjustment(s), device connection(s), and device training),
as indicated, and, when performed, hearing assistive device,
supplemental technology fitting services; each additional 15 minutes),
CPT code 9X11X (Behavioral verification of amplification including
aided thresholds, functional gain, speech in noise, when performed),
CPT code 9X12X (Hearing-aid measurement, verification with probe-
microphone), CPT code 9X13X (Hearing device verification,
electroacoustic analysis), and CPT code 9X14X (Hearing assistive
device, supplemental technology fitting services (for example, personal
frequency modulation (FM)/digital modulation (DM) system, remote
microphone, alerting devices)).
The RUC is recommending contractor pricing for all twelve codes in
the family. However, section 1862(a)(7) of the Act prohibits Medicare
payment under Part A or Part B for any expenses incurred for hearing
aids or examinations therefore, it has been our established policy not
to pay for these hearing device services on the PFS, as their
predecessor CPT codes 92590-92595 all have non-payable status codes.
Therefore, we are proposing to maintain the same policy of assigning
non-payable status codes to each of the twelve new CPT codes in this
family.
(32) Scalp Cooling Services (CPT Codes 9XX01, 9XX02, and 9XX03)
At the September 2024 CPT Editorial Panel meeting, CPT deleted two
Category II CPT codes and created three new Category I CPT codes, CPT
code 9XX01(Mechanical Scalp cooling, including individual cap supply
with head measurement, fitting, and patient education),
9XX02(mechanical scalp cooling; including hair preparation, individual
cap placement, therapy initiation, and pre-cooling period), and
9XX03(mechanical scalp cooling; each 30 minutes)) to report scalp
cooling services to address chemotherapy induced alopecia. The new
codes were surveyed for the January 2025 RUC meeting and the RUC
determined that the code family requires no physician work and are
practice expense (PE) only services. As such, the RUC did not
recommend, and we are not proposing work RVUs for these codes.
We disagree with the RUC-recommended 5 minutes of service period
clinical staff time in direct PE input CA021 (Perform procedure/
service--not directly related to physician work time) for CPT code
9XX01. We are proposing 27 minutes of clinical labor time for CA021
based off reference CPT code 99453 (Remote monitoring of physiologic
parameter(s) (for example, weight, blood pressure, pulse oximetry,
respiratory flow rate), initial; set-up and patient education on use of
equipment). We have received feedback from interested parties that 5
minutes does not adequately account for the full duration of time
required to educate, measure, fit, and calibrate the cap. We agree with
interested parties and believe that the 27 minutes of clinical staff
time in CA021 for CPT code 99453 better accounts for the full duration
of time required for this service. We are proposing all other direct PE
inputs, supplies, and equipment as recommended by the RUC for CPT code
9XX01. We are also proposing all direct PE inputs, supplies, and
equipment as recommended by the RUC for CPT codes 9XX02 and 9XX03
without refinement.
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F. Evaluation and Management (E/M) Visits
1. 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 office/outpatient evaluation and
management (O/O E/M) visit complexity add-on code, 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).
In the CY 2024 PFS final rule, we noted that 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 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).
Interested parties have recommended that CMS either establish
separate payment for an evaluation and management inherent complexity
add-on code specific to home-based visits or expand use of the O/O E/M
visit complexity add-on code HCPCS code G2211 to be reported alongside
home and residence E/M visits furnished to beneficiaries in nursing
facilities, assisted living facilities, and the beneficiary's home.
Interested parties have explained that home-based primary care
practices provide access to primary care services for patients who
otherwise would not be able to leave the house to see a primary care
practitioner, and include the development of longitudinal, ``high-
touch'' relationships with their patients.
In the CY 2024 PFS final rule (88 FR 78818, 78971), we stated that
the values we established for the revised O/O E/M CPT codes in the CY
2021 PFS final rule were finalized in concert with separate payment for
HCPCS code G2211 (85 FR 84569, 87 FR 69588), and that we finalized work
RVUs for the nursing facility E/M visit codes (87 FR 69604 through
69606) and the home or residence services code family (87 FR 69608 and
69609) subsequently in the CY 2023 PFS final rule. We stated that we
may nevertheless consider in future rulemaking whether home or
residence evaluation and management services bear unrecognized resource
costs and whether HCPCS code G2211 should be applicable to home or
residence E/M visits. We have noted that the application of the add-on
code is not based on the characteristics of particular patients (even
though the rationale for valuing the code is based on recognizing the
typical complexity of patient needs), but rather the relationship
between the patient and the practitioner (88 FR 78973). In part, HCPCS
code G2211 recognizes the resource costs involved in building trust in
a long-term practitioner-patient relationship that are
[[Page 32496]]
not reflected in the valuation of the O/O E/M code set. The same
appears to be true about the home and residence evaluation and
management code set. Building trust as part of a longitudinal
practitioner-patient relationship may be particularly significant in
the context of home and residence E/M visits. Typically, home visits
occur at least monthly and people with serious illness may receive
weekly visits. These visits involve developing and following through on
a longitudinal care plan with proactive contacts regarding all of a
person's health care needs. The follow-through based on a trusting
practitioner/patient relationship is critical to keeping patients
stable and preventing exacerbations. For this reason, we believe it is
appropriate to extend the application of HCPCS code G2211 to home and
residence E/M visits at this time. Therefore, we are proposing to allow
HCPCS code G2211 to be billed as an add-on code with the home or
residence evaluation and management visits code family (CPT codes
99341, 99342, 99344, 99345, 99347, 99348, 99349, 99350). The HCPCS code
G2211 descriptor would read as follows, ``(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 home or residence or office/
outpatient evaluation and management service, new or established))''.
G. Enhanced Care Management
1. Integrating Behavioral Health Into Advanced Primary Care Management
(APCM)
In the CY 2025 PFS final rule (89 FR 97859 through 97902), we
finalized separate coding and payment for Advanced Primary Care
Management (APCM) services (HCPCS codes G0556, G0557, and G0558).
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In the CY 2017 PFS final rule (81 FR 80230), we began making
separate payment to practitioners who provide behavioral health
integration (BHI) services to patients using the Psychiatric
Collaborative Care Model (CoCM) (a specific model of care provided by a
primary care team consisting of a primary care provider and a health
care manager who works in collaboration with a psychiatric consultant)
using HCPCS codes G0502, G0503, and G0504.
In the CY 2018 PFS final rule (82 FR 53077 through 53078), these
codes were replaced by CPT codes 99492 (Initial psychiatric
collaborative care management, first 70 minutes in the first calendar
month of behavioral health care manager activities, in consultation
with a psychiatric consultant, and directed by the treating physician
or other qualified health care professional, with the following
required elements: outreach to and engagement in treatment of a patient
directed by the treating physician or other qualified health care
professional, initial assessment of the patient, including
administration of validated rating scales, with the development of an
individualized treatment plan, review by the psychiatric consultant
with modifications of the plan if recommended, entering patient in a
registry and tracking patient follow-up and progress using the
registry, with appropriate documentation, and participation in weekly
caseload consultation with the psychiatric consultant, and provision of
brief interventions using evidence-based techniques such as behavioral
activation, motivational interviewing, and other focused treatment
strategies), 99493 (Subsequent psychiatric collaborative care
management, first 60 minutes in a subsequent month of behavioral health
care manager activities, in consultation with a psychiatric consultant,
and directed by the treating physician or other qualified health care
professional, with the following required elements: tracking patient
follow-up and progress using the registry, with appropriate
documentation, participation in weekly caseload consultation with the
psychiatric consultant, ongoing collaboration with and coordination of
the patient's mental health care with the treating physician or other
qualified health care professional and any other treating mental health
providers, additional review of progress and recommendations for
changes in treatment, as indicated, including medications, based on
recommendations provided by the psychiatric consultant, provision of
brief interventions using evidence-based techniques such as behavioral
activation, motivational interviewing, and other focused treatment
strategies, monitoring of patient outcomes using validated rating
scales, and relapse prevention planning with patients as they achieve
remission of symptoms and/or other treatment goals and are prepared for
discharge from active treatment), and 99494 (Initial or subsequent
psychiatric collaborative care management, each additional 30 minutes
in a calendar month of behavioral health care manager activities, in
consultation with a psychiatric consultant, and directed by the
treating physician or other qualified health care professional (List
separately in addition to code for primary procedure)), respectively.
In the CY 2017 PFS final rule (81 FR 80230), we also began making
separate payment to practitioners who provide general BHI services to
patients, using HCPCS code G0507. 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. In the CY 2018 PFS final rule (82 FR 53077 through
53078), HCPCS code G0507 was replaced by CPT code 99484.
CPT code 99484 is for care management services for behavioral
health conditions, at least 20 minutes of clinical staff time, directed
by a physician or other qualified health care professional, per
calendar month, with the following required elements: initial
assessment or follow-up monitoring, including the use of applicable
validated rating scales, behavioral health care planning in relation to
behavioral/psychiatric health problems, including revision for patients
who are not progressing or whose status changes,
[[Page 32501]]
facilitating and coordinating treatment such as psychotherapy,
pharmacotherapy, counseling and/or psychiatric consultation, and
continuity of care with a designated member of the care team.
Patients with chronic health conditions are ``more likely to have
related behavioral health concerns and find it easier to improve
chronic conditions when these concerns are also addressed.'' \54\
Integrating behavioral health with primary care has been shown to
improve outcomes like reduced depression severity, and enhancing
patient's experience of care.\55\ In the CY 2025 PFS final rule (89 FR
97897), we summarized comments that we had received on our APCM
services proposals discussing the importance of behavioral health on
overall health and urging us to consider including behavioral health in
future rulemaking as it relates to advanced primary care, citing the
growing need for fully integrated physical and behavioral health. In
our response, we agreed with commenters that behavioral health
integration services are complementary to APCM services and that
behavioral health is important in the context of overall health. We
stated that we will take comments recommending strategies for further
integration into consideration for future rulemaking. We further stated
that we continue to be interested in the use of behavioral health
integration services as they relate to advanced primary care and
welcome input from interested parties, including how evolving changes
in practice may warrant reconsideration of payment and coding policies.
---------------------------------------------------------------------------
\54\ https://integrationacademy.ahrq.gov/about/integrated-
behavioral-
health#:~:text=Integrated%20behavioral%20health%20offers%20many,these
%20concerns%20are%20also%20addressed.
\55\ Balasubramanian, Bijal, Deborah Cohen, Katelyn Jetelina,
Miriam Dickinson, Melinda Davis, Rose Gunn, Kris Gowen, Frank DeGruy
3rd, Benjamin Miller, Larry Green. ``Outcomes of Integrated
Behavioral Health with Primary Care.'' J Am Board Fam Med. 2017 Mar-
Apr;30(2):130-139.doi: 10.3122/jabfm.2017.02.160234.
---------------------------------------------------------------------------
We believe that the physicians and practitioners who furnish APCM
services should be able to provide BHI services and CoCM without
needing to document their time spent performing the service because
this would help facilitate a more holistic, team-based approach to care
coordination and reduce burden. Otherwise, the practice would need to
develop a time documentation system for BHI and CoCM, but not APCM.
Functionally, we also believe that many practices that develop the
interdisciplinary teams to provide advanced primary care are also the
ones most likely ready to furnish BHI and CoCM services, so alignment
in billing requirements would streamline processes. Therefore, for CY
2026, we are proposing to create optional add-on codes for APCM
services that would facilitate providing complementary BHI services by
removing the time-based requirements of the existing BHI and CoCM
codes. We believe that removing the time-based requirements will reduce
burden on practitioners by reducing the documentation requirements for
billing. By reducing the documentation requirements, we also believe
primary care practitioners may be more likely to offer and furnish BHI
and CoCM services, which would improve access to BHI and CoCM for
primary care patients. These proposed optional add-on codes for 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. In
the CY 2024 PFS final rule (88 FR 78939), we summarized comments
received for Principal Illness Navigation services that discussed that
patients with severe mental illness and substance use disorders may
only see behavioral health practitioners regularly, which we believe
makes the integration of behavioral health and primary care important
for this population to improve access. We are opting to not create an
add-on code for CPT code 99494 as this code is for an additional 30
minutes of initial or subsequent psychiatric collaborative care
management in a calendar month, and the APCM codes, and proposed add-on
codes do not require the counting of minutes in order to bill.
2. Behavioral Health Integration Add-On Codes for APCM (HCPCS Codes
GPCM1, GPCM2, GPCM3)
We are proposing the establishment of three new G-codes to be
billed as add-on services when the APCM base code (HCPCS codes G0556,
G0557, and G0558) is reported by the same practitioner in the same
month. HCPCS code GPCM1, an add-on code based on CPT code 99492, HCPCS
code GPCM2, an add-on code based on CPT code 99493 for CoCM services
delivered to patients also receiving APCM services, and HCPCS code
GPCM3, an add-on code for general behavioral health integration
services based on CPT code 99484. We are not proposing to create an
add-on code for CPT code 99494, as that code describes additional time,
and these codes do not require the counting of minutes.
Our proposed code descriptors are listed below.
HCPCS code GPCM1: Initial psychiatric collaborative care
management, in the first calendar month of behavioral health care
manager activities, in consultation with a psychiatric consultant, and
directed by the treating physician or other qualified health care
professional, with the following required elements: outreach to and
engagement in treatment of a patient directed by the treating physician
or other qualified health care professional, initial assessment of the
patient, including administration of validated rating scales, with the
development of an individualized treatment plan, review by the
psychiatric consultant with modifications of the plan if recommended,
entering patient in a registry and tracking patient follow-up and
progress using the registry, with appropriate documentation, and
participation in weekly caseload consultation with the psychiatric
consultant, and provision of brief interventions using evidence-based
techniques such as behavioral activation, motivational interviewing,
and other focused treatment strategies (list separately and in addition
to the Advanced Primary Care Management code).
HCPCS code GPCM2: Subsequent psychiatric collaborative care
management, in a subsequent month of behavioral health care manager
activities, in consultation with a psychiatric consultant, and directed
by the treating physician or other qualified health care professional,
with the following required elements: tracking patient follow-up and
progress using the registry, with appropriate documentation,
participation in weekly caseload consultation with the psychiatric
consultant, ongoing collaboration with and coordination of the
patient's mental health care with the treating physician or other
qualified health care professional and any other treating mental health
providers, additional review of progress and recommendations for
changes in treatment, as indicated, including medications, based on
recommendations provided by the psychiatric consultant, provision of
brief interventions using evidence-based techniques such as behavioral
activation, motivational interviewing, and other focused treatment
strategies, monitoring of patient outcomes using validated rating
scales, and relapse prevention planning with patients as they achieve
remission of symptoms and/or other treatment goals and are
[[Page 32502]]
prepared for discharge from active treatment (list separately and in
addition to Advanced Primary Care Management code).
HCPCS code GPCM3: Care management services for behavioral health
conditions, directed by a physician or other qualified health care
professional, per calendar month, with the following required elements:
initial assessment or follow-up monitoring, including the use of
applicable validated rating scales, behavioral health care planning in
relation to behavioral/psychiatric health problems, including revision
for patients who are not progressing or whose status changes,
facilitating and coordinating treatment such as psychotherapy,
pharmacotherapy, counseling and/or psychiatric consultation, and
continuity of care with a designated member of the care team (list
separately and in addition to Advanced Primary Care Management code).
3. Valuation of Behavioral Health Integration Add-on Codes for APCM
Services
In consideration that the services described by the proposed add-on
codes are meant to be directly comparable to the existing CoCM and BHI
codes, we propose a direct crosswalk to the current work RVU values of
CPT code 99492 for HCPCS code GPCM1 (work RVU 1.88), CPT code 99493 for
HCPCS code GPCM2 (work RVU 2.05), and CPT code 99484 for HCPCS code
GPCM3 (work RVU 0.93). We also propose a direct crosswalk to the
current direct PE inputs for CPT codes 99492 (non-facility RVU 2.48,
facility RVU 0.80), 99493 (non-facility RVU 1.93, facility RVU 0.86),
and 99484 (non-facility RVU 0.66, facility RVU 0.30), to HCPCS codes
GPCM1, GPCM2, and GPCM3, respectively. We welcome comments on this
approach.
4. Request for Information Related to APCM and Prevention
Having a usual source of primary care can be positively associated
with better receipt of recommended prevention services \56\ and
effective management of chronic disease,\57\ which per the Trump
Administration's Executive Order, ``Establishing the President's Make
America Healthy Again Commission,'' \58\ is a top priority for CMS.
APCM coding and payment has represented CMS' recent efforts to promote
team-based primary care. In the CY 2025 PFS final rule (89 FR 97863),
commenters recommended that cost sharing be eliminated for APCM
services, indicating that any amount of cost sharing could be
prohibitive and may limit the uptake of APCM services. A few commenters
suggested that APCM services are preventive services that should be
exempt from beneficiary cost sharing.
---------------------------------------------------------------------------
\56\ Blewett, Lynn, Pamela Jo Johnson, Brian Lee, and Peter
Scal. When a Usual Source of Care and Usual Provider Matter: Adult
Prevention and Screening Services. Journal of General Internal
Medicine. Volume 23, pages 1354-1360. Published May 28, 2008.
\57\ Luo, Jiajun, Muhammad Kibriya, Paul Zakin, Andrew Craver,
Liz Connellan, Saira Tasmin, Tamar Polonsky, Karen Kim, Habibul
Ahsan, Briseis Aschebrook-Kilfoy. ``Urban Spatial Accessibility of
Primary Care and Hypertension Control and Awareness on Chicago's
South Side: A Study From the COMPASS Cohort. Circ Carvdiovasc Qual
Outcomes. 2022 Sep; 15(9):e008845. Doi: 10.1161/
CIRCOUTCOMES.121.008845. Epub 2022 Sep 6.
\58\ https://www.whitehouse.gov/presidential-actions/2025/02/establishing-the-presidents-make-america-healthy-again-commission/.
---------------------------------------------------------------------------
At the time, we responded to comments stating that CMS did not see
how APCM fit within the benefit categories for preventive services.
After further consideration and analysis, there are some service
elements of APCM that are substantively similar to certain aspects of
the ``personalized prevention plan services'' described under section
1861(hhh)(1) of the Act. For example, the personalized prevention plan
includes a health risk assessment, which includes identification of
chronic diseases, injury risks, modifiable risk factors, and urgent
health needs. This is substantively similar to the service element of
APCM that requires an overall systematic needs assessment (which
includes both medical and psychosocial needs). The personalized
prevention plan includes ``improving self-management, or community-
based lifestyle interventions to reduce health risks and promote self-
management,'' which is substantively similar to the APCM service
element of ``oversight of self-management.'' However, as APCM is a
bundle of different care management and communication technology-based
services, there are other service elements of the APCM codes that may
be covered under Medicare Part B and carry cost sharing obligations.
The blending of prevention and treatment services makes intuitive
sense for those familiar with advanced primary care practices-- which
must simultaneously balance ensuring patients receive their needed
preventive services and treatment services. Indeed, effective care
management often means balancing prevention and treatment in the life
an individual patient. For example, for a patient with a recent history
of a Deep Venous Thrombosis (DVT) on anticoagulation medication, a
primary care team must often balance whether or not to hold the
patient's anticoagulation in order for the patient to receive a
colonoscopy (where removal of a polyp while the patient is on
anticoagulation can lead to excessive bleeding).\59\ The primary care
team must balance the relative risks of holding the anticoagulation
medication, with the relative risks of delaying cancer screening, for
the optimal health and wellbeing of the patient.
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\59\ O'Donnel, Michael and Seth A. Gross. ``Management of
Anticoagulation and Colonoscopy.'' Current Treatment Options in
Gastroenterology. Volume 19, pages 1-13(2021). Published January 16,
2021.
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Given these factors, we are seeking comments on how CMS should
consider application of cost sharing for APCM services, particularly,
if we were to include preventive services within the APCM bundles. How
should we account for cost sharing if APCM includes both preventive
services and other Part B services? Should CMS consider including the
Annual Wellness Visit, depression screening, or other preventative
services in the APCM bundle, and if so, which services and why?
Should CMS consider other changes to APCM or additional coding to
further recognize the work of advanced primary care practices in
preventing and managing chronic disease?
Additionally, we have often described how primary care teams are
central to the relative success of Medicare Shared Savings ACOs. In
2023, as in previous years, ACOs comprised of larger proportions of
primary care clinicians had significantly higher net per capita savings
than ACOs comprised of smaller proportions of primary care clinicians.
Should CMS consider new payments to Shared Savings Program ACOs for
prospective monthly APCM payments to be delivered to primary care
practices that satisfy the APCM billing requirements, with the payments
reconciled under the ACO benchmark?
If so, how should CMS consider consent and other features of APCM
in these contexts?
Should CMS consider other updates to APCM payments or Shared
Savings Program policies that would drive increased participation of
primary care practitioners in ACOs?
[[Page 32503]]
I. Policies To Improve Care for Chronic Illness and Behavioral Health
Needs
1. Updates to Payment for Digital Mental Health Treatment (DMHT) and
Comment Solicitation on Payment Policy for Software as a Service (SaaS)
a. Updates to Payment for DMHT
In the CY 2025 PFS final rule (89 FR 97923 through 97928), we
established Medicare payment to billing practitioners for digital
mental health treatment (DMHT) devices furnished incident to
professional behavioral health services used in conjunction with
ongoing behavioral health care treatment under a behavioral health
treatment plan of care. We use the term ``DMHT device'' to include the
term digital cognitive behavioral therapy we used in prior rulemaking
(88 FR 79012 through 79013) and in general to refer to software devices
cleared, approved, or granted De Novo authorization 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 use the terms ``behavioral health conditions'' and ``mental
disorders'' interchangeably and to mean psychiatric disorders as
referenced in FDA regulation, 21 CFR 882.5801. This includes substance
use disorders. The FDA definition of devices encompasses certain
software intended for use in the diagnosis of disease or other
conditions, or in the cure, mitigation, treatment, or prevention of
disease, in man or other animals, or intended to affect the structure
or any function of the body of man or other animals.\60\ As the field
of innovative products including digital therapeutics and computerized
behavioral therapy devices for behavioral health treatment develops and
expands the FDA continues to apply a risk-based framework to review and
classify computerized behavioral therapy devices.
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\60\ Sec. 201(h)(1) of the Federal Food, Drug, and Cosmetic Act.
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Effective January 1, 2025, we finalized three HCPCS G-codes for
DMHT devices, to be billed by physicians and practitioners who are
authorized to furnish services for the diagnosis and treatment of
mental illness: G0552 (Supply of digital mental health treatment device
and initial education and onboarding, per course of treatment that
augments a behavioral therapy plan); HCPCS code G0553 (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 HCPCS code G0554 (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).
Additionally, we finalized the conditions of payment for these
codes. To be payable under the PFS, the DMHT device must have been
cleared under section 510(k) of the Federal Food, Drug, and Cosmetic
Act (FD&C Act) or granted De Novo authorization by FDA and in each
instance classified at Sec. 882.5801. In addition, the billing
practitioner must incur the cost of the DMHT device furnished to the
beneficiary, and the furnishing of the DMHT device must be incident to
the billing practitioner's professional services in association with
ongoing behavioral health treatment under a plan of care by the billing
practitioner. Furthermore, we finalized that the billing practitioner
must diagnose the patient with a mental health condition and prescribe
or order the DMHT device. We are clarifying here that the patient must
have a mental health condition diagnosis, but the billing practitioner
does not need to be the practitioner who made the diagnosis. The
patient could then use the DMHT device in settings according to how the
device has been classified by FDA for use at Sec. 882.5801, which
could include the home or an office or other outpatient setting if
consistent with the FDA classification for use. Also, payment may only
be made for DHMT devices for mental health treatment in accordance with
the use indicated in their FDA classification at Sec. 882.5801. We
continue to be vigilant about waste, fraud and abuse as we develop
payment policy for devices that may function like DMHT devices but
whose technology platforms may differ from those of DMHT devices
classified at Sec. 882.5801. We seek to ensure that DMHT devices are
not only safe for patients but also beneficial for patients. Our
objective in requiring that DMHT devices be classified at Sec.
882.5801 as a condition of payment was to set guardrails within our
payment policy for patient safety and benefit. While partly in
recognition of our inability to evaluate every DMHT device, in this way
we limited payment to devices which are required to comply with the
special controls requiring clinical data to validate the model of
behavioral therapy as implemented by the device. While presently use
cases for insomnia, substance use disorder, depression and anxiety have
been classified by the FDA at 21 CFR 882.5801, future use cases are not
necessarily limited to these.
It is possible that additional DMHT devices for other use cases
with similar characteristics may be classified under this code section.
We anticipate that updating our payment policies will be an
iterative process relating first to behavioral health treatment and by
extension to chronic conditions. Behavioral health conditions are some
of the most prevalent chronic diseases in the country. Among adults
aged 18 or older in 2023, 22.8 percent (or 58.7 million people) had any
mental illness and 48.5 million people aged 12 or older (or 17.1
percent) had a substance use disorder (SUD) in the past year. These
behavioral health conditions are often chronic in nature. Individuals
with Major Depressive Disorder, for example, often have recurrent
episodes throughout their lives.\61\
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\61\ https://www.samhsa.gov/data/sites/default/files/NSDUH%202023%20Annual%20Release/2023-nsduh-main-highlights.pdf.
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The technologies and platforms for digital therapeutics are
evolving rapidly. We are at an early stage of Medicare payment for DMHT
devices as supplies furnished incident to professional behavioral
health services used in conjunction with ongoing behavioral health care
treatment under a behavioral health treatment plan of care. In
considering the next stage in the development of our payment policy, we
have been reviewing interested parties' recommendations to make payment
for FDA authorized devices under other classifications, including
Computerized behavioral therapy device for treating symptoms of
gastrointestinal conditions under 21 CFR 876.5960; Biofeedback device
under 21 CFR 882.5050; Digital
[[Page 32504]]
therapy device to reduce sleep disturbance for psychiatric conditions
under 21 CFR 882.5705; Digital therapy device for Attention Deficit
Hyperactivity Disorder under 21 CFR 882.5803; and Computerized
behavioral therapy device for the treatment of fibromyalgia symptoms to
be codified at 21 CFR 882.5804. We note that Medicare coverage of
biofeedback is limited by a long-standing national coverage
determination. See, Medicare National Coverage Determinations Manual
Chapter 1, Part 1 (Sections 10-80.12) Coverage Determinations, Section
30.1, Biofeedback, https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/ncd103c1_part1.pdf.
We are proposing to expand our payment policies for HCPCS codes
G0552, G0553, and G0554 to also make payment for DMHT devices cleared
under section 510(k) of the FD&C Act or granted De Novo authorization
by FDA and in each instance classified at Sec. 882.5803 Digital
therapy device for Attention Deficit Hyperactivity Disorder (ADHD). The
Sec. 882.5803 classification is for software intended to provide
therapy for ADHD or any of its individual symptoms as an adjunct to
clinician supervised treatment. Comparable to the special controls for
device classification Sec. 882.5801 Computerized behavioral therapy
device for psychiatric disorders, the Sec. 882.5803 device
classification's special controls require the use of a validated
measure to evaluate effectiveness of the device to provide therapy for
ADHD or any of its individual symptoms. The special controls for device
classification Sec. 882.5801 require that clinical data must be
provided to describe a validated model of behavioral therapy for the
psychiatric disorder; and to validate the model of behavioral therapy
as implemented by the device. Comparable to the Sec. 882.5801 device
classification, the Sec. 882.5803 device classification is intended to
provide therapy as an adjunct to clinician supervised treatment. We
believe that it is important to expand our coding and payment policies
to include such devices classified at Sec. 882.5803 to more fully
reflect the range of behavioral health disorders treated by FDA-
authorized products. We also propose that all the conditions of payment
for HCPCS codes G0552, G0553, and G0554 finalized in the CY 2025 PFS
final rule would apply to DMHT devices classified at Sec. 882.5803.
Additionally, we welcome comments on whether we should establish coding
and payment policies for devices classified under the following FDA
regulation sections that were recommended to us by interested parties:
Computerized behavioral therapy devices for treating symptoms of
gastrointestinal conditions at Sec. 876.5960; Digital therapy devices
to reduce sleep disturbance for psychiatric conditions at Sec.
882.5705; and Computerized behavioral therapy device for the treatment
of fibromyalgia symptoms to be codified at Sec. 882.5804.
Medicare FFS claims data for HCPCS codes G0552, G0553, and G0554
have remained low in volume since we established these codes in the CY
2025 PFS final rule. We understand there may be several reasons for
this. We are aware per interested parties and commenters that a
condition of payment that we established for these codes, that the
billing practitioner is incurring the cost of furnishing the DMHT
device to the patient, may not align with direct to consumer delivery
and payment models that existed before the final rule was issued.
At this time, we do not believe we can appropriately price all the
DMHT devices for which we would make payment under our current policies
and proposals, and therefore, we are not proposing any changes to the
existing contractor-priced status for HCPCS code G0552. As we have
noted, the technologies and DMHT therapies are evolving rapidly. We
recognize our payment policy, too, will evolve. Given the dynamic
nature of the development of these devices and the variation in methods
of action for potential technology platforms, we do not have sufficient
information needed to establish national pricing for devices described
by HCPCS code G0552 at this time. We recognize that the ongoing
nationwide behavioral health workforce shortage combined with
increasing demand for behavioral health care services may limit access
to behavioral health services for some Medicare beneficiaries.\62\ We
recognize that digital therapeutic devices may offer innovative means
to access certain behavioral health care services. We acknowledge that
the field of digital therapeutics is evolving and continue to solicit
comments from the public on this topic, including the CPT Editorial
Panel. We continue to 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 to the behavioral health care
they furnish, and their use by patients for the treatment of behavioral
health conditions. We continue to welcome information and may consider
national pricing through future rulemaking.
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\62\ https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand.
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We are seeking comments on the possibility of establishing for CY
2026 additional separate coding and payment for a broader based set of
services describing digital tools used by practitioners intended for
maintaining or encouraging a healthy lifestyle, as part of a mental
health treatment plan of care. Specifically, we are seeking information
about clinical practice involving use of such tools. On what reliable
evidence do practitioners inform their clinical judgment that use of
such digital tools is warranted or beneficial to their treatment of the
patient? What role do these digital tools typically have within plans
of behavioral health treatment? What appropriate crosswalks would we
consider for the purposes of nationally pricing a code to describe
digital tools that do not require FDA clearance, approval or
authorization and therefore do not entail the development costs of FDA
clearance, approval or authorization or meet other conditions of
payment for HCPCS code G0552, primarily that the practitioner must bear
the cost of the DMHT device as a supply incident to their services. For
example, we could consider the inputs assigned to CPT code 98016 (Brief
communication technology-based service (for example, 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 to 10 minutes of medical
discussion) or CPT code 99421 (Online digital evaluation and management
service, for an established patient, for up to 7 days, cumulative time
during the 7 days; 5 to 10 minutes). Since the resource costs reflected
in the practice expense should be lower for services involving digital
tools that do not require FDA clearance, approval, or authorization or
meet the condition of payment that the billing practitioner bears the
cost of supplying the DMHT device for HCPCS code G0552, we anticipate
that the corresponding valuation for any additional coding would be
appropriately lower than G0552. We welcome comments on these potential
crosswalks or any other services that
[[Page 32505]]
may best approximate the resource costs involved in cases where
practitioners furnish a digital tool as part of a mental health
treatment plan of care and furnish initial education and onboarding,
per course of treatment that augments a behavioral therapy plan, and
monthly treatment management services directly related to the patient's
use of these digital tools. We also welcome comments on these potential
crosswalks or any other services that may best approximate the resource
costs involved in cases where practitioners do not furnish the digital
tool and do not furnish initial education and onboarding for the tool,
but nonetheless incorporate use of the tool as part of a mental health
treatment plan of care.
Additionally, we are requesting comments on other related digital
device policies for our consideration in future rulemaking.
Specifically, we received a request from an interested party to create
a new add-on G code to existing CPT codes 96112, 96113, 96116, 96121,
96130, 96131, 96132, and 96133 (code descriptors can be found in Table
26), for physicians' or non-physician practitioners' psychological/
neuropsychological evaluations so they may report administration of an
FDA authorized eye-tracking technology to aid in the diagnosis of
Autism Spectrum Disorder (ASD) in pediatric patients, including staff
time with the patient, data submission and output.
The interested party stated that the device collects data based on
the clinical presentation of a patient, then an analysis algorithm is
applied to the collected data to generate output. The interested party
raised concerns that currently there are delays and waitlists to obtain
diagnostic evaluations for children at risk for ASD. Their solution is
to use this ASD diagnosis tool at the point of care after a parent or
physician identifies a risk of ASD in a child. According to the
interested party, this digital device can help reduce ASD diagnosis
delays to be seen by a diagnostic specialist. The interested party is
requesting the following code descriptor, Algorithm-driven neurological
assessment for likelihood of Autism Spectrum Disorder (ASD) diagnosis,
and of ASD-measures' severity (for example, social disability, verbal
and non-verbal ability), derived from validated quantitative analysis
of looking behavior, and recommends for CMS to either establish a
national rate for the add-on code using a crosswalk to CPT code 93243
(External electrocardiographic recording for more than 48 hours up to 7
days by continuous rhythm recording and storage; scanning analysis with
report), CPT code 93247 (External electrocardiographic recording for
more than 7 days up to 15 days by continuous rhythm recording and
storage; scanning analysis with report), or to allow contractor
pricing.
We are seeking comments from the public regarding whether creating
an add-on G code and contractor pricing is needed for the
administration of an FDA authorized eye-tracking technology and other
technology to aid in the diagnosis of ASD in pediatric patients; or
whether it would be more appropriate to go through the CPT Editorial
Panel process to obtain a Category III CPT code for this treatment.
[[Page 32506]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.094
b. Comment Solicitation on Payment Policy for Software as a Service
(SaaS)
In recent years, there have been rapid developments in the use of
software-based technologies to support clinical decision-making in the
outpatient and physician office settings, some of which may be devices
requiring FDA, clearance, approval, or authorization. We refer to these
software-based technologies as software as a service (SaaS). As the
data used in our PE methodology has aged, and more services have begun
to include innovative technology such as software algorithms and AI,
these innovative applications are not well accounted for in our PE
methodology. As described in section II.B of this proposed rule, PE
resources typically involved in furnishing services are characterized
as either direct or indirect costs. Direct costs involved in furnishing
a service are estimated for each 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 was the Physician Practice
Information (PPI) Survey, last administered in 2007 and 2008, when
emerging technologies that rely primarily on software, licensing, and
analysis fees, with minimal costs in equipment and hardware may not
have been typical. Thus, these costs are not well accounted for in the
PE methodology. While we have received updated PPI survey data from the
AMA that did incorporate information on the practice costs associated
with SaaS and AI services, this information would only reflect the
impact of SaaS and AI on the PE/hr associated with a given medical
specialty, rather than providing insight into the direct costs
associated with use of this technology.
Furthermore, as described in section II.B.5 of this proposed rule,
due to several limitations with the data, we are
[[Page 32507]]
not proposing to implement the PE/HR data or cost shares from the AMA's
PPI Survey data for CY 2026 ratesetting. Consistent with our PE
methodology and as we have stated in past PFS rulemaking (83 FR 59557),
we have considered most computer software and associated analysis and
licensing fees to be indirect costs tied to costs for associated
hardware that is considered to be medical equipment. However, beginning
with payment for Fractional Flow Reserve Computed Tomography
(Heartflow) in the CY 2022 PFS final rule (86 FR 65041) CMS has made
intermediate, service-specific policies to allow for PFS payment of
SaaS and AI applications in certain circumstances.
We consider several distinct issues when evaluating SaaS
technologies. First, we have observed wide variations in the purported
costs of clinically similar SaaS technologies. The various costs that
manufacturers consider when pricing their technologies, including
research and development and software maintenance, are often not
publicly verifiable. Additionally, due to the novel and evolving nature
of these technologies, there are rarely existing medical items or
services that can be utilized for comparison purposes to determine
clinical and resource similarity. Finally, while there has been a rapid
increase in the development and coding of services incorporating these
technologies in recent years, there is a very limited amount of
Medicare claims data for these services.
As this technology has continued to evolve and diversify,
interested parties have stated that the lack of a consistent payment
policy for SaaS and AI devices is an impediment to patient access when
these devices are otherwise cleared, approved, or authorized by the
FDA. Interested parties have requested that CMS consider the
development of a payment policy for these devices that is stable and
consistent across settings of care, payment systems, and types of
services incorporating SaaS and AI devices. Additionally, as we are
interested in paying accurately for the management of chronic disease
and primary care services, we are seeking to understand how the use of
SaaS and AI technology affects those services and how to incorporate
these costs into our current strategy for paying for evolving models of
care delivery, such as Advanced Primary Care Management and risk-based
payment arrangements generally. Therefore, we are requesting public
comments on how we should consider paying for SaaS under the PFS,
including:
What factors should we consider when paying for SaaS?
What has the experience been of risk-based payment
arrangement participants with incorporating SaaS under their payment
arrangements?
Have risk-based payment arrangements reflected the
underlying value of SaaS to the practice of medicine?
Given the limitations of the PE methodology to account for
this kind of technology, what alternative pricing strategies should CMS
use to accurately pay for SaaS and AI devices under the PFS? For
example, should CMS continue its current practice, as referenced in
section II.E.23. of this proposed rule, of crosswalking values from the
OPPS established payment amounts for the technical components of
services incorporating SaaS and AI? Or should we integrate OPPS
geometric mean costs for these devices into our ratesetting methodology
as we are proposing to do in this proposed rule for RPM and RTM
services, or set payment rates relative to OPPS rates as we are
proposing to do for radiation oncology services? See sections II.E.24.
and 30. this proposed rule.
How should CMS value the physician work associated with
utilizing and interpreting the clinical outputs associated with SaaS
and AI devices?
Is there an alternative data source outside of the limited
Medicare claims data currently available and hospital invoices provided
by manufacturers, which may not fully depict total hospital acquisition
costs, that can accurately reflect the costs of the SaaS?
How are these technologies used in the treatment of
chronic disease?
How may CMS best evaluate the quality and efficacy of SaaS
and AI technologies?
We welcome input from interested parties on these questions as well
as any additional suggestions that would enhance our ability to provide
accurate and consistent payment for procedures incorporating SaaS. We
note that there is a comment solicitation in the CY 2026 OPPS proposed
rule regarding SaaS devices furnished in hospital outpatient
departments and ASCs.
2. Prevention and Management of Chronic Disease--Request for
Information
Six in ten Americans have at least one chronic disease, and four in
ten have two or more chronic diseases. Many preventable chronic
diseases are caused by a short list of risk behaviors, including
smoking, poor nutrition, physical inactivity, and excessive alcohol
use.\63\ In 2023, among adults aged 18 or older, 22.8 percent (or 58.7
million people) had any mental illness (AMI) in the past year.\64\
Although Medicare Part B covers many preventive services,\65\ as
defined in section 1861(ddd)(3) of the Act, Medicare preventive
services have some restrictions.\66\
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\63\ Centers for Disease Control. ``Chronic diseases in
America.'' Available from: https://www.cdc.gov/chronic-disease/
about/index.html#:~:text=Six%20in%2010%20Americans%20have,inactivity%
2C%20and%20excessive%20alcohol%20use.
\64\ Highlights for the 2023 National Survey on Drug Use and
Heath, https://www.samhsa.gov/data/sites/default/files/NSDUH%202023%20Annual%20Release/2023-nsduh-main-highlights.pdf.
\65\ https://www.medicare.gov/coverage/preventive-screening-services.
\66\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c18pdf.pdf.
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Per the Trump Administration Executive Order, ``Establishing the
President's Make America Healthy Again Commission,'' \67\ the
Administration is directing our focus towards understanding and
drastically lowering chronic disease rates, including thinking on
nutrition, physical activity, healthy lifestyles, over-reliance on
medication and treatments, the effects of new technological habits,
environmental impacts, and food and drug quality and safety.
Furthermore, the Executive Order directs that agencies must ensure the
availability of expanded treatment options and the flexibility for
health insurance coverage to provide benefits to support beneficial
lifestyle changes and disease prevention. As such, focusing on the
prevention and management of chronic disease is a top priority for us.
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\67\ https://www.whitehouse.gov/presidential-actions/2025/02/establishing-the-presidents-make-america-healthy-again-commission/.
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We are broadly soliciting feedback to help us better understand how
we could enhance our support management for prevention and management
of chronic disease. Specifically, we are requesting commenters consider
the following information:
How could we better support prevention and management,
including self-management, of chronic disease?
Are there certain services that address the root causes of
disease, chronic disease management, or prevention, where the time and
resources to perform the services are not adequately captured by the
current physician fee schedule code set? If so, please provide specific
examples.
Are there current services being performed to address
social isolation and loneliness of persons with
[[Page 32508]]
Medicare, where the time and resources to perform the services are not
adequately captured by the current physician fee schedule code set? If
so, what evidence has supported these services, and what do these
services entail? What services have been delivered by Medicare
providers or community-based organizations, including area agencies on
aging and other local aging and disability organizations? What has been
the impact?
Are there current services being performed that improve
physical activity, where the time and resources to perform the services
are not adequately captured by the current physician fee schedule code
set? How should CMS consider provider assessment of physical activity,
exercise prescription, supervised exercise programs, and referral,
given the accelerating use of wearable devices and advances in remote
monitoring technology?
Should CMS consider creating separate coding and payment
for intensive lifestyle interventions, where the time and resources to
perform the services are not adequately captured by the current
physician fee schedule code set, and how should these interventions be
prioritized? If so, what evidence has supported these services, and
what do the services entail? How would additional coding and payment be
substantively different from coding and payment for Intensive
Behavioral Therapy?
Should CMS consider creating separate coding and payment
for medically-tailored meals, as an incident-to service performed under
general supervision of a billing practitioner? If so, what would be the
appropriate description of such a service, and under what patient
circumstances (that is, after discharge from a hospital)? Do community-
based organizations providing medically tailored meals currently employ
a physician, nurse practitioner, physician assistant, or other
practitioner who could both bill Medicare and supervise a medically-
tailored meal service? Should CMS consider allowing billing providers
to refer to community-based organizations to deliver and ensure quality
of medically-tailored meals while under general supervision (please see
Sec. 410.26(a)(3) for further information about general supervision)
of the referring billing provider? If CMS were to create separate
coding and payment for medically-tailored meals, how should CMS ensure
integrity of the service being delivered?
Please provide information on whether we should consider
creating separate coding and payment for FDA-cleared digital
therapeutics that treat or manage the symptoms of chronic diseases an
incident-to service performed under the general supervision of a
billing practitioner. Please see the CY 2025 PFS final rule (89 FR
97923 through 97928) for reference as to how we created new coding and
payment for FDA-cleared digital mental health treatments (DMHTs).
Are there technical solutions that would enhance the
uptake of the annual wellness visit (AWV), or the improving
accessibility, impact, and usefulness of the AWV? How can CMS better
support practitioners and beneficiaries related to the AWV? Should CMS
consider moving some of the required components of the AWV to optional
add-on codes of the AWV instead, with the intent of decreasing burden,
improving uptake, and allowing practitioners to select additional AWV
elements that may be more relevant to particular patients?
The Administration for Community Living (ACL) has defined
evidence-based programs,\68\ which have demonstrated impact in
effectively treating chronic disease, preventing disease, and helping
older adults and people with disabilities to adopt healthy behaviors,
improve their health status, reduce disability and injury, and reduce
their use of hospital services and emergency room visits. In addition
to programs impacting chronic disease management and prevention, there
are evidence-based health programs that address older adult falls,
mental health, physical activity, and more. Fifty-six State units on
aging that work with over 600 area agencies on aging (AAAs) and their
networks of service providers receive formula grants from ACL to
administer programs, but the need exceeds available federal funding.
Are there certain existing or new Physician Fee Schedule codes and
payment, or Innovation Center Models, that could better support
practitioner provision of successful interventions through partnerships
between health care entities, AAAs, community care hubs, and other
local aging and disability organizations? If so, please provide
specific examples.
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\68\ Administration for Community Living. ``Health Promotion.''
https://acl.gov/programs/health-wellness/disease-prevention.
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In consideration that there are significantly more types
of coding and payment that describe procedures in the physician fee
schedule, please provide feedback regarding whether this detracts from
the codes describing services that address underlying health behaviors,
chronic disease management, and prevention.
Aligning with this initiative to focus on the prevention and
management of chronic disease, we are considering whether to create
additional coding and payment for motivational interviewing.
Motivational interviewing is a collaborative, goal-oriented style of
communication with particular attention to the language of change. It
is designed to strengthen personal motivation for and commitment to a
specific health goal and exploring the person's own reasons for change
within an atmosphere of acceptance and compassion.\69\ Compared to
traditional advice-giving, motivational interviewing is more successful
at improving a patient's underlying health behaviors that contribute to
chronic disease, including but not limited to smoking, substance use,
physical activity, nutrition, and adherence to medication and other
treatments. Multiple meta-analyses have demonstrated that motivational
interviewing has demonstrated statistically significant improvements in
reduction of alcohol consumption, reduction in substance use in people
with dependency or addiction, increased physical activity
participation,\70\ increased weight loss, and reduction in blood
pressure.\71\ Motivational interviewing has been adapted and integrated
into many settings, including primary care facilities, emergency
departments, behavioral health centers, and criminal justice and social
service agencies.\72\ We are considering whether to develop separate
coding and payment for motivational interviewing, which could also be
performed under general supervision of the billing practitioner, in
order to better account for the time and resources involved in
furnishing this care. Furthermore, we understand that in many
practices, health coaches can help support the provision of
motivational interviewing services. We note that the Category III CPT
codes
[[Page 32509]]
(0591T, 0592T, and 0593T) for health coaching are currently contractor-
priced, and have a January 2030 sunset date. However, health coaches do
not have a Medicare benefit category and therefore cannot bill Medicare
directly (a new benefit category requires statutory change) but could
potentially operate as clinical staff under general supervision
incident-to a physician service if new coding and payment were
constructed in this way.
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\69\ Miller, W.R. & Rollnick, S. (2013) Motivational
Interviewing: Helping people to change (3rd Edition). Guilford
Press.
\70\ Frost, Helen et al. ``Effectiveness of Motivational
Interviewing on Adult Behaviour Change in Health and Social Care
Settings: a Systematic Review of Reviews.'' Available from: https://pubmed.ncbi.nlm.nih.gov/30335780/.
\71\ VanBuskirk, Katherine, Julie Loebach Wetherell.
``Motivational interviewing with primary care populations: a
systematic review and meta-analysis.'' Available from: https://pubmed.ncbi.nlm.nih.gov/23934180/.
\72\ SAMHSA, Treatment Improvement Protocol 35: Enhancing
Motivation for Change in Substance Abuse Treatment Updated 2019,
https://library.samhsa.gov/sites/default/files/tip-35-pep19-02-01-003.pdf.
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We are soliciting feedback from the public regarding motivational
interviewing and health coaches. Specifically, we are requesting
commenters consider the following information:
Please provide information on whether we should create
separate coding and payment for motivational interviewing, or whether
the resources involved in furnishing these services are appropriately
recognized in current coding and payment.
What is the best definition and description of
motivational interviewing?
What types of clinical staff should be able to perform
motivational interviewing under the general supervision of a billing
practitioner?
How long does a session of motivational interviewing
typically last? If we were to create coding and payment for
motivational interviewing, what should the time-based requirements of
the code be?
We heard from interested parties that in many clinics,
health coaches perform services under general supervision, and that
there may be substantive overlap with motivational interviewing. To
what extent are the services performed by health coaches encompassed by
motivational interviewing?
What training is required to effectively perform
motivational interviewing? Are there agreed upon national training or
certification standards for health coaches? If so, what are they? Do
states have separate training or certification standards for health
coaches?
To what extent would health coaches be able to perform
motivational interviewing incident-to billing practitioners under
general supervision? Please see Sec. 410.26(a)(3) for further
information about general supervision.
In what clinical situations are motivational interviewing
and health coaching most commonly performed? What are the clinical
characteristics of a patient where motivational interviewing and health
coaching would be medically reasonable and necessary?
Can motivational interviewing and health coaching
appropriately be performed via audiovisual or audio-only synchronous
telecommunication?
What has been the experience of providers and payers
utilizing the codes 0591T (Health and well-being coaching: face-to-
face, individual initial assessment), 0592T (Individual follow-up
session, at least 30 minutes), and 0593T (Group session, two or more
individuals, at least 30 minutes)? If the CPT committee were to create
permanent codes with staff able to operate under the general
supervision of a billing practitioner, would this capture the time and
resources to perform health coaching?
To what extent would new coding for motivational
interviewing or health coaching better support some of the evidence-
based programs funded and overseen by ACL that effectively manage or
prevent chronic disease?
We welcome feedback from stakeholders and the public on how we
could better support management of chronic disease and prevention,
including whether we should create separate coding and payment for
motivational interviewing, along with overlap between motivational
interviewing and health coaches for consideration for future
rulemaking.
3. Community Health Integration and Principal Illness Navigation for
Behavioral Health
a. Practitioner Types
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) services (HCPCS codes 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)), provided by certified or trained
auxiliary personnel, including a community health worker, under the
direction of a physician or other practitioner. We also finalized
Principal Illness Navigation (PIN) services (HCPCS codes 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)), provided by certified or
trained auxiliary personnel under the direction of a physician or other
practitioner, including a patient navigator or certified peer
specialist. In the CY 2025 PFS final rule (89 FR 97822), we clarified
that when we refer to ``certified or trained auxiliary personnel'' in
the following codes: G0019, G0022, G0023, G0024, G0140, G0146, this
also includes clinical social workers (CSWs).
Marriage and family therapists (MFTs) and mental health counselors
(MHCs) have a similar statutory benefit category as CSWs and may also
connect individuals with community-based resources to address unmet
social needs that affect the diagnosis and treatment of medical
problems. Like CSWs, MFTs and MHCs can bill Medicare directly for
services they personally perform for the diagnosis or treatment of
mental illness and substance use disorders, but are not authorized by
statute to bill under the PFS for services that are provided by
auxiliary personnel incident to their professional services. CHI and
PIN services are typically provided by auxiliary personnel supervised
by the billing practitioner, and MFTs and MHCs could serve as auxiliary
personnel, as the codes do not limit the types of auxiliary personnel
that can perform CHI and PIN services 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.
[thinsp]410.26(a)(1). MFTs and MHCs could not directly bill Medicare
under the PFS 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. 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
[[Page 32510]]
auxiliary personnel at Sec. [thinsp]410.26(a)(1).'' We are clarifying
that when we refer to ``certified or trained auxiliary personnel'' in
the following HCPCS codes: G0019, G0022, G0023, G0024, G0140, G0146,
this also includes MFT and MHCs. We are clarifying that, like CSWs,
MFTs and MHCs can bill Medicare directly for CHI and PIN services they
personally perform for the diagnosis or treatment of mental illness.
Additionally, CMS required for auxiliary personnel performing CHI and
PIN under general supervision, that in the absence of state level
certification or training requirements, CMS required training to
perform the services. We are further clarifying that if CSWs, MFTs, and
MHCs are performing the services as auxiliary personnel under the
general supervision of a billing practitioner, in the absence of state-
level requirements, that they meet the certification or training
requirements to perform all CHI and PIN service elements. This is
relevant in the cases where a CSW, MFT, or MHC are performing CHI and
PIN under the general supervision of a billing practitioner for a
medical problem that is not considered a mental illness. For CHI and
PIN services, as with all incidents to services, it is the billing
practitioner's responsibility to ensure that all payment rules and
applicable State requirements are met including licensure,
certification, and/or training. This does not mean that the billing
practitioners are required to provide the licensure, certification,
and/or training themselves, but rather that they must ensure that the
Medicare criteria for billing and payment of CHI and PIN services are
met.
Individuals who personally furnish or serve as auxiliary personnel
for CHI and PIN services must meet all other service requirements
associated with these codes. We welcome comments on this clarification.
b. Initiating Visits
In the CY 2024 PFS final rule (88 FR 78923), we finalized allowing
E/M services (other than a low-level E/M visit done by clinical staff),
including an E/M service that is part of a transitional care management
(TCM) service and an annual wellness visit (AWV) service to serve as
the initiating visit for CHI services. We received comments requesting
for CPT codes 90791 (Psychiatric diagnostic evaluation) and 96156
(Health behavior assessment, or re-assessment (that is, health-focused
clinical interview, behavioral observations, clinical decision making))
to be allowed to serve as initiating visits, but we determined at the
time that these services would be better captured and better serve the
needs being addressed with the PIN service elements. We have continued
to analyze the uptake of CHI services and believe that these services
may fit the need for additional initiating CHI visits, as utilization
data is showing that CHI services are being used to address SDOH
need(s) that significantly limit the practitioner's ability to diagnose
or treat mental illness.
For CSWs, MFTs, and MHCs to bill Medicare directly for CHI services
personally performed for the diagnosis or treatment of mental illness,
we are proposing to allow for CPT code 90791 (Psychiatric diagnostic
evaluation) or the Health Behavior Assessment and Intervention (HBAI)
services that CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and
96168 (and any subsequent HBAI codes) to serve as initiating visits for
CHI, as we believe these codes are the most analogous codes to the E/M
codes that are currently used as initiating visits for CHI that are
utilized by practitioners in a specialty whose covered services are
limited by statute to services for the diagnosis and treatment of
mental illness. All other policies for CHI initiating visits also apply
to CHI services furnished by CSWs, MFTs, and MHCs. Please see the 2024
PFS final rule (88 FR 78921 through 78932) and 2025 PFS final rule (89
FR 97821 through 97824) for additional information regarding CHI
services and CHI initiating visits. We welcome comments on this
proposal.
4. Technical Refinements To Revise Terminology for Services Related to
Upstream Drivers of Health
a. Policies To Improve Care for Chronic Illness and Behavioral Health
Needs
(1) Social Determinants of Health Risk Assessment (HCPCS Code G0136)
In the CY 2024 PFS final rule (88 FR 78932 through 78937), we
finalized coding and payment for HCPCS code G0136 (Administration of a
standardized, evidence-based social determinants of health risk
assessment tool, 5 to 15 minutes). After further review of utilization
information, we have come to believe that the resource costs described
by HCPCS code G0136 are already accounted for in existing codes,
including but not limited to E/M visits. Therefore, we are proposing to
delete this code for CY 2026. Accordingly, we are proposing to remove
this code from the Medicare Telehealth Services list.
Additionally, we are proposing conforming regulation text updates
at 42 CFR 410.15. We are proposing to revise Sec. 410.15(a) as
follows: in paragraph (a), by revising the definition of First annual
wellness visit providing personalized prevention plan services by
removing subparagraph (xiii) and redesignating subparagraph (xiv) as
(xiii); and, in revising the definition of Subsequent annual wellness
visit providing personalized prevention plan services by removing
subparagraph (xi) and redesignating subparagraph (xii) as (xi).
(2) Community Health Integration Services (HCPCS Codes G0019)
In response to the CY 2024 PFS proposed rule, we received several
comments requesting that CMS revise some of the language used in the
Community Health Integration (CHI) (HCPCS codes G0019) code descriptor
to better fit the purpose of CHI services. Some of the examples that
commenters provided as an alternative to ``social determinants of
health'' included: ``social drivers of health, drivers of health, or
health-related social needs.'' Many of these commenters noted that
other CMS programs use the term social drivers of health and requested
that CMS use consistent naming conventions (88 FR 78933). After further
consideration of the code descriptors, we are proposing to replace the
term ``social determinants of health (SDOH)'' with the term ``upstream
driver(s)''. We have determined that the term ``upstream driver(s)'' is
more comprehensive and includes a variety of factors that can impact
the health of Medicare beneficiaries. The term ``upstream driver(s)''
encompasses a wider range of root causes of the problems that
practitioners are addressing through CHI services. This type of whole-
person care can better address the upstream drivers that affect patient
behaviors (such as smoking, poor nutrition, low physical activity,
substance misuse, etc.) or potential dietary, behavioral, medical, and
environmental drivers to lessen the impacts of the problem(s) addressed
in the initiating visit.
We are proposing the following changes to HCPCS codes G0019, and we
will make conforming revisions to codes describing similar services to
reflect the updated terminology, including services furnished by RHCs,
FQHCs, and OTPs.
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, in the following activities to address upstream
driver(s) that are significantly limiting ability to
[[Page 32511]]
diagnose or treat problem(s) addressed in an initiating E/M visit:
Person-centered assessment, performed to better understand
the individualized context of the intersection between the upstream
driver(s) and the problem(s) addressed in the initiating E/M visit.
++ Conducting a person-centered assessment to understand patient's
life story, strengths, needs, goals, preferences and desired outcomes,
including understanding cultural and linguistic factors.
++ Facilitating patient-driven goal-setting and establishing an
action plan.
++ Providing tailored support to the patient as needed to
accomplish the practitioner's treatment plan.
Practitioner, Home-, and Community-Based Care
Coordination.
++ Coordinating receipt of needed services from healthcare
practitioners, providers, and facilities; and from home- and community-
based service providers, social service providers, and caregiver (if
applicable).
++ Communication with practitioners, home- and community-based
service providers, hospitals, and skilled nursing facilities (or other
health care facilities) regarding the patient's psychosocial strengths
and needs, functional deficits, goals, preferences, and desired
outcomes, including cultural and linguistic factors.
++ Coordination of care transitions between and among health care
practitioners and settings, including transitions involving referral to
other clinicians; follow-up after an emergency department visit; or
follow-up after discharges from hospitals, skilled nursing facilities
or other health care facilities.
++ Facilitating access to community-based social services to
address upstream driver(s).
Health education--Helping the patient contextualize health
education provided by the patient's treatment team with the patient's
individual needs, goals, and preferences, in the context of the
upstream driver(s), and educating the patient on how to best
participate in medical decision-making.
Building patient self-advocacy skills, so that the patient
can interact with members of the health care team and related
community-based services addressing the upstream driver(s), in ways
that are more likely to promote personalized and effective diagnosis or
treatment.
Health care access/health system navigation.
++ Helping the patient access healthcare, including identifying
appropriate practitioners or providers for clinical care and helping
secure appointments with them.
Facilitating behavioral change as necessary for meeting
diagnosis and treatment goals, including promoting patient motivation
to participate in care and reach person-centered diagnosis or treatment
goals.
Facilitating and providing social and emotional support to
help the patient cope with the problem(s) addressed in the initiating
visit, the upstream driver(s), and adjust daily routines to better meet
diagnosis and treatment goals.
Leveraging lived experience when applicable to provide
support, mentorship, or inspiration to meet treatment goals.
J. Provisions on Medicare Parts A and B Payment for Dental Services
Inextricably Linked to Other 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) and in the CY 2025 PFS final rule (89 FR 97936
through 97945).
b. Submissions Received Through Public Submission Process
In the CY 2023 PFS final rule, we 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). We thank all those who submitted recommendations
through this process. We received seven submissions from various
organizations and individuals on or before February 10, 2025.
Most of the submissions recommended that we consider clinical
scenarios involving beneficiaries with diabetes mellitus when
contemplating payment under Medicare for dental services that are
inextricably linked to other covered services. Four submitters had
similar themes in their submissions that expressed the concern that the
absence of treatment of chronic dental infections could complicate
covered medical treatment for the management of diabetes-associated
retinopathy and nephropathy. Two submitters were focused on their view
of how important it is to improve oral health through treatment of oral
infections like periodontitis and preventive dental care, as they
asserted these dental services are related to the successful prevention
and treatment of diabetic retinopathy. These two submitters were
specifically concerned about beneficiaries who are at risk for
diabetes-related retinopathy and vision loss or who have diabetes-
related retinopathy and vision loss.
One submitter explained that their submission's purpose was not to
nominate a new clinical scenario for consideration for CY 2026
rulemaking, but instead was to provide an update on their ongoing
research efforts in response to CMS' previous questions about the
connection between autoimmune disease and oral health. The submitter
referred to their nomination for CY 2025 rulemaking and CMS' respective
request for comment
[[Page 32512]]
which is discussed in the CY 2025 PFS proposed rule (89 FR 61760
through 61762). The letter emphasized that patients with autoimmune
diseases often experience oral and dental complications, which can be
exacerbated by immunosuppressive therapies. The submitter stated that
they are currently analyzing Medicare claims data and commercial
insurance data to demonstrate the positive impact of dental care on
patients undergoing immunosuppressive treatment. They explained that
they are particularly focused on investigating the relationship between
regular preventive dental visits and systemic infection rates for those
with Sjogren's disease.
Since CY 2023, we have discussed our commitment to review
submissions we receive through the public submissions process. We have
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. For CY 2026, we are not making any proposals in response to
the submissions that we received and will take the information and
recommendations submitted into consideration for the future.
K. Payment for Skin Substitutes
A. Background
The CY 2014 Hospital Outpatient Prospective Payment System (OPPS)/
Ambulatory Surgical Center (ASC) final rule with comment period
describes skin substitutes as ``. . . a category of products that are
most commonly used in outpatient settings for the treatment of diabetic
foot ulcers and venous leg ulcers . . .'' (78 FR 74930 through 74931).
When a procedure utilizing a skin substitute product is performed,
providers bill one or more Healthcare Common Procedure Coding System
(HCPCS) codes to describe the preparation of the wound, the use of at
least one skin substitute product, and application of the skin
substitute product through suturing or various other techniques.
Specifically, CPT codes 15271 through 15278 describe the application of
skin substitutes to various size wounds and anatomical locations.
Recently, several novel industry practices have come to our
attention, likely driving substantial and unusual increases in the
number of available skin substitute products, the sales and
distribution structure for these products, and the rapidity of products
changing manufacturer ownership. These industry changes are causing a
significant increase in spending under Medicare Part B for skin
substitute products in the non-facility setting. According to Medicare
claims data, Part B spending for these products rose from approximately
$250 million in 2019 to over $10 billion in 2024, a nearly 40-fold
increase, while the number of patients receiving these products only
doubled. Increases in payment rates and launch prices for skin
substitutes, especially newer products, account for the majority of
observed Medicare spending increases on these products. Of note, as
part of its workplan, the U.S. Department of Health and Human Services'
Office of the Inspector General announced in November 2024 plans to
review Medicare Part B claims for skin substitutes to identify payments
that were at risk for noncompliance with Medicare requirements with an
expected issue date of fiscal year 2026.\73\
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\73\ https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000894.asp.
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We outlined our HCPCS Level II coding and payment policy objectives
for skin substitutes in the CY 2023 PFS proposed rule (87 FR 46249)
because we concluded it would be beneficial for interested parties to
understand our priorities as we work to create a consistent approach
for the suite of products we have referred to as skin substitutes. As
discussed in the CY 2023 PFS proposed rule, we have a number of
objectives related to refining our Medicare policies in this area,
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) employing 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, so we can incorporate payment methodologies that are more
consistent; and (4) promoting clarity for interested parties on CMS
skin substitutes policies and procedures. Interested parties have
requested that CMS address what they have described as inconsistencies
in our payment and coding policies, indicating that treating clinically
similar products (for example, animal-based and synthetic skin
products) differently for purposes of payment is confusing and
problematic for healthcare providers and patients. These concerns exist
specifically within the non-facility setting; however, interested
parties have also indicated that further alignment of our policies
across the non-facility and hospital outpatient department settings
would reduce confusion.
On April 25, 2024, the Medicare Administrative Contractors (MACs)
released a proposed Local Coverage Determination (LCD) to provide
appropriate coverage for skin substitute grafts used for chronic non-
healing diabetic foot and venous leg ulcers. The MACs issued the
collaborative proposed Skin Substitute Grafts/Cellular and Tissue-Based
Products for the Treatment of Diabetic Foot Ulcers and Venous Leg
Ulcers LCD to make sure that Medicare covers, and people with Medicare
have access to, skin substitute products that are supported by evidence
that shows that they are reasonable and necessary for the treatment of
diabetic foot and venous leg ulcers in the Medicare population and that
coverage aligns with professional guidelines for appropriately managing
these wounds. All of the MACs have delayed the effective date of the
final local coverage determinations for cellular and tissue-based
products for wounds (CTPs, or skin substitutes) in diabetic foot ulcers
and venous leg ulcers, moving the implementation date across all MAC
jurisdictions to January 1, 2026. For details, please see the final
LCD, L36377, titled: Skin Substitute Grafts/Cellular and Tissue-Based
Products for the Treatment of Diabetic Foot Ulcers and Venous Leg
Ulcers at: https://www.cms.gov/medicare-coverage-database/view/lcd.aspx?lcdId=36377&ver=19. We note that additional coverage
determinations may apply to skin substitute products.
The Medicare statute, regulations, and manual provisions empower
the Medicare program to determine if a product is reasonable and
necessary for the treatment of a beneficiary's condition and safe and
effective, not experimental or investigational, and appropriate and
therefore eligible for coverage under Part B. (See, for example, 42
U.S.C. 1395l(e), 1395y(a)(1)(A), 42 CFR 411.15(k)(1), 424.5(a)(6),
Medicare Program Integrity Manual Sec. 3.6.2.2, Medicare Benefit
Policy Manual ch. 15, Sec. Sec. 50.4.1-50.4.3, and Medicare Program
Integrity Manual, ch. 13 Sec. Sec. 13.5.3, 13.5.4.) The inclusion of a
product in this payment rule does not necessarily imply that a
determination has been made by CMS or its contractors that it is
reasonable and necessary and meets the other preconditions to Medicare
coverage. Similarly, the use of short descriptors and associated FDA
regulatory categories \74\ may reflect current FDA
[[Page 32513]]
regulation but are not intended to imply that FDA has determined that a
product meets any specific FDA statutory or regulatory requirements.
FDA's statutory and regulatory framework, including, for example, FDA's
findings that a product is ``safe and effective,'' is not controlling
of Medicare's determination under its own authorities of whether a
product is ``reasonable and necessary'' for an individual patient and
meets all preconditions for Medicare coverage and payment. FDA does not
make Medicare coverage or payment determinations, nor do FDA statutes
and regulations govern Medicare coverage or payment determinations.
However, CMS has determined that, when it is setting payment rates on a
prospective basis, a different inquiry and set of considerations apply
and that it makes sense to consider how FDA regulates products that CMS
considers to be skin substitutes.
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\74\ The term ``FDA regulatory categories'' is used in this
Proposed Rule when referring to the basis for CMS's proposed payment
policies but is not intended to reflect or imply that the products
discussed within this Proposed Rule are characterized as such or
grouped together by FDA.
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We continue to believe that our existing payment policies are
unsatisfactory, unsustainable over the long term, and rooted in
historical practice established two decades ago prior to significant
evolutions in medical technology and practice. After hosting a town
hall \75\ to provide an opportunity for public input, including
discussion of potential approaches to the methodology for payment of
skin substitute products, as well as reviewing several years of
comments in response to CY rulemaking in 2023, 2024, and 2025 on this
subject, we have developed a proposal that addresses our stated
objectives as well as many of the comments we have received.
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\75\ CMS Skin Substitutes Town Hall, which was held virtually on
January 18, 2023. More information regarding the CMS Skin
Substitutes Town Hall such as links to recording and transcripts is
available at https://www.cms.gov/medicare/payment/fee-schedules/
physician/skin-
substitutes#:~:text=The%20CMS%20Skin%20Substitutes%20Town,Physician%2
0Fee%20Schedule%20(PFS).
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B. Medicare Part B Payment for Skin Substitutes
1. Payment for Skin Substitutes When Used During a Covered Application
Procedure Under the PFS in the Non-Facility Setting
CMS has historically considered skin substitutes to be biologicals
for payment purposes under Medicare Part B. The Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108-173)
(MMA) established payment methodology for drugs and biologicals under
section 1847A of the Act. Under this methodology, a vast majority of
drugs and biologicals separately paid under Medicare Part B are paid at
the Average Sales Price (ASP) plus six percent. Section 303(c) of the
MMA, titled ``Payment reform for covered outpatient drugs and
biologicals,'' amended Title XVIII of the Act by adding new section
1847A of the Act. In part, this section established the use of the ASP
to determine the payment limit for drugs and biologicals described in
section 1842(o)(1)(C) of the Act (that is, drugs or biologicals billed
by a physician, supplier, or any other person and not paid on a cost or
prospective payment basis) furnished on or after January 1, 2005.
Because Medicare is currently paying for most skin substitutes as
biologicals using the methodology under section 1847A of the Act, each
skin substitute product receives a unique billing code (typically, a
Level II HCPCS code) and payment limit.
Section 401 of Division CC, Title IV of the Consolidated
Appropriations Act, 2021 (Pub. L. 116-260) (CAA, 2021) amended section
1847A of the Act to add new section 1847A(f)(2) of the Act, which
requires certain manufacturers without a Medicaid drug rebate
agreement, such as certain manufacturers of skin substitutes, to report
ASP data to CMS for calendar quarters beginning on January 1, 2022, for
drugs or biologicals payable under Medicare Part B and described in
sections 1842(o)(1)(C), (E), or (G) or 1881(b)(14)(B) of the Act,
including items, services, supplies, and products that are payable
under Part B as a drug or biological. Because most skin substitutes are
currently paid as biologicals using the methodology described in
section 1847A of the Act, manufacturers of these products are currently
required to report their ASP data to CMS every quarter. Prior to this,
section 1927(b)(3)(A)(iii)(I) of the Act only required manufacturers
with a Medicaid drug rebate agreement to report ASP data to CMS for
drugs or biologicals described in section 1842(o)(1)(C) of the Act.
Section 1847A of the Act also includes several relevant
definitions. While the definition of ``single-source drug or
biological'' provided at section 1847A(c)(6)(D) includes ``a
biological,'' sections 1847A(c)(6)(H) and (I) of the Act offer more
insight into the meaning of the term for purposes of this section.
Subparagraph (I) defines the term ``reference biological product'' as a
biological product licensed under section 351 of the PHS Act.
Subparagraph (H) defines the term ``biosimilar biological product'' as
``a biological product approved under an abbreviated application for a
license of a biological product that relies in part on data or
information in an application for another biological product licensed
under section 351 of the Public Health Service Act.''
Section 1927 of the Act, which is referred to multiple times in
section 1847A of the Act, also references section 351 of the PHS Act
when referencing biologicals. The title of section 303 of the MMA,
which added section 1847A to the Act, refers to ``covered outpatient
drugs,'' defined in section 1927(k)(2) of the Act. Subparagraph (B)
adds biological products to this definition when those products are
licensed under section 351 of the PHS Act, among other requirements.
In the CY 2022 PFS final rule, to address the need to establish a
payment mechanism for synthetic skin substitutes in the physician
office setting and to be responsive to feedback received from
commenters, we finalized an approach for payment of each synthetic skin
substitute for which we had received a HCPCS Level II coding
application. We finalized that those products would be payable in the
physician office setting and billed separately from the procedure to
apply them using HCPCS A-codes (86 FR 65120).
2. Payment for Skin Substitutes Under the Outpatient Prospective
Payment System (OPPS)
Prior to CY 2014, all products considered to be skin substitutes
were separately paid under the OPPS as if they were biologicals
according to the ASP methodology (78 FR 74930 through 74931). In the CY
2014 OPPS/ASC final rule with comment period (78 FR 74938), we
unconditionally packaged skin substitute products furnished in the
hospital outpatient setting into their associated application
procedures as part of a broader policy to package all drugs and
biologicals that function as supplies when used in a surgical
procedure. As part of the policy to package skin substitutes, we also
finalized a methodology that divides the skin substitutes into a high-
cost group and a low-cost group, to ensure adequate resource
homogeneity among APC assignments for the skin substitute application
procedures (78 FR 74933). In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66886), we stated that skin substitutes are best
characterized as either surgical supplies or devices because of their
required surgical application and because they share significant
clinical similarity with other surgical devices and supplies.
[[Page 32514]]
Skin substitutes assigned to the high-cost group are described by
CPT codes 15271 through 15278. Skin substitutes assigned to the low-
cost group are described by HCPCS codes C5271 through C5278. Claims
billed with primary CPT codes 15271, 15273, 15275, or 15277 are used to
calculate the geometric mean costs for procedures assigned to the high-
cost group, and claims billed with primary HCPCS codes C5271, C5273,
C5275, or C5277 are used to calculate the geometric mean costs for
procedures assigned to the low-cost group (78 FR 74935). The graft skin
substitute administration add-on codes, which include ``each additional
25 sq cm'' in the description (that is, CPT codes 15272, 15274, 15276,
and 15278; HCPCS codes C5272, C5274, C5276, and C5278), are packaged
into the payment rates for the primary administration codes.
For CY 2025, each of the HCPCS codes described earlier are assigned
to one of the following three skin procedure APCs according to the
geometric mean cost for the code: APC 5053 (Level 3 Skin Procedures):
HCPCS codes C5271, C5275, and C5277; APC 5054 (Level 4 Skin
Procedures): HCPCS codes C5273, 15271, 15275, and 15277; or APC 5055
(Level 5 Skin Procedures): HCPCS code 15273. In CY 2025, the payment
rate for APC 5053 (Level 3 Skin Procedures) is $612.13, the payment
rate for APC 5054 (Level 4 Skin Procedures) is $1,829.23, and the
payment rate for APC 5055 (Level 5 Skin Procedures) is $3,660.97. Table
27 lists the APC assignments and CY 2025 payment rates for the HCPCS
codes describing the skin substitute application procedures. This
information is also available in Addenda A and B of the CY 2025 final
OPPS/ASC rule with comment period (the Addenda A and B are available on
the CMS website https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices).
[GRAPHIC] [TIFF OMITTED] TP16JY25.095
Beginning in CY 2016, we adopted a policy where we determine the
high-cost/low-cost status for each skin substitute product based on
either a product's geometric mean unit cost (MUC) exceeding the
geometric MUC threshold or the product's per day cost (PDC), which is
calculated as the total units of a skin substitute multiplied by the
mean unit cost and divided by the total number of days, exceeding the
PDC threshold. We assign each skin substitute that exceeds either the
MUC threshold or the PDC threshold to the high-cost group. We assign
any skin substitute with a MUC or a PDC that does not exceed either the
MUC threshold or the PDC threshold to the low-cost group (87 FR 71976).
We also assign skin substitutes with pass-through payment status to the
high-cost category.
We assign skin substitutes with some pricing information but
without claims data for which to calculate a geometric MUC or PDC to
either the high-cost or low-cost category based on the product's ASP
plus 6 percent payment rate as compared to the MUC threshold. If ASP is
not available, we use the wholesale acquisition cost (WAC) plus 3
percent to assign a product to either the high-cost or low-cost
category. Finally, if neither ASP nor WAC is available, we use 95
percent of the average wholesale price (AWP) to assign a skin
substitute to either the high-cost or low-cost category.
In the CY 2021 OPPS/ASC final rule with comment period, after the
first entirely synthetic skin substitute products were introduced into
the market, we revised our description of skin substitutes to include
both biological and synthetic products (85 FR 86064 through 86067). Any
skin substitute product that is assigned to a code in the HCPCS A2XXX
series is assigned to the high-cost skin substitute group, including
new products without pricing information. New skin substitutes without
pricing information that are not assigned a code in the HCPCS A2XXX
series are assigned to the low-cost category until pricing information
is available to compare to the MUC and PDC thresholds (89 FR 94247).
In the CY 2014 OPPS/ASC final rule, we also noted that several skin
substitute products are applied as either liquids or powders per
milliliter or per milligram and are employed in procedures outside of
CPT codes 15271 through 15278. We stated that these products ``. . .
will be packaged into the surgical procedure in which they are used.''
(78 FR 74930 through 74931).
We also clarified that our definition of skin substitutes does not
include bandages or standard dressings, and that, under the OPPS, these
items cannot be assigned to either the high-cost or low-cost skin
substitute groups or be reported with either CPT codes 15271 through
15278 or HCPCS codes C5271 through C5278 (85 FR 86066).
C. Current FDA Regulation of Products CMS Considers To Be Skin
Substitutes
The FDA regulates products that CMS considers to be skin
substitutes based on a variety of factors, including product
composition, mode of action, and intended use. Relevant categories of
FDA regulation for skin substitute products include the following:
1. Self-determination Under Section 361 of the PHS Act and the
Regulations in 21 CFR 1271 (361 HCT/Ps)
Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/
Ps) are defined in 21 CFR 1271.3(d) as articles containing or
consisting of human cells or tissues that are intended for
implantation, transplantation, infusion, or transfer into a human
recipient. Examples include bone, ligament, skin, dura mater, heart
valve, cornea, hematopoietic stem/progenitor cells derived from
peripheral and cord blood, manipulated autologous chondrocytes,
epithelial cells on a synthetic matrix, and semen or other reproductive
tissue. Pursuant to section 361 of the Public Health Service (PHS) Act,
FDA promulgated regulations at 21 CFR
[[Page 32515]]
1271, et seq that create an electronic registration and listing system
for establishments that manufacture HCT/Ps, regulate donor eligibility,
and establish current good tissue practice and other procedures to
prevent the introduction, transmission, and spread of communicable
diseases by HCT/Ps.
A subset of HCT/Ps are those that are regulated solely under
section 361 of the PHS Act and the regulations in 21 CFR 1271 (361 HCT/
Ps). The FDA has taken a risk-based, tiered approach in regulating HCT/
Ps; as the potential risk posed by a product increases, so too does the
level of oversight (63 FR 26745). Although FDA is authorized to apply
the requirements in the Federal Food, Drug, and Cosmetic Act (FD&C Act)
and/or the PHS Act to those products that meet the definition of drug,
biological product, or device, under a tiered, risk-based approach,
HCT/Ps that meet specific criteria or fall within detailed exceptions
do not require premarket review and approval. HCT/Ps that do not meet
all the criteria in 21 CFR 1271.10(a) are not regulated solely under
section 361 of the PHS Act and the regulations in 21 CFR part 1271.
Unless an exception in 21 CFR 1271.15 applies, such products are
regulated as drugs, devices, and/or biological products under the FD&C
Act and/or the PHS Act and are subject to additional regulation,
including applicable premarket review. An HCT/P is regulated solely
under section 361 of the PHS Act and 21 CFR part 1271 if it meets all
of the following criteria (21 CFR 1271.10(a)):
The HCT/P is minimally manipulated.
The HCT/P is intended for homologous use only, as
reflected by the labeling, advertising, or other indications of the
manufacturer's objective intent.
The manufacture of the HCT/P does not involve the
combination of the cells or tissues with another article, except for
water, crystalloids, or a sterilizing, preserving, or storage agent,
provided that the addition of water, crystalloids, or the sterilizing,
preserving, or storage agent does not raise new clinical safety
concerns with respect to the HCT/P.
Either:
++ The HCT/P does not have a systemic effect and is not dependent
upon the metabolic activity of living cells for its primary function;
or
++ The HCT/P has a systemic effect or is dependent upon the
metabolic activity of living cells for its primary function; and
--- Is for autologous use;
--- Is for allogeneic use in a first-degree or second-degree blood
relative; or
--- Is for reproductive use.
Establishments that manufacture 361 HCT/Ps, as defined by 21 CFR
1271.3(e), must register and list their 361 HCT/Ps in the FDA's
electronic Human Cell and Tissue Establishment Registration System
(eHCTERS), but premarket review and approval by FDA is not needed.
However, FDA acceptance of an establishment registration and 361 HCT/P
listing form does not constitute a determination that an establishment
is compliant with applicable FDA rules and regulations, that the FDA
has agreed with the manufacturer's self-determination as a 361 HCT/P,
or that the HCT/P is licensed or approved by FDA (21 CFR 1271.27(b)).
When this proposed rule refers to 361 HCT/Ps, it generally refers to
products where an establishment has self-determined that their product
is a 361 HCT/P.\76\ If an HCT/P does not meet the criteria set out in
21 CFR 1271.10(a), and the establishment that manufactures the HCT/P
does not qualify for any of the exceptions in 21 CFR 1271.15, the HCT/P
will be regulated as a drug, device, and/or biological product under
the FD&C Act, and/or section 351 of the PHS Act (42 U.S.C. 262), and
applicable regulations, including 21 CFR part 1271, and premarket
review generally is required.
---------------------------------------------------------------------------
\76\ We note that establishments may seek feedback from FDA
regarding their self-determination analysis and conclusion that a
particular product is a 361 HCT/P. See, For example., https://www.fda.gov/vaccines-blood-biologics/tissue-tissue-products/tissue-reference-group.
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2. 510(k) Premarket Notification Submissions, Premarket Approval
Applications, and De Novo Requests
``Devices,'' as defined under 21 U.S.C. 321(h)(1), do not achieve
their primary intended purposes through chemical action and are not
dependent upon being metabolized for the achievement of their primary
intended purposes. Devices may be subject to premarket review through:
(1) a 510(k) premarket notification submission (510(k)) in accordance
with section 510(k) of the FD&C Act and implementing regulations in
subpart E of 21 CFR part 807; (2) a premarket approval application
(PMA) under section 515 of the FD&C Act and regulations in 21 CFR part
814; or, potentially, (3) a De Novo classification request (De Novo
request) under section 513(f)(2) of the FD&C Act and regulations in
subpart D of 21 CFR part 860. A 510(k) is a premarket submission made
to the FDA to demonstrate that the device to be marketed is
substantially equivalent to a legally marketed device that is not
subject to premarket approval (sections 510(k) and 513(i) of the FD&C
Act). Premarket approval is the most rigorous type of review and
generally is required for class III medical devices. Class III devices
are those devices for which insufficient information exists to
determine that general controls and special controls would provide a
reasonable assurance of safety and effectiveness and are purported or
represented to be for a use in supporting or sustaining human life or
for a use which is of substantial importance in preventing impairment
of human health, or present potential unreasonable risk of illness or
injury (section 513(a)(1)(C) of the FD&C Act). De Novo classification
is a marketing pathway for novel medical devices for which general
controls alone (class I), or general and special controls (class II),
provide reasonable assurance of safety and effectiveness, but for which
there is no legally marketed predicate device. Devices that are
classified into class I or class II through a De Novo request may be
marketed and used as predicates for future premarket notification (that
is, 510(k)) submissions, when applicable.
3. Biologics License Application
To lawfully introduce or deliver for introduction into interstate
commerce a drug that is a biological product, a valid biologics license
application (BLA) must be in effect under section 351(a)(1) of the PHS
Act, 42 U.S.C. 262(a)(1), unless exempted under 42 U.S.C. 262(a)(3).
Such licenses are issued only after showing that the product is safe,
pure, and potent. Approval of a biologics license application or
issuance of a biologics license shall constitute a determination that
the establishment(s) and the product meet applicable requirements to
ensure the continued safety, purity, and potency of such products (21
CFR 601.2(d)). Potency has long been interpreted to include
effectiveness (21 CFR 600.3(s)).
The definition of the term ``biological product'' in section 351(i)
of the PHS Act is: ``a virus, therapeutic serum, toxin, antitoxin,
vaccine, blood, blood component or derivative, allergenic product,
protein, or analogous product . . . applicable to the prevention,
treatment, or cure of a disease or condition of human beings.'' (42
U.S.C. 262(i)). In contrast to the registration and listing
requirements for a 361 HCT/P or the substantial equivalence
requirements for 510(k)s, products licensed under section 351 of the
PHS Act are required to meet stringent pre-and post-market requirements
to ensure the products' safety and efficacy when
[[Page 32516]]
marketed. Table 2 lists several other notable differences between the
relevant FDA regulatory categories for products CMS considers to be
skin substitutes.
[GRAPHIC] [TIFF OMITTED] TP16JY25.096
D. Proposed Payment of Skin Substitute Products Under the PFS and OPPS
1. Separate Payment for Skin Substitute Products as Incident-To
Supplies
---------------------------------------------------------------------------
\77\ No premarket authorization is required for 361 HCT/Ps.
\78\ https://www.fda.gov/industry/fda-user-fee-programs/medical-device-user-fee-amendments-mdufa.
\79\ These numbers include either a review within 180 days for
decisions without advisory committee input or a review within 320
days for decisions with advisory committee input, respectively.
\80\ PDUFA performance goals call for FDA to review and act on
90 percent of original BLA submissions within 10 months of the 60-
day filing date. Other regulatory pathways may have different
timelines. See https://www.fda.gov/patients/learn-about-drug-and-device-approvals/fast-track-breakthrough-therapy-accelerated-approval-priority-review; https://www.fda.gov/drugs/development-approval-process-drugs.
\81\ https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments.
---------------------------------------------------------------------------
We have carefully considered our policy objectives, which include:
(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) employing a uniform approach across products
within the physician office setting, regardless of whether the product
is synthetic or comprised of human- or animal-based material; and (4)
providing clarity for interested parties on CMS skin substitutes
policies and procedures. We propose, starting January 1, 2026, to
separately pay for the provision of certain groups of skin substitute
products as incident-to supplies when, for those products that are
coverable under Medicare's rules, they are used during a covered
application procedure paid under the PFS in the non-facility setting or
under the OPPS. This proposal does not apply to biological products
licensed under section 351 of the PHS Act, which will continue to be
paid as biologicals under the ASP methodology in section 1847A of the
Act. While we considered proposing to pay separately for skin
substitutes initially under just the PFS in non-facility settings
consistent with current practice, one of our primary policy objectives
is to ensure a consistent payment approach for skin substitute products
across the physician office and hospital outpatient department
settings; and so, we ultimately determined that the suite of products
referred to as skin substitutes should be treated in a uniform manner
across different outpatient care settings, to the extent permitted by
applicable law. The physician, in consultation with his or her patient,
decides the site of service for treatment. While many factors are
considered as a part of that decision, substantial differences in
payment for the application of the same skin substitute product in one
site of service versus another, or between similar skin substitute
products, should not be one of them. Establishing a consistent
framework for how these products are treated within the non-facility
and hospital outpatient settings would empower providers to make the
best treatment decisions for their patients, ensure equitable access to
needed services, and pay appropriately for these services. We also
considered bundling payment for skin substitute products in both the
PFS and OPPS as part of this proposal. While supplies are generally
bundled into the payment of the service in both the physician office
and hospital outpatient departments, for many years skin substitute
products have been paid separately in the physician office setting,
where the majority of these products are currently applied. So, we have
determined that bundling payment for skin substitute products with
their administration procedures across both settings under this new
proposal, before efforts are made to address improper utilization
patterns, would be premature. Depending on whether our proposal is
finalized, and the outcomes of a final policy, we may consider
packaging skin substitute products with the related application
procedures in both the hospital outpatient setting and non-facility
setting in future rulemaking. We seek comments on our proposal to
separately pay for the provision of certain groups of skin substitute
products as well as on our proposal to implement this policy in both
the non-facility and hospital outpatient settings. For additional
details on the OPPS proposal for skin substitutes, please see the CY
2026 OPPS/ASC proposed rule with comment period; the remainder of this
policy proposal will focus on implementation under the PFS.
We propose, under the PFS, to pay separately for the use of
specific skin substitute products (that is, skin substitute products
that are not regulated as biological products under section 351 of the
PHS Act) that are eligible for Medicare coverage during a covered
application procedure in the non-facility setting as incident-to
supplies in accordance with section 1861(s)(2)(A) of the Act. Supplies
are a large category of items that typically are either for single use
or have a shorter use life span than equipment. Supplies can be
anything that is not equipment and include not only minor, inexpensive,
or commodity-type items but also include a wide range of products used
in outpatient settings, including certain implantable medical devices.
``Incident-to supplies'' refers to supplies that are furnished as an
integral, although incidental, part of the physician's professional
services in the course of diagnosis or treatment of an injury or
illness (42 CFR 410.26). Because a skin substitute must be used to
perform any of the procedures described by a CPT code in the range
15271 through 15278, and the procedure of treating the wound and
applying a covering to the wound is the independent service, skin
substitute products serve as a necessary supply for these surgical
repair procedures. We seek comments on our proposal to separately pay
for provision of skin substitutes as incident-to supplies under the PFS
in the non-facility setting.
Skin substitutes have historically been paid separately in the non-
facility setting as biologicals instead of supplies when used during a
covered application procedure. Products CMS considers to be skin
substitutes may also meet FDA's
[[Page 32517]]
definition of a biological product, either directly or as an analogous
product. However, section 1847A of the Act, which includes the
controlling provisions for setting Medicare payment for drugs and
biologicals billed by a physician, generally refers to biologicals in
ways that do not encompass most skin substitutes. While most skin
substitutes are either medical devices regulated under the FD&C Act or
products regulated solely under section 361 of the PHS Act,
subparagraphs (H) and (I) of section 1847A(c)(6) of the Act only refer
to biologicals licensed under section 351 of the PHS Act. Section 1847A
of the Act also references section 1927 of the Act, which again refers
to section 351 of the PHS Act when referencing biologicals. In
addition, to operationalize the payment system, section 1847A of the
Act includes extensive references to National Drug Codes, a type of
drug identifier published by the FDA and generally not assigned to skin
substitutes, which further supports our proposal to stop utilizing
1847A payment methodologies for skin substitutes that are not licensed
under section 351 of the PHS Act. For example, section 1847A(b)(4)(A)
of the Act directs use of the lesser of the average sales price or
wholesale acquisition cost when determining the payment amount for a
single-source drug or biological for all National Drug Codes assigned
to the drug or biological. The methodology for calculating both the
average sales price and the wholesale acquisition cost is described in
paragraph (6) of section 1847A(b) of the Act, which describes a process
that again specifies the use of National Drug Codes. Because skin
substitutes generally do not have National Drug Codes, CMS has
operationalized this process for skin substitutes by allowing
manufacturers of skin substitutes to self-select an Alternate ID to
distinguish between different skin substitute products.\82\ However,
the use of an alternative identification method is not required by the
statute, and the calculation of a payment rate for these products is
otherwise not possible.
---------------------------------------------------------------------------
\82\ https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf.
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We note that section 351 and section 361 of the PHS Act are two
distinct regulatory frameworks. Section 351 biological products must
seek FDA pre-marketing approval (using clinical studies that are
required by the applicable section 351 regulations) and are applicable
to the prevention, treatment, or cure of a disease or condition. In
contrast to the prerequisites for marketing products that fall under
section 351 of the PHS Act , no FDA approval or clearance is required
for marketing the self-determined 361 HCT/Ps. Section 361 products also
do not receive an FDA license of approval for a specific prevention,
treatment, or cure of a disease or condition and do not require
controlled clinical trials to demonstrate effectiveness. Rather the
self-determined 361 HCT/Ps are limited to intended uses that reflect
homologous use for that particular product.
In light of our careful review of the applicable statutory
provisions governing skin substitute products paid under the ASP
methodology under 1847A of the Act, the different FDA regulatory
frameworks used for these products, and the skyrocketing increase in
Medicare spending for such products, we are proposing to pay separately
for specific skin substitute products (other than products licensed
under section 351 of the PHS Act, which will continue to be paid as
biologicals under the ASP methodology in section 1847A of the Act) that
are eligible for Medicare coverage during a covered application
procedure in the non-facility setting as incident-to supplies in
accordance with section 1861(s)(2)(A) of the Act.
One purpose of the new proposed policy is to limit some of the
current profiteering practices occurring in this industry. For example,
as reflected in CMS's ASP pricing files, we have observed a dramatic
increase in launch prices. It is unclear how these prices could be
attached to realistic changes in resource costs as many of these new
products are minimally manipulated tissues. Our proposed policy is
likely to disincentivize this practice, as well as several other novel
industry practices that have come to our attention by preventing
exploitation of skin substitute pricing under section 1847A of the Act,
overuse of expensive skin substitute products, and waste resulting from
use of more-expensive skin substitute products over clinically-
appropriate, less-expensive alternatives. Notably, there has not been
significant growth in payments for skin substitutes in the OPPS, which
unconditionally packages the payment for skin substitute products with
their associated application procedures. We note that the relevant
statutory provisions, when considered together, do not require all of
these kinds of products to be paid as biologicals under section 1847A
of the Act. Therefore, under this proposed policy, unless a skin
substitute is approved as a drug or as a biological product under
section 351 of the PHS Act, in which case we would continue to pay for
it consistent with section 1847A of the Act, we would consider it an
incident-to supply for payment purposes under the PFS with the
definitions and rates described below. For Medicare purposes, we
propose to codify the definition of ``biological'' as ``a product
licensed under section 351 of the Public Health Service Act'' at
Sec. Sec. 414.802 and 414.902. We seek comments on our proposal to
limit application of section 1847A of the Act to skin substitutes that
are approved as a drug or as a biological product under section 351 of
the PHS Act and our proposed edits to the regulations.
2. Payment Categories Based on FDA Regulatory Category
Paying separately for skin substitutes in the non-facility setting
has led to dramatic price increases for these products, as noted above.
Grouping similar products or services into a single billing code and
using a single payment amount for them, as we do with many services
under the OPPS, some services under the PFS, and all multiple-source
drugs under section 1847A of the Act, incentivizes hospitals and
prescribers to make the most cost-efficient, clinically effective
treatment decision. However, we recognize that grouping dissimilar
products and/or services to set payment rates can limit beneficiaries'
access to appropriate care, especially when some groups encompass
products and services with significant clinical and resource
variability. In the case of skin substitutes, no single product among
the wide range of products stands out as typical; so we have reviewed
several methods to group or classify skin substitutes to determine
which best reflects clinical and resource similarities between these
products.
To reflect relevant product characteristics, we propose to group
skin substitutes that are not drugs or biologicals (that is, biological
products licensed under section 351 of the PHS Act) using three CMS
payment categories based on FDA regulatory categories (PMAs, 510(k)s,
and 361 HCT/Ps) to set payment rates. We have previously noted in
rulemaking that CMS has no obligation to categorize products based on
the FDA's current regulatory framework (74 FR 60476); but, in this
case, we have determined that the FDA regulatory categories provide an
appropriate level of distinction for a heterogeneous category of
products that exhibit clinical and resource variability that can
ultimately improve the accuracy of the relative value units under the
PFS. Proposing a payment policy that aligns with FDA's current
regulatory framework also
[[Page 32518]]
provides for predictability and efficiency for purposes of Medicare
payment. Payment for new products, as discussed below, could be
achieved quickly and consistently by CMS's capacity to immediately
recognize the FDA regulatory categories.
a. 361 HCT/Ps
As described previously, 361 HCT/Ps are a subset of HCT/Ps that are
regulated solely under section 361 of the PHS Act and the regulations
in 21 CFR 1271 and listed in the FDA's eHCTERS. Currently, registered
361 HCT/Ps generally are dressings intended only to cover and protect a
wound. They are not intended to act on the wound to mediate,
facilitate, or accelerate wound healing. Their activity is typically
limited to that of a physical covering or wrap. A structural tissue
intended for wound care is generally limited to the homologous use of
cover and protect in order to be a 361 HCT/P.\83\ Intended uses such as
wound treatment, promotion or acceleration of wound healing, or serving
as a skin substitute would generally be non-homologous uses of
structural tissues. Instead, products for such intended uses (for
example, the treatment of wounds) generally are subject to PMA or BLA
requirements.
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\83\ See Regulatory Considerations for HCT/Ps: Minimal
Manipulation and Homologous Use, July 2020 (pg. 19).
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b. Devices Requiring 510(k) Clearance
A 510(k) is a premarket submission made to the FDA generally by the
manufacturer of a device to demonstrate that the device to be marketed
is substantially equivalent to a legally marketed device that is not
subject to premarket approval. (FD&C Act sections 510(k), 513(i)).
Currently, 510(k)-cleared devices that we are considering for purposes
of this proposal generally are dressings intended only to cover and
protect a wound, to absorb exudate, and to maintain appropriate
moisture balance within the wound. They are not intended to act on the
wound to mediate, facilitate, or accelerate wound healing. Their
activity is typically limited to that of a physical covering or wrap.
When intended only to cover and protect a wound, to absorb exudate, and
to maintain appropriate moisture balance within the wound and otherwise
meeting the device definition, generally the FDA's Center for Devices
and Radiological Health (CDRH) regulates wound dressings composed of
natural biomaterials, including animal and human derived tissue as
devices, and they are currently subject to 510(k) requirements. At this
time, wound dressings have not been 510(k) cleared by FDA for
indications such as wound treatment, promotion or acceleration of wound
healing, or serving as a skin substitute.\84\ Instead, products for
such intended uses generally are subject to PMA or BLA requirements.
---------------------------------------------------------------------------
\84\ FDA Executive Summary Prepared for the October 26 & 27,
2022 Meeting of the General and Plastic Surgery Devices Panel of the
Medical Devices Advisory Panel Classification of Wound Dressings
with Animal-derived Materials (Section 3). Available at download
---------------------------------------------------------------------------
For the purposes of this policy, we propose to group any skin
substitutes authorized through the De Novo pathway with those cleared
under 510(k)s. De Novo classification is a marketing pathway for
medical devices for which general controls alone (class I), or general
and special controls (class II), provide reasonable assurance of safety
and effectiveness. While products authorized through the De Novo
pathway have no legally marketed predicate device, devices that are
classified into class I or class II through a De Novo authorization may
be marketed and used as predicates for future premarket notification
(that is, 510(k)) submissions, when applicable. Because of this, we
would expect skin substitutes authorized through the De Novo pathway
and those cleared under 510(k)s to be similar for purposes of this
proposal.
c. Products Subject to PMAs
Premarket approval is the most rigorous type of review and
generally is required for class III medical devices. Similar to BLA-
approved wound care products, PMA-approved wound care products
generally are intended to go beyond a simple wound cover to provide
some type of direct treatment effect. The FDA has not defined the term
``skin substitute.'' However, the term has been used as a descriptor
for certain wound care constructs that are currently approved under a
BLA or PMA for treatment of burns or skin ulcers, including ulcers that
appear to have failed to heal after standard of care. The intended uses
of these products may include scaffold claims, reference to matrix
attributes that promote endogenous cell binding, migration,
differentiation, or proliferation, and/or activities mediated by
matrix-associated regulatory factors that facilitate wound healing.
Currently, wound care products intended to interact with the wound to
facilitate, promote, or accelerate wound healing generally require
approval of a BLA or, in some instances, a PMA. Approval of these
products requires demonstration of safety and efficacy for the intended
use, which generally requires the performance of clinical studies. So
PMA-approved devices can be readily distinguished from 510(k)-cleared
devices and 361 HCT/P products, which are intended mainly to cover and
protect the wound. They are clinically different, provide different
benefits, and would theoretically be used for patients presenting with
different clinical scenarios. As discussed, PMA-approved devices also
go through a much more rigorous review process before marketing as
compared to the substantial equivalence requirements for 510(k)s and
lack of premarket review for registered 361 HCT/Ps. This more rigorous
review for PMAs, as well as differences in clinical utility, and the
associated costs to manufacturers, suggests that the resources involved
in furnishing these products could be distinct from 361 HCT/Ps and
510(k)s. We seek comment on our proposal to group skin substitutes into
three FDA categories, PMA, 510(k), and 361 HCT/P, to set payment rates.
d. Innovative Products
We note that recognizing innovation for supplies through payment
policy is complex. It may be difficult to differentiate a truly
innovative product from another that offers no true clinical advance.
We seek comments on how to properly recognize innovative products
through payment policy under the PFS as we continue to assess how best
to identify and value innovative products under the PFS. For example,
we seek comments on whether skin substitutes with active pass-through
payment status under the OPPS and/or those receiving new technology
add-on payments (NTAP) under the IPPS should be paid separately from
their FDA category under the PFS. We seek comments on whether these
products should meet a substantial clinical improvement standard or
whether, consistent with current pass-through policy, a device that has
received marketing authorization for an indication covered by FDA's
Breakthrough Devices Program would generally represent clinically-
relevant innovation sufficient to qualify for a product-specific
payment rate. Finally, we seek comments on using either a product's ASP
or invoice pricing, similar to how devices with pass-through status are
paid in ambulatory surgical centers, or adding a set percentage,
similar to the NTAP add-on, to the applicable FDA category's base rate
to set payment limits during the period of time that the product is
covered by the pass-through and/or NTAP programs.
[[Page 32519]]
3. Alternative Payment Categories
As a conceptually possible alternative to our proposal to group
skin substitutes based on FDA regulatory categories for purposes of
payment, we considered aligning these products based on their
composition, for example, whether they are non-synthetic or synthetic.
Two examples provided by interested parties include grouping the
products as allografts (for example, amniotic products, cellular
products), xenografts (for example, collagen products derived from
animals), synthetics (for example, artificial products made from
various biomaterials) and grouping the products as human living/
cryopreserved tissue, dehydrated human/amniotic tissue, animal
xenografts, and synthetics/polymers. However, as noted previously, skin
substitutes are a heterogenous group with an increasing intersection
between tissue, bioengineered, and synthetic components. With many
products now including both non-synthetic and synthetic components,
clear categorization of skin substitutes by composition is no longer
feasible. This makes this alternative extremely complex to implement
because it would be necessary to determine which category would be most
appropriate for each individual product based on the components of its
composition and an assessment of the importance of each. In addition,
it is unclear if grouping products based solely on their composition
would provide accurate differentiation with respect to resource or
clinical similarity for the purposes of setting an appropriate payment
rate.
Other alternatives we considered include grouping all products
together to set a single payment rate or creating two or more
categories reflecting product cost, similar to the grouping used
currently to set payment rates for skin substitutes in hospital
outpatient departments. While these options may offer certain
operational advantages for their simplicity, neither recognizes the
clinical differences among skin substitutes as reflected by their
different intended uses. Paying for similar items and services at a
comparable rate is a foundational aspect of our payment systems, but
hospital outpatient departments and physicians and other practitioners
paid under the PFS would instead have a financial incentive to use the
least expensive skin substitute or the product offering the greatest
discount, which could negatively affect patient outcomes and
disincentivize innovation in this space if clinical differences are not
recognized and differential payments rates are not set. In addition,
dividing products by cost relies on pricing set by manufacturers.
Especially in light of the dramatic growth of skin substitutes' ASP-
based payment limits, this method is unlikely to accurately reflect
skin substitute resource costs or clinical similarity.
We seek comments on whether adding certain subcategories to the
three proposed FDA categories would improve clinical or resource
similarity. One potential example is creating certain subcategories for
payment based on one or more FDA device product codes, which is a
categorization process that FDA uses to group similar products
together. Other examples that have come to our attention include
setting unique payment rates for 361 HCT/Ps based on the number of
tissue layers (for example, one layer, two layers, and three or more
tissue layers) or entirely synthetic products versus non-synthetic
products for 510(k)s. If significant clinical or resource differences
were identified between products in one or more of these categories,
CMS could create a separate payment grouping for these products for
payment purposes.
We also seek comments on whether products that are not in sheet
form are appropriately considered skin substitutes for the purposes of
providing separate payment under this policy. Examples include gel,
powder, ointment, foam, liquid, or injected products listed in the
nontraditional units of cc, mL, mg, and cm\3\. We request feedback on
whether these products could be appropriately used as part of the CPT
administration codes in the range 15271 through 15278, despite existing
CPT coding guidelines limiting their use, and how these units could be
paid using the FDA regulatory category groups. For example, assuming
these products were appropriate to administer using the noted CPT
administration codes or other administration codes, CMS could include
products listed in units of cc, mL, or cm\3\ in the applicable FDA
categories and equate a single cm\2\ unit to each cc, mL, or cm\3\ for
payment purposes. We seek comments on whether other administration
codes could be used to appropriately describe services performed using
products with units other than cm\2\.
4. Establishing RVUs and Initial Payment Rates
Section 1848(c)(2)(N) of the Act provides authority to establish or
adjust practice expense RVUs using cost, charge, or other data from
suppliers or providers of services, including information collected or
obtained under section 1848(c)(2)(M) of the Act. Section 1848(c)(2)(M)
of the Act authorizes the Secretary to collect or obtain information on
the resources directly or indirectly related to furnishing services for
which payment is made under the PFS fee schedule, and such information
may be collected or obtained from any eligible professional or any
other source. In addition, it allows the Secretary, as he determines
appropriate, to use such information in the determination of RVUs. We
are relying on these authorities to propose to establish practice
expense RVUs and initial payment rates for skin substitute products in
each of the three FDA regulatory categories discussed above based on
the volume-weighted average ASP, with no additional markup, as
submitted by manufacturers, when available. We have developed initial
payment rates for each group based on the weighted, per-unit average of
ASPs for the fourth quarter of calendar year 2024. These initial
payment rates are listed in the file titled ``Skin Substitute Products
by FDA Regulatory Category'' on the CMS website under downloads for the
CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. When ASP was not available, we used the MUC, which we
currently use to determine the high-cost/low-cost status for each skin
substitute product in the hospital outpatient setting, to calculate the
proposed initial rates. While use of hospital cost data departs from
the hierarchy of data sources contained in section 1847A of the Act to
calculate prices for drugs and biologicals, we note that section
1848(c)(2)(N) of the Act provides authority for us to use this data to
establish or adjust practice expense RVUs. In addition, as proposed,
skin substitutes in the three FDA regulatory categories would no longer
be considered biologicals for the purposes of payment under section
1847A of the Act. We considered using only the MUC data to calculate
payment rates for these products. However, when ASP is reported, it may
serve as a better estimate of cost across both settings as the ASP
reflects sales to physicians as well as hospitals. We seek comments on
our proposal to establish PE RVUs and initial payment rates for skin
substitute products in each of the three FDA regulatory categories
using ASP, or MUC when ASP is not available, using per-unit averaged
pricing data from the fourth quarter of 2024. We also seek comments on
whether these calculations, if finalized, should be updated with the
most recently
[[Page 32520]]
available data at the time the final rule is drafted.
As we are proposing to implement this policy for CY 2026 in a site-
neutral manner across both the non-facility setting under the PFS and
hospital outpatient setting under the OPPS, we are including all
products used in either setting to calculate the rates. However, when
product-specific utilization across both settings is used to calculate
volume-weighted average payments, the result is an apparent rank order
anomaly; despite having a more rigorous regulatory review process and
receiving indications to treat and heal wounds, the PMA category has
the lowest average payment. We are concerned that use of the novel
pricing practices noted above has resulted in a decoupling of actual
resource costs from the ASP. To address this, as a short-term measure,
we propose to weight the product-specific utilization in calculating
the proposed rates using the proportions from only the hospital OPPS
data and establish for CY 2026 a single payment rate that would apply
to all skin substitute products in the three FDA regulatory categories.
We believe the OPPS utilization data may better predict utilization
patterns under our proposed policies for non-facility settings because,
similar to our proposals, these products are already grouped together
for payment purposes under the OPPS. By grouping skin substitutes into
high- and low-cost groups in the OPPS, hospitals are incentivized to
choose either the lowest-cost, clinically appropriate product in the
low-cost group or the lowest-cost, clinically appropriate product in
the high-cost group. No similar incentive currently exists in the non-
facility setting for physicians and other suppliers billing under the
PFS. As the proposed policies are intended to mitigate the problematic
incentives associated with current patterns of use in the non-facility
setting by establishing payment rates for the products in groups
instead of individually, we do not believe it would reflect the
expected resource costs involved in providing care if we were to base
the initial rates on utilization data from the non-facility setting
that may be skewed by incentives that would no longer exist under our
proposals. For these reasons, we are proposing to initially use
hospital outpatient utilization to weight how much each product's price
contributes to the proposed payment rates for skin substitutes cleared
through the 510(k) pathway, self-determined to be 361 HCT/Ps, or
approved under a PMA. We seek comments on the use of the hospital
outpatient product utilization patterns to set payment rates for these
products under the PFS. We are also proposing for CY 2026 to establish
the same initial rate for each group of skin substitutes, including
510(k)-cleared products, registered 361 HCT/Ps, and approved PMAs. To
ensure we are not underestimating the resources involved in using these
products in furnishing care, we are proposing to use the highest of the
calculated volume-weighted average payment amounts for 510(k)s, 361
HCT/Ps, and PMAs to set initial payment valuations. As the 361 HCT/Ps
have the highest volume-weighted average payment amount, this average
payment rate is reflected in the proposed initial payment rate below.
However, we note that, in future notice and comment rulemaking, we
intend to propose using claims data to set payment rates for products
in these three categories, which would likely result in payment
valuations that diverge based on the updated data. Another alternative
is to set the payment rate for products in these categories at the
volume-weighted average for all three categories, resulting in a lower
initial payment rate for all three groups of products. We seek comment
on our proposal to use the 361 HCT/P volume-weighted average payment
amount to set the initial payment rates for products in all three
categories as well as the alternative of using a pooled average of the
three categories to set the initial payment rates.
Alternatively, while the ASP pricing files show that skin
substitutes across all three of the FDA regulatory categories have
increased in cost substantially since 2019, unlike the self-determined
361 HCT/Ps and 510(k)-cleared devices, there has not been a substantial
increase in the number of skin substitutes with approved PMAs.
Consequently, it is possible that the non-facility utilization of the
skin substitutes with approved PMAs is not as distorted as the
utilization of the other kinds of skin substitutes. Setting a separate
payment rate for this category using combined product utilization
patterns (from both OPPS and non-facility settings), would result in a
higher initial payment rate for the PMA category. This would rationally
order the FDA regulatory categories, based on clinical considerations
and some indicators of resource cost, until pricing data removed from
these aberrant financial incentives can be incorporated. We seek
comments on this alternative policy option.
Under the PFS, payment rates are determined based on work RVUs, PE
RVUs, and MP RVUs multiplied by their respective GPCI adjusters and
then converted into dollars through multiplication by the conversion
factor. For skin substitutes that would be valued and paid as incident-
to supplies under our proposal, the practitioner work associated with
the application of the skin substitute is already accounted for in the
valuation of the application codes themselves (CPT codes 15271-15278),
so we are not proposing work RVUs for the codes that describe the
products involved in furnishing the application service. Rather than
using the established PE methodology to derive PE RVUs from work,
direct PE inputs, and the PE/HR data (as described in section II.E of
this proposed rule), we are instead proposing to use our authority
under sections 1848(c)(2)(M) and (N) of the Act to establish PE RVUs
for these supplies using rates calculated from a combination of OPPS
cost data and ASP data weighted by OPPS volume. For the specific PE
RVUs, please see Addendum B of this proposed rule available on the CMS
website under downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For malpractice
RVUs, we generally believe that the malpractice resources are already
reflected in the MP RVUs associated with the application codes, but
because the standard PFS methodologies assign a minimum of .01 MP RVUs
to all codes except add-on codes (75 FR 73276.), we are proposing an MP
RVU of 0.01 for these supplies consistent with the rounding convention
We also seek comments on whether we should consider treating the codes
describing skin substitute products as add-on codes to the current CPT
application codes. This would more clearly indicate that the only skin
substitute products to be paid for and treated as supplies by Medicare
are those used in conjunction with the already existing CPT
administration codes. If we were to treat these codes as add-on codes
to the application codes, we would effectuate this by assigning a
global indicator of ZZZ to the skin substitute codes under the PFS. If
we were to finalize these codes as add-on codes, we would assign 0 MP
RVUs to them, consistent with existing policy regarding add-on codes.
The proposed PE and MP RVUs would result in an initial payment rate
of approximately $125.38/cm\2\ for skin substitute products in all
three FDA regulatory categories (including PMA-
[[Page 32521]]
approved devices, 361 HCT/Ps, and 510(k) cleared devices) prior to the
application of the geographic adjustments. Again, the proposed PE and
MP RVUs are available in Addendum B of this proposed rule. We seek
comments on these proposed initial values.
We determined these proposed values using product pricing and
volume for skin substitutes from paid claims with dates of service in
the fourth quarter of 2024 because it is the most recent, substantially
complete quarter of data. For professional claims, we excluded claims
without a positive line-level allowed amount, so that we did not
inadvertently include volume without presumed costs in the calculation.
In addition, in reviewing the ASP pricing files from the first quarter
of 2017 through the first quarter of 2025, the most complete ASP
reporting is in the fourth quarter of each year. To determine the
payment rates, we first used a product's ASP if it was available. If
the ASP rate was missing, we used the 2024 MUC for the HCPCS code. We
then calculated a single rate for each FDA category by taking the
volume-weighted average of the rates for the applicable codes using the
hospital outpatient utilization to weight each category. We note that
if rather than using the final quarter of CY 2024, we alternatively,
were to use pricing and volume from all four quarters of 2024 to
determine proposed rates, the rate for all categories would be
approximately $114.87/cm\2\. Using a pooled payment rate across all
three categories would result in a rate of approximately $65.85/cm\2\,
while splitting the categories to pay the PMA category using the
combined product utilization patterns and the 510(k) and 361 HCT/P
categories using the OPPS utilization patterns would result in rates of
approximately $259.47/cm\2\ and $125.38/cm\2\ respectively. We seek
comments on our proposed process to calculate initial payment rates as
well as these alternatives.
We propose to maintain the current structure of HCPCS codes for
skin substitutes, including a process to introduce new product-specific
codes and propose initial valuation based on the typical resource costs
(that is, those reflected in ASP and MUC data) of the groups associated
with each skin substitute's HCPCS code. For a complete list of codes
and FDA categories, please see file titled ``Skin Substitute Products
by FDA Regulatory Category'' available on the CMS website under
downloads for the CY 2026 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Individual HCPCS coding remains
necessary to provide identification on claims and track each product's
cost. This will also allow effectuation of any applicable coverage
policies and improve our ability to determine if any refinements in
payment categories would be appropriate in future rulemaking. For the
most part, the resources for incident-to supplies are included in the
total RVUs of a procedural code or are packaged under the OPPS.
However, this proposed approach is not entirely novel, since Medicare
pays for various components of services through the use of separate
HCPCS codes and/or payment modifiers. The most obvious examples of
these kinds of payment and coding splits occur in diagnostic tests and
radiation treatment services, but there are also many examples in the
PFS of add-on codes with RVUs primarily driven by the costs of
particular items, including disposable supplies. In this case, the full
range of resource costs for the services would not be included in the
RVUs or payment amount for a single code but rather spread across
several codes, namely a base code and one or more add-on codes. In this
case, the application base codes would be reported with an add-on or
multiple add-on HCPCS codes associated with skin substitutes. For
example, CPT code 15271 (application of skin substitute graft, leg or
ankle) would be reported with a PE-only add-on code that includes the
resources involved in using the skin substitute product. (Such PE-only
codes are designated with a PC/TC indicator of 3 and are only paid
under the PFS in the non-facility setting. The same HCPCS code would be
separately reportable in the hospital outpatient setting but not paid
under the PFS.)
We propose that new HCPCS codes describing skin substitutes would
be categorized based on whether they are PMA-approved, 510(k)-cleared,
or self-determined 361 HCT/Ps and the RVUs that apply to that category
would be applied to the new code at the next quarterly update. Any
change to the RVUs associated with each group would be subject to
annual notice and comment rulemaking. Currently, HCPCS Level II coding
applications are submitted and reviewed during the quarterly and
biannual coding cycles. We post our coding determinations for drugs and
biologicals on a quarterly basis, and do not routinely review those
applications at a HCPCS public meeting. For non-drugs and non-
biologicals, we post our coding decisions on a biannual basis. For our
biannual cycles for non-drugs and non-biologicals, we post preliminary
coding determinations then invite feedback on those preliminary coding
determinations at a biannual HCPCS public meeting; final coding
determinations are posted following the HCPCS public meeting. CMS has
been reviewing skin substitutes marketed as 361 HCT/Ps in the quarterly
drugs and biologicals coding cycle and 510(k)-cleared skin substitutes
in the biannual, non-drugs and non-biologicals coding cycle. Beginning
January 1, 2026, we propose to review HCPCS Level II coding
applications for all skin substitutes marketed as 361 HCT/Ps through
our biannual coding cycle for non-drugs and non-biological products,
rather than on a quarterly basis. Skin substitutes that received a
510(k) clearance, PMA approval, or a granted De Novo request would
continue to be evaluated in the biannual HCPCS Level II coding cycles.
Therefore, under this proposal, CMS would evaluate all complete HCPCS
Level II applications for skin substitutes in our biannual cycles.
Should any products come to market under the BLA, NDA, or ANDA pathways
that could potentially be considered skin substitutes, CMS would
instead review them in a quarterly HCPCS Level II drugs and biologicals
coding cycle. Before a code is assigned, not otherwise classified (NOC)
codes would be used and the CMS MACs would assign the appropriate
payment based on the product's FDA regulatory category.
If skin substitutes that are not licensed under section 351 of the
PHS Act are no longer paid as biologicals using the methodology under
section 1847A of the Act, as proposed, then the manufacturers of these
products would no longer be required to report ASP data to CMS under
section 1847A(f)(2) of the Act. However, as noted above, when ASP data
is reported, it may serve as a better estimate of resources across the
hospital outpatient and non-facility settings than hospital outpatient
MUC data. We propose to update the rates for the skin substitute
categories annually through rulemaking using the most recently
available calendar quarter of ASP data, when available, to set the
rates. However, we have concerns that using a single, scheduled quarter
of ASP data to set payment rates could encourage gaming. We seek
comments on the use of a longer timeframe, such as the most recently
available four calendar quarters, to set payment rates in future years.
In the event ASP is not available for a particular product, we propose
to use the MUC data. If MUC is not available, we propose to use the
product's WAC or 89.6 percent of AWP
[[Page 32522]]
if WAC is also unavailable, similar to other products for which ASP is
used to calculate a payment rate.\85\ Once updated use patterns
reflecting this policy are available to calculate rates, we propose
using all relevant products and the combined product utilization
patterns (OPPS and non-facility) to determine a weighted average per-
unit cost by category to set separate payment rates for each of the
three categories. We seek comments on our proposed methodology to set
and update the payment rates for skin substitutes as well as the rates
themselves.
---------------------------------------------------------------------------
\85\ 89.6 percent of AWP was calculated by first reducing the
usual 95 percent of AWP price by 6 percent to generate a value that
is similar to WAC with no percentage markup.
---------------------------------------------------------------------------
5. Summary
To implement this policy, we propose, starting January 1, 2026, to
separately pay for skin substitute products as incident-to supplies in
both the non-facility and hospital outpatient settings. We propose to
create three groups to pay for skin substitutes based on their FDA
regulatory categories: PMA, 510(k), and 361 HCT/P, and would include
each skin substitute in the applicable category based on its FDA
approval, clearance, or self-determination, unless a skin substitute is
licensed under section 351 of the PHS Act, as described earlier in this
section, in which case the payment methodology under section 1847A
would continue to apply. We propose calculate initial payment rates for
skin substitute products in each of the three FDA regulatory categories
using the volume-weighted average ASP for skin substitute products in
each group as submitted by manufacturers, when available, and the MUC
when ASP is not available. We propose to use the hospital outpatient
utilization patterns to set the payment rates for all three categories
of skin substitutes, which we propose to pay at a single rate for CY
2026. For CY 2026, the proposed PE and MP RVUs would result in an
initial payment rate of approximately $125.38/cm\2\ (prior to the
application of the geographic adjustments) for PMA approvals, 510(k)s,
and self-determined 361 HCT/Ps. We propose to accomplish this by
maintaining the current HCPCS codes for skin substitutes and then
applying this rate to each code. We propose to update the rates for the
skin substitute categories annually through rulemaking using the most
recently available calendar quarter of ASP data, when available, to set
the rates, though we are seeking comments on whether a single quarter
is most advisable. In the event ASP is not available for a particular
product, we propose to use the hospital outpatient MUC data. If MUC is
not available, we propose to use the product's WAC or 89.6 percent of
AWP if WAC is also unavailable. We propose to include all skin
substitute products used across both settings as well as the combined
product utilization patterns, as soon as data is available that
reflects the results of this policy, to determine a weighted average
per-unit cost by group to set the payment rates for each of the three
categories. We are also seeking comments on how to best integrate this
data into updated PE RVUs for years subsequent to CY 2026.
Specifically, we are seeking comment on whether we should apply PE
scaling factors to the data (that is, volume-weighted ASP or MUC) in
order to optimize relativity with other PFS services and supplies once
these products are incorporated into PFS data used for rate setting. We
propose to evaluate all complete HCPCS Level II applications for skin
substitutes in our biannual cycles. Finally, we propose to codify the
definition of ``biological'' as ``a product licensed under section 351
of the Public Health Service Act'' at Sec. Sec. 414.802 and 414.902.
L. Strategies for Improving Global Surgery Payment Accuracy
1. Background
CMS establishes valuation and payment for approximately several
thousand physician services as ``global surgical packages'' (herein
`globals') under the PFS. Each package includes a surgical procedure
defined by the HCPCS code as well as related services, for example, pre
and immediate post-operative care on the day of the procedure, care
related to complications, and discharge services, and post-operative
evaluation and management (E/M) services typically provided during
postoperative periods of specified lengths called ``global periods.''
Currently, CMS pays for approximately 5,500 globals covering 0-, 10-
and 90-day postoperative periods. Of the 5,500 total global surgical
procedures, approximately 4,200 have either a 10- or 90-day global
periods and nearly all of these 4,200 globals have at least one post-
operative E/M visit included as part of their respective global
surgical packages. Global surgical packages apply to the practitioner
performing the procedure and, in the case of group practices, to the
entire practice. Practitioners outside of those performing the
procedure (or in the same group practice) can separately bill for post-
operative and other care related to a global surgical procedure.
Taking into consideration findings from OIG reports that
practitioners were performing fewer post-operative visits than Medicare
assumed when valuing globals as well as our internal analysis, we
finalized a policy in the CY 2015 PFS final rule to transition all
globals with 10-day and 90-day global periods to have 0-day global
periods. This change would allow practitioners to bill separately for
any post-operative visits (or other care related to the procedure, for
example, care for complications) furnished after the day of the
procedure to be billed as standalone services. However, the Medicare
Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10),
prohibited CMS from implementing this finalized policy and required
that we collect data on the number and level of post-operative visits
provided to enrollees as part of global periods and use this
information to improve the valuation of globals.
In response to the MACRA requirements, CMS developed a claims-based
reporting system and required practitioners in nine states and in
practices of 10 or more National Provider Identifiers (NPIs) to report
post-operative visits falling with global periods using no-pay HCPCS
code 99024. We also initiated a research contract with RAND to analyze
the collected data, to conduct a survey-based study on the level of
post-operative visits, and to model different approaches to use the
collected data and other information to improve the accuracy of
valuation for global surgical services (see 81 FR 80212 through 80222
for more detailed discussion).
We recognize that, in some cases, a practitioner may only furnish
the procedure component of a global surgical package, while in others,
a practitioner may only provide post-operative care. In these cases, we
rely on a set of transfer of care modifiers to split the fixed overall
valuation of global surgical packages between providers. CMS broadened
the scope for required reporting of transfer of care modifier -54
(Surgical care only) in the CY 2025 PFS Final Rule as part of an
iterative process to improve global package valuation and therefore
payment. Previously, this modifier could only be attached to global
procedures with a 10 or 90-day global period when a patient's transfer
of care was formally documented by both the surgeon and one or more
post-operative care practitioners. In internal analyses, CMS found
modifier -54 was used only rarely in aggregate and was concentrated in
a small number of
[[Page 32523]]
ophthalmologic and cardiology procedures. Beginning January 1, 2025,
and onward, modifier -54 must be reported in all cases where the
surgeon does not intend to provide post-operative care, including but
not limited to cases where both the surgeon and another practitioner
both formally document the transfer of care as under the previous
policy (see 89 FR 97961 through 97967 for that discussion).
For CY 2025, we also finalized a new add-on code, HCPCS code G0559,
for post-operative care services furnished by a practitioner other than
the one who performed the surgical procedure (or another practitioner
in the same group practice). This add-on code will more appropriately
reflect the time and resources involved in these post-operative follow-
up visits by practitioners who were not involved in furnishing the
surgical procedure however may see the patient for postoperative care
(see 89 FR 97968 through 97971 for that discussion).
2. Strategies To Address Global Package Valuation
We noted in the CY 2025 PFS final rule that our proposal to broaden
the required use of the transfer of care modifiers was a first step in
an iterative process towards improving the accuracy of global surgical
service valuation and payment. We are considering next steps to improve
the valuation and payment for these services. 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. Furthermore, we are considering approaches to specifically use
information reported to CMS on the number and level of post operative
visits to improve global surgical service valuation as required by
Section 1848(c)(8)(C) of the Act.
We requested comments in the CY 2025 proposed rule on how best to
determine the appropriate shares used to split total global surgical
package valuations into discrete portions for the purposes of
determining valuation (and therefore payment) in transfer of care
scenarios. We sought comment on potential approaches to revise these
shares and how they could better reflect current medical practice and
conventions for post-operative follow-up care. We sought to identify a
procedure-specific, data-driven method for assigning shares to portions
of the global package valuation to more appropriately align the
resources involved in each portion to payment rates. We stated in the
CY 2025 PFS proposed rule that we would appreciate and carefully
consider recommendations from interested parties, including the AMA
RUC, on what those shares should be and other relevant information. We
also stated in the proposed rule that CMS could use data collected over
nearly a decade on the observed number of post-operative visits
furnished to patients as part of global surgical packages as the basis
for calculating new data-driven shares. We note that we received few
comments in response to our comment solicitation.
Currently, Medicare pays surgeons a fixed share of a global
procedure's valuation when billed with specified modifiers,
specifically, modifier -54. These ``procedure shares'' are based on
long-standing assumption and are clustered at certain values, for
example, 79 percent, 80 percent, or 81 percent for roughly half of
procedures with 90-day global periods and 90 percent for most
procedures with 10-day global periods (the remaining approximately 20
percent and 10 percent for 90-day and 10-day procedures, respectively,
account for post-operative care). We believe that the use of these
distinct portions of the global package will help us to best align
valuation--and therefore payment--to the practitioner who is performing
a specific portion of the global surgical service.
We heard from commenters that the current component percentages
published in the PFS were developed using magnitude estimation and
cross-specialty scaling and that there is not any reverse engineering
of work and time that can be performed to develop a better percentage
of pre-, intra- and post-operative work than what is currently
published in the PFS. Given the fact that both PFS global surgical
procedures and relative valuations have changed since the inception of
the PFS, we believe there may be better ways to provide the correct
apportionments to the global surgical packages. Furthermore, clinical
practice including post-operative care has changed dramatically over
the decades since the inception of the current shares. We did not
update procedure shares in the CY 2025 PFS final rule.
We are again soliciting public comments on strategies to improve
the accuracy of payment for global surgical packages, specifically
related to the procedure shares. We are seeking public comments on what
the procedure shares should be based on for the 90-day global packages.
We are also seeking comments and stakeholder input as to current
practice standards and division of work between surgeons and providers
of post-operative care. Currently, there is no clear basis for the
current procedure shares, and this will allow for stakeholder input as
to what those procedure shares should be.
In accordance with MACRA, we have been collecting data on post-
operative visits furnished as part of global surgical packages and the
extent to which these furnished post-operative visits align with the
number of post-operative visits assumed by CMS when valuing global
surgical services. For procedures with 90-day global periods and 2023
dates of service, our internal analysis shows that only 28 percent of
post-operative visits considered by CMS during global surgical service
valuation were actually provided to enrollees as part of global
surgical packages. Our internal findings and RAND's published analyses
have consistently shown that only a fraction of ``expected'' post-
operative visits are provided. Absent evidence to the contrary, which
CMS has not identified despite several solicitations for comments from
the public (89 FR 97961 through 97962), our interpretation is that many
post-operative visits considered during the valuation of global
surgical packages are not provided as part of these packages. This
presents an opportunity to use information from claims-based reporting
of post-operative visits to develop procedure shares that better
reflect current practice patterns. Using this data, as established
through notice and comment rulemaking (81 FR 80212 through 80222), we
considered several options regarding how the procedure shares could be
updated, based on the data that was analyzed. These options are
available in the file titled ``Estimated Procedure Shares Under
Procedure-Only Modifier -54, Surgical Services with 90-day Global
Period'' on the CMS website under downloads for the CY 2026 PFS
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
As we continue to contemplate how to pay more accurately for global
surgical packages, and specifically in consideration of how the
procedure shares could be updated, we identified three alternatives to
the status quo assumed procedure shares (that is, the share of a global
surgical package valuation assigned to the surgeon when modifier -54 is
reported) for global surgical packages. Each alternative uses
information available in claims data to calculate new HCPCS code-
specific procedure shares. Each alternative also calculates procedure
shares as the ratio of procedure work RVUs (defined as the sum of
intraservice work and other work on the day of the procedure (that is,
pre-service work) as indicated on the
[[Page 32524]]
Physician Time File to total global surgical package work RVUs. The
Physician Time File and Addendum B are both located under the Download
files for this proposed rule at: https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. The approaches
differ in the way we would calculate procedure work RVUs, and more
specifically, intraservice work as a component of procedure work RVUs.
Under the first approach, we would calculate procedure work RVUs by
subtracting work RVUs assigned to each post-operative visit listed in
the Physician Time File for a global procedure HCPCS code from the
total valuation of the global surgical package. Under the second
approach, we would calculate procedures' work RVUs by subtracting the
work RVUs for post-operative visits provided as part of global surgical
packages. To do so, we would multiply the number of post-operative
visits typically provided for the global procedure HCPCS code (defined
as the median count of post-operative visits reported to CMS using no-
pay code 99024 among procedures without overlapping global periods with
other global surgical services) by the average valuation per post-
operative visit calculated for the mix (that is, number and level) of
post-operative visits for the global procedure HCPCS code as listed in
the Physician Time File. Under the third approach, would calculate
procedure RVUs as the product of total physician time (in minutes) for
each global procedure HCPCS code from the Physician Time File and the
ratio of physician time (in minutes) assigned to post-operative visits
for the code in the Physician Time File to total physician time.
In the CY 2025 PFS final rule, we expanded the scope for modifier -
54 (surgical care only) to include all scenarios where the surgeon does
not expect to provide post-operative care. The scope for modifier -55
(post-operative care only) was not changed. As a result, the post-
operative share of total global surgical package valuation can only be
billed with modifier -55 when transfers of care are formally documented
by the surgeon and another practitioner.
Looking at 2023 claims data, RAND's analyses suggest the current
procedure shares do not reflect the real-world division of work between
surgeons and providers of post-operative care. Across all CY 2023 90-
day global procedures and weighted by procedure volume, the procedure
share under our current assumed procedure shares would have been 82
percent, on average, assuming all procedures were billed with modifier
-54. Under the procedure shares calculated based on the actual number
of visits furnished in global surgical periods (determined using
information from claims-based reporting of post-operative visits), the
average procedure share would have been 91 percent, with 85 percent of
procedures having higher procedure shares under this approach compared
to CMS' current assumptions.
We are seeking comments on the best approach to utilize going
forward, specifically on the CPT code 99024-based approach. Of these
approaches, the first (in terms of work RVUs) and third (in terms of
physician time minutes) rely on Physician Time File counts of the
number and level of post-operative visits assumed to occur as part of
global surgical packages. Based on prior analyses (see 89 FR 97961),
these counts are substantially inflated. Of all Physician Time File
assumed visits and for 2023 global surgical procedure volumes, only 2
percent of visits following procedures with 10-day global periods and
28 percent of visits following procedures with 90-day global periods
were provided to patients as part of global surgical packages. For this
reason, we believe the resulting procedure shares under these
approaches are too low and would lead to payments to surgeons that do
not reflect the time and resources involved in furnishing the procedure
component of global surgical services. In contrast, the second approach
(using post-operative visit counts from claims-based reporting)
reflects real-world, observed patterns of post-operative care.
Furthermore, the second approach allows for routine, transparent
updating of procedure shares over time. In contrast, shares could be
updated under the first and third approaches only when global surgical
services are revalued, and even then, with the limitation noted
previously that the resulting visit counts by E/M service level are
often substantially too high.
We are seeking comments on replacing the current procedure shares
using the second approach described above (that is, with procedure work
RVUs calculated using counts of post-operative visits reported using
no-pay CPT code 99024).
Additionally, in our internal review of the percentages assigned
for the pre-operative, surgical care, and post-operative portions of
the global packages, 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. We are again seeking
comments on whether we should consider, first, whether these codes are
appropriately categorized as 90-day global package codes, and if so, we
are seeking comments on what the assigned percentages should be for
each portion of the service.
M. Determination of Malpractice Relative Value Units (RVUs)
1. Overview
Section 1848(c) of the Act requires that each service paid under
the PFS be composed of three components: work, practice expense (PE),
and malpractice (MP) expense. As required by section 1848(c)(2)(C)(iii)
of the Act, beginning in CY 2000, MP RVUs are resource-based. Section
1848(c)(2)(B)(i) of the Act also requires that we review, and if
necessary, adjust RVUs no less often than every 5 years. As explained
in the CY 2011 PFS final rule with comment period (75 FR 73208), MP
RVUs for new and revised codes effective before the next 5-year review
of MP RVUs were determined either by a direct crosswalk from a similar
source code or by a modified crosswalk to account for differences in
work RVUs between the new/revised code and the source code. For the
modified crosswalk approach, we adjusted (or scaled) the MP RVU for the
new/revised code to reflect the difference in work RVU between the
source code and the new/revised work RVU (or, if greater, the
difference in the clinical labor portion of the fully implemented PE
RVU) for the new code. For example, if the proposed work RVU for a
revised code was 10 percent higher than the work RVU for its source
code, the MP RVU for the revised code would be increased by 10 percent
over the source code MP RVU. Under this approach, the same risk factor
(RF) was applied for the new/revised code and source code, but the work
RVU for the new/revised code was used to adjust the MP RVUs for risk.
We consider the following factors when we determine MP RVUs for
individual PFS services: (1) specialty-level risk values derived from
data on specialty-specific MP premiums incurred by practitioners; (2)
service-level risk values derived from Medicare claims data of the
weighted average risk values of the specialties that furnish each
service; and (3) an intensity/complexity of service adjustment to the
service-level risk value based on either the higher of the work RVU or
clinical labor portion of the direct PE RVU. In the CY 2016 PFS final
rule with comment period (80 FR 70906 through 70910), we discussed this
methodology and finalized a policy to begin conducting annual MP RVU
updates to
[[Page 32525]]
reflect changes in the mix of practitioners providing services (using
Medicare claims data), and to adjust MP RVUs for risk for intensity and
complexity (using the work RVU or clinical labor RVU). We also
finalized a policy to modify the specialty mix assignment methodology
(for both MP and PE RVU calculations) to use an average of the three
most recent years of data instead of a single year of data. Under this
approach, for new and revised codes, we generally assign a specialty-
level risk factor to individual codes based on the same utilization
assumptions we make regarding specialty mix we use for calculating PE
RVUs and for PFS budget neutrality. We continue to use the work RVU or
clinical labor RVU to adjust the MP RVU for each code for intensity and
complexity. In finalizing this policy, we stated that the specialty-
level risk factors would continue to be updated through notice and
comment rulemaking every 5 years using updated premium data but would
remain unchanged between the 5-year reviews.
In the CY 2018 PFS proposed rule (82 FR 33965 through 33970), we
proposed to update the specialty-level risk factors used in the
calculation of MP RVUs prior to the next required 5-year update (CY
2020) using the updated MP premium data that were used in the eighth
Geographic Practice Cost Index (GPCI) update for CY 2017; however, the
proposal was ultimately not finalized for CY 2018.
Section 1848(e)(1)(C) of the Act requires us to review, and if
necessary, adjust the GPCIs at least every 3 years. In the CY 2020 PFS
final rule (84 FR 62606 through 62615), we implemented the fourth
review and update of MP RVUs, and we also conducted the statutorily
required 3-year review of the GPCIs. The MP premium data used to update
the MP GPCIs are the same data used to determine the specialty-level
risk factors, which are used in the calculation of MP RVUs. Therefore,
to increase efficiency, we finalized a policy to align the update of MP
premium data and specialty-level risk factors with the update to the MP
GPCIs. We finalized a policy to review, and if necessary, update the MP
RVUs at least every 3 years, similar to our review and update of the
GPCIs.
In the CY 2023 PFS final rule, we conducted the statutorily
required review of the MP RVUs and GPCIs (87 FR 69634 through 69641).
We refer to this review and update of the MP RVUs as the ``CY 2023
update.'' As part of this review, we finalized a methodological
improvement to move from MP risk factors to a MP risk index. The risk
index is calculated as a ratio of the specialty's national average
premium to the volume-weighted national average premium across all
specialties. We finalized this methodological improvement to increase
consistency with the calculation of MP RVUs, so that changes in the MP
risk index reflect changes in payment, as opposed to changes relative
only to the specialty with the lowest national average premium.
2. Methodology for the Proposed Revision of Resource-Based Malpractice
(MP) RVUs
a. General Discussion
We calculated the MP RVUs that we are proposing for CY 2026 using
updated MP premium data obtained from state insurance rate filings. The
methodology used to calculate the CY 2026 resource-based MP RVUs
largely parallels the process used in the CY 2023 update with continued
improvements to our data collection process. To calculate the MP RVUs,
we obtain information on specialty-specific MP premiums that are linked
to specific services, and using this information, we derive relative
risk values for the various specialties that furnish a particular
service. Because MP premiums vary by state and specialty, we weigh the
MP premium data geographically and by specialty. We calculated the MP
RVUs we are proposing using four data sources: data on MP insurance
premium rates presumed to be in effect as of December 31, 2023; CY 2023
Medicare payment and utilization data; higher of the CY 2025 final work
RVUs or the clinical labor portion of the direct PE RVUs; and CY 2025
GPCIs. We used the higher of the CY 2025 final work RVUs or clinical
labor portion of the direct PE RVUs in our calculation to develop the
CY 2026 proposed MP RVUs while maintaining overall PFS budget
neutrality.
Similar to the CY 2023 update, we calculated the proposed MP RVUs
using specialty[dash]specific MP premium data because they represent
the expense incurred by practitioners to obtain MP insurance as
reported by insurers. For CY 2026, we obtained the most current MP
insurance premium data available, reflecting rates with a presumed
effective date of no later than December 31, 2023, from insurers with
the largest market share in each state. We identified insurers with the
largest market share using the National Association of Insurance
Commissioners (NAIC) 2023 market share report. This annual report
provides state-level market share for entities that provide premium
liability insurance (PLI) in a state. Premium data was downloaded from
the System for Electronic Rates & Forms Filing Access Interface (SERFF)
(accessed from the NAIC website) for participating states. For non-
SERFF states, data was downloaded from the state-specific website (if
available online) or obtained directly from the state's alternate
access to filings. For SERFF states and non-SERFF states with online
access to filings, we used the 2023 market share report to select
insurance companies. These market share filings were the most current
data available during the data collection and acquisition process.
MP insurance premium data was collected from all 50 States and the
District of Columbia. We made efforts to collect filings from Puerto
Rico; however, no recent filings were submitted at the time of data
collection, and therefore, we used filings from the previous update.
Consistent with the CY 2023 MP RVU update, we did not collect filings
for the other U.S. territories: American Samoa, Guam, Virgin Islands,
or Northern Mariana Islands. We collected MP insurance premium data for
coverage limits of $1 million/$3 million, mature, claims-made policies
(policies covering claims made, rather than those covering losses
occurring, during the policy term). A $1 million/$3 million liability
limit policy means that the most that would be paid on any claim is $1
million and the most that the policy would pay for claims over the
timeframe of the policy is $3 million. We made adjustments to the
premium data to reflect mandatory surcharges for patient compensation
funds (PCF, funds used to pay for any claim beyond the state's
statutory amount, thereby limiting an individual physician's liability
in cases of a large suit) in states where participation in such funds
is mandatory.
In the CY 2020 PFS final rule (84 FR 62607 through 62610), we
finalized methodological improvements that expanded the specialties and
amount of filings data used to develop the proposed risk factors, which
are used to develop the proposed MP RVUs. Premium data were included
for all physician and nonphysician practitioner (NPP) specialties, and
all risk classifications available in the collected rate filings.
Although premium data were collected from all States, the District of
Columbia, and previous filings for Puerto Rico were utilized, not all
specialties had distinct premium data in the rate filings from all
States.
[[Page 32526]]
b. Proposed Methodological Refinements
For the CY 2026 update, we are not proposing any major
methodological refinements to the development of MP premium data.
However, we have continued to refine the universe of specialties
subject to imputation and sources of imputation for each specialty. For
the CY 2023 update, premium data for the specialties of Geriatric
Medicine, Hospitalist, Internal Medicine, Medical Oncology, Pain
Management, and Preventive Medicine were augmented with some imputed
data, but sufficient data was collected for these specialties during
this CY 2026 update such that imputation was unnecessary. Additionally,
Allergy/Immunology was previously used as the imputation source for
both Osteopathic Manipulative Medicine and Addiction Medicine. For this
CY 2026 update, more clinically similar specialties were used as the
imputation source for these specialties.
c. Steps for Calculating Proposed Malpractice RVUs
Calculation of the proposed MP RVUs conceptually follows the
specialty-weighted approach used in the CY 2015 PFS final rule with
comment period (79 FR 67591), along with the methodological
improvements established in the CY 2023 PFS final rule (87 FR 69634
through 69641). The specialty[dash]weighted approach bases the MP RVUs
for a given service on a weighted average of the risk index of all
specialties furnishing the service. This approach ensures that all
specialties furnishing a given service are reflected in the calculation
of the MP RVUs. The steps for calculating the proposed MP RVUs are
described below.
Step (1): Compute a preliminary national average premium for each
specialty.
Insurance rating area MP premiums for each specialty are mapped to
the county level. The specialty premium for each county is then
multiplied by its share of the total U.S. population (from the U.S.
Census Bureau's 2018 to 2022 American Community Survey (ACS) 5-year
estimates). This contrasts with the method used for creating national
average premiums for each specialty in the 2015 update; in that update,
specialty premiums were weighted by the total RVU per county, rather
than by the county share of the total U.S. population. We refer readers
to the CY 2016 PFS final rule with comment period (80 FR 70909) for a
discussion of why we have adopted a weighting method based on share of
total U.S. population. This calculation is then divided by the average
MP GPCI across all counties for each specialty to yield a normalized
national average premium for each specialty. The specialty premiums are
normalized for geographic variation so that the locality cost
differences (as reflected by the 2025 GPCIs) would not be counted
twice. Without the geographic variation adjustment, the cost
differences among fee schedule areas would be reflected once under the
methodology used to calculate the MP RVUs and again when computing the
service specific payment amount for a given fee schedule area.
Step (2): Determine which premium service risk groups to use within
each specialty.
Some specialties had premium rates that differed for surgery,
surgery with obstetrics, and non-surgery. These premium classes are
designed to reflect differences in risk of professional liability and
the cost of MP claims if they occur. To account for the presence of
different classes in the MP premium data and the task of mapping these
premiums to procedures, we calculated a distinct risk index for
surgical, surgical with obstetrics, and nonsurgical procedures where
applicable. However, the availability of data by surgery and non-
surgery varied across specialties. Historically, no single approach
accurately addressed the variability in premium class among
specialties, and we previously employed several methods for calculating
average premiums by specialty.
Developing Distinct Service Risk Groups: We determined that there
was sufficient data for surgery and non-surgery premiums, as well as
sufficient differences in rates between classes for 17 specialties.
These specialties are listed in Table 29. The CY 2026 update uses the
same structure of specialty/service risk group as the CY 2023 update.
For all other specialties (those that are not listed in Table 29) that
typically do not distinguish premiums as described above, a single risk
index value was calculated, and that specialty risk index value was
applied to all services performed by those specialties.
[GRAPHIC] [TIFF OMITTED] TP16JY25.097
Step (3): Calculate a risk index for each specialty.
The relative differences in national average premiums between
specialties are expressed in our methodology as a specialty-level risk
index. These risk index values are calculated by dividing the national
average premium for each specialty by the volume-weighted national
average premium across all specialties. Risk index values less than one
correspond to specialties with relatively lower malpractice risk than
average, and values greater than one correspond to specialties with
relatively higher malpractice risk. The volume-weighted national
average premium was calculated as the sum of the product of the
national average premium and total CY 2023 PE and work RVUs for each
specialty/service risk group, then dividing by total CY 2023 PE and
work RVUs across all specialties.
(a) Technical Component (TC) Only Services
For the CY 2020 update of the MP RVUs (84 FR 62606 through 62615),
we finalized that we would assign a risk factor of 1.00, which was the
lowest physician specialty risk factor (allergy/immunology), to TC-only
services due to a lack of sufficient professional liability premium
data. For the proposed CY 2023 update of the MP RVUs (87 FR 46016), our
expanded data
[[Page 32527]]
collection efforts resulted in sufficient premium data such that we
could directly assign a risk value for TC- only services without the
need for mapping. However, due to a technical error, we continued to
assign a 1.0 risk factor for all TC-only services which resulted in an
incorrect calculation of the proposed MP RVUs for TC-only services. In
the CY 2023 PFS final rule (87 FR 69641), we finalized a correction to
this ratesetting error for the 2023 update of the MP RVUs that again
mapped TC-only services to allergy/immunology, which had a risk index
value of 0.430. We stated that using this risk value will correct the
identified error, while also maintaining as much stability as possible
for TC-only services so that there is not a major shift in value from
current MP RVUs for the technical and professional components.
For this CY 2026 update of the MP RVUs, we are proposing to map TC-
only services to the specialty allergy/immunology, which now has a risk
index value of 0.427. Mapping the TC-only services to the specialty
allergy/immunology would be consistent with the CY 2020 and 2023
updates of the MP RVUs and maintain stability in our ratesetting
process. We request comments regarding the risk index value for TC-only
services. Table 30 shows the risk index values by specialty type and
service risk group.
BILLING CODE 4120-01-P
[[Page 32528]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.098
[[Page 32529]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.099
[[Page 32530]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.100
BILLING CODE 4120-01-C
Step (4): Calculate MP RVUs for each CPT/HCPCS code.
Resource-based MP RVUs were calculated for each CPT/HCPCS code that
has work or PE RVUs. The first step was to identify the percentage of
services furnished by each specialty for each respective CPT/HCPCS
code. This percentage was then multiplied by each respective
specialty's risk index value as calculated in Step 3. The products for
all specialties for the CPT/HCPCS code were then added together,
yielding a specialty[dash]weighted service specific risk index
reflecting the weighted MP costs across all specialties furnishing that
procedure. The service specific risk index was multiplied by the
greater of the work RVU or clinical labor portion of the direct PE RVU
for that service, to reflect differences in the complexity and risk-of-
service between services.
For low volume services codes, we finalized in the CY 2018 PFS
final rule (82 FR 53000 through 53006) a proposal to apply the list of
expected specialties instead of the claims-based specialty mix for low
volume services to address stakeholder concerns about the year to year
variability in PE and MP RVUs for low volume services (which also
includes no volume services); these are defined as codes that have 100
allowed services or fewer. These service-level overrides are used to
determine the specialty for low volume procedures for both PE and MP.
In the CY 2018 PFS final rule (82 FR 53000 through 53006), we also
finalized our proposal to eliminate general use of an MP-specific
specialty-mix crosswalk for new and revised codes. However, we
indicated that we would continue to consider, in conjunction with
annual recommendations, specific recommendations regarding specialty
mix assignments for new and revised codes, particularly in cases where
coding changes are expected to result in differential reporting of
services by specialty, or where the new or revised code is expected to
be low-volume. Absent such information, the specialty mix assumption
for a new or revised code would derive from the analytic crosswalk in
the first year, followed by the introduction of actual claims data,
which is consistent with our approach for developing PE RVUs.
For CY 2026, we are soliciting public comment on the list of
expected specialties. The proposed list of codes and expected
specialties is available on our website under downloads for the CY 2026
PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
Step (5): Rescale for budget neutrality.
The statute requires that changes to fee schedule RVUs must be
budget neutral. Thus, the last step is to adjust for relativity by
rescaling the proposed MP RVUs so that the total proposed resource-
based MP RVUs are equal to the total current resource-based MP RVUs
scaled by the ratio of the pools of the proposed and current MP and
work RVUs. This scaling is necessary to maintain the work RVUs for
individual services from year to year while also maintaining the
overall relationship among work, PE, and MP RVUs.
Specialties Excluded from Ratesetting Calculation: In section II.B.
of this proposed rule, Determination of Practice Expense Relative Value
Units, we discuss specialties that are excluded from ratesetting for
the purposes of calculating PE RVUs. We are proposing to treat those
excluded specialties in a consistent manner for the purposes of
calculating MP RVUs. We note that all specialties are included for
purposes of calculating the final BN adjustment. The list of
specialties excluded from the ratesetting calculation for the purpose
of calculating the PE RVUs that we propose to also exclude for the
purpose of calculating MP RVUs is available in section II.B. of this
final rule, Determination of Practice Expense Relative Value Units. The
resource-based MP RVUs are shown in Addendum B, which is available on
the CMS website under the downloads section of the CY 2026 PFS rule at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
Because a different share of the resources involved in furnishing
PFS services is reflected in each of the three fee schedule components,
implementation of the resource-based MP RVU update will have much
smaller payment effects than implementing updates of resource-based
work RVUs and resource-based PE RVUs. On average, work currently
represents about 50.9 percent of payment for a service under the fee
schedule, PE about 44.8 percent, and MP about 4.3 percent. Therefore, a
25 percent change in PE RVUs or work RVUs for a service would result in
a change in payment of about 11 to 13 percent. In contrast, a
corresponding 25 percent change in MP values for a service would yield
a change in payment of only about 1 percent. Estimates of the effects
on payment by specialty type is detailed in section VII. of this
proposed rule, the Regulatory Impact Analysis.
Additional information on our methodology for updating the MP RVUs
is available in the ``Interim Report for the CY 2026 Update of GPCIs
and MP RVUs for the Medicare Physician Fee Schedule,'' which is
available on the CMS website under the downloads section of the CY 2026
PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
N. Geographic Practice Cost Indices (GPCIs)
1. Background
Section 1848(e)(1)(A) of the Act requires us to develop separate
[[Page 32531]]
Geographic Practice Cost Indices (GPCIs) to measure relative cost
differences among localities compared to the national average for each
of the three fee schedule components (that is, work, practice expense
(PE), and malpractice (MP)). We discuss the localities established
under the PFS below in this section. Although the statute requires that
the PE and MP GPCIs reflect full relative cost differences, section
1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only
one[dash]quarter of the relative cost differences compared to the
national average. In addition, section 1848(e)(1)(G) of the Act sets a
permanent 1.5 work GPCI floor for services furnished in Alaska
beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a
permanent 1.0 PE GPCI floor for services furnished in Frontier States
(as defined in section 1848(e)(1)(I) of the Act) beginning January 1,
2011. Additionally, section 1848(e)(1)(E) of the Act provides for a 1.0
floor for the work GPCIs, which has been extended by many successive
amendments to the statute. The 1.0 floor for the work GPCI under
section 1848(e)(1)(E) of the Act was most recently extended by section
2206 of the Full-Year Continuing Appropriations and Extensions Act,
2025 (Pub. L. 119-4, enacted March 15, 2025) through September 30, 2025
(that is, for services furnished no later than September 30, 2025).
Therefore, as proposed, the CY 2026 work GPCIs and summarized GAFs do
not reflect the 1.0 work floor. Additionally, as required by sections
1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor for Alaska
and the 1.0 PE GPCI floor for Frontier States are permanent, and
therefore, are reflected in the CY 2026 proposed GPCIs.
Section 1848(e)(1)(C) of the Act requires us to review and, if
necessary, adjust the GPCIs at least every 3 years. Section
1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed
since the date of the last previous GPCI adjustment, the adjustment to
be applied in the first year of the next adjustment shall be \1/2\ of
the adjustment that otherwise would be made. Therefore, since more than
1 year has passed since the previous GPCI update was implemented in CY
2023 and 2024, we are proposing to phase in \1/2\ of the proposed GPCI
adjustment in CY 2026 and the remaining \1/2\ of the adjustment for CY
2027.
We have completed our review of the GPCIs and are proposing new
GPCIs beginning for CY 2026 in this proposed rule. We also calculate a
geographic adjustment factor (GAF) for each PFS locality. The GAFs are
a weighted composite of each PFS locality's proposed work, PE, and MP
GPCIs using the share of total RVUs that each component accounts for in
the actual Medicare utilization from CY 2023. While we do not actually
use GAFs in computing the PFS payment for a specific service, they are
a useful metric for purposes of comparing overall costs and payments
across fee schedule areas. The actual effect of GPCIs on payment for
any actual service would deviate from the GAF to the extent that the
proportions of work, PE and MP RVUs for the service differ from those
reflected in the GAF.
See Addenda D and E to this proposed rule for the CY 2026 proposed
GPCIs and summarized GAFs. These Addenda are available on the CMS
website under the supporting documents section of the CY 2026 PFS
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
2. Payment Locality Background
Prior to 1992, Medicare payments for physicians' services were made
under the reasonable charge system. Payments under this system largely
reflected the charging patterns of physicians, which resulted in large
differences in payment for physicians' services among types of
services, physician specialties and geographic payment areas.
Local Medicare carriers initially established 210 payment
localities, to reflect local physician charging patterns and economic
conditions. These localities changed little between the inception of
Medicare in 1967 and the beginning of the PFS in 1992. In 1994, we
undertook a study that culminated in a comprehensive locality revision
(based on locality resource cost differences as reflected by the GPCIs)
that we implemented in 1997. The development of the current locality
structure is described in detail in the CY 1997 PFS final rule (61 FR
34615) and the subsequent final rule with comment period (61 FR 59494).
The revised locality structure reduced the number of localities from
210 to 89 and increased the number of Statewide localities from 22 to
34.
Section 220(h) of the Protecting Access to Medicare Act (PAMA)
(Pub. L. 113-93, enacted April 1, 2014) required modifications to the
payment localities in California for payment purposes beginning with
2017. As a result, in the CY 2017 PFS final rule (81 FR 80265 through
80268) we established 23 additional localities, increasing the total
number of PFS localities from 89 to 112. Subsequently, we
operationalized a technical refinement to retire several California
localities that were no longer operationally necessary, resulting in a
reduction of unique California localities from 32 to 29 from CY 2024
on. We refer readers to the discussion of this technical refinement in
the CY 2023 (87 FR 69621 through 69625) and 2024 (88 FR 78985 through
78987) PFS final rules, and the section below. As a result, the current
109 payment localities include 34 Statewide areas (that is, only one
locality for the entire State) and 72 localities in the other 16
States, with 10 States having two localities, two States having three
localities, one State having four localities, and three States having
five or more localities. The remainder of the 109 PFS payment
localities are comprised as follows: the combined District of Columbia,
Maryland, and Virginia suburbs; Puerto Rico; and the Virgin Islands. We
note that the localities generally represent a grouping of one or more
constituent counties.
The current 109 fee schedule areas, also referred to as payment
localities, are defined alternatively by State boundaries (Statewide
areas for example, Wisconsin), metropolitan areas (for example,
Metropolitan St. Louis, MO), portions of a metropolitan area (for
example, Manhattan), or rest-of-state areas that exclude metropolitan
areas (for example, Rest of Missouri). This locality configuration is
used to calculate the GPCIs that are in turn used to calculate
geographically adjusted payments for physicians' services under the
PFS.
As stated in the CY 2011 PFS final rule with comment period (75 FR
73261), changes to the PFS locality structure would generally result in
changes that are budget neutral within a State. For many years, before
making any locality changes, we have sought consensus from among the
professionals whose payments would be affected. We refer readers to the
CY 2014 PFS final rule with comment period (78 FR 74384 through 74386)
for further discussion regarding additional information about locality
configuration considerations.
3. GPCI Update
As required by the statute, we developed GPCIs to measure relative
cost differences among payment localities compared to the national
average for each of the three fee schedule components (that is, work,
PE, and MP). The changes to the proposed CY 2026 GPCIs for each
locality reflect the updated resource cost data in each area to better
adjust PFS payments for geographic cost differences compared to
national average costs. We note that the changes in the proposed GPCIs
reflect
[[Page 32532]]
the statutory floors and limitations on variation discussed above that
may advantage some rural localities. We describe the data sources and
methodologies we use to calculate each of the three GPCIs below in this
section. Additional information on the CY 2026 GPCI update is available
in an interim report, ``Interim Report for the CY 2026 Update of GPCIs
and MP RVUs for the Medicare PFS,'' on our website located under the
supporting documents section for the CY 2026 PFS proposed rule at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
a. Work GPCIs
The work GPCIs are designed to reflect the relative cost of
physician labor by Medicare PFS locality. As required by statute, the
work GPCI reflects one quarter of the relative wage differences for
each locality compared to the national average.
To calculate the work GPCIs, we use wage data for nine professional
specialty occupation categories, adjusted to reflect one-quarter of the
relative cost differences for each locality compared to the national
average, as a proxy for physicians' wages. Physicians' wages are not
included in the occupation categories used in calculating the work GPCI
because Medicare payments are a key determinant of physicians'
earnings. Including physician wage data in calculating the work GPCIs
would potentially introduce some circularity to the adjustment since
Medicare payments typically contribute to or influence physician wages.
That is, including physicians' wages in the physician work GPCIs would,
in effect, make the indices, to some extent, dependent upon Medicare
payments.
The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based
on professional earnings data from the 2000 Census. However, for the CY
2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage
and earnings data were not available from the more recent Census
because the ``long form'' was discontinued. Therefore, we used the
median hourly earnings from the 2006 through 2008 Bureau of Labor
Statistics (BLS) Occupational Employment and Wage Statistics (OEWS),
formerly known as Occupational Employee Statistics (OES), wage data as
a replacement for the 2000 Census data. The BLS OEWS data meet several
criteria that we consider to be important for selecting a data source
for purposes of calculating the GPCIs. For example, the BLS OEWS wage
and employment data are derived from a large sample size of
approximately 200,000 establishments of varying sizes nationwide from
every metropolitan area and can be easily accessible to the public at
no cost. Additionally, the BLS OEWS is updated regularly, and includes
a comprehensive set of occupations and industries (for example, 800
occupations in 450 industries). For the CY 2014 GPCI update, we used
updated BLS OEWS data (2009 through 2011) as a replacement for the 2006
through 2008 data to compute the work GPCIs; for the CY 2017 GPCI
update, we used updated BLS OEWS data (2011 through 2014) as a
replacement for the 2009 through 2011 data to compute the work GPCIs;
for the CY 2020 GPCI update, we used updated BLS OEWS data (2014
through 2017) as a replacement for the 2011 through 2014 data to
compute the work GPCIs; and for the CY 2023 GPCI update, we used
updated BLS OEWS data (2017 through 2020) as a replacement for the 2014
through 2017 data to compute the work GPCIs.
Because of its reliability, public availability, level of detail,
and national scope, we believe the BLS OEWS data continue to be the
most appropriate source of wage and employment data for use in
calculating the work GPCIs (and as discussed below, the employee wage
component and purchased services component of the PE GPCI). Therefore,
for the CY 2026 GPCI update, we used updated BLS OEWS data (2020
through 2023) as a replacement for the 2017 through 2020 data to
compute the proposed work GPCIs.
b. Practice Expense (PE) GPCIs
The PE GPCIs are designed to measure the relative cost difference
in the mix of goods and services comprising PEs (not including MP
expenses) among the PFS localities as compared to the national average
of these costs. Whereas the physician work GPCIs (and as discussed
later in this section, the MP GPCIs) are comprised of a single index,
the PE GPCIs are comprised of four component indices (employee wages;
purchased services; office rent; and equipment, supplies and other
miscellaneous expenses). The employee wage index component measures
geographic variation in the cost of the kinds of skilled and unskilled
labor that would be directly employed by a physician practice. Although
the employee wage index adjusts for geographic variation in the cost of
labor employed directly by physician practices, it does not account for
geographic variation in the cost of services that typically would be
purchased from other entities, such as law firms, accounting firms,
information technology consultants, building service managers, or any
other third-party vendor. The purchased services index component of the
PE GPCI (which is a separate index from employee wages) measures
geographic variation in the cost of contracted services that physician
practices would typically buy. For more information on the development
of the purchased service index, we refer readers to the CY 2012 PFS
final rule with comment period (76 FR 73084 through 73085). The office
rent index component of the PE GPCI measures relative geographic
variation in the cost of typical physician office rents. For the
medical equipment, supplies, and miscellaneous expenses component, we
believe there is a national market for these items such that there is
not significant geographic variation in costs. Therefore, the
equipment, supplies and other miscellaneous expense cost index
component of the PE GPCI is given a value of 1.000 for each PFS
locality.
For the previous update to the GPCIs (implemented in CY 2023), we
used 2017 through 2020 BLS OEWS data to calculate the employee wage and
purchased services indices for the PE GPCI. As discussed previously in
this section, because of its reliability, public availability, level of
detail, and national scope, we continue to believe the BLS OEWS is the
most appropriate data source for collecting wage and employment data.
Therefore, in calculating the CY 2026 GPCI update, we used updated BLS
OEWS data (2020 through 2023) as a replacement for the 2017 through
2020 data for purposes of calculating the employee wage component and
purchased service index component of the PE GPCI. In calculating the CY
2026 GPCI update for the office rent index component of the PE GPCI, we
used the 2018 through 2022 American Community Survey (ACS) 5-year
estimates as a replacement for the 2015 through 2019 ACS data.
c. Malpractice Expense (MP) GPCIs
The MP GPCIs measure the relative cost differences among PFS
localities for the purchase of professional liability insurance (PLI).
To ensure that premium data are homogenous and comparable across
geographic areas, data were collected for policies with uniform
coverage limits of $1 million per occurrence and $3 million aggregate
($1 million/$3 million). The MP GPCIs are calculated based on insurer
rate filings of premium data for $1 million/$3 million mature claims-
made policies (policies for claims made rather than losses occurring
during the policy term). For the CY 2023 GPCI update, we used
[[Page 32533]]
premium data presumed in effect as of December 31, 2020. The CY 2026 MP
GPCI update reflects premium data presumed in effect no later than
December 31, 2023. We note that we finalized a few technical
refinements to the MP GPCI methodology in CY 2017 and refer readers to
the CY 2017 (81 FR 80270) PFS final rule for additional discussion of
those.
d. GPCI Cost Share Weights
For the CY 2026 GPCIs, we are proposing to continue to use the
current 2006-based MEI cost share weights for determining the proposed
PE GPCI values. Specifically, we use the cost share weights to weight
the four components of the PE GPCI: employee compensation, office rent,
purchased services, and medical equipment, supplies, and other
miscellaneous expenses, as shown in Table 31. We refer readers to the
CY 2014 PFS final rule with comment period (78 FR 74382 through 74383),
for further discussion regarding the 2006-based MEI cost share weights
revised in CY 2014 that we also finalized for use in the CY 2017, CY
2020, and CY 2023 GPCI updates.
We note that we proposed and finalized to rebase and revise the MEI
cost share weights for CY 2023, and we refer readers to the detailed
discussion in section II.M. of the CY 2023 PFS final rule (87 FR 69688
through 69710). Due to the concurrent rebasing and revision of the MEI
cost share weights during the CY 2023 GPCI update, we proposed and
finalized to maintain the use of the 2006-based MEI cost share weights
for the CY 2023 GPCIs, thus delaying the implementation of the rebased
and revised 2017-based MEI cost share weights for this purpose. We
refer readers to our discussion about using the rebased and revised MEI
cost share weights for purposes of proportioning the work, PE, and MP
RVU pools in PFS ratesetting and for the purposes of updating the GPCIs
in the CY 2023 PFS final rule (87 FR 69414 through 69415, 69619 through
69620, and 70212 through 70218). In those sections, we discussed our
considerations for updating the MEI cost share weights for the RVUs and
the GPCIs and the potential redistributive impact that making such a
change would have had on PFS payments. We have historically updated the
GPCI cost share weights to make them consistent with the most recent
update to the MEI, which was most recently done for CY 2023; however,
in light of the overall impacts of making this change and in the
interest of maintaining stability in payments, we proposed and
finalized to maintain the use of the currently used 2006-based MEI cost
share weights for the CY 2023 final PE GPCIs. For the CY 2026 GPCI
update, we have the same concerns about the potential redistributive
effects that implementing the 2017-based MEI would have on PFS
payments. Additionally, we have received data from the American Medical
Association's (AMA) Physician Practice Information \86\ (PPI) and
Clinician Practice Information \87\ (CPI) Surveys, however, these data
lack the specific breakdown of practice expense that we would need to
consider its use to weight the four components of the PE GPCI for CY
2026, including Office Rent and Purchased Services, which are reported
in an aggregate buckets of general overhead costs and other expenses in
the survey data. We refer readers to section VII. of this proposed rule
for more discussion regarding a possible derivation of cost share
weights for use in the PE GPCI from the PPI and CPI Survey.
---------------------------------------------------------------------------
\86\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf.
\87\ https://www.ama-assn.org/system/files/table-1-results-from-cpi-final.pdf.
---------------------------------------------------------------------------
We also note that maintaining the 2006-based MEI cost share weights
for the CY 2026 GPCI update preserves consistency in the data used to
update both the GPCI and PFS ratesetting inputs for CY 2026. We refer
readers to section VII. of this proposed rule for additional discussion
on this issue and the estimated impacts as it relates to PFS
ratesetting and the GPCI update for CY 2026. We also refer readers to
the discussion regarding the PPI and CPI survey data in section II.B.
of this proposed rule. In addition, we direct readers to the CY 2011
PFS final rule (75 FR 73256) where we similarly delayed implementation
of updated MEI cost share weights in response to commenters' concerns
about our separate, ongoing analysis that would inform future GPCI
changes and the reallocation of labor-related costs from the medical
equipment and supplies and miscellaneous component to the employee
compensation component of the PE GPCI.
In the CY 2011 PFS final rule (75 FR 73256), we acknowledged that
we typically update the GPCI cost share weights concurrently with the
most recent MEI rebasing and revision, but in consideration of the
commenters' concerns in response to the proposed rule, we did not use
the revised cost share weights for the CY 2011 GPCIs and instead
finalized the implementation of the rebased and revised MEI cost share
weights through subsequent rulemaking. We invite comments on the 2017-
based MEI cost share weights and the weights based on PPI and CPI
Survey data for purposes of alternatives considered for the CY 2026
GPCIs and PFS ratesetting, given the estimated impacts discussed in
section VII. of this proposed rule. We are also soliciting comments on
how best to proceed with implementation of the 2017-based MEI cost
share weights or PPI and CPI Survey weights in the future. More
specifically, we are seeking comment on how best to incorporate updated
cost share weights into the PE GPCI if we were to implement them
outside the statutorily required triennial update in which we phase in
all aspects of the GPCI update through the previously discussed 2-year
(\1/2\ in each year) phase-in required by section 1848(e)(1)(C) of the
Act. Section 1848(e)(1)(C) of the Act requires that, if more than one
year has elapsed since the date of the last GPCI adjustment, the
adjustment to be applied in the first year of the next adjustment shall
be \1/2\ of the adjustment that otherwise would be made. Therefore,
specifically, we are seeking comment on potentially incorporating the
updated cost share weights into the CY 2027 GPCIs. We note that we
would not be required by statute to phase in the adjustment over 2
years as specified in section 1848(e)(1)(C) of the Act because, in CY
2027, no more than one year would have elapsed since this CY 2026 GPCI
adjustment. Therefore, we are also seeking comment on whether it would
be appropriate to use a multi-year transition to incorporate updated
cost share weights for purposes of the PE GPCI and PFS ratesetting as
we have done in the past when incorporating other new data into the PFS
payment methodology (for example, the clinical labor update), or if,
because updated cost share weights only impact the composition of the
PE GPCI, such a transition would not be warranted. If we were to
instead apply updated cost share weights for purposes of the PE GPCI
and PFS ratesetting for CY 2028 or later, we would be required under
section 1848(e)(1)(C) of the Act to phase in the GPCI adjustments over
2 years. We are seeking comments on whether, in that case, it would be
appropriate to similarly apply a transition to implement updated cost
share weights for purposes of PFS ratesetting as well, and refer
readers to section II.B and VII. of this proposed rule for more
discussion regarding the alternatives considered and impacts of a
phase-in of updated cost share weights in PFS ratesetting. The proposed
CY 2026 GPCI cost share weights are displayed in
[[Page 32534]]
Table 31. We note that the 2017-based MEI cost share weights as
finalized in section II.M. of the CY 2023 PFS (87 FR 69688 through
69708) final rule are also displayed in Table 31 for awareness
regarding potential future rulemaking and GPCI updates. As previously
discussed, the PPI and CPI Survey data lack the specific breakdown of
practice expense that we would need to consider its use to weight the
four components of the PE GPCI for CY 2026, therefore, we refer readers
to section VII. of this proposed rule for more discussion regarding a
possible derivation of cost share weights for use in the PE GPCI from
the PPI and CPI Survey for awareness regarding potential future
rulemaking and GPCI updates.
[GRAPHIC] [TIFF OMITTED] TP16JY25.101
e. PE GPCI Floor for Frontier States
Section 10324(c) of the Affordable Care Act added a new
subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0
PE GPCI floor for physicians' services furnished in Frontier States
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for
physicians' services furnished in States determined to be Frontier
States. In general, a Frontier State is one in which at least 50
percent of the counties are ``frontier counties,'' which are those that
have a population per square mile of less than 6. For more information
on the criteria used to define a Frontier State, we refer readers to
the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75
FR 50160 through 50161). There are no changes in the states identified
as Frontier States for the CY 2026 PFS proposed rule. The qualifying
states are: Montana; Wyoming; North Dakota; South Dakota; and Nevada.
In accordance with statute, we will apply a 1.0 PE GPCI floor for these
states in CY 2026.
f. Methodology for Calculating GPCIs in the U.S. Territories
Prior to CY 2017, for all the island territories other than Puerto
Rico, the lack of comprehensive data about unique costs for island
territories had minimal impact on GPCIs because we used either the
Hawaii GPCIs (for the Pacific territories: Guam; American Samoa; and
Northern Mariana Islands) or used the unadjusted national averages (for
the Virgin Islands). In an effort to provide greater consistency in the
calculation of GPCIs given the lack of comprehensive data regarding the
validity of applying the proxy data used in the States in accurately
accounting for variability of costs for these island territories, in
the CY 2017 PFS final rule (81 FR 80268 through 80270), we finalized a
policy to treat the Caribbean Island territories (the Virgin Islands
and Puerto Rico) in a consistent manner. We do so by assigning the
national average of 1.0 to each GPCI index for both Puerto Rico and the
Virgin Islands. We refer readers to the CY 2017 PFS final rule for a
comprehensive discussion of this policy.
g. California Update to the Fee Schedule Areas Used for Payment Under
Section 220(h) of the Protecting Access to Medicare Act
Section 220(h) of the PAMA added a new section 1848(e)(6) to the
Act that modified the fee schedule areas used for payment purposes in
California beginning in CY 2017. Prior to CY 2017, the fee schedule
areas used for payment in California were based on the revised locality
structure that was implemented in 1997 as previously discussed.
Beginning in CY 2017, section 1848(e)(6)(A)(i) of the Act required that
the fee schedule areas used for payment in California must be
Metropolitan Statistical Areas (MSAs) as defined by the Office of
Management and Budget (OMB) as of December 31 of the previous year; and
section 1848(e)(6)(A)(ii) of the Act required that all areas not
located in an MSA must be treated as a single rest-of-state fee
schedule area. The resulting modifications to California's locality
structure increased its number of fee schedule areas from 9 under the
current locality structure to 27 under the MSA-based locality
structure; although for the purposes of payment, the actual number of
fee schedule areas under the MSA-based locality structure is 32. We
refer readers to the CY 2017 PFS final rule (81 FR 80267) for a
detailed discussion of this operational decision.
Section 1848(e)(6)(D) of the Act defined transition areas as the
counties in fee schedule areas for 2013 that were in the rest-of-state
locality, and locality 3, which was comprised of Marin County, Napa
County, and Solano County. Section 1848(e)(6)(B) of the Act specified
that the GPCI values used for payment in a transition area are to be
phased in over 6 years, from 2017 through 2022, using a weighted sum of
the GPCIs calculated under the new MSA-based locality structure and the
GPCIs calculated under the PFS locality structure that was in place
prior to CY 2017. That is, the GPCI values applicable for these areas
during this transition period were a blend of what the GPCI values
would have been for California under the locality structure that was in
place prior to CY 2017, and what the GPCI values would be for
California under the MSA-based locality structure. For example, in CY
2020, which represented the fourth year of the transition period, the
applicable GPCI values for counties that were previously
[[Page 32535]]
in the rest-of-state locality or locality 3 and are now in MSAs were a
blend of \2/3\ of the GPCI value calculated for the year under the MSA-
based locality structure, and \1/3\ of the GPCI value calculated for
the year under the locality structure that was in place prior to CY
2017. The proportions continued to shift by \1/6\ in each subsequent
year so that, by CY 2021, the applicable GPCI values for counties
within transition areas were a blend of \5/6\ of the GPCI value for the
year under the MSA-based locality structure, and \1/6\ of the GPCI
value for the year under the locality structure that was in place prior
to CY 2017. Beginning in CY 2022, the applicable GPCI values for
counties in transition areas were the values calculated solely under
the new MSA-based locality structure; therefore, the phase-in for
transition areas is complete. Additionally, section 1848(e)(6)(C) of
the Act establishes a hold harmless requirement for transition areas
beginning with CY 2017; whereby, the applicable GPCI values for a year
under the new MSA-based locality structure may not be less than what
they would have been for the year under the locality structure that was
in place prior to CY 2017. There are 58 counties in California, 50 of
which were in transition areas as defined in section 1848(e)(6)(D) of
the Act. The eight counties that were not within transition areas are:
Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo;
Santa Clara; and Ventura counties. We note that while the phase-in for
transition areas is no longer applicable, the hold harmless requirement
is not time-limited, and therefore, is still in effect.
For the purposes of calculating budget neutrality and consistent
with the PFS budget neutrality requirements as specified under section
1848(c)(2)(B)(ii)(II) of the Act, we finalized the policy to start by
calculating the national GPCIs as if the fee schedule areas that were
in place prior to CY 2017 are still applicable nationwide; then, for
the purposes of payment in California, we override the GPCI values with
the values that are applicable for California consistent with the
requirements of section 1848(e)(6) of the Act. This approach to
applying the hold harmless requirement is consistent with the
implementation of the GPCI floor provisions that have previously been
implemented--that is, as an after-the-fact adjustment that is made for
purposes of payment after both the GPCIs and PFS budget neutrality have
already been calculated.
Additionally, section 1848(e)(1)(C) of the Act requires that, if
more than 1 year has elapsed since the date of the last GPCI
adjustment, the adjustment to be applied in the first year of the next
adjustment shall be \1/2\ of the adjustment that otherwise would be
made. For a comprehensive discussion of this provision, transition
areas, and operational considerations, we refer readers to the CY 2017
PFS final rule (81 FR 80265 through 80268).
In the CY 2020 final rule (84 FR 62622), a commenter indicated that
some of the distinct fee schedule areas that were used during the
period between CY 2017 and CY 2018 are no longer necessary.
Specifically, with regard to the Los Angeles-Long Beach-Anaheim MSA,
which contains 2 counties (across two former unique locality numbers,
18 and 26) that are not transition areas, we acknowledge that we only
needed more than one unique locality number for that MSA for payment
purposes in CY 2017, which was the first year of the implementation of
the MSA-based payment locality structure. Neither of the counties in
the Los Angeles-Long Beach-Anaheim MSA (Orange County and Los Angeles
County) are transition areas under section 1848(e)(6)(D) of the Act.
Therefore, the counties were not subject to the aforementioned GPCI
value incremental phase-in (which is no longer applicable) or the hold-
harmless provision at section 1848(e)(6)(C) of the Act. Similarly, the
San Francisco-Oakland-Berkeley MSA contains four counties--San
Francisco, San Mateo, Alameda, and Contra Costa counties--across three
former unique locality numbers, 05, 06, and 07. These counties are not
transition areas and will receive the same GPCI values, for payment
purposes, going forward. In response to the comment, we acknowledged
that we did not propose any changes to the number of fee schedule areas
in California, but would consider the feasibility of a technical
refinement to consolidate into fewer unique locality numbers; and if we
determined that consolidation was operationally feasible, we would
propose the technical refinement in future rulemaking. In light of the
foregoing, for CY 2023, we proposed and finalized to identify the Los
Angeles-Long Beach-Anaheim MSA, containing Orange County and Los
Angeles County, by one unique locality number, 18, as opposed to two,
thus retiring locality number 26, as it is no longer needed. Similarly,
we proposed and finalized to identify the San Francisco-Oakland-
Berkeley MSA containing San Francisco, San Mateo, Alameda, and Contra
Costa counties by one unique locality number, 05, as opposed to four,
thus retiring locality numbers 06 and 07, as they are no longer needed.
Additionally, we noted that we would modify the MSA names as follows:
the San Francisco-Oakland-Berkeley (San Francisco Cnty) locality
(locality 05) would become San Francisco-Oakland-Berkeley (San
Francisco/San Mateo/Alameda/Contra Costa Cnty), and Los Angeles-Long
Beach-Anaheim (Los Angeles Cnty) locality (locality 18) would become
Los Angeles-Long Beach-Anaheim (Los Angeles/Orange Cnty). The
refinement finalized in the CY 2024 PFS final rule (88 FR 78985 through
78987) ultimately changed the number of distinct fee schedule areas for
payment purposes in California from 32 to 29. We noted that because
Marin County is in a transition area and subject to the hold harmless
provision at section 1848(e)(6)(C) of the Act, we needed to retain a
unique locality number for San Francisco-Oakland-Berkeley (Marin Cnty),
locality 52. We note that these changes do not have any payment
implications under the PFS.
h. Alternatives Considered Related to List of Occupation Codes Used in
the Work GPCI Calculation
As explained in the Work GPCIs section above, we utilize a refined
list of occupation groups and codes from the Bureau of Labor Statistics
(BLS) Occupational Employment and Wage Statistics (OEWS) data to
calculate the work GPCI. Because of its reliability, public
availability, level of detail, and national scope, we believe the BLS
OEWS data continue to be the most appropriate source of wage and
employment data for use in calculating the work GPCIs. For the CY 2023
GPCI update, we reviewed the occupation codes and groups used to
capture geographic variation in professional wages to assess other
potential codes and groups that could be used in addition to the
current selections to calculate the work GPCI, with significant
consideration given to the extent to which the data exist in the file
(data existence) and how well the occupation codes are represented in
the data (data sufficiency). Based on our review and commenters'
response to the proposals, we finalized the addition of two new
occupation groups (and their corresponding occupation codes),
Management Occupations and Business and Financial Operation
Occupations, to the preexisting seven occupation groups, and four new
occupation codes to the pre-existing Computer, Mathematical, Life, and
Physical Science group, and three occupation codes to the pre-existing
Social Science,
[[Page 32536]]
Community and Social Service, and Legal group in the CY 2023 PFS final
rule (87 FR 69621 through 69625). The practical effect of the addition
of these occupation groups and codes on the work GPCI was minimal
because the statute at section 1848(e)(1)(A)(iii) of the Act requires
that the work GPCI reflect only one quarter of cost differences, but
their inclusion added meaningful data regarding the geographic
variation in professional wages for CY 2023.
In the CY 2023 PFS final rule (87 FR 69631), some commenters stated
that our methodologic changes to the work GPCI occupation groups and
codes create unnecessary complexity and limited transparency. The
commenters stated that CMS did not provide an impact analysis or
criteria for inclusion (that is, how well it correlated as a proxy)
other than significant consideration to the extent to which the data
exist in the file (data existence) and how well the occupation codes
are represented in the data (data sufficiency). The commenters stated
that, without further explanation, two additional occupation groups
were added to the previous seven occupation groups, which increased the
greater than 100 current occupation codes by 60. One commenter believed
that it is unlikely that the cumulation of so many professions will
accurately reflect the relative difference in work of a single
profession such as a physician; the commenter stated that, if one were
to compare the BLS OEWS data file used for the work GPCI with that of
the healthcare provider dataset, there is a discordance. The commenters
agreed that the healthcare provider dataset should not be used for
developing the work GPCI due to circularity, but believe it could be
used to validate the proposed work GPCIs and to identify a much smaller
subset of professions that would act as more reliable proxies than what
was proposed. The commenters urged CMS to apply a smaller number of
professions to the work GPCI, as they thought that doing so would
result in a more reliable and accurate proxy for physician work, and
provide more information about the correlation between physician work
and the proxy professions to allow the public to verify its accuracy.
In response to commenters, we noted that we do not claim the proxy
professions themselves, or the absolute wages of the proxy
professionals are correlated to physician wages, but rather, that the
geographic variation in proxy professional wages is similar to the
geographic variation in physician wages.
We believed that there would be similar geographic variation if one
were to compare the BLS OEWS data used for the work GPCI with data from
a healthcare provider dataset. We continue to believe in the majority
of instances, the earnings of physicians will vary among areas to the
same degree that the earnings of other professionals across an array of
industries vary. Further, we welcomed opportunities to discuss data
sources that can be used to validate the work GPCI, similar to the
analysis that we performed for residential and commercial rent data
used for the office rent index for CY 2023.
For CY 2026, we analyzed the potential effect of using a
consolidated set of occupation codes on the work GPCI and compared that
effect to changes in work GPCI values that would occur utilizing the
standard set of occupation codes, as finalized for CY 2023. We
acknowledge that the use of a more parsimonious set of occupations
could be an improvement if it results in essentially the same work GPCI
values with increased simplicity and clarity for interested parties. We
explored approaches to condense the list of occupation codes used in a
more systematic manner, with the establishment of inclusion criteria
for an occupation code such as level of education attainment and data
completeness. For our analysis, we identified 274, 157 and 90
occupation codes with at least 50 percent, 75 percent, and 90 percent
having a Bachelor's Degree or higher, excluding occupation codes in
Group 29 that are paid on the Fee Schedule, respectively from the May
2023 OEWS data. We then applied various data completeness criteria
thresholds to these occupation codes with wage data for at least 50
percent, 75 percent, and 90 percent of U.S. counties, resulting in the
number of occupation codes displayed below in Table 32.
[GRAPHIC] [TIFF OMITTED] TP16JY25.102
Of these scenarios with various thresholds of the education
attainment and data completeness inclusion criterion, we investigated
two scenarios compared to the standard CY 2026 GPCI: (1) occupation
codes with at least 75 percent of Bachelor's Degree or Higher excluding
Group 29 and wage data for at least 50 percent of U.S. counties,
resulting in a list of 57 occupation codes and (2) occupation codes
with at least 75 percent of Bachelor's Degree or Higher excluding Group
29 and wage data for at least 75 percent of U.S. counties, resulting in
a
[[Page 32537]]
list of 31 occupation codes from the May 2023 OWES data. Under these
two scenarios, the work GPCIs result in changes relative to current CY
2025 work GPCI values that are nearly identical to those under the
standard CY 2026 GPCI update, as shown below in Table 33.
[GRAPHIC] [TIFF OMITTED] TP16JY25.103
Based on the two scenarios' changes relative to current CY 2025
work GPCI values that are nearly identical to those under the standard
CY 2026 GPCI update, we are seeking comment on the potential to
establish clear inclusion criteria for occupation codes for the
calculation of the work GPCI in future GPCI updates. We note that a
smaller, standardized list of occupation codes that meet rigorous and
clearly established thresholds for education attainment and data
completeness would aid transparency in the work GPCI and be responsive
to the commenters' requests.
Similar to the finalized addition of occupation groups and codes
for the CY 2023 GPCI update, the practical effect of limiting the
occupation groups and codes on the work GPCI would be minimal because
the statute at section 1848(e)(1)(A)(iii) of the Act requires that the
work GPCI reflect only one quarter of cost differences, but the
limitation could aid transparency and allow for a greater degree of
precision when tracking changes in geographic variation in professional
wages across GPCI update years.
i. Proposed GPCI Update Summary
As explained in the Background section above, section 1848(e)(1)(C)
of the Act mandates the periodic review and adjustment of GPCIs. For
each periodic review and adjustment, we publish the proposed GPCIs in
the PFS proposed rule to provide an opportunity for public notice and
comment and allow us to consider whether any revisions in response to
comments are warranted prior to implementation. The proposed CY 2026
updated GPCIs that we propose for the first and second year of the 2-
year phase-in, along with the GAFs, are displayed in Addenda D and E to
this proposed rule available on our website under the supporting
documents section of the CY 2026 PFS proposed rule web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
We note that in recent GPCI updates, commenters have stated that
there is a lack of transparency into the GPCI data and methodology used
to derive the GPCIs. In response to the CY 2023 PFS proposed rule, one
commenter stated that they cannot accurately validate CMS' GPCI
calculations because there is little transparency and access to the
data and methods used. The commenter stated that they submitted a
comment on the CY 2022 PFS proposed rule urging CMS to provide more
transparency into the GPCI calculations in general, including a more
detailed description of the step-by-step methodology and the specific
data files used to derive the GPCIs. In addition to making the RVUs by
county available, the commenters also suggested CMS to make available
the source data for the work GPCI by county, the source data for each
component of the practice expense GPCI, and all budget neutrality
adjustments and calculations.
The commenters stated that CMS provided these data prior to 2020
and that they used it to reproduce and validate the CMS methodology for
calculating the GPCIs each year. In the CY 2023 PFS final rule, in
response to these comments, we referred readers to the step-by-step
instructions provided in the final report, ``Final Report for the CY
2023 Update of GPCIs and MP RVUs for the Medicare PFS,'' on our website
located under the supporting documents section for the CY 2023 PFS
final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We also referred readers to Table
4.A.1: Summary of Elements Required for GPCI Calculation in the final
report, and the previous discussion, for the data sources used for the
work GPCI and each component of the practice expense GPCI. As noted in
the proposed and final rules for each GPCI update, we discuss the years
and timeframes of data used from each source. We note that we provide
web links to the publicly-available data sources used in the GPCI
updates, the methodological parameters, as well as an overview of how
we develop each GPCI component in the interim and final reports
published with
[[Page 32538]]
each proposed and final rule containing a GPCI update. This practice is
consistent with previous updates. We also note that the budget
neutrality adjustment and statutory floors applied after the budget
neutrality adjustment are detailed in the note, ``CY 2023 GPCI Update
Note_County_Data,'' on our website located under the supporting
documents section for the CY 2023 PFS proposed and final rules at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We also reminded commenters that, in
response to the commenters' concerns expressed in rulemaking for the CY
2020 GPCI update, we included more detailed steps in the final report,
``Final Report for the CY 2020 Update of GPCIs and MP RVUs for the
Medicare Phys Fee Sched_v19Feb2020'', which is available on the CMS
website under the downloads section of the CY 2020 PFS final rule to
assist interested parties in navigating these data. Additionally, as
part of our ongoing commitment to transparency, we post the county-
level data that we use to develop the proposed GPCIs, which allows
interested parties to further examine and replicate our GPCI
methodology. This file is also available on the CMS website on our
website under the Downloads section, titled ``CY 2023 Proposed Rule
GPCI County-Level Data File.'' We believe that we sufficiently
addressed previous commenters' concerns for the CY 2023 GPCI update in
the proposed and final rules and aforementioned CY 2020 and CY 2023
interim and final reports, but we are seeking comment related to any
additional information specific to what data was provided prior to 2020
that is no longer provided. Based on a comparison of data and
information in the interim and final reports, as well as the data file
downloads, we have not identified any information or data that we have
discontinued since 2020, as commenters have claimed. We are open to any
feedback related to specific information and data that would aid
transparency in a GPCI update.
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. 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 add a
provision requiring 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.
The calculation of the refund is codified at Sec. 414.940(c). For
a new refund quarter (as defined at Sec. 414.902) beginning on or
after January 1, 2023, an amount equal to the estimated amount (if any)
by which:
The product of the total number of units of the billing
and payment code for such drug that were discarded during such new
refund quarter; and the amount of payment determined for such drug or
biological under section 1847A(b)(1)(B) or (C) of the Act, as
applicable, for such new refund quarter;
Exceeds an amount equal to the applicable percentage of
the estimated total allowed charges for such drug for the new refund
quarter.
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. In the CY 2023
PFS final rule, we adopted an increased applicable percentage of 35
percent for drugs reconstituted with a hydrogel and with variable
dosing based on patient-specific characteristics (87 FR 69731). In the
CY 2024 PFS final rule (88 FR 79047 through 79064), we finalized an
increased applicable percentage for two categories of drugs with unique
circumstances, codified at Sec. 414.940(d). These categories include:
certain drugs with a low-volume dose (that is, where the volume removed
from the vial or container containing the labeled dose does not exceed
0.1 mL or falls between 0.11 mL and 0.4 mL); and orphan drugs furnished
to fewer than 100 unique beneficiaries. Drugs with an increased
applicable percentage are listed on the CMS website.\88\
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\88\ https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
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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.89 90 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. Following a review of timely applications,
CMS will summarize its analyses of applications and propose appropriate
increases in rulemaking. If adopted, the increased applicable
percentage will be the applicable percentage beginning as of the
following January 1. The collection of information requests associated
with the application process (CMS-10835, OMB 0938-1435) would remain
unchanged under this proposed rule.
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\89\ https://www.cms.gov/files/document/drugs-increased-applicable-percentage.pdf.
\90\ https://cms.gov/files/document/orphan-drugs-increased-applicable-percentage-calendar-quarters-2023.pdf.
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We received two applications for increased applicable percentage
for consideration in the CY 2026 PFS proposed rule. Both applicants
submitted the information required under Sec. 414.940(e)(1),
including, as applicable, the FDA-approved labeling for the drug,
justification for consideration for increased applicable
[[Page 32539]]
percentage, and justification for the requested applicable percentage.
The first application for increased applicable percentage for CY
2026 is from the manufacturer of Leukine[supreg] (sargramostim),\91\
who has resubmitted a request for a 72 percent applicable percentage
after applying in the previous year. Leukine[supreg] is a leukocyte
growth factor with five FDA-approved indications in hematological
malignancies and one indication for post-radiation exposure to increase
white blood cell counts. The applicant's submitted FDA-approved
labeling for the drug did not include the adjuvant uses described in
the application (further described below in this paragraph) due to
ongoing cancer vaccine adjuvant trials. The applicant reemphasizes that
multiple sponsors are in late-stage development, with a total of 22
Phase II and Phase III clinical trials, an increase from 16 reported in
the previous year, investigating Leukine[supreg] as a vaccine adjuvant
for oncology indications, specifically to stimulate the immune response
of dendritic cells when used alongside these vaccines. Cancer treatment
vaccines differ from the vaccines that protect against viruses, such as
the influenza virus. Instead of preventing disease, cancer treatment
vaccines aim to stimulate the immune system to attack existing cancer
cells in the body.\92\ The applicant states that it has no ownership
stake in the development of these cancer treatment 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 late 2025 \93\ and the
latest in March 2029.\94\ The adjuvant use of Leukine[supreg] in
predetermined dosage 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 suggests that if use of these
small doses were to become more common for an approved indication, 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 another manufacturer were to seek FDA approval for
adjuvant use of sargramostim but was not involved in its production,
the available single-dose 250-mcg vial presentation of Leukine[supreg]
would likely not be optimized for the small doses being studied in
these trials.
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\91\ https:/www.accessdata.fda.gov/drugsatfda_docs/label/2022/103362s5249lb1.pdf.
\92\ https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html.
\93\ https://clinicaltrials.gov/study/NCT04229979.
\94\ https://clinicaltrials.gov/study/NCT05100641.
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As part of CMS's review of the application, we analyzed existing
claims data from the first quarter of 2018 through the last quarter of
2024 and found the percentage of units discarded for the HCPCS code for
Leukine[supreg] (J2820) ranged from 1.2 percent to 3.8 percent, which
is below the applicable percentage of 10 percent. In addition to the
low overall discard rate, the percentage of units discarded showed a
standard deviation of less than 1 percent across quarters. This is
notably lower than the 6.21 percent average standard deviation observed
for rarely utilized orphan drugs, as reported in the CY 2024 PFS final
rule (88 FR 52393). The low standard deviation indicates minimal
quarter-to-quarter variation, with the percentage of units discarded
tightly clustered around a 2.2 percent mean. For context, approximately
two-thirds of the quarterly percentage values for units discarded fall
within one percentage point above or below the mean, highlighting the
consistency and stability of the trend over the 7-year period.
Therefore, although the applicant suggests otherwise, this data does
not follow a statistical distribution similar to that considered for
rarely-utilized orphan drugs meeting the criteria in Sec.
414.940(d)(5), which may not have a normal statistical distribution
from quarter to quarter, potentially resulting in highly variable
refund amounts as compared with the variability of drugs administered
to a higher number of beneficiaries. Since we did not yet know the
impact of a new adjuvant indication with a type of immunotherapy
commonly referred to as cancer vaccines \95\ on the current percentage
of units discarded, we did not propose an increased applicable
percentage in the CY 2025 PFS proposed rule. Additionally, because it
was not yet known whether sargramostim would be approved for additional
indications and dosages, as indicated in the information provided by
the applicant, and the available data did not provide enough
information for CMS to determine whether Leukine[supreg] had unique
circumstances that would prompt an increase in the applicable
percentage, we did not propose an increase in the applicable percentage
for the drug in the CY 2025 PFS proposed rule. The applicant agreed
with CMS' rationale for this decision.
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\95\ https://www.cancerresearch.org/treatment-types/cancer-vaccines.
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Because we are maintaining our determination from the CY 2025 PFS
proposed rule, we are not proposing an increase in the applicable
percentage for Leukine[supreg] at this time. The applicant may reapply
in a future application cycle when more information, such as FDA-
approved labeling reflecting new indications or dosages, becomes
available.
The second application is from the manufacturer of Jelmyto[supreg]
(mitomycin for pyelocalyceal solution) \96\ who is requesting an
additional 10 percent increase to the 35 percent applicable percentage
finalized in the CY 2023 PFS final rule (87 FR 69727 through 69731),
bringing the total applicable percentage to 45 percent. Jelmyto[supreg]
is indicated for the treatment of adult patients with low-grade Upper
Tract Urothelial Cancer (LG-UTUC), a rare cancer with approximately
7,000 new annual cases \97\ in the United States. According to the
applicant, Jelmyto[supreg] dosing ranges from 20 mg to 60 mg per single
treatment, with the specific dose determined by kidney volume
measurements obtained through pyelography.\9\ In the CY 2023 PFS final
rule, we stated that Jelmyto[supreg], a drug reconstituted with a
hydrogel and administered via ureteral catheter or nephrostomy tube
into the kidneys, may leave a substantial amount adhering to the vial
wall due to its viscosity, and making it non-extractable. This
viscosity results from proprietary reverse-thermal technology
(RTGel[supreg]), which enables the drug to transition from a chilled
liquid at instillation into a gel at body temperature. We determined
that a 35 percent applicable percentage was appropriate--accounting for
25 percent lost to adhesion (that is, an 80 mg package with maximum
extractable dose of 60 mg results in at least 25 percent being
discarded) and an additional 10 percent to align with drugs without
unique circumstances for patients requiring less than the maximum dose
of 60 mg. We disagreed that an
[[Page 32540]]
applicable percentage greater than 35 percent should be applied to such
hydrogel products, because we believe that 25 percent accounts for the
hydrogel that adheres to the vial, and because we have allowed for an
additional 10 percent of drug to be discarded before any refund would
be owed. This 35 percent applicable percentage was codified at Sec.
414.940(d)(2), with broad support from commenters, for drugs that are
both reconstituted with a hydrogel and subject to variable dosing based
on patient-specific characteristics.
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\96\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/211728s010lbl.pdf.
\97\ https://www.urologyhealth.org/urology-a-z/u/upper-tract-urothelial-carcinoma-(utuc).
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The applicant contends that the current 35 percent applicable
percentage does not account for drug loss due to kidney volume
variations and different administration routes, both of which the
applicant claims meet the patient-specific characteristics outlined in
Sec. 414.940(d)(2). Since kidney volume cannot be determined until the
pharmacy has prepared the drug and the patient is ready for
administration of the initial treatment, the applicant states that
patients with smaller-than-average kidney volumes may lead to a higher
amount of drug being discarded. Additionally, the amount of
Jelmyto[supreg] discarded may increase when providers choose antegrade
(via nephrostomy tube) administration over the more common retrograde
(via ureteral catheter) administration, as the greater drug delivery
efficiency of the antegrade route may result in a lower dose required,
leading to more of the drug being discarded. The choice of
administration route must be determined on an individual basis,
considering multiple factors, including but not limited to the risks
and benefits of each route, previous history of failed administration
attempts, tolerance to anesthesia, anatomical variations in the urinary
tract, patient preference, and the patient's clinical presentation at
the time of drug administration.98 99 100 These patient-
specific characteristics, combined with the requirement for hydrogel
reconstitution, were considered when establishing the current 35
percent applicable percentage.
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\98\ https://bjui-journals.onlinelibrary.wiley.com/doi/full/10.1111/bju.15925.
\99\ https://www.sciencedirect.com/science/article/pii/S2405456923001232.
\100\ https://www.jelmyto.com/hcp/pdf/jelmyto-antegrade-instillation-overview.pdf.
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In the CY 2024 PFS final rule (88 FR 79057), we stated that we do
not consider the following to be unique circumstances warranting an
increased applicable percentage at this time: weight-based doses, BSA-
based doses, varying surface area of a wound, loading doses, escalation
or titration doses, tapering doses, and dose adjustments for toxicity
because we believe manufacturers can optimize the availability of
products for these circumstances to limit the percentage of discarded
units for a drug, unlike the circumstances of manufacturers of drugs
that require filtration during the preparation process, as described in
section 1847A(h)(8)(B)(ii) of the Act. Consistent with that statement,
we generally do not consider dose variations due to patient- or
condition-specific characteristics to be unique circumstances for the
same reason. That is, manufacturers can optimize the availability of
products for these circumstances to minimize discarded amounts.
Therefore, we do not consider the drug loss due to patient-specific
characteristics, such as variation in kidney volume and factors leading
to antegrade administration, to be unique circumstances, and we are not
proposing an increase in the applicable percentage of 45 percent for
the drug. Consistent with the CY 2023 PFS final rule, we propose that
the applicable percentage for Jelmyto[supreg] continue to be 35
percent.
We welcome comments on these applications for increased applicable
percentage.
2. Average Sales Price: Price Concessions and Bona Fide Service Fees
(Sec. 414.804 and 414.802)
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, which are both updated
quarterly.
The calculation of payment limits for such drugs payable under Part
B is done on a quarterly basis using the manufacturer's ASP (as defined
in Sec. 414.902), as applicable, using methodology in section 1847A of
the Act. Manufacturers are required to report ASP data to CMS under
sections 1847A(f)(2) and 1927(b)(3) of the Act and are instructed to
calculate the manufacturer's ASP in accordance with section 1847A(c) of
the Act and Sec. 414.804(a).
As part of that calculation of the manufacturer's ASP, required
under section 1847A(c)(3) of the Act and Sec. 414.804(a)(2),
manufacturers must deduct price concessions such as 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 and the Medicare Prescription
Drug Inflation Rebate Program). Section 1847A(c)(3) of the Act also
provides that, ``[f]or years after 2004, the Secretary may include in
such price other price concessions, which may be based on
recommendations of the Inspector General, that would result in a
reduction of the cost to the purchaser.'' The Secretary implemented an
interim rule adopting those statutory categories of price concessions
in 2004 (69 FR 47488). In 2006 the Secretary finalized policies for how
the manufacturer's ASP is calculated, which required manufacturers to
deduct all price concessions from ASP at Sec. 414.804(a)(2). While
price concessions are deducted from the manufacturer's ASP (that is,
price concessions will lower the resulting manufacturer's ASP), bona
fide service fees (BFSFs) are not considered price concessions and,
therefore, are not deducted when calculating the manufacturer's ASP
(see Sec. 414.804(a)(2)(ii)). In other words, BFSFs do not lower the
manufacturer's ASP because they are not part of the calculation.
In the Calendar Year (CY) 2007 Physician Fee Schedule (PFS) final
rule (71 FR 69665 through 69678) Medicare finalized a definition of
BFSF for the purposes of calculating the manufacturer's ASP at Sec.
414.802. The definition finalized in that final rule states that the
term ``BFSFs'' means fees paid by a manufacturer to an entity, that
represent fair market value for a bona fide, itemized service actually
performed on behalf of the manufacturer that the manufacturer would
otherwise perform (or contract for) in the absence of the service
arrangement, and that are not passed on in whole or in part to a client
or customer of an entity, whether or not the entity takes title to the
drug. In the CY 2007 PFS final rule, we stated that the BFSF definition
provides an appropriate safeguard against the potential risk for
inappropriately
[[Page 32541]]
inflated ASPs. We stated that if a manufacturer has determined that a
fee paid meets the other elements of the definition of ``bona fide
service fee,'' then the manufacturer may presume, in the absence of any
evidence or notice to the contrary, that the fee paid is not passed on
to a client or customer of any entity. Further, we stated (71 FR 69669)
that in the absence of specific guidance in the Act or Federal
regulations, the manufacturer may make reasonable assumptions in its
calculations of the manufacturer's ASP, consistent with the general
requirements and intent of the Act, Federal regulations, and its
customary business practices. We stated that these assumptions may be
submitted along with the ASP data.
Accurate assessment and reporting of price concessions and BFSFs
are essential to correctly calculating the manufacturer's ASP.
Improperly classifying price concessions as BFSFs would artificially
increase the manufacturer's ASP resulting in Medicare overpayments and
higher coinsurance amounts paid by beneficiaries.
In December of 2022, the Office of Inspector General (OIG)
published a report entitled ``Manufacturers May Need Additional
Guidance to Ensure Consistent Calculations of Average Sales Prices''
(hereinafter referred to as the December 2022 OIG report).\101\ That
report recommended CMS actively review current guidance related to
areas identified in the report and determine whether additional
guidance would ensure more accurate and consistent ASP calculations.
One area identified was how bundled sales price concessions should be
incorporated into the manufacturer's ASP calculation. Manufacturers
noted they would like additional guidance regarding whether unbundling
a bundled arrangement should include just the discounts contingent on
purchase or performance or all discounts that are part of the
arrangement, how to treat bundled sales that include covered and
noncovered products, and how manufacturers should identify and
reallocate discounts with sales that may be considered bundled across
time periods.
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\101\ Manufacturers May Need Additional Guidance To Ensure
Consistent Calculations of Average Sales Price, Office of Inspector
General, U.S. Department of Health and Human Services. December
2022. https://oig.hhs.gov/documents/evaluation/3215/OEI-BL-21-00330-Complete%20Report.pdf.
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This report also recommended CMS give particular consideration to
guidance regarding BFSFs. Manufacturers surveyed in the report
expressed that there could be inconsistencies and differences in how
manufacturers interpret the BFSF definition. For example, manufacturers
noted that CMS has not defined the term fair market value (FMV) for the
purposes of the BFSF. The report states that CMS should provide
additional guidance on the methodology that manufacturers should use to
assess FMV and clarify a timeframe after which manufacturers should
reassess the FMV of BFSFs.
In addition to the recommendations from the December 2022 OIG
report, we have concern that certain costs could be classified as BFSFs
when they should instead be classified as a price concession in some
instances. Further, we are concerned that certain costs that are
classified as BFSFs may not represent the FMV for the service. Lastly,
the current policy that manufacturers may presume none of the fees are
passed on in whole or in part may allow for certain costs to be
misclassified when reasonable inquiry would demonstrate that fees are
indeed passed on. Such occurrences would likely impact the accuracy of
ASP data that is reported to CMS each quarter.
For these reasons, in this proposed rule, we are proposing policies
to provide additional guidance on two aspects of the calculation of
manufacturer's ASP. First, we are proposing regulatory text to specify
when certain fees are considered price concessions and on how
manufacturers should allocate pricing for drugs sold under a bundled
arrangement. Second, we are proposing to revise the definition of BFSFs
by (1) specifying the methodology that should be used to determine FMV
and the time period after which manufacturers should reassess the FMV;
and (2) further explaining what CMS considers to be sufficient evidence
of whether or not a fee is passed on in whole or in part to an
affiliate,\102\ client, or customer of an entity. We are also proposing
that in the absence of specific guidance, manufacturers be required to
submit any reasonable assumptions they utilize for manufacturer's ASP
calculations (which is currently voluntary), including documentation of
the methodology used to determine fair market value and periodic
reviews of fair market value. We propose that manufacturers must also
submit a warranty or certification from the recipient of the fee that
it is not passed on in whole or in part to an affiliate, client, or
customer of an entity. Finally, in this proposed rule, we will provide
certain non-exhaustive examples of fees that CMS considers to be price
concessions and not BFSFs.
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\102\ Affiliate meaning the affiliate of an entity that is
receiving the fee that is providing the service.
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The goal of these proposed policies is to avoid inaccurate
calculation of the manufacturer's ASP that is used to determine Part B
drug payment limits. These proposed policies also will clarify how
certain costs should be considered under newer pharmaceutical business
practices that may not have been considered when Medicare last
finalized the definition of BFSFs in 2007.
b. Price Concessions
As discussed in the background section, the statute requires that
the manufacturer's ASP 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 and the Medicare Prescription Drug
Inflation Rebate Program).
Manufacturers can offer certain price concessions as part of
bundled arrangements in which price concessions are treated as
discounts that are tied to the purchase of the same drug or item or
multiple drugs or items. They can also be discounts contingent on
certain performance requirements, such as achievement of market share.
In addition, price concessions as part of a bundled arrangement may
include only Part B drugs or may include both Part B drugs and other
products or services. These price concessions within bundled
arrangements are accounted for in the calculation of the manufacturer's
ASP.
We discussed bundled price concessions and considered how
manufacturers could apportion such discounts to calculate the
manufacturer's ASP in the CY 2007 PFS final rule (71 FR 69673 through
69676). We stated that given the potentially wide range of bundling
arrangements that might exist, based on the information we had about
such arrangements, we could not determine at that time whether there is
a universal approach for treating bundled price concessions in the
manufacturer's ASP calculation that would address all potential
structures of bundling arrangements in a manner that would achieve our
goal of ensuring the accuracy of the ASP payment methodology and
preventing inappropriate financial incentives. Then, in the Medicare
Payment Advisory Commission's (MedPAC) January 2007 Report to Congress,
``Impact of Changes in Medicare
[[Page 32542]]
Payments for Part B Drugs,'' \103\ they discussed the issue of
allocation of bundled price concessions for purposes of calculating the
manufacturer's ASP, noting that ``some manufacturers offer provider
discounts for one of their products contingent on purchases of one or
more other products.'' In light of MedPAC's recommendation that CMS
address the ASP reporting requirements for bundled products and our
discussion of bundled price concessions in the CY 2007 PFS rulemaking,
we stated in the CY 2008 PFS proposed rule (72 FR 38150 through 38151)
that we believe specific guidance in the ASP context is warranted to
ensure consistency in ASP reporting across manufacturers and to enhance
the accuracy of the ASP payment system. We stated at that time that we
found MedPAC's suggestion not to defer further guidance in this area
compelling with respect to the potential that manufacturers may make
differing assumptions in the absence of specific guidance on how to
allocate bundled price concessions in the context of ASP. However, in
the CY 2008 PFS final rule (72 FR 66256 through 66258), based on
comments recommending a delay and to better understand the concerns
stated by the commenters, we did not finalize the regulatory language
changes we proposed in the CY 2008 PFS proposed rule at that time.
However, we explained that in the absence of specific guidance,
manufacturers may make reasonable assumptions in their calculation of
ASP, consistent with the general requirements and the intent of the
Act, Federal regulations, and their customary business practices.
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\103\ Impact of Changes in Medicare Payments for Part B Drugs,
Medicare Payment Advisory Commission. January 2007. https://www.govinfo.gov/content/pkg/GOVPUB-Y3_M46_3-PURL-LPS78409/pdf/GOVPUB-Y3_M46_3-PURL-LPS78409.pdf.
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In the 2007 Prescription Drugs final rule (72 FR 39144 through
39145), Medicaid finalized a definition of the term ``bundled sale''
for the purpose of calculating the average manufacturer price (AMP) and
best price, which is codified at Sec. 447.502. The definition was
revised in the CY 2016 Covered Outpatient Drugs final rule (81 FR 5181
through 5183) and the 2020 Establishing Minimum Standards in Medicaid
State Drug Utilization Review and Supporting Value-Based Purchasing for
Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third
Party Liability Requirements final rule (85 FR 87022 through 87024).
The current definition states that a bundled sale means any arrangement
regardless of physical packaging under which the rebate, discount, or
other price concession is conditioned upon the purchase of the same
drug, drugs of different types (that is, at the nine-digit National
Drug Code (NDC) level) or another product or some other performance
requirement (for example, the achievement of market share, inclusion or
tier placement on a formulary), or where the resulting discounts or
other price concessions are greater than those which would have been
available had the bundled drugs been purchased separately or outside
the bundled arrangement. The definition further states: (1) The
discounts in a bundled sale, including those discounts resulting from a
contingent arrangement, are allocated proportionally to the total
dollar value of the units of all drugs or products sold under the
bundled arrangement; (2) For bundled sales where multiple drugs are
discounted, the aggregate value of all the discounts in the bundled
arrangement must be proportionally allocated across all the drugs or
products in the bundle; and (3) Value-based purchasing (VBP)
arrangements may qualify as a bundled sale.
We are aware that many manufacturers currently utilize portions of
the Medicaid definition of bundled sales to identify any bundled
arrangements for the purposes of their ASP calculations. In addition,
we noted in the CY 2008 PFS final rule (72 FR 66257 through 66258),
that most commenters supported an appropriately consistent approach for
the treatment of bundled price concessions with both AMP and ASP
calculations. We also stated our intention at that time to remain
consistent, as appropriate, with the final policy adopted in the 2007
Prescription Drugs final rule (72 FR 39144 through 39145).
As discussed in the background section, the December 2022 OIG
report recommended that CMS consider providing additional guidance with
regard to how bundled sales price concessions should be incorporated
into the manufacturer's ASP calculation. The report stated specifically
that one manufacturer requested additional guidance pertaining to
bundled sales discounts for the following:
Whether unbundling a bundled arrangement should include
just the discounts contingent on purchase or performance requirements
or all discounts that may be part of the underlying arrangement.
How to treat bundled sales that include both covered
products and noncovered products (that is, products for which there is
no government price reporting obligation).
How manufacturers should identify and reallocate discounts
associated with sales that may be considered bundled across time
periods. The manufacturer stated that CMS guidance on these types of
temporal bundling will be critical because they will play an important
role in the implementation and evaluation of value- and outcomes-based
arrangements, which may require assessing the efficacy of a drug over
multiple reporting periods.
Therefore, in this proposed rule, we propose to add a definition of
the term bundled arrangement to Sec. 414.802, similar to that which
was proposed in the CY 2008 PFS proposed rule. Specifically, we are
proposing the definition to state ``Bundled Arrangement means an
arrangement regardless of physical packaging under which the rebate,
discount, or other price concession is conditioned upon the purchase of
the same drug or biological or other drugs or biologicals or another
product or some other performance requirement (for example, the
achievement of market share, inclusion or tier placement on a
formulary, purchasing patterns, prior purchases), or where the
resulting discounts or other price concessions are greater than those
which would have been available had the bundled drugs or biologicals
been purchased separately or outside the bundled arrangement.'' We also
propose adding subparagraphs (iii) and (iv) at Sec. 414.804(a)(2) to
provide manufacturers with additional guidance on how to allocate
discounts under bundled arrangements, which aligns with Medicaid's
definition of bundled sale further described later in this section.
This proposal aligns with our previously stated intent to remain
consistent, as appropriate, with Medicaid's policy for calculating AMP
and aligns with supportive comments discussed in the CY 2007 and 2008
PFS final rule discussions on this topic.
Second, to address the suggestion that the agency determine whether
additional guidance would be appropriate for the areas described in the
December 2022 OIG report for how to account for unbundling a bundled
arrangement, we note that Medicaid's definition of ``bundled sale'' at
Sec. 447.502 directs that discounts in a bundled sale, including those
discounts resulting from a contingent arrangement, are allocated
proportionally to the total dollar value of the units of all drugs or
products sold under the bundled arrangement. In other words, as noted
in 81 FR 5181 through 5183, the ``unbundling'' of both contingent and
non-contingent discounts is appropriate because ``all
[[Page 32543]]
the discounts'' in the bundled arrangement should be proportionally
allocated. We propose to adopt this approach for the calculation of the
manufacturer's ASP because of our stated intent for consistency with
policies for AMP. Consistent application of this policy by all
manufacturers reduces the opportunity for improper manipulation of the
ASP calculation, providing greater certainty to CMS of the integrity of
the submitted ASP. We are, therefore, proposing the same regulatory
language be added to Sec. 414.804(a)(2) under paragraphs (iii) and
(iv).
Third, to address the suggestion that the agency determine whether
additional guidance would be appropriate for the areas described in the
December 2022 OIG report for how to allocate discounts for bundled
sales, we propose that for bundled sales containing both Medicare Part
B-covered and non-covered products, manufacturers allocate discounts
proportionally as described in the previous paragraph. However, we have
heard from interested parties that this method may not be sufficient to
cover all cases and could potentially result in inaccurate ASPs.
Bundled arrangements may vary depending upon the number and type of
products included in a bundling arrangement, whether the price
concessions are contingent on the purchase of only one product, the
purchase of multiple products, or the inclusion of one or more products
on a formulary, and the timing of the price concessions. For example, a
different allocation method may be needed to account for variable costs
per product in the bundled arrangement. We solicit comment on if there
are other methods of allocating discounts in these circumstances that
would more accurately represent ASP.
Finally, to address the suggestion that the agency determine
whether additional guidance would be appropriate for the areas
described in the December 2022 OIG report as it relates to how to
reallocate discounts associated with sales that may be considered
bundled across time periods (for example, outcomes-based arrangements
or value-based purchasing arrangements), we are not proposing to adopt
the portion of the Medicaid definition of bundled sale stating that
value-based purchasing arrangements may qualify as a bundled sale
because we are continuing to evaluate how value-based purchasing
arrangements should be considered for drugs payable under Medicare Part
B. We solicit comments on how discounts associated with sales that may
be considered bundled across time periods could be accounted for in the
manufacturer's ASP calculation.
We solicit comments on this proposal.
c. Bona Fide Service Fees
As described in the background section above, currently, the term
``BFSFs'' means fees paid by a manufacturer to an entity, that (1)
represent FMV (2) for a bona fide, itemized service actually performed
on behalf of the manufacturer (3) that the manufacturer would otherwise
perform (or contract for) in the absence of the service arrangement,
and (4) that are not passed on in whole or in part to a client or
customer of an entity, whether or not the entity takes title to the
drug.\104\ A fee must meet all four conditions of the definition to be
considered a BFSF rather than a price concession to be deducted from
ASP. We are proposing two changes to the BFSFs regarding (1) what is
considered FMV and (2) proposing what evidence is required to be
provided by a manufacturer to show that a fee is not passed on in whole
or in part to an affiliate, client, or customer of an entity, whether
or not the entity takes title to the drug. In addition, we are
proposing an addition to the list of price concessions to include when
certain fees paid by a manufacturer are presumed to be price
concessions.
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\104\ 42 CFR 414.802.
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(1) Fair Market Value
One element of the definition of BFSFs specifies that the fees must
represent FMV for the service. To date, we have not issued guidance on
a specific method that manufacturers must use to determine whether a
fee represents FMV. In the CY 2007 PFS final rule (71 FR 69666 through
69670), we stated that the appropriate method or methods for
determining whether a fee represents FMV may depend upon the specifics
of the contracting terms, such as the activities the entity will
perform and the agreed-upon mechanism for establishing the payment (for
example, percentage of goods purchased). We stated in that final rule
that we believe manufacturers are well-equipped to determine the most
appropriate, industry-accepted method for determining FMV of drug
distribution services for which they contract. Therefore, we did not
mandate the specific method manufacturers must use to determine whether
a fee represents FMV for purposes of excluding BFSFs from the
calculation of ASP.
As discussed in the background section above, the December 2022 OIG
report identified BFSFs as an area where CMS could provide additional
guidance to manufacturers and further stated that manufacturers
expressed that competitors may be taking disparate approaches when
applying CMS's four-part test to make these determinations. In some
cases, BFSFs that are very high could mask price concessions that are
passed on by the entity performing the bona fide service so that the
product's ASP can remain high. Conversely, certain fees that are BFSFs
could be incorrectly classified as a price concession to reduce the
manufacturer's ASP and mask price increases that could be faster than
the rate of inflation for purposes of the Medicare Prescription Drug
Inflation Rebate Program. Consequently, we recommend additional
guardrails to ensure that BFSFs are correctly identified, and that the
manufacturer's ASP is not manipulated to be artificially increased or
decreased.
Accordingly, in this proposed rule, we are (1) proposing revisions
to the definition of BFSFs at Sec. 414.802 that retains the existing
four prong test (as described in the background section) and adds
proposed requirements for the standards and the methodology that should
be used to determine the FMV for such fees; (2) the time period after
which manufacturers should reassess the FMV; and (3) any FMV analysis
of fees that vary directly with the amount of drug sold or price of a
manufacturer's drug must be conducted by an independent third party
that does not have a conflict of interest.
Based on the structure or arrangement of certain fees that meet the
definition of BFSF, we propose additional requirements for the
standards and methodology that should be used to determine FMV.
Specifically, we propose that for fees paid by a manufacturer to an
entity that do not vary directly with the amount of drug sold or price
of a manufacturer's drug, that the FME must be determined either based
on comparable market transactions that generally reflect current market
conditions or the cost of the service plus a reasonable markup to the
total cost.
We propose that, for fees paid by a manufacturer to an entity that
vary directly with the amount of drug sold or price of a manufacturer's
drug, the FMV must be determined by using the cost of the service and
adding a reasonable markup to the total cost. If any material portion
of cost data is not available, manufacturers should follow a market-
based approach based on verifiable market data until such time as
sufficient cost data becomes available. In addition,
[[Page 32544]]
we propose that under such circumstances that the FMV assessment must
be conducted by an independent third-party valuator. This means that
the valuator must not have any financial relationship (other than the
arrangement to conduct FMV analyses) with either party to the
arrangement and no stake in the outcome of the valuation. The FMV
analysis must be documented with a clear explanation, including a
description of the methodology used.
Regarding FMV assessments, we propose manufacturers conduct
periodic updates of any FMV analyses for service arrangements that are
ongoing, at a frequency no less than the renewal frequency of the
agreement (that is, annually for annual renewals). Documentation of
this update should be included in the reasonable assumption
documentation that corresponds with the quarter when the update is
conducted. Implementing standards and defining the methodology
manufacturers must use to determine FMV will better establish uniform
industry practices and provide the desired clarity requested by
manufacturers in the December 2022 OIG report.
We solicit comments on this proposal.
(2) Fees Presumed To Be Price Concessions
We are proposing revisions to Sec. 414.804(a)(2) to specify when
certain fees should be presumed to be price concessions. Specifically,
we propose that if fees paid by a manufacturer to an entity vary
directly with the amount or price of a manufacturer's drugs (that is,
the fees paid are (i) percentage-based fees or (ii) flat fees or fixed
fees that are designed in such a way as to approximate percentage-based
fees), such fees are presumed to be price concessions to be deducted
from the calculation of the manufacturer's ASP unless such manufacturer
determines such fees to be FMV using a cost-based approach which may be
further validated with market-based data.
(3) Evidence
Another element of the BFSF definition specifies that the BFSF must
not be passed on, in whole or in part, to a client or customer of an
entity. When finalizing the CY 2007 PFS final rule (71 FR 69669 through
69670), we stated that there may be significant barriers that limit a
manufacturer's ability to determine whether a fee that otherwise meets
the definition of BFSF is passed on, in whole or in part, to a client
or customer of any entity. We noted in the preamble section of that
rule that we believe that it is essential to retain the ``not passed
on'' element in the definition of BFSFs given that the ``not passed
on'' element is a key factor in distinguishing a price concession from
a BFSF because, if a fee that is passed on is excluded from the ASP
calculation, then there is a greater risk of the ASP being
inappropriately inflated. We stated that if a manufacturer has
determined that a fee paid meets the other elements of the definition
of ``bona fide service fees,'' then the manufacturer may presume, in
the absence of any evidence or notice to the contrary, that the fee
paid is not passed on to a client or customer of any entity.
There may be certain fees that a manufacturer classifies as BFSFs
for the purposes of calculating the manufacturer's ASP that should
actually be considered price concessions and, therefore, deducted from
the manufacturer's ASP. In the December 2022 OIG report, manufacturers
reported inconsistent practices in the treatment of BFSFs. As such, we
propose that it is no longer appropriate that a manufacturer may
presume, in absence of any evidence or notice to the contrary, that a
fee paid is not passed on to an affiliate, client, or customer of any
entity. This proposed revision to the definition specifies that, in
addition to a client or customer of any entity, that the fee also shall
not be passed on to an affiliate, which means an affiliate of an entity
that is receiving the fee the tis providing the service. We propose the
addition of the word affiliate to more comprehensively address the type
of arrangements that may exist between certain entities.
In addition, we propose that the manufacturer be responsible for
obtaining a certification or warranty from the entity receiving the fee
stating that such fee will not be passed on to an affiliate, client, or
customer of any entity. We are proposing to add new subparagraph Sec.
414.804(a)(5)(iii) requiring manufacturers to provide certification
letters from any recipient of a BFSF that the fee is not passed on in
whole or in part to an affiliate, client or customer of an entity,
whether or not the entity takes title to the drug.
We also propose to revise Sec. 414.804(a)(5) to add additional
data submission requirements. This paragraph currently states that the
manufacturer's average sales price must be calculated by the
manufacturer every calendar quarter and submitted to CMS within 30 days
of the close of the quarter. The first quarter submission must be
submitted by April 30, 2004. Subsequent reports are due not later than
30 days after the last day of each calendar quarter. We are proposing
to add a header to this section titled ``Submission Requirements'' and
remove ``The first quarter submission must be submitted by April 30,
2004. Subsequent reports are due not later than 30 days after the last
day of each calendar quarter.'' We are also proposing to add three
paragraphs (i, ii, and iii). The proposed text would be revised to
state that manufacturers must submit the following to CMS within 30
days of the close of the quarter:
The manufacturer's average sales price, which must be
calculated by the manufacturer every calendar quarter. The first
quarter submission must be submitted by April 30, 2004.
Effective January 1, 2026, reasonable assumptions for
calculation of the manufacturer's ASP including the fair market value
analysis for bona fide service fees, consistent with the general
requirements and intent of the Act, Federal regulations, and its
customary business practices, including documentation of the
methodology used to determine fair market value and periodic reviews of
fair market value.
Effective January 1, 2026, certification letter from the
recipient of a bona fide service fee (as defined under Sec. 414.802)
as evidence that the fee is not passed on in whole or in part to an
affiliate, client, or customer of an entity, whether or not the entity
takes title to the drug.
These data submission requirements, if finalized, would be
effective for sales occurring January 1, 2026, and after and that data
would be due to CMS by April 30, 2026, and used in the July 2026
pricing file. The newly proposed certification letter should be
submitted in the current portal and uploaded under reasonable
assumptions. Lastly, manufacturers must maintain and submit to CMS a
copy of the FMV analysis, confirming it was conducted in a timely
manner, documentation (such as a certification letter from the
recipient of the fee) that the fee is not passed on in whole or in part
to an affiliate, client or customer of an entity, whether or not the
entity takes title to the drug, and documentation (such as a mutual
representation in the relevant services agreement) that both parties
have agreed to represent the payment as a BFSF in a consistent manner
to all third parties, including any affiliates, clients, and
governmental agencies.
We solicit comment on this proposal.
(3) Further Guidance on the BFSF Definition
In the CY 2007 PFS final rule (71 FR 69667 through 69668), we
discussed the option of providing a list of bona fide
[[Page 32545]]
services. However, many commenters at that time were opposed to
establishing a list of bona fide services because it would require
ongoing refinement for manufacturers to accurately calculate ASP. In
that final rule, we did not establish a list of bona fide services
because we wanted to avoid inadvertently limiting the scope of what
could constitute a bona fide service. We continue to believe that
constructing an exhaustive list could be prohibitive over time.
However, in this proposed rule, we are proposing some specific, non-
exhaustive examples of fees and how they should be considered in the
calculation of manufacturer's ASP.
First, we note that certain payments by drug manufacturers to drug
distributors, which lower the price that distributors and purchasing
physicians pay, appear to be price concessions. In 2024, the Department
of Justice filed a complaint against a manufacturer alleging the
company engaged in fraudulent drug price reporting practices by
classifying payments to distributors to cover credit card processing
fees as BFSFs instead of price concessions.\105\ The manufacturers'
payment allegedly enabled the purchasers of the product to use credit
cards to purchase drugs from the distributor without incurring an
additional fee that would otherwise be charged, while also taking
advantage of the benefits of using credit cards, such as ``cash back''
and other credit card rewards. This type of arrangement would lower the
price of the drug to both the distributor and the distributors'
customers and the manufacturers' payments should be classified as price
concessions, which are deducted from ASP, not BFSFs.
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\105\ United States Files Complaint Against Regeneron
Pharmaceuticals Alleging Fraudulent Drug Price Reporting, District
of Massachusetts, United States Attorney's Office. April 2024.
https://www.justice.gov/usao-ma/pr/united-states-files-complaint-against-regeneron-pharmaceuticals-alleging-fraudulent-drug.
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Second, as discussed in our Autologous Cell-based Immunotherapy and
Gene Therapy Payment proposal, we also propose that any payment by the
manufacturer to an entity for tissue procurement is not considered a
BFSF for the purposes of calculating the manufacturer's ASP since this
is an integral part of the manufacturing process for autologous cell-
based immunotherapy or gene therapy and should be included in the price
of the product.
Third, certain fees for data sharing services about the product
appear to exceed the FMV for the service or are not for bona fide
services because the data is required for legal compliance and audit
purposes under the services agreement (such as complete and timely data
to validate that a rebate or discount has been earned or is not
duplicative prior to its payment by the manufacturer). If a
manufacturer pays an entity for providing data back to the manufacturer
about the product being sold, that fee should be assessed for FMV as
discussed previously in this section and we propose a certification or
warranty from the entity providing the service that the fee is not
passed on in whole or in part to an affiliate, client, or customer of
an entity. As proposed previously in this section, we propose that such
certification or warranty should be submitted by the manufacturer to
CMS as part of the quarterly ASP data submission.
Lastly, certain fees paid for distribution services appear to
exceed the FMV for the service. Similar to data sharing services, if a
manufacturer pays an entity for distributing their product, the fee
should be assessed for FMV, and we propose a certification or warranty
should be provided by the entity providing the service that the fee is
not passed on in whole or in part to an affiliate, client, or customer
of an entity. As proposed previously in this section, we propose that
such certification or warranty should be submitted by the manufacturer
to CMS as part of the quarterly ASP data submission.
We solicit comment on these proposals.
d. Summary
In summary, we are proposing to add a definition of bundled
arrangement at Sec. 414.802 and to update Sec. 414.804(a)(2) to
provide guidance to manufacturers regarding pricing of bundled price
concessions. We are also proposing new regulatory text at Sec.
414.804(a)(2)(i) to specify when certain fees are considered price
concessions. We propose revisions to the definition of BFSFs at Sec.
414.802 to specify: (1) standards and the methodology that should be
used to determine FMV for such fees; (2) the time period after which
manufacturers should reassess the FMV; and (3) that any FMV analysis
regarding BFSFs that vary directly with the amount of drug sold or
price of a manufacturer's drug must be conducted by an independent
third party that does not have a conflict of interest. Further, we
propose revising Sec. 414.804(a)(5) to update requirements for ASP
data submissions as they relate to reasonable assumptions and evidence
that BFSFs are not passed on. Finally, we are proposing a non-
exhaustive list of certain fees that we either do not consider BFSFs or
may not be in line with FMV.
3. Average Sales Price: Units Sold at Maximum Fair Price
The Act establishes the Medicare Drug Price Negotiation Program
(the ``Negotiation Program'') to negotiate a maximum fair price (MFP)
\106\ for certain high expenditure, single source drugs payable under
Medicare Part B and covered under Part D (each, a ``selected drug'').
For the initial price applicability year 2026, CMS reached agreement on
a negotiated price for all 10 selected drugs covered under Part D.
Then, for initial price applicability year 2027, CMS selected an
additional 15 drugs covered under Part D. For the third year of the
Negotiation Program, initial price applicability year 2028, CMS will
select for negotiation up to 15 high expenditure, single source drugs
payable under Part B and/or covered under Part D.
---------------------------------------------------------------------------
\106\ Defined at section 1191(c)(3) of the Act.
---------------------------------------------------------------------------
Beginning in initial price applicability year 2028, for selected
drugs payable under Part B, section 1847A(b)(1)(B) of the Act sets the
Medicare Part B payment limit during the price applicability period as
106 percent of MFP. Payment limits are published on the ASP drug
pricing file, which is updated quarterly. For selected drugs with a
negotiated price for initial price applicability year 2026 and 2027
that have utilization under Medicare Part B, we clarify that the Part B
payment limit will not be based on the MFP unless it is selected for
renegotiation, pursuant to section 1194(f)(3) of the Act and as
discussed in section 130.2 of the Medicare Drug Price Negotiation
Program: Draft Guidance, Implementation of sections 1191 through 1198
of the Act for Initial Price Applicability Year 2028 and Manufacturer
Effectuation of the Maximum Fair Price in 2026, 2027, and 2028; \107\
and there is an agreed-upon renegotiated MFP.
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\107\ See: https://www.cms.gov/files/document/ipay-2028-draft-guidance.pdf.
---------------------------------------------------------------------------
Manufacturers of drugs payable under Part B are required to report
the manufacturer's ASP to CMS each quarter as described in sections
1927(b)(3) and 1847A(f) of the Act, even when a drug is a selected drug
with an MFP, including a renegotiated MFP. The statute directs that the
manufacturer's ASP include sales to all purchasers in the United States
(section 1847A(c)(1) of the Act) with two exempted categories of sales:
(1) sales exempt from best price under section 1927(c)(1)(C)(i) of the
Act; and (2) sales that are merely nominal in
[[Page 32546]]
amount as applied for purposes of section 1927(c)(1)(C)(ii)(III) of the
Act, as limited by section 1927(c)(1)(D) of the Act. Units of drugs
sold at MFP do not fall in either of those categories. In addition,
units sold at MFP are expressly included in the determination of best
price, as stated in section 1927(c)(1)(C)(ii)(V) of the Act. Therefore,
since the statutory language does not expressly or implicitly exempt
units of Medicare Part B or Part D MFP sales from the calculation of
the manufacturer's ASP, we clarify in this proposed rule that units of
selected drugs sold at MFP are included in the calculation of the
manufacturer's ASP described in section 1847A(c) of the Act effective
January 1, 2026.
The file used for publishing payment limits for drugs covered under
Part B is usually referred to as the ``ASP drug pricing file'' likely
because most drugs listed on the file have a payment limit based on the
ASP (usually 106 percent of ASP). However, the file also contains the
payment limits based on other pricing metrics. For example, several
provisions in section 1847A of the Act require that the payment limit
be based on a pricing metric other than ASP under specific
circumstances, including the following:
When the Wholesale acquisition cost (WAC) is less than ASP
for a single source drug or biological (section 1847A(b)(4) of the
Act);
When ASP exceeds the widely available market price (WAMP)
or average manufacturer price (AMP) (section 1847A(d) of the Act); and
For a selected drug, 106 percent of MFP (section
1847A(b)(1) of the Act).
In such circumstances, only the actual payment limit is published
on the pricing file (and no ASP information is displayed).
4. Autologous Cell-Based Immunotherapy and Gene Therapy Payment
a. Background
Medicare Part B covers many cellular immunotherapies and gene
therapies that are FDA-approved under a biologics license application
(BLA) as incident to drugs and biologicals under section 1861(s)(2) of
the Act, which are paid under section 1847A of the Act (typically, at
ASP plus 6 percent). Cell-based autologous therapies are a particular
subset, which require cells to be collected from the patient, altered
to create the intended therapy, and then administered to the same
patient for treatment of a condition. These steps generally include
cell collection from the patient via apheresis (including
leukapheresis), surgical removal, biopsies or other means, the cells
are immediately transported at very low temperatures to a manufacturing
site for genetic engineering and/or other steps (for example,
activation, cell expansion, and/or quality testing). After the
manufacturing steps are complete, the final product is transported back
to the healthcare provider or treatment facility to be administered to
the patient.
For example, for Chimeric Antigen Receptor (CAR) T-cell therapy, T-
cells are collected from the patient via leukapheresis and genetically
engineered to express a chimeric antigen receptor that will bind to a
certain protein on a patient's cancerous cells. The CAR T-cells are
then administered to the same patient to attack certain cancerous
cells. For other autologous cell-based therapy, the preparatory and
manufacturing steps follow a similar general process.
Many studies show that the manufacturing steps for these therapies
have a very high cost of goods sold (COGS), including very high
proportion of labor costs in manufacturing, which ultimately leads to a
high final cost of the therapy.108 109 Some also note that
the acquisition of raw materials, including tissue procurement, and
quality-related activities are other top contributors to the COGS for
autologous cell-based therapies. As technologies advance, there has
been continued research to scale cell-based therapies, including a
possible shift to allogeneic cell therapy, in which cell collection
would be from healthy donors or stem cells. Manufacturing allogenic
cell-based therapy would allow the therapy to be ready ahead of time
instead of the multiple-week wait time between cell collection and
administration of the treatment for allogeneic
therapies.110 111 112 Throughout research and discussions of
cell-based therapies, tissue procurement is a key consideration in the
discussion of the COGS. This further distinguishes all types of tissue
procurement, whether it be for allogenic or autologous therapies, are
part of the COGS and part of the manufacturing process for the
products.
---------------------------------------------------------------------------
\108\ Yonatan Y. Lipsitz, William D. Milligan, Ian Fitzpatrick,
et al, A roadmap for cost-of-goods planning to guide economic
production of cell therapy products, Cytotherapy,Volume 19, Issue
12, 2017, Pages 1383-1391.
\109\ Brian Canter, Sabine Sussman, Stephen Colvill, Nitzan
Arad, Elizabeth Staton, Arti Rai, Introducing biosimilar competition
for cell and gene therapy products, Journal of Law and the
Biosciences, Volume 11, Issue 2, July-December 2024, lsae015,
https://doi.org/10.1093/jlb/lsae015.
\110\ Caldwell KJ, Gottschalk S, Talleur AC. Allogeneic CAR Cell
Therapy-More Than a Pipe Dream. Front Immunol. 2021 Jan 8;11:618427.
doi: 10.3389/fimmu.2020.618427. PMID: 33488631; PMCID: PMC7821739.
\111\ Abbasalizadeh, S., Pakzad, M., Cabral, J.M.S., &
Baharvand, H. (2017). Allogeneic cell therapy manufacturing: process
development technologies and facility design options. Expert Opinion
on Biological Therapy, 17(10), 1201-1219. https://doi.org/10.1080/14712598.2017.1354982.
\112\ Pigeau GM, Csaszar E, Dulgar-Tulloch A. Commercial Scale
Manufacturing of Allogeneic Cell Therapy. Front Med (Lausanne). 2018
Aug 22;5:233. doi: 10.3389/fmed.2018.00233. PMID: 30186836; PMCID:
PMC6113399.
---------------------------------------------------------------------------
As technologies for autologous cell-based immunotherapies and gene
therapies continue to advance, we aim for payment policies amongst
these therapies to be consistent. Therefore, in this proposed rule, we
are proposing policies for how Medicare pays for the manufacturing
steps across all types of autologous cell-based immunotherapies and
gene therapies and proposing how these steps should be considered by
manufacturers when submitting ASP data to CMS.
b. Payment
Medicare payment for the manufacturing steps to CAR T-cell
therapies have previously been discussed in rulemaking, specifically in
the CY 2019, 2020, and 2021 Medicare hospital Outpatient Prospective
Payment System (OPPS) and Ambulatory Surgical Center (ASC) payment
system final rules and the CY 2025 Physician Fee Schedule (PFS) final
rule. In the 2019 OPPS/ASC final rule (83 FR 58904 through 58908), we
finalized policies for payment of four Level III CPT codes (0537T
through 0540T). We finalized that CPT codes describing (1) harvesting
of blood-derived T lymphocytes, (2) preparation of T lymphocytes for
transportation, cryopreservation, and storage, and (3) preparation of
the CAR T-cell therapy for administration are not payable under OPPS.
We stated that these codes describe various steps required to collect
and prepare the genetically modified T-cells, and Medicare does not
generally pay separately for each step used to manufacture a drug or
biological. We noted that the billing and payment codes for the CAR T-
cell therapies include leukapheresis and dose preparation procedures
because these services are included in the manufacturing of these
biologicals. In that final rule, we also finalized to pay separately
for the Level III CPT code describing the administration service for
CAR T-cell therapy. This policy was reiterated in the CY 2020 and 2021
OPPS/ASC final rules (84 FR 61231 through 61234 and 85 FR 85949 through
85951, respectively).
[[Page 32547]]
In September 2023, the CPT Editorial Panel deleted four Level III
codes (0537T through 0540T) and created four new Level I codes (38225
through 38228) that describe only the steps of the complex CAR-T
Therapy process performed and supervised by physicians: CPT code 38225
(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); 38226 (Chimeric antigen receptor T-
cell (CAR-T) therapy; preparation of blood-derived T lymphocytes for
transportation (e.g., cryopreservation, storage)); 38227 (Chimeric
antigen receptor T-cell (CAR-T) therapy; receipt and preparation of
CAR-T cells for administration); 38228 (Chimeric antigen receptor T-
cell (CAR-T) therapy; CAR-T cell administration, autologous). In the CY
2025 PFS final rule (89 FR 97779 through 97780), we finalized the
policy to continue to bundle payment under the PFS for CAR-T services
described under CPT codes 38225, 38226, and 38227. We stated that
bundling payment is appropriate for these codes to align with OPPS
policies to not pay separately for each step used to manufacture a drug
or biological. In that final rule we also finalized to pay separately
for CPT code 38228 (the service of CAR T-cell therapy administration),
which aligns with OPPS policy.
To date, payment for procedures that are required for manufacturing
other autologous cell-based immunotherapies and gene therapies (that
are not CAR T-cell therapies) have not been explicitly addressed. As
discussed in the background section above, the tissue procurement step
for all autologous cell-based therapies is a pivotal part of the
manufacturing process and a key component of the overall cost of the
product, that is, COGS. In addition, if certain therapies could be
scaled in a way that they could be allogenic in nature, we see that the
tissue procurement step would even more clearly be considered a
manufacturing step.
Therefore, in this proposed rule, we propose that preparatory
procedures for tissue procurement required for manufacturing an
autologous cell-based immunotherapy or gene therapy be included in the
payment of the product itself. This proposal continues the current
payment policies for CAR T-cell therapies as discussed earlier in this
section and extends the same payment policy to other autologous cell-
based therapies. In our evaluation of each therapy, there are similar
sequences of steps as we described in the background section.
Consistent with previous rulemaking, we propose that Medicare not pay
separately for each step used to manufacture an autologous cell-based
immunotherapy or gene therapy. In other words, Medicare does not pay
separately for the collection of raw materials or labor associated with
the collection of raw materials for a drug or biological that are
essentially part of the COGS. Payment for the raw materials and any
labor associated with collection of the raw materials is included in
the payment of the drug or biological itself, using the billing and
payment code for the product.
We solicit comments on the proposal to continue this policy for CAR
T-cell therapies and extension of the policy to other autologous cell-
based immunotherapy or gene therapies.
c. Average Sales Price
Payment limit calculations for drugs payable under Part B are done
on a quarterly basis using the manufacturer's ASP (as defined in Sec.
414.902) using methodology in section 1847A of the Act. Manufacturers
are required to report ASP data to CMS under sections 1847A(f)(2) and
1927(b)(3) of the Act. Manufacturers are instructed to calculate the
manufacturer's ASP in accordance with section 1847A(c) of the Act and
Sec. 414.804(a). To date, we have not addressed how manufacturers of
autologous cell-based immunotherapy or gene therapy should account for
the procedures for the collection of cells used to manufacture the
product into the calculation of the manufacturer's ASP.
As discussed in section III.A.3.a. of this proposed rule, the COGS
and manufacturing process for an autologous cell-based immunotherapy or
gene therapy include tissue procurement (that is, the collection of
cells from the patient). Consistent with the proposal in the previous
section that preparatory procedures required for manufacturing an
autologous cell-based immunotherapy or gene therapy be included in the
payment of the product itself, we also propose that, beginning January
1, 2026 (that is, data reflecting sales beginning on that date), any
preparatory procedures for tissue procurement required for
manufacturing an autologous cell-based immunotherapy or gene therapy
that are paid by the manufacturer be included in the calculation of the
manufacturer's ASP. We also propose that any payment by the
manufacturer to an entity for tissue procurement is not considered a
bona fide service fee for the purposes of calculating the
manufacturer's ASP since this is an integral part of the manufacturing
process for autologous cell-based immunotherapy or gene therapy and
should be included in the price of the product.
We solicit comment on this proposal.
d. Summary
In summary, we propose that preparatory procedures for tissue
procurement required for manufacturing an autologous cell-based
immunotherapy or gene therapy be included in the payment of the product
itself and that, beginning January 1, 2026, any preparatory procedures
for tissue procurement required for manufacturing an autologous cell-
based immunotherapy or gene therapy that were paid for by the
manufacturer be included in the calculation of the manufacturer's ASP.
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 that is
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
[[Page 32548]]
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 per visit. As of April 1,
2021, all RHCs are subject to statutory upper payment limits determined
in accordance with section 1833(f) of the Act, as amended by section
130 of the Consolidated Appropriations Act, 2021 (Pub. L. 116-260).
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 initially designed
to reflect the cost of all services and supplies that an RHC or FQHC
furnishes to a patient in a single day. These nearly all-inclusive
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, we rebased and revised the 2017-based FQHC
market basket to reflect a 2022 base year (89 FR 98023 through 98032).
2. Payment for Care Coordination Services
a. Background
In the last several years of rulemaking, we have expanded the scope
of care coordination services (formerly referred to as care management
services) that are billable using HCPCS code G0511. More recently, in
the CY 2025 PFS final rule, we unbundled the individual HCPCS codes
that make up G0511 (89 FR 97999 through 98000). We have also 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 to independently recognize and pay for these
important services. As stated in the CY 2016 PFS Final Rule (80 FR
71080 through 71088), 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. We noted that payment for office visits may not reflect
all the services and resources required to furnish comprehensive,
coordinated care management for certain categories of beneficiaries,
such as those who are returning to a community setting following
discharge from a hospital or skilled nursing facility (SNF) stay.
Over the last decade, we have updated RHC and FQHC 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 a
result, we reaffirmed our support of primary care and recognized care
management as one of the critical components of primary care by
implementing significant changes aimed at better capturing the
resources required for care management services, including chronic care
management (CCM), principal care management (PCM), general behavior
health integration (BHI), chronic pain management (CPM), transitional
care management (TCM), remote physiologic monitoring (RPM), remote
therapeutic monitoring (RTM), community health integration (CHI),
principal illness navigation (PIN), PIN-peer support services and
Advanced Primary Care Management (APCM). For RHCs and FQHCs, we
established payment for these suites of care coordination services
outside of the RHC AIR and FQHC PPS. That is, payment is made in
addition to the otherwise billable visit.
In the CY 2025 PFS final rule (89 FR 97870 through 97874), we
discussed how we established coding and payment under the PFS for a
newly defined set of APCM services described and defined by three new
HCPCS G-codes. This new coding reflects the recognized effectiveness
and growing adoption of the advanced primary care approach to care. It
also encompasses a broader range of services and simplifies the billing
and documentation requirements, as compared to existing care management
codes. The finalized coding for APCM incorporated 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 incorporated 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. Therefore, to allow RHCs and FQHCs the ability to simplify
the billing and documentation requirements associated with furnishing
APCM services we finalized in the CY 2025 PFS final rule to allow RHCs
and FQHCs to bill for these services and receive separate payment.
Further, 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. In the CY 2025 final rule, we finalized and adopted the three
new APCM codes G0556, G0557, and G0558.
RHCs and FQHCs are required to use the more specific coding, that
is, the three HCPCS G-codes listed above when furnishing APCM. These
services are paid in addition to the otherwise billable visit under the
RHC AIR methodology or FQHC PPS because we believe that they are
similar to the other care coordination services, such as, CCM, PCM, and
RPM. That is, APCM involves non-face to-face care coordination of which
the costs associated with these services are not captured in the RHC
AIR or FQHC PPS rate. Similarly to the care coordination services,
payment for APCM is based on the PFS national non-facility rate. It is
important to note that if RHCs and FQHCs furnish APCM services, the
HCPCS codes for APCM are per calendar month bundles. Consequently, if
the RHC/FQHC furnishes APCM then they would not bill for certain other
individual care coordination services. For further discussion on
duplicative services and concurrent billing restrictions regarding APCM
policies, please refer to the CY 2025 PFS final rule (89 FR 97710).
[[Page 32549]]
b. Integrating Behavioral Health Into Advanced Primary Care Management
(APCM)
In the CY 2018 PFS final rule, we established requirements and
separate payment for general Behavioral Health Integration (BHI) and
Psychiatric Collaborative Care Model (CoCM) services furnished in RHCs
and FQHCs (82 FR 53169 through 53180). General BHI and Psychiatric CoCM
services are based on a model of behavioral health integration that
enhances usual primary care by adding two key services to the primary
care team: care management support for patients receiving behavioral
health treatment and regular psychiatric inter-specialty consultation.
In the CY 2018 PFS final rule, we also initiated the use of HCPCS codes
G0511 and G0512 to pay for general care coordination services and CoCM
services, respectively.
As discussed in section II.G.1. of this proposed rule, we recognize
that patients with chronic health conditions are ``more likely to have
related behavioral health concerns and find it easier to improve
chronic conditions when these concerns are also addressed.'' \113\
Integrating behavioral health with primary care has been shown to
improve outcomes like reduced depression severity, and enhancing
patient's experience of care. \114\ We explain that in response to
comments received for CY 2025 rulemaking, for services paid under the
PFS, we are proposing to create optional add-on codes for APCM services
that would facilitate providing complementary BHI services.
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\113\ https://integrationacademy.ahrq.gov/about/integrated-
behavioral-
health#:~:text=Integrated%20behavioral%20health%20offers%20many,these
%20concerns%20are%20also%20addressed.
\114\ Balasubramanian, Bijal, Deborah Cohen, Katelyn Jetelina,
Miriam Dickinson, Melinda Davis, Rose Gunn, Kris Gowen, Frank DeGruy
3rd, Benjamin Miller, Larry Green. ``Outcomes of Integrated
Behavioral Health with Primary Care.'' J Am Board Fam Med. 2017 Mar-
Apr;30(2):130-139.doi: 10.3122/jabfm.2017.02.160234.
---------------------------------------------------------------------------
As discussed previously in this section, we adopted the coding for
the defined set of APCM services described and defined by HCPCS codes
G0556, G0557, and G0558 to allow RHCs and FQHCs the ability to simplify
the billing and documentation requirements associated with furnishing
APCM services (89 FR 98010 through 98012). In addition, and similarly
to the discussion in section II.G of this proposed rule, since RHCs and
FQHCs that fulfill the requirements to bill for APCM services must
comply with requirements that ensure the integrity of the services
provided, we believe that these settings should also be able to provide
BHI and CoCM with simpler billing and documentation requirements.
Therefore, for CY 2026, in alignment with the PFS and goals associated
with APCM services, we are proposing to adopt the add-on codes for APCM
that would facilitate billing for BHI and CoCM services when RHCs and
FQHCs are providing advanced primary care. We believe allowing for the
use of these add-on codes would encourage RHCs and FQHCs to provide
complementary BHI services, thereby improving access to BHI and CoCM
for primary care patients in the RHC and FQHC settings. For further
discussion regarding the optional add-on codes, please see section
II.G.2 of this proposed rule.
In the CY 2025 PFS final rule (89 FR 98010), commenters suggested
that we consider unbundling HCPCS code G0512, similarly to what we did
with HCPCS code G0511. That is, unbundle the services that comprise
HCPCS code G0512 and permit billing of HCPCS codes 99492, 99493, and
99494. Commenters explained that allowing RHCs and FQHCs to report the
dedicated CPT codes would support and encourage the adoption of CoCM in
these settings. In addition, since we are proposing use of add-on codes
for APCM services to facilitate payment of BHI and CoCM services when
they are furnished by RHCs and FQHCs providing advanced primary care
services, we believe that we would also need to unbundle HCPCS code
G0512 to effectuate that policy. RHCs and FQHCs that are furnishing BHI
and CoCM as advanced primary care services would not be able to bill
for certain other individual CPT codes, such as, 99492, 99493, and
99484.
Therefore, we are proposing to require RHCs and FQHCs to report the
individual codes that make up the CoCM HCPCS code, G0512 beginning
January 1, 2026. Similar to what was finalized in the CY 2025 PFS final
rule (89 FR 98000 through 98010) for the general care management HCPCS
code G0511, HCPCS code G0512 would no longer be payable when billed by
RHCs and FQHCs; instead, RHCs and FQHCs will be required to bill the
individual CPT and HCPCS codes that make up HCPCS G0512. The current
list of base codes and add-on codes that make up G0512 are listed in
Table 34, titled ``Psychiatric Collaborative Care Model HCPCS Codes and
Descriptors.'' Payment for these services will be based on 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
are proposing to revise Sec. 405.2464(c) to reflect our proposal on
payment of CoCM services for RHCs and FQHCs.
BILLING CODE 4120-01-P
[[Page 32550]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.104
[[Page 32551]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.105
BILLING CODE 4120-01-C
c. Payment for Communication Technology-Based Services (CTBS) and
Remote Evaluation Services--HCPCS Code G0071
In the CY 2019 PFS final rule (83 FR 59683 through 59688), we
established requirements and separate payment for certain CTBS and
remote evaluation services in RHCs and FQHCs. Effective January 1,
2019, RHCs and FQHCs are paid for HCPCS code G0071 (Virtual
Communication Services), when HCPCS code G0071 is on an RHC or FQHC
claim, either alone or with other payable services, and at least 5
minutes of communication technology-based or remote evaluation services
are furnished by an RHC or FQHC practitioner to a patient who has had
an RHC or FQHC billable visit within the previous year, and the medical
discussion or remote evaluation is for a condition not related to an
RHC or FQHC service provided within the previous 7 days, and does not
lead to an RHC or FQHC visit within the next 24 hours or at the soonest
available appointment. At that time, HCPCS code G0071 comprised
individual HCPCS codes G2012 (CTBS) and G2010 (remote evaluation
services). For respective CTBS code descriptors, please refer to Table
35 in this section. The payment rate for HCPCS G0071 was set at the
average of the PFS national non-facility payment rates for HCPCS code
G2012 and HCPCS code G2010 for remote evaluation services.
(1) Updates to CTBS and Remote Evaluation Services Under the PFS
In the CY 2021 PFS final rule (85 FR 84532 through 84533), for
practitioners billing under the PFS, we discuss additional policies as
they relate to CTBS services. One of which was the establishment of
HCPCS code G2250, which allows billing of CTBS by certain non-physician
practitioners (NPPs), consistent with the scope of these practitioners'
benefit categories, who cannot independently bill for evaluation and
management (E/M) services. At the time of the CY 2021 PFS rulemaking we
did not address the applicability of
[[Page 32552]]
G2250 for RHC and FQHC purposes. However, we acknowledge that the code
descriptor for HCPCS code G2250 mirrors that of the existing HCPCS code
G2010 in that both codes describe the remote assessment of recorded
video and/or images submitted by an established patient (for example,
store and forward), including interpretation with follow-up with the
patient within 24 business hours, not originating from a related
service provided within the previous 7 days nor leading to a service or
procedure within the next 24 hours or soonest available appointment.
Since HCPCS code G2250 describes remote evaluation services similarly
to HCPCS code G2010 and certain non-physician practitioners are
recognized as RHC and FQHC practitioners, we propose to consider HCPCS
code G2250 as billable for separate payment when this service is
furnished in an RHC or FQHC. Please see below for more detail on the
proposals for CY 2026.
In CY 2025 PFS final rule (89 FR 97791 through 97794), for
practitioners billing under the PFS, we discuss how the CPT Editorial
Panel established new CPT code 98016 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). We stated that the code descriptor for CPT code 98016 mirrored
the existing HCPCS code G2012, which is described as a brief
communication technology-based service, for example, 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 to 10 minutes of
medical discussion). We further stated that given the similarity
between CPT code 98016 and HCPCS code G2012, we finalized the
replacement of HCPCS code G2012 with CPT 98016. That is, HCPCS code
G2012 was terminated effective December 31, 2024. We inadvertently did
not discuss the applicability of this code termination to RHCs and
FQHCs; however, given our alignment with the PFS, beginning January 1,
2025 for HCPCS code G0071, CPT code 98016 was used for purposes of
computing the payment rate.
(2) Proposal for CY 2026 for CTBS and Remote Evaluation Services
As we stated previously in section III.B.2.a. of this proposed
rule, APCM includes elements of CTBS and remote evaluation services,
however in the CY 2025 PFS final rule, we did not address how there are
potential duplicative services with APCM and these services for RHCs
and FQHCs (89 FR 98010 through 98012). Similarly with unbundling of
G0512, we believe that we would also need to unbundle HCPCS code G0071
to better effectuate the payment policy for APCM. RHCs and FQHCs that
are furnishing CTBS or remote evaluation services as advanced primary
care services would not be able to bill for certain other individual
CPT codes, such as, G2010, G2250, and 98016. Therefore, we are
proposing to require RHCs and FQHCs to report the individual codes that
make up HCPCS code G0071 beginning January 1, 2026. Payment for these
services will be based on 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 are proposing to revise
Sec. 405.2464(e) to reflect our proposal for payment of CTBS and
remote evaluation services for RHCs and FQHCs.
BILLING CODE 4120-01-P
[[Page 32553]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.106
[[Page 32554]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.107
BILLING CODE 4120-01-C
d. Aligning With the PFS for Care Coordination Services
(1) Background
Under the PFS, certain care management/coordination services are
categorized as designated care management services and assigned general
supervision for purposes of ``incident to'' billing. As we discuss in
the CY 2017 PFS final rule (81 FR 80238), generally, we do not believe
it is clinically necessary for the individuals on the team who provide
these services other than the treating practitioner (namely, clinical
staff) to have the treating practitioner immediately available to them
at all times, as would be required under a higher level of supervision.
We also discussed how the regulations under Sec. 410.26(b), at that
time, provided for an exception to assign general supervision to CCM
services (and similarly, for the non-face-to-face portion of TCM
services), because these are generally non-face-to-face care
management/care coordination services that would commonly be provided
by clinical staff when the billing practitioner (who is also the
supervising practitioner) is not physically present; and the CPT codes
comprise solely (or to a significant degree) non-face-to-face services
provided by clinical staff (81 FR 80255).
For practitioners billing under the PFS, in an effort to better
define general supervision and to assign general supervision not only
to CCM services and the non-face-to-face portion of TCM services, but
also to the then proposed codes., we amended Sec. Sec. 410.26(a)(3)
and 410.26(b). We amended Sec. 410.26(a)(3) to better describe general
supervision in the context of these services, and amended Sec.
410.26(b) to assign general supervision to ``designated care management
services'', stating that we will designate such services through notice
and comment rulemaking (81 FR 80255 through 80256). We state at Sec.
410.26(b)(5) that designated care management services can be furnished
under general supervision of the physician (or other practitioner) when
these services or supplies are provided incident to the services of a
physician (or other practitioner). The physician (or other
practitioner) supervising the auxiliary personnel need not be the same
physician (or other practitioner) who is treating the patient more
broadly. However, only the supervising physician (or other
practitioner) may bill Medicare for incident to services.
Since CY 2017, when new care management/coordination services are
proposed under the PFS, we also propose to add the new codes, when
applicable, to the list of designated care management services for
which we allow general supervision. Each year along with the proposed
rule and the final rule we have published the codes for designated care
management services assigned general supervision as supporting
documentation. For example, for the CY 2025 PFS final rule, the file is
titled ``CY 2025 Final Rule List of Designated Care Management
Services.''
(2) RHC and FQHC Care Coordination Services
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 behavioral health conditions. Care coordination services
are typically non-face-to-face services that do not require the skill
level of an RHC or FQHC practitioner. 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.
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 (80 FR 71081). Therefore, we have proposed
payment policies for RHCs and FQHCs that complement the new services
for care coordination established under the PFS to align use of the RHC
and FQHC resources for those services with a separate payment.
Over the last decade, the number of new care coordination services
established under the PFS has increased. As these services are
proposed, we review and evaluate the new care coordination codes each
year as established under the PFS to determine their applicability to
RHCs and FQHCs. Our general process is to review the descriptor and
policies under the PFS for each new HCPCS code to determine if the
services are provided face-to-face with a practitioner or auxiliary
personnel with a patient, or have some face-to-face component with a
practitioner or auxiliary personnel or are strictly non-face-to-face;
that is, the care coordination services are being performed behind the
scenes and not in
[[Page 32555]]
the presence of the patient. If the new care coordination service met
the non-face-to-face criteria for RHCs and FQHCs, we would propose in
the proposed rule adding it to the list of care coordination services
that can be paid separately from a billable visit for RHCs and FQHCs.
For a detailed history on the payment for care coordination services,
please see section III.B.2. of the CY 2025 PFS final rule (89 FR 97998
through 98010).
The increase in frequency of this complementary rulemaking has
prompted us consider operational efficiencies that we believe could
result in more transparency and clarity in determining applicable care
coordination services for RHCs and FQHCs. In the CY 2025 PFS final rule
(89 FR 98012), we solicited comment on how we can improve the
transparency regarding which HCPCS codes are considered care
coordination services. Our goal is to classify care coordination
services established under the PFS that extend to RHCs and FQHCs. We
stated that we believe establishing a streamlined policy regarding
which services are separately paid for RHCs and FQHCs versus which
services are included as part of the visit creates transparency. In
addition, we believe establishing a policy where codes are communicated
and updated through subregulatory guidance such as manuals, website
pages, and change requests may be more efficient.
Only a few commenters responded to our request for information on
how we can improve transparency and predictability regarding which
HCPCS codes are considered care coordination services. These commenters
agreed with a streamlined approach and that communicating these updates
through sub-regulatory guidance would be more transparent and
efficient. Commenters stated that by distinguishing services that are
separately payable from those services included in a visit, we would
provide RHCs and FQHCs the clarity needed to accurately submit claims
for Medicare reimbursement.
In response to the comment solicitation, we propose adopting
services that are established and paid under the PFS and designated as
care management services as care coordination services for purposes of
separate payment for RHCs and FQHCs. We believe this proposal would
improve transparency and efficiency for RHCs and FQHCs since these
services and their designation as care management services go through
notice and comment rulemaking. In addition, as discussed under
Sec. Sec. 405.2413 and 405.2415, service and supplies furnished
incident to TCM and care coordination services can be furnished under
general supervision.
As discussed previously in this section, under the PFS, when new
care management/coordination services are proposed under the PFS, we
also propose to add the new codes, when applicable, to the list of
designated care management services for which we allow general
supervision. Each year, along with the proposed rule and the final
rule, we have published the codes for designated care management
services assigned general supervision as supporting documentation. For
example, for the CY 2025 PFS final rule, the file is titled ``CY 2025
Final Rule List of Designated Care Management Services.'' Under our
proposal, services designated as care management services and added to
the list of designated care management services could also be furnished
in RHCs and FQHCs and paid separately as described in Sec.
405.2464(c). Interested parties can look for opportunities to review
and comment on new services in the respective sections of the PFS
proposed and final rules. When services are finalized under the PFS, we
propose to update RHC and FQHC sub-regulatory guidance to reflect the
new care coordination services. We expect that this will occur, that
is, we would adopt any new care management services that are proposed
and finalized in the CY 2027 PFS rule and displayed on the list of the
designated care management services to be care coordination services
for RHCs and FQHCs.
Any new care coordination HCPCS codes will be paid separately from
the RHC AIR methodology or FQHC PPS at the national non-facility PFS
payment rate, either alone or with other payable visits. We note that
some of the current RHC and FQHC care coordination services are not
listed on the current list of designated care management service,
however, we will continue to make separate payments for these RHC and
FQHC care coordination services as they have been previously adopted
through notice and comment rulemaking. These services include CCM, PCM,
BHI, CPM, RPM, RTM, CHI, PIN and PIN-peer support services, and APCM.
We seek comment on whether the proposed process to align with the
care coordination services paid under the PFS as care management
services is sustainable moving forward or is there a more effective
approach for adopting new care coordination codes established under the
PFS as care management codes that would improve transparency and
efficiency for RHCs and FQHCs.
3. Services Using Telecommunications Technology
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 payment for RHC and FQHC services that are
provided as Medicare telehealth services 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 section 3704 of 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. We established payment rates for these services
furnished by RHCs and FQHCs based on the average PFS payment amount for
all Medicare telehealth services, weighted by volume in a Special
Edition Medicare Learning Network Article (SE20016). We subsequently
finalized a policy to extend use of this payment methodology for these
services through CY2025.
Section 303 of the Consolidated Appropriations Acs (CAA), 2022,
section 4113(c) of CAA, 2023, section 3207(c) of the American Relief
Act, 2025, and section 2207(c) of the Full-Year Continuing
Appropriations and Extensions Act, 2025 each subsequently extended
these flexibilities. Most recently, section 2207(c) of the Full-Year
Continuing Appropriations and Extensions Act, 2025 amended section
1834(m)(8) of the Act to continue payment for RHC and FQHC services as
Medicare telehealth services through September 30, 2025.
In addition to the statutory and associated rulemaking changes
noted previously, we established various flexibilities related to use
of telecommunications technology through rulemaking; for example, in
the CY 2022 PFS final rule with comment period (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
[[Page 32556]]
an RHC or FQHC practitioner, and 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 also revised Sec. 405.2469, to add a supplemental wraparound
payment to be made to the FQHC when a covered face-to-face (that is,
in-person) encounter or an encounter where services are furnished using
interactive, real-time, telecommunications technology or audio-only
interactions in cases where beneficiaries do not wish to use or do not
have access to devices that permit a two-way, audio/video interaction
for the purposes of diagnosis, evaluation or treatment of a mental
health disorder occurs between a MA enrollee and a practitioner as set
forth in Sec. 405.2463. We noted that these changes aligned with
similar changes for Medicare telehealth services for behavioral health
paid under the PFS. We also noted that this change would allow 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, in the CY 2022 PFS final rule (86 FR 65210 and 65211),
we revised the regulations at Sec. Sec. 405.2463 and 405.2469 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. In the CY 2025 PFS final
rule, we announced that we would 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. However, subsequent to the publication of the CY 2025
PFS final rule, section 2207(d) of the Full-Year Continuing
Appropriations and Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025)
legislated the in-person visit requirement for mental health visits
following September 30, 2025; we are implementing conforming regulatory
changes as discussed in section III.B.3.d. of this proposed rule.
As an additional regulatory flexibility, in the CY 2025 PFS final
rule (89 FR 98013 through 98017), we extended our policy to deem the
presence of the physician (or other practitioner) to include virtual
presence for the purposes of direct supervision through audio/video
real-time communications technology (excluding audio-only) through
December 31, 2025.
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 of this proposed rule 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, 2024, 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;
specifically, 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 had in regard to this policy. In the
CY 2025 final rule, (89 FR 98015) we finalized our policy 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 as such a policy
continues to support access and preserve workforce capacity.
(1) Proposal for CY 2026 Regarding Direct Supervision in RHCs/FQHCs
We have considered information from interested parties,
particularly in response to the CY 2024 PFS proposed rule where 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 regarding this policy.
As discussed in the CY 2025 final rule (89 FR 98014 through 98015),
in response to our proposal to extend this definition through the end
of 2025, commenters strongly supported the proposal to allow virtual
direct supervision through real-time audio/video communications
technology in RHCs and FQHCs, citing benefits such as reduced
inefficiencies, improved accessibility, better alignment with other
outpatient providers, and enhanced healthcare delivery without
compromising patient safety or program integrity.
[[Page 32557]]
Given the information presented by interested parties on safety and
effectiveness, we think direct supervision provided via two-way real
time audio-video telecommunications technology meets the statutory
requirements specific to RHCs and FQHCs at section 1861(aa)(2)(B) of
the Act regarding necessary physician supervision and guidance. We note
that in section II.D.2 of this proposed rule, we propose 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), for all services
described under Sec. 410.26, except for services that have global
surgery indicators of, 010, or 090. These indicators are defined in IOM
Pub. 100-04, chapter 23, section 50.6 as 010 ``Minor procedure with
preoperative relative values on the day of the procedure and
postoperative relative values during a 10-day postoperative period
included in the fee schedule amount; evaluation and management services
on the day of the procedure and during this 10-day postoperative period
generally not payable'' and 090 ``Major surgery with a 1-day
preoperative period and 90-day postoperative period included in the fee
schedule payment amount''. These are services that describe a surgical
service as well as its post-operative period of either 10 days, or 90
days, respectively.
In the interests of aligning our approach toward direct supervision
for RHCs and FQHCs with that discussed in section II.D.2. of this
proposed rule, we believe that we should permanently adopt this
flexibility in RHCs and FQHCs as it continues to support access and
preserve workforce capacity. However, as we discuss in IOM Pub. 100-02,
chapter 13, section 40.4, the Medicare global billing requirements do
not apply to RHCs and FQHCs, and global billing codes are not accepted
for RHC or FQHC billing or payment. Since services that have global
surgery indicators are not applicable in the RHC and FQHC settings, we
are proposing revisions at Sec. 405.2401(b) to define ``Direct
Supervision'' to mean that the physician (or other supervising
practitioner) must be present in the RHC or FQHC 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. The presence of the physician (or other
practitioner) includes virtual presence through audio/video real-time
communications technology (excluding audio-only).
c. Payment for Medical Visits Furnished via Telecommunications
Technology
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 health care providers, had to change how they
furnish care to meet the needs of their patients. RHCs and FQHCs
heavily utilized the temporary authority to be paid for their services
when provided as Medicare telehealth services during the PHE.
Eliminating flexibilities under which RHC and FQHC services have been
furnished to beneficiaries via telecommunications technology for over 5
years and resuming payment solely for in-person, face-to-face medical
visits, 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 telecommunications technology temporarily and to do
so through an approach that these settings are familiar with to
mitigate burden while we consider how to incorporate services furnished
through telecommunications technology on a more permanent basis.
For these reasons, in the event that Congress no longer authorizes
payment to be made for telehealth services furnished via a
telecommunications system by RHCs and FQHCs using a payment methodology
based upon payment rates that are similar to the national average
payment rates for comparable telehealth services under the PFS, we are
proposing, on a temporary basis, to facilitate payment for non-
behavioral health visits (hereafter referred to in this discussion as
``medical visit services'') furnished via telecommunications technology
using an approach that closely aligns with this methodology. Like the
methodology we used during and after the PHE, RHCs and FQHCs would
continue to bill for RHC and FQHC medical visit services furnished
using telecommunications technology, including services furnished using
audio-only communications technology, by reporting HCPCS code G2025 on
the claim. Since the costs associated with medical visit services
furnished via telecommunications technology are not included in the
calculations for the RHC AIR methodology and FQHC PPS, we believe,
similar to the methodology described in section 1834(m)(8) of the Act,
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 for these services billed using HCPCS
code G2025 based on the average amount for all Medicare telehealth
services paid under the PFS, weighted by volume for those services
reported under the PFS. We believe that continuing to use this weighted
average is appropriate during this interim period while we contemplate
permanent policies for these services since there is a wide range of
payment rates for the Medicare telehealth services paid under the PFS.
As discussed in the CY 2025 final rule (89 FR 98015 through 98016), 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 the proposed approach would preserve the
telecommunication technology flexibility under which RHC and FQHC
services have been furnished for over 5 years and would not impact
access to care for Medicare beneficiaries who currently benefit from
these services while CMS contemplates next steps. We note that this is
a stopgap approach to preserve access concerns temporarily. The same
rationale that led us to propose and finalize this policy last year
applies again now given that congress has again extended this
flexibility following publication of last year's final rule; we beleive
that our regulatory approach toward inclusion of these services
furnished via telecommunications technology will continue to apply
after the end of the statutory requirement that they be included. In
addition, we believe that continuing this payment methodology on a
temporary basis through December 31, 2026 would provide flexibility to
respond to any future statutory changes.
[[Page 32558]]
(1) 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 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 are soliciting 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. Proposal for Conforming Regulatory Text Changes
Subsequent to the publication of the CY 2025 PFS final rule,
section 2207(d) of the Full-Year Continuing Appropriations and
Extensions Act, 2025 amended sections 1834(y)(2) and 1834(o)(4)(B) of
the Act by extending the delay of in-person requirements for mental
health services furnished through telecommunication technology for RHCs
and FQHCs, respectively, through September 30, 2025. We are therefore
proposing to make conforming regulatory text changes based to the
applicable RHC and FQHC regulations in 42 CFR part 405, subpart X,
specifically, at Sec. 405.2463, ``What constitutes a visit,'' we
propose to amend paragraph (b)(3) and, at Sec. 405.2469 ``FQHC
supplemental payments,'' we propose to amend paragraph (d). Both of
these provisions would require that, beginning October 1, 2025, 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.
C. Ambulatory Specialty Model (ASM)
1. Overview of Proposed Ambulatory Specialty Model
a. Introduction
Under the authority of the Center for Medicare and Medicaid
Innovation (Innovation Center) in section 1115A(b) of the Act, we are
proposing the implementation and testing of the Ambulatory Specialty
Model (ASM), a new mandatory alternative payment model with 5
performance years that would begin January 1, 2027 and end December 31,
2031. ASM would test whether adjusting payment for specialists based on
their performance on targeted measures of quality, cost, care
coordination, and meaningful use of certified electronic health record
(EHR) technology (CEHRT) results in enhanced quality of care and
reduced costs through more effective upstream chronic condition
management.
To enhance quality of care and lower the costs of care, ASM would
be established as a mandatory model focused on the care provided by
select specialists to Medicare beneficiaries with the chronic
conditions of heart failure and low back pain. Under the model,
clinicians would be required to report a select set of measures and
activities clinically relevant to their specialty type and the chronic
condition of interest. These measures and activities would assess
quality, cost, interoperability, and care coordination practices, all
of which are necessary for effective upstream chronic condition
management. To incentivize improvements in quality and care
coordination, CMS would assess the clinician's performance on those
measures and activities relative to their peers, who are also
participants of the model and of a similar specialty type treating the
same chronic condition.
ASM falls within a larger framework of activities initiated by the
Innovation Center to focus on high-volume, high-cost chronic conditions
and direct engagement of specialists in value-based payment. The
Innovation Center recently announced its new strategy based on three
strategic pillars for improving the health of Americans and protecting
taxpayers: preventing disease through evidence-based practices,
empowering people with information to make better decisions, and
driving choice and competition.\115\
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\115\ CMS Innovation Center, CMS Innovation Center 2025 Strategy
to Make America Healthy Again, May 2025. https://www.cms.gov/
priorities/innovation/about/strategic-
direction#:~:text=Three%2DPronged%20Approach,served%20by%20the%20Inno
vation%20Center.
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In line with the updated Innovation Center principles, this
proposed rule proposes a new mandatory model that would improve
beneficiary and provider engagement, incentivize preventive care, and
increase financial accountability for certain specialists. The model
would build upon lessons learned from previous Innovation Center models
and the Merit-based Incentive Payment System (MIPS) under the Quality
Payment Program. We believe the model would answer the call to create a
more cohesive and efficient health system that enhances the quality of
care and reduces costs over time. To promote preventive care, the model
would incentivize specialists who are ASM participants to ensure that
their patients have a regular source of primary care and are screened
to help identify risks and early signs of chronic conditions. This
model would also seek to prevent deterioration of and complications
associated with established chronic conditions. To empower patients,
the model would promote direct accountability for quality. By featuring
patient-reported outcome measures in the proposed quality ASM
performance category, this model encourages patients to report their
improvement or decline in function, which directly impacts clinician
payment and further incentivizes clinicians to incorporate patient
voice and experience in clinical care decisions. We believe a focus on
[[Page 32559]]
patient-reported measures elevates patient voice, leading clinicians to
be more responsive to the patient's response to treatment, while also
addressing the significant spending that results from functional
impairment. These measures also provide a pathway for clinicians to
have conversations about non-medical, lifestyle-based interventions
with their patients. This proposed model is intent on removing the onus
from patients to act as the go-between among clinicians they see for
their care by incentivizing clinicians to coordinate care for their
patients more seamlessly. Patients would be able to focus on solutions
to their health, rather than resolving information and guidance they
have received from multiple clinicians.
Finally, the model would require the participation of individual
clinicians rather than organizations to encourage competition and
create a level playing field for solo and small practices. By
evaluating clinicians individually, ASM removes the unequal reporting
and scoring benefits that have been previously afforded to consolidated
health systems and group practices. This form of mandatory
participation would bring transparency, accountability, and
comparability at the clinician-level, helping to identify clinicians
within large, consolidated health systems or provider networks
providing low-value care.
Low-value care refers to services that: (1) may offer limited or no
clinical benefit to a patient; or (2) may present risks of harm that
outweigh the potential benefit. By requiring the participation of
individual clinicians, we believe this model would reduce spending that
represents low-value services and major cost-drivers for heart failure
and low back pain (for example, unnecessary imaging, surgeries,
hospital admissions). Ultimately, this model aims to drive competition
among similar specialists with a targeted assessment of their
performance relative to their peers in the treatment of a specific
chronic condition and protect taxpayers by reducing low-value services
by holding specialists accountable for the cost of services clinically
related to their role in managing care.
We have designed ASM with a focus on clinicians who commonly treat
patients in the ambulatory setting, develop longitudinal relationships
with patients, and co-manage beneficiaries with primary care
clinicians. In addition, we considered those who treat chronic
conditions that are likely to benefit from improved integration between
specialty and primary care to maximize opportunities for incentivizing
high-value care and tertiary prevention. Specifically, we propose to
focus the model on the chronic conditions of heart failure and low back
pain, as they have previously established episode-based cost measures
(EBCMs) specified for the MIPS cost performance category.
The EBCMs were developed with specialists and stakeholders through
an extensive, collaborative process that, by design, focused on
conditions with a large share of Medicare spending, a high number of
responsible clinicians, and opportunities for care improvement. Based
on recent estimates, heart failure and low back pain, in particular,
account for 3.5 and 2.7 percent total Medicare Part A and B
spending.\116\ These are significantly higher than other chronic
conditions with EBCMs, which account for less than one percent of
Medicare Part A and B spending, except for diabetes, which accounts for
4.2 percent of spending.\117\ In contrast, many Medicare beneficiaries
with type 2 diabetes are capably managed by primary care physicians as
the quarterback of their care with input from consulting specialists.
Consequently, we do not believe it would be an appropriate chronic
condition for this specialty care model.
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\116\ Quality Payment Program, 2025 Summary of Cost Measures,
December 2024. https://qpp-cm-prod-content.s3.amazonaws.com/uploads/3129/2025-mips-summary-cost-measures.pdf.
\117\ Ibid.
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ASM would be a mandatory model that begins on January 1, 2027 and
ends December, 31, 2033. There would be 5 performance years, beginning
January 1, 2027 and ending December 31, 2031. Final data submission of
measures and activities would be in CY 2032, with final model payment
adjustments in CY 2033.
To measure clinician performance in ASM, we would establish a
mandatory set of measures and activities for physicians that meet the
proposed ASM participant eligibility criteria described in section
III.C.2.c.(3). of this proposed rule. ASM aims to assess the
performance of ASM participants providing care for Medicare
beneficiaries with the targeted chronic conditions at the individual
clinician level. Specifically, ASM would test whether adjusting
Medicare Part B payments for covered professional services based on
measures of quality, cost, care coordination, and CEHRT results in
enhanced quality of care and reduced costs through more effective
upstream chronic condition management.
ASM would leverage components of the existing MIPS Value Pathway
(MVP) framework, as appropriate, to meaningfully engage specialists in
improving the quality of care for high-volume, high-cost chronic
conditions and better integrate specialists in primary care. MVPs are
one MIPS reporting option that provides a smaller set of measures to
choose from that are most relevant to a condition or specialty.
Currently, for MIPS, CMS assesses the performance of each MIPS eligible
clinician on measures and activities CMS has specified for a CY
performance period/MIPS payment year for four performance categories:
quality, cost, clinical practice improvement activities, and meaningful
use of CEHRT (referred to as ``Promoting Interoperability''). In
accordance with section 1848(q) of the Act, CMS calculates a composite
performance score (a ``final score'' as defined at Sec. 414.1305) from
0 to 100 points for each MIPS eligible clinician. Then, CMS compares
each MIPS eligible clinician's final score to the performance threshold
established in prior rulemaking for that CY performance period/MIPS
payment year to calculate the MIPS payment adjustment factor as
specified in section 1848(q)(6) of the Act. For the applicable MIPS
payment year, CMS would calculate and apply to each MIPS eligible
clinician: (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 each MIPS eligible clinician, CMS
accounts for scaling factor and budget neutrality requirements, as
further specified in section 1848(q)(6) of the Act.
By applying these budget neutrality and scaling factor
requirements, CMS's calculations of positive MIPS payment adjustment
factors for each MIPS eligible clinician are limited by CMS's
calculations of negative MIPS payment factors for each MIPS eligible
clinician. In other words, CMS's estimated amounts of positive MIPS
payment adjustment factors for MIPS eligible clinicians performing
above the performance threshold must be offset by CMS's estimated
amounts of negative MIPS payment adjustment factors for MIPS eligible
clinicians performing below the performance threshold. In MVPs,
however, clinicians still have flexibility to select which measures to
report. Under MIPS, a clinician's performance is assessed against all
MIPS clinicians, regardless of reporting
[[Page 32560]]
option, specialty type, or the services they provide.
As CMS discussed in a 2024 Request for Information (RFI) (89 FR
61596),\118\ we expect that a more targeted approach where clinicians
are evaluated: (1) on required reporting of a set of relevant
performance measures; 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. This targeted approach would include reporting or required
collection of patient-reported outcome measures that assess the change
in a beneficiary's functional status over the course of the episode,
ensuring clinicians prioritize the same goals as their patients.
Furthermore, equipped with more specialty-relevant performance
information, we expect clinicians would be more likely to invest
resources in pursuit of better outcomes and improved care coordination,
ultimately resulting in better care for patients. To test this more
targeted approach, this proposed mandatory model leverages the existing
MVP policies, deviating from MVP policies in specific ways, as
applicable.
---------------------------------------------------------------------------
\118\ Medicare and Medicaid Programs; CY 2025 Payment Policies
Under the Medicare 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.
---------------------------------------------------------------------------
First, unlike the voluntary measure and activity selection
permitted under the MVP reporting option, ASM would require clinicians
to report on a set of measures and activities clinically relevant to
their specialty type and the chronic condition. of interest. This would
ensure a more analogous comparison between clinicians. Second, while
clinicians reporting under MVPs are scored against the entire pool of
MIPS clinicians, ASM would assess performance against only those
clinicians treating the same chronic condition. Each clinician would
receive a performance score based on the measures and activities
included in the four ASM performance categories (which are based on the
MIPS performance categories)--quality, cost, improvement activities,
and Promoting Interoperability. In section III.C.2.d. of this proposed
rule, we describe the proposed requirements in the quality, cost,
improvement activities, and Promoting Interoperability ASM performance
categories.
Third, we would use a different approach, compared to MVPs, for
aggregating the ASM performance categories to calculate a final score
and determine the ASM payment adjustment. This approach would broaden
the distribution of final scores and increase the magnitude of payment
adjustments, which we believe would incentivize performance
improvements that would lead to more effective upstream chronic
condition management. We refer readers to the CY 2022 PFS final rule
for additional details on the MVP performance category weighting Sec.
414.1365(e). As described in section III.C.2.e. of this proposed rule,
we would focus on value and variation in clinician performance by
primarily measuring performance on quality and cost performance
categories for calculating the ASM final score. We also understand the
importance of the improvement activities and Promoting Interoperability
performance categories and would apply potential negative scoring
adjustments for non-reporting or poor performance. We are also
considering additional positive scoring adjustments for clinicians in
small practices participating in the model and for ASM participants
treating a large proportion of medically complex patients. We refer
readers to sections III.C.2.c., III.C.2.d., and III.C.2.e. of this
proposed rule for additional details on the proposed policies related
to ASM participant eligibility criteria, the quality, cost, improvement
activities, and Promoting Interoperability ASM performance categories,
and ASM final scoring calculations.
To ensure savings in the financial impacts for the model, ASM would
also retain a percentage of the payments rather than distributing all
funds as clinicians' payment adjustments. ASM participants would
receive neutral, negative, or positive payment adjustments on future
Medicare Part B payments for covered professional services based on
their performance during an ASM performance year. As is done under
MIPS, clinicians participating in ASM would continue to bill Medicare
under the traditional FFS system for services furnished to Medicare FFS
beneficiaries. MIPS eligibility criteria described under 42 CFR
414.1305 are not factored into the ASM participant eligibility criteria
described in section III.C.2.c.(3). of this proposed rule. However,
MIPS eligible clinicians participating in this model would be exempt
from MIPS reporting requirements for any ASM performance year that they
are included in ASM.
b. Background
Health care is becoming more fragmented as Medicare beneficiaries
are increasingly seeing a greater number of specialists on a more
regular basis. At the same time, the volume of primary care visits has
remained relatively constant.119 120 Primary care teams must
now coordinate with more specialists than ever before,\121\ despite
persistent barriers to specialist access for certain
patients.122 123 We believe there are opportunities to
improve coordination between specialists and primary care providers
(PCPs) and increase beneficiary engagement in care decisions,
particularly with respect to preventing the onset and progression of
disease.
---------------------------------------------------------------------------
\119\ 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.
\120\ Lori Timmins, PhD, Carol Urato, MA, Lisa M. Kern, MD, MPH,
Arkadipta Ghosh, PhD, Eugene Rich, MD. Primary Care Redesign and
Care Fragmentation Among Medicare Beneficiaries. The American
Journal of Managed Care, March 2022, Volume 28, Issue 3.
\121\ The CMS Innovation Center's strategy to support person-
centered, value-based specialty care. 2022. Retrieved from https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care.
\122\ McConnell KJ, Charlesworth CJ, Zhu JM, Meath THA, George
RM, Davis MM, Saha S, Kim H. Access to Primary, Mental Health, and
Specialty Care: A Comparison of Medicaid and Commercially Insured
Populations in Oregon. J Gen Intern Med. 2020 Jan;35(1):247-254.
doi: 10.1007/s11606-019-05439-z. Epub 2019 Oct 28. PMID: 31659659;
PMCID: PMC6957609.
\123\ Romaire MA, Haber SG, Wensky SG, McCall N. Primary care
and specialty providers: an assessment of continuity of care,
utilization, and expenditures. Med Care. 2014;52(12):1042-1049.
doi:10.1097/MLR.0000000000000246.
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Although the Innovation Center has tested models that address the
integration of primary and specialty care for chronic conditions that
may benefit from greater collaboration and create opportunities for
preventive care, these models have been largely focused on behaviors
and practice patterns in primary care.\124\ This proposed model test
elects to focus on the behaviors and practice patterns in specialty
care for those treating chronic conditions and would be the first
Innovation Center
[[Page 32561]]
model to use the MVP framework as the foundation for a model test.
---------------------------------------------------------------------------
\124\ See the evaluation reports of the Comprehensive Primary
Care Plus (CPC+) model, which ran from 2017 to 2021, https://www.cms.gov/priorities/innovation/innovation-models/comprehensive-primary-care-plus. See also the evaluation reports of the Primary
Care First (PCF) model, which began in 2021 and will end December
31, 2025, https://www.cms.gov/priorities/innovation/innovation-models/primary-care-first-model-options.
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We believe the MVP framework 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 utilize a cohesive set of measures and
activities focused on performance in rendering care for a particular
specialty or clinical condition. Second, we believe that meaningful
comparisons of performance combined with a payment methodology that
includes more significant Medicare Part B payment adjustments, would
encourage meaningful specialty care engagement with primary care
clinicians to both prevent and manage the onset of chronic conditions.
Third, we intend to test ASM's more targeted approach to performance
assessment, as described in the introduction section of this proposed
rule, so it may provide a foundation to potentially expand this
approach to other specialist cohorts treating other chronic conditions.
While there are 21 MVPs for the CY 2025 performance period/2027 MIPS
payment year spanning numerous specialties, CMS has a goal of creating
additional MVPs relevant to the practices of 80 percent of MIPS
eligible clinicians. The MVP reporting option, with its focused set of
measures and activities aligned around specific specialties or
conditions, provides a framework for applying ASM's targeted approach
to other specialist cohorts treating other chronic conditions. 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.
Using MVPs as a framework to test a chronic condition model, ASM
would increase the number of specialists in value-based care
arrangements and hold them accountable for ensuring beneficiaries have
a regular source of primary care. Through required improvement
activities and measures, the model would also encourage specialty care
providers to actively engage with both beneficiaries and PCPs to
improve care transitions and make certain their patients are receiving
preventive care, such as screening for obesity and depression. When
primary and specialty care providers collaborate across care settings,
together they can deliver accountable care that best meets patients'
needs and preferences.
2. Provisions of Proposed Ambulatory Specialty Model
a. Definitions
We propose at 42 CFR 512.705 to define certain terms for ASM. We
describe these proposed definitions in context throughout section
III.C.2 of this proposed rule. We propose to codify the definitions and
policies of ASM at 42 CFR part 512 subpart G (proposed Sec. 512.705
through Sec. 512.780). In addition, we propose that the definitions
contained in the standard provisions for mandatory Innovation Center
models at subpart A of part 512 would also apply to ASM, unless
expressly stated otherwise in the proposed policies set forth at Sec.
512.705 through Sec. 512.780. We seek comments on these proposed
definitions for ASM.
b. Proposed Length of Model Test
We propose at Sec. 512.705 to define the ``ASM test period'' as
the 7-year period from January 1, 2027, to December 31, 2033, that
includes all ASM performance years and ASM payment years as described
in Table 36. We propose at Sec. 512.705 to define ``ASM performance
year'' as a 12-month period beginning on January 1 and ending on
December 31 of each year during the first 5 calendar years of ASM test
period. We propose at Sec. 512.705 to define an ``ASM payment year''
as a calendar year in which CMS applies the ASM payment multiplier to
Medicare Part B payments based on the final score achieved by that ASM
participant for the ASM performance year 2 years prior.
Like MIPS, we propose that an ASM payment year occurs 2 calendar
years following the ASM performance year that determines the ASM
participant's final score that then determines their payment adjustment
factor applied in that ASM payment year. For instance, the CY 2027 ASM
performance year would correspond to the CY 2029 ASM payment year to
allow time for ASM participants to submit required data for each of the
ASM performance categories as described in section III.C.2.d of this
proposed rule and for CMS to score submitted data for the ASM
performance categories, calculate final scores, and determine payment
adjustments as discussed in sections III.C.2.d., III.C.2.e, and
III.C.2.f of proposed rule. Final data submission of measures and
activities would be in CY 2032, with final model payment adjustments in
CY 2033. This timeline aligns with MIPS in that those who report
traditional MIPS or 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 MIPS performance categories (see
Sec. Sec. 414.1305, 414.1320, 414.1365, and 414.1405(e)). We believe 5
ASM performance years followed by 5 ASM payment years would allow
sufficient time for ASM participants to invest in care delivery
transformation and for CMS to evaluate the impact of the model's
payment adjustments.
[[Page 32562]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.108
We propose an ASM start date of January 1, 2027. We alternatively
considered proposing an ASM start date as January 1, 2026, but given
the rulemaking process, an earlier start date would not have given ASM
participants enough time to prepare for participation in ASM.
We believe that the ASM test period of 7 years, as opposed to a
shorter duration, is necessary to obtain sufficient data to compute a
reliable impact estimate and to analyze the data from the Model to
determine the next steps regarding potential expansion or extension of
the Model. Further, we believe that a test period of 7 years is
necessary to address and mitigate any potential implementation issues
or unintended consequences. For a discussion of the proposed evaluation
approach, please see section III.C.2.l of this proposed rule.
We invite public comments on the proposed ASM test period of 7
years. We also seek comment on the proposed ASM start date of January
1, 2027.
c. Proposed ASM Participants
(1) Proposed Mandatory Participation
We believe that requiring clinicians to participate in the model
test is necessary to eliminate selection bias, yield generalizable
results, and ensure an evaluable comparison group. Voluntary
participation in Innovation Center models has demonstrated that those
electing to voluntarily participate are more likely to have the
infrastructure and experience to succeed under the model. Moreover, in
a voluntary model, when the opportunity for financial gain is reduced
or uncertain, participant attrition increases. We believe requiring
participation in ASM would prevent this type of selection bias.
Mandatory participation in ASM would also ensure a sufficient
volume of participants to produce a necessarily diverse, representative
evaluation of clinicians providing specialty care to Medicare
beneficiaries with heart failure or low back pain. We believe ASM could
highlight inefficient care utilization patterns and potentially inform
quality improvement and care coordination incentives for application in
the Quality Payment Program, the MVP reporting option, and future
Innovation Center models. Finally, mandatory participation would
generate a statistically robust test of ASM with results that are
reliable, generalizable, and able to support potential model expansion.
Therefore, we propose at Sec. 512.710(a)(1) that participation in ASM
would be mandatory for all clinicians who meet the ASM participant
eligibility criteria at Sec. 512.710(b).
Specifically--
2027 ASM performance year: ASM participants would be
measured for performance and exempted from MIPS participation, if
applicable, during CY 2027; report and be scored during CY 2028; and
receive payment adjustments for CY 2027 performance in CY 2029;
2028 performance year: ASM participants meeting ASM
participant eligibility criteria for the 2028 performance year would be
measured for performance and exempted from MIPS participation, if
applicable, during CY 2028; report and be scored during CY 2029; and
receive payment adjustments for CY 2028 performance in CY 2030;
2029 ASM performance year: ASM participants meeting ASM
participant eligibility criteria for the 2029 performance year would be
measured for performance and exempted from MIPS participation, if
applicable, during CY 2029; report and be scored during CY 2030; and
receive payment adjustments for CY 2029 performance in CY 2031;
2030 ASM performance year: ASM participants meeting ASM
participant eligibility criteria for the 2030 performance year would be
measured for performance and exempted from MIPS participation, if
applicable, during CY 2030; report and be scored during CY 2031; and
receive payment adjustments for CY 2030 performance in CY 2032; and
2031 ASM performance year: ASM participants meeting ASM
participant eligibility criteria for the 2031 performance year would be
measured for performance and exempted from MIPS participation, if
applicable, during CY 2031; report and be scored during CY 2032; and
receive payment adjustments for CY 2031 performance in CY 2033.
We propose at Sec. 512.710(a)(1) that once a clinician meets the
ASM participant eligibility criteria, they would be considered an ASM
participant for the duration of the model. We propose at Sec.
512.710(a)(2) that clinicians would be exempt from MIPS reporting for
any ASM performance year that they meet ASM participant eligibility
criteria and, therefore, must meet ASM model requirements. However, for
any model year that a previously selected ASM participant does not
continue to meet the ASM participant eligibility criteria for the
upcoming ASM performance year/ASM payment year, the ASM participant
would not be required to submit data in accordance with Sec. 512.720,
as proposed, would not be scored in accordance with Sec. 512.745, as
proposed, and would not receive an ASM payment adjustment in accordance
with Sec. 512.750. In addition, because the proposed Medicare waiver
at Sec. 512.775 only waives the requirements of section 1848(q) of the
Act, and its implementing
[[Page 32563]]
regulations for an ASM performance year that ASM participants meets the
ASM participant eligibility criteria, the ASM participant would be
required to satisfy any MIPS reporting obligations and would receive a
MIPS payment adjustment two years later, in accordance with current
regulations, for any performance year that they do not meet the ASM
participant eligibility criteria. Because ASM participants would
potentially be subject to MIPS for any ASM performance year that they
do not meet the ASM participant eligibility criteria, ASM payment
adjustments may be applied during an ASM payment year during which an
ASM participant is not actively participating in ASM and is instead
participating in MIPS.
We invite public comments on our proposal at Sec. 512.710(a) to
require mandatory participation in ASM, exempt ASM participants from
reporting under MIPS for only those years that they meet ASM
participant eligibility criteria.
(2) Proposed ASM Participants
We propose that certain clinicians who treat heart failure and low
back pain would be required to participate in ASM. We propose at Sec.
512.705 to define the term ``ASM participant'' to mean an individual
clinician who, for at least one ASM performance year, satisfies the ASM
participant eligibility criteria described in section III.C.2.c.(3). of
this proposed rule and has been selected for participation in the model
as described in section III.C.2.c.(5). of this proposed rule. For ASM
specifically, we propose at Sec. 512.705 to define ``clinician'' as
any ``eligible professional'' defined in section 1848(k)(3) of the Act,
as identified by a unique TIN and NPI combination. We propose at Sec.
512.705 to define ``ASM heart failure participant'' as an ASM
participant who meets the ASM participant eligibility criteria related
to heart failure and ``ASM low back pain participant'' as an ASM
participant who meets the ASM participant eligibility criteria related
to low back pain (discussed later in this section of this proposed
rule). We note that the definition of ``model participant'' contained
in Sec. 512.110 should be interpreted to include each ASM participant.
We propose to define an ``ASM targeted chronic condition'' at Sec.
512.705 as a medical condition that is a core focus of ASM; that is,
heart failure or low back pain. We propose to define an ``ASM cohort''
as a group of ASM participants who treat the same ASM targeted chronic
condition; specifically, we propose an ASM heart failure cohort and an
ASM back pain cohort for this model. We propose to define the ``ASM
heart failure cohort'' to be composed of all ASM heart failure
participants and the ``ASM low back pain cohort'' to be composed of all
ASM low back pain participants. We note that the proposed ASM cohorts
would not include nonphysician practitioners (NPP) because NPPs would
not meet the ASM participant eligibility criteria as proposed at Sec.
512.710(b), which states that only clinicians assigned one of the
specialty codes at Sec. 512.710(d) may be ASM participants. Medicare
does not currently assign specialty codes to NPPs; therefore, NPPs
would not satisfy this criterion.
We also considered defining an ASM participant as a group of
clinicians within a single practice, provided each clinician
individually meets the proposed ASM participant eligibility criteria.
However, the inclusion of a group of specialists would result in fewer
ASM participants overall and would add complexity to comparing
performance across the ASM performance categories and determining final
scores. We also believe that a group-based approach to ASM
participation may not reflect the variable arrangements of care teams,
as clinicians may also work outside the group, across multiple service
locations and teams. Under this alternative group-level scenario, we
would need to provide the ASM participant with a list of clinicians who
individually meet the ASM participant eligibility criteria for an
applicable ASM performance year. In this case, each eligible clinician
on an ASM participant's clinician list would be considered a downstream
participant in ASM, and the ASM participant would be required to
contractually bind all downstream participants to comply with all laws
pertaining to any patient-identifiable data requested from CMS and the
terms of any agreement with CMS, as a condition of receiving and
maintaining data from the ASM participant.
We also considered whether the ASM participant under this
alternative participant identification approach would be permitted to
add or remove clinicians during an ASM performance year. We believe the
addition of model policies and processes to account for individual
clinician changes would increase operational complexity and the
administrative burden of ASM participants if defined under this
alternative group-based definition.
We seek comments on our proposed definitions at Sec. 512.705. We
also seek comments on adopting an alternative group participation
policy and, if so, whether groups should be allowed to add or remove
clinicians during a performance year.
(a) ASM Heart Failure Cohort
We propose at Sec. 512.710(d)(1) for the ASM heart failure cohort
to only select clinicians who have been assigned a specialty code of
cardiology on the plurality of their Medicare Part B claims, provided
they meet all applicable ASM participant eligibility criteria under
Sec. 512.710(b) for an ASM performance year. We understand that other
clinicians may treat heart failure. However, only cardiologists would
be required to participate in the model. Cardiologists commonly provide
care to Medicare beneficiaries with heart failure and are well-
positioned to improve outcomes by ensuring patients are optimized on
guideline-directed medical therapy. We believe ASM would incentivize
cardiologists to work with a primary care team to engage beneficiaries
in addressing the root cause of their illness through lifestyle changes
and preventing acute episodes.
In addition to the cardiology specialty code, we considered
including clinicians identified by additional cardiac specialty codes,
as Medicare uses distinct specialty codes for cardiac
electrophysiology, intensive cardiac rehabilitation, cardiac surgery,
interventional cardiology, and advanced heart failure and transplant
cardiology. Depending on the etiology of heart failure, some
beneficiaries may receive care from interventional cardiologists and
cardiac electrophysiologists. However, as proceduralists, these
specialists do not commonly participate in the longitudinal management
of beneficiaries with heart failure and have limited ongoing
interactions with primary care.\125\ We also considered including
cardiologists who specialize in adult congenital heart disease and
advanced heart failure and transplant cardiology because these
subspecialists often take over as primary managers of care. However,
they do not generally co-manage patients or share responsibilities with
primary care. Furthermore, they treat a particularly complex patient
population, which makes comparing their performance to other
cardiologists difficult. For these reasons, we do not propose to
include clinicians with specialty codes other than cardiology as ASM
participants.
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\125\ Sokos G, Kido K, Panjrath G, et al. Multidisciplinary Care
in Heart Failure Services. J Card Fail. 2023;29(6):943-958.
doi:10.1016/j.cardfail.2023.02.011.
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We seek comment on our proposal at Sec. 512.710(d)(1) to only
include in the ASM heart failure cohort clinicians with
[[Page 32564]]
a cardiology specialty code on the plurality of their Medicare Part B
claims. We also seek comments on including subspecialist cardiology
codes in the ASM heart failure cohort.
(b) ASM Low Back Pain Cohort
We identified several nonsurgical and surgical specialties that
commonly manage, treat, and maintain long-term relationships with
patients with low back pain in the ambulatory setting. Both nonsurgical
and surgical specialists offer meaningful, conservative (that is, less
invasive) treatment options.\126\ However, some low back pain
treatments, including spinal fusion for the treatment of non-complex
low back pain, contribute to low-value care.\127\ For this reason, we
believe including the specialists who most commonly perform these
procedures is prudent for this model.
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\126\ Steinmetz A. Back pain treatment: a new perspective. Ther
Adv Musculoskelet Dis. 2022 Jul 4;14:1759720X221100293. doi:
10.1177/1759720X221100293. PMID: 35814351; PMCID: PMC9260567.
\127\ Buchbinder R, Underwood M, Hartvigsen J, Maher CG. The
Lancet Series call to action to reduce low value care for low back
pain: an update. Pain. 2020 Sep;161 Suppl 1(1):S57-S64. doi:
10.1097/j.pain.0000000000001869. PMID: 33090740; PMCID: PMC7434211.
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While surgical specialists are proceduralists, they are also
commonly involved in the longitudinal management of Medicare
beneficiaries with low back pain. Nevertheless, to ensure ASM would
meet its goal of comparing like participants, we examined whether it
would be appropriate to include nonsurgical and surgical specialists in
the same ASM cohort.
We stratified 2023 EBCM data by beneficiaries who underwent surgery
on their spine and who had complex low back pain and found that, across
all specialty types, more than 80 percent of beneficiaries with
episodes for low back pain did not undergo spine surgery (83.8 percent
for neurosurgery; 90.8 percent for orthopedic surgery), as demonstrated
in Table 37.
[GRAPHIC] [TIFF OMITTED] TP16JY25.109
Because orthopedic surgeons and neurosurgeons primarily treat low
back pain non-surgically, we believe it is acceptable to include both
surgical and nonsurgical specialists in the ASM low back pain cohort.
Moreover, the EBCM episode volume eligibility criteria as described in
section III.C.2.c.(3)(b) of this proposed rule would screen out
specialists who are not treating low back pain longitudinally in the
outpatient setting.
We propose at Sec. 512.710(d)(2), for the ASM low back pain
cohort, to select clinicians with a specialty type of anesthesiology,
interventional pain management, neurosurgery, orthopedic surgery, pain
management, and physical medicine and rehabilitation, provided they
meet all applicable ASM participant eligibility criteria for an ASM
performance year. We note that there may be some overlap between pain
management, interventional pain management, and anesthesiology.
However, we propose to include all three specialty designations to
ensure we include anesthesiologists that have not yet updated their
subspecialty with Medicare and those anesthesiologists treating low
back pain without pursuing fellowship training.
Although other clinicians do treat low back pain, we propose that
only those listed would be required to participate in ASM. We
considered other specialties who could trigger higher volumes of low
back pain episodes. For example, chiropractors and physical therapists
work closely with both primary care and specialists to treat low back
pain, often providing first-line therapy. However, we believe the
selected specialties are better positioned to direct and be held
accountable for the longitudinal management of low back pain that may
employ a variety of modalities.
We seek public comments on our proposal at Sec. 512.710(d)(2) to
only include in the ASM low back pain cohort clinicians with a
specialty code of anesthesiology, interventional pain management,
neurosurgery, orthopedic surgery, pain management, or physical medicine
and rehabilitation on the plurality of their Medicare Part B claims. We
seek comments on alternative low back pain-related specialty types that
we considered including the ASM low back pain cohort.
(3) ASM Participant Eligibility Criteria
In selecting participants for ASM, we seek to ensure (1) we include
a sufficient volume of clinicians treating Medicare beneficiaries for
the same clinical condition in the ambulatory setting; (2) there is a
reasonable expectation that participants can be measured under the
model and held accountable for the care provided to Medicare
beneficiaries with heart failure and low back pain; (3) the selected
clinicians have the operational capacity to meet the ASM performance
requirements described in section III.C.2.d of this proposed rule; and
(4) the model test results would be statistically valid, reliable, and
generalizable to specialty types included in ASM nationwide should the
model test be successful and considered for expansion under section
1115A(c) of the Act.
Therefore, we propose at Sec. 512.705 to define ``ASM participant
eligibility criteria'' as the set of criteria defined at Sec.
512.710(b) that CMS uses to determine whether a clinician is selected
to participate in ASM. We propose at Sec. 512.710(b) that clinicians
who meet all of the following ASM participant eligibility criteria
would be required to participate in ASM:
Is a clinician who bills claims under the Medicare
Physician Fee Schedule.
Is identified by TIN/NPI as a selected specialty type.
Meets the EBCM episode volume threshold applicable to an
ASM targeted chronic condition.
Is located in one of the selected mandatory geographic
areas.
[[Page 32565]]
At Sec. 512.705, we propose to define ``mandatory geographic
area'' to mean a core-based statistical area (CBSA) or metropolitan
division as defined by the Office of Management and Budget (OMB) and
selected by CMS under the terms of Sec. 512.710(f). We note that the
proposed mandatory geographic areas may include rural areas as defined
by MIPS at Sec. 414.1305, which is a ZIP code designated as rural by
the Health Resources and Services Administration's Federal Office of
Rural Health Policy (FORHP), using the most recent FORHP Eligible ZIP
Code file available.
We note that, as is the case in MIPS, clinicians practicing in
Rural Health Clinics (RHCs) and Federally Qualified Health Centers
(FQHCs) who provide services that are billed exclusively under the RHC
or FQHC payment methodologies would not be selected to participate in
ASM. This is because FQHCs and RHCs receive All-Inclusive Rate (AIR) or
Prospective Payment System (PPS) payments and do not submit claims
under the Medicare Physician Fee Schedule. However, if these
clinicians, separately, provide and bill for services under the
Physician Fee Schedule, they would be required to participate in ASM
provided they meet the ASM eligibility requirements. Clinicians who
provide services at Critical Access Hospitals (CAHs) that are paid
under Method I would be required to participate if they meet the ASM
eligibility requirements, given that such services are paid under the
Medicare PFS. Clinicians who provide services at CAHs that are paid
under Method II, and meet all ASM eligibility requirements, would only
be required to participate in ASM if they have not reassigned their
billing rights to the Method II CAH; that is, if the clinician
continues to submit professional claims through the PFS. This is
because when a clinician reassigns their billing rights to a Method II
CAH, the CAH bills those services through institutional claims. Under
MIPS, we use both professional and institutional claims to trigger
EBCMs and include clinicians who have reassigned their billing rights
to a Method II CAH. However, in contrast to MIPS, ASM, as proposed,
would only use professional claims to trigger EBCMs, and, therefore,
would not include clinicians who have reassigned their billing rights
to a Method II CAH.
We seek comments on the proposed ASM participant eligibility
criteria at Sec. 512.710(b).
(a) ASM Participant and Specialty Type Identification
As discussed in section III.C.2.c.(2) of this proposed rule, we
propose at Sec. 512.710(d) that only a certain subset of clinicians
who treat heart failure and low back pain would be required to
participate in this model. To identify ASM participants, we propose to
adopt the Quality Payment Program policies for identifying clinicians
and clinical specialty.
(i) ASM Participant Identification
Medicare claims are processed using TINs, which may represent an
individual clinician or may represent a hospital or group practice.
Because we propose that ASM would evaluate performance at an individual
clinician level, TIN alone would not be useful for ASM. Individual
providers are, however, identifiable by their unique NPI. When TIN and
NPI are used together, CMS is able to identify and evaluate individual
providers. NPI-level participation also aligns with the Innovation
Center's goal of creating a level playing field for all clinicians and
removing unequal benefits afforded to consolidated group practices and
health systems.
The Quality Payment Program identifies MIPS eligible clinicians for
the individual participation option, defined at Sec. 414.1305, by a
combination of TIN and NPI, (hereafter TIN/NPI). We believe this method
is also the best method of identifying clinicians in ASM.
Using TIN/NPI for identifying ASM participants would offer several
advantages. First, direct comparison of specialist performance between
similar clinicians is a central feature of ASM. Participation at the
TIN/NPI level puts the specialist as the unit of comparison, allowing
for more meaningful assessment among peers. This level of participation
would also produce more granular performance analysis and useful
feedback for clinicians. Second, we also propose to use TIN/NPI to
determine whether clinicians meet the other ASM participant eligibility
criteria. Specifically, TIN/NPI would be used to ensure that each ASM
participant has met the episode volume criteria for the EBCMs and for
assigning clinicians to mandatory geographic areas described later in
this section of this proposed rule. This approach would maintain
consistency between participant identification and performance
assessment within ASM and mirrors the methodology used in the Quality
Payment Program. Finally, identifying ASM participants at the TIN/NPI
level would enable us to identify claims for a single provider who
works at more than one location or organization and, therefore, bills
under multiple TINs.
We recognize that an individual clinician may assign their billing
rights to multiple TINs (that is, practice across multiple TINs). Such
an arrangement would have implications on how we identify ASM
participants. For example, if a clinician's NPI is associated with two
TINs and meets the ASM participant eligibility criteria for both TINs,
then we would consider each TIN/NPI combination to be a separate ASM
participant that must separately meet model requirements and report
required data. Accordingly, we would separately assess performance and
determine payment adjustments for each unique TIN/NPI combination, as
described in sections III.C.2.d.(1).(b) and III.C.2.f. of this proposed
rule. If an NPI is associated with two TINs but only meets the ASM
participant eligibility criteria for one TIN/NPI combination, the
clinician would only be considered an ASM participant under that one
TIN/NPI combination.
We also considered selecting a single TIN/NPI combination to be
the ASM participant in the case that a clinician meets ASM eligibility
requirements under more than one TIN/NPI combination. Under that
scenario, we would have selected the TIN/NPI combination with the
majority of EBCM-triggered episodes for a given ASM cohort (see section
III.C.2.c.(3).(b) for further discussion on EBCM as part of the ASM
participant eligibility criteria). However, this alternative could
adversely affect participant volume and exclude appropriate beneficiary
episodes.
We believe that identifying ASM participants at the TIN/NPI level
drives direct accountability so that outcomes are clearly attributed to
ASM participants. Identifying ASM participants at the TIN/NPI level
would allow for a like-to-like performance assessment of clinicians who
meet ASM participant eligibility criteria. We believe this performance
comparison approach would provide granular and actionable insights into
best practices and specialty care delivery.
Therefore, we propose to identify clinicians for ASM by the same
method used by the Quality Payment Program. Specifically, we propose to
use TIN/NPI to identify clinicians as ASM participants.
We seek public comment on our proposal at Sec. 512.710(b)(2) that
ASM participants would be identified at the TIN/NPI level. We also seek
comments
[[Page 32566]]
on the alternative method of using TIN-level specialty type for
identifying ASM participants, as well as selecting a single TIN/NPI
combination as an ASM participant in the case that a clinician meets
ASM eligibility requirements under more than one TIN/NPI combination.
(ii) Participant Exclusion due to Change in TIN During an ASM
Performance Year
We recognize that ASM participants may change practices (as
reflected by a change in TIN) during an ASM performance year. In such
circumstances, we would need to determine whether the ASM participant
must continue to meet model requirements for the original TIN, for the
new TIN, or would no longer be required to meet model requirements
under either TIN for that ASM performance year. We propose at Sec.
512.710(c)(1) that an ASM participant who, during an applicable ASM
performance year, no longer assigns their billing rights to the TIN CMS
used to identify them as an ASM participant must notify CMS of such
change within 30 days of the change in a form and manner determined by
CMS. We propose at Sec. 512.710(c)(2) that an ASM participant who
notifies CMS of a change in TIN during an ASM performance year would no
longer be required to meet ASM requirements, including data submission
requirements described at Sec. 512.720, for the applicable ASM
performance year and would instead be subject to MIPS reporting
obligations, if applicable. We also propose that the waivers, including
the MIPS waiver, established at Sec. 512.775 would no longer apply
beginning on the date we determine the clinician is no longer required
to meet model requirements for the applicable ASM performance year. If
the ASM participant fails to notify CMS within 30 days of no longer
assigning billing rights to the original TIN in the form and manner
determined by CMS, then the ASM participant would be required to meet
the data submission requirements described at Sec. 512.720 for the
applicable ASM performance year.
Given our proposal to determine whether clinicians meet ASM
participant eligibility criteria for each ASM performance year, we
believe that we would naturally identify the movement of individual
clinicians to a different TIN between ASM performance years. However,
if an ASM participant reassigns their billing rights to a new TIN
during an ASM performance year, CMS would not have sufficient data for
the new TIN/NPI combination to determine if the ASM participant
continues to meet all ASM participant eligibility criteria. For
example, we would not have timely EBCM data available for the new TIN/
NPI combination to determine if the ASM participant meets the 20 EBCM
episode volume criterion (discussed in section III.C.2.c.(3).(b) of
this proposed rule) under the new TIN. Without complete data to
evaluate whether the ASM participant continues to meet the ASM
participant eligibility criteria, we propose, for that ASM performance
year, the ASM participant would not be required to submit data in
accordance with Sec. 512.720, as proposed, would not be scored in
accordance with Sec. 512.745, as proposed, and would not receive an
ASM payment adjustment in accordance with Sec. 512.750. Because the
proposed Medicare waiver at Sec. 512.775 only waives the requirements
of section 1848(q) of the Act, and its implementing regulations for an
ASM performance year that ASM participants meets the ASM participant
eligibility criteria, the ASM participant would be required to satisfy
any MIPS reporting obligations and would receive a MIPS payment
adjustment two years later, in accordance with current regulations.
We intend to monitor TIN changes in each ASM cohort within each ASM
performance year and across the ASM model test period. If CMS
determines that changes to this policy are warranted for future ASM
performance years, we would propose those changes through notice and
comment rulemaking.
We considered requiring an ASM participant who reassigns their
billing rights to a new TIN during an ASM performance year to continue
to meet all model requirements for the applicable ASM performance year
under the new TIN/NPI combination. As ASM focuses on specialty care
related to specific chronic conditions, we considered that the ASM
participant would likely continue to furnish services related to ASM
targeted chronic conditions under the same specialty type and trigger
applicable EBCM episodes during the remainder of the applicable ASM
performance year. As discussed in sections III.C.2.d.(3) and
III.C.2.e.(2).(b) of this proposed rule, in the case that an ASM
participant under a new TIN/NPI combination does not trigger at least
20 episodes during the remainder of the applicable ASM performance
year, the ASM participant would not receive a final score. Accordingly,
they would receive no payment adjustments in the corresponding ASM
payment year as described at Sec. 512.750(d). However, if an ASM
participant under a new TIN were to: (1) receive quality and cost ASM
performance category scores discussed in sections III.C.2.d.(2).(i) and
III.C.2.d.(3).(g) of this proposed rule, and (2) meet the requirements
to receive a final score as discussed in section III.C.2.e.(2) of this
proposed rule, then we believe it would be appropriate to determine an
ASM payment adjustment factor and ASM payment multiplier for the ASM
participant under the new TIN/NPI combination. We ultimately decided to
not propose this policy because we believe that conforming to the
policy set forth in section III.C.2.c.(1), which requires an ASM
participant to satisfy any MIPS reporting obligations when they no
longer meet ASM participant eligibility criteria, would avoid adding
unnecessary complexity to the model.
We also considered not requiring an ASM participant to notify CMS
if the change in TIN occurs during an ASM performance year and
continuing to require the ASM participant to meet all model
requirements under the original TIN/NPI combination for the applicable
ASM performance year. However, we believe that it would be challenging
for the ASM participant to access the necessary data to meet the data
submission requirements if no longer affiliated with the original TIN.
Therefore, we do not believe it would be appropriate to hold an ASM
participant in this situation accountable for ASM requirements under
the original TIN.
We seek comments on our proposal at Sec. 512.710(c) to exclude ASM
participants who change TIN during an applicable ASM performance year
from ASM reporting requirements for that year of the model. We also
seek comments on the alternatives of requiring the ASM participant to
meet model requirements under their new TIN, as well as the alternative
of requiring the ASM participant to meet model requirements and data
submission requirements under the original TIN/NPI combination that
identified them as an ASM participant.
(iii) ASM Specialty Identification
To ensure that all clinicians meeting the specialty requirements
described at Sec. 512.710(d) are included in the model, we propose to
define ``specialty type'' based on the specialty code indicated on the
plurality of a clinician's Medicare Part B claims during the period
described in section III.C.2.c.(5) of this proposed rule. Specifically,
we plan to use the same specialty codes used for the Quality Payment
Program to identify
[[Page 32567]]
MIPS eligible clinicians as defined at Sec. 414.1305.\128\
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\128\ https://www.federalregister.gov/d/2022-23873/page-70039.
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The specialty codes used on Medicare Part B claims are not reported
by clinicians but are assigned to claims by the Medicare Administrative
Contractors (MACs) and derived from the clinician-reported specialty
designations that are entered in the Provider Enrollment, Chain, and
Ownership System (PECOS) as part of the Medicare provider enrollment
application. Because a clinician's specialty code could change during
an ASM performance year, we propose to use the specialty code assigned
to the majority of a clinician's Medicare Part B claims for determining
specialty type for ASM.
We also considered using PECOS specialty designation alone for the
purpose of determining specialty type for ASM. However, the PECOS
specialty codes are self-reported, and a single clinician may list more
than one primary specialty, which may make it unreliable as a single
source for identifying a clinician's primary specialty. We stated in
the CY 2023 PFS final rule that given the strong alignment between
PECOS data and claims data and our historical use of claims data to
identify a clinician's specialty, we believe that Medicare Part B
claims data would be the best data source to use to identify a
clinician's specialty (87 FR 70039).\129\ Moreover, given that the
Quality Payment Program uses Medicare claims data, we do not want to
create inconsistencies between specialty types for ASM and MIPS. We
also considered using the Health Care Provider Taxonomy Codes, which
categorize the type, classification, and/or specialization of health
care providers. These codes offer more specificity than PECOS (87 FR
70039) and are used when applying for an NPI from the National Plan and
Provider Enumeration System (NPPES). However, they are not verified for
accuracy.\130\ We have previously elected not to use the Health Care
Provider Taxonomy Codes for MIPS because of uncertainty regarding the
reliability of NPPES as a data source for MIPS eligibility
determinations (87 FR 70039). We analyzed the congruence between
specialty designations made for the purposes of MIPS and those reported
in NPPES for the proposed specialty types for each of ASM's targeted
chronic conditions. Our analysis found a high degree of congruence
between the two specialty type codes, likely because we provide a
crosswalk of the Health Care Provider Taxonomy Codes and Medicare
Specialty Codes that can be used by a clinician when they enroll in
Medicare through PECOS.\131\ Given the alignment between these coding
systems, we believe that remaining consistent with the specialty type
determination methodology used by the Quality Payment Program is
important for potential scalability of ASM.
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\129\ https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855i.pdf.
\130\ https://data.cms.gov/resources/medicare-provider-and-supplier-taxonomy-crosswalk-methodology.
\131\ https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/medicare-provider-and-supplier-taxonomy-crosswalk/data.
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We seek comments on our proposal at Sec. 512.710(d) to identify
specialty type based on the specialty code indicated on the plurality
of a clinician's Medicare Part B claims. We also seek comments on using
PECOS specialty codes alone and Health Care Provider Taxonomy Codes for
the purpose of determining specialty type for ASM.
(b) Episode-Based Cost Measure (EBCM) Episode Volume
We believe that ASM participant eligibility criteria must
appropriately identify clinicians who furnish a sufficient volume of
services related to ASM targeted chronic conditions and who can be
appropriately evaluated on costs related to the ASM targeted chronic
conditions. We propose to identify ASM participants using the volume of
services related to heart failure and low back pain furnished by
clinicians who have a specialty designation that corresponds with the
proposed specialty types discussed in III.C.2.c.(2). of this proposed
rule. Only clinicians with the proposed specialty types that furnish a
volume of services above a specific threshold related to the applicable
ASM targeted chronic condition would be identified as ASM participants.
That is, not all clinicians with the proposed specialty types related
to heart failure and low back pain would be required to participate in
ASM.
We propose to use MIPS EBCMs to determine volume, rather than
assessing volume based on claims for individual services. Specifically,
the volume of attributed episodes from EBCMs related to the ASM
targeted chronic conditions would serve as the data source by which we
evaluate the volume of furnished episodes for ASM. We propose at Sec.
512.710(e)(1) to identify ASM heart failure participants using the
volume of episodes attributed to a TIN/NPI in accordance with the heart
failure EBCM as specified under MIPS. We propose at Sec. 512.710(e)(2)
to identify ASM low back pain participants using the volume of episodes
attributed to a TIN/NPI in accordance with the low back pain EBCM as
specified under MIPS. We refer readers to section III.C.2.c.(5). of
this proposed rule on the proposed processes and specific years of data
that we would use to assess EBCM volume to identify ASM participants.
EBCMs assess Medicare resource use for a specific condition or
procedure based on only those costs that occur as part of an attributed
clinician's care management. CMS uses claims data from Medicare Parts A
and B, and some Medicare Part D data, if applicable, to construct the
EBCMs. An episode is initiated when a clinician submits a professional
claim for at least two separate services, provided to a single
beneficiary, that are clinically related to the chronic condition being
assessed. Although the episode is initiated and attributed to a
particular clinician, the episode includes all Medicare Part A and B
services for the length of the episode, as defined by the measure
specifications (88 FR 79339 through79347). Therefore, regardless of who
provides the care, an episode includes all services related to a
beneficiary's condition, routine care services, and consequences of
care, and excludes services that are clinically unrelated to the
targeted condition of the measure.\132\
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\132\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf.
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To attribute episodes to practices and clinicians, CMS first
attributes episodes to a TIN when it performs two services indicating
care for a particular condition for a single beneficiary within a
certain number of days (for example, 180 days); both professional
claims must have diagnosis codes for the relevant chronic condition.
CMS then attributes episodes to each clinician (NPI) within the group
(TIN) that rendered at least 30 percent of the total number of
qualifying services during the episode. For the heart failure EBCM, CMS
also checks that the clinician prescribed at least two condition-
related prescriptions on different days to two different patients
during the calendar year used to construct the episode plus a 1-year
lookback period to ensure that attributed clinicians are actually
involved in providing ongoing chronic care management.\133\ The low
back pain EBCM does not use this additional check since the types of
clinicians that manage low back pain may may not prescribe the relevant
medication,
[[Page 32568]]
which could prevent certain clinician types from being attributed
episodes.\134\
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\133\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0.
\134\ https://www.cms.gov/files/zip/mips-chrcondition-episode-based-cost-measures-attribution-methodology-2023-zip.zip.
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CMS began development and field testing of the heart failure and
low back pain measures in 2022.\135\ We finalized the inclusion of the
heart failure and low back pain measures to the MIPS cost performance
category beginning in the 2024 MIPS performance period/2026 MIPS
payment year (88 FR 79319). We also finalized the inclusion of the
heart failure EBCM in the Advancing Care for Heart Disease MVP (88 FR
80022 through 80025; 89 FR 99015 through 99019) and the low back pain
EBCM in the in the Rehabilitative Support for Musculoskeletal Care MVP
(88 FR 80002 through 80007; 89 FR 99050 through 990054).
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\135\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf.
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We believe that the construction of the EBCMs and the existing use
of these measures within MIPS and MVPs relevant to ASM targeted chronic
conditions make the measures an appropriate data source by which to
identify ASM participants that furnish enough services and provide
longitudinal care management for Medicare beneficiaries diagnosed with
ASM targeted chronic conditions.
We believe that an annual threshold of 20 or more attributed
episodes from an EBCM is appropriate for identifying ASM participants
that can be held accountable for quality and cost related to ASM
targeted chronic conditions. We have defined a case minimum of 20
episodes for the purposes of scoring chronic condition EBCMs in MIPS,
including MVP reporting, as specified in Sec. 414.1350(c)(6) (88 FR
79346 through 79348). We believe using a similar 20-episode minimum
from the calendar year used for determining ASM participant eligibility
increases the likelihood that an ASM participant would trigger and be
attributed at least 20 episodes within a given ASM performance year.
Using a 20-episode threshold would increase the likelihood that they
could be scored on the applicable EBCM during the relevant ASM
performance year, as described in section III.C.2.d.(3).(g) of this
proposed rule.
We also considered using an EBCM episode threshold greater than 20
episodes. For example, we considered the effects of using a 30-episode
or 50-episode threshold. In our analysis of calendar year 2023 data, we
found that a 30-episode threshold would decrease the number of
potentially eligible ASM participants by 43 percent for heart failure
and 35 percent for low back pain relative to the 20-episode threshold.
We found that a 50-episode threshold would decrease the number of
potentially eligible ASM participants by 76 percent for heart failure
and by 65 percent for low back pain relative to the 20-episode
threshold. We believe that the smaller number of potentially eligible
ASM participants under a higher EBCM episode threshold would make for a
less reliable model test.
We considered but are not proposing to add the MIPS low volume
threshold of Medicare Part B allowed charges for covered professional
services, Medicare patients that receive Medicare Part B covered
professional services, and the number of Medicare Part B services
provided for individual MIPS eligible clinicians as defined at Sec.
414.1305 as part of the ASM participant eligibility criteria. Adding
the MIPS low volume threshold would mean that clinicians would have to
meet the MIPS eligibility determinations as defined at Sec. 414.1305,
as well as all other ASM participant eligibility criteria, to be
identified as an ASM participant. We considered using the same low
volume threshold for individual MIPS eligible clinicians given the use
of the MVP framework for selecting measures for ASM and to identify ASM
participants that furnish a sufficient volume of services related to
ASM targeted chronic conditions. Given the importance of using EBCM
episode volume to identify ASM participants, we found that inclusion of
the MIPS low volume threshold in our ASM participant eligibility
criteria would add a secondary service volume criterion. We estimate
that the inclusion of the MIPS low volume threshold on top of the EBCM
episode volume threshold could potentially decrease the number of ASM
participants by more than 50 percent. We believe that the use of the
EBCM 20-episode threshold would be a more appropriate criterion for
identifying ASM.
We seek public comments on our proposals at Sec. 512.710(e) to use
the heart failure EBCM as specified under MIPS to identify potential
ASM heart failure participants and the low back pain EBCM as specified
under MIPS to identify potential ASM low back pain participants. We
also seek comments on our proposal that clinicians who have 20 or more
heart failure EBCM episodes attributed in accordance with the heart
failure EBCM as specified under MIPS during the calendar year 2 years
prior to the applicable ASM performance year would meet the ASM
participation eligibility criterion at Sec. 512.710(b)(3) and
clinicians who have 20 or more low back pain EBCM episodes attributed
in accordance with the low back pain EBCM under MIPS during the
calendar year 2 years prior to the applicable ASM performance year
would similarly meet the ASM participation eligibility criterion at
Sec. 512.710(b)(3). We also seek comment on specifying a higher
episode volume threshold and using the MIPS low volume threshold of
Medicare Part B allowed charges for covered professional services for
identifying clinicians who provide a sufficient volume of services.
(4) Mandatory Geographic Areas
(a) Identification of Geographic Areas
We propose at Sec. 512.710(f) that only clinicians in certain
selected areas would be required to participate in the model. As
proposed in Sec. 512.710(f), the proposed unit of selection is CBSAs
except in cases where OMB has divided large metropolitan statistical
areas (MSAs) into metropolitan divisions. For these MSAs, we propose to
use these metropolitan divisions in place of the CBSA. Using
metropolitan divisions rather than large MSAs would enable more precise
matching of intervention and control groups by using geographic units
of more comparable size, which would improve the statistical validity
of our evaluation approach.
OMB Bulletin 23-01, issued on July 21, 2023, states that there are
935 CBSAs in the United States and Puerto Rico. OMB delineates MSAs and
micropolitan statistical areas, which are referred to collectively as
CBSAs. The general concept of the MSA and micropolitan statistical area
is that of a core area containing a substantial population nucleus,
together with adjacent communities having a high degree of economic and
social integration with that core. MSAs contain at least one urban area
of 50,000 or more population; micropolitan statistical areas contain at
least one urban area of at least 10,000 and less than 50,000
population.
If specified criteria are met, an MSA containing a single core with
a population of 2.5 million or more may be subdivided into metropolitan
divisions, which function as distinct areas within the larger
metropolitan statistical area. CBSAs are composed of entire counties.
There are 393 MSAs, of which 13 are subdivided into 37 metropolitan
divisions, and 542 micropolitan statistical areas in the United States
and Puerto Rico, as of July 2023.
We also considered using the following geographic areas as the
geographic unit from which ASM
[[Page 32569]]
participants are identified: (1) certain ZIP Codes based on their
Hospital Referral Regions (HRR); or (2) certain states. We considered
selecting based on HRRs for ASM. HRRs represent regional health care
markets for tertiary medical care and are defined by determining where
most patients were referred for major cardiovascular surgical
procedures and for neurosurgery. There are 306 HRRs with at least one
city where both major cardiovascular surgical procedures and
neurosurgery are performed. While HRRs may sufficiently reflect
referral patterns for heart failure episodes of care, they are less
appropriate for low back pain episodes. Therefore, we decided that
using CBSAs and metropolitan divisions as a geographic unit is
preferable over HRRs for this model.
We also considered selecting states as the geographic unit of
selection for ASM. However, we concluded that CBSAs and metropolitan
divisions would provide a more granular unit of analysis, allowing for
better matching of comparison areas. Additionally, selecting states
would greatly reduce the number of independent geographic areas subject
to selection under the model, and thus would decrease the statistical
power of the model evaluation. Finally, CBSAs and metropolitan
divisions straddle state lines where providers and Medicare
beneficiaries can easily cross these boundaries for health care.
We propose that we would select the CBSAs and metropolitan
divisions through the stratified random sampling methodology described
later in this section of this proposed rule to participate in ASM.
Although CBSAs are revised periodically, we propose to use the CBSA and
metropolitan division designations in OMB Bulletin 23-01 issued on July
21, 2023 as the CBSA designations for purposes of selecting
participants for this model, regardless of whether such CBSA
designations have changed since July 21, 2023, or would change at some
point during the ASM test period. We believe that this approach would
best maintain the consistency of the ASM participants in the model,
which is crucial for our ability to evaluate the effects of the model
test on quality of care and changes in Medicare spending.
As discussed later in this in section III.C.2.c.(4).(e) of this
proposed rule, we propose in Sec. 512.710(f)(4) to use the ZIP Codes
of the service locations of each clinician as discussed in section
III.C.2.c.(4).(e) of this proposed rule to assign each clinician to a
single CBSA or metropolitan division. Each clinician that CMS
determines falls under the selected CBSA or metropolitan division, and
that otherwise meets the other eligibility criteria set forth in Sec.
512.710(b), would be required to participate in the model.
Based on our proposal to randomly select CBSAs and metropolitan
divisions as ASM's mandatory geographic areas, III.CZIP Codes and other
areas not located in a CBSA or metropolitan division would not be
included in the ASM selection methodology as discussed in section
III.C.2.c.(4).(b) of this proposed rule. We note that Transforming
Episode Accountability Model (TEAM), a mandatory episode-based payment
model, uses CBSAs as the geographic unit of selection (as defined in
Sec. 512.515). We note that the proposed mandatory geographic areas
may include some areas considered as rural areas under MIPS, which
defines rural areas at Sec. 414.1305 as a ZIP Code designated as rural
by the Health Resources and Services Administration's Federal Office of
Rural Health Policy (FORHP), using the most recent FORHP Eligible ZIP
Code file available.
We seek comments on our proposal to use CBSAs and metropolitan
divisions as the geographic unit from which ASM participants are
identified. We seek comments on our proposal to use the ZIP Codes of
the service locations of each clinician as discussed in section
III.C.2.c.(4).(e) of this proposed rule to assign each clinician to a
single CBSA or metropolitan division, including ZIP Codes designated as
rural by HRSA's FORHP using the most recent FORHP Eligible ZIP Code
file available. We seek comment on our proposal to require all eligible
clinicians within a CBSA or metropolitan division that the Innovation
Center selects through the stratified random sampling methodology as
part of the intervention group described in section III.C.2.c.(4).(d)
in this proposed rule to participate in ASM. Finally, we seek comments
on our proposal to use the CBSA and metropolitan division designations
in OMB Bulletin 23-01 issued on July 21, 2023 as the CBSA designations
for purposes of selecting participants for this model.
(b) Exclusion of Certain CBSAs and Metropolitan Divisions
We propose at Sec. 512.710(f)(1) that we would not consider
certain CBSAs or metropolitan divisions for selection. Specifically, we
propose at Sec. 512.710(f)(1)(ii) that we would exclude any CBSA or
metropolitan division located entirely in U.S. territories due to
challenges we would have in finding suitable geographic areas for
comparison. We also propose at Sec. 512.710(f)(1)(i) to exclude any
CBSAs or metropolitan divisions that do not have any clinicians of the
mandated specialty types with at least 20 eligible episodes between
January 1, 2024 and December 31, 2024 in accordance with the EBCM
episode threshold described in section III.C.3.c.(3).(b). We believe it
is unlikely for these CBSAs or metropolitan divisions to have data
available for evaluation after the model starts. After applying these
criteria, we expect to have approximately 600 CBSA and metropolitan
divisions remain available for selection into ASM.
We considered the alternative of excluding from ASM any CBSA or
metropolitan divisions located within a state or portion of a state
with a commitment to participate in the Advancing All-Payer Health
Equity Approaches and Development (AHEAD) model. The AHEAD model is a
state-wide CMS Innovation Center model implemented under section 1115A
of the Act that aims to increase investment in primary care, provide
financial stability for hospitals, and support beneficiary connections
to community resources. We decided not to propose these exclusions
because ASM would not interact with the payment methodology in AHEAD
and may help align a broader set of clinicians towards the goals of
AHEAD. We seek comments on our proposal to exclude from selection any
CBSA or metropolitan division located entirely in a U.S. territory and
any CBSAs or metropolitan divisions that do not have any clinicians of
the mandated specialty types with at least 20 eligible episodes between
January 1, 2024 and December 31, 2024. We seek comments on the
alternative to exclude AHEAD geographies from ASM's mandatory CBSA or
metropolitan divisions.
(c) Geographic Selection Methodology
To determine which CBSAs and metropolitan divisions would be
included in the model, we propose to use a stratified random sampling
method to select approximately 25 percent of CBSAs and metropolitan
divisions into ASM following the process described in the following two
sections of this proposed rule. We propose at Sec. 512.710(f)(2) to
stratify CBSAs and metropolitan divisions into mutually exclusive
groups based on 3 CBSA/metropolitan division-level characteristics:
average total Parts A and B episode spending, volume of eligible
episodes, and metropolitan division status. We propose at Sec.
512.710(f)(2)(i)
[[Page 32570]]
through (vi) stratifying eligible CBSAs into six mutually exclusive
groups:
Eligible CBSAs with ``Low'' average total episode spending
(as defined below) and ``Low'' eligible episode volume (as defined
below);
Eligible CBSAs with ``Low'' average total episode spending
and ``High'' eligible episode volume (as defined below);
Eligible CBSAs with ``High'' average total episode
spending (as defined below) and ``Low'' eligible episode volume;
Eligible CBSAs with ``High'' average total episode
spending and ``High'' eligible episode volume;
Eligible CBSAs with ``Very High'' eligible episode volume
(as defined below);
Eligible metropolitan divisions.
(i) Average Total Parts A and B Episode Spending
We propose at Sec. 512.710(f)(2) to measure average total Medicare
Parts A and B episode spending using claims data from January 1, 2024
to December 31, 2024. One of the main objectives of ASM is to reduce
spending, and therefore, it would be important to account for the
significant variation in average episode spending across geographic
areas. This stratification would help ensure that we can measure any
variation in model effects between high and low spending areas. We
propose to use a single, pooled measure including spending for both
heart failure and low back pain episodes. This would help limit the
number of overall strata and we believe would allow for adequate
representation of both high spending low back pain areas and high
spending heart failure areas, where the potential for savings may be
greatest. We propose to categorize CBSAs into two categories based on
average total parts A & B episode spending: below the median (``Low'')
and at-or-above the median (``High'').
(ii) Volume of Eligible Episodes
We propose at Sec. 512.710(f)(2) to measure eligible episode
volume using claims data from January 1, 2024 to December 31, 2024. We
expect significant variation in the volume of eligible episodes across
areas. This variation may reflect differences in other characteristics
that are related to ASM performance. For example, large, active markets
with a larger number of specialists may have structural advantages in
performing well in ASM compared to smaller, less active markets. The
proposed stratification on volume of eligible episodes would help
ensure we select an adequate sample of areas with varying levels of
specialty activity so that we would be able to identify statistical
differences in outcomes across levels of specialty activity. This
stratification would also help ensure that selected CBSAs have
sufficient episode volume to support a robust evaluation. We propose to
use a single, pooled measure including both heart failure and low back
pain episodes. This allows us to limit our number of stratification
variables and analysis of 2023 episode-level data found that the
episode volumes of the two conditions are highly correlated across
CBSAs. We propose to categorize CBSAs into three categories based on
total episode volume: below median (``Low''), at-or-above median up to
the 95th percentile (``High''), and the 95th percentile and above
(``Very High''). We propose to stratify out the top 5 percent of CBSAs
by episode volume because of the right-skewed nature of the episode
volume distribution.
(iii) Metropolitan Divisions
The largest 13 CBSAs are divided into 37 metropolitan divisions.
Metropolitan divisions therefore represent a subdivision level compared
to CBSAs. Additionally, these metropolitan divisions, all belonging to
CBSAs with a core population of 2.5 million or more, may have important
characteristics in common beyond episode volume and average total
spending. To ensure adequate representation of metropolitan divisions
in the sample, we propose to categorize metropolitan divisions into
their own stratum.
We considered stratifying by other characteristics, including ACO
penetration, supply of PCPs, region, rurality, and participation in the
AHEAD model. We seek comments on our proposed selection strata as well
as alternatives considered.
[GRAPHIC] [TIFF OMITTED] TP16JY25.110
(d) Stratified Random Selection of Mandatory Geographic Areas
A representative sample of clinicians that meet eligibility
requirements for the proposed ASM is necessary for a robust evaluation
of the model. Testing the model in this manner would also allow us to
learn more about utilization patterns of health care services and how
to incentivize the improvement of quality and care coordination for
chronic heart failure and low back pain. This learning could
potentially inform the Quality Payment Program and the future of the
MVP reporting option. Therefore, we are proposing a broad,
representative sample of clinicians in multiple geographic areas. We
determined that the best method for obtaining the necessarily diverse,
representative group of clinicians would be through stratified, random
selection. A stratified, randomly selected sample would allow us to
ensure statistical
[[Page 32571]]
balance across characteristics of interest (for example, average
spending and episode volume) and would provide results that applies
generally to similar Medicare clinicians that submit FFS claims and
treat heart failure or low back pain and would allow for a more robust
evaluation of the model. We also believe that there could be broader
learnings from ASM that could apply to other conditions and
specialists.
At Sec. 512.710(f)(3), we propose to randomly select CBSAs and
metropolitan divisions for ASM from the six stratified groups described
above at a 40 percent rate (that is, each CBSA and metropolitan
division in each stratum has a 40 percent chance of being selected into
the model). If 40 percent of a given stratum does not result in a whole
number of CBSAs or metropolitan divisions, CMS would round up to the
next whole number to ensure that at least 40 percent of areas from each
stratum are selected. Table 38 provides an illustrative example of the
six stratified groups based on CY 2023 data. We considered using other
selection rates but based on preliminary analyses, we believe these
selection rates would produce adequate sample size and participant mix
for the model test. We refer readers to the regulatory impact analysis
in section VII. of this proposed rule for further discussion on the
scale of ASM and its estimated financial impact.
We conducted power analyses to identify detectable changes in total
and episode spending between a potential group of CBSAs and
metropolitan divisions selected for the model and a potential control
group of CBSAs using a Type I error of 0.05 and Type 2 error of 0.2
(implying a power of 0.8). The analysis shows that, if 240 eligible
CBSAs are selected for ASM, we would be able to detect about a 3.5
percent change in total episode spending if we look at heart failure
and low back pain episodes separately. Allowing a higher Type I error
of 0.25 and pooling heart failure and low back pain episodes would
allow us to detect about a 1.7 percent change in total episode
spending.
This model may be underpowered to detect statistically significant
changes in total spending. However, the model may be more likely to
generate statistically significant savings among certain low-value
services or spending categories that are major cost drivers for heart
failure and low back pain (for example, imaging, surgeries, hospital
admissions). In a case where the model's impact on total spending is
ambiguous, significant savings among these categories of spending may
provide strong supporting evidence that Medicare saved money overall.
We seek public comments on our proposed approach to random
selection of CBSAs and metropolitan divisions from our proposed
selection strata as well as all alternatives considered.
(e) Assignment of Geographic Areas to Clinicians
We propose at Sec. 512.710(f)(4) to assign a single CBSA or
metropolitan division to each clinician based on the clinician's most
common episode-level service location ZIP Code for each ASM performance
year. We believe that it would be appropriate to use service location
data from EBCM episodes to identify the CBSA or metropolitan division
of clinicians' service locations given the use of the EBCMs as part of
ASM participant eligibility criteria. As discussed in section
III.C.2.c.(3).(b). of this proposed rule, EBCM episodes would help
identify ASM participants who render a meaningful volume of services
related to ASM's targeted chronic conditions. Using the service
location from Medicare Part B claims of rendered services used to
construct the episode as the basis for determining the service location
of a clinician would keep a consistent and accurate source of data by
which to make these geographic assignments. We also considered using
the CBSA or metropolitan division related to the ZIP Code of the TIN to
which a clinician has assigned billing rights for the purpose of
determining whether a clinician furnishes ASM-related services in a
mandatory geographic area. We believe that it would not be appropriate
use a TIN's ZIP Code since a TIN's ZIP Code does not necessarily
correlate to service location, particularly in the case of multi-site
practices.
Using episode-level service location ZIP Code assignments, we
propose at Sec. 512.710(f)(4) the following process to identify
clinician-level CBSA or metropolitan division assignments:
Identify all EBCM episodes relevant to ASM targeted
chronic conditions attributed to a clinician during the calendar year 2
years before the applicable ASM performance year (or during January 1,
2024 through December 31, 2024 for initial CBSA or metropolitan
division assignment).
For each episode, establish a service location ZIP Code.
An episode may consist of several Medicare Part B Claims. Not all of
the ZIP Codes set forth on the Medicare Part B claims form may be the
same. To determine which ZIP Code the episode would be associated with,
we propose to review all applicable Medicare Part B claims associated
with the episode and identify the Medicare Part B claim line ZIP Code
appearing most often. An episode could have an equal number of ZIP
Codes on claims associated with the episode. We would break any ties
between ZIP Codes by determining the episode's ZIP Code based on the
ZIP Code on the claim with the highest total cost indicated by the
total standardized allowed amount, or in instances a second tie break
is needed, by using the ZIP Code on the claim with the most recent
date.
Match the ZIP Code assigned to each episode to a CBSA or
metropolitan division. In other words, determine the CBSA or
metropolitan division to which the episode is assigned. To do so, we
propose to use ZIP Code and CBSA/metropolitan division crosswalks
published quarterly by the U.S. Department of Housing and Urban
Development.\136\ Some CBSA and metropolitan division share ZIP Codes,
meaning a ZIP Code could be assigned to multiple CBSAs and metropolitan
divisions. In these instances, to ensure each ZIP Code is linked to a
unique CBSA or metropolitan division, we would assign the ZIP Code to
the CBSA or metropolitan division where the ZIP Code has the highest
proportion of total addresses. For example, if ZIP-A spans CBSA-B and
CBSA-C, and ZIP-A has more addresses in CBSA-B, then we would assign
ZIP-A to CBSA-B. We would get the proportion of total addresses in each
ZIP Code from the ZIP Code to CBSA/metropolitan division crosswalk
published by the U.S. Department of Housing and Urban Development.\137\
The crosswalk also subdivides the proportion of total addresses into
the number of business addresses, residence addresses, and other
addresses. If the proportion of total addresses within the ZIP Code is
equal across CBSAs or metropolitan divisions (meaning that we cannot
use the proportion of total addresses to assign a single CBSA or
metropolitan division to the ZIP Code), then we would assign the ZIP
Code to the CBSA and metropolitan division (if applicable) with the
highest proportion of business addresses (regardless of the number of
residence addresses or other addresses). We use business addresses as
the tiebreaker since business addresses would represent where
clinicians would practice, which aligns with our overall approach for
using service location for participant identification.
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\136\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
\137\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
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[[Page 32572]]
Determine the appropriate CBSA or metropolitan division
for each clinician attributed applicable episodes. If the clinician is
attributed multiple episodes in multiple CBSAs or metropolitan
divisions, we would match the clinician with the CBSA or metropolitan
division where the clinician has the most assigned episodes. If a
clinician has an equal number of episodes assigned to multiple CBSAs or
metropolitan divisions, we would break such a tie by matching the
clinician to the CBSA or metropolitan division that has the highest
total risk-adjusted spending across all episodes assigned to each CBSA
or metropolitan division. If a second tie break is needed, we would
match the clinician to the CBSA or metropolitan division that has
episodes with the more recent dates. For example, if a clinician has an
equal number of episodes in CBSA-B and CBSA-C, but the episodes in
CBSA-B collectively have a higher total risk-adjusted spending compared
to all episodes in CBSA-C, then the clinician would be matched to CBSA-
B.
We seek comments on our proposed process at Sec. 512.710(f)(4) for
determining the CBSA or metropolitan division of a clinician for each
ASM performance year using EBCM data for the purposes of determining
whether a clinician is located within a mandatory geographic area for
each ASM performance year.
(5) Proposed Selection and Notification Process for ASM Participants
We propose to identify ASM participants on an annual basis. At
Sec. 512.710(g) we propose to identify all clinicians furnishing
covered services in accordance with the ASM participant eligibility
criteria specified in section III.C.2.c.(3) of this proposed rule using
applicable data from 2 calendar years prior to each ASM performance
year. We also propose that a clinician selected for participation for
any ASM performance year would be considered an ASM participant for the
remainder of the model.
We propose at Sec. 512.710(g)(1)(i), for the 2027 ASM performance
year/2029 ASM payment year only, to identify preliminarily eligible ASM
participants using the ASM participant eligibility criteria and
applicable data from calendar year 2024. If ASM is finalized as
proposed, we propose to make public the preliminarily eligible ASM
participants in a form and manner determined by CMS. We expect to
release this information by the end of CY 2025. Then, to finalize the
ASM participants for the 2027 ASM performance year/2029 ASM payment
year, we propose Sec. 512.710(g)(1)(ii) to confirm that the
preliminarily eligible ASM participants continue to meet the ASM
participant eligibility criteria using more recent data from calendar
year 2025. We propose to make public the selected ASM participants for
the 2027 ASM performance year/2029 ASM payment year in a form and
manner determined by CMS. We expect to release this information by the
end of July 2026, preceding the start of the 2027 ASM performance year/
2029 ASM payment year. We believe that notifying preliminarily eligible
ASM participants well before the start of the first ASM performance
year in 2027 would provide ample time to become familiar with ASM
requirements, make practice adjustments, and prepare for reporting of
the required measures and data.
We considered not releasing the preliminarily eligible ASM
participants for the 2027 ASM performance year/2029 ASM payment year
and, instead, only using applicable data from the 2025 calendar year to
identify the final ASM participants for the 2027 ASM performance year/
2029 ASM payment year. However, this alternative would provide less
time for ASM participants to prepare for the first ASM performance year
and potentially increase the operational burden for clinicians selected
for the model.
If ASM is finalized, as proposed, for each ASM performance year,
beginning with the 2028 ASM performance year/2030 ASM payment year, we
propose at Sec. 512.710(g)(2)(i) to confirm that ASM participants
continue to meet ASM participant eligibility criteria for the upcoming
ASM performance year/ASM payment year using applicable data from the
calendar year 2 years prior to the applicable ASM performance year. If
an ASM participant does not meet the ASM participant eligibility
criteria for the upcoming ASM performance year, then they would not be
required to participate in ASM for the applicable ASM performance year
and would not need to meet applicable reporting requirements of ASM.
Further, waivers, including the MIPS waiver, described at Sec. 512.775
would no longer apply to the ASM participant, and the ASM participant
must participate in MIPS if applicable.
Beginning with the 2028 ASM performance year/2030 ASM payment year,
we propose at Sec. 512.710(g)(2)(ii) to identify additional clinicians
not previously identified as ASM participants but who meet the ASM
participant eligibility criteria at Sec. 512.710(b) for the upcoming
ASM performance year/ASM payment year using data from the calendar year
2 years prior to the applicable ASM performance year.
We propose that CMS would make public the ASM participants for a
given ASM performance year annually in a form and manner determined by
CMS. We intend to release this information by the end of July in the
year preceding the start of the applicable ASM performance year. We
believe that the proposed approach of annually identifying clinicians
who meet the ASM participant eligibility criteria would ensure we are
accurately selecting ASM participants. That is, we would ensure that
ASM participants continue to be of the required specialty type and meet
the EBCM episode volume thresholds year-over-year. This proposed
approach to selecting ASM participants also allows us to account for
movement of ASM participants to different practices within mandatory
geographic areas and allows new ASM participants into the model over
the ASM test period. We also believe that this approach would allow ASM
to maintain an appropriate number of ASM participants over the ASM test
period to produce a reliable model test.
We considered an alternative approach of establishing a fixed list
of ASM participants for all ASM performance years. Under this
alternative, we would first identify ASM participants as clinicians
that meet the ASM participant eligibility criteria using applicable
data from the 2024 calendar year for the 2027 ASM performance year/2029
ASM payment year and release a list of preliminarily eligible ASM
participants. We would then finalize the ASM participants for the 2027
ASM performance year/2029 ASM payment year using applicable data from
the 2025 calendar year. Beginning in the 2028 ASM performance year/2030
ASM payment year, we would reconfirm that the final ASM participants
identified for the 2027 ASM performance year/2029 ASM payment year
continue to meet the ASM participant eligibility criteria for each ASM
performance year thereafter using applicable data from 2 calendar years
before the applicable ASM performance year. Under this alternative, we
would not identify new ASM participants over the course of the ASM
model test period. Repeatedly reconfirming that the initial ASM
participants continue to meet ASM participant eligibility criteria for
each ASM performance year would result in attrition of any ASM
participant who changes their association with a practice (that is,
assigns billing rights to a different TIN) after the first ASM
performance year based on our proposed identification of
[[Page 32573]]
ASM participants at the TIN/NPI level. Accordingly, we believe that
this alternative fixed-list approach would reduce the number of ASM
participants over the ASM test period and the magnitude of this
potential decrease could undermine the reliability of the model test.
We seek comments on our proposed approach for selecting and
notifying ASM participants at Sec. 512.710(g). We also seek comment on
only identifying the final ASM participants for the 2027 ASM
performance year/2029 ASM payment year using applicable data from the
2025 calendar year and the use of a fixed list of ASM participants for
all ASM performance years.
d. Proposed ASM Performance Assessment Approach, Data Submission
Requirements, and ASM Performance Category Requirements and Scoring
As discussed earlier in section III.C.1.b. of this proposed rule,
we propose to use the MVP framework, including its performance
categories, to assess ASM participant performance related to improving
quality of care and reducing low-value care related ASM targeted
chronic conditions. We believe this framework offers a tested
performance assessment framework to use in creating value-based
incentives for ASM participants. In this section of this proposed rule,
we discuss the performance measures and activities that would be used
to assess the performance of ASM participants in four ASM performance
categories of (1) quality, (2) cost, (3) improvement activities, and
(4) Promoting Interoperability. We propose to define at Sec. 512.705
``ASM performance category'' as a group of applicable measures or
activities used to assess an ASM participant's performance on quality,
cost, improvement activities, or Promoting Interoperability. Tying a
clinician's performance to certain measures and activities (as
discussed below) in these performance categories would support ASM
goals, as discussed in section III.C.1 of this proposed rule, of
decreasing the cost of care for beneficiaries with ASM's targeted
chronic conditions as well as improving quality care as measured
through a focused measure set relevant to ASM's clinical specialties
and targeted chronic conditions.
The quality ASM performance category would assess the
quality of care ASM participants delivered by measuring health care
processes, outcomes, and patient experiences of care with the goal of
improving the quality of care for beneficiaries with ASM's targeted
chronic conditions.
The cost ASM performance category would assess the
efficiency and cost-effectiveness of care provided to Medicare
beneficiaries with ASM targeted chronic conditions with the goal of
providing more cost-efficient care to generate cost savings.
The improvement activities ASM performance category would
assess ASM participants in their efforts to make practice improvements
that improve population health, enhance patient experiences and
outcomes, reduce cost of care, and improve clinician experience. To
meet ASM's practice improvement goals, ASM's improvement activities
would incentivize practice improvements that would strengthen care
management and processes related to ASM's targeted chronic conditions,
and incentivize stronger integration between specialist and primary
care providers.
The Promoting Interoperability ASM performance category
would assess ASM participants in their efforts to promote patient
engagement and electronic exchange of information using CEHRT to
enhance quality of care and reduce costs through more effective
upstream chronic condition management and care integration related to
ASM's targeted chronic conditions. Under ASM, CEHRT should meet the
requirements set forth in Sec. 414.1305, except all instances of
references to MIPS are to be replaced with references to ASM.
As further discussed below in section III.C.2.d.(2) of this
proposed rule, we propose for the quality ASM performance category,
cost ASM performance category, and promoting interoperability ASM
performance category, to draw measures and activities from specific
MVPs related to each of ASM's targeted chronic conditions to identify a
cohesive set of vetted and clinically relevant measures and activities
that would allow us to appropriately assess ASM participants on the
care they deliver related to ASM's targeted chronic conditions. Using
the same measures would mean the many ASM participants would already be
familiar with required measures and activities proposed in each of the
ASM performance categories. proposed in these ASM performance
categories. However, as we discuss in sections III.C.2.d.(1) and
III.C.2.f of this proposed rule, comparing performance on these
measures and activities as measured by ASM performance category and
final scores within each ASM cohort would result in payment adjustments
based on direct peer-to-peer comparisons of similar specialists. For
some ASM performance categories, we propose to include measures from
outside of the relevant MVP, such as from the broader inventory of MIPS
measures, when we believe there is a clinically justifiable rationale
for including such a measure. We propose ASM-specific measures or
activities in limited circumstances when we believe there is rationale
for assessing performance or creating an incentive for practice
improvement specific to ASM's targeted chronic conditions. For example,
the improvement activities ASM performance category, as discussed in
section III.C.2.d.(4). of this proposed rule, includes ASM-specific
improvement activities.
We also discuss how we propose to score each ASM performance
category within each of the ASM performance category sections within
this section of this proposed rule. While many of the proposed scoring
policies draw from MIPS, we are proposing scoring policies that
simplify some existing policies. As a mandatory model, simplification
of scoring compared to some MIPS and MVP policies would make it easier
for the ASM participant to understand how their performance in each of
the ASM performance categories contributes to their final score and
resulting payment adjustment. As part of this simplification, our
proposed scoring policies ensure that each ASM participant would at
minimum be measured on quality and cost, with further scoring
adjustments based on performance in the improvement activities and
Promoting Interoperability ASM performance categories, to determine
payment adjustments.
As discussed in section III.C.2.e of this proposed rule, we plan to
calculate a final score based on the quality, cost, improvement
activities, and Promoting Interoperability performance categories
scores for each ASM participant for each ASM performance year. The
scores in the quality and cost ASM performance categories would
positively impact the ASM final score while performance in the
improvement activities and Promoting Interoperability ASM performance
categories could result in negative scoring adjustments to the ASM
final score.
In the following section III.C.2.d.(1).(a) of this proposed rule,
we first discuss the ASM performance assessment approach. We then
propose data submission requirements applicable across the ASM
performance categories in section III.C.2.d.(1).(b) of this proposed
rule. Finally, we propose specific requirements and scoring policies
for each of the four ASM performance categories in sections
[[Page 32574]]
III.C.2.d.(2) through III.C.2.d.(5). of this proposed rule.
(1) Proposed Performance Assessment and Data Submission Requirements
(a) ASM Performance Categories
We propose at Sec. 512.715(a)(1) through (3) that CMS uses the
performance measures and activities described under Sec. Sec.
512.725(b) and (c), 512.730(b), 512.735(b), and 512.740(b) to assess
ASM participants in the quality, cost, improvement activities, and
Promoting Interoperability ASM performance categories. As discussed in
section III.C.1 of this proposed rule, we believe that these ASM
performance categories taken together would improve the quality of care
and produce cost savings related to ASM's chronic conditions. Further,
we believe that, taken together, the ASM performance categories provide
a comprehensive understanding of an ASM participant's management of
their beneficiaries' targeted chronic conditions.
We also believe that ASM participants, because of participation in
other CMS programs including MIPS, would already be familiar with
reporting (1) quality; (2) cost; (3) improvement activities; and (4)
Promoting Interoperability performance categories to determine a final
score. This proposed structure is similar to the performance assessment
approach of other CMS programs like the MIPS reporting option of the
Quality Payment Program. MIPS assesses the performance of MIPS eligible
clinicians across four performance categories and then determines a
MIPS payment adjustment factor that applies to the clinician's Medicare
Part B payments for covered professional services finalized at
Sec. Sec. 414.1380(a) and 414.1405(a) and as defined at Sec.
414.1305.
Under the proposed ASM performance categories, the value of care
provided to chronic care patients would be assessed through performance
in the quality and cost performance categories, supported by
performance in the improvement activities and Promoting
Interoperability performance categories. Measures and activities CMS
selects to assess an ASM's performance across the quality ASM
performance category and cost ASM performance category would assess the
value of care directly furnished to chronic care patients. Measuring
ASM participants' cost and quality performance ensures that Medicare
beneficiaries are receiving clinically appropriate, comprehensive,
high-value care. The measurement of cost and quality is essential to
measuring the value of care provided to Medicare beneficiaries with
chronic conditions. The improvement activities ASM performance category
incentivizes care coordination and collaboration between specialty
medicine and primary care, creating new opportunities for both groups
playing vital roles in care management and coordination. And lastly,
the Promoting Interoperability ASM performance category enables
meaningful EHR use, the reporting of clinical quality measures,
including electronic clinical quality measures (eCQMs) and continuous
practice-based quality improvement and care transformation.
We believe that ASM's more targeted approach to performance
assessment where we would evaluate ASM participants within each ASM
cohort across the ASM performance categories--(1) on a set of relevant
performance measures that they are required to report; and (2) among
clinicians furnishing similar sets of services, would produce final
scores and subsequent payment adjustments, as described in section
III.C.2.f of this proposed rule, 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 through
participation in ASM, 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.
We propose at Sec. 512.715(a) that, as further described in
Sec. Sec. 512.725, 512.730, 512.735, and 512.740, ASM participants
would receive a specific number of points for their performance on each
measure or activity within an ASM performance category. CMS assigns the
total number of points that a measure or activity may receive. The
total score across all four performance categories that an ASM
participant may receive is capped at 100 points. The number of points
awarded for an ASM's performance on a measure or activity corresponds
to the level of performance, the higher the points, the better the
performance. We propose to define at Sec. 512.705 ``ASM performance
category score'' as the assessment of each ASM participant's
performance on the applicable measures and activities for a performance
category during an ASM performance year based on the policies proposed
at Sec. Sec. 512.715, 512.725, 512.730, 512.735, and 512.740. As
further described below in this section of this proposed rule, CMS
would, using an ASM participant's ASM performance category scores
across all ASM performance categories, calculate an ASM participant's
final score for an ASM performance year/ASM payment year in accordance
with Sec. 512.745.
We propose at Sec. 512.715(b)(1) to use Medicare claims data and
administrative data to calculate some measures included in the quality
and cost ASM performance categories under Sec. Sec. 512.725 and
512.730. We propose at Sec. 512.715(b)(2) that we use other model-
specific data reported by ASM participants to calculate measure or
activity scores for the quality, improvement activities, and Promoting
Interoperability ASM performance categories under Sec. Sec. 512.725,
512.735, and 512.740.
We are soliciting feedback from the public on our proposal to
assess ASM participant performance across four ASM performance
categories: (1) quality; (2) cost; (3) improvement activities; and (4)
promoting interoperability. We seek comments on our proposal at Sec.
512.715(a) to set and assign specific points on measures or activities
in each ASM performance category and to calculate a final score using
point received across all four ASM performance categories as described
at Sec. 512.745. Finally, we seek comments on our proposal at Sec.
512.715(b) to use Medicare claims, administrative data, and model-
specific data reported by an ASM participant to calculate measure or
activity scores used to calculate ASM performance category scores.
(b) Data Submission Requirements
We propose at Sec. 512.720 that ASM participants would be required
to submit data on the measures and activities for the quality,
improvement activities, and Promoting Interoperability ASM performance
categories in accordance with each ASM performance categories described
in Sec. Sec. 512.725, 512.735, and 512.740. As further discussed
below, we are proposing to align some data submission requirements
under this model with the data submission requirements under MIPS as
defined at Sec. 414.1325. We believe that the use of similar processes
and ``submission types''--which we propose to define at Sec. 512.705
as the mechanism by which the ASM submitter submits data to us in the
form and manner specified by us, including, but not limited to: (1)
direct;
[[Page 32575]]
(2) log in and upload; and (3) log in and attest--would limit confusion
and burden for those ASM participants that have previously participated
in MIPS. We also intend to provide further resources on the exact data
submission procedures prior to the first data submission deadline for
the 2027 ASM performance year.
We propose that ASM participants must submit data at the same level
at which they are identified in the model. Since we propose identifying
ASM participants at the TIN/NPI level (as outlined in section
III.C.2.c.(3).(a).(i). of this proposed rule), we are likewise
proposing that each ASM participant would be required to submit data
for each ASM performance category at this same TIN/NPI level, unless
specifically stated otherwise within the requirements for a particular
performance category. Alignment between participant identification and
data submission levels is necessary for a mandatory model and supports
our goal of making accurate comparisons between similar participants.
This approach differs from MIPS, which offers various reporting options
(such as group, subgroup, or APM entity as defined in Sec. 414.1305).
We have determined that allowing multiple reporting configurations
would undermine ASM's design objective of creating clear peer-to-peer
performance comparisons for determining payment adjustments.
We recognize that some of the required measures and attestations in
each ASM performance category may reflect practice-level activities.
We, therefore, considered whether to allow submission of required
measures and attestations for the improvement activities and Promoting
Interoperability ASM performance categories at the TIN level. We
believe that it is more appropriate to align the data submission level
across all the ASM performance categories instead of having some ASM
performance categories with data submitted at the TIN/NPI level and
others at the TIN level. Alignment of submission level across all ASM
performance categories supports our goal of making like-to-like
performance comparisons to determine payment adjustments.
We are proposing the following data submission requirements at
Sec. 512.720(a)(1)(i) through (iii) (the order of the requirements
aligns with the order in which similar data submission requirements for
MIPS appear in Sec. 414.1325):
Quality ASM performance category data submission
requirements. For the quality ASM performance category, we propose at
Sec. 512.720(a)(1)(i) that an ASM participant must report at least one
required quality measure that is not an administrative claims-based
collection type (discussed in sections III.C.2.d.(2).(b) and
III.C.2.d.(2).(c) of this proposed rule) and meets the proposed data
completeness requirement as discussed in section III.C.2.d.(2).(h).(i)
of this proposed rule. The proposed requirements for the quality ASM
performance category are similar to those required under MIPS as
defined at Sec. 414.1325(1)(i) but with the addition of meeting the
data completeness requirement. We believe that the addition of the data
completeness requirement ensures that we would have complete data by
which to score at least one required quality measure. We also
considered that an ASM participant must report complete data for at
least two, at least three, or all required quality measures that are
not administrative claims-based collection types as the data submission
requirement for the quality ASM performance category. However, not
reporting all required measures would negatively affect an ASM's
participant quality ASM performance category score as discussed in
section III.C.2.(d).(i) of this proposed rule. Further, not meeting the
data submission requirement for the quality ASM performance category
would mean that an ASM participant would receive the maximum negative
payment adjustment for the applicable ASM payment year as discussed in
section III.C.2.f.(4) of this proposed rule. Setting the minimum data
submission requirement as reporting more than one complete quality
measure could penalize ASM participants that are unable to report
required measures because of extenuating circumstances. We believe that
the proposed minimum data submission requirement combined with the
proposed scoring policies would provide the appropriate incentive for
reporting all required quality measures while ensuring that we can
appropriately evaluate quality performance.
Improvement activities ASM performance category data
submission requirements. We propose Sec. 512.720(a)(1)(ii) that the
data submission requirement for the improvement activities ASM
performance category would require that an ASM participant attest to
completing or not completing the required ASM improvement activities
defined in Sec. 512.735. Unlike MIPS, we are not proposing to include
a ``yes'' attestation to the minimum data submission requirements to
receive a final score under ASM as defined in Sec. 512.745(b) as it
would conflict with how we propose to factor in the ASM improvement
activities performance category score into the final score as proposed
at Sec. 512.745(a)(1)(iii).
Promoting Interoperability ASM performance category data
submission requirements. The proposed requirements for the Promoting
Interoperability ASM performance category at Sec. 512.720(a)(1)(iii)
align with the MIPS requirements as defined at Sec. 414.1325(1)(iii).
ASM performance categories without data submission
requirements. Like the cost performance category or administrative
claims-based quality measures under MIPS, we propose at Sec.
512.720(a)(2) that there would be no data submission requirements for
the cost ASM performance category or for quality measures that have an
administrative claims-based collection type. Like MIPS, performance in
the ASM cost performance category and on some quality, measures would
be calculated using administrative claims data, which includes claims
submitted with dates of service during the applicable ASM performance
year that are processed no later than 60 days following the close of
the applicable ASM performance year.
Data submission types for ASM participants. We propose at
Sec. Sec. 512.720(b)(1) and (2) that an ASM participant would, like an
individual MIPS eligible clinician, be able to submit their ASM data
using, for the quality ASM performance category, the direct, login and
upload, submission types, and for improvement activities or Promoting
Interoperability ASM performance categories, the direct, login and
upload, or login and attest submission types as proposed at Sec.
512.720(b). These are the same submission types available under MIPS.
Use of multiple data submission types. Like the policy
established under MIPS, we propose at Sec. 512.720(c) that ASM
participants would be permitted to submit their ASM data using multiple
submission types for any performance category described at Sec.
512.720(b) as applicable; provided, however, that the ASM participant
uses the same identifier for all ASM performance categories and all
data submissions.
Data submission deadlines. We propose at Sec. 512.720(d)
that ASM participants would need to submit all required data and
attestations as required for each ASM performance category by March 31
following the close of the applicable ASM performance year, or a later
date as specified by CMS. This proposal aligns
[[Page 32576]]
with the deadline policy established under MIPS at Sec. 414.325(e). We
considered requiring a data submission deadline earlier than March 31
but believed that it would not provide ASM participants with sufficient
time to prepare their data submission.
Treatment of multiple data submissions. Like the policy
established under MIPS, for multiple data submissions received in the
quality and improvement activities ASM performance categories, for an
ASM participant submitters in multiple organizations (for example,
qualified registry, practice administrator, or EHR vendor), we propose
at Sec. 512.720(e) to calculate and score each submission received and
assign the highest of the scores. We propose at Sec. 512.720(e)(1)
that for multiple data submissions received for an individual ASM
participant from one or multiple submitters in the same organization,
we propose to score the most recent submission. We propose at Sec.
512.720(e)(2) that for multiple data submissions received for the
Promoting Interoperability performance category, we propose to
calculate a score for each data submission received and assign the
highest of the scores. We also propose that data can be submitted on
behalf of the ASM participant by an entity or individual designated to
submit data to CMS, including a third-party intermediary as described
in Sec. 512.720(a), on behalf of the ASM participant. We propose at
Sec. 512.705 to use with the definition of third-party intermediary
set forth in MIPS at Sec. 414.1305 to align the data submission
policies for third party intermediaries between MIPS and ASM.
We seek comments on the proposed data submission requirements and
submission types for each ASM performance category, the data submission
deadline, and the proposed treatment of multiple data submissions and
scoring at Sec. 512.720. We also seek comments on our proposal to
require data submission at the level by which we determine ASM
participation. We also seek comments on the alternative data submission
requirements for the quality ASM performance category that we
considered.
(2) Proposed Quality ASM Performance Category
The proposed quality ASM performance category supports the model
goals of improving quality of care with a focus on measures that are
relevant to ASM clinical specialties and targeted chronic conditions.
It also seeks to decrease the cost of care for beneficiaries with ASM-
targeted chronic conditions. Measuring quality of care helps identify
areas for improvement and ensures that clinical interventions are
effective and lead to improved patient outcomes. The importance of the
quality ASM performance category is reflected in the weight of the
performance category on the final score, discussed in section
III.C.2.e.(1) of this proposed rule.
(a) Background
We propose at Sec. 512.725(b) and (c) to use a quality measure set
specific to each ASM cohort, one measure set for heart failure and one
measure set for low back pain, which would contain condition-specific
mandatory measures. Each ASM participant must report all measures
specified in Table 39 for their applicable chronic condition, except
for the proposed administrative claims-based measures, which would be
calculated by CMS based on their submitted claims. These measures would
likely stay consistent throughout the duration of the model to support
reporting continuity, minimize burden, and ensure a reliable and valid
model evaluation. The quality measurement approach in ASM is similar to
the MVP reporting option under MIPS in that it limits reporting to a
subset of clinically relevant measures. However, while the MVP
reporting option allows a clinician to select an MVP and choose which
MVP measures to report, the ASM participant would be required to report
all quality measures in their respective ASM measure set.
Medicare's payment landscape is continuing to transform, moving
away from traditional FFS payments that are not tied to quality and
towards value-based models with increased provider accountability. ASM
is a continuation of these efforts, strengthening the connection
between quality and payment. We aim, in payment models such as ASM, to
utilize quality measures that incentivize evidence-based care and
prevention, improve patient outcomes, and reduce low-value health care
spending.
We propose to avoid making significant changes to these measure
sets over the period of model; however, we may propose to add or remove
measures through rulemaking if we believe refinements to the measure
set are necessary. We may propose to add or remove measures in response
to relevant public comments, recommendations from participants and
their collaborators, new CMS program activities, or significant changes
to the included measures. We would use notice and comment rulemaking to
propose any modifications, such as adding or removing measures for
monitoring quality or calculating scores for quality performance. We
seek comment on this proposal.
As proposed, ASM is designed to provide financial incentives for
measurable improvements in clinical outcomes for beneficiaries. We
expect our quality measurement strategy to increase adherence to
clinical guidelines, focus attention on outcomes to reduce costs, and
enhance the patient experience. Several of the measures also promote
prevention, as detailed in Table 39, by mitigating the progression of
the chronic diseases that ASM targets and reducing the risk for other
comorbid diseases that may exacerbate health issues. Each quality
measure proposed contains measures that aim to measure and incentivize
improvement in the following three domains: (1) excess utilization, (2)
evidence-based care and outcomes, and (3) patient-reported outcomes and
experience. Each measure set would include a utilization-focused
measure to assess appropriate use of select services in chronic disease
management. This measurement area may also indicate where excess or
inappropriate utilization is occurring, which aligns with CMS
priorities to reduce spending related to unnecessary care, imaging, or
procedures. Measures in the evidence-based care and outcomes domain are
clinically relevant to the conditions of focus, can meaningfully
discern differences in care furnished by ASM participants, and are
associated with improved outcomes for patients. Finally, measures
related to patient-reported outcomes capture what matters most to
patients, and incentivizing ASM participants to be more attuned to the
patient experience could drive improvements in functional status among
beneficiaries receiving treatment for heart failure and low back pain.
We believe that the measures in all three domains are clinically
relevant to the conditions of focus and would align with other CMS
programs and nationwide measurement efforts.
[[Page 32577]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.111
(i) Performance Year for the Quality ASM Performance Category
We propose at Sec. 512.725(a) that the ASM performance year for
quality measures would be the full calendar year from January 1 to
December 31, and the performance year would occur 2 years prior to an
applicable ASM payment year. We believe that setting the ASM
performance year for quality measures in this way aligns with MIPS as
defined at Sec. 414.1320 and would be easily adoptable for ASM
participants.
We seek comments on our proposed approach setting the ASM
performance year for quality measures.
(b) Quality Measure Set for the ASM Heart Failure Cohort
We propose at Sec. 512.725(b)(1) through (5) to include the
following measures in the heart failure measure set. Each ASM heart
failure participant must report each measure using one of the
collection types specified in Table 39.
(i) Risk-Standardized Acute Unplanned Cardiovascular-Related Admission
Rates for Patients With Heart Failure (HF) (MIPS Q492)
We propose to include Risk-Standardized Acute Unplanned
Cardiovascular-Related Admission Rates for Patients with Heart Failure
(HF) (MIPS Q492) in the ASM heart failure measure set. By assessing
potentially preventable cardiovascular-related hospital admissions,
this measure incentivizes clinicians to adopt evidence-based practices
in heart failure management, improve care coordination, and enhance the
overall quality of care.
A hospital readmission, for any reason, is disruptive to patients
and caregivers, costly to the health care system, and puts patients at
additional risk of hospital-acquired infections and complications.\138\
Readmissions are also a major source of patient and family stress and
may contribute substantially to a decline in functional ability,
particularly in older patients.\139\ Some readmissions are unavoidable
and result from inevitable progression of disease or worsening of
chronic conditions. Patients with heart failure, particularly those at
a more advanced stage, are vulnerable to a range of factors that may
increase their risk for cardiovascular-related hospitalizations.\140\
Risk of hospitalization may be related to an individual's clinical and
social/community risk factors but may also be affected by the quality
of care received. Activities that could improve quality of care include
the adoption of guideline-directed medical therapy, early intervention
for acute symptoms, optimal care coordination across providers, and
support for self-management. Policy changes, such as the Medicare
Hospital Readmissions Reduction Program, have led to a decrease in
readmission rates for both principal and secondary heart failure
hospitalizations; however, readmission rates in both groups remain
high.\141\ We propose to include this measure to continue the momentum
on reducing avoidable hospital admissions and readmissions, as well as
improve overall
[[Page 32578]]
quality of care for Medicare patients with heart failure.
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\138\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions.
Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/.
\139\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions.
Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/.
\140\ Malhotra C, Chaudhry I, Yeo Khung Keong, Sim D.
Multifactorial risk factors for hospital readmissions among patients
with symptoms of advanced heart failure. ESC heart failure.
2024;11(2):1144-1152. doi:https://doi.org/10.1002/ehf2.14670.
\141\ Blecker S, Herrin J, Li L, Yu H, Grady JN, Horwitz LI.
Trends in Hospital Readmission of Medicare-Covered Patients With
Heart Failure. Journal of the American College of Cardiology.
2019;73(9):1004-1012. doi:https://doi.org/10.1016/j.jacc.2018.12.040.
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In addition, this measure aligns with other quality programs, such
as the Quality Payment Program, which includes the measure in the
Advancing Care for Heart Disease MVP. Another benefit of the measure is
that it is calculated using administrative claims, which reduces
reporting burden for the ASM participant.
Furthermore, ASM proposes to use this measure at the TIN/NPI level.
We plan to pursue additional testing and analyses to ensure measure
validity at this level. To date, this measure has been validated at the
TIN level in the MIPS program. Analyses have determined a certain
threshold of attributed patients' needs to be met to ensure measure
validity; this threshold can be challenging to achieve at the TIN/NPI
level in MIPS given the wide range of specialty types that participate.
Internal analyses indicate that, given the 20 EBCM episode threshold
for participation of cardiologists described in section
III.C.2.c.(3)(b) of this proposed rule, meeting this threshold of
attributed patients in ASM would not be a significant issue or threat
to measure validity. For that reason, we anticipate this measure would
be valid and reliable at the TIN/NPI level for ASM participants
treating heart failure.
We seek comment on the proposal to include the Risk-Standardized
Acute Unplanned Cardiovascular-Related Admission Rates for Patients
with HF (MIPS Q492) measure in ASM and to assess performance at the
TIN/NPI level.
(ii) Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular
Systolic Dysfunction (LVSD) (MIPS Q008)
We propose to include Heart Failure (HF): Beta-Blocker Therapy for
Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q008) in the ASM
heart failure measure set. This measure aims to promote the appropriate
use of beta-blocker therapy in select patients with heart failure with
reduced ejection fraction (HFrEF). It assesses the percentage of
patients aged 18 years and older with a diagnosis of heart failure with
a current or prior left ventricular ejection fraction (LVEF) <= 40
percent who were prescribed beta-blocker therapy either within a 12-
month period of being seen in the outpatient setting or at each
hospital discharge. Beta-blockers, especially when delivered as part of
guideline-directed medical therapy, decrease the risk of major
cardiovascular events, reduce mortality and hospitalization in patients
with HFrEF, lessen the symptoms of heart failure, improve the clinical
status of these patients, and reduce future clinical deterioration
associated with heart failure.\142\ These improvements are observed in
all populations with heart failure of various etiologies, such as
patients with or without coronary artery disease (CAD), patients with
or without diabetes, older patients, as well as women and across
various racial and ethnic groups.\143\
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\142\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\143\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
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Despite its survival benefits, use of beta blockers in eligible
patients remains suboptimal.144 145 Nonadherence to
medications prescribed for heart failure, including beta-blockers, can
be associated with adverse outcomes such as hospital readmission and
mortality.146 147 By including this measure, we aim to
increase the appropriate use of beta-blocker therapy in eligible
patients with heart failure. This aligns with the goals of ASM to drive
improvements in the quality of care delivered to heart failure
patients, particularly in evidence-based pharmacotherapy. In addition,
inclusion of this measure aligns with other quality programs, such as
the Quality Payment Program, which includes the measure in the
Advancing Care for Heart Disease MVP, and the Cardiology Core Quality
Measures Collaborative (CQMC) set. We seek comment on the proposal to
include Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular
Systolic Dysfunction (LVSD) (MIPS Q008) in the ASM heart failure
measure set.
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\144\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\145\ Kim SE, Byung Su Yoo. Treatment Strategies of Improving
Quality of Care in Patients With Heart Failure. Korean circulation
journal. 2023;53. doi:https://doi.org/10.4070/kcj.2023.0024.
\146\ Ruppar TM, Cooper PS, Mehr DR, Delgado JM,
Dunbar[hyphen]Jacob JM. Medication Adherence Interventions Improve
Heart Failure Mortality and Readmission Rates: Systematic Review and
Meta[hyphen]Analysis of Controlled Trials. Journal of the American
Heart Association. 2016;5(6). doi:https://doi.org/10.1161/jaha.115.002606.
\147\ Ho PM, Magid DJ, Shetterly SM, et al. Medication
nonadherence is associated with a broad range of adverse outcomes in
patients with coronary artery disease. American Heart Journal.
2008;155(4):772-779. doi:https://doi.org/10.1016/j.ahj.2007.12.011.
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(iii) Heart Failure (HF): Angiotensin-Converting Enzyme (ACE) Inhibitor
or Angiotensin Receptor Blocker (ARB) or Angiotensin Receptor-
Neprilysin Inhibitor (ARNI) Therapy for Left Ventricular Systolic
Dysfunction (LVSD) (MIPS Q005)
We propose to include Heart Failure (HF): Angiotensin-Converting
Enzyme (ACEi) Inhibitor or Angiotensin Receptor Blocker (ARB) or
Angiotensin Receptor-Neprilysin Inhibitor (ARNI) Therapy for Left
Ventricular Systolic Dysfunction (LVSD) (MIPS Q005) in the heart
failure measure set. This measure assesses the appropriate use of the
specified medicines in patients with heart failure with reduced LVEF.
Adherence to this class of medications, especially as part of
guideline-directed medical therapy, offers cardioprotective benefits in
patients with heart failure and reduces mortality and heart failure-
related hospitalizations.148 149 Furthermore, McMurray et
al. in PARADIGM-HF showed use of angiotensin receptor-neprilysin
inhibitor compared to enalapril, an ACEi, not only reduced risk for
cardiovascular death and hospitalization related to heart failure, but
also decreased the symptoms and physical limitations of heart
failure.\150\ Similar to beta blockers, optimal dosing and adherence to
this group of medication in heart failure patients remains
suboptimal.\151\ By including this measure, we can incentivize
cardiologists participating in the ASM to prescribe evidence-based
pharmacotherapy for patients with HFrEF. In addition, inclusion of this
measure aligns with other quality measurement efforts, such as the
Advancing Care for Heart Disease MVP in the Quality Payment Program and
the Cardiology Core Quality Measures Collaborative (CQMC) set. We seek
[[Page 32579]]
comment on the appropriateness of including this measure in the heart
failure measure set.
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\148\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\149\ D[uuml]sing R. Mega clinical trials which have shaped the
RAS intervention clinical practice. Therapeutic Advances in
Cardiovascular Disease. 2016;10(3):133-150. doi:https://doi.org/10.1177/1753944716644131.
\150\ McMurray JJV, Packer M, Desai AS, et al. Angiotensin-
Neprilysin Inhibition versus Enalapril in Heart Failure. New England
Journal of Medicine. 2014;371(11):993-1004. doi:https://doi.org/10.1056/nejmoa1409077.
\151\ Kim SE, Byung Su Yoo. Treatment Strategies of Improving
Quality of Care in Patients With Heart Failure. Korean circulation
journal. 2023;53. doi:https://doi.org/10.4070/kcj.2023.0024.
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(iv) Controlling High Blood Pressure (MIPS Q236)
We propose including Controlling High Blood Pressure (MIPS Q236) in
the heart failure measure set for ASM because optimal blood pressure
management is a critical part of heart failure management and
uncontrolled blood pressure can contribute to complications and
progression.152 153 For example, severe hypertension can
result in pulmonary edema (more common in patients with preserved
LVEF), requiring urgent treatment to reduce blood pressure.\154\
Controlling blood pressure helps reduce the risk of adverse outcomes,
such as hospitalizations and mortality related to heart
failure.155 156 By including this measure, ASM incentivizes
cardiologists to optimize blood pressure control, particularly given
that patients with heart failure very commonly have a history of
hypertension.\157\ In addition, this measure complements the two other
quality measures for heart failure in ASM, as the use of beta blockers
and ACEi/ARB/ARNIs also have favorable effects on heart failure
outcomes and lower blood pressure.\158\ The complimentary emphasis on
blood pressure control and medication management in this measure set
may also slow disease progression and function as a form of tertiary
prevention in heart failure patients. Furthermore, its inclusion in
other quality measure sets, such as the CMS Universal Foundation
Measure Set and the Cardiology Core Quality Measures Collaborative
(CQMC) set has resulted in more widespread adoption, helping streamline
reporting and reduce burden.\159\ We seek comment on our inclusion of
this measure in the heart failure quality measure set.
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\152\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\153\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical
Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x.
\154\ Ratko Lasica, Lazar Djukanovic, Jovanka Vukmirovic, et al.
Clinical Review of Hypertensive Acute Heart Failure. Medicina
(Kaunas Spausdinta). 2024;60(1):133-133. doi:https://doi.org/10.3390/medicina60010133.
\155\ The SPRINT Research Group. A Randomized Trial of Intensive
versus Standard Blood-Pressure Control. New England Journal of
Medicine. 2015;373(22):2103-2116. doi:https://doi.org/10.1056/nejmoa1511939.
\156\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\157\ Messerli FH, Rimoldi SF, Bangalore S. The Transition From
Hypertension to Heart Failure. JACC: Heart Failure. 2017;5(8):543-
551. doi:https://doi.org/10.1016/j.jchf.2017.04.012.
\158\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical
Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x.
\159\ Jacobs DB, Schreiber M, Seshamani M, Tsai D, Fowler E,
Fleisher LA. Aligning Quality Measures across CMS--The Universal
Foundation. New England Journal of Medicine. 2023;388(9).
doi:https://doi.org/10.1056/nejmp2215539.
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(v) Functional Status Assessments for Heart Failure (MIPS Q377)
We propose including Functional Status Assessments for Heart
Failure (MIPS Q377) in the heart failure measure set in ASM because
patients with heart failure often experience poor functional status and
health-related quality of life, both of which tend to decline as the
disease progresses. Assessing functional status is crucial for managing
the complex health needs of patients who often have multiple
comorbidities. Furthermore, standardized assessment of patient-reported
health status using a validated questionnaire can be useful for
providing incremental information related to patient functional status
and prognosis. It is also an independent predictor of hospitalization
and mortality.\160\ The measure emphasizes the importance of collecting
relevant patient-reported health status from heart failure patients,
such as functional limitations, symptom burden, and quality of life. It
supports the creation of a dynamic conversation between patients and
providers regarding care goals and priorities, which we believe can
facilitate shared decision-making, empower patients, and incentivize
clinicians to incorporate patient voice and lived experience in
clinical care activities. This measure is appropriate for ASM as it
encourages cardiologists to regularly assess, monitor, and help improve
the functional status of their heart failure patients, which are
crucial for providing patient-centered care and aligning treatment
plans with individual goals and priorities. In addition, this measure
aligns with other quality measurement efforts, such as the Advancing
Care for Heart Disease MVP in the Quality Payment Program and the
Cardiology Core Quality Measures Collaborative (CQMC) set. We seek
comment on our inclusion of this measure in the heart failure quality
measure set.
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\160\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
---------------------------------------------------------------------------
We note that the Functional Status Assessments for Heart Failure
(MIPS Q377) measure is currently a process measure. We propose that the
process measure would be included for the 2027 ASM performance year,
while we explore the benefit and applicability of developing a
Patient--patient-reported outcome-based performance measure (PRO-PM).
The current measure ensures a functional status assessment is
completed. A PRO-PM would hold the ASM participant accountable for not
only collecting patient-reported data but also improving or slowing
progression of decline in functional status over time. We believe this
would capture more meaningful changes in patient care. We seek comments
on our proposal to include the Functional Status Assessments for Heart
Failure (MIPS Q377) measure in ASM, the applicability of the measure as
a PRO-PM, and whether the PRO-PM, if available, should be included in
the heart failure measure set for future performance years of ASM.
(c) Quality Measure Set for the ASM Low Back Pain Cohort
We propose at Sec. 512.725(c)(1) through (5) to include the
following measures in the low back pain measure set. Each ASM low back
pain participant must report each measure using one of the collection
types specified in Table 39.
(i) Magnetic Resonance Imaging (MRI) Lumbar Spine for Low Back Pain,
Respecified To Be Relevant to ASM Participants Treating Low Back Pain
We propose to include a respecified MRI Lumbar Spine for Low Back
Pain measure in the low back pain measure set. We believe this
administrative claims-based measure can effectively assess overuse and
hopefully incentivize reductions in inappropriate MRI imaging for low
back pain. Routine imaging (such as MRI) is not recommended for
patients with non-specific low back pain in the absence of certain
clinical indicators with concerning features.\161\ However, studies
have shown that a significant proportion of patients with low back pain
undergo imaging, often within the first few weeks of symptom onset,
[[Page 32580]]
despite the lack of clear indication.\162\ Overuse of imaging for low
back pain can lead to unnecessary health care costs and potential
patient harm from incidental findings that may prompt further
unnecessary testing or procedures.163 164 By including this
measure in the low back pain measure set, ASM aims to incentivize
adherence to evidence-based guidelines and a reduction of unnecessary
MRIs for patients with uncomplicated low back pain, particularly in the
initial stages of evaluation and management. We believe this could also
have a positive impact on patient experience as it reduces time spent
at medical appointments and health care costs. Furthermore, as an
administrative claims measure, ASM participants would not have to
report data for this measure, reducing reporting burden.
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\161\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020. https://www.spine.org/Portals/0/assets/downloads/ResearchClinicalCare/Guidelines/LowBackPain.pdf
\162\ Medicare Payment Advisory Commission. Health Care Spending
and the Medicare Program: A Data Book. Medicare Payment Advisory
Commission; July 2021. Accessed [insert access date]. https://www.medpac.gov/wp-content/uploads/2021/10/July2021_MedPAC_DataBook_Sec7_SEC.pdf.
\163\ Litkowski PE, Smetana GW, Zeidel ML, Blanchard MS. Curbing
the Urge to Image. The American Journal of Medicine.
2016;129(10):1131-1135. doi:https://doi.org/10.1016/j.amjmed.2016.06.020.
\164\ Chou R. Diagnostic Imaging for Low Back Pain: Advice for
High-Value Health Care From the American College of Physicians.
Annals of Internal Medicine. 2011;154(3):181. doi:https://doi.org/10.7326/0003-4819-154-3-201102010-00008.
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MRI Lumbar Spine for Low Back Pain measure was specified for use in
Hospital Outpatient Departments at the facility level and was
previously included in the Hospital Outpatient Quality Reporting
Program (HOQRP) as OP-8 (73 FR 68766).\165\ Part of our re-
specification efforts would involve ensuring validity and reliability
at the TIN/NPI level. We are also exploring the denominator criteria of
the measure and potentially redefining the denominator. This potential
change is pending further internal analyses to determine whether
participants would be able to meet denominator minimum and
specification changes and ensure the measure accurately identifies
unwarranted MRI usage. We would propose the measure's specifications
through notice and comment rulemaking when available and in advance of
using the measure in the low back pain cohort.
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\165\ Hospital Outpatient Quality Reporting
Partnership for Quality Measurement. P4qm.org. Published 2025.
Accessed April 23, 2025. https://p4qm.org/taxonomy/term/216.
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We seek comment on the re-specification and inclusion of MRI Lumbar
Spine for Low Back Pain measure in the low back pain measure set.
(ii) Use of High-Risk Medications in Older Adults (MIPS Q238)
We propose to include the Use of High-Risk Medications in Older
Adults (MIPS Q238) measure in the low back pain quality measure set.
Older adults with low back pain who receive a prescription for a high-
risk medication as part of their treatment plan, may have a range of
adverse events, including medication side effects, drug interactions, a
prescribing cascade, or hospitalization. Individuals ages 65 and older
are more likely to have multiple chronic conditions, increasing their
risk for adverse drug effects associated with polypharmacy.\166\ Forty
percent of individuals 65 and older filled at least one prescription
for a potentially inappropriate medication and 13 percent filled two or
more, leading to as much as $7.2 billion spent per year on
inappropriate medications in older adults167 168 Several of
the medications included in the measure are prescribed for treatment of
musculoskeletal conditions and pain, such as skeletal muscle relaxants
and tricyclic antidepressants.169 170 171 Skeletal muscle
relaxants may be prescribed as an alternative to conventional pain
medication; however, they carry considerable risk of falls and
associated morbidity due to common side effects of dizziness,
drowsiness, and hypotension. One study found that elderly patients who
were using skeletal muscle relaxants were 2.25 times more likely to
visit the emergency room for a fall or fracture than elderly patients
who weren't prescribed these medications.\172\ Similarly, a meta-
analysis exploring the risks associated with use of tricyclic
antidepressants in elderly patients found a significant increased risk
of falls and fracture.\173\ In addition to the morbidity and
substantial costs associated with falls in the older adult population,
falls in a patient with low back pain could significantly worsen their
condition and functional status. We believe including this measure in
the low back pain measure set could encourage ASM participants to be
more cautious in their prescribing of high-risk medications to patients
with low back pain and potentially prevent falls and other adverse
events that may negatively impact patient outcomes. It also could align
clinical practice with efforts to avoid inappropriate describing in
older adults, such as the Beers criteria, and deprescribe where
appropriate.\174\ We believe the measure may promote positive changes
in care delivery, such as incorporating regular medication review and
reconciliation. This measure could be particularly impactful in ASM
given the promotion of specialty and primary care integration as a goal
of the model. We seek comments on our inclusion of the Use of High-Risk
Medications in Older Adults (MIPS Q238) measure in the ASM low back
pain measure set.
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\166\ Medicare Payment Advisory Commission. Polypharmacy and
opioid use among Medicare Part D enrollees. In: Report to the
Congress: Medicare and the Health Care Delivery System. June 2015.
Chapter 5. Accessed [insert access date]. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/chapter-5-polypharmacy-and-opioid-use-among-medicare-part-d-enrollees-june-2015-report-.pdf.
\167\ Fick DM, Mion LC, Beers MH, L. Waller J. Health outcomes
associated with potentially inappropriate medication use in older
adults. Research in Nursing & Health. 2008;31(1):42-51. doi:https://doi.org/10.1002/nur.20232.
\168\ Fu AZ, Jiang JZ, Reeves JH, Fincham JE, Liu GG, Perri M.
Potentially Inappropriate Medication Use and Healthcare Expenditures
in the US Community-Dwelling Elderly. Medical Care. 2007;45(5):472-
476. doi:https://doi.org/10.1097/01.mlr.0000254571.05722.34.
\169\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020. https://www.spine.org/Portals/0/assets/downloads/ResearchClinicalCar.
\170\ Santandreu J, Francisco F[eacute]lix Caballero, M Pilar
G[oacute]mez-Serranillos, Gonz[aacute]lez-Burgos E. Association
between tricyclic antidepressants and health outcomes among older
people: A systematic review and meta-analysis. Maturitas.
2024;188:108083-108083. doi:https://doi.org/10.1016/j.maturitas.2024.108083.
\171\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants
in Geriatric Patients. Uspharmacist.com. Published January 21, 2020.
Accessed April 17, 2025. https://www.uspharmacist.com/article/
inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric-
patients#:~:text=Skeletal%20muscle%20relaxants%20are%20on,opioids%20i
n%20the%20geriatric%20population.
\172\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants
in Geriatric Patients. Uspharmacist.com. Published January 21, 2020.
Accessed April 23, 2025. https://www.uspharmacist.com/article/inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric-patients?utm_source=TrendMD&utm_medium=cpc&utm_campaign=US_Pharmacist_TrendMD_0.
\173\ Santandreu J, Francisco F[eacute]lix Caballero, M Pilar
G[oacute]mez-Serranillos, Gonz[aacute]lez-Burgos E. Association
between tricyclic antidepressants and health outcomes among older
people: A systematic review and meta-analysis. Maturitas.
2024;188:108083-108083. doi:https://doi.org/10.1016/j.maturitas.2024.108083.
\174\ American Geriatrics Society. American Geriatrics Society
2023 updated AGS Beers Criteria for potentially inappropriate
medication use in older adults. Journal of the American Geriatrics
Society. 2023;71(7). doi:https://doi.org/10.1111/jgs.18372.
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(iii) Preventive Care and Screening: Screening for Depression and
Follow-Up Plan (MIPS Q134)
We propose to including Preventive Care and Screening: Screening
for Depression and Follow-Up Plan (Q134) in the low back pain measure
set
[[Page 32581]]
because patients with chronic pain conditions, such as low back pain,
are at an increased risk of developing depression.\175\ Comorbid
depression can negatively impact quality of life, treatment adherence,
and overall health outcomes.\176\ Screening for depression and
providing appropriate follow-up care is an essential aspect of
comprehensive care for patients with low back pain, as depression may
exacerbate pain and worsen functional status.\177\ Co-occurring
depression has also been found to worsen low back pain outcomes and
increase health care costs.\178\ Effective management of low back pain
often requires a multidisciplinary approach to address the physical,
psychological, and emotional aspects of the condition. Including this
measure in the ASM low back pain measure set would encourage ASM
participants treating low back pain to prioritize mental health
screening and follow-up care. We believe this would lead to better
management of physical and mental health, prevent worsening of a
patient's health status, and improve overall
outcomes.179 180 We seek comment on the proposal to include
the Preventive Care and Screening: Screening for Depression and Follow-
Up Plan (MIPS Q134) measure in the ASM low back pain measure set.
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\175\ Mullins PM, Yong RJ, Bhattacharyya N. Associations between
chronic pain, anxiety, and depression among adults in the United
States. Pain Practice. 2023;23(6). doi:https://doi.org/10.1111/papr.13220.
\176\ Mullins PM, Yong RJ, Bhattacharyya N. Associations between
chronic pain, anxiety, and depression among adults in the United
States. Pain Practice. 2023;23(6). doi:https://doi.org/10.1111/papr.13220.
\177\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
\178\ Wong JJ, Tricco AC, C[ocirc]t[eacute] P, et al.
Association Between Depressive Symptoms or Depression and Health
Outcomes for Low Back Pain: a Systematic Review and Meta-analysis.
Journal of General Internal Medicine. 2021;37(5). doi:https://doi.org/10.1007/s11606-021-07079-8.
\179\ Pinheiro MB, Ferreira ML, Refshauge K, et al. Symptoms of
Depression and Risk of New Episodes of Low Back Pain: A Systematic
Review and Meta-Analysis. Arthritis Care & Research.
2015;67(11):1591-1603. doi:https://doi.org/10.1002/acr.22619.
\180\ Tagliaferri SD, Miller CT, Owen PJ, et al. Domains of
chronic low back pain and assessing treatment effectiveness: A
clinical perspective. Pain Practice. 2019;20(2). doi:https://doi.org/10.1111/papr.12846.
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(iv) Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-Up Plan (MIPS Q128)
We propose to including the Preventive Care and Screening: Body
Mass Index (BMI) Screening and Follow-Up Plan (MIPS Q128) measure in
the low back pain measure set because obesity can predispose patients
to and exacerbate chronic low back pain.181 182
Incorporating BMI screening and related follow-up into the care of
patients with low back pain can improve outcomes by reducing the
severity and recurrence of low back pain. The inclusion of this measure
in the ASM low back pain measure set would incentivize a more holistic
approach to low back pain management, addressing both the physical and
lifestyle factors contributing to the condition. We believe ASM
participants treating low back pain can play a crucial role in
preventing and addressing modifiable risk factors like obesity and
providing appropriate follow-up plans for weight management. In
addition, this measure aligns with those used in other quality
programs, such as the Rehabilitative Support for Musculoskeletal Care
MVP in the Quality Payment Program. We seek comments on the proposal to
include Preventive Care and Screening: Body Mass Index (BMI) Screening
and Follow-Up Plan (MIPS Q128) in the ASM low back pain measure set.
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\181\ Zhang TT, Liu Z, Liu YL, Zhao JJ, Liu DW, Tian QB. Obesity
as a Risk Factor for Low Back Pain: A Meta-Analysis. Clinical Spine
Surgery. 2018;31(1):22-27. doi:https://doi.org/10.1097/BSD.0000000000000468.
\182\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
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(v) Functional Status Change for Patients With Low Back Impairments
(MIPS Q220)
We propose to include the Functional Status Change for Patients
with Low Back Impairments (MIPS Q220) measure in the ASM low back pain
measure set. This measure would encourage ASM participants to adopt a
more patient-centered and holistic approach to improving functional
status and quality of life in patients with low back pain. As a
patient-reported outcome measure, the measure tracks changes in a
patient's functional status over time, assessing changes and rewarding
meaningful improvement with a better measure score for the ASM
participant. We believe measuring and improving functional status could
increase self-efficacy, improve financial well-being, and lower future
medical costs. Measuring a change in functional status can also be used
to direct and assess the success of treatment. Furthermore, the
adoption of validated objective measurements may enhance the
reliability and sensitivity of detecting physical deficits or
monitoring posttreatment improvements of low back pain in older
adults.\183\ Notably, relevant professional organizations and specialty
societies recommend the use of functional status surveys to assess and
monitor changes in low back pain over time. The American Academy of
Orthopaedic Surgeons recommends the use of the Oswestry Disability
Index, which can be used to fulfill this measure, as one of its
preferred tools for spine care. While AAOS also recommends the Neck
Disability Index, it is less relevant to ASM.184 185 These
functional status surveys include questions related to modifiable
lifestyle factors, such as physical activity and social isolation,
prompting conversation with patients that can prevent the worsening of
comorbid conditions and low back pain. In addition, this measure aligns
with other quality programs, such as the Rehabilitative Support for
Musculoskeletal Care MVP in the Quality Payment Program and the Core
Quality Measures Collaborative Orthopedics set. By holding ASM
participants who treat low back pain accountable for this measure, ASM
promotes a comprehensive approach to low back pain management,
including appropriate assessment, treatment, and monitoring of changes.
We seek comment on our proposal to include the Functional Status Change
for Patients with Low Back Impairments (MIPS Q220) measure in the low
back pain measure set.
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\183\ Wong AY, Karppinen J, Samartzis D. Low back pain in older
adults: risk factors, management options and future directions.
Scoliosis and Spinal Disorders. 2017;12(1):1-23. doi:https://doi.org/10.1186/s13013-017-0121-3.
\184\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
\185\ Performance Measures by Orthopaedic Subspecialty.
Aaos.org. Published 2025. Accessed April 23, 2025. https://www.aaos.org/quality/research-resources/patient-reported-outcome-measures/performance-measures-by-orthopaedic-subspecialty.
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(d) Other Measures Under Consideration
(i) Patient Activation Measure (PAM) (MIPS Q503)
We seek comments on whether the Patient Activation Measure (PAM)
(MIPS Q503) would be appropriate to include in both the heart failure
and low back pain measure sets. Chronic conditions, in general, are
influenced by external factors, such as lifestyle, education,
nutrition, and activity. Patient activation, which refers to a
patient's knowledge, skills, and confidence in managing their health
condition, is an important factor in achieving better health outcomes
and
[[Page 32582]]
adherence to treatment plans. For chronic conditions , such as heart
failure and low back pain, where self-management and active patient
engagement are crucial, assessing and improving patient activation
levels could help ASM participants tailor their ability to provide more
patient-centered support and education. Including the PAM measure in
ASM could incentivize clinicians to prioritize strategies that enhance
patient activation, such as shared decision-making, goal setting, and
self-management support.\186\ Furthermore, higher levels of patient
activation have been associated with better health behaviors, such as
physical activity, and improved mental health outcomes.\187\ We are
concerned by the burden on participants and patients that may be
introduced by: (1) adding an additional measure to the set, (2) using a
patient survey measure, and (3) PAM being a proprietary measure. We
seek comments on whether PAM could be applicable to the heart failure
and low back pain measure sets.
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\186\ Newland P, Lorenz R, Oliver BJ. Patient activation in
adults with chronic conditions: A systematic review. Journal of
Health Psychology. Published online August 23, 2020:135910532094779.
doi:https://doi.org/10.1177/1359105320947790.
\187\ Hosseinzadeh H, Downie S, Shnaigat M. Effectiveness of
health literacy- and patient activation-targeted interventions on
chronic disease self-management outcomes in outpatient settings: a
systematic review. Australian Journal of Primary Health. 2022;28(2).
doi:https://doi.org/10.1071/py21176.
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(ii) Advance Care Plan (MIPS Q047)
We considered including the Advance Care Plan (MIPS Q047) measure
in the heart failure measure set. Advance care planning is important
for understanding and documenting a patient's wishes regarding their
medical treatment, acknowledging that wishes may evolve as
circumstances and health status change. Heart failure, depending on
stage and other risk factors, can progress unpredictably and rapidly.
According to one meta-analysis, survival rates for all patients with
heart failure are 95.7 percent at one month, 86.5 percent at 1 year,
and 56.7 percent at 5 years, with elderly patients having lower
survival rates on average.\188\ Having a documented plan in place is
necessary to ensure a patient's wishes are followed should they become
incapacitated and unable to make care decisions. One study of Medicare
beneficiaries with severe illness found that timely advance care
planning was associated with significantly less intensive end-of-life
care utilization and fewer in-hospital deaths, hospital admissions,
intensive care unit admissions, and emergency department visits.\189\
Another study on Medicare beneficiaries with heart failure found that
beneficiaries who received advance care planning visits had 19 percent
lower total end-of-life expenditure compared to those who did not.\190\
This measure could encourage ASM participants to have proactive
discussions with their patients about end-of-life care, advance
directives, and other important decisions related to their treatment
plan. However, we decided not to include the measure, as we worry the
measure would not result in sufficiently meaningful positive changes
for patients to justify the increased burden. Also, we do not believe
the cardiologist would be the most appropriate provider to oversee
advance care planning in every case, and we want to avoid duplication
of effort with PCPs. We seek comments on whether the Advance Care Plan
measure could be meaningful if included in the heart failure measure
set.
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\188\ Jones NR, Roalfe AK, Adoki I, Hobbs FDR, Taylor CJ.
Survival of patients with chronic heart failure in the community: A
systematic review and meta[hyphen]analysis. European Journal of
Heart Failure. 2019;21(11):1306-1325. doi:https://doi.org/10.1002/ejhf.1594.
\189\ Weissman JS, Reich AJ, Prigerson HG, et al. Association of
Advance Care Planning Visits With Intensity of Health Care for
Medicare Beneficiaries With Serious Illness at the End of Life. JAMA
Health Forum. 2021;2(7):e211829. doi:https://doi.org/10.1001/jamahealthforum.2021.1829.
\190\ Brill SB, Riley SR, Prater L, et al. Advance Care Planning
(ACP) in Medicare Beneficiaries with Heart Failure. Journal of
General Internal Medicine. 2024;39(13):2487-2495. doi:https://doi.org/10.1007/s11606-024-08604-1.
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(iii) Clinician and Clinician Group Risk-Standardized Hospital
Admission Rates for Patients With Multiple Chronic Conditions (MIPS
Q484)
We considered including the Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple
Chronic Conditions (MIPS Q484) measure in the heart failure measure
set. We believe evaluating potentially preventable hospital admissions
could help assess the quality of ambulatory care provided by
cardiologists to patients with multiple chronic conditions, including
heart failure. Nearly 90 percent of adults with heart failure have two
or more additional chronic conditions, and almost 60 percent have five
or more chronic conditions.\191\ For heart failure patients with
multiple comorbidities, reducing potentially preventable
hospitalizations is a key goal for improving outcomes and reducing
health care costs. While incentivizing cardiologists to adopt best
practices, such as improving care coordination with primary care and
enhancing self-management support, is of interest to CMS, this measure
is not adequately targeted to heart failure. We also do not consider
this measure appropriate for the low back pain measure set, as the
condition is less prone to hospital admissions and re-admissions. We
seek comments on whether the Clinician and Clinician Group Risk-
standardized Hospital Admission Rates for Patients with Multiple
Chronic Conditions (MIPS Q484) measure should be considered for
inclusion in the heart failure measure set.
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\191\ Dharmarajan K, Dunlay SM. Multimorbidity in Older Adults
with Heart Failure. Clinics in Geriatric Medicine. 2016;32(2):277-
289. doi:https://doi.org/10.1016/j.cger.2016.01.002.
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(iv) Cardiac Rehabilitation Patient Referral From an Outpatient Setting
(MIPS Q243)
We considered including the Cardiac Rehabilitation Patient Referral
from an Outpatient Setting measure in the heart failure measure set.
This measure assesses the percentage of patients evaluated in an
outpatient setting who have qualified for cardiac rehabilitation and
were referred to an outpatient cardiac rehabilitation program. As it
relates to heart failure, Medicare patients only qualify for a cardiac
rehabilitation program if they have stable chronic heart failure,
defined as left ventricular ejection fraction of 35 percent or less and
New York Heart Association (NYHA) class II to IV symptoms despite being
on optimal heart failure therapy for at least 6 weeks.\192\ In these
patients, cardiac rehabilitation is a comprehensive intervention that
includes exercise training, education, and counseling to improve
cardiovascular health and reduce the risk of future cardiac events. For
patients with heart failure, meta-analyses on cardiac rehabilitation
have shown that it improves functional capacity, exercise duration, and
health-related quality of life.\193\ Also, cardiac rehabilitation
programs have evolved to serve other purposes, such as disease
management and prevention centers that assist with medication
adherence, weight loss, smoking cessation, and other contributors to
heart disease.\194\
[[Page 32583]]
By including this measure in the heart failure measure set, CMS could
incentivize cardiologists and other clinicians to refer eligible
patients with heart failure to cardiac rehabilitation programs, which
can potentially improve their long-term outcomes and reduce their risk
of hospitalizations. We decided not to include the measure in the heart
failure measure set because access to cardiac rehabilitation programs
is significantly varied based on region due to factors like limited
availability, density, eligibility, or distance, and these factors
could negatively affect ASM participants due to no fault of their
own.\195\ We seek comment on whether the Cardiac Rehabilitation Patient
Referral from an Outpatient Setting measure could be meaningful if
included in the heart failure measure set.
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\192\ Cardiac Rehabilitation Program Coverage. www.medicare.gov.
https://www.medicare.gov/coverage/cardiac-rehabilitation.
\193\ Heidenreich PA, Bozkurt B, Aguilar D, et al. 2022 AHA/ACC/
HFSA Guideline for the Management of Heart failure: a Report of the
American College of Cardiology/American Heart Association Joint
Committee on Clinical Practice Guidelines. Circulation.
2022;145(18). doi:https://doi.org/10.1161/cir.0000000000001063.
\194\ Ades PA, Keteyian SJ, Wright JS, et al. Increasing Cardiac
Rehabilitation Participation From 20% to 70%: A Road Map From the
Million Hearts Cardiac Rehabilitation Collaborative. Mayo Clinic
Proceedings. 2017;92(2):234-242. doi:https://doi.org/10.1016/j.mayocp.2016.10.014.
\195\ Duncan MS, Robbins NN, Wernke SA, et al. Geographic
Variation in Access to Cardiac Rehabilitation. Journal of the
American College of Cardiology. 2023;81(11):1049-1060. doi:https://doi.org/10.1016/j.jacc.2023.01.016.
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(v) Falls: Plan of Care
We considered including the Falls: Plan of Care measure in the low
back pain measure set. This measure assesses the percentage of patients
aged 65 years and older with a history of falls that had a plan of care
for falls documented within 12 months. The implementation of a falls
plan of care for this population could address multiple aspects of
patient safety and functional improvement. Such a plan may include
assessment of environmental hazards, evaluation of medication side
effects, and implementation of appropriate exercise interventions to
improve strength, balance, and coordination.\196\ For low back pain
patients specifically, the plan could incorporate targeted exercises
that not only address fall prevention but also support their primary
condition management, creating a comprehensive approach to their care.
The Falls: Plan of Care quality measure is particularly relevant for
the low back pain patient population as these patients may experience
altered biomechanics, decreased mobility, and impaired balance, which
may significantly increase their risk of falls. Patients with low back
pain may also exhibit protective movement patterns and altered postures
that, while intended to minimize pain, may compromise their stability
and balance. Studies have shown that some elderly patients with a
recent history of back pain are at increased risk for falls, with that
risk increasing as the number of locations they experience pain in
their back increases.197 198 Another study found that
community-dwelling older adults with chronic pain generally, such as
low back pain, were more likely to have fallen in the past 12 months
and to fall again in the future.\199\ Additionally, low back pain
patients may take medications such as muscle relaxants, anti-
depressants, or other medications that can affect their balance and
coordination, further elevating their fall risk.200 201 By
including this measure in the low back pain measure set, we could
promote ASM participants to assess the risk a patient is at for falls
and implement any needed plan or corrective actions to mitigate the
issues that may be present. We decided not to include the measure in
the low back pain measure set as we are concerned that beneficiaries in
ASM may have falls may for reasons, such as syncope, that are less
relevant to the care of the ASM participant, and that the incidence of
falls is not high enough in this patient population. We seek comments
on whether the Falls: Plan of Care measure could be meaningful if
included in the low back pain measure set.
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\196\ CDC. Outpatient Care--STEADI in Primary Care. STEADI--
Older Adult Fall Prevention. Published May 16, 2024. https://www.cdc.gov/steadi/hcp/clinical-resources/outpatient-care.html.
\197\ Marshall LM, Litwack-Harrison S, Makris UE, et al. A
Prospective Study of Back Pain and Risk of Falls Among Older
Community-dwelling Men. The Journals of Gerontology Series A:
Biological Sciences and Medical Sciences. Published online November
16, 2016:glw227. doi:https://doi.org/10.1093/gerona/glw227.
\198\ Marshall LM, Litwack-Harrison S, Cawthon PM, et al. A
Prospective Study of Back Pain and Risk of Falls Among Older
Community-dwelling Women. The Journals of Gerontology Series A:
Biological Sciences and Medical Sciences. 2016;71(9):1177-1183.
doi:https://doi.org/10.1093/gerona/glv225.
\199\ Stubbs B, Binnekade T, Eggermont L, Sepehry AA, Patchay S,
Schofield P. Pain and the Risk for Falls in Community-Dwelling Older
Adults: Systematic Review and Meta-Analysis. Archives of Physical
Medicine and Rehabilitation. 2014;95(1):175-187.e9. doi:https://doi.org/10.1016/j.apmr.2013.08.241.
\200\ Park H, Satoh H, Miki A, Urushihara H, Sawada Y.
Medications associated with falls in older people: systematic review
of publications from a recent 5-year period. European Journal of
Clinical Pharmacology. 2015;71(12):1429-1440. doi:https://doi.org/10.1007/s00228-015-1955-3.
\201\ Castillo S. Inappropriate Use of Skeletal Muscle Relaxants
in Geriatric Patients. Uspharmacist.com. Published January 21, 2020.
Accessed April 17, 2025. https://www.uspharmacist.com/article/inappropriate-use-of-skeletal-muscle-relaxants-in-geriatric-patients?utm_source=TrendMD&utm_medium=cpc&utm_campaign=US_Pharmacist_TrendMD_0.
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(e) Removal and Addition of Quality Measures
While we do not plan to add or remove measures from either cohort's
measure set of the ASM test period, there may be circumstances in which
it is necessary. We propose at Sec. 512.725(d) that we would add or
remove any quality measure for an ASM cohort through notice and comment
rulemaking.
We may propose to add or remove measures in response to relevant
public comments, recommendations from participants and their
collaborators, new CMS program activities, or significant changes to
the included measures. Because the quality measures currently proposed
are all part of MIPS, any updates CMS applies to the measures within
MIPS would be incorporated into the quality measure sets accordingly.
We seek comments on the proposed approach for removal or addition
of quality measures.
(f) Maintenance of Technical Specifications for Quality Measures
We propose at Sec. 512.725(d) to release technical specifications
for the required quality measures in a form and manner determined by
CMS for each ASM performance year via notice and comment rulemaking. We
intend to use the most recent MIPS version of the technical
specifications for all applicable measures. For non-MIPS measures, we
would release the measure specifications in advance of the ASM
performance year in which the specifications would be applicable via
notice-and-comment rulemaking. If any changes are made to
specifications for MIPS measures, and ASM chooses not to adopt these
changes, we propose releasing the measure technical specifications
applicable to ASM via notice and comment rulemaking before the start of
each ASM performance year.
We seek comments on our proposal to use the most recent MIPS
version of technical specifications of quality measures for each ASM
performance year. We also seek comment on our intent to release the
technical specifications of non-MIPS measures via notice and comment
rulemaking, and if it allows adequate time for ASM participants to make
any needed adjustments to data collections systems or practice
workflows.
(g) Data Submission Criteria for the Quality ASM Performance Category
We propose at Sec. 512.725(e)(1) that ASM participants submitting
data for measures with non-administrative claims-based measures would
be required to submit data for each measure using one of the measure's
collection types identified for each required quality measure as
detailed in Table 39. We propose at Sec. 512.725(e)(2)
[[Page 32584]]
that for the applicable ASM performance year, each ASM heart failure
participant would report all of the measures in the heart failure
measure set as described in section III.C.2.d.(2).(b) of this proposed
rule and each ASM low back pain participant would report all the
measures in the low back pain measure set as described in section
III.C.2.d.(2).(c) of this proposed rule.
We seek comments on the proposed form, manner, and timing of
quality measures reporting at Sec. 512.725(e).
(h) Data Completeness Requirement and Case Minimums for the Quality ASM
Performance Category
(i) Data Completeness Requirement
We propose at Sec. 512.725(f)(1) to set a data completeness
requirement of at least 75 percent beginning in the 2027 ASM
performance year. Data completeness is essential to ensure that data
submitted on quality measures are sufficiently complete to accurately
assess each ASM participant's quality performance. The data
completeness requirement means that an ASM participant submitting
measure data on MIPS clinical quality measures (MIPS CQMs) or eCQMs
must submit data on at least a specific percent of their patients that
meet the measure's denominator criteria, regardless of payer. Also, the
inclusion of eCQMs in ASM measure sets more easily enables submission
of data on 100 percent of the patient records in a provider's EHR,
making data completeness more achievable. We believe it is important to
maintain high data completeness to ensure the most accurate assessment
of ASM participants. The CY 2025 PFS final rule set the CY 2025 MIPS
performance period/2027 MIPS payment year MIPS data completeness
requirement for the quality performance category at 75 percent (89 FR
98383 through 98387). Prior to this, the MIPS data completeness
requirement had been periodically increasing from where it started,
which was at least 50 percent to where it currently is (89 FR 98383
through 98387). We do not intend to continue to align with MIPS data
completeness requirements and instead propose to assess changes to the
ASM quality measure data completeness as needed for model-specific
purposes. Since some ASM participants would not have previously
reported to MIPS and, therefore, may have limited experience and
capabilities with quality reporting of this type, we considered data
completeness requirement lower than 75 percent for 2027 ASM performance
year and then increasing to 75 percent beginning in the 2028 ASM
performance year 2028.
We also propose at Sec. 512.725(f)(2) that ASM participants would
receive zero ``measure achievement points,'' which we propose at Sec.
512.705 to mean numerical values assigned to an ASM participant's
reported performance data that we use to calculate an ASM performance
category score, for any required measure that does not meet the
proposed data completeness requirement. Meeting the data completeness
requirement ensures that the measure represents an appropriate
percentage of the clinical population applicable for a given quality
measure. Therefore, we believe that not meeting the proposed data
completeness requirement for a given required quality measure should
result in the ASM participant receiving zero achievement points for
that measure.
Finally, we propose at Sec. 512.725(f)(3) that we exclude from an
ASM's participant total measure achievement points and total available
measure achievement points any required measures meet the respective
measure's data completeness requirement, but do not have a benchmark.
As discussed later in this section of this proposed rule, we believe
that it would not be appropriate to score quality measures for which we
cannot determine a benchmark.
We seek comments on the proposed data completeness requirement of
75 percent at Sec. 512.725(f)(1) and whether a different data
completeness percentage that we considered would be more appropriate.
We also seek comment on our proposal at Sec. 512.725(f)(2) that ASM
participants would receive zero measure achievement points for any
submitted quality measure that does not meet the data completeness
requirement. Finally, we seek comment on our proposal at Sec.
512.725(f)(3) for not scoring measures that meet data completeness
requirements but for which we cannot determine a benchmark.
(ii) Minimum Case Requirements
We seek to ensure that ASM participants are measured reliably,
therefore, we propose at Sec. 512.725(g)(1) to use 20 cases as the
minimum case requirement for each quality measure. We propose at Sec.
512.725(g)(2) that ASM participants that report measures with fewer
cases than the case minimum for the measure and meet the data
completeness requirement proposed at Sec. 512.725(f)(1) would receive
recognition for submitting the measure, but we would not include the
measure in the quality ASM performance category scoring as described
later in this section of this proposed rule. We believe this case
minimum is appropriate as it aligns with the case minimum under MIPS as
defined at Sec. 414.1380(b)(1)(iii).
We seek comments on our proposed case minimum for quality measures
at Sec. 512.725(g).
(i) Quality Measure Achievement Points and Quality ASM Performance
Category Scoring
(i) Quality Measure Achievement Points
We propose at 512.725(h)(1)(i) to assign 1 to 10 measure
achievement points to each measure based on how an ASM participant
performance compares to measure-specific benchmarks determined as
described in section III.C.2.d.(2).(i) of this proposed rule. We
propose at Sec. 512.725(h)(1)(iii) that if an ASM participant fails to
submit a measure required under the quality ASM performance category,
then the ASM participant would receive zero measure achievement points
for that measure. We propose at Sec. 512.725(h)(1)(ii) and (iii) that
measures reported by ASM participants must have the required case
minimum as applicable for each measure, as proposed at Sec.
512.725(g)(1), and meet the data completeness requirement, as proposed
at Sec. 512.725(f)(1), to receive a score. For example, if an ASM
participant reports a measure that meets the data completeness
requirement rule but does meet the required case minimum, then the ASM
participant would not be scored on that measure, and that measure score
would not be factored into the ASM participant's quality ASM
performance category score. An ASM participant who reports a measure
that does not meet the data completeness requirement but meets the
required case minimum of this proposed rule would receive a score of
zero for the measure. An ASM participant who does not report the
measure would receive a score of zero for the measure. We propose at
Sec. 512.725(h)(1)(iv) that an ASM participant that submits data for
the same measure under two different collection types, if applicable,
would be scored on the data submission that leads to the greatest
number of achievement points for that required measure.
The quality ASM performance category score would be the sum of all
the measure achievement points assigned for the scored measures
required for the quality ASM performance category divided by the sum of
total possible measure achievement points.
We also propose not to score measures for which we could not
[[Page 32585]]
determine a benchmark for a given ASM performance year as described in
section.III.C.2.d.(2)(i)(ii) of this proposed rule. In this situation,
the quality ASM performance category score would not include any
measure or measures for which a benchmark could not be determined. We
believe that it would be unfair to penalize ASM participants due to a
lack of a benchmark.
We seek comments on this proposed quality ASM performance category
scoring approach as described at Sec. 512.725(h)(1).
(ii) Benchmarking
For the quality ASM performance category, we propose at Sec.
512.725(h)(2) that the ASM performance standard is a measure-specific
benchmark. We propose at Sec. Sec. 512.725(h)(2)(i)(A) through (C) to
determine benchmarks for each quality measure and for each of the
measure's collection types using data reported by ASM participants, to
the extent feasible, during the ASM performance year, from a previous
ASM performance year, or from another period determined by CMS. The
benchmark determination is contingent on relevant available data for
accurate calculation that is specific to ASM participants. For measures
with an administrative claims-based collection type, we propose at
Sec. 512.725(h)(2)(iii) to calculate the benchmark using performance
on the measure during the current ASM performance year. We believe it
is important to determine separate benchmarks for each of a measure's
collection types since performance varies by collection type in
MIPS.\202\ We considered determining one benchmark per quality measure
regardless of collection type since having a single benchmark may help
ASM participants more readily calibrate their performance. Given the
differences in MIPS performance by collection type for measures that we
propose to require in ASM,\203\ we believe it would be more appropriate
to calculate a benchmark for each collection type.
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\202\ https://qpp.cms.gov/resources/performance-data.
\203\ https://qpp.cms.gov/resources/performance-data.
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We propose at Sec. 512.725(h)(2)(iv) to determine benchmarks for
each measure's collection type using deciles based on the applicable
period of data we use to determine the measure's benchmark. Then, we
would evaluate an ASM participant's actual measure performance during
the ASM performance year to determine the number of measure achievement
points that should be assigned based on where the actual measure
performance falls within the benchmark. We propose establishing
benchmarks using a percentile distribution, separated by decile
categories, because it translates measure-specific score distributions
into a uniform distribution of ASM participants based on actual
performance values. For each set of benchmarks, we propose to calculate
the decile breaks for measure performance and assign measure
achievement points for a measure based on which benchmark decile range
the ASM participant's performance rate on the measure falls between.
For example, an ASM participant in the top decile would receive 10
measure achievement points for the measure, and an ASM participant in
the next lower decile would receive measure achievement points ranging
from 9 to 9.9. We propose to assign partial measure achievement points
to prevent performance cliffs for ASM participants near the decile
breaks. The partial measure achievement points would be assigned based
on the percentile distribution
We propose at Sec. Sec. 512.725(h)(2)(ii)(A) through (C) that we
only calculate benchmarks for measures that have a minimum of 20 ASM
participants that report the measure: (1) meeting the data completeness
requirement as proposed at Sec. Sec. 512.725(f)(1) through (2) meeting
the required case as proposed at Sec. Sec. 512.725(g)(1) and (3) a
performance rate greater than zero. We propose a minimum of 20 because
our benchmarking methodology relies on assigning measure achievement
points based on decile distributions with decimals. A decile
distribution requires at least 10 observations. We would double the
requirement to 20 so that we would be able to assign decimal measure
achievement point values and minimize cliffs between deciles. Given the
mandatory participation of ASM and the mandatory quality measure sets,
we do not anticipate that we would encounter challenges with meeting
this proposed minimum of 20 ASM participants reporting a measure to
determine a benchmark.
We seek comments on our proposed benchmark determination process as
proposed at Sec. 512.725(h)(2) and all alternatives considered.
(iii) Topped-Out Quality Measures
We propose at Sec. 512.725(h)(3) that we would identify topped out
measures in the benchmarks for each ASM performance year, based on
within-model performance on each measure. We considered but are not
proposing an initial policy regarding topped out measures and
differential benchmarking for measures with a topped-out status. MIPS
defines at Sec. 414.1305 a topped out non-process measure as a measure
where the Truncated Coefficient of Variation is less than 0.10 and the
75th and 90th percentiles are within 2 standard errors; MIPS also
defines at Sec. 414.1305 a topped-out process measure as measure with
a median performance rate of 95 percent or higher. We propose
monitoring during initial ASM performance year(s) before designating an
ASM measure with topped out status. We would propose using a definition
like the definition used by MIPS and the Hospital Value-Based
Purchasing (HVBP) Program: a Truncated Coefficient of Variation less
than 0.10 and the 75th and 90th percentiles are within 2 standard
errors as defined at Sec. 412.164(c)(3) (88 FR 59333);[thinsp]or
median value for a process measure that is 95 percent or greater (80 FR
49550). Topped out measures are of concern as it makes it difficult to
assess relative performance to most accurately score the quality ASM
performance category. However, since all ASM participants reporting one
of the two measure sets would only be compared among others also
reporting that measure set, and all the measures are mandatory to
report, the benefit of selecting a topped-out measure is nullified. In
this way, the reasoning for removing topped out measures is also
nullified. Several of the measures included in our measure sets are
topped out in other programs, such as MIPS, potentially because MIPS
participants can select the measures on which they believe they would
perform well. It is unclear whether requiring ASM participants to
report a measure that is topped out in MIPS would present the same
issues typically associated with topped-out measures or if the
appearance of being topped out is simply due to voluntary reporting by
only the highest performers in MIPS.
We seek comment on our proposal at Sec. 512.725(3) to identify
topped out measures in the benchmarks for each ASM performance year,
based on within-model performance on each measure, as well as all
alternatives considered.
(iv) Calculation of the Quality ASM Performance Score
We propose at Sec. 512.725(h)(4) to sum all quality measure
achievement points determined for all measure reported by an ASM
participant for an applicable ASM performance year. We would then
divide that total achievement points by the total available measure
achievement
[[Page 32586]]
points for measures reported by the ASM participant that meets the case
minimum requirements as defined at Sec. 512.725(g) to determine an
overall quality ASM performance category score, which could not exceed
100 percentage points.
We propose at Sec. 512.725(h)(4)(ii) that if data used to
calculate a score for a quality measure are impacted by significant
changes or errors affecting the ASM performance year, such that
calculating the quality measure score would lead to misleading or
inaccurate results, then the affected quality measure would be based on
data for 9 consecutive months of the applicable ASM performance year.
We propose at Sec. 512.725(h)(4)(ii)(A) to consider ``significant
changes or errors'' regarding instances in which a quality measure
score could not be calculated 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. We further propose at Sec. 512.735(h)(4)(ii)(A) that
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. We also propose at Sec. 512.725(h)(4)(ii)(B)
that we would publish a list of all measures scored in a form and
manner specified by CMS. Finally, we propose at Sec.
512.725(h)(4)(ii)(C) that if CMS determines sufficient measure data is
not available, or that there is the possibility of patient harm or
misleading results, a measure would be excluded from a participants
score. We believe these proposed policies would appropriately adapt the
proposed quality ASM performance category scoring policies so that ASM
participants would not be penalized for changes or errors in the
measure and associated submitted data that would be outside the control
of the ASM participant.
We propose at Sec. 512.735(h)(4)(iii) that an ASM participant
would not receive a quality ASM performance category score if the ASM
participant meets the quality ASM performance category data submission
requirements proposed at Sec. 512.720(a)(1)(i) but does not meet the
case minimum requirements for any of the required quality measures in
their applicable quality measure set. As discussed in sections
III.C.2.e.(2)(b) and III.C.2.f.(4) of this proposed rule, the ASM
participant in this situation would not receive a payment adjustment
for the applicable ASM payment year. We believe that we should hold all
ASM participants accountable to performance on quality. Accordingly, it
would be inappropriate to evaluate the performance of an ASM
participant that reports complete quality measure data but cannot meet
the case minimums for any required measure within the applicable
quality measure set since they would not have sufficient case volume by
which to evaluate clinical quality.
We seek comments on our proposed approach to calculate measure
achievement points for each required quality measure and determine
benchmarks for quality measures in the quality ASM performance
category. We also seek comment on our proposed approach to monitor for
topped out measure status and future considerations for how we should
approach and manage identified topped out measures in ASM. Finally, we
seek comment on our proposal to calculate the quality ASM performance
category score, as well as the proposed exceptions that could prevent
the calculation of an individual quality measure score. or an overall
performance category score.
(3) Proposed Cost ASM Performance Category
The proposed cost ASM performance category supports the model goals
to improve quality care as measured through a focused measure set
relevant to ASM's clinical specialties and targeted chronic conditions,
while decreasing the cost of care for beneficiaries with ASM's targeted
chronic conditions. The cost ASM performance category ensures that
Medicare beneficiaries are receiving clinically appropriate,
comprehensive, high-value care. The importance of the cost ASM
performance category is reflected in the weight of the performance
category contribution to the final score, discussed at section
III.C.2.e.(1) of this proposed rule.
(a) Background
The cost ASM performance category is one of four ASM performance
categories measuring an ASM participant's performance on the care
delivered related to ASM's targeted chronic conditions. The cost ASM
performance category incentivizes ASM participants to ensure Medicare
beneficiaries are receiving clinically appropriate, comprehensive,
high-value care. Like the cost performance category under the MVPs, ASM
participants in each ASM cohort would be scored on a condition-relevant
EBCM. We propose at Sec. 512.730(b) to use two EBCMs specified for the
MIPS cost performance category, the Heart Failure EBCM and the Low Back
Pain EBCM. As discussed below, while we are proposing to evaluate ASM
participants on their performance on these two MIPS cost measures, and
are proposing to use the same MIPS cost benchmarking and scoring
methodology finalized for the 2024 MIPS performance period defined at
Sec. 414.1380(b)(2)(i)(B), we are proposing to use different benchmark
ranges.
(b) Performance Year for Cost ASM Performance Category
Beginning with ASM payment year 2029, we propose at Sec.
512.730(a) that the ASM performance year for cost measures would be the
full calendar year from January 1 to December 31 that occurred 2 years
prior to an applicable ASM payment year. We believe that setting that
setting the ASM performance year for cost measures in this way aligns
with MIPS as defined at Sec. 414.1320 and would be easily adoptable by
ASM participants.
We seek comments on our proposed approach at Sec. 512.730(a)
setting the ASM performance year for cost measures.
(c) Cost Measure for the ASM Heart Failure Cohort
For the ASM heart failure cohort, we propose at Sec. 512.730(b)(1)
to utilize the heart failure EBCM, a MIPS cost measure specified by CMS
through rulemaking, to determine an ASM heart failure participant's
cost ASM performance category score.\204\ We are proposing the heart
failure EBCM, in part, because the Advancing Care for Heart Disease MVP
(88 FR 80022 through 80025; 89 FR 99015 through 99019) includes it as
one of the mandatory cost measures. The heart failure EBCM evaluates a
participant's risk adjusted and specialty-adjusted cost to Medicare for
beneficiaries receiving medical care to manage and treat heart
failure.\205\ We are proposing the heart failure EBCM because the
measure quantifies the costs of services that are clinically related to
the participant's role in managing care during a heart failure episode.
We believe that the heart failure EBCM captures a targeted high-cost
patient population, has robust clinician coverage, and can help lower
Medicare spending. The heart failure EBCM is a complex, yet feasible,
chronic condition measure that
[[Page 32587]]
addresses care delivered to manage heart failure. We believe holding
ASM heart failure participants accountable on the heart failure EBCM
represents an opportunity to measure reductions in the cost of care for
beneficiaries with heart failure.
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\204\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
\205\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0.
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Additionally, we are proposing this measure and the focus on heart
failure, generally, due to the prevalence of heart failure in the
Medicare FFS population, and the high costs associated with the
management of the disease and its complications. The incidence of heart
failure increases with age, rising from 20 per 1,000 individuals aged
65 to 69 to more than 80 per 1,000 individuals over 80 years of
age.\206\ With an estimated 1 in 5 Americans 40 years and older
expected to develop heart failure and 1 in 5 Americans expected to be
65 years or older by 2050, the number of Americans with heart failure
is predicted to significantly increase in the future.\207\ Further,
heart failure was listed as the cause of death on 13.4 percent of all
death certificates in the United States in 2018.\208\ In addition to
its prevalence, heart failure is also costly for the health care
system. According to the Centers for Disease Control and Prevention
(CDC), heart failure costs the United States $30.7 billion annually,
including health care services, medications used to treat heart
failure, and lost productivity.\209\ A large contributor to heart
failure-related health care costs may be inpatient admissions, with one
study estimating that roughly 1 in 6 beneficiaries returned to the
hospital for admission for heart failure-related reasons within 90 days
of their initial discharge.\210\
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\206\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.''
(2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776.
\207\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.''
(2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776.
\208\ Centers for Disease Control and Prevention (CDC) ``Heart
Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm.
\209\ Centers for Disease Control and Prevention (CDC) ``Heart
Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm.
\210\ Kilgore et al., ``Economic burden of hospitalizations of
Medicare beneficiaries with heart failure,'' Risk Management and
Healthcare Policy 10 (2017): 63-70, doi: 10.2147/RMHP.S130341.
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We seek comments on the proposed use of the heart failure EBCM at
Sec. 512.730(b)(1) to score the cost ASM performance category for the
ASM heart failure cohort.
(d) Cost Measure for ASM Low Back Pain Cohort
For the ASM low back pain cohort, we propose at Sec. 512.730(b)(2)
to utilize the low back pain EBCM to determine an ASM low back pain
participant's cost ASM performance category score.\211\ The low back
pain EBCM evaluates a participant's risk adjusted and specialty-
adjusted cost to Medicare for patients receiving medical care to manage
and treat low back pain. We are proposing the low back pain EBCM, in
part, to align with the Rehabilitative Support for Musculoskeletal Care
MVP (88 FR 80002 through 80007; 89 FR 99050 through 990054). We also
believe this chronic condition EBCM appropriately captures the costs of
services that are clinically related to the participant's role in
managing the longitudinal care during a low back pain episode.
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\211\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
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We believe that use of the low back pain EBCM would help increase
accountability on spending and limit low-value care related to low back
pain. Low back pain is highly prevalent and a high driver of spending.
For example, an estimated 20 percent of people living in the United
States experience low back pain,\212\ and a 2020 study found that low
back and neck pain contributed the most to health care spending among
154 mutually exclusive diagnoses, at $134.5 billion in 2016.\213\ Other
studies have also found large increases in resource use for low
backpain despite only modest increase in its prevalence and little
improvement in patient outcomes,214 215 216 which
underscores the need for more precise measure of resource use and
quality of care. Given these findings, we believe the low back pain
EBCM would be an appropriate measure by which to accurately determine
resource use related to low back pain and compare cost-related
performance across ASM low back pain participants.
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\212\ Will, Joshua Scott, David Bury, and John Miller,
``Mechanical Low Back Pain.'' American Academy of Family Physicians
98(7) (2018): 421-428.
\213\ Dieleman, Joseph, Jackie Cao, and Abby Chapin, ``US Health
Care Spending by Payer and Health Condition, 1996-2016.'' JAMA
Network 323(9) (2020): 863-884. doi:10.1001/jama.2020.0734.
\214\ Luo, Xuemei, Ricardo Pietrobon, Shawn Sun, Gordon Liu, and
Lloyd Hey, ``Estimates and Patterns of Direct Health Care
Expenditures Among Individuals With Back Pain in the United
States.'' Spine 29(1) (2004): 79-86. doi:10.1097/
01.BRS.0000105527.13866.0.
\215\ Deyo, Richard, Sohail Mirza, Judith Turner, and Brook
Martin, ``Overtreating Chronic Back Pain: Time to Back Off?'' J Am
Board Fam Med 22(1) (2009): 62-68. doi:10.3122/jabfm.2009.01.080102.
\216\ Norman Marcus Pain Institute, ``Pain Facts.'' Last updated
23 January 2012. https://www.normanmarcuspaininstitute.com/tag/neck-and-shoulder-pain/.
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We seek comments on the proposed use of the low back pain EBCM at
Sec. 512.730(b)(2) to determine the cost ASM performance category
score for the ASM low back pain cohort.
(e) Removal and Addition of Cost Measures
We intend to avoid making significant changes to the cost measure
over the ASM test period. However, we propose at Sec. 512.730(c) to
add or remove measures through notice and comment rulemaking as
discussed at Sec. 512.730(c) if we believe refinements to the measure
set are necessary. We may propose to add or remove measures in response
to relevant public comments, recommendations from participants and
their collaborators, new CMS program activities, or significant changes
to the included measures. Because the cost measures currently proposed
are all part of MIPS, any updates CMS applies to the measures within
MIPS would be incorporated into the cost ASM measure sets accordingly.
We seek comments on our proposed approach at Sec. 512.730(c) for
adding or removing cost measures if necessary.
(f) Minimum Case Requirements
Like under MIPS, as specified in Sec. 414.1350(c)(6) (88 FR 79346
through 79348), we propose at Sec. 512.730(d) that an ASM participant
must have at least 20 attributed episodes (that is, cases) at the TIN/
NPI level during an ASM performance year for the ASM participant to
receive a score on the applicable EBCM. A participant with an unscored
EBCM would also remain unscored in their ASM cost performance category
score, resulting in a neutral payment adjustment for the applicable ASM
payment year because the participant is required to have an ASM cost
performance category score to receive a final score as discussed in
section III.C.2.e.(2)(b). As discussed in section III.C.2.c.(3)(b) of
this proposed rule, we believe that setting a minimum volume threshold
during the calendar year 2 years prior to the applicable ASM
performance year for the heart failure EBCM and the low back pain EBCM
as part of ASM participant eligibility criteria would mean that ASM
heart failure participants and ASM low back pain participants would be
likely to meet the same episode case minimum during each ASM
performance year.
We seek comment on the proposed case minimum of 20 attributed
episodes for all cost measures at Sec. 512.730(d) used to score the
cost ASM performance category.
[[Page 32588]]
(g) Cost Measure Achievement Points and Cost ASM Performance Category
Scoring
(i) Cost Measure Achievement Points
We propose to follow a similar methodology for establishing and
assigning measure achievement points as is used by MIPS. We propose at
Sec. Sec. 512.730(e)(1)(i) and 512.730(e)(1)(ii) that for each cost
measure attributed to an ASM participant, CMS assigns the ASM
participant 1 to 10 achievement points (including partial points) based
on the ASM participant's performance on the cost measure during the ASM
performance year compared to the cost measure's benchmark. Achievement
points are awarded based on which benchmark range the ASM participant's
performance on the measure is in.
(ii) Benchmarking
We propose at Sec. 512.730(e)(2)(i) that CMS bases cost measure
benchmarks on cost measure performance of ASM participants during the
ASM performance year. To develop reliable cost measure benchmarks, we
propose at Sec. 512.730(e)(2)(i)(A) that each benchmark must have a
minimum of 20 ASM participants who meet the minimum case volume
specified at Sec. 512.730(d) for CMS to determine a benchmark for the
cost measure. We propose at Sec. 512.730(e)(2)(i)(B) if a benchmark is
not determined for a cost measure, then the measure would not be
scored.
We propose at Sec. 512.730(e)(2)(ii) to score each EBCM using 10
benchmark ranges based on the median (that is, 50th percentile) cost of
all ASM participants attributed the relevant measure plus or minus
standard deviations. We propose at Sec. 512.730(e)(2)(ii) to center
the 10 benchmarks ranges at half the measure achievement points
achievable for each EBCM. Given that the measure achievement points
range from 1 to 10, the ASM participant with the median cost would be
assigned 6 EBCM measure achievement points. We would then determine the
score ranges applicable to each of the 10 measure achievement points
based on standard deviations above and below the median score. We
propose to calculate these benchmark ranges separately for each EBCM.
We believe the proposed benchmark ranges, calculated using the
median and centered around half of the available points for each EBCM
would be dynamic and responsive to changes in average spending per
episode assessed by cost measures and performance thresholds for each
ASM performance year. We would update the median and standard
deviations used to determine cutoffs for benchmark ranges so that they
are based on performance within the ASM performance year. To determine
the benchmark ranges, we would adhere to the following principles: (1)
determine benchmark ranges according to the distribution of the EBCM
averages; and (2) ensure distribution of measure achievement points for
cost measures is reflective of overall program performance. We refer
readers to Table 40 for an example of how the proposed cost scoring
methodology could be implemented for a specific cost measure.
[GRAPHIC] [TIFF OMITTED] TP16JY25.112
We propose at Sec. 512.730(e)(2)(ii) to award up to 10 measure
achievement points for each EBCM based on which benchmark range an ASM
participant's EBCM average corresponds using the following formula:
EBCM Achievement Points = Benchmark Range # + [(measure score,
expressed as a dollar amount-bottom of benchmark range)/(top of
benchmark range-bottom of benchmark range)].
This scoring methodology for cost measures would align the
assignment of measure achievement points for cost measures so that
participants with costs near the measure's median (that is, 50th
percentile) would not receive a disproportionately low score. Rather
participants with costs near the median would receive an individual
EBCM score clustered closer to the median.
We also considered using even decile benchmark ranges based on the
distribution of each EBCM score. This alternative approach, however,
would mean that ASM participants with EBCM averages near the 50th
percentile would receive lower cost measure scores. Given the
distribution of EBCM averages proposed for ASM, we believe even decile
benchmark ranges would create narrow benchmark deciles that would
result in a less accurate assessment of cost performance. For these
reasons, we believe it would be more appropriate to use the proposed
episode-based cost benchmarking and measure scoring methodologies.
We seek comments on our proposed approach for assigning measure
achievement points, calculating EBCM benchmarks and scoring each cost
measure, as well as all alternatives considered.
[[Page 32589]]
(iii) Calculation of the Cost ASM Performance Category Score
We propose at Sec. 512.730(e)(3) that the cost ASM performance
category score would be calculated as the sum of the total number of
measure achievement points earned by the ASM participant from each
required measure divided by the total number of available measure
achievement points for each required cost measure, not to exceed 100
percent, for ASM heart failure participants or ASM low back pain
participants. As discussed in section III.C.2.d.(3)(g) of this proposed
rule, we propose at Sec. 512.730(e)(3)(i) that an ASM participant who
does not have 20 attributed episodes during an ASM performance year
would not receive a cost ASM performance category score and would not
receive a final score as discussed in section III.C.2.e.(b) of this
proposed rule.
We believe that this proposed cost ASM performance category score
ensures that ASM participants can be appropriately held accountable on
spending related to ASM's targeted chronic conditions. This proposed
cost ASM performance category scoring methodology means that the cost
ASM performance category would be equivalent to the score for the heart
failure EBCM for ASM heart failure participants and the low back pain
EBCM for ASM low back pain participants since each participant group is
only scored on one cost measure.
We propose at Sec. 512.730(e)(3)(ii) that if data used to
calculate a score for a cost measure are impacted by significant
changes or errors affecting the ASM performance year, such that
calculating the cost measure score would lead to misleading or
inaccurate results, then the affected cost measure is excluded from the
ASM participant's cost performance category score and a cost
performance category score is not calculated.
We propose at Sec. 512.730(e)(3)(ii)(A) to define ``significant
changes or errors'' regarding instances in which the cost measure score
could not be calculated 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.
We propose at Sec. 512.730(e)(3)(ii)(B) that significant changes
or errors include, but are not limited to, rapid or unprecedented
changes to service utilization, changes to codes (such as ICD-10, CPT
or HCPCS codes), the inadvertent omission of codes or inclusion of
codes, or changes to clinical guidelines or measure specifications.
We also propose at Sec. 512.730(e)(3)(ii)(C) that we 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 these proposed
policies would appropriately adapt the proposed cost ASM performance
category scoring policies so that ASM participants would not be
penalized for changes or errors in the measure and associated submitted
data that would be outside the control of the ASM participant.
We seek comments on our proposed methodology for calculating the
cost ASM performance category score.
(4) Proposed Improvement Activities ASM Performance Category
The proposed requirements in the improvement activities ASM
performance category aim to improve care coordination, increase
collaboration between specialty and primary care, and better address
upstream drivers of health for patients. These activities support the
model goals to improve quality care as measured through a focused
measure set relevant to ASM participants. They also support prevention
efforts that incentivize ASM participants to ensure that their patients
have a regular source of primary care and are screened to help identify
early signs of chronic conditions. The improvement activities ASM
performance category would be used to determine a potential scoring
adjustment to the final score. We refer readers to sections
III.C.2.e.(1) and III.C.2.e.(5) of this proposed rule for details on
how the scores in the improvement activities scoring adjustment would
be applied to the ASM final score.
(a) Background
The improvement activities ASM performance category provides ASM
participants with an opportunity to support broader improvements in
health care delivery. Improvement activities originated in MIPS to
improve care coordination, foster beneficiary engagement, and advance
population health management as described at Sec. 414.1355. ASM
leverages this structure and proposes at Sec. 512.705 to define
``improvement activities'' as activities relating to care coordination,
integration of specialty and primary care, and addressing health-
related social needs of patients.
Care coordination helps to ensure that all healthcare providers
involved in a patient's care have appropriate access to relevant
patient information and are working towards the same care goals. The
exchange of up-to-date and detailed patient information among
healthcare providers can improve patient outcomes, safety, and support
clinical decision making.\217\ Integration of specialty and primary
care would also positively impact the patient experience. A 2022 study
examining fragmentation in ambulatory care for Medicare FFS
beneficiaries found that 4 in 10 beneficiaries experience highly
fragmented care, with a mean of 13 ambulatory visits across seven
practitioners in 1 year.\218\ By providing a more seamless and
coordinated approach to beneficiary care, providers reduce the need for
patients to spend as much time navigating the health care system and
lower any undue costs for patients that may be associated with an
increased number of clinical visits and services. This approach also
can prevent the worsening of disease by ensuring all parties are aware
of a patient's needs, aligned with a care plan, and receiving
appropriate prevention and screening services. We borrow elements from
the care coordination improvement activity subcategory of MIPS to align
with activities in which organizations may already be engaged.
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\217\ Foy R. Meta-analysis: Effect of Interactive Communication
Between Collaborating Primary Care Physicians and Specialists.
Annals of Internal Medicine. 2010;152(4):247. doi:https://doi.org/10.7326/0003-4819-152-4-201002160-00010.
\218\ Centers for Medicare & Medicaid Services. CMS Innovation
Center's Strategy to Support Person-Centered, Value-Based Specialty
Care. CMS.gov Blog. Published October 19, 2023. https://www.cms.gov/blog/cms-innovation-centers-strategy-support-person-centered-value-based-specialty-care (accessed 2/24/25).
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Consistent with our model goals, we believe it is important to
create a single set of achievable improvement activities that are
applicable to all ASM participants. We took several steps to ensure
these improvement activities are consistent with our intent to improve
meaningful coordination and collaboration. We developed the measures
for this ASM performance category based on our review of feedback
provided in response to our RFI (89 FR 61596), interviews with
interested parties, and an environmental scan of existing practice
coordination activities from the Quality Payment
[[Page 32590]]
Program and other Innovation Center models.\219\
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\219\ 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.
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(b) Performance Year for Improvement Activities
Beginning with ASM payment year 2029, we propose at Sec.
512.735(a) that the ASM performance year for improvement activities
would be a minimum of a continuous 90-day period within the calendar
year that occurs 2 years prior to the applicable ASM payment year, up
to and including the full calendar year. We believe that setting the
ASM performance year for improvement activities in this way aligns with
MIPS as defined at Sec. 414.1320 and would be easily adoptable by ASM
participants. We seek comments on this proposal.
(c) Improvement Activities
We propose at Sec. 512.735 the establishment of the improvement
activities ASM performance category. We propose at Sec. 512.735(c) to
establish the following ASM improvement activities : (1) Improvement
Activity 1 (IA-1): Connecting to Primary Care and Ensuring Completion
of Health-Related Social Needs Screening and Improvement Activity 2
(IA-2): Establishing Communication and Collaboration Expectations with
Primary Care using Collaborative Care Arrangements.
(i) Improvement Activity 1 (IA-1): Connecting to Primary Care and
Ensuring Completion of Health-Related Social Needs Screening
In IA-1, we propose at Sec. 512.735(c)(1) to require annual
attestations by ASM participants on activities related to enhancing
connections to and relationships with primary care. As the first part
of IA-1, we propose at Sec. 512.735(c)(1)(i) that ASM participants
develop processes and workflows within their practices to identify
patients without a PCP and assist them in finding one. Primary care is
a vital resource for patients, providing an efficient and accessible
level of care. We believe it is essential that the vast majority of
patients have a PCP who can coordinate their overall health care needs,
manage chronic conditions, and serve as the first point of contact for
health concerns. However, some patients may not have a designated PCP,
which can lead to fragmented care and suboptimal health outcomes. A
2022 study found that up to a third of Medicare beneficiaries don't see
a PCP yearly.\220\ Furthermore, we believe that connecting patients
with a PCP could help reduce demand on specialists in situations where
the patient could more appropriately be treated in the primary care
setting. Continuity with a primary care practice or provider also has
the potential to reduce costs.\221\ We believe specialists can play a
crucial role in ensuring that their patients have access to these high-
value primary care services. As part of IA-1, we also propose at Sec.
512.735(c)(1)(ii) to require that the ASM specialist always communicate
relevant information back to the ASM beneficiary's PCP following the
ASM beneficiary's visit with the ASM participant. This exchange of
information is important to patient care planning and is an aspect of
specialty care and primary care collaboration that has room for
improvement.\222\
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\220\ Barnett ML, Bitton A, Souza J, Landon BE. Trends in
Outpatient Care for Medicare Beneficiaries and Implications for
Primary Care, 2000 to 2019. Annals of Internal Medicine. Published
online November 2, 2021. doi:https://doi.org/10.7326/m21-1523.
\221\ Yang Z, Ganguli I, Davis C, et al. Physician[hyphen]
versus practice[hyphen]level primary care continuity and association
with outcomes in Medicare beneficiaries. Health Services Research.
2022;57(4):914-929. doi:https://doi.org/10.1111/1475-6773.13999.
\222\ Timmins, Lori, et al. ``Communication Gaps Persist between
Primary Care and Specialist Physicians.'' The Annals of Family
Medicine, vol. 20, no. 4, 1 July 2022, pp. 343-347,
www.annfammed.org/content/20/4/343, https://doi.org/10.1370/afm.2781.
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As the final element of IA-1, we propose at Sec.
512.735(c)(1)(iii) that ASM participants collaborate with PCPs to
ensure that their patients have received HRSN screenings. In addition
to ensuring access to primary care, we also recognize the importance of
addressing patients' upstream drivers of health. These factors, such as
housing, food insecurity, transportation, and financial constraints,
are common in the Medicare population. One study found that of
approximately 68,000 Medicare Advantage patients who responded to a
HRSN screening, 33 percent experienced financial strain, 18.5 percent
experienced food insecurity, and 17.7 percent had poor housing
quality.\223\ These unmet needs can significantly impact a patient's
well-being and contribute to the development or exacerbation of
diseases, lead to unnecessary health care costs, and worsen overall
outcomes.\224\ HRSN screening also has the opportunity to open a
dialogue between the patient and provider about lifestyle factors, such
as diet and physical activity. This discussion with the provider and
associated education can promote the adoption of a healthier lifestyle,
thereby mitigating the presence of new or worsening diseases. Feedback
from interested parties has indicated that PCPs are best equipped to
conduct HRSN screenings and may have established relationships with
community resources to address identified needs. While specialists may
not have the resources to conduct HRSN screenings or be the most
appropriate provider to address these concerns, we believe they should
have some responsibility in ensuring HRSN screenings have been
completed, considering unmet social needs can have a direct impact on
the medical condition(s) they are managing. If a specialist identifies
that a patient has not received an annual HRSN screening, they should
communicate this information to the patient's PCP and encourage them to
conduct the screening and initiate any necessary follow-up action(s).
The specialist may also choose to conduct the screening themselves, as
long as they communicate the results and any follow-up actions to the
patient's PCP.
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\223\ Long CL, Franklin SM, Hagan AS, et al. Health-Related
Social Needs Among Older Adults Enrolled In Medicare Advantage.
Health Affairs. 2022;41(4):557-562. doi:https://doi.org/10.1377/hlthaff.2021.01547.
\224\ ROI Calculator for Partnerships to Address the Social
Determinants of Health Review of Evidence for Health-Related Social
Needs Interventions. (2019). https://www.commonwealthfund.org/sites/default/files/2019-07/COMBINED-ROI-EVIDENCE-REVIEW-7-1-19.pdf.
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(ii) Improvement Activity 1 (IA-1) Specifications
IA-1 Name. Connecting to Primary Care and Ensuring Completion of
Health-Related Social Needs Screening
IA-1 Specifications ASM participants must have evidence of
processes, workflows, and/or technology that require the ASM
participant to: (1) confirm the ASM beneficiary has access to primary
care services and, if not, assist the ASM beneficiary in finding a
clinician who provides primary care services, (2) communicate relevant
information back to the ASM beneficiary's primary care provider
following the ASM beneficiary's visit with the ASM participant, and (3)
determine whether the ASM beneficiary has received an annual HRSN
screening in the primary care setting and, if not, encourage the
primary care services provider to conduct the screening or allow the
ASM participant to conduct the HRSN screening.
[[Page 32591]]
Evidence can include items such as the following:
Documented workflows or protocols outlining the process
for identifying patients without a designated PCP, assisting patients
in finding and establishing care with a PCP (such as practice intake
forms or integrated into normal practice in the patient's visit),
sharing relevant information (test results, treatment plans, follow-up
recommendations) with the patient's PCP after each visit, confirming if
the patient has completed an annual HRSN screening, or conducting or
communicating with the PCP to conduct an annual HRSN screening if it
has not been done.
EHR system configurations or templates, or other health IT
tools, that facilitate capturing and documenting the patient's PCP
information, generating and sending visit summaries or reports to the
PCP, or recording HRSN screening status and prompting follow-up
actions.
Staff training materials or competency assessments related
to identifying patients without a PCP and assisting them in finding
one, proper documentation and communication of information to the PCP,
or inquiring about HRSN screening status and initiating appropriate
follow-up.
Audit trails or reports from the EHR or practice
management system demonstrating patients who were identified as not
having a PCP and the actions taken, visit summaries or reports sent to
the PCP after each patient encounter, or patients who were confirmed to
have completed an annual HRSN screening or underwent one or were
referred to the PCP for one.
(iii) Improvement Activity 2 (IA-2): Establishing Communication and
Collaboration Expectations With Primary Care Using Collaborative Care
Arrangements
In IA-2, we propose at Sec. 512.735(c)(2) to require annual
attestations by ASM participants on activities related to establishing
collaboration expectations with primary care. We believe that
formalizing the collaborative relationship between ASM participants and
PCPs through a collaborative care arrangement (CCA) is an important
step to reduce patient fragmentation of care and ensures vital
coordination activities are occurring. As discussed further below, we
propose defining ``collaborative care arrangement'' to mean an
arrangement that complies with all of the requirements set forth in
Sec. 512.771. We also propose to define ``ASM beneficiary'' at Sec.
512.705 as a Medicare FFS beneficiary who is being treated by an ASM
participant for a targeted chronic condition. There are several
possible aspects to a CCA, but the goal of the CCA is to set forth
expectations between the parties to facilitate primary care and
specialty care integration for the benefit of the patient while
ensuring both parties are held accountable for how they fulfill their
duties.
To receive achievement points for IA-2, we propose at Sec. Sec.
512.735(c)(2)(i) and (ii) that the ASM participant must enter into at
least one CCA with a primary care practice that includes at least three
of the following five following collaborative elements: data sharing,
co-management, transitions in care planning, closed-loop connections,
and care coordination integration as proposed at Sec. Sec.
512.735(c)(2)(ii)(A) through (E). All of these CCA elements support an
important prevention framework by promoting a seamless information
ecosystem where providers collaborate to detect health risks before
they occur and optimize care through communication. These elements also
have properties that may overlap in their implementation with each
other and IA-1, which together further the goals of the improvement
activities ASM performance category.
The sharing of data back to PCPs is crucial for ensuring continuity
of care for shared patients. Specialists should have clear processes in
place to provide timely updates, test results, treatment plans, and
follow-up recommendations to the patient's PCP, even outside the time
of a referral between the parties. We also believe this exchange should
be bi-directional, so that both entities have a comprehensive
understanding of the patient's condition and can provide appropriate
follow-up care and management.
Co-management is a collaborative approach where specialists and
PCPs work together to provide coordinated care for patients with
complex or chronic conditions. Generally, the different types of co-
management include consultative co-management, where the specialist
provides consultation and recommendations to the PCP who remains the
primary manager of the patient's care; shared co-management, where both
the specialist and PCP actively participate in managing the patient's
care with clearly defined roles and responsibilities; and principal co-
management, where the specialist takes the lead in managing the
patient's condition while the PCP provides overall coordination and
management of other aspects of the patient's care.\225\ The benefits of
co-management include shared decision-making and treatment planning,
consistent monitoring and follow-up of the patient's condition, reduced
duplication of tests and procedures, enhanced patient education and
self-management support, and better management of comorbidities and
potential drug interactions. Additionally, we believe co-management can
lead to better health outcomes, improved patient satisfaction, and
potentially lower health care costs by reducing fragmentation and
unnecessary utilization of health care resources.
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\225\ Kuo D, Gifford DR, Stein MD. A typology of specialists'
clinical roles. Arch Intern Med. 2009;169(11):1062-1068.
doi:10.1001/archinternmed.2009.114.
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Transition in care planning refers to the processes and protocols
in place for seamlessly transitioning a patient's care between
specialists and PCPs, or between different care settings (for example,
hospital to outpatient care).\226\ Care planning can include follow-up
appointments, medication reconciliation, and clear communication of the
treatment plan. We believe effective transitions in care planning can
help prevent gaps in care, reduce hospital readmissions, and ensure
continuity of care for the patient. It may also involve defining roles
and responsibilities for coordinating care, conducting warm handoffs,
and ensuring timely follow-up appointments. When meaningfully
implemented, it promotes a seamless and coordinated approach to care,
where all providers involved have a shared understanding of the
patient's needs and can work together to provide high-quality, patient-
centered care.
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\226\ Smith, Lucia Rojas, et al. Care Transitions Framework.
www.ncbi.nlm.nih.gov, Agency for Healthcare Research and Quality
(US), 1 Mar. 2014, www.ncbi.nlm.nih.gov/books/NBK196206/.
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Closed-loop communication and feedback between specialists and PCPs
involve establishing a structured and coordinated process for when the
patient is referred from primary care to specialty care and back. The
model considers this to include elements such as structured referral
templates, communication and information sharing, collaborative
treatment planning, and shared monitoring of patient outcomes. By
coordinating care effectively, providers can identify and address
potential issues or gaps in care, reduce duplication of services or
tests, and ensure that patients receive appropriate and timely care,
ultimately improving quality and preventing
[[Page 32592]]
unnecessary utilization of health care resources.\227\
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\227\ Murray M. Reducing Waits and Delays in the Referral
Process. Family Practice Management. 2002;9(3):39-42. https://www.aafp.org/pubs/fpm/issues/2002/0300/p39.html.
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Care coordination activities generally refer to efforts by the ASM
participant to identify areas of their practice that could be improved
by codified workflows or initiatives, as well as establishment of these
activities collaboratively with the partnered primary care practice.
These innovations support an environment of continuous improvement for
practices and positive outcomes for their shared patients.
When selecting primary care practices for CCAs, ASM participants
must ensure the CCA is with a primary care practice with whom they
share at least one ASM beneficiary. We recommend that the ASM
participant explore entering into a CCA with a primary care practice
with whom the ASM participant shares a meaningful portion of their
Medicare patients, to maximize the impact of the CCA activities. That
is, ASM participants should seek to enter into an CCA with another
primary care practice with which they share the largest number of ASM
beneficiaries. If that is not feasible, then ASM participants should
seek to enter into a CCA with a different primary care practice that
they share a significant portion of ASM beneficiaries with.
(iv) Improvement Activity 2 (IA-2) Specifications
IA-2 Name. Establishing Communication and Collaboration
Expectations with Primary Care Practices using Collaborative Care
Arrangements
IA-2 Specifications. Documentation of at least one executed CCA
between a primary care practice with which the ASM participant shares
ASM beneficiaries, and the CCA must include collaborative efforts
related to at least three of the following five elements:
Data Sharing. Setting expectations for bi-directional
sharing of patient information between the parties to the CCA,
including but not limited to test results, treatment plans, and follow-
up recommendations. This is aimed toward population health management
of shared patients and is not necessarily coordinated around a specific
referral episode. Elements may include: (1) evidence that the ASM
participant always sends a report to the referring PCP; or (2) a
process for capturing referral information that the ASM participant has
a defined method for capturing reports from the primary care provider
in the medical record, for example: reports transmitted between EHRs;
documents that are electronically scanned and linked to the patient's
EHR; or chart documentation of the relevant details of the specialist-
patient interaction, such as notes written into a progress note.
Co-Management. Criteria that define co-management
approaches, where the parties to the CCA work together to furnish
complementary care for patients with complex or chronic conditions. The
criteria should clearly set forth the available co-management
approaches. Examples of such co-management relationships may include:
(1) consultative co-management, (2) shared co-management, or (3)
principal co-management.
Transitions in Care. Defined protocols for seamless
transitions of care between ASM participants, the primary care
practice, or different care settings. Elements may include: (1)
patient-centered care transition action plans, such as documented plans
from the ASM participant to the PCP, including outpatient follow-up
recommendations, medication reconciliation, and any necessary post-
transition support; (2) implementation of the transition plan,
including documentation of staff involved in the care transition,
records of real-time communication between the ASM participant and the
primary care practice, and ensuring the primary care practice is
included in any follow-up transition communication; or (3) care
transition planning processes, which outline steps the ASM participant
would take to prepare and implement the patient-centered care
transition plan when transferring care to the PCP.
Closed-Loop Communication. Clearly articulated processes
enforcing parameters on how ASM beneficiaries may be referred between
the parties to an executed CCA. These structured and enhanced referral
processes would add efficiency to communications between the parties to
the CCA and ensure expectations around what is needed for effective
specialty consultation and collaboration. Examples of provisions that
should be included are as follows: (1) expectations for the structure,
elements, and flow of information and responsibilities between
practices during a referral; (2) monitoring of shared ASM beneficiaries
through the entire process to ensure proper follow-up, integration of
information, and maintenance of beneficiary choice; and (3) integration
of information from the closed-loop connection into the ASM
beneficiary's plan of care.
Care Coordination Integration. Structured processes to
embed care coordination processes into the ASM participant's practice
workflow. Such processes may include: (1) activity records documenting
the implementation of care coordination activities with the primary
care practice, such as meeting minutes on process improvements,
workflow diagrams, training syllabi for training staff on new
processes, copies of old and new processes on documenting care
coordination activities; or (2) outcome measures demonstrating changes
attributable to newly implemented care coordination processes.
We seek comments on the goals and specifications of the required
improvement activities proposed at Sec. 512.735(b) and (c).
(d) Improvement Activities Data Submission, Achievement Points, ASM
Performance Category Scoring
We propose ASM participants must submit data on ASM improvement
activities in the form of attestations meeting the submission
requirements at Sec. 512.720. We propose at Sec. 512.735(d)(1) and
(2) that ASM participants would receive 10 measure achievement points
for reporting ``yes'' for each improvement activity specified at Sec.
512.735(c) in accordance with the data submission requirements at Sec.
512.720(a). We would sum the total achievement points for all submitted
improvement activities and divide this sum by the total number of
available achievement points for the required improvement activities as
specified in paragraph Sec. 512.735(c), not to exceed 100 percent.
In our proposals, both improvement activities would be weighted the
same, each accounting for half of the potential improvement activities
ASM performance category scoring adjustments to the final score. We
considered differential weighting, with IA-1 comprising a smaller
number of points for the scoring adjustment. The activities in IA-1,
such as sharing patient information back to a PCP after a specialist
visit, should already be occurring, whereas activities in IA-2, like
the creation of a CCA, are less common and potentially more time
consuming. We decided to propose to weight the improvement activities
equally, each accounting for the same number of potential points in the
improvement activities ASM performance category scoring adjustment,
acknowledging the burden that these improvement activities may present
to practices. For example, if an ASM participant is already conducting
[[Page 32593]]
activities that satisfy IA-1 specifications but do not satisfy IA-2
specifications in the 2027 ASM performance year, they would still be
awarded 10 measure achievement points and an improvement activities ASM
performance category score of 50 percent. We believe IA-1 would be
achieved by the vast majority of ASM participants with limited effort,
which may lessen the concern of initial improvement activity burden and
impact to the ASM participant's overall score. Simultaneously, we want
to promote specialty collaboration with primary care, thus if ASM
participants do not achieve the expectations in IA-2, the ASM
participant would only receive 10 measure achievement points. If ASM
participants do not complete the requirements for IA-1 and do not
complete the requirements for IA-2, they would receive zero measure
achievement points and an improvement activities ASM performance
category score of zero percent.
We seek comments on our improvement activities ASM performance
category scoring approach at Sec. 512.735(d)(1) and (2) and
alternative improvement activity weighting and scoring options.
(5) Proposed Promoting Interoperability ASM Performance Category
Our long-term goal for the Promoting Interoperability performance
category is to ensure the meaningful use of CEHRT and information
exchange throughout the year, for all data, all clinicians, and all
patients. We believe it is important to leverage the Promoting
Interoperability ASM performance category for scoring adjustments to
the final score, as discussed in section III.C.2.e. of this proposed
rule.
(a) Background
This section includes proposals for the performance year for
Promoting Interoperability measures, the requirement for CEHRT use and
related attestations, data submission criteria and scoring for the ASM
Promoting Interoperability performance category. The Promoting
Interoperability performance category score would be used to determine
the Promoting Interoperability performance category scoring adjustment
applied to the final score.
(b) ASM Performance Year for the Promoting Interoperability ASM
Performance Category
At Sec. 512.740(a), we propose the ASM performance year for
Promoting Interoperability category. Beginning with ASM payment year
2029, the performance year for Promoting Interoperability measures is
the minimum of a continuous 180-day period within the calendar year
that occurs 2 years prior to the applicable ASM payment year, up to and
including the full calendar year.
Reporting for this period would provide ASM participants with the
opportunity to continuously monitor their performance, identify gaps in
reporting and identify areas that may require investigation and
corrective action. Additionally, this performance period aligns with
the MIPS performance period established for the MIPS Promoting
Interoperability performance period established at Sec.
414.1320(i)(1). We believe that alignment of the performance period
between MIPS and the ASM model supports ASM participant's transition
from MIPS to ASM.
We seek comments on our proposal at Sec. 512.740(a) for the 180-
day performance period for Promoting Interoperability measures.
(c) Reporting for the Promoting Interoperability Performance Category
We propose at Sec. 512.740(b) to earn a performance category score
for the Promoting Interoperability Performance category for inclusion
in the final score, an ASM participant must be a meaningful EHR user. A
meaningful EHR user means an ASM participant who possesses CEHRT, uses
the functionality of CEHRT, reports on applicable objectives and
measures specified for the Promoting Interoperability performance
category for a performance period in the form and manner specified by
CMS, and engages in activities related to supporting providers with the
performance of CEHRT. We are proposing to not include additional
provisions related to information blocking as defined at 45 CFR 171.103
in the definition of a meaningful EHR user.
The Promoting Interoperability ASM performance category would focus
on the safe use and exchange of patient data. Our requirements to
demonstrate meaningful CEHRT use through reporting Promoting
Interoperability measures are discussed later in this section of this
proposed rule.
(i) Required CEHRT Use
We propose our requirement for CEHRT use at Sec. 512.740(b)(1)
that ASM participants are required to provide evidence, in a form and
manner specified by CMS, demonstrating use of CEHRT to fulfill the
Promoting Interoperability measure requirements (as defined by a
meaningful EHR user at Sec. 414.1305) and receive a score greater than
zero percentage points for the Promoting Interoperability ASM
performance category. ASM participants must use certified health IT
that meets the definition of CEHRT at Sec. 414.1305 (which references
health IT certification criteria finalized at 45 CFR 170.315) to
receive a score greater than zero for the Promoting Interoperability
ASM performance category. To demonstrate evidence of CEHRT use, ASM
participants would be required to provide their EHR's CMS
identification ID from the Certified Health IT Product List, available
on HealthIT.gov.
We believe requiring the use of CEHRT supports the goals of ASM by
helping enable: (1) meaningful EHR use, further measured by ASM's
proposed Promoting Interoperability measures; (2) reporting of clinical
quality measures, including eCQMs; (3) interoperability and data
sharing between providers and with patients to drive better patient
care, care coordination, and primary and specialty care integration;
and (4) continuous practice-based quality improvement and care
transformation. To promote standardization, we align with the
definition of CEHRT at Sec. 414.1305 used across CMS in other
Promoting Interoperability and quality reporting programs. For example,
CEHRT use is required for eligible clinicians participating in the MIPS
program as stated at Sec. 414.1375(b)(1).
In addition to requiring use of CEHRT, we are also maintaining the
requirement ASM participants submit confirmation of the following to
earn a score for this category:
The Office of the National Coordinator for Health
Information Technology (ONC) Direct Review attestation at 45 part 170,
subpart E.
The Security Risk Assessment Measure.
The High Priority Practices Guide of the Safety Assurance
Factors for EHR Resilience (SAFER) Guides \228\ Measure.
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\228\ https://www.healthit.gov/topic/safety/safer-guides.
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We are proposing to not include the Actions to Limit or Restrict
Compatibility or Interoperability of CEHRT attestation in ASM at this
time.
We believe maintaining the ONC Direct Review process (45 CFR part
170, subpart E) in ASM increases accountability among certified health
IT developers and vendors by ensuring ASM participants' Health IT
Module \229\ conforms to ONC's Health IT Certification Program
requirements not
[[Page 32594]]
only during implementation of CEHRT, but also while CEHRT is being used
during patient care and in care delivery.
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\229\ 45 CFR 170.102.
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The Security Risk Analysis and SAFER measures are designed to
optimize the safety of ASM participants' EHR systems. We propose at
Sec. 512.740(b)(3)(ii) that an ASM participant must complete the
activities included in the Security Risk Analysis measure within the
calendar year of the ASM performance year. This aligns with a MIPS
requirement for eligible clinicians in MIPS as stated at Sec.
414.1375(b)(2)(ii)(A); ASM participants that previously participated in
MIPS are likely familiar with these requirements. The security risk
analysis is conducted to protect the security of individually
identifiable health information and the systems that are used to
create, receive, maintain, or transmit such information. An ASM
participant would conduct a security risk analysi \230\ in accordance
with 45 CFR 164.308(a)(1)(A). As part of the security risk analysis,
ASM participants would be required to address the security of
electronic protected health information (ePHI) created, received,
maintained, or transmitted by CEHRT, including whether it would be
reasonable and appropriate in the participants' specific circumstances
to encrypt ePHI in their CEHRT in accordance with requirements in 45
CFR 164.306(d)(3) and 45 CFR 164.312(a)(2)(iv), implement security
updates as necessary, and correct identified security deficiencies as
part of the ASM participant's risk management process.
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\230\ Security Risk Analysis: https://qpp.cms.gov/docs/pi_specifications/Measure%20Specifications/2025-MIPS-Promoting%20Interoperability-Measure-Security-Risk-Analysis.pdf.
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We also propose at Sec. 512.740(b)(3)(iii) that the ASM
participant must confirm the ASM participant's completion of the annual
self-assessment under the SAFER Guides measure within the calendar year
of the ASM performance year. The High Priority Practices SAFER Guide
\231\ is used as an annual self-assessment to support consistent safety
practices for all EHR users and further enable the electronic exchange
of health information. This aligns with a requirement for eligible
clinicians in MIPS as stated at Sec. 414.1375(b)(2)(ii)(D).
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\231\ SAFER Guides. https://qpp.cms.gov/docs/pi_specifications/Measure%20Specifications/2025-MIPS-Promoting-Interoperability-Measure-High-Priority-Practices-Guide-of-SAFER-Guides.pdf.
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Together, we believe these measures drive more secure, efficient,
and meaningful use of CEHRT and health IT in ASM. Furthermore, given
current and historical requirements in the Promoting Interoperability
performance category in MIPS, these requirements are likely familiar
and already implemented, or readily implementable, for many ASM
participants.
We considered the alternative of allowing identified ASM
participants without CEHRT to opt-out of participating in ASM. However,
we would be concerned an opt-out would: (1) disincentivize the adoption
of CEHRT and participation of specialists in value-based payment
models, (2) be challenging for CMS to operationalize and audit, and (3)
potentially result in a reduction in participant volume that would
significantly affect ASM's impact and evaluability. We recognize there
are underlying reasons why certain practices have yet to adopt CEHRT
and that these practices currently not on CEHRT may share certain
characteristics, such as smaller practice sizes with 15 or fewer
clinicians, as defined at Sec. 414.1305. To support these practices,
we propose additional policies and flexibilities in ASM, such as the
complex patient scoring payment adjustment described in section
III.C.2.e.(3) of this proposed rule and the small practice scoring
adjustment described in section III.C.2.e.(4) of this proposed rule,
with the goal of not inadvertently penalizing these practices,
particularly those who disproportionally care for populations with
higher medical complexity and social risk. We also considered the
alternative of requiring CEHRT but not requiring CEHRT-related
attestations and requirements mentioned earlier, such as the Security
Risk Assessment and SAFER Guides measures. We decided to include them
given they help ensure safer and more meaningful use of CEHRT amongst
ASM participants. Because they have been a consistent part of MIPS
reporting in the past, ASM participants are likely familiar with these
attestations and measures, which could help reduce burden.
We also considered the alternative of not requiring CEHRT to
achieve a Promoting Interoperability ASM performance category score
greater than zero. However, we were concerned this would deviate from
existing MIPS policy and may disincentivize CEHRT adoption among ASM
participants. Furthermore, requiring CEHRT to achieve a Promoting
Interoperability category score underscores the role CEHRT plays in
providing foundational IT capabilities to enable the reporting of
quality data and inclusion of additional IT functionality, such as e-
prescribing and health information exchange (HIE), which is captured in
ASM's Promoting Interoperability measures. CEHRT use plays an important
role in helping ASM participants improve and transform care for
Medicare beneficiaries with chronic conditions, whether through
electronic clinical decision support, physician order entry or
exchanging electronic health information with other clinicians or
health care settings.
Lastly, we considered inclusion of The Actions to Limit or Restrict
Compatibility or Interoperability of CEHRT attestation in ASM as it
would help ensure that ASM participants are acting in good faith when
implementing and using CEHRT to exchange electronic health information,
and not knowingly and willfully taking action to limit or restrict the
compatibility or interoperability of CEHRT.
We request comments on our proposals to require that ASM
participants use CEHRT to receive a score for the ASM Promoting
Interoperability performance category. We also seek comments on the
definition of meaningful EHR user and other alternatives discussed in
this section of this proposed rule that would be required for ASM
participants to achieve a Promoting Interoperability ASM performance
category score greater than zero; this includes allowing for a CEHRT-
related opt-out, not requiring CEHRT, and requiring the Actions to
Limit or Restrict Compatibility or Interoperability of CEHRT
attestation.
(ii) Promoting Interoperability Objectives and Measures
To receive a score for the ASM Promoting Interoperability
performance category, clinicians must complete the relevant
attestations and measures related to CEHRT and report Promoting
Interoperability objectives and measures. Our Promoting
Interoperability objectives and measures align with model goals and
objectives and measures used in other CMS programs, including MIPS. We
propose at Sec. 512.740(b)(2) that an ASM participant must report on
objectives and associated MIPS measures specified by CMS to assess
performance in the Promoting Interoperability ASM performance category.
We propose at Sec. 512.740(b)(2) that an ASM participant must
fulfill the following requirements to earn an ASM performance category
score for the Promoting Interoperability performance category: For each
measure, as applicable, ASM participants would report the numerator (of
at least one) and denominator, or yes/no statement or an exclusion for
each measure that includes an option for an exclusion. We would require
ASM participants to report all Promoting Interoperability
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measures at the TIN/NPI level, which is consistent with the methodology
used to identify eligible ASM participants, as described in section
III.C.2.c.(3)(a)(i) of this proposed rule. We considered allowing for
TIN-level reporting for Promoting Interoperability measures but decided
to prioritize maintaining individual accountability and robust
comparisons among ASM heart failure participants or ASM low back pain
participants. We propose at Sec. Sec. 512.740(b)(2)(i) through (iv)
that ASM participants must attest to the objectives and associated
measures for the ASM performance year. The Promoting Interoperability
measures support the following objectives: Electronic Prescribing, HIE,
Provider to Patient Exchange, and Public Health and Clinical Data
Exchange, as shown in Table 41. The objectives encourage leveraging the
electronic exchange of health information, with a focus on the safety
of prescribing medications, communication between clinicians, patient
access to their health information and reporting essential health data
to public health agencies.
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[GRAPHIC] [TIFF OMITTED] TP16JY25.113
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As discussed earlier in this section of this proposed rule, ASM
participants would be required to submit collected data for the
required measures in each objective (unless an applicable exclusion is
claimed) for the same 180 continuous days (or more) during the calendar
year. Given these measures have remained consistent, required measures
in MIPS, as stated at Sec. 414.1375(b)(2), they are likely familiar
with the measure specifications and implemented by many MIPS
clinicians, which represents a substantial portion of potential ASM
participants. We believe these measures align with the goals of ASM and
reflect meaningful use of CEHRT. Electronic prescribing and provider to
patient exchange, for example, through a patient portal, support
patient-centered care and
[[Page 32596]]
improve communication between patients and providers. Interoperability
is needed for effective collaboration between specialists and PCPs
(aligning with the goals and activities of ASM's improvement
activities), comprehensive care coordination, and seamless transitions
of care.
Of the measures in the Public Health and Clinical Data Exchange
category in MIPS, we would include the required measures only
(Immunization Registry Reporting and Electronic Case Reporting) in ASM
as they provide critical information to the mission and operations of
our public health agencies. The other measures in this category (Public
Health Registry Reporting, Clinical Data Registry Reporting, and
Syndromic Surveillance Reporting) would remain optional in ASM. Given
these measures have been a stable part of the MIPS Promoting
Interoperability measure set, keeping them optional allows for ease of
reporting for ASM participants who may already have developed workflows
and infrastructure to capture this data.
(iii) Adding, Removing, and Modifying Measures
We propose to avoid making significant changes to these measure
sets over the period of model; however, we may propose to add or remove
measures in response to relevant public comments, recommendations from
participants and their collaborators, new CMS program activities, or
significant changes to the included measures. Note, because the
measures currently proposed are all part of MIPS, any updates CMS
applies to the measures within MIPS would be incorporated into the
Promoting Interoperability ASM measure sets accordingly. Alternatively,
we considered adopting the MIPS Promoting Interoperability measures,
but requiring notice and comment rulemaking before adopting any
modifications made to the measures' specifications specified by CMS
through rulemaking for MIPS.
We seek public comments on these proposals on Promoting
Interoperability measures and objectives and proposed alternative for
adopting modifications made to the MIPS Promoting Interoperability
measure specifications specified by CMS through rulemaking.
(iv) Supporting Use of CEHRT
ASM aims to support the electronic exchange of health information
using CEHRT to improve patient care and coordination of care. We
propose at Sec. 512.740(b)(4) requirements to support the use of
CEHRT.
Supporting the use and performance of CEHRT. We propose at
Sec. 512.740(b)(4)(i)(A)(1) and (2) that the ASM participant support
use of CEHRT by providing acknowledgement of the requirement to
cooperate in good faith with ONC direct review of the ASM participant's
health information technology certified under the ONC Health IT
Certification Program if a request to assist in ONC direct review is
received; and if requested, cooperate in good faith with ONC direct
review of the ASM participant's health information technology certified
under the ONC Health IT Certification Program as authorized by 45 CFR
part 170, subpart E, to the extent that such technology meets (or can
be used to meet) the definition of CEHRT, including by permitting
timely access to such technology and demonstrating its capabilities as
implemented and used by the ASM participant in the field. Furthermore,
we propose at Sec. 512.740(b)(4)(i)(B) that an ASM participant has the
option to attest to the following objectives and measures: at Sec.
512.740(b)(4)(i)(B)(1) that the ASM participant acknowledges the option
to cooperate in good faith with ONC-ACB surveillance of his or her
health information technology certified under the ONC Health IT
Certification Program if a request to assist in ONC-ACB surveillance is
received; and at Sec. 512.740(b)(4)(i)(B)(2) if requested, that the
ASM participant cooperate in good faith with ONC-ACB surveillance of
the ASM participant's health information technology certified under the
ONC Health IT Certification Program as authorized by 45 CFR part 170,
subpart E, to the extent that such technology meets (or can be used to
meet) the definition of CEHRT, including by permitting timely access to
such technology and demonstrating its capabilities as implemented and
used by the ASM participant in the field. Proposals to support
providers with the performance of CEHRT aligns with requirements of the
MIPS program as finalized at Sec. 414.1375(b)(3)(i) through
414.1375(b)(3)(i)(B)(2).
We seek comments on our policies supporting the use and performance
of CEHRT.
(d) Alternatives Considered for the Promoting Interoperability
Reporting Requirements
We considered alternatives for the Promoting Interoperability
reporting requirements. Our proposals mostly align with reporting
requirements for the Promoting Interoperability performance category
with the MIPS program for multiple reasons. Aligning with MIPS
Promoting Interoperability objectives and measures where appropriate
promotes standardization across CMS and its programs. Measure alignment
can also reduce confusion, burden, and operational complexity for ASM
participants by limiting the need for ASM participants to implement
different specifications for potentially similar or related measures.
Furthermore, the MIPS Promoting Interoperability measure set has been
stable for several years and has been successfully reported in MIPS by
most of its participants. Therefore, we do not believe it would be an
undue burden for ASM participants to continue reporting these measures,
particularly given they support the goals of ASM.
In our first alternative, we considered requiring reporting for
CEHRT attestation, the ONC Direct Review Attestation, the Security Risk
Assessment Measure, and the Safety Assurance Factors for EHR Resilience
(SAFER) Guides Measure; each of these items is required in MIPS to get
a Promoting Interoperability performance category score greater than
zero. This option would not require specific reporting of Promoting
Interoperability measures.
We also considered a second alternative that would require the
attestations in the first alternative as well as reporting one of the
Health Information Exchange options. We believe this option would
emphasize the importance of health information exchange to the ASM.
A third alternative we considered was to adopt, by reference, the
provisions of MIPS for the PI category, including both the measures and
scoring policies. We also considered deferring the PI category measures
within ASM to the PI category within MIPS such that the ASM would
automatically update to align with MIPS for each future ASM performance
year. Aligning with the PI category within MIPS would reduce complexity
for ASM participants, especially those who have been participating in
MIPS. While we believe this would limit confusion and align objectives
across CMS, we decided that this could introduce risk to ASM insofar
changes to the PI category could be introduced in MIPS that may not
align with ASM's goals and priorities; in these cases, ASM could
consider not adopting or delaying adoption of these changes. We believe
that maintaining the PI category in ASM through rulemaking would be the
better approach; however, we invite comment on the merits of ASM
deferring measure selection and scoring to the MIPS PI category.
[[Page 32597]]
A fourth alternative would be to develop new Promoting
Interoperability measures specific to ASM. While new measures could
potentially more meaningfully capture the use of health IT in patient
care, we were concerned about the feasibility of new measure
development and the operational challenges that would be imposed on ASM
participants and their EHR vendors to implement these new measures.
We seek comments on our proposals on Promoting Interoperability
measures. We also seek comments on alternatives to reporting the full
set of Promoting Interoperability performance category measures. We
also seek comment on the alternative considered to adopt the PI
category in MIPS in its entirety, in addition to the applicable scoring
methods, for each applicable ASM performance year, including any
ongoing updates to the MIPS PI category over the course of the model.
(e) Promoting Interoperability ASM Performance Category Scoring
We propose at Sec. 512.740(c)(1) an ASM participant earns a score
for each measure by fulfilling the reporting requirements specified at
Sec. 512.740(b) and if an exclusion, under the measure's
specifications as maintained and published by MIPS, is reported for a
measure, the points available for that measure are redistributed to
another measure. We propose at Sec. 512.740(c)(1)(i) maintaining the
score amounts and applicable redistribution scoring policies for each
required measure as set forth in the MIPS measure specifications. We
refer readers to Table 41 for the scores assigned to each measure as
defined in the MIPS measure specifications. We considered the
alternative of developing an ASM-specific scoring system that assigns
different scores to each Promoting Interoperability measure. However,
we were concerned this would deviate from MIPS, which is likely already
familiar to ASM participants. Furthermore, the existing scoring in MIPS
already reflects ASM's priorities, for example, with more measure
achievement points assigned to the Health Information Exchange category
compared to the others.
As stated earlier and consistent with MIPS, the optional Public
Health and Clinical Data Exchange measures (Public Health Registry
Reporting, Clinical Data Registry Reporting, or Syndromic Surveillance
Reporting) in ASM would remain optional in ASM. Furthermore, we are not
adopting the MIPS scoring policy of assigning 5 bonus points for
submitting a ``yes'' response for any of the optional Public Health and
Clinical Data Exchange measures given they may be less relevant to the
care provided to Medicare beneficiaries by ASM participant, for
example, engaging with a public health agency to submit syndromic
surveillance data from an urgent care setting. In addition, bonus
points may signal greater importance of these measures over other
Promoting Interoperability measures that more directly support ASM's
goals, such as interoperability to support primary and specialty care
integration. We continue to capture essential public health reporting
activities on immunizations and reportable conditions in the two
required Public Health and Clinical Data Exchange Promoting
Interoperability measures.
We propose at Sec. 512.740(c)(2) that unless otherwise specified
by CMS, provided an ASM participant meets the CEHRT requirements as
described in section III.C.2.d.(5).(b), CMS sums the scores for each of
the required Promoting Interoperability measures described at Sec.
512.740(b) and divides this sum by the total number of available
Promoting Interoperability points to determine the ASM Promoting
Interoperability performance category score. The ASM Promoting
Interoperability performance category score cannot exceed 100 percent.
If an ASM participant does not demonstrate meaningful CEHRT use as
described in section III.C.2.d.5.(b) they would receive a zero for
their Promoting Interoperability ASM performance category score. The
Promoting Interoperability ASM performance category score would be used
as a Promoting Interoperability performance category scoring adjustment
to the final score specified under Sec. 512.745(a)(1)(iv).
We considered automatically applying a score of zero for an ASM
participant's Promoting Interoperability performance score for any ASM
participant who did not meet achieve full points on the Promoting
Interoperability performance category, however, we recognize it is
important to acknowledge and credit the achieved points on the
individual measures. Therefore, we would leverage the Promoting
Interoperability performance category score for the Promoting
Interoperability performance category scoring adjustments to the ASM
final score, as discussed in section III.C.2.e.(1). of this proposed
rule. The concepts represented in the Promoting Interoperability
requirements support ASM participants in improving value, by improving
patient care while maintaining or lowering the cost of care.
We are not proposing any exceptions for the Promoting
Interoperability ASM performance category requirements. CMS has
established automatic reweighting criteria of the Promoting
Interoperability category in MIPS at Sec. 414.1380(c)(2)(i)(C)(9) for
certain MIPS eligible clinicians, such as hospital-based clinicians and
Ambulatory Surgical Center-based clinicians, and for clinicians in
small practices as defined in Sec. 414.1305. The MIPS reweighting
policy generally excludes the Promoting Interoperability performance
category from the MIPS final score if the applicable clinician or group
practice does not submit Promoting Interoperability data. Due to ASM's
participant selection criteria (see section III.C.2.c.(3). of this
proposed rule) many ASM participants, except for those in small
practices with 15 or fewer clinicians, would not qualify for this
automatic reweighting criterion if they were to be considered eligible
clinicians under MIPS. For ASM participants in small practices or solo
practitioner ASM participants, we are proposing to adjust final scores
as described in section III.C.2.e.(4). of this proposed rule. We
believe the potential confusion and complexity to develop and implement
an exclusion policy for the Promoting Interoperability ASM performance
category would outweigh any potential benefits it would have for a
likely small number of participants.
Lastly, we are proposing an Extreme and Uncontrollable
Circumstances policy at Sec. 512.780 and discussed in section
III.C.2.i. of this proposed rule, but we are not proposing to include a
Promoting Interoperability-specific hardship application in ASM. Data
analysis of 2023 data submitted by clinicians who participated in MIPS
that would have met the ASM participant selection criteria showed that
less than 1 percent of those clinicians submitted a Promoting
Interoperability -specific hardship application. The operational lift
and resources needed to develop and maintain a hardship application for
ASM likely outweigh the potential benefit only a few practices may
receive.
We seek comments on these proposals and discussed alternatives to
score the ASM Promoting Interoperability performance category.
e. Proposed Final Score Methodology
In this section, we propose a scoring methodology for assessing the
total performance of each ASM participant (referred to as a ``final
score'') that allows for accountability and alignment for performance
within each ASM cohort. Specifically, we propose to define at Sec.
512.705 ``final score'' to
[[Page 32598]]
mean a composite assessment (using a scoring scale of zero to 100
points) for each ASM participant for an ASM performance year determined
using the methodology for assessing the total performance of an ASM
participant according to performance standards for applicable measures
and activities for each ASM performance category as described in Sec.
512.745.
The methodology discussed in this section would calculate a final
score based on the quality and cost ASM performance categories scores
for each ASM participant while considering negative scoring adjustments
for the improvement activities and Promoting Interoperability ASM
performance categories. Additional points would be added to the final
score for ASM participants that address complex care and ASM
participants that are part of small practices. Later in this section of
the proposed rule, we propose specific data submission requirements for
ASM participants to receive a final score. ASM participants that do not
meet these minimum data submission requirements would receive a final
score of zero, which would lead to the maximum negative payment
adjustment applicable for the corresponding ASM payment year. We also
propose that ASM participants who meet the data submission requirements
to receive a final score but cannot be measured on quality or cost
performance would not receive a final score and would therefore receive
a neutral payment adjustment.
Specifically, we propose at Sec. 512.745(a) to calculate a final
score of zero to 100 points using the formula we propose in section
III.C.2.e.(5). of this proposed rule and specified at Sec.
512.745(a)(5) for each ASM participant that meets the requirements to
receive a final score as proposed in section III.C.2.e.(2) of this
proposed rule and specified at Sec. 512.745(a)(2). We propose policies
to determine scores for the ASM performance categories in sections
III.C.2.d.(2). through III.C.2.d.(5). of this proposed rule. ASM
performance category scores reflect the assessment of each ASM
participant's performance on the applicable measures and activities for
an ASM performance category for its applicable performance period based
on the performance standards for those measures and activities.
We would use the final score to determine an ASM payment adjustment
factor for the ASM participant for the applicable ASM payment year as
discussed in section III.C.2.f. of this proposed rule.
(1) ASM Performance Category Weights and Scoring Adjustments
To create a final score from zero to 100 based on the individual
ASM performance category scores, we propose at Sec. 512.745(a)(1)(i)
through (iv) to assign an ASM performance category weight of 50 percent
to each of the quality and cost ASM performance categories and to apply
adjustments to the final score based on scores in the improvement
activities and Promoting Interoperability ASM performance categories.
Accordingly, we propose that the improvement activities and Promoting
Interoperability ASM performance categories would not have a
performance category weight but would have separately applied scoring
adjustments that are potentially applied to the final score. The
proposed weights for the quality and cost ASM performance categories,
as well as the improvement activities and Promoting Interoperability
ASM performance category scoring adjustments are described in Table 42.
[GRAPHIC] [TIFF OMITTED] TP16JY25.114
We are proposing to only add weights to the quality and cost ASM
performance categories for the final score and to not add weights to
the improvement activities and Promoting Interoperability ASM
performance categories to broaden the distribution of final scores.
Based on historical MIPS performance in the improvement activities and
Promoting Interoperability performance categories, we believe ASM
participants would be likely to achieve higher ASM performance category
scores in these two performance categories. One of the stated goals of
ASM is to increase two-sided risk and create payment adjustments of a
higher magnitude for ASM participants to incentivize performance
improvements. If final scores were clustered around a small range of
performance scores, differentiating performance and operationalizing a
wider range of payment adjustments could prove difficult.
We are also proposing to weight the cost and quality ASM
performance category scores at 50 percent each because those weights
align with ASM's goal, as described in sections III.C.2.d.(2). and
III.C.2.d.(3). of this proposed rule, of decreasing the cost of care
for beneficiaries with ASM's targeted chronic conditions and improving
quality care through a focused measure set relevant to ASM's clinical
specialties and targeted chronic conditions. To drive cost and quality
improvement as described in sections III.C.2.d.(2). and III.C.2.d.(3).
of this proposed rule, we believe that weighting cost and quality ASM
performance category scores at 50 percent creates the necessary
incentives to lower chronic condition cost of care while improving
quality metrics.
We propose at Sec. Sec. 512.745(a)(1)(iii) and 512.745(a)(1)(iv)
to introduce improvement activities and Promoting Interoperability
scoring adjustments to the ASM participant's final score dependent on
the performance in the improvement activities and Promoting
Interoperability ASM performance categories. We propose at Sec.
512.745(a)(1)(iii)(A) that ASM participants that achieve a 100 percent
score for the improvement activities ASM performance category would not
receive an improvement activities ASM performance category scoring
adjustment to their final scores. We propose at Sec.
512.745(a)(1)(iii)(B) that ASM participants that receive a 50 percent
improvement activities ASM performance category score (that is, an ASM
participant that attested to meeting the requirements of one of the two
proposed required improvement
[[Page 32599]]
activities) would receive an improvement activities ASM performance
category scoring adjustment of negative 10 points to the final score
specified at Sec. 512.745(a). We propose at Sec.
512.745(a)(1)(iii)(C) that ASM participants that receive a zero percent
improvement activities ASM performance category score would receive an
improvement activities ASM performance category scoring adjustment of
negative 20 points to the final score specified at Sec. 512.745(a).
The maximum improvement activities ASM performance category scoring
adjustment would be negative 20 points.
To determine the Promoting Interoperability performance category
scoring adjustment, we propose at Sec. 512.745(a)(1)(iv)(A) and (B)
that we would multiply the Promoting Interoperability ASM performance
category score by 100 then subtract that product from 100 and divide by
the maximum negative Promoting Interoperability ASM performance
category scoring adjustment of 10 points. The maximum Promoting
Interoperability ASM performance category scoring adjustment would be
negative 10 points. For example, if an ASM participant's Promoting
Interoperability ASM performance category score was 73 percent, we
would multiply 73 percent by 100, subtract 73 from 100 and divide the
score by the maximum negative Promoting Interoperability ASM
performance category scoring adjustment of 10, resulting in a negative
Promoting Interoperability ASM performance category scoring adjustment
of 2.7 points.
We considered weighting all the ASM performance category scores to
determine a final score instead of proposing the scoring adjustments
for the improvement activities and Promoting Interoperability ASM
performance category scores. Under this alternative, we considered the
following ASM performance category weights to calculate the final score
when there is no reweighting: (1) quality 30 percent; (2) cost 30
percent; (3) improvement activities 25 percent, and (4) Promoting
Interoperability 15 percent. For similar reasons discussed earlier in
this section of this proposed rule, we believe that increasing the
weight on the improvement activities and decreasing the Promoting
Interoperability ASM performance category weights relative to
performance category weights in MVPs as defined at Sec. 414.1365(e)(1)
would increase the incentive to achieve the desired aims of improved
primary care and specialty care integration under ASM. We believe that
the improvement activities would be important to meet ASM's goal of
better integrating specialty and primary care clinicians as described
in section III.C.2.d.(4). of this proposed rule. Ultimately, we believe
that the proposed ASM performance category weights and scoring
adjustments, as discussed earlier in this section of this proposed
rule, would overcome the potential challenges in determining meaningful
payment adjustments if final scores were clustered around a small range
of performance scores.
We also considered using the same ASM performance category weights
used by the Quality Payment Program to score performance categories in
MVPs as defined at Sec. 414.1365(e)(1) but without the potential for
reweighting as defined at Sec. 414.1365(e)(2) (89 FR 98345). As
defined at Sec. 414.1365(e)(1), MVPs use the following performance
category weights to calculate the final score when there is no
reweighting: (1) quality 30 percent; (2) cost 30 percent; (3)
improvement activities 15 percent; and (4) Promoting Interoperability
25 percent. We believe that the improvement activities ASM performance
category's goal of integrating specialty managed care with primary care
specialists is central to ASM's larger goal. Therefore, a higher weight
should be given to the improvement activities ASM performance category
over the Promoting Interoperability ASM performance category.
We believe weighting the quality and cost performance categories at
50 percent more accurately assigns points in support of ASM's goals.
With regards to the negative scoring adjustments, the improvement
activities ASM performance category's goal of integrating specialty
managed care with primary care specialists is central to ASM's larger
goal. Therefore, a higher number of potential negative scoring
adjustment points should be given to ASM participants that do not meet
requirements of the improvement activities ASM performance category
over the Promoting Interoperability ASM performance category.
We seek comments on our proposed ASM performance category weights
and scoring adjustments as proposed at Sec. 512.745(a)(1) and the
alternative ASM performance category weights we considered in this
proposed rule.
(2) Requirements To Receive a Final Score
(a) Determining a Final Score When an ASM Participant Meets or Does Not
Meet Minimum Data Submission Requirements
We propose at Sec. 512.745(a)(2) that we would determine whether
an ASM participant is eligible to receive a final score for the
applicable ASM performance year depending on the data submitted by the
ASM participant. We propose at Sec. 512.745(a)(2)(i) that ASM
participants who meet the data submission requirement for the quality
ASM performance category as proposed at Sec. 512.725(a)(1)(i) and
receive quality and cost ASM performance category scores would receive
a final score greater than zero but not exceeding 100 for the
applicable ASM performance year. These ASM participants would receive a
payment adjustment based on the methodology proposed in section
III.C.2.f of this proposed rule. We propose at Sec. 512.745(a)(2)(ii)
that ASM participants who do not meet the data submission requirement
for the quality ASM performance category as proposed at Sec.
512.725(a)(1)(i) would receive a final score of zero for the applicable
ASM performance year. As discussed in section III.C.2.f of this
proposed rule, these ASM participants would be subject to the maximum
negative payment adjustment for the applicable ASM payment year. We
also note that an ASM participant's final score may also be affected if
the ASM participant is affected by an eligible extreme and
uncontrollable circumstance during an ASM performance year as discussed
in section III.C.2.i of this proposed rule. We refer readers to section
III.C.2.e.(2).(b) later in this section of this proposed rule for
proposals related to final scores when ASM participants meet the
quality ASM performance category data submission requirements but do
not receive a quality or cost ASM performance category score. We also
refer readers to Table 43 later in this section of this proposed rule
for a summary of the proposed final score policies and their impact on
payment adjustments.
As we propose ASM to be a mandatory model, we believe that we must
set a minimum data submission requirement for an ASM participant to
meet or otherwise be subject to the maximum negative payment adjustment
as discussed in section III.C.2.f of this proposed rule. We believe
that our proposed minimum data submission requirement is reasonable
because it requires that an ASM participant reports at least one non-
administrative claims-
[[Page 32600]]
based quality measure that also meets the data completeness
requirement. Ultimately, this requirement would mean that the ASM
participant is held accountable on the quality ASM performance
category. Since we do not require ASM participants to submit data for
the cost ASM performance category because we directly calculate the
EBCMs, this proposed minimum data submission requirement would allow us
to hold ASM participants accountable for quality and cost performance
except in the case the ASM participant does not meet the case minimums
for the quality and cost ASM performance category measures as discussed
later in section III.C.2.e.(2).(b) of this proposed rule.
We seek comments on our proposed requirements at Sec.
512.745(a)(2)(i) to calculate a final score for ASM participants and
our proposal at Sec. 512.745(a)(2)(ii) that an ASM participant who
does not meet these requirements would receive a final score of zero
for the applicable ASM performance year.
(b) Not Determining a Final Score When an ASM Participant Cannot Be
Scored on the Quality or Cost ASM Performance Category
At Sec. 512.745(a)(2)(iii), we propose that ASM participants who
meet the data submission requirement for the quality ASM performance
category as proposed at Sec. 512.725(a)(1)(i) but do not receive a
quality ASM performance category or a cost ASM performance category
score would not receive a final score for the applicable ASM
performance year. As discussed in section III.C.2.f.(4) of this
proposed rule, these ASM participants would not receive payment
adjustments in the corresponding ASM payment year. That is, only ASM
participants who meet the requirements to receive a final score
proposed earlier in this section of this proposed rule and receive a
quality or cost ASM performance category score would receive a final
score for the applicable ASM performance year. As proposed in section
III.C.2.f.(4) of this proposed rule, ASM participants that receive a
final score greater or equal to zero and not exceeding 100 would
receive an ASM payment adjustment factor, defined in section III.C.2.f
of this proposed rule, based on that final score for the applicable ASM
payment year; otherwise, we propose that the ASM participant would not
receive a final score and would receive no payment adjustments for the
applicable ASM payment year. We also refer readers to section III.C.2.i
of this proposed rule for how the proposed extreme and uncontrollable
circumstance policy influences an ASM participant's final score if an
ASM participant has been deemed to be affected by an eligible
circumstance.
We believe that it is appropriate to hold ASM participants
accountable for quality and cost for the purpose of determining payment
adjustments. We recognize that there may be instances where an ASM
participant meets the minimum data submission requirements for the ASM
performance category to receive a final score described earlier in this
section of this proposed rule but does not meet the case minimums for
any required quality measure as discussed in section III.C.2.d.(2).(h)
of this proposed rule or does not meet the case minimum for the
required EBCM as discussed in section III.C.2.d.(3).(g) of this
proposed rule. An ASM participant who does not receive a final score
would receive a no payment adjustment (that is, neutral payment
adjustment), meaning that they would not receive an upward or downward
payment adjustment to their Medicare Part B payments for covered
professional services for the applicable payment year because of
participation in ASM. We believe that not determining a final score for
the ASM participant and not adjusting payments during the applicable
ASM payment year ensures that the ASM participant would not be unfairly
penalized. We also believe that this proposal avoids complex reweighing
policies. Reweighting policies would potentially mean that each final
score represents a different mix of measures from different ASM
performance categories. For example, one ASM participant could have a
final score comprised of a cost ASM performance category score with
improvement activities and Promoting Interoperability ASM performance
category scoring adjustments whereas another could have a final score
comprised of quality and cost ASM performance category scores. We
believe that ensuring that all ASM participants' final scores reflect
quality and cost performance is the most appropriate for determining
payment adjustments that incentivize the care improvement and
transformation that we seek to achieve through ASM.
We considered requiring that an ASM participant would only receive
a final score if we could score them on all four proposed ASM
performance categories as discussed in section III.C.2.d. of this
proposed rule. We believed, however, that such a requirement would
potentially be burdensome and not as well aligned with our intention to
hold all ASM participants accountable for quality and cost performance
at a minimum.
Table 43 summarizes the proposed requirements to receive a final
score and the resulting impact on payment adjustments discussed in this
section and in section III.C.2.f of this proposed rule.
[[Page 32601]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.115
We seek comments on our proposal at Sec. 512.745(a)(2)(iii) that
ASM participants that we cannot score on the quality or cost ASM
performance category would not receive a final score for an ASM
performance year. We also seek comments on the alternative of requiring
data submission for all four ASM performance categories that we
considered.
(3) Complex Patient Scoring Adjustment
We propose at Sec. 512.745(a)(3) to apply a complex patient
scoring adjustment to ASM participants' final scores for eligible ASM
participants as described later in this section of this proposed rule.
We propose to use two risk indicators, Hierarchical Condition Category
(HCC) risk scores and the proportion of patients with dual eligible
status, ``dual eligible proportion,'' to calculate the complex patient
scoring adjustment to ASM participants' final scores. For the purposes
of ASM, we propose at Sec. 512.705 that ``risk indicator'' refers to
Hierarchical Condition Category (HCC) risk scores under the HCC risk
adjustment model established by CMS under section 1853(a)(1) of the Act
or the proportion of beneficiaries with dual eligible status used in
calculating the complex patient scoring adjustment as defined at Sec.
512.745(a)(3).
Social and medical risk factors, such as income and co-occurring
chronic conditions, play a major role in health status and,
accordingly, the types of services and procedures furnished to a
beneficiary. Physicians may face unique challenges delivering care to
those with more ``patient complexity,'' a term used to describe and
account for a combination of factors that impact beneficiaries' health
outcomes. In ASM, our aim is to shift the focus away from volume and
towards direct accountability for the cost and quality of health care
services delivered. At the same time, by introducing an assessment of
performance among physicians with similar clinical profiles but who may
have different caseloads of complex patients, we seek to ensure that
the care furnished by ASM participants is assessed fairly to espouse
predictability and sustainability. We believe that inclusion of a
complex patient scoring adjustment in the determination of final scores
would help to achieve these objectives.
The Quality Payment Program calculates a complex patient bonus and
adds it to the MIPS final score for qualifying MIPS eligible clinicians
based on their caseload of complex patients using two well-established
risk indicators within the Medicare program: HCC risk scores and dual-
eligible proportion under Sec. 414.1380(c)(3). The CY 2018 Quality
Payment Program final rule established a complex patient bonus to be
added to the final score for the CY 2020 MIPS payment year (82 FR 53771
through 537756) as required by MACRA. The purpose of the policy was to
address the impact patient complexity may have on MIPS scoring and
mitigate discrepancies without masking performance. Subsequent
rulemaking continued using the complex patient bonus and modified the
formula based on several factors including stakeholder feedback,
updated analysis, and implications from the HHS Assistant Secretary for
Planning and Evaluation (ASPE) reports to Congress (86 FR 65510 through
65519).
We considered, but are not proposing, adopting an approach in which
quality performance is risk adjusted for complex patients. We believe
that providers have substantial control over the health care encounter
and the outcomes assessed after the encounter. Thus, we decided that
adjustments made at the quality measure or quality ASM performance
category level would undermine our core aim to promote direct
accountability and high-quality outcomes for all beneficiaries.
Further, ASPE's second report released in June 2020, Social Risk and
Performance in Medicare's Value-Based Purchasing Programs, provides
recommendations for addressing risk factors in Medicare's value-based
payment programs, including discouraging risk adjustments on measures
that assess the process and outcome of care given in the care
setting.\232\ The report reasoned that adjusting quality measures may
have a negative impact on transparency for consumers and may
inadvertently lower the standard of care. Instead, the report suggests
including additional payments or bonuses for practices with a greater
share of dual eligible and high-risk
[[Page 32602]]
patients is more appropriate as it recognizes that providing excellent
care for complex beneficiaries may require more physician services,
resources, and capacity.\233\
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\232\ https://aspe.hhs.gov/sites/default/files/private/pdf/263676/Social-Risk-in-Medicare%25E2%2580%2599s-VBP-2nd-Report-Executive-Summary.pdf.
\233\ Johnston KJ, Joynt Maddox KE. The Role Of Social,
Cognitive, and Functional Risk Factors In Medicare Spending For Dual
And Nondual Enrollees. Health Aff (Millwood). 2019;38(4):569-576.
doi:10.1377/hlthaff.2018.05032. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05032.
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Since the goal of the complex patient scoring adjustment policy in
ASM is: (1) to protect access to care for complex patients and provide
them with excellent whole-person care; and (2) to avoid placing ASM
participants who care for complex patients at a potential disadvantage,
we believe applying this complex patient scoring adjustment to the
final score to determine payment adjustments is appropriate because
caring for complex patients can affect all aspects of a practice, not
just success in specific ASM performance categories. However, we
recognize the importance of holding providers accountable for overall
results, regardless of social and medical risk, and would want ASM
participants to know the contribution of the complex patient scoring
adjustment, if applicable, to their final score. Therefore, an ASM
performance report, as discussed later in this section of this proposed
rule, would include an ASM participant's complex patient scoring
adjustment, if applicable, in addition to their final scores to ensure
transparency in final score calculations.
We propose at Sec. 512.745(a)(3)(i) that ASM participants who have
at least one risk indicator (HCC risk scores and dual proportion) that
is equal to or greater than the reference median for the risk
indicator, described later in this section, for an applicable ASM
performance year would have the complex patient scoring adjustment
added to their final score for a given ASM performance year. The
complex patient scoring adjustment would only be provided if the ASM
participant meets the requirements to receive a final score greater
than zero proposed at Sec. 512.745(a)(2)(i) and discussed in section
III.C.2.e.(2). of this proposed rule. We note that the proposed complex
patient scoring adjustment calculation methodology is similar to MIPS'
complex patient bonus. However, we propose limited methodological
adjustments to better align the scoring adjustment with ASM's scoring
approach.
To determine whether an ASM participant would qualify for the
complex patient scoring adjustment, we propose to calculate a reference
median for each risk indicator (HCC risk score and dual proportion) for
each ASM cohort and for each ASM performance year. We propose to
calculate the reference median of the ASM cohort's HCC risk scores and
dual proportions using applicable data from 1 calendar year prior to
the start of the applicable ASM performance year. We would only use
applicable data from ASM participants that meet the data submission
requirements for the quality ASM performance category for the
applicable ASM performance year as described at Sec. 512.725(a)(1)(i).
For example, we would calculate the reference medians for the 2027 ASM
performance year using data from the 2026 calendar year. We would then
calculate each risk indicator (HCC risk score and dual proportion) for
each ASM participant using data from the current ASM performance year
(in this example, the 2027 ASM performance year). ASM participants who
have at least one calculated risk indicator for the ASM performance
year that is equal to or greater than the reference median risk
indicator calculated for their applicable ASM cohort would be eligible
to receive the complex patient scoring adjustment. ASM participants
that do not have data available to calculate either risk indicator
score for an applicable ASM performance year would not be eligible to
have the complex patient scoring adjustment added to their final score.
We also propose to determine the reference median of each risk
indicator separately for each ASM cohort to align with our proposed
approach to make separate performance comparisons within each of these
participant cohorts. We considered determining the reference median for
each risk indicator using data from data from the concurrent ASM
performance year but were concerned that Medicare claims runout periods
would not provide complete data to calculate these medians within an
ASM performance year. This approach would mirror the method that MIPS
uses in calculating the complex patient bonus under Sec.
414.1380(c)(3) with adaptations to align with the overall performance
comparison approach of ASM. We also considered not requiring that an
ASM participant have a median or higher value for at least one of the
two risk indicators to qualify for the complex patient scoring
adjustment. While this alternative would expand the number of ASM
participants that would qualify for the complex patient scoring
adjustment for an ASM performance, we believe targeting the complex
patient scoring adjustments to ASM participants treating a higher
caseload of highly complex patients would be more appropriate. We also
considered using the mean, instead of the proposed median of the risk
indicator as the cutoff point but believe it could decrease the
percentage of ASM participants that would receive the complex patient
scoring adjustment like what was observed by the Quality Payment
Program in exploratory analyses for the MIPS complex patient bonus
methodology (86 FR 65110).
We propose at Sec. 512.745(a)(3)(ii)(C), like in MIPS, to
determine a standardized score for each risk indicator based on the
mean and standard deviation of the raw risk indicator score to provide
a standardized measurement of the distance between each risk score and
the mean: (raw risk indicator score-risk indicator mean)/risk indicator
standard deviation. We propose to use the mean and standard deviation
from 1 calendar year prior to the ASM performance year using applicable
data from ASM participants identified for that ASM performance year.
Standardization allows us to determine how far each risk indicator
score is from the mean. For example, the mean and standard deviations
for the 2027 ASM performance year would be determined based on data
from CY 2026 for ASM participants identified for the 2027 ASM
performance year, which is a similar methodology to our proposed
methodology to calculate the risk indicator reference medians described
earlier in this section of this proposed rule.
We propose at Sec. 512.745(a)(3)(ii)(A) to calculate the social
complex patient scoring adjustment component as follows:
Medically complex patient scoring adjustment component = 1.5 +
4*associated HCC standardized score calculated with the average HCC
risk score assigned to beneficiaries (under the HCC risk adjustment
model established by CMS under section 1853(a)(1) of the Act) seen
by an ASM participant;
We propose at Sec. 512.745(a)(3)(ii)(B) to calculate the
medical complex patient scoring adjustment component as follows:
Social complex patient scoring adjustment component = 1.5 + 4*
associated dual proportion standardized score.
We propose Sec. 512.745(a)(3)(ii)(C) to add the components
together to calculate one overall complex patient scoring
adjustment.
[[Page 32603]]
We propose at Sec. 512.745(a)(3)(iii) that ASM participants with
an HCC risk score or dual-eligible proportion above their respective
medians, as calculated earlier in this section, would receive a complex
patient scoring adjustment that cannot exceed 10 points and cannot be
below zero points. We considered a complex scoring patient adjustment
that could exceed 10 points and a complex scoring adjustment with a
maximum point value less than 10 points but not below zero points.
However, we believe that aligning the proposed complex patient scoring
adjustment maximum point value with the MIPS complex patient bonus
maximum point value would reduce confusion across ASM participant who
would have previously participated in MIPS.
We believe the proposed formula compensates for a potential
difference in payment related to HCC risk scores and dual proportion
since MIPS uses the same approach in calculating the MIPS complex
patient bonus defined at Sec. 414.1380(c)(3) (86 FR 65510 through
65519). We believe this methodology and formula are strongly supported
by data and analyses explained in the CY 2022 PFS proposed rule (86 FR
65510 through 65519). Furthermore, dual enrollees tend to have lower
income, a greater prevalence of mental health conditions, somatic
chronic conditions, and significantly higher annual costs of care than
their nondual counterparts.\234\ Thus, we believe that a complex
patient scoring adjustment based on HCC risk scores and dual
proportions, as is done in MIPS, would not only reduce inappropriate
penalties among ASM participants that disproportionately care for dual
eligible, high-risk populations but would also reduce inappropriate
payments for ASM participants that care for less complex populations.
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\234\ Johnston KJ, Joynt Maddox KE. The Role Of Social,
Cognitive, and Functional Risk Factors In Medicare Spending For Dual
And Nondual Enrollees. Health Aff (Millwood). 2019;38(4):569-576.
doi:10.1377/hlthaff.2018.05032. https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05032.
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We seek comments on the proposed inclusion of the complex patient
scoring adjustment in final scores and the proposed methodology for
calculating the complex patient scoring adjustment. We also seek
comments on our alternatives considered related to calculating the
reference median based on data from the concurrent ASM performance year
and using a reference mean instead of a reference median. We also seek
comment on the alternative of not requiring ASM participants to have at
least one risk indicator that is equal to or greater than the reference
median to receive the complex patient scoring adjustment.
(4) Small Practice Scoring Adjustment
We propose at Sec. 512.745(a)(4) that an ASM participant would be
eligible to receive a small practice scoring adjustment in the
calculation of their final score. We propose at Sec. 512.705 to define
a ``small practice'' as a practice consisting of 15 or fewer clinicians
at the time we identify ASM participants for an ASM performance year as
described at Sec. 512.710(g). We propose at Sec. 512.705 to define a
``solo practitioner'' as a practice consisting of 1 clinician at the
time we identify ASM participants for an ASM performance year as
described at Sec. 512.710(g). Our proposed definitions for small
practice and solo practitioner align with MIPS' small practice
definition at Sec. 414.1305.
We propose at Sec. 512.745(a)(4)(i) to add 10 points to the final
score of an ASM participant who: (1) is in a small practice as defined
at Sec. 512.705; (2) is not a solo practitioner as defined at Sec.
512.705; and (3) and meets the requirement to receive a final score
greater than zero as described at Sec. 512.745(a)(2)(i) for an
applicable ASM performance year. We propose at Sec. 512.745(a)(4)(ii)
to add 15 points to the final score of an ASM participant who is a solo
practitioner as defined at Sec. 512.705 and meets the requirement to
receive a final score greater than zero as described at Sec.
512.745(a)(2)(i) for an applicable ASM performance year.
We believe that it is necessary to support ASM participants against
the potential challenges that they face in participation in Innovation
Center models and other CMS value-based payment programs, like the
Quality Payment Program. Participants in MIPS have provided feedback
that many small practices and solo practitioners face challenges in
their ability to participate in MIPS, including the costs to implement
and maintain CEHRT, staff and training costs, and limited staff
capacity to manage the complexity of the program (89 FR 98452). MIPS
has several policies that aim to support small and solo practices,
including scoring and reweighting policies as defined at Sec.
414.1380. We considered adopting some of these policies for the
purposes of ASM given our use of the MVPs as a framework for this
model. However, our goal in designing a scoring policy for ASM was to
increase incentives for participation and to reduce the complexity of
reweighting policies based on the characteristics of an ASM participant
or the context in which they practice.
We analyzed historical MIPS final score performance among a pool of
likely ASM participants for both heart failure and low back pain. We
found that small practices, including solo practitioners, were more
likely to receive lower final MIPS scores compared to MIPS eligible
clinicians in larger practices (that is, TINs with more than 15
clinicians). We also found that solo practitioners were more likely to
receive lower scores than MIPS eligible clinicians in small practices
(that is, practices with 2 to 15 clinicians in this situation). For
these reasons, we believe that ASM participants in small practices
would likely score lower than their counterparts in larger practices
under ASM, with solo practitioners potentially scoring lower than other
small practices. While we would not want to inadvertently skew the
distribution of ASM participant final scores, we believe that it would
be appropriate to support ASM participants in small practices to
receive a final score adjustment.
We based the proposed magnitudes of the final scoring adjustments
based on the distribution of MIPS final scores among likely ASM
participants. We also considered small practice scoring adjustments
that were lower and higher than the proposed 10 points for non-solo
practitioner ASM participants in small practices and 15 points for solo
practitioner ASM participants. However, we believe that the proposed
magnitudes of the scoring adjustments would appropriately increase the
applicable ASM participants' score and would be easily understood by
ASM participants. We refer readers to section III.C.2.f.(4).(b). of
this proposed rule for an alternative level of risk that we considered
for ASM participants in small practices.
We believe that using a flat adjustment on the final score would be
a clear and transparent method to support ASM participants to increase
their score relative to other ASM participants so as to avoid
potentially creating a barrier for them to achieve a net positive
payment adjustment (see section III.C.2.f in this proposed rule for
further discussion on our proposed payment methodology). Since we are
not proposing to reweight ASM performance categories in the calculation
of final scores as discussed earlier in this section of this proposed
rule to simplify the data submission requirements and scoring policies,
we believe that a flat adjustment would be a simple but effective
mechanism to support ASM participants in small practices.
We considered but are not proposing a similar flat-point adjustment
for ASM
[[Page 32604]]
participants in rural areas as defined at Sec. 512.705 (which aligns
with the MIPS rural area definition at Sec. 414.1305). We, however,
found in our analysis of historical MIPS performance data among likely
ASM participants that there was not a systematic difference in the
performance data between likely ASM participants in rural and non-rural
areas. While MIPS reduces the reporting requirements for the
improvement activities performance category for MIPS eligible
clinicians in rural areas as defined at Sec. 414.1380(b)(3), the lack
of a systematic difference in historical MIPS performance between
likely ASM participants of rural and non-rural status led us to not
propose a scoring adjustment for ASM participants in rural areas.
Furthermore, we observed that a high proportion of likely ASM
participants in small practices were in rural areas. Adding a rural
scoring adjustment on top of the small practice scoring adjustments
would potentially be duplicative and inappropriately skew the
distribution of final scores.
We seek comments on our proposal at Sec. 512.745 (a)(4)(i) to add
10 points to the final score of an ASM participant who is in a small
practice, is not a solo practitioner, and meets the requirements to
receive a final score greater than zero and not exceeding 100. We also
seek comment on our proposal at Sec. 512.745 (a)(4)(ii) to add 15
points to the final score of an ASM participant who is a solo
practitioner and meets the requirements to receive a final score
greater than zero and not exceeding 100. Finally, we seek comments on
the alternative we considered of applying a similar flat-point
adjustment for ASM participants in rural areas.
(5) Final Score Calculation
We propose at Sec. 512.745(a)(5) the following formula to
calculate the final score for each ASM participant that meets the
minimum data submission requirements discussed in section
III.C.2.e.(2).(a) of this proposed rule:
Final score = [(quality ASM performance category score x quality ASM
performance category weight) + (cost ASM performance category score
x cost ASM performance category weight)] x 100 + improvement
activities ASM performance category scoring adjustment + Promoting
Interoperability ASM performance category scoring adjustment +
Complex Patient scoring adjustment + Small Practice scoring
adjustment.
Note: The final score cannot be below zero points or exceed 100
points
We believe that this proposed final score calculation appropriately
utilizes the quality and cost ASM performance category scores as
outlined in sections III.C.2.e of this proposed rule, weights the
quality and cost ASM performance categories, and considers the
inclusion of the negative improvement activities ASM performance
category scoring adjustment, the negative Promoting Interoperability
ASM performance category scoring adjustment, the positive complex
patient payment adjustment, and positive small practice scoring
adjustment.
For example, under the proposed final score calculation and the
proposed weights for the quality and cost performance category, if an
ASM participant has a quality performance category score of 80
percentage points [(40 measure achievement points out of 50 available
measure achievement points)], a cost performance category score of 75
percentage points [(7.5 achievement points out of 10 available
achievement points)], a negative improvement activity performance
category scoring adjustment of -10 from successfully attesting to one
improvement activity, a negative Promoting Interoperability ASM
performance category scoring adjustment of -2.7 ((100 potential maximum
Promoting Interoperability ASM performance category points-73 Promoting
Interoperability ASM performance category score)/-10), a complex
patient scoring adjustment of 5.5, and a small practice scoring
adjustment of 10 from being in a small practice, the final score would
be as follows:
Final Score = [0.80 x 50 percent) + (0.75 x 50 percent)] x 100 + (-
10) + (-2.7) + 5.5 + 10 = 80.3.
The ASM participant under the example conditions described above
would have 77.5 points from the quality and cost ASM performance
categories ([(0.80 x 50 percent) + (0.75 x 50 percent)] x 100), before
the scoring adjustments are applied, and a final ASM score of 80.3
points
We seek comments on the proposed final score calculation formula.
(6) ASM Performance Report
We propose at Sec. 512.745(b) to release an ASM participant's
final score for each ASM performance year through an ``ASM performance
report,'' which we propose to define at Sec. 512.705 as the
notification that CMS provides to the ASM participant for each ASM
performance year, which contains the information specified at Sec.
512.745(b). We propose at Sec. 512.745(b)(1) through (7) that the ASM
performance report would, at minimum, provide each ASM participant: (1)
individual measure-level scores for each of the measures required under
each ASM performance category; (2) ASM performance category-level
scores; (3) complex patient scoring adjustment, as applicable; (4)
small practice or solo practitioner scoring adjustment, as applicable;
(5) final score, and (6) the applicable ASM payment adjustment factor
and (7) ASM payment multiplier for the applicable ASM payment year as
discussed in section III.C.2.f of this proposed rule. As proposed, the
ASM performance reports would not contain any protected health
information or personally identifiable information of beneficiaries.
Accordingly, we would share the ASM performance reports with ASM
participants as a matter of course without following the attestation
and data sharing agreement process for CMS sharing of beneficiary-
identifiable information proposed in section III.C.2.j. of this
proposed rule.
We believe that the proposed approach to releasing ASM participant
data would be a transparent way to help the ASM participant understand
their performance on each of the required measures, activities,
attestations, how those individual scores roll up to an overall ASM
performance category score, and then how each ASM performance category
score rolls up into the final score. We believe that this ASM
performance report would be complementary to the other proposed data
sharing approaches discussed in section III.C.2.j. of this proposed
rule.
We seek comments on our proposal at Sec. 512.745(b) to provide ASM
participants with an ASM performance report for each ASM performance
year. We also seek comments on the proposed components of the ASM
performance report.
f. Proposed ASM Payment Approach
(1) Payment Approach
In this section, we discuss our proposed payment methodology to use
an ASM participant's final score to determine net positive, neutral, or
negative payment adjustments to an ASM participant's future Medicare
Part B payments for an applicable ASM payment year.
ASM would test whether payment adjustments to ASM participants'
future Part B FFS payments would preserve or improve the quality of
care for beneficiaries with ASM's targeted chronic conditions receiving
service from ASM participants while reducing program expenditures.
Determining payment adjustments based on an ASM participant's
performance across the ASM performance categories relative to other
specialists furnishing services
[[Page 32605]]
related to each of ASM's targeted chronic conditions would directly
incentivize performance improvement through financial incentives. We
believe the proposed individualized payment adjustments under ASM would
be reflective of the range of performance of specialists caring for
beneficiaries with ASM targeted chronic conditions. As discussed in
section III.C.1. of this proposed rule, we believe that the risk of a
potential negative payment adjustment coupled with the incentive of a
potential positive payment adjustment would incentivize the quality
improvement and reduced low-value care spending that we aim to achieve
through ASM. This type of risk arrangement would reward high
performance and encourage ASM participants to improve the quality of
care that they furnish to Medicare beneficiaries with ASM's targeted
chronic conditions. Further, we believe that this type of incentive
payment approach aligns with existing value-based purchasing programs,
such as the Quality Payment Program, in which ASM participants may have
previously participated, and through which they may have received
payment adjustment on future Medicare Part B payments based on their
performance in MIPS.
We believe our proposed payment methodology for an ASM participant
to receive a positive, neutral, or negative payment adjustment based on
their performance would be a strong incentive to promote performance
improvement and achieve ASM's objectives.
(2) Payment Methodology Overview
We propose at Sec. 512.750 a payment methodology for ASM where we
would distribute, based on performance and in the form of scaled
payment adjustments, a portion of the Medicare Part B payments paid to
ASM participants for covered professional services during an ASM
performance year, which would result in net positive, neutral, or
negative payment adjustments during an ASM payment year. Accordingly,
we propose to define at Sec. 512.705 an ``ASM incentive pool'' that
would be a fixed percentage of the total amount of Medicare Part B
covered professional service claims paid to ASM participants with final
scores within an ASM cohort during an ASM performance year that would
be distributed in in the form of scaled payment adjustments during an
ASM payment year. We would calculate an ASM incentive pool for each ASM
cohort for each ASM payment year as described at Sec.
512.750(c)(1)(iii). The ASM incentive pool would be the total amount of
funds that we would use to calculate scaled payment adjustments for an
ASM payment year. We propose to separately calculate an ASM incentive
pool for each ASM cohort. For example, we would calculate a separate
ASM incentive pool for the ASM heart failure cohort and ASM low back
pain cohort. As discussed later in this section of this proposed rule,
we would not prospectively withhold a portion of Part B payments for
covered professional services during an ASM performance year to create
the ASM incentive pools but would instead create virtual incentive
pools based on actual spending during the ASM performance year.
We also propose to define at Sec. 512.705 an ``ASM payment
adjustment factor'' as a percent value based on an ASM's participant's
final score as described at Sec. 512.750(c)(1) that we use in
calculating adjustments to the ASM participant's Medicare Part B
payments for covered professional services during an ASM payment year.
Based on their performance, an ASM participant could earn an ASM
payment adjustment factor percentage that is less than, equal to, or
more than the percentage of their Medicare Part B payments used to
calculate the ASM incentive pool, leading to a net negative, neutral,
or positive net payment adjustment. Similar to our proposal to
calculate separate ASM incentive pools for each ASM cohort, we would
determine ASM payment adjustment factors separately for each ASM cohort
as described later in this section of this proposed rule. We also
propose to define at Sec. 512.705 an ``ASM payment multiplier'' as the
numerical value equal to 1 plus the ASM payment adjustment factor
determined for the ASM participant for an applicable ASM payment year
as described at Sec. 512.750(c).
As proposed at Sec. 512.750(a), to adjust payments, the amount
otherwise paid under Medicare Part B for covered professional services
furnished by an ASM participant during an ASM payment year would be
multiplied by the ASM participant's ASM payment multiplier unless that
ASM participant receives no payment adjustment (that is, a neutral
payment adjustment) as described at Sec. 512.750(d) because they do
not receive a final score for the corresponding ASM performance year.
We refer readers to Sec. 512.745(a)(2) and section III.C.2.e.(2). of
this proposed rule for proposals related to final scores. We also refer
readers to section III.C.2.f. of this proposed rule and Sec.
512.750(f) for further proposals on how payment adjustments are applied
in the case the ASM participant bills during an ASM payment year under
a different TIN than the TIN we used to identify them as an ASM
participant for the corresponding ASM performance year.
The proposed payment methodology is similar in design to existing
incentive payment structures in CMS value-based programs, such as the
Hospital Valued-Based Purchasing Program (Hospital VBP Program) \235\
and the Skilled Nursing Facility Value-Based Purchasing Program (SNF
VBP Program).\236\
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\235\ https://www.cms.gov/medicare/quality/initiativeshospital-quality-initiative/hospital-value-based-purchasing.
\236\ https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing.
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The Hospital VBP Program rewards acute care hospitals with
incentive payments based on the quality of care they provide, rather
than just the quantity of services they provide. The statutory
requirements of the Hospital VBP Program are set forth in Section
1886(o) of the Social Security Act. The program uses selected measures
that were first specified under the Hospital Inpatient Quality
Reporting Program as established by section 1886(o)(2)(A) of the Act
and defined at Sec. 412.164(a).\237\ A fixed percentage withhold of
base operating Diagnosis-Related Group (DRG) payments for each
discharge during an applicable fiscal year determines the amount of
money that can be redistributed to participating hospitals through
value-based incentive payments based on a participating hospital's
total performance score. A hospital may earn back a value-based
incentive payment percentage that is less than, equal to, or more than
the applicable reduction for that program year (88 FR 59063 through
59108).
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\237\ https://www.cms.gov/medicare/quality/initiatives/hospital-quality-initiative/hospital-value-based-purchasing.
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Section 215 of the Protecting Access to Medicare Act of
2014 and subsequent additions of sections 1888(g) and (h) of the Act
established the SNF VBP Program.\238\ Then, section 111 of the
Consolidated Appropriations Act, 2021 amended section 1888(h) of the
Act to allow the Secretary to apply up to 9 additional measures to the
SNF VBP Program.\239\ The SNF VBP Program requires CMS to evaluate SNFs
based on their performance on multiple measures, including improvement
and achievement, provide quarterly performance reports to SNFs, and
calculate incentive payments for SNFs based on their performance (88 FR
[[Page 32606]]
53276 through 53304).\240\ To determine and fund the statutorily
required incentive payments, CMS withholds 2 percent of SNFs' Medicare
FFS Part A payments to fund the SNF VBP Program. CMS then redistributes
60 percent of this total withhold to SNFs as incentive payments, which
CMS applies prospectively to all Medicare FFS Part A claims paid under
the SNF Prospective Payment System (PPS) for the applicable program
year (82 FR 36619 through 36621).
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\238\ 42 U.S.C. 1395yy(h).
\239\ 42 U.S.C. 1395yy(h).
\240\ https://www.cms.gov/medicare/quality/nursing-home-improvement/value-based-purchasing.
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Our proposed payment methodology differs from the Hospital VBP
Program and the SNF VBP Program in that we are not proposing a
prospective withhold of ASM participants' Medicare Part B payments
during an ASM performance year. Instead, we are proposing to determine
a virtual ASM incentive pool as a fixed percentage of ASM participants'
Medicare Part B covered professional service payments during the ASM
performance year. We would then distribute this virtual incentive pool
through scaled payment adjustments on ASM participants' future Medicare
Part B payments during an ASM payment year. The size of each ASM
incentive pool and the distribution of final scores within each ASM
cohort would together influence the possible magnitude of the scaled
payment adjustments and the distribution of net negative, neutral, and
positive payment adjustments. As discussed earlier and later in this
section of this proposed rule, we propose to calculate ASM incentive
pools, ASM payment adjustment factors, and ASM payment multipliers
separately for each ASM cohort. The higher an ASM participant's final
score, the greater the likelihood that they would receive a positive
payment adjustment. Under this proposed methodology, the ASM
participant's performance during an ASM performance year would not have
an immediate financial impact but would result in a future net payment
adjustment determined by the ASM participant's performance relative to
other ASM participants. We believe that this proposed payment
methodology would allow ASM to create net positive, neutral, and
negative payment adjustments based on the annual distribution of final
scores in each ASM cohort.
We also recognize that MIPS, under the Quality Payment Program,
uses a value-based purchasing approach but determines payment
adjustments based on performance relative to a performance threshold.
In accordance with section 1848(q)(6) of the Act and Sec. 414.1405(b),
MIPS compares each MIPS eligible clinician's final score against the
performance threshold established for that MIPS payment year and
against the other MIPS eligible clinicians in a single comparison pool
to determine whether each MIPS eligible clinician will receive a
positive, negative, or neutral payment adjustment. As defined at Sec.
414.1405, scores equal to the defined performance threshold receive a
neutral (zero 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 zero 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 zero percent and up
to positive 9 percent based on a linear sliding scale. Depending on the
range of scores within a given MIPS performance period, a scaling
factor (ranging from zero to 3 is applied to the positive adjustments
to retain budget neutrality.
We considered, but decided not to propose, a payment methodology
that includes a performance threshold like MIPS uses to determine ASM
payment adjustment factors. To determine a MIPS payment adjustment
factor for each MIPS eligible clinician for a MIPS performance period,
CMS compares the MIPS eligible clinician's final score for the given
year to the performance threshold CMS 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 CMS 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. For each CY
performance period/MIPS payment year, CMS has finalized a performance
threshold based on the mean final score of all MIPS eligible clinicians
from a previous MIPS performance period, as set forth in Sec.
414.1405(b)(4) through (10). CMS establishes the performance threshold
via rulemaking prior to the beginning of each MIPS performance period.
Adopting a similar performance threshold and payment adjustment
approach for ASM would introduce several operational complexities.
First, given the proposed separate comparison of final scores and
separate calculation of ASM payment adjustment factors and ASM payment
multipliers for each ASM cohort, we would need to determine a
performance threshold for each ASM cohort for each ASM performance
year. Because ASM is a new Innovation Center model, we would need to
set a prospective performance threshold for the first ASM performance
year without historical data on final scores. This lack of historical
data could present challenges in calibrating the performance threshold
to actual performance within the first ASM performance year. Second, we
believe that a payment methodology that leverages a prospective
performance threshold would limit the magnitude of ASM's negative and
positive payment adjustments and, ultimately, the model's incentives to
improve performance compared to our proposal to scale the payment
adjustments distributed to ASM participants to equal the amount of an
ASM incentive pool. For example, if a larger proportion of participants
score above the performance threshold relative to the proportion of
participants who score below the performance threshold, then the
positive payment adjustments for those participants scoring above the
performance threshold may be smaller in magnitude due to there being
fewer negative adjustments from participants scoring below the
performance threshold that can be distributed in positive payment
adjustments.
We seek comment on our overall payment approach for ASM, which
would include an ASM incentive pool that is distributed in the form of
scaled payment adjustments to ASM participants' future Medicare Part B
payments based on their performance. We also seek comments on the
alternative approach we considered that would use a performance
threshold similar to MIPS in our payment methodology.
In the following sections, we propose and seek comments on our
proposed policies to (1) compare performance across ASM participants
within each ASM cohort and (2) calculate ASM payment adjustment factors
and ASM payment multipliers, including how we propose to calculate the
ASM incentive pools.
(3) Comparison of ASM Participant Performance
We propose at Sec. 512.750(b) to separately compare the final
scores of ASM participants in each ASM cohort to determine the payment
adjustments
[[Page 32607]]
for each ASM participant. We believe that the ASM participant
eligibility criteria appropriately identify specialists that can be
held accountable for cost, quality, and practice improvement for
specific chronic conditions. Accordingly, we believe that separately
comparing ASM participants' final scores for each of the ASM targeted
chronic conditions would provide more meaningful performance
comparisons. Since each ASM cohort would be compared on the same set of
requirements reported at the same TIN/NPI level (that is, the level at
which an ASM participant is identified), the proposed performance
comparison approach would allow for better differentiation in
performance upon which to determine the payment adjustments.
Currently, under MIPS, performance measurement and the subsequent
payment adjustment are based on a range of measures voluntarily
reported by clinicians, each of whom receives a final score based on
the submitted measures. A MIPS eligible clinician's performance is
assessed against a pool of all clinicians, regardless of specialty type
or the services they provide. 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 (89 FR 61985). In ASM, we wish to test
whether 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
final scores and subsequent payment adjustments that are more
reflective of clinician performance. We believe our proposed approach
to separately compare ASM heart failure participants against other ASM
heart failure participants and ASM low back pain participants against
other ASM low back pain participants supports and incentivizes
accountable care by creating more meaningful payment adjustments that
differentiate and reflect ASM participant performance related to the
chronic condition for which we believe the ASM participant should be
accountable.
We considered not separating ASM participants in each ASM cohort
when comparing final scores to determine ASM payment adjustment factors
and ASM payment multipliers, and instead, comparing the final scores of
all ASM participants together. This approach would potentially be
administratively easier to operationalize and would align with the
current practice of comparison under MIPS, including MVPs, as defined
at Sec. 414.1405. It would also potentially lead to a more varied
distribution of final scores that would translate into a more varied
distribution of payment adjustment, which could be helpful in creating
the desired payment incentives. However, we believe that comparing
performance within each ASM cohort is more appropriate in meeting our
aim to test whether like-to-like performance comparisons based on a
clinically relevant measure set and the resulting payment incentives
achieve ASM's objectives of increasing accountability for specialty
care related to ASM targeted chronic conditions.
We also believe that comparing performance using a continuous
distribution of final scores would result in more meaningful incentives
for ASM participants because payment adjustments would be determined on
relative performance across ASM participants instead of relative to a
prospectively determined performance threshold. This approach also more
closely mirrors the general market for goods and services, which does
not provide an upfront guarantee of a certain market share or profit
margin based on a predetermined threshold of performance. Rather, ASM
participants would compete to provide the highest quality, most
efficient care to ASM beneficiaries, and the top performers would
receive positive payment adjustments--in the same way that competitive
markets reward top performers with profits.
We seek comments on our proposal at Sec. 512.750(b) to determine
ASM payment adjustment factors and ASM payment multipliers by comparing
final scores separately among each ASM cohort. We also seek comment on
the alternative we considered of comparing final scores of all ASM
participants together, like the MIPS approach for comparing performance
scores.
(4) Calculation of ASM Payment Adjustment Factors and ASM Payment
Multipliers
In this section, we first provide an overview of the proposed
process to calculate ASM payment adjustment factors and ASM payment
multipliers. We then break down each part of the calculation process
and discuss our proposals and alternatives considered. As part of this
process, we discuss the calculation of the ASM incentive pool using the
``ASM risk level,'' which we propose to define at Sec. 512.705 as the
magnitude of the maximum positive or negative net payment adjustment
percentage to which an ASM participant would be subject during an ASM
payment year as described at Sec. 512.750(c)(1)(i), and the ``ASM
redistribution percentage,'' which we propose to define at Sec.
512.705 as a percentage of Medicare Part B covered professional
services payments to ASM participants during an ASM performance year
that CMS distributes in the form of payment adjustments to ASM
participants during an ASM payment year as described at Sec.
512.750(c)(1)(iii).
We then discuss our proposals on how we would convert final scores
into ASM payment adjustment factors and ASM payment multipliers based
on the ASM incentive pool and our proposed ``exchange function,'' which
we propose to define at Sec. 512.705 as the function used to translate
an ASM participant's final score into an ASM payment adjustment factor
as described at proposed Sec. 512.750(c)(1)(ii). We also propose to
define at Sec. 512.705 a ``scaling factor'' as a numerical value
calculated by CMS to ensure that the total estimated payment
adjustments in an ASM payment year are equal to an ASM incentive pool
for an applicable ASM payment year as described at Sec.
512.750(c)(1)(iv).
Finally, we discuss how these ASM payment multipliers would be
applied to future Medicare Part B claims for covered professional
services during an ASM payment year.
(a) Overview of ASM Payment Adjustment Factor and Payment Multiplier
Calculation Process
We propose at Sec. 512.750(c) to use the following process to
calculate ASM payment adjustment factors and ASM payment multipliers
for each ASM payment year for ASM participants with final scores for
the corresponding ASM performance year. We refer readers to Table 43 in
section III.C.2.e.(2). of this proposed rule for a summary of how an
ASM participant's final score influences their payment adjustment.
Calculation of ASM Incentive Pool
Step 1. Calculate total Medicare Part B payments for
covered professional services made to ASM participants with final
scores in each ASM cohort during an ASM performance year.
Step 2. Multiply the total calculated in Step 1 by the ASM
risk level for each ASM payment year proposed at
[[Page 32608]]
Sec. 512.750(c)(1)(i) and discussed in section III.C.2.f.(4).(b).(i).
of this proposed rule.
Step 3. Multiply the amount calculated in Step 2 by the
ASM redistribution percentage proposed at Sec. 512.750(c)(1)(iii) and
discussed in section III.C.2.f.(4).(b).(ii) of this proposed rule to
determine the total ASM incentive pool amount available for payment
adjustment for each ASM cohort.
Calculation of ASM Payment Adjustment Factor
Step 4. Convert each ASM participant's final score into a
transformed numerical final score by using the exchange function
proposed at Sec. 512.750(c)(1)(ii) and described in section
III.C.2.f.(4).(c). of this proposed rule.
Step 5. Calculate a scaling factor as proposed at Sec.
512.750(c)(1)(iv) to ensure that the sum of applied ASM payment
adjustment factors would equal the ASM incentive pool for each ASM
cohort. The scaling factor is calculated by dividing the total amount
in the ASM incentive pool (calculated in Step 3) by the sum of all ASM
participant's transformed final scores (calculated in Step 4)
multiplied by their respective total Medicare Part B covered
professional services payments and the ASM risk level.
Step 6A. For ASM participants that receive a final score
greater than zero as described at Sec. 512.745(2)(i), calculate an ASM
payment adjustment factor for each ASM participant within each ASM
cohort by multiplying the ASM risk level, the ASM participant's
transformed final score (calculated in Step 4), and the scaling factor
(calculated in Step 5), and then subtracting the ASM risk level from
this product as described at Sec. 512.750(c)(1)(i):
ASM payment adjustment factor = (ASM risk level x transformed final
score x scaling factor)-ASM risk level
Step 6B. For ASM participants that receive a final score
of zero as described at Sec. 512.745(2)(ii), calculate the ASM payment
adjustment factor for each ASM participant equal to the negative of the
applicable ASM risk level as described at Sec. 512.750(c)(1)(i).
Calculation of ASM Payment Multiplier
Step 7. Calculate the ASM payment multiplier for each ASM
participant by using the following formula as described Sec.
512.750(c):
ASM payment multiplier = 1 + ASM payment adjustment factor
Under this proposed calculation process, an ASM payment adjustment
factor could be negative (meaning net negative payment adjustments),
zero (meaning neutral or no payment adjustments), or positive (meaning
net positive payment adjustments). Accordingly, an ASM payment
multiplier above 1 would result in net positive payment adjustments; an
ASM payment multiplier of 1 would result in no (that is, neutral)
payment adjustments, and an ASM payment multiplier less than 1 would
result in a net negative payment adjustment.
We propose at Sec. 512.750(d) that ASM participants that do not
receive a final score as discussed in section III.C.2.e.(2).(b). of
this proposed rule would receive an ASM payment adjustment factor of
zero and an ASM payment multiplier of 1 (that is, a neutral payment
adjustment) for the applicable ASM payment year.
To illustrate how this process would work, we provide the following
example of how we would calculate the ASM payment adjustment factor and
ASM payment multiplier for individual ASM participants who received a
final score greater than zero. In this example, we assume an ASM risk
level of 9 percent and an ASM redistribution percentage of 85 percent.
Step 1. We determine that all ASM participants with final
scores in the example ASM cohort had a total of $1 billion in Medicare
Part B covered professional service payments during the ASM performance
year.
Steps 2 and 3. We multiply the $1 billion calculated in
Step 1 by the 9 percent ASM risk level and the 85 percent ASM
redistribution percentage to determine an ASM incentive pool of $76.5
million for this example.
Step 4. An ASM participant, in this example, received a
final score of 80 points and the median score for the example ASM
cohort was 50 points. When transformed under the exchange function,
this final score would result in a transformed final score of 0.95.
Step 5. We calculate a scaling factor of 1.5 applicable
for all ASM participants in this example ASM cohort to ensure that the
amount in the ASM incentive pool would be distributed in the form of
scaled payment adjustments. The numerator of the scaling factor would
be the $76.5 million in the ASM incentive pool (calculated in Steps 2
and 3) and the denominator would be calculated as $51 million based on
the sum of all ASM participant's transformed final scores multiplied by
their respective total Medicare Part B covered professional services
payments and the 9 percent ASM risk level: ($76.5 million/$51 million =
1.5).
Step 6A. The ASM payment adjustment factor, in this
example, would be calculated as: [ASM risk level (9 percent) x
transformed final score (0.95) x scaling factor (1.5)]-ASM risk level
(9 percent) = 0.0385
Step 7. The resulting ASM payment multiplier, in this
example, would be calculated as: 1 + ASM payment adjustment factor
(0.0385) = 1.0385. The value of this ASM payment multiplier would mean
that the example ASM participant would receive a positive adjustment of
3.85 percent on all Medicare Part B covered professional service
payments during the corresponding ASM payment year. We note that the
parameters of the previous calculation are fictitious and may look
entirely different when calculating the ASM payment adjustment factors
and ASM payment multipliers for the model, depending on the
distribution of final scores, the magnitude of Medicare Part B covered
professional service payments associated with ASM participants, the
size of ASM incentive pool, among other factors.
As discussed earlier in this section of this proposed rule, we are
not proposing to use a performance threshold to determine a cutoff
between positive and negative ASM payment adjustment factors and
resulting ASM payment multipliers. We would, therefore, calculate ASM
payment adjustment factors and resulting ASM payment multipliers based
on the size of the ASM incentive pool and the distribution of final
scores for a given ASM performance year using the proposed payment
methodology described throughout this section of this proposed rule.
Our proposed process to calculate ASM payment adjustment factors
and adjust an ASM participant's Medicare Part B payments using an ASM
payment multiplier during an applicable ASM payment year as proposed at
Sec. 512.750 currently aligns with the processes and timelines by
which the Quality Payment Program applies MIPS payment adjustments for
each Medicare Part B claim made for covered professional services
furnished by a MIPS eligible clinician as defined at Sec. 414.1405(e).
We believe that aligning the timeline and processes with the Quality
Payment Program's application of MIPS payment adjustments would ensure
operational consistency and minimize confusion. As discussed in section
III.C.2.e.(6). of this proposed rule, we propose to provide an ASM
participant with their ASM payment adjustment factor and ASM payment
multiplier in the ASM
[[Page 32609]]
performance report provided to each ASM participant for the applicable
ASM performance year.
We seek comment on our proposed process as described at Sec.
512.750(c) to calculate the ASM payment adjustment factors and ASM
payment multipliers, and how we would apply ASM payment multipliers to
an ASM participant's Medicare Part B payment during an ASM payment
year.
The following sections discuss our proposals and alternatives on
how we propose to calculate an ASM incentive pool, including the
proposed ASM risk level, ASM redistribution percentage, and our
proposal for the exchange function.
(b) ASM Incentive Pool
As discussed earlier in this section of this proposed rule, we
propose to calculate the ASM incentive pool for each ASM cohort based
on two factors: (1) the ASM risk level as described at Sec.
512.705(c)(1) (that is, the magnitude of the maximum positive or
negative net payment adjustment percentage to which an ASM participant
would be subject during an ASM payment year) and (2) the ASM
redistribution percentage as described at Sec. 512.750(c)(1)(iii)
(that is, the percentage of Medicare Part B covered professional
services payments to ASM participants during an ASM performance year
that would be distributed in the form of payment adjustments to ASM
participants during an ASM payment year). We discuss our proposals for
the magnitude of ASM risk level and ASM redistribution percentage later
in this section of this proposed rule. The total amount in an ASM
incentive pool would directly determine the magnitude of ASM payment
adjustment factors and resulting ASM payment multipliers that each ASM
participant would receive during an ASM payment year.
We describe the step-by-step process of calculating the ASM
incentive pool earlier in this section of this proposed rule. In
summary, we propose at Sec. 512.750(c)(1)(iii) to calculate an ASM
incentive pool for each ASM cohort for applicable for each ASM payment
year using the following formula:
ASM Incentive Pool = ASM risk level x ASM redistribution percentage x
[Sgr] ASM participant Medicare Part B payments
The proposed approach to calculating an ASM incentive pool aligns
with the current approach that other CMS VBP programs use when
calculating the total amount that can be distributed to program
participants through payment adjustments. Both the SNF VBP Program (82
FR 36619 through 36621) and the Hospital VBP Program (88 FR 59063
through 59108) employ a similar calculation to determine the total
amount that can be redistributed through payment adjustments for their
respective program participants. We believe the proposed approach would
determine an ASM incentive pool amount that would be appropriate to
distribute through scaled payment adjustments, and that the proposed
approach would align with the desired level of two-sided risk that we
believe would incentivize behavioral change and increased
accountability.
We seek comments on our proposed approach to calculate the ASM
incentive pool for each ASM cohort.
(i) ASM Risk Level
As discussed earlier in this section of this proposed rule, we
propose to use the annual ASM risk level to calculate the ASM incentive
pool for each ASM cohort. We propose at Sec. 512.750(c)(1)(i) to
establish the ASM risk level that is the magnitude of the maximum
downside or upside risk to which an ASM participant would be subject to
during an ASM payment year. We propose at Sec. 512.750(c)(1)(i)(A)
through (E) the risk levels for each ASM payment year as summarized in
Table 44.
[GRAPHIC] [TIFF OMITTED] TP16JY25.116
Our proposed ASM risk level of 9 percent for the 2029 ASM payment
year (based on 2027 ASM performance year performance) and the 2030 ASM
payment year (based on 2028 ASM performance year performance) aligns
with the CY2024 applicable percent of 9 percent under MIPS, which is
the maximum and minimum range of potential MIPS payment adjustment
factor for a given MIPS payment year defined at Sec. 414.1405(c) (88
FR 79378). Depending on the range of MIPS eligible clinicians' scores
within a given MIPS performance period, a scaling factor (ranging from
zero to 3) is applied to positive adjustments to retain budget
neutrality as defined at Sec. 414.1405(b)(3) (88 FR 79378), meaning
that the maximum positive payment adjustment factor may be below or
above the applicable percent. A MIPS eligible clinician with a score of
zero receives a payment adjustment factor equal to the negative of the
applicable percent as defined at defined at Sec. 414.1405, meaning
that all MIPS eligible clinicians are potentially subject to a maximum
downside risk equivalent to the applicable percent. Based on our
proposed ASM performance category and scoring approach that leverages
the MVP measurement framework, we believe that starting and keeping the
ASM risk level at 9 percent for the first two ASM payment years would
be appropriate given its continued use within MIPS. We believe that
gradually increasing the ASM risk level over time would provide an
incentive for increased accountability that would be central to
increasing accountability for longitudinal care management and
improving the quality of care for beneficiaries with heart failure and
low back pain.
We considered annual ASM risk levels higher and lower than what we
propose for each ASM performance year. Higher ASM risk levels would
mean that ASM participants with lower final scores would be subject to
potentially higher negative payment adjustments, whereas lower ASM risk
levels would mean that ASM participants with lower final scores would
be subject to potentially lower negative payment adjustments.
Calibrating the right level of risk is critical to ensure that ASM
participants
[[Page 32610]]
would receive meaningful incentives to improve performance. We believe
that starting with a level of downside risk already familiar to many
ASM participants who previously participated in MIPS would be
appropriate given that the application of ASM payment adjustment
factors would be applied to Medicare Part B claims for covered
professional services (as discussed earlier in this section of this
proposed rule) in a similar fashion as MIPS as defined at Sec.
414.1405(e).
While we propose at Sec. 512.745(a)(4) a small practice scoring
adjustment in an ASM participant's final score, we also considered
whether to reduce the ASM risk level for ASM participants in small
practices. Given the systematic differences in historical MIPS
performance of likely ASM participants in small practices that we
observed and discuss in section III.C.2.e.(4). of this proposed rule,
reducing the ASM risk level for ASM participants in small practices
would be one way to prevent them from being unfairly penalized in their
payment adjustments. We were, however, concerned that decreasing the
ASM risk level for ASM participants in small practices to be lower than
the equivalent applicable percent in MIPS as defined at Sec.
414.1405(c) would be a disincentive for ASM participants in small
practices to submit the required data under ASM and would potentially
limit the magnitude of any net positive payment adjustments. We,
therefore, believe that the proposed small practice scoring adjustment
is a simpler and more transparent adjustment for ASM participants in
small practices.
We also considered a similar adjustment in ASM risk level for ASM
participants in a rural location as an alternative to the rural
practice scoring adjustment that we considered in section
III.C.2.e.(4). of this proposed rule. For the same reasons discussed in
section III.C.2.e.(4). of this proposed rule, we decided not to propose
a scoring adjustment for ASM participants in rural areas.
We seek comments on our proposed ASM risk level for each ASM
payment year as part of our payment approach. We also seek comment on
the alternative risk levels we considered for each ASM payment year.
Finally, we seek comment on the alternatives we considered related to a
lower ASM risk level for ASM participants in small practices and in
rural areas.
(ii) ASM Redistribution Percentage
As discussed earlier in this section of this proposed rule, we
propose to set an ASM redistribution percentage that is the percentage
of the Medicare Part B covered professional service payments to ASM
participants during an ASM performance year multiplied by the
applicable ASM risk level that would be distributed in the form of
scaled payment adjustments to ASM participants during an ASM payment
year. As discussed earlier, we propose to define this total amount
available for distribution as the ASM incentive pool. We propose at
Sec. 512.750(c)(1)(iii) an ASM redistribution percentage of 85 percent
beginning with the 2029 ASM payment year. Under this proposed ASM
redistribution percentage, 85 percent of the Medicare Part B covered
professional service payments to ASM participants during an ASM
performance year multiplied by the applicable ASM risk level (that is,
the value of the ASM incentive pool) would be distributed to ASM
participants in the form of scaled payment adjustments. The other 15
percent of the Medicare Part B payments multiplied by the ASM risk
level would be retained in the Medicare Trust Fund. To illustrate the
scale of the net payment adjustments under these proposed policies, the
proposed ASM redistribution percentage of 85 percent and an ASM risk
level of 9 percent would lead to an estimated net 7.65 percent (that
is, 85 percent multiplied by 9 percent) of the Medicare Part B covered
professional service payments distributed in the form of payment
adjustments to ASM participants and an estimated 1.35 percent (that is,
15 percent multiplied by 9 percent) retained by Medicare We refer
readers to the regulatory impact analysis in section VII of this
proposed rule for further discussion on the estimated impacts of these
payment adjustments.
As with our proposed exchange function discussed later in this
section of this proposed rule, we view the important factors when
specifying a ASM redistribution percentage to be--(1) the number of ASM
participants that receive a positive payment adjustment; (2) the
marginal incentives for all ASM participants to make broad-based care
quality improvements and reduce low-value care,; and (3) the ability
for ASM to demonstrate savings over the ASM test period. We intend for
the proposed ASM redistribution percentage to appropriately balance
these factors.
We analyzed the distribution of ASM payment adjustment factors
using simulated final scores data, focusing on the full range of
available ASM payment adjustment factors using a sample of likely ASM
participants. We found that an 85 percent ASM redistribution percentage
would achieve an appropriate distribution of the number of ASM
participants that would receive positive and negative payment
adjustments under the different exchange functions that we considered,
as discussed later in this section of this proposed rule. We also found
that an 85 percent ASM redistribution percentage under the proposed
exchange function would achieve the desired magnitude of positive and
negative ASM payment adjustment factors under the ASM risk level
proposed for the 2027 ASM performance year.
We considered ASM redistribution percentages as high as 100 percent
and as low as 60 percent. An ASM redistribution percentage of 100
percent would mean that the entirety of Medicare Part B covered
professional service payments multiplied by the applicable ASM risk
level would be distributed through ASM payment adjustment factors to
ASM participants. We believe that ensuring a particular level of net
savings through an ASM redistribution percentage less than 100 percent
would help guarantee a particular level of Medicare Part B savings that
would contribute to the net savings in total cost of care from provider
behavioral effects that we hypothesize would occur as part of ASM as
described in section III.C.1.(b). of this proposed rule.
We refer readers to the regulatory impact analysis in section VII.
of this proposed rule for further discussion on the scale of ASM and
its estimated financial impacts. We considered an ASM redistribution
percentage as low as 60 percent because it would increase the potential
for higher net savings on Medicare Part B payments and mirrors a
similar rate used by SNF VBP Program (82 FR 36619 through 36621). In
analyses, however, we found decreasing the ASM redistribution
percentages below what we are proposing (for example, to 60 percent or
75 percent) would result in an unfavorable distribution of negative and
positive ASM payment adjustment factors that would not create the
desired set of payment incentives to achieve ASM's goals.
We seek comments on our proposed ASM redistribution percentage and
alternatives considered.
(c) Exchange Function
An exchange function translates a participant's final score into a
payment adjustment. The type of exchange function used can influence:
(1) how many participants receive positive, neutral, or negative
payment adjustments; and (2) the size, or magnitude, of the payment
adjustment percentage that corresponds to a given
[[Page 32611]]
performance score. The choice of an exchange function ultimately
contributes to creating an optimal set of incentives by setting the
distribution and size of payment adjustments.
We propose at Sec. 512.750(c)(1)(ii) to use a logistic exchange
function to translate final scores into ASM payment adjustment factors
that would distribute each ASM incentive pool to their respective ASM
participants through ASM payment adjustment factors that result in net
negative, neutral, or positive payment adjustments.
In our view, important factors when adopting an exchange function
include: (1) the percentage of ASM participants that would receive
positive payment adjustments compared to those that would receive
negative payment adjustments and (2) the magnitude of the maximum
positive and negative net payment adjustment. We believe that ASM would
be most effective at encouraging ASM participants to improve the
quality of care that they provide to Medicare beneficiaries if ASM
participants can earn positive adjustments through high performance
across ASM's performance categories but also face some level of
downside risk through possible negative payment adjustments. We also
believe that the magnitude of negative and positive adjustments must
create a strong incentive for improving care related to ASM's targeted
chronic conditions. The choice of an exchange function, and the
specific parameters of the chosen exchange function, can create
different distributions of ASM payment adjustment factors, ASM payment
multipliers, and net payment adjustments based on the final scores of
ASM participants in each ASM cohort.
In the Quality Payment Program, CMS uses a linear exchange function
to translate MIPS eligible clinicians' final scores into MIPS payment
adjustment factors relative to an annually determined performance
threshold so that the program is budget neutral (89 FR 62199). Under
the Hospital VBP Program, CMS uses a linear exchange function to
translate a hospital's Total Performance Score into the percentage
multiplier to be applied to each Medicare discharge claim submitted by
the hospital during the applicable FY (76 FR 26531 through 26534). We
refer readers to the Hospital VBP Program Final Rule (76 FR 26531
through 26534) for detailed discussion of the Hospital VBP Program's
exchange function, as well as responses to public comments on this
issue. Under the SNF VBP Program, CMS uses a logistic function to
translate a SNF's performance score into an incentive payment
multiplier (82 FR 36616 through 36619). The SNF VBP Program also
considered a cube exchange function during its notice-and-comment
rulemaking related to the SNF VBP Program exchange function (82 FR
36616 through 36619). We refer readers to the SNF VBP Program final
rule (82 FR 36616 through 36619) for detailed discussion on the SNF VBP
Program's exchange function and responses to public comments on this
issue.
Using the exchange functions that other Medicare VBP programs use
or considered using while determining their payment methodology, we
considered three exchange functions for use in ASM's payment
methodology: (1) linear, (2) logistic, and (3) cube. The equations and
graphs of the proposed exchange functions displayed in the remainder of
this section of this proposed rule are illustrative. We note that the
actual exchange functions' forms and slopes would vary depending on the
distributions of final scores and wish to emphasize that we present
these representations solely for the reader's clarity as we discuss our
exchange function policy.
The linear function is a simple, steadily increasing function
ranging from zero to one hundred (Figure 2). A linear exchange function
would provide ASM participants the same marginal incentive to
continually improve performance of their final score. The linear
exchange function we considered had the following formula, where xi is
an ASM participant's final score:
[GRAPHIC] [TIFF OMITTED] TP16JY25.117
[[Page 32612]]
The logistic function is an S-shaped curve ranging between zero and
one hundred with an inflection point at a specified midpoint (Figure
3). The S-shaped curve would mean that participants with scores within
the bottom end of the distribution would receive similar payment
adjustments and participants at the top end of the distribution would
receive similar payment adjustments to one another. There would be more
variation in the resulting payment adjustments for those participants
with final scores in the middle of the distribution. The logistic
exchange function we considered had the following formula, where xi is
an ASM participant's final score, x0 represents the function's
midpoint:
[GRAPHIC] [TIFF OMITTED] TP16JY25.118
For the logistic exchange function, we considered values of the
function's midpoint (that is, x0 in the earlier formula) set at: (1)
50, which represents the midpoint between the zero to 100 point range
that an ASM participant could achieve in their final score; (2) the
annual median final score in the ASM performance year for each ASM
cohort, and (3) the annual mean final score in the ASM performance year
for each ASM cohort. The functional form of the logistic function when
centered at 50 points would mean that those ASM participants with final
scores within the top 25 percent and the bottom 25 percent of final
scores would receive relatively similar ASM payment adjustment factors.
However, setting the midpoint at the median or mean final score could
help to achieve a more balanced distribution between ASM payment
adjustment factors that result in net positive or net negative payment
adjustments.
The cube function exponentially increases between zero and one
hundred (Figure 4). The cube functions means that the incentive to
improve performance increases more dramatically at the top end of the
score distribution, meaning that a one-point difference in final score
at the top end would result in a bigger difference in payment
adjustment than the same one-point difference at the lower end of the
final score distribution. The cube exchange function we considered had
the following formula, where xi is an ASM participant's final score:
[[Page 32613]]
[GRAPHIC] [TIFF OMITTED] TP16JY25.119
We analyzed these three exchange functions using simulated final
score data. For the logistic exchange function, we used a midpoint of
the median final score within each ASM cohort (see discussion on the
logistic function's midpoint earlier in this section of this proposed
rule). We simulated final scores by simulating each of the four ASM
performance category scores using informed distributions for measures
and the proposed scoring policies for each ASM performance category
(see the regulatory impact analysis in section VII of this proposed
rule for further information on our simulation methods). Our modeling
ensures that the estimated ASM payment adjustment factors and ASM
payment multipliers for each ASM cohort resulted in net payment
adjustments that equaled the total ASM incentive pool for the
applicable ASM cohort. We evaluated the distribution of ASM payment
adjustments factors that resulted from each function (that is, the
number and proportion of each ASM cohort that received net negative and
positive payment adjustments). We also evaluated descriptive statistics
(for example, mean, median, minimum, maximum) of the resulting ASM
payment adjustment factors and ASM payment multipliers from each
function. We also considered the distribution of ASM payment adjustment
factors and ASM payment multipliers by specific ASM participant
characteristics, such as small practices.
In our analysis, we found that linear and logistic exchange
functions produced relatively similar distributions of ASM participants
that would receive net positive payment adjustments, whereas more ASM
participants would receive net positive payment adjustments under the
cube function. Comparatively, the steadily increasing linear exchange
function would mean that there would be a more even distribution of ASM
payment adjustment factors across the distribution of final scores.
Under the cube function, fewer ASM participants would receive net
positive payment adjustments.
We found that setting the logistic function midpoint at the median
or mean final score for each ASM cohort produced a maximum ASM payment
adjustment factor that exceeded the maximum ASM payment adjustment
factor under the linear exchange function (we refer readers to the
discussion of the logistic function's midpoint earlier in this section
of this proposed rule). That is, adjusting the logistic function
midpoint to a value around the mean or median final score of each ASM
cohort would increase the maximum net positive payment adjustment while
producing a more even distribution between net positive and negative
payment adjustments. The cube function produced the highest maximum ASM
payment adjustment factor. All the exchange functions had the same
maximum negative ASM payment adjustment factor because the ASM risk
level would determine the maximum net negative payment adjustment.
When we compared the median ASM payment adjustment factor produced
under each exchange function, we found that the logistic exchange
function would produce the highest median net payment adjustment
followed by the linear exchange function and then the cube exchange
function. The cube exchange function would allow those ASM participants
that achieve the highest final scores to achieve high ASM payment
adjustment factors but would mean that ASM participants with final
scores near the median final score would receive potentially lower ASM
payment adjustment factors.
Based on the results of this analysis, we believe that the logistic
exchange function would be best suited to achieving the appropriate
distribution of ASM payment adjustment factors at the appropriate level
of magnitude.
We recognize that using the same exchange function from other CMS
programs would help stakeholders that use these programs' payment
information across care settings better understand ASM's payment
methodology. Both the Hospital VBP program and the Quality Payment
[[Page 32614]]
Program use some form of a linear exchange function in their payment
methodologies. Three key program aspects that facilitate the use of a
linear exchange function are a program's number of measures, measure
weights, and correlation across program measures. These three aspects
mean that there is less chance for a single required measure to skew
scores into a non-normal distribution, meaning that it would be
appropriate to use a linear exchange function for these programs (82 FR
36618). When first established, the SNF VBP Program relied on a single
performance measure to determine performance scores. This approach
meant that the distribution of performance scores could have been
easily skewed, which could have resulted in an undesired distribution
of incentive payments (82 FR 36618). The SNF VBP Program has since
added up to 9 measures by which it can assess performance and has
retained use of a logistic exchange function (88 FR 53276 through
53304). In our analysis, we found that simulated final scores among
likely ASM participants could be skewed due to the potential
directional correlation between measures across ASM's performance
categories; for example, an ASM participant who performs well on one
required quality measure may perform well across other quality
measures. The potential for a skewed final score distribution and the
use of a linear exchange function could result in an undesired
distribution of ASM payment adjustment factors. For these reasons, we
believe that the logistic exchange function would be more appropriate
for the purposes of ASM's payment methodology.
We seek comments on our proposal to use a logistic exchange
function with midpoint set at the median final score for each ASM
cohort to translate final scores into ASM payment adjustment factors.
We also seek comments on the alternative exchange functions and
specifications of each exchange function we considered.
(d) Notification of ASM Payment Adjustment Factors and ASM Payment
Adjustment Multipliers to ASM Participants
As discussed in section III.C.2.e.(6) of this proposed rule, we
propose at Sec. 512.750(e) to notify ASM participants of their ASM
payment adjustment factor and ASM payment multiplier through the ASM
performance report provided for each ASM performance year. As discussed
earlier, we propose at Sec. 512.750(a) that the amount otherwise paid
under Medicare Part B for covered professional services furnished by an
ASM participant during an ASM payment year would be multiplied by the
ASM payment multiplier determined based on an ASM participant's
performance during an ASM performance year.
As discussed earlier in this section of this proposed rule, our
proposed process currently draws from the processes and timelines by
which the Quality Payment Program applies MIPS payment adjustments for
MIPS eligible clinician as defined at Sec. 414.1405(e). Aligning the
timeline and processes with the Quality Payment Program application of
MIPS payment adjustments would ensure operational consistency and
minimize confusion for ASM participants that have previously
participated in MIPS.
Given the time separation between the ASM performance year and the
ASM payment year, there may be situations when an ASM participant's TIN
affiliation changes between the ASM performance year and the
corresponding ASM payment year. We propose at Sec. 512.750(f) that ASM
payment adjustment factors and ASM payment multipliers would continue
to apply to Medicare Part B covered professional services payments to
ASM participants during an ASM payment year with adjustments made
depending on how TIN affiliations change after an ASM performance year
and the end of the corresponding ASM payment year. In Table 45, we
provide several illustrative scenarios and how our proposed policies
discussed in this section of this proposed rule would affect the
application of ASM payment multipliers in each scenario.
During an ASM payment year, we propose at Sec. 512.750(f)(1) that
Medicare Part B professional service claims submitted by an NPI who is
an ASM participant with a final score for an ASM performance year but
under a TIN (1) that did not identify the NPI as an ASM participant for
the applicable ASM performance year and (2) to which the NPI began
assigning billing rights after the ASM performance year but before the
end of the payment year would be adjusted using the ASM payment
multiplier calculated for the ASM participant for the corresponding ASM
performance year. For example, if an ASM participant identified by TIN-
A/NPI bills Medicare under their original practice (TIN A) during an
ASM performance year but begins billing Medicare Part B covered
professional services claims under a new practice (TIN B) after the ASM
performance year but before the end of the corresponding ASM payment
year, then we would apply the ASM participant's ASM payment multiplier
to Medicare Part B claims submitted by the NPI under the new practice
(TIN-B/NPI). If the same ASM participant (TIN-A/NPI) from the above
example also billed under TIN A during the same ASM payment year, we
would adjust their Medicare Part B payments for covered professional
services using the applicable ASM payment multiplier calculated for the
ASM participant.
Our proposal means that we would not apply ASM payment multipliers
to Medicare Part B claims submitted by TINs, other than the TIN
identifying an ASM participant for an applicable ASM performance year
and corresponding ASM payment year, to which the ASM participant
assigned billing rights to before or during an ASM performance year.
For example, if an ASM participant identified by TIN-A/NPI billed to
TIN A and TIN B during the ASM performance year, then we would not
apply the ASM payment multiplier to Medicare Part B claims submitted by
the NPI under TIN-B during the corresponding ASM payment year. Our
reasons for only applying ASM payment multipliers to Medicare Part B
claims to TIN/NPIs combinations created after the end of the ASM
performance year and before the end of the corresponding ASM payment
year would be to prevent application of multiple payment adjustments on
Medicare Part B claims, such as MIPS payment adjustments, during an ASM
payment year. Building on the earlier example, in a given ASM
performance year, an ASM participant (TIN-A/NPI) could be a MIPS
eligible clinician under a different TIN/NPI combination (TIN-B/NPI)
and receive a MIPS payment adjustment factor that would apply in the
MIPS payment year that aligns with the corresponding ASM payment year.
We would not want to interfere with the application of a MIPS payment
adjustment factor to Medicare Part B claims billed under the TIN that
identified the same NPI as a MIPS eligible clinician.
If we identify an NPI as ASM participants under multiple TINs and
that NPI begins billing Medicare Part B claims under a new TIN (that
is, neither of the original TINs) after the ASM performance year but
before the end of the corresponding ASM payment year, then we propose
at Sec. 512.750(f)(2) to adjust Medicare Part B covered professional
service payments submitted by the NPI under the new TIN using the
highest of all ASM payment multipliers received for all TIN and NPI
combinations that identified the NPI as multiple ASM participants for
the corresponding ASM performance year. While we believe that there
would
[[Page 32615]]
be few instances where a single NPI would be identified as multiple ASM
participants, we believe this policy would appropriately track
accountability to the NPI under a new TIN while reducing complexity by
only applying on ASM payment adjustment multiplier.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP16JY25.120
BILLING CODE 4120-01-C
Our proposals would closely link the ASM participants' performance
during an ASM performance year to the ASM payment multiplier. It would
also ensure that ASM participants that qualify for net positive payment
adjustments keep them, even if they change TINs by the start of the ASM
performance year. For those who have a net negative payment adjustment,
this proposal would also ensure ASM participants would remain
accountable for their performance. As discussed earlier in this section
of this proposed rule, our proposals would also prevent interference
with the application of MIPS payment adjustment factors if the NPI
identifying the ASM participant was a MIPS eligible clinician under a
different TIN/NPI combination during the same ASM performance year/MIPS
performance period.
We based our proposed approach on sub-regulatory guidance issued by
the Quality Payment Program on how MIPS payment adjustment factors
follow MIPS eligible clinicians if they change their TIN affiliation
after a MIPS performance period (81 FR 77330, 85 FR 84917 through
84919, and 86 FR 65536).\241\ Like MIPS, our proposal for ASM tracks
accountability to the ASM participant regardless of their specific TIN
affiliation at the time we would apply ASM payment multipliers to an
ASM participant's Medicare Part B covered professional services
payments during an ASM payment year.
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\241\ https://qpp.cms.gov/resources/document/21ee9d76-a002-4f5d-b228-3a99b32aa7dc.
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We seek comments on our proposed approach to notify and apply ASM
payment multipliers to Medicare Part B covered professional services
payments during an ASM payment year. We also seek comment on how ASM
payment multipliers would be applied to Medicare Part B covered
professional services payments for ASM participants whose TIN
affiliations change after an ASM performance year and before the end of
a corresponding ASM payment year.
g. Proposed Timely Error Notice Process
We believe that it is necessary to have a process by which ASM
participants may appeal the ASM performance report. However, the
standard CMS claims appeals process submitted through a MAC would not
lead to timely resolution of disputes for the purposes of ASM because
MACs and other CMS officials would not have timely access to
beneficiary attribution data. Therefore, we propose to waive the
requirements of section 1869 of the Act specific to
[[Page 32616]]
claims appeals for purposes of testing ASM. The proposed ASM error
notice process is specific to ASM and distinct from the standard CMS
appeals procedures set forth under section 1869 of the Act. We note
that ASM participants would still be subject to the same limitations on
review as stipulated at Sec. 512.170.
We propose at Sec. 512.755(a) to permit ASM participants to submit
a timely error notice regarding the calculations contained within the
ASM performance report if the ASM participant believes an error
occurred in calculations due to data quality or other issues, or if the
ASM participant believes an error occurred in calculations due to
misapplication of methodology. We propose at Sec. 512.755(b) that if
an ASM participant believes the ASM performance report contains a
calculation error, then the ASM participant would be required to submit
a timely error notice documenting the suspected calculation error
within 30 calendar days of issuance of the ASM performance report. We
also propose that CMS may specify different requirements for the form,
manner, or deadline for submission of the error notice. If the ASM
participant does not provide such timely error notice error in
accordance with the timelines and processes specified by CMS, then we
propose at Sec. 512.755(b)(1) that the ASM performance report would be
deemed final and the ASM participant would be precluded from later
contesting those elements of the ASM performance report for that
performance year. Additionally, we propose that only an ASM participant
may submit a written timely error notice according to the provisions at
proposed Sec. 512.755(b)(2).
The proposed 30-day window to review and appeal CMS calculations
aligns with the length of time we have finalized for submitting appeals
in other mandatory Innovation Center models, such as TEAM and the
Increasing Organ Transplant Access (IOTA) Model.
We acknowledge that the Quality Payment Program allows MIPS
eligible clinicians to request a targeted review within 60 days of the
closing of the data submission period. As explained in the 2016 Quality
Payment Program Final Rule (81 FR 77353), section 1848(q)(13)(A) of the
Act describes the required review process for MIPS as ``targeted'' and
``informal,'' and does not warrant a second level of review or appeals.
Under MIPS, all decisions under the targeted review process are final.
We considered an appeal window that conforms with MIPS, however, a
60-day timeframe would not be appropriate for ASM, as it would not
provide sufficient time to generate final ASM payment adjustment
factors and ASM payment multipliers before the applicable ASM payment
year begins, given the process outlined in Sec. 512.190 of the
Standard Provisions--which offers the ASM participant the opportunity
to request two additional levels of appeal, including a final review by
the CMS Administrator. If an ASM participant elects to go through all
levels of appeal available to them, this would be a lengthy process
that must conclude by December 1, when CMS must submit final payment
adjustment factors to the MACs for the subsequent payment year.
Therefore, because of the two additional levels of appeal, CMS is
unable to offer ASM participants a lengthier period to review their
initial calculations.
We propose at Sec. 512.755(c) that if CMS receives a timely notice
of a calculation error, we would issue an initial determination in
writing within 30 calendar days to either confirm that there was an
error in the calculation or verify that the calculation is correct. We
note that CMS would reserve the right to an extension of the time for
providing its initial determination upon written notice to the ASM
participant.
If an ASM participant disagrees with CMS' initial and wishes to
dispute the results of the initial determination, under proposed Sec.
512.755(d), the ASM participant or CMS may request a reconsideration of
the initial determination by following the reconsideration review
process described in the standard provisions at Sec. 512.190.
We solicit comment on our proposed timely error notice process for
ASM appeals at Sec. 512.755 as well as alternatives considered.
h. Proposed Waivers of Medicare Program Requirements
(1) Background
Under section 1115A(d)(1) of the Act, the Secretary may waive such
requirements of Titles XI and XVIII and of sections 1902(a)(1),
1902(a)(13), 1903(m)(2)(A)(iii) of the Act, and certain provisions of
section 1934 of the Act as may be necessary solely for purposes of
carrying out section 1115A of the Act with respect to testing models
described in section 1115A(b) of the Act. We propose to waive ASM
participants from MIPS reporting and payment adjustments. We also
propose to waive certain telehealth restrictions to encourage greater
flexibility with the use of telehealth services by ASM participants. We
seek comment on these proposed waivers.
(2) MIPS Waiver
We believe it may be necessary and appropriate to provide
flexibilities to clinicians participating in ASM. We propose at Sec.
512.775 to use the Innovation Center's statutory authority under
section 1115A(d)(1) of the Act to waive all ASM participants from
participation in MIPS for any ASM performance year/ASM payment year in
which they meet the ASM participant eligibility criteria, unless
otherwise specified at proposed Sec. 512.710(a)(2). Our previous and
current efforts in testing models where participants are judged against
the performance of their peers, such as the SNF VBP Program and the
HVBP Program, are likely to incentivize substantial improvements in
cost savings and efficiency. We are building off existing mechanisms
for payment adjustments of Medicare Part B claims found in MIPS. To
maximize the effectiveness of these payment adjustments, we propose to
waive ASM participants from participation in MIPS. This waiver would
ease administrative burden, as ASM participants would be required to
only report ASM performance category measures. The waiver would also
prevent possible double-payment adjustments by ensuring ASM
participants report their performance measures and receive payment
adjustments through ASM alone. The MIPS waiver would only be available
to ASM participants for the year(s) for which they are measured for
performance under the model (that is, the ASM performance year). For
example, if a clinician meets eligibility criteria for the model in CY
2027 and is measured for performance under the model for that year, the
MIPS waiver applies to CY 2027 and the clinician is not required to
participate in MIPS and be measured for performance under MIPS for that
year. Yet, for any subsequent year that that clinician does not meet
ASM eligibility criteria and is not measured for performance under the
model, the MIPS waiver does not apply. The clinician must participate
in MIPS and be measured for performance under MIPS if determined to be
a MIPS eligible clinician for the applicable MIPS performance period.
As described in section III.C.2.m of this proposed rule, we intend
to promote as much longitudinal model overlap as possible and ensure
maximum flexibility for ASM participants to join existing voluntary
models, including Advanced APMs. Specialty care providers have been
part of whole-person and primary care models, such as the Medicare
Shared Savings Program, but the performance
[[Page 32617]]
measures in those programs are less relevant to specialty care. ASM
takes the founding tenets for MVPs and goes further, allowing for like-
to-like comparisons for all ASM participants by ensuring they are
reporting on the same, clinically relevant measures.
For these reasons, we propose to seek a MIPS waiver at Sec.
512.775(a) for all ASM participants regardless of whether they have
achieved QP status through another Medicare model or program.
We seek comment on the proposed MIPS waiver for all ASM
participants at Sec. 512.775(a).
(3) Telehealth
(a) Background
We expect that the proposed ASM design features would lead to
greater interest on the part of ASM participants caring for ASM
beneficiaries in furnishing services to beneficiaries in their home or
place of residence. ASM would create new incentives for comprehensive
care management for beneficiaries, including early identification and
intervention regarding changes in health status. Under section 1834(m)
of the Act, Medicare pays for telehealth services furnished by a
physician or practitioner under certain conditions even though the
physician or practitioner is not in the same location as the
beneficiary. Under the longstanding statutory payment requirements,
telehealth services must be furnished to a beneficiary located in one
of the originating sites specified in section 1834(m)(4)(C)(ii) of the
Act and the site must satisfy at least one of the geographic
requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act.
Generally, for Medicare payment to be made for telehealth services
under the Medicare Physician Fee Schedule several conditions must be
met, as set forth under Sec. 410.78(b). Specifically, the service must
be on the Medicare list of telehealth services and meet all the
following other requirements for payment: (1) the service must be
furnished via an interactive telecommunications system, (2) the service
must be furnished to an eligible telehealth individual, and (3) the
individual receiving the services must be in an eligible originating
site. For most telehealth services, this requires the beneficiary to be
located at an originating site that is in certain, mostly rural, areas,
and in a setting that is a health care facility.
During the COVID-19 PHE, CMS used emergency authority under section
1135(b)(8) of the Act to waive these requirements to allow
beneficiaries to be located in an originating site in any geographic
area and in any setting, including the home of the beneficiary.
Congress has enacted several laws that temporarily extend these
flexibilities beyond the PHE. Most recently, the Full-Year Continuing
Appropriations and Extensions Act, 2025 (Pub. L. 119-4) amended section
1834(m)(4)(C)(iii) of the Act to extend these originating site
flexibilities through September 30, 2025. Absent Congressional action,
beginning October 1, 2025, the statutory limitations that were in place
for Medicare telehealth services prior to the COVID-19 PHE will retake
effect for most telehealth services. These include geographic and
location restrictions on where the services are provided.
When all these conditions are met, Medicare pays a facility fee to
the originating site and provides separate payment to the distant site
practitioner for the service. Section 1834(m)(4)(F)(i) of the Act
defines Medicare telehealth services to include professional
consultations, office visits, office psychiatry services, and any
additional service specified by the Secretary, when furnished via a
telecommunications system. For the list of approved Medicare telehealth
services, see the CMS website at https://www.cms.gov/medicare/coverage/telehealth/list-services. Under section 1834(m)(4)(F)(ii) of the Act,
we have an annual process to consider additions to and deletions from
the list of telehealth services.
Some literature suggests certain beneficial telehealth
technologies, which enable health care providers to deliver care to
patients in locations remote from providers, are being increasingly
used to complement face-to-face patient-provider encounters to increase
access to care, especially in rural or underserved areas.\242\ In these
cases, the use of remote access technologies may improve the
accessibility and timeliness of needed care, increase communication
between providers and patients, enhance care coordination, and improve
the efficiency of care. We note that certain covered professional
services that are commonly furnished remotely using telecommunications
technology are paid under the same conditions as in-person physicians'
services and thus do not require a waiver to be considered as
telehealth services. Such services that do not require the patient to
be present in person with the practitioner when they are furnished are
covered and paid in the same way as services delivered without the use
of telecommunications technology when the practitioner is in person at
the medical facility furnishing care to the patient.
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\242\ Azizi Z, Broadwin C, Islam S, et al. Digital Health
Interventions for Heart Failure Management in Underserved Rural
Areas of the United States: A Systematic Review of Randomized
Trials. J Am Heart Assoc. 2024;13(2):e030956. doi:10.1161/
JAHA.123.030956.
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In other CMS episode-based payment models, such as TEAM and the
Comprehensive Care for Joint Replacement Model (CJR) model,
participants were permitted to use telehealth waivers that applied to
two provisions:
CMS waived the geographic site requirements under
1834(m)(4)(C)(i)(I) through (III) of the Act which allowed telehealth
services to be furnished to eligible telehealth individuals when they
are located at an originating site at the time the service is furnished
via a telecommunications system but without regard to the site meeting
one of the geographic site requirements.
CMS waived the originating site requirements under section
1834(m)(4)(C)(ii)(I) through (VIII) of the Act which allowed the
eligible telehealth individual to not be in an originating site when
the otherwise eligible individual is receiving telehealth services in
their home or place of residence.
These telehealth waivers allowed providers and suppliers furnishing
services to ASM beneficiaries to utilize telemedicine for beneficiaries
that are not classified as rural and allowed the greatest degree of
efficiency and communication between providers and suppliers and
beneficiaries by allowing beneficiaries to receive telehealth services
at their home or place of residence. We believe similar telehealth
waivers would be essential to maximize the opportunity to improve the
quality of care and efficiency for ASM.
(b) Telehealth Waivers
Specifically, like the telehealth waivers in TEAM and the CJR
model, we propose at Sec. 512.775(b) to waive the geographic site
requirements of section 1834(m)(4)(C)(i)(I) through (III) of the Act
that limit telehealth payment to services furnished within specific
types of geographic areas or in an entity participating in a federal
telemedicine demonstration project approved as of December 31, 2000.
Waiving of this requirement would allow beneficiaries located in any
region to receive services related to the episode to be furnished via
telehealth, as long as all other Medicare requirements for telehealth
services are met. Any service on the list of Medicare approved
telehealth services and reported on a claim that is not excluded from
the proposed episode (see section III.C.2.c.(3).(b). of this
[[Page 32618]]
proposed rule) could be furnished to an ASM beneficiary, regardless of
the beneficiary's geographic location. Under ASM, this waiver would
support care coordination and increasing timely access to high quality
care for all ASM beneficiaries, regardless of geography. Additionally,
we propose waiving the originating site requirements of sections
1834(m)(4)(C)(ii)(I) through (VIII) of the Act that specify the
particular sites at which the eligible telehealth individual must be
located at the time the service is furnished via a telecommunications
system. Specifically, we propose at Sec. 512.775(b)(2) to waive the
requirement only when telehealth services are being furnished in the
ASM beneficiary's home or place of residence during the episode. Any
service on the list of Medicare approved telehealth services that is
not excluded from the proposed episode definition (see section
III.C.2.c.(3).(b). of this proposed rule) could be furnished to a ASM
beneficiary in their home or place of residence, unless the service's
HCPCS code descriptor precludes delivering the service in the home or
place of residence.
The existing set of codes used to report evaluation and management
(E/M) visits are extensively categorized and defined by the setting of
the service, and the codes describe the services furnished when both
the patient and the practitioner are in that setting. Section 1834(m)
of the Act provides for the conditions under which Medicare can make
payment for office visits when a patient is located in a health care
setting (the originating sites authorized by statute) and the eligible
practitioner is located elsewhere. However, we do not believe that the
kinds of E/M services furnished to patients outside of health care
settings via real-time, interactive communication technology are
accurately described by any existing E/M codes. This would include
circumstances when the patient is located in his or her home and the
location of the practitioner is unspecified. To create a mechanism to
report E/M services accurately, TEAM and the CJR model used specific
sets of HCPCS G-codes to describe the E/M services furnished to the
model beneficiaries in their homes via telehealth. We considered
whether establishing ASM-specific G-codes would serve a distinct
purpose to the model. Upon review of existing G-codes for services
provided via telehealth, we identified concerns with administrative
burden and duplicative codes. Thus, we propose to allow ASM
participants to bill established G-codes.\243\
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\243\ https://www.cms.gov/medicare/coverage/telehealth/list-services.
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Under the proposed waiver of the geographic site requirement and
originating site requirement, all telehealth services would be required
to be furnished in accordance with all Medicare coverage and payment
criteria, and no additional payment would be made to cover set-up
costs, technology purchases, training and education, or other related
costs. The facility fee paid by Medicare to an originating site for a
telehealth service would be waived if there is no facility as an
originating site (that is, the service was originated in the
beneficiary's home). Finally, ASM participants furnishing a telehealth
service to an ASM beneficiary in his or her home or place of residence
would not be permitted to bill for telehealth services that were not
fully furnished when an inability to provide the intended telehealth
service is due to technical issues with telecommunications equipment
required for that service. Beneficiaries would be able to receive
services furnished under the telehealth waivers only during the
episode.
We plan to monitor patterns of utilization of telehealth services
under ASM to monitor for overutilization or reductions in medically
necessary care, and significant reductions in face-to-face visits with
ASM participants.
We seek comments on the proposed waivers with respect to telehealth
services at Sec. 512.775(b).
i. Proposed Extreme and Uncontrollable Circumstances (EUC) Policy
Events may occur outside the purview and control of the ASM
participant that may affect their performance in the model. We propose
at Sec. 512.780 to apply a variation of the EUC policy for MIPS
eligible clinicians (83 FR 60081), but with notable differences around
scoring. Currently, MIPS has three mechanisms to adjust scoring MIPS
performance categories due to external circumstances that may impact a
MIPS eligible clinician's ability to report during a given performance
year: (1) the MIPS automatic EUC policy; \244\ (2) the MIPS EUC
Exception; and (3) the MIPS Promoting Interoperability Performance
Category Hardship Exception.\245\ The latter two require affected MIPS
eligible clinicians to submit an application to MIPS for consideration
before being granted the exception. The MIPS Automatic EUC Policy,
however, grants the exception to any MIPS eligible clinician located in
a CMS-designated region affected by EUC, such as a Federal Emergency
Management Agency (FEMA)-designated major disaster or an HHS-determined
public health emergency. The exception eliminates the need for an
application to request reweighting one or more MIPS performance
categories.
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\244\ https://qpp.cms.gov/resources/document/3579730b-0891-4491-b880-eb21da631b15.
\245\ https://qpp.cms.gov/mips/exception-applications.
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We propose to adopt at Sec. 512.780 a modified version of the MIPS
Automatic EUC Policy. We would use the same triggering events from the
MIPS Automatic EUC Policy, such as federal disaster and/or public
health emergency declarations, as the basis for determining whether an
ASM participant may be automatically exempted from submitting ASM
performance category data for an ASM performance year during which they
were impacted by the EUC. If the ASM participant's CBSA or metropolitan
division that we use to determine ASM participant eligibility (as
described at Sec. 512.710(e)(5)) is within an area identified by CMS,
under Sec. 414.1380(c)(2)(i)(A)(8), as having been affected by extreme
and uncontrollable circumstances,, then the ASM participant would be
exempted from the requirement to submit ASM performance category data,
as described at proposed Sec. 512.720. We propose at Sec.
512.780(c)(1) that ASM participants who qualify for the exemption and
do not submit ASM performance category data that meet the requirements
at Sec. 512.720 would not receive a final score and would receive an
ASM payment adjustment factor that results in a neutral payment
adjustment for the applicable ASM payment year. We propose at Sec.
512.780(c)(2) that ASM participants who qualify for the exemption but
still submit ASM performance category data that meet the requirements
at Sec. 512.720 would be scored according to the methodology described
at proposed Sec. 512.745. We also considered using claims data to
determine whether an ASM participant furnishes services in a Federal
disaster area or in an area in which HHS has declared a public health
emergency. However, we believe that using the same methodology to
determine whether a clinician furnishes services in a mandatory
geographic area as part of the ASM participant eligibility criteria
would ensure consistency across geographic determinations used for EUC-
related exemptions.
Furthermore, we recognize the external impact of circumstances
outside of the ASM participants' control, such as large-scale
cyberattacks
[[Page 32619]]
and other emergencies outside of those identified in the previous
paragraphs. We propose at Sec. 512.780(b)(1) and (2) to allow CMS to
determine, based on information known to the agency prior to the
beginning of the relevant ASM payment year, that data for an ASM
participant are inaccurate, unusable, or otherwise compromised due to
circumstances outside of the control of the clinician and its agents,
including third-party intermediaries. We propose to notify ASM
participants of CMS' decision on the existence of circumstances as
proposed at Sec. 512.780(b)(1) and the impact of these circumstances
upon scoring methodology for affected ASM participants. We also propose
to grant CMS discretion in the form and manner of the notice to ASM
participants.
We considered adopting an application-based process for EUC
exceptions like the MIPS provisions described at Sec. 414.1380(c)(6).
However, we believe that any hardships outside of those contemplated at
proposed Sec. 512.780(a) and (b) that renders an ASM participant
unable to report on ASM performance categories for quality, improvement
activities, or Promoting Interoperability, would likely result in the
ASM participant being unable to bill claims for that ASM performance
year as well. Accordingly, we believe that ASM participants in these
circumstances would likely not meet the case minimums for quality and
cost measures in their respective ASM performance categories (as
proposed at Sec. Sec. 512.725(g) and 512.730(d)) and would, therefore,
be subject to a neutral payment adjustment for the applicable ASM
payment year. For example, if the ASM participant does not have 20 EBCM
episodes identified in claims data for the impacted ASM performance
year, then the ASM participant would not receive a final score and
would be subject to an automatic neutral payment adjustment. However,
in this scenario, since CMS is unable to determine whether the ASM
participant meets the 20 EBCM episodes for the given ASM performance
year until all claims for that ASM performance year have been
completed, the ASM participant is encouraged to submit as much data as
they are able to for all other ASM performance measures.
We considered whether an ASM participant affected by the
circumstances at proposed Sec. 512.780(a) or (b) who chooses to report
ASM performance category data would be subject to a lower risk level as
described at Sec. 512.745(a)(3). Applying a differential risk level
for some ASM participants could skew the calculation of ASM payment
adjustment factors for all ASM participants depending on how many ASM
participants are impacted by the identified circumstances. Instead of
adjusting the ASM participant's risk level, we believe it would be
preferable for ASM participants not to receive a final score, which
would result in an automatic neutral payment adjustment.
We seek comments on the proposed provisions at Sec. 512.780, as
well as the alternatives that we considered.
j. Proposed Data Sharing
Under this proposed model, we aim to incentivize ASM participants
to engage in care redesign efforts to improve quality of care and
reduce Medicare FFS spending for ASM beneficiaries. We expect ASM
participants to work toward independently tracking their own data
through electronic health records, health information exchanges, or
other means that they believe are necessary to best evaluate the health
needs of their patients, improve health outcomes, and produce
efficiencies in the provision and use of health care items and
services. However, we are proposing certain data sharing requirements
in Sec. 512.760 to assist ASM participants in this process and in
meeting the model objectives.
We propose at Sec. 512.760(d) to provide certain aggregate data
that has been de-identified in accordance with the Health Insurance
Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, 45 CFR
164.514(b), for the purposes of helping ASM participants understand
their progress towards improving upon the model's performance metrics.
Any aggregate data provided in advance of an ASM performance report for
an ASM performance year would not be a guarantee of the ASM
participant's final score or ASM payment adjustment factor.
Additionally, as with other mandatory Innovation Center models such
as TEAM and IOTA, we propose to provide certain beneficiary-
identifiable data to ASM participants regarding the ASM beneficiaries
under their care, upon request and execution of a data sharing
agreement. We anticipate that ASM participants would use this data to
assess their treatment patterns and overall care plans and to identify
room for improvement under the model or conducting other ``health care
operations'' under the HIPAA Privacy Rule, 45 CFR 165.501.
Specifically, subject to the limitations discussed in this proposed
rule, and in accordance with applicable law, including the HIPAA
Privacy Rule (45 CFR part 160 and subparts A and E of part 164), we
propose at Sec. 512.760(b) that CMS may offer an ASM participant an
opportunity to request certain Medicare beneficiary-identifiable data.
We propose that CMS would share this beneficiary identifiable data with
ASM participants on the condition that the ASM participants and other
individuals or entities performing functions or services related to the
ASM participant's activities observe all relevant statutory and
regulatory provisions regarding: (1) the appropriate use of data; and
(2) the confidentiality and privacy of individually identifiable health
information, and comply with the terms of the data sharing agreement
proposed at Sec. 512.760(e).
Moreover, we recognize that an individual clinician generally may
not be a covered entity. However, the participant clinicians are likely
part of a covered entity and therefore are subject to the HIPAA Rules.
We propose at Sec. 512.760(f) that ASM participants must allow
Medicare beneficiaries to request restrictions on sharing data,
consistent with 45 CFR 164.522(a). We also propose at Sec.
512.760(b)(4) that, for the beneficiary-identifiable claims data, we
would exclude information that is subject to the regulations governing
the confidentiality of substance use disorder patient records (42 CFR
part 2) from the data shared with an ASM participant.
We request comment and feedback on our proposed policies at Sec.
512.760(a) to make certain beneficiary-identifiable data available to
ASM participants upon execution of an ASM data sharing agreement.
(1) Data Provided to ASM Participants
(a) Legal Authority To Share Beneficiary-Identifiable Data and
Applicability to Proposed ASM Data Sharing Processes
We believe that an ASM participant may need access to certain
Medicare beneficiary-identifiable data for the purposes of evaluating
its performance, conducting quality assessment and improvement
activities, conducting population-based activities relating to
improving health or reducing health care costs, or conducting other
health care operations listed in the first or second paragraph of the
definition of ``health care operations'' under the HIPAA Privacy Rule,
45 CFR 164.501.
We recognize there are sensitivities surrounding the disclosure of
beneficiaries' individually identifiable health information, and that
several laws place constraints on the sharing of individually
identifiable health information. For example, section 1106 of the Act
generally bars the disclosure
[[Page 32620]]
of information collected under the Act without consent unless a law
(statute or regulation) permits the disclosure. Here, the HIPAA Privacy
Rule would allow for the proposed disclosure of individually
identifiable health information by CMS to ASM participants so they can
carry out ``health care operations'' that fall within the first and
second paragraphs of the definition of the term as defined at 45 CFR
164.501. In this proposed rule, we propose to make ASM participants
accountable for quality and cost outcomes during an applicable ASM
performance year. We believe it is necessary for the purposes of this
model to offer ASM participants the ability to request certain raw
beneficiary-identifiable Medicare claims data that CMS used to
determine ASM participant eligibility for an applicable ASM performance
year, as well as for the beneficiaries who trigger an EBCM episode with
the ASM participant during the applicable ASM performance year. ASM
participants would only receive data for the ASM beneficiaries who are
their patients. We believe these data would constitute the minimum
information necessary to enable ASM participants to understand care
spending patterns, appropriately coordinate care, and target care
strategies toward ASM beneficiaries.
Under the HIPAA Privacy Rule, covered entities (defined in 45 CFR
160.103 as health plans, health care providers that conduct certain
transactions electronically, and health care clearinghouses) may only
use or disclose protected health information (PHI), a subset of
individually identifiable health information I, as permitted or
required by the HIPAA Privacy Rule, without the individual's
authorization. The Medicare FFS program, a ``health plan'' function of
the Department, is subject to the HIPAA Privacy Rule limitations on the
use or disclosure of PHI without an individual's authorization. ASM
participants are also covered entities, provided they are health care
providers as defined by 45 CFR 160.103 and they electronically transmit
any health information in connection with one or more HIPAA standard
transactions, such as for claims, eligibility or enrollment
transactions. ASM participants are clinicians who are either covered
entities themselves, or they are part of a covered entity. We believe
that the proposed disclosure of beneficiary-identifiable data under the
ASM model would be permitted by the HIPAA Privacy Rule under the
provisions that permit disclosures of PHI for ``health care
operations'' purposes. Under those provisions, a covered entity is
permitted to disclose PHI to another covered entity for the recipient's
health care operation's purposes if both covered entities have or had a
relationship with the subject of the PHI being requested, the PHI
pertains to such relationship, and the PHI disclosure is for a ``health
care operations'' purpose listed within the first two paragraphs of the
definition of ``health care operations'' in the HIPAA Privacy Rule (45
CFR 164.506(c)(4)).
The first paragraph of the definition of health care operations
includes ``conducting quality assessment and improvement activities,
including outcomes evaluation and development of clinical guidelines,''
and ``population-based activities relating to improving health or
reducing health costs, protocol development, case management and care
coordination.'' The second paragraph of the definition of health care
operations includes ``evaluating practitioner and provider
performance'' (45 CFR 164.501).
We propose at Sec. 512.760 that, subject to having an ASM data
sharing agreement in place, an ASM participant may request from CMS
certain beneficiary-identifiable claims for ASM beneficiaries under
their care. Under the ASM data sharing agreement, we propose at Sec.
512.760(b)(5)(i) and (ii) to allow CMS to share data with an ASM
participant which includes unrefined (raw) Medicare Parts A, B, and D
beneficiary-identifiable claims data used to determine ASM participant
eligibility for an applicable ASM performance year, as well as
unrefined (raw) Medicare Parts A, B, and D beneficiary-identifiable
claims data for ASM beneficiaries who trigger an episode with the ASM
participant during the applicable ASM performance year. ASM
participants would use the data on their patients to evaluate the
performance of the ASM participant and other providers and suppliers,
such as clinicians with whom the ASM participant may have entered into
a collaborative care arrangement, that furnished services to the
patient, conducts quality assessment and improvement activities, and
conducts population-based activities relating to improved health for
their patients. When done by or on behalf of an ASM participant that is
a covered entity, these data uses would qualify as ``health care
operations'' under the first and second paragraphs of the definition of
health care operations at 45 CFR 164.501. This encompasses the
anticipated uses of the beneficiary-identifiable data by an ASM
participant so that such uses would be permissible under the HIPAA
Privacy Rule. Moreover, done by or on behalf of a covered entity, these
are covered functions and activities that would qualify as ``health
care operations'' under the first and second paragraphs of the
definition of health care operations at 45 CFR 164.501, thus
encompassing the anticipated uses of the beneficiary-identifiable data
by an ASM participant and that such uses would be permissible under the
HIPAA Privacy Rule. Moreover, our proposed disclosures would be made
only to HIPAA covered entities that have (or had) a relationship with
the subject of the information, the information we would disclose would
pertain to such relationship, and those disclosures would be for
purposes listed in the first two paragraphs of the definition of
``health care operations.''
When using or disclosing PHI, or when requesting this information
from another covered entity, covered entities or business associates
must make ``reasonable efforts to limit'' the PHI that is used,
disclosed, or requested to the ``minimum necessary'' to accomplish the
intended purpose of the use, disclosure, or request (45 CFR
164.502(b)). Thus, ASM participants must limit their beneficiary-
identifiable data requests to the minimum necessary, as selected from
the proposed data elements identified at Sec. 512.760(c), to
accomplish the intended purpose of the use, disclosure, or request. The
proposed minimum necessary data elements include, but are not limited
to:
Medicare beneficiary identifier (ID).
Procedure code.
Sex.
Diagnosis code.
Claim ID.
The from and through dates of service.
The provider or supplier ID.
The claim payment type.
Date of birth and death, if applicable.
Tax identification number.
National provider identifier.
The Privacy Act of 1974 also places limits on agency data
disclosures. The Privacy Act applies when Federal agencies maintain
systems of records by which information about an individual is
retrieved by use of one of the individual's personal identifiers
(names, Social Security numbers, or any other codes or identifiers that
are assigned to the individual). The Privacy Act generally prohibits
disclosure of information from a system of records to any third party
without the prior written consent of the individual to whom the records
apply (5 U.S.C. 552a(b)).
[[Page 32621]]
``Routine uses'' are an exception to this general principle. A
routine use is a disclosure outside of the agency that is compatible
with the purpose for which the data was collected. Routine uses are
established by means of a publication in the Federal Register about the
applicable system of records describing to whom the disclosure will be
made and the purpose for the disclosure. For the proposed ASM model, we
believe that the proposed data disclosures are compatible with the
purposes for which the data discussed in this rule was collected, and,
thus, would not run afoul of the Privacy Act, provided we ensure that
an appropriate Privacy Act system of records ``routine use'' is in
place prior to making any disclosures. The systems of records from
which CMS would share data are the Medicare Integrated Data Repository
(IDR), the Common Working File, Medicare Provider Enrollment, Chain,
and Ownership System (PECOS), the Enrollment Database (EDB), and the
Part D Event (PDE) File. We believe that the proposed data disclosures
are compatible with the purposes for which the data discussed in the
proposed rule were collected and may be disclosed in accordance with
the routine uses applicable to those records.
We propose at Sec. 512.760 that we would share the ASM
beneficiary-identifiable lists and data with ASM participants who have
submitted a formal request for the data. Under our proposal, the
request must be submitted on at least an annual basis in a manner and
form specified by CMS. The request also would need to identify the data
being requested and include an attestation that (1) the ASM participant
is requesting this beneficiary-identifiable data as a HIPAA covered
entity, or as part of a HIPAA covered entity, and (2) the ASM
participant's request reflects the minimum data necessary for the ASM
participant to conduct activities that are described in the first or
second paragraph of the definition of health care operations at 45 CFR
164.501. In addition, ASM participants who request this data must have
a valid and signed ASM data sharing agreement in place, as described in
more detail later in this section of this proposed rule. We propose at
Sec. 512.760(b) that we would make available beneficiary-identifiable
data for ASM participants to request for purposes of conducting
activities described in the first or second paragraph of the definition
of health care operations at 45 CFR 164.501 on behalf of their
attributed patients who are Medicare beneficiaries. We believe that
access to beneficiary-identifiable claims data would improve care
coordination between ASM participants and other health care providers.
We also propose at Sec. 512.760(b)(2)(ii) that ASM participants
limit the request for beneficiary-identifiable claims data to Medicare
beneficiaries who have been seen by ASM participants for an ASM
targeted chronic condition, and who did not request to restrict sharing
their claims data with the ASM participant, as proposed at Sec.
512.760(f)(1). Finally, we propose that CMS would share beneficiary
identifiable data with an ASM participant on the condition that the ASM
participant and other individuals or entities performing functions or
services related to the ASM participant's activities, comply with all
applicable laws governing the use of data and the privacy and security
of individually identifiable health information and the terms of the
ASM data sharing agreement proposed at Sec. 512.760(e)(1).
(b) Medicare Beneficiary Opportunity To Request Restrictions on Data
Sharing
We propose at Sec. 512.760(f)(1) that ASM beneficiaries would be
notified about the opportunity to request restrictions on sharing
claims data with an ASM participant, in accordance with 45 CFR 164.522.
Recognizing the administrative burden associated with such
restrictions, however, we note that under 45 CFR 164.522(a)(1)(iii),
covered entities are not required to agree to such a restriction unless
the request fulfills the conditions set forth at 45 CFR
164.522(a)(1)(vi). Furthermore, we propose that Medicare beneficiaries
may not decline to have the aggregate, de-identified data proposed in
Sec. 512.760(d) shared with ASM participants. We also note that, in
accordance with 42 U.S.C. 290dd-2 and its implementing regulations at
42 CFR part 2, we do not share beneficiary identifiable claims data
relating to the diagnosis and treatment of substance use disorders
under this model.
We recognize this policy is distinct from the data sharing policy
in IOTA and other voluntary Innovation Center models. We considered
aligning the data sharing provisions with IOTA but decided to align
with HIPAA requested data restriction provisions because they are less
administratively burdensome on providers. We request comment and
feedback on our proposed policies at Sec. 512.760(f) to enable ASM
beneficiaries to request restrictions on data sharing with their
treating ASM participant. We also request comment and feedback on
whether ASM should align its data sharing policies with existing
Innovation Center models or retain its existing proposed structure,
which is based on HIPAA requirements at 45 CFR 164.522.
(c) Aggregated Data Sharing
We propose at Sec. 512.760(d) to deliver certain aggregate data
that has been de-identified in accordance with the HIPAA Privacy Rule,
45 CFR 164.514(b), for the purposes of helping ASM participants
understand their progress towards improving upon the model's
performance metrics. Such aggregated, de-identified data could include,
when available, claims-based cost, utilization, and quality data. Cost
and utilization data could include fields such as average Medicare FFS
(Part A and Part B) expenditure per beneficiary, the top diagnosis
codes for beneficiaries the ASM participant is seeing, or hospital
admission and readmission rates. Quality data could include preliminary
measure rates for the claims-based measures in each ASM measure set.
The data would support ASM participants in analyzing care provided to
their Medicare patients and their efforts to monitor, understand, and
manage utilization and expenditure patterns as well as to develop,
target, and implement quality improvement programs and initiatives. We
are considering providing these two forms of performance feedback at
regular intervals, allowing insights into trends that could result in
improved model performance and beneficiary care. We seek comments on
the elements, cadence, and format of this claims-based performance
aggregated data and how it could be most beneficial to ASM participants
in improving quality and reducing costs.
Any aggregate data provided in advance of an ASM performance report
for an ASM performance year would not be a guarantee of the ASM
participant's final score or ASM payment adjustment factor. Since this
data would be de-identified according to the HIPAA Privacy Rule
requirements and would not contain any protected health information
(PHI) or personally identifiable information (PII), this aggregate data
would be provided to ASM participants regardless of whether they have
executed an ASM data sharing agreement with CMS.
(2) ASM Data Sharing Agreement
(a) General Requirement for Beneficiary-Identifiable Data
We propose at Sec. 512.760(e)(1) that if an ASM participant wishes
to retrieve ASM beneficiary-identifiable data, the ASM participant
would be required to
[[Page 32622]]
complete, sign, and submit--and thereby agree to the terms of--an ASM
data sharing agreement with CMS on at least an annual basis. We propose
to define the ``ASM data sharing agreement'' as an agreement between
the ASM participant and CMS that includes the terms and conditions for
any beneficiary-identifiable data being shared with the ASM participant
under proposed Sec. 512.760(e). We propose that under the ASM data
sharing agreement, the ASM participant would be required to comply with
the limitations on the use and disclosure of PHI imposed by the HIPAA
Privacy Rule, the applicable ASM data sharing agreement, and the
statutory and regulatory requirements of ASM. We also propose that the
ASM data sharing agreement would include certain protections and
limitations on the ASM participant's use and further disclosure of the
beneficiary-identifiable data and would be provided in a form and
manner specified by CMS. We propose at Sec. 512.760(g) that a
designated data custodian would be the individual(s) that an ASM
participant would identify as responsible for ensuring compliance with
all privacy and security requirements, including all applicable laws
and terms of the ASM data sharing agreement, and for notifying CMS of
any incidents relating to unauthorized disclosures of beneficiary-
identifiable data.
We believe it is important for the ASM participant to first
complete and submit a signed ASM data sharing agreement before it
retrieves any beneficiary-identifiable data to help protect the privacy
and security of any beneficiary-identifiable data shared by CMS with
the ASM participant. As noted previously in this section of the
proposed rule, there are important sensitivities surrounding the
sharing of this type of individually identifiable health information,
and CMS must ensure to the best of its ability that any beneficiary-
identifiable data that it shares with ASM participants would be further
protected in an appropriate fashion.
We seek public comment on our proposal at Sec. 512.760(e) to
require that the ASM participant agree to comply with all applicable
laws and terms of the ASM data sharing agreement as a condition of
retrieving beneficiary-identifiable data, and on our proposal that the
ASM participant would need to submit the signed ASM data sharing
agreement at least annually if the ASM participant wishes to retrieve
the beneficiary-identifiable data.
(b) Content of the ASM Data Sharing Agreement
We recognize that ASM participants may already be required to
comply with the HIPAA Privacy Security, and Breach Notification Rules
``(HIPAA Rules'') as covered entities themselves, or as employees or
owners of HIPAA covered entities. However, since ASM participation is
at the TIN-NPI level, we recognize that the TINs to which the ASM
participants belong may be the covered entities, rather than the ASM
participants themselves. Thus, we included language allowing ASM data
sharing agreements to be executed between CMS and ASM participants or
the covered entities that conduct HIPAA standard transactions on behalf
of the ASM participants. We also propose at Sec. Sec. 512.760(e)(1)(i)
through (v) to impose CMS-specific requirements within the ASM data
sharing agreement to reinforce the Innovation Center's specific
expectations and consequences for misuse, which is intended to protect
the privacy and security CMS' beneficiary-identifiable data in the
hands of ASM participants and any downstream recipients. We propose
that under the ASM data sharing agreement, ASM participants would agree
to certain terms, including:
Complying with the requirements for use and disclosure of
this ASM beneficiary-identifiable data that are imposed on covered
entities, as defined by 45 CFR 160.103, by the regulations at 45 CFR
part 160 and part 164, subparts A and E, including but not limited to
ensuring the data will not be used for purposes outside of conducting
health care operations as defined at 45 CFR 164.501 and as permitted by
45 CFR 164.506(c)(4) on behalf of their ASM beneficiaries
Complying with privacy, security, breach notification, and
data retention requirements specified by CMS in the ASM data sharing
agreement if CMS deems such requirements necessary to safeguard
beneficiary data, in addition to applicable law, such as the HIPAA
Privacy, Security, and Breach Notification Rules
Contractually binding any and each downstream recipient of
the ASM beneficiary-identifiable data, such as persons or entities
performing functions or services related to the ASM participant's data
sharing activities including those that meet the definition of a
business associate as defined at 45 CFR 160.103 and non-ASM participant
parties to collaborative care arrangements described at Sec. 512.771,
to the same terms and conditions to which the ASM participant is itself
bound in its ASM data sharing agreement with CMS as a condition of the
business associate's receipt of the ASM beneficiary-identifiable data
obtained by the ASM participant
Acknowledging that if the ASM participant or any
downstream recipient misuses or discloses the ASM beneficiary-
identifiable data in a manner that violates any applicable statutory or
regulatory requirements or that is otherwise non-compliant with the
provisions of the ASM data sharing agreement, CMS may do any or all of
the following: deem the ASM participant ineligible to obtain ASM
beneficiary-identifiable data for any amount of time, or subject the
ASM participant to additional sanctions and penalties available under
applicable law.
An ASM participant must comply with all applicable laws
and the terms of the ASM data sharing agreement to obtain ASM
beneficiary-identifiable data.
We propose at Sec. 512.760(e)(2) that CMS would share beneficiary-
identifiable data with an ASM participant on the condition that the ASM
participant and other individuals or entities performing functions or
services related to the ASM participant's data sharing activities,
including business associates of the ASM participant as defined at 45
CFR 160.103 and non-ASM participant parties to collaborative care
arrangements described at Sec. 512.771, comply with all relevant laws
governing the use of data and the privacy and security of individually
identifiable health information and the proposed terms of the ASM data
sharing agreement.
We believe that these proposed terms for sharing beneficiary-
identifiable data with ASM participants are appropriate and important,
as CMS must ensure to the best of its ability that any beneficiary-
identifiable data that it shares with ASM participants would be further
protected by the ASM participant, and any business associates of the
ASM participant as defined at 45 CFR 160.103 and non-ASM participant
parties to collaborative care arrangements described at Sec. 512.771,
in an appropriate fashion. We have these types of agreements in place
as part of the governing documents of other models tested under section
1115A of the Act and in the Medicare Shared Savings Program. In these
agreements, CMS typically requires the identification of data
custodian(s) and imposes certain requirements related to
administrative, physical, and technical safeguards for data storage and
transmission; limitations on further use and disclosure of the data;
procedures
[[Page 32623]]
for responding to data incidents and breaches; and data destruction and
retention. These provisions would be in addition to any restrictions
imposed by applicable law, such as the HIPAA Rules. These ASM data
sharing agreement provisions would not prohibit the ASM participant
from making any disclosures of the data otherwise required by law.
We solicit public comments on this proposal at Sec. 512.760(e) to
impose certain requirements in the ASM data sharing agreement related
to privacy, security, data retention, breach notification, and data
destruction.
k. Proposed ASM Beneficiary Incentives, Collaborative Care
Arrangements, and Applicability of CMS-Sponsored Model Safe Harbor at
Sec. 1001.952(ii)
(1) ASM Beneficiary Incentives
As part of CMS' commitment to empower patients to actively
participate and be accountable for quality and whole health outcomes,
we invite ASM participants to think outside the box with regards to
physical and lifestyle factors that contribute to the ASM's targeted
chronic conditions. We propose at Sec. 512.770(a)(1) through (8) to
allow ASM participants the option of providing in-kind patient
engagement incentives, so long as the following criteria are met:
The incentive must be provided directly by the ASM
participant or by an agent of the ASM participant under the ASM
participant's direction and control to an ASM beneficiary who is an
established patient of the ASM participant.
The ASM participant must be solely responsible for any
costs associated with the provision of the incentive, including but not
limited to, the retail value of the item or services offered as the ASM
beneficiary incentive.
The item or service provided must be reasonably connected
to medical care provided by the ASM participant to an ASM beneficiary
for an ASM targeted chronic condition.
The item or service must be a preventive care item or
service or an item or service that advances a clinical goal for an ASM
beneficiary by engaging the ASM beneficiary in better managing an ASM
targeted chronic condition. ASM's clinical goals are centered around
promoting preventive care through improved management of ASM targeted
chronic conditions; empowering patients to actively participate and be
accountable for quality and whole health outcomes; and facilitating
meaningful and efficient coordination between specialists and primary
care providers to increase independent physician participation in
value-based payment programs.
The item or service must not be tied to the receipt of
items or services outside the services furnished by the ASM participant
to the ASM beneficiary.
The item or service must not be tied to the receipt of
items or services from a particular provider or supplier.
The availability of the items or services must not be
advertised or promoted, except that an ASM beneficiary may be made
aware of the availability of the items or services at the time the ASM
beneficiary could reasonably benefit from them.
The cost of the items or services must not be shifted to
any Federal health care program, as defined at section 1128B(f) of the
Act.
The totality of items or services, including technology as
described at paragraph (b) of this section, provided to an ASM
beneficiary may not exceed $1,000 in retail value for any one ASM
beneficiary.
We envision this could take the form of remote patient monitoring
devices such as blood pressure monitors or scales with or without the
capability to send data to their providers, vouchers for healthier food
options or meal planning, and promotions for regular physical activity
such as gym memberships or classes. These are, however, just examples
and are not inclusive of all options available to ASM participants who
offer beneficiary incentives. To safeguard against potential fraud,
waste, and abuse, however, we propose to require limits on the retail
value of offered items or services, when offered items must be
retrieved from the ASM beneficiary, and when an ASM beneficiary becomes
eligible for ASM beneficiary incentives. Specifically, due to multi-use
nature of technological items and devices, we propose at Sec.
512.770(b)(1) and (2) the following stipulations for technology that is
provided to ASM beneficiaries:
Items or services involving technology provided to a ASM
beneficiary must be the minimum necessary to advance a clinical goal of
the model as proposed at Sec. 512.770(b), which are: promoting
preventive care through improved management of ASM targeted chronic
conditions; empowering patients to actively participate and be
accountable for quality and whole health outcomes; and facilitating
meaningful and efficient coordination between specialists and primary
care providers to increase independent physician participation in
value-based payment programs.
Items of technology exceeding $75 in retail value must
remain the property of the ASM participant. However, upon the end of
their care relationship with the ASM participant, that technology must
be retrieved from the ASM beneficiary with documentation of the
ultimate date of retrieval. The ASM participant must document all
retrieval attempts. In cases when the item of technology is not able to
be retrieved, the ASM participant must determine why the item was not
retrievable. If it was determined that the item was misappropriated,
then the ASM participant must take steps to prevent future beneficiary
incentives for that ASM beneficiary. Following this process,
documented, diligent, good faith attempts to retrieve items of
technology would be deemed to meet the retrieval requirement. If the
provided technology breaks or is otherwise rendered unusable for its
intended purposes, the technology must be retrieved from the ASM
beneficiary with documentation of the ultimate date of retrieval. The
ASM participant may replace the unusable unit with the same or similar
technology, to the extent practicable, that meets the original
requirements for the technology.
In addition to the requirements on audits and record
retention at Sec. 512.135, we propose at Sec. 512.770(c)(1) through
(4) that ASM participants who wish to offer ASM beneficiary incentives
must also ensure documentation of the incentives distributed according
to the following requirements:
ASM participants must maintain documentation of items and
services furnished as beneficiary incentives that exceed $75 in retail
value.
The documentation must be established contemporaneously
with the provision of the items and services with a record established
and maintained to include at least the date the incentive is provided
and the identity of the ASM beneficiary to whom the item or service was
provided.
The documentation regarding items of technology exceeding
$75 in retail value must also include contemporaneous documentation of
any attempt to retrieve technology at the end of an episode, or why the
items were not retrievable.
The ASM participant must retain and provide access to the
required documentation.
We seek comment on the proposed parameters at Sec. 512.770 for
allowed ASM beneficiary incentives, especially regarding the
practicality and feasibility
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of the requirements around items of technology.
(2) Collaborative Care Arrangements
To support the goals of ASM, we propose to encourage ASM
participants to enter into collaborative care arrangements with primary
care practices to further the ASM participant's performance in the
improvement activities ASM performance category or advance the clinical
goals of ASM.
To allow ASM participants greater flexibility when negotiating
collaborative care arrangements, we propose at Sec. 512.771(a) to make
the CMS-sponsored model arrangements safe harbor at 42 CFR
1001.952(ii)(1) available to ASM participants when establishing
collaborative care arrangements so long as they comply with the
requirements of that safe harbor and proposed Sec. 512.771. We propose
at Sec. 512.771(a) to require all collaborative care arrangements to:
Be in writing, signed by both parties, and containing the
effective date of the collaborative care arrangement.
Be exclusively between the ASM participant and the primary
care practice with whom the ASM participant shares at least one
established patient who is an ASM beneficiary,
The arrangement must be entered into for the purpose of
furthering the ASM participant's improvement activities or advancing at
least one of ASM's three clinical goals proposed at Sec. 512.771(b),
which are: promoting preventive care through improved management of ASM
targeted chronic conditions; empowering patients to actively
participate and be accountable for quality and whole health outcomes;
and facilitating meaningful and efficient coordination between
specialists and primary care providers to increase independent
physician participation in value-based payment programs.
Participation in a collaborative care arrangement must be
voluntary and without penalty for nonparticipation.