[Federal Register Volume 90, Number 212 (Wednesday, November 5, 2025)]
[Rules and Regulations]
[Pages 49266-50481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19787]
[[Page 49265]]
Vol. 90
Wednesday,
No. 212
November 5, 2025
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
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; Final Rule
Federal Register / Vol. 90, No. 212 / Wednesday, November 5, 2025 /
Rules and Regulations
[[Page 49266]]
-----------------------------------------------------------------------
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-F]
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: This major final 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: These regulations are effective on January 1, 2026.
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, (410) 786-6600, 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.
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 final 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 final rule, refer to item CMS-1832-F. Readers with questions
related to accessing any of the Addenda or other supporting documents
referenced in this final rule and posted on the CMS website identified
above should contact [email protected].
CPT (Current Procedural Terminology) Copyright Notice:
[[Page 49267]]
Throughout this final rule, we use CPT codes and descriptions to refer
to a variety of services. We note that CPT codes and descriptions are
copyright 2020 American Medical Association. All Rights Reserved. CPT
is a registered trademark of the American Medical Association (AMA).
Applicable Federal Acquisition Regulations (FAR) and Defense Federal
Acquisition Regulations (DFAR) apply.
I. Executive Summary
A. Purpose
This major annual rule revises payment policies under the Medicare
PFS and makes other policy changes, including policies 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 final rule includes provisions regarding other Medicare
payment provisions described in sections III. and IV. of this final
rule.
This final rule updates 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). For the Medicare Part B Drug Inflation Rebate Program,
this rule describes the identification of payment amount benchmark
quarter in certain instances and the calculation for the Part B rebate
amount in such instances. For the Medicare Part D Drug Inflation Rebate
Program, this rule finalizes a methodology for removal of units for a
Part D rebatable drug for which a manufacturer provides a discount
under the 340B Program for the applicable period beginning October 1,
2025, as well as the establishment of a voluntary 340B data repository
for Part D claims for testing purposes.
This final rule modifies 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 final rule, we are establishing 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 final rule also includes discussions
and provisions regarding several other Medicare Part B payment
policies, and other policies regarding programs administered by CMS.
Specifically, this final 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 Policies to Improve Care for Chronic Illness and
Behavioral Health Needs (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.)
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.)
Regulatory Impact Analysis (section VI.)
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
final 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 provisions, 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 VI.,
Regulatory Impact Analysis, of this final rule.
II. Provisions of the 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
[[Page 49268]]
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 final rule, unless otherwise noted,
the term ``practitioner'' is used to describe both physicians and
nonphysician practitioners (NPPs) who are permitted to bill Medicare
under the PFS for 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.
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 final rule PE/HR'' on the
CMS website under downloads for the CY 2026 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
For CY 2026 final rule, we have incorporated the available
utilization data for one new specialty, Epileptologists, which we
recognized effective July 1, 2024 through our
[[Page 49269]]
established process. We proposed to use proxy PE/HR values from
Neurology for this new specialty, as there are no PPIS data for this
specialty. We did not receive public comments on this provision, and
therefore, we are finalizing as proposed.
These updates are reflected in the ``CY 2026 PFS final rule PE/HR''
file available on the CMS website under the supporting data files for
the CY 2026 PFS final 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 Non-Facility 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 non-facility. The methodology for calculating PE
RVUs is generally the same for both the facility and non-facility 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 non-facility PE RVUs. We note, too, that in
the CY 2026 PFS proposed rule (90 FR 32593 through 32597), we proposed
a modification in the allocation of indirect PE, described in detail in
the CY 2026 PFS proposed rule.
(4) Services With Technical Components and Professional Components
Diagnostic services are generally comprised of two components: a
professional component (PC); and a technical component (TC). The PC and
TC may be furnished independently or by different healthcare providers,
or they may be furnished together as a global service. When services
have separately billable PC and TC components, the payment for the
global service equals the sum of the payment for the TC and PC. To
achieve this, we use a weighted average of the ratio of indirect to
direct costs across all the specialties that furnish the global
service, TCs, and PCs; that is, we apply the same weighted average
indirect percentage factor to allocate indirect expenses to the global
service, PCs, and TCs for a service. (The direct PE RVUs for the TC and
PC sum to the global.)
(5) PE RVU Methodology
For a more detailed description of the PE RVU methodology, we
direct readers to the CY 2010 PFS final rule with comment period (74 FR
61745 through 61746). We also direct readers to the file titled
``Calculation of PE RVUs under Methodology for Selected Codes'' which
is available on our website under downloads for the CY 2026 PFS final
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 final rule for individual codes.
(a) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/non-facility 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
[[Page 49270]]
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 3 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.
We did not make any proposals associated with the list of expected
specialty assignments for low volume services, however we received
public comments on this topic from interested parties. The following is
a summary of the comments we received and our responses.
Comment: Several commenters stated that they had performed an
analysis to identify all codes that meet the criteria to receive a
specialty override under this CMS policy and drafted updated
recommendations for codes that meet these criteria for the CY 2026 PFS
rule. Commenters stated that the purpose of assigning a specialty to
these codes was to avoid the significant adverse impact on MP RVUs that
results from errors in specialty utilization data magnified in
representation (percentage) by small sample size. These commenters
submitted a list of approximately 75 low volume HCPCS codes with
recommended expected specialty assignments.
Response: For the past few years, we have reviewed the information
provided by the commenters to determine whether the specialty
assignments they recommended were appropriate for the services in
question, based on determining if the recommended specialty matches the
dominant specialty in the claims data. However, we have long held
reservations on whether this is the most accurate method for
implementing updates to the expected specialty assignments list. Since
these updates to the list have never been formally proposed in the CY
2026 PFS proposed rule (90 FR 32593 through 32597), there has been no
opportunity for interested parties to comment and provide feedback
before the assignments are finalized in the final rule. We believe that
it would provide greater transparency and more opportunities for public
comment if additions to the expected specialty assignments list were
instead proposed in a future year's proposed rule.
Therefore, we are not finalizing any additions to the expected
specialty assignments list in this final rule. We will instead review
the list of approximately 75 low volume HCPCS codes submitted by
commenters and propose additions to the list in next year's CY 2027 PFS
proposed rule. We will also review any submissions for inclusion to the
expected specialty assignments list by the same February 10th deadline
that we have finalized in the past for consideration of RUC
recommendations and invoice-based updates to supply and equipment
pricing. We believe that synchronizing submissions to the expected
specialty assignments list for low volume services with the same annual
date used for RUC recommendations and invoice submissions will help
standardize the process, while also providing more opportunities for
feedback from interested parties by going through the annual comment
process.
Comment: A commenter stated that there were four cardiothoracic
surgery codes on the expected specialty assignments list which did not
have the override applied. The commenter stated that these codes should
meet the low volume criteria if their utilization were calculated using
the number of services with no modifier or calculated using services
with modifiers 22, 52 or 53. The commenter stated that if the
utilization were calculated using data for all services, including
modifiers 80, 82, 62 or AS, then the codes would not qualify for the 3-
year average and requested clarification on the policy from CMS.
Response: We note again that we did not propose any changes to the
methodology associated with the list of expected specialty assignments
for low volume services. We continue to use an average of the most
recent 3 years of claims data to determine low volume status (those
that have fewer than 100 allowed services) based on using all of the
information contained in the claims data, including all modifiers.
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 final 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.
[[Page 49271]]
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 proposed a change to the methodology
so that when work RVUs are used to allocate indirect PE to the facility
RVUs, they are assigned at one-half the amount allocated to the non-
facility PE RVUs for that same service. This 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 final rule.)
Step 19: Apply the phase-in of significant RVU reductions and its
associated adjustment. Section 1848(c)(7) of the Act specifies that for
services that are not new or revised codes, if the total RVUs for a
service for a year would otherwise be decreased by an estimated 20
percent or more as compared to the total RVUs for the previous year,
the applicable adjustments in work, PE, and MP RVUs shall be phased in
over a 2-year period. In implementing the phase-in, we consider a 19
percent reduction as the maximum 1-year reduction for any service not
described by a new or revised code. This approach limits the year 1
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).
We did not make any proposals associated with the allocation of
indirect PE for some office-based services policy for CY 2026, however
we received public comments on this topic from interested parties. The
following is a summary of the comments we received and our responses.
Comment: Many commenters expressed concerns associated with the
previously finalized adjustment to allocation of indirect PE for some
office-based services policy, also known as the cognitive floor policy.
The commenters stated that critical psychological and
neuropsychological testing services are expected to receive a reduction
in national average non-facility payment due to a technical calculation
CMS uses to determine if a service meets specific criteria for the fee
schedule's indirect PE floor (specifically a 0.40 non-facility PE to
work RVU ratio). The commenters stated that these codes met the
requirement to receive this adjustment in 2025 but were projected to
miss the technical screen by a slim margin in the 2026 proposed rule
calculations, resulting in unexpected year-over-year payment
fluctuations. The commenters stated that this current eligibility
screen produces payment instability for services that are often on the
cusp of eligibility, and in recent years developmental testing and
neuropsychological testing services have been finalized as both
eligible and ineligible depending on this calculation. The commenters
requested that CMS
[[Page 49272]]
use a rolling 3-year average of each services' non-facility PE and work
RVUs when screening for the 0.40 non-facility PE to work RVU ratio,
release eligibility calculations in each year's proposed rule for
improved transparency into the technical screen, and adopt a 1-year
notice period before finalizing a previously eligible code as newly
ineligible for the indirect PE floor.
Response: We did not make any proposals associated with the
allocation of indirect PE for some office-based services policy for CY
2026, the details of which were finalized in the CY 2018 PFS final rule
(82 FR 52999 through 53000). As such, we are not finalizing any changes
in this policy for CY 2026 PFS final rule, since the codes identified
by the commenters do not meet the criteria for application of this
policy as previously finalized. However, we will take the feedback from
the commenters into consideration for potential use in future
rulemaking.
(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 A-B1.
[GRAPHIC] [TIFF OMITTED] TR05NO25.000
[[Page 49273]]
Crosswalk certain low volume physician specialties:
Crosswalk the utilization of certain specialties with relatively low
PFS utilization to the associated specialties.
Physical therapy utilization: Crosswalk the utilization
associated with all physical therapy services to the specialty of
physical therapy.
Identify professional and technical services not
identified under the usual TC and 26 modifiers: Flag the services that
are PC and TC services but do not use TC and 26 modifiers (for example,
electrocardiograms). This flag associates the PC and TC with the
associated global code for use in creating the indirect PE RVUs. For
example, the professional service, CPT code 93010 (Electrocardiogram,
routine ECG with at least 12 leads; interpretation and report only), is
associated with the global service, CPT code 93000 (Electrocardiogram,
routine ECG with at least 12 leads; with interpretation and report).
Payment modifiers: Payment modifiers are accounted for in
creating the file consistent with the current payment policy as
implemented in claims processing. For example, services billed with the
assistant at surgery modifier are paid 16 percent of the PFS amount for
that service; therefore, the utilization file is modified to only
account for 16 percent of any service that contains the assistant at
surgery modifier. Similarly, for those services to which volume
adjustments are made to account for the payment modifiers, time
adjustments are applied as well. For time adjustments to surgical
services, the intraoperative portion in the work time file is used;
where it is not present, the intraoperative percentage from the payment
files used by contractors to process Medicare claims is used instead.
Where neither is available, we use the payment adjustment ratio to
adjust the time accordingly. Table A-B2 provides details in which the
modifiers are applied.
[GRAPHIC] [TIFF OMITTED] TR05NO25.001
We also adjust volume and time that correspond to other payment
rules, including special multiple procedure endoscopy rules and
multiple procedure payment reductions (MPPRs). We note that section
1848(c)(2)(B)(v) of the Act exempts certain reduced payments for
multiple imaging procedures and multiple therapy services from the BN
calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs
are not included in the development of the RVUs.
We received many comments stating that CMS should not apply the
multiple procedure payment reduction (MPPR) to always therapy services
due to the way in which CMS finalized direct PE recommendations from
the HCPAC in the CY 2025 PFS final rule (89 FR 97801 through 97803).
However, we did not make any proposals associated with these always
therapy services or the MPPR policy, and as such these comments are out
of scope.
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
[[Page 49274]]
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
final rule.
(6) Equipment Cost per Minute
The equipment cost per minute is calculated as:
(1/(minutes per year * usage)) * price * ((interest rate/(1 (1/((1
+ interest rate)[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 later in this final rule.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion later in this final rule.
Usage: We currently use an equipment utilization rate assumption of
50 percent for most equipment, with the exception of expensive
diagnostic imaging equipment, for which we use a 90 percent assumption
as required by section 1848(b)(4)(C) of the Act.
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 2 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, (85 FR 84482 through 84483) 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, in the
proposed rule, 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 in the CY 2026 PFS proposed
rule (90 FR 32593) 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 A-B3.
[GRAPHIC] [TIFF OMITTED] TR05NO25.002
We did not propose 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
[[Page 49275]]
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 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 rule (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 rule 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 the 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 in the proposed rule
and our previously described policy goal to balance PFS payment
stability and predictability with incorporating new data through
routine updates to the MEI, we proposed not implementing the PE/HR or
cost shares from the AMA's survey data at this time. Instead, we
proposed maintaining the current PE/HR and 2006-based MEI cost shares
for CY 2026 PFS ratesetting.
We discuss the topic of the MEI shares along with the
implementation of PE/HR survey data from the AMA in section II.B.5
(Development of Strategies for Updates to Practice Expense Data
Collection and Methodology) of this final rule; we are finalizing both
of these topics as proposed.
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 final
rule at https://www.cms.gov/Medicare/Medicare-Fee-fafor-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
[[Page 49276]]
a. Standardization of Clinical Labor Tasks
As we noted in the CY 2015 PFS final rule with comment period (79
FR 67640 through 67641), we continue to make improvements to the direct
PE input database to provide the number of clinical labor minutes
assigned for each task for every code in the database instead of only
including the number of clinical labor minutes for the preservice,
service, and post service periods for each code. In addition to
increasing the transparency of the information used to set PE RVUs,
this level of detail would allow us to compare clinical labor times for
activities associated with services across the PFS, which we believe is
important to maintaining the relativity of the direct PE inputs. This
information would facilitate the identification of the usual numbers of
minutes for clinical labor tasks and the identification of exceptions
to the usual values. It would also allow for greater transparency and
consistency in the assignment of equipment minutes based on clinical
labor times. Finally, we believe that the detailed information can be
useful in maintaining standard times for particular clinical labor
tasks that can be applied consistently to many codes as they are valued
over several years, similar in principle to physician preservice time
packages. We believe that setting and maintaining such standards would
provide greater consistency among codes that share the same clinical
labor tasks and could improve the relativity of values among codes. For
example, as medical practice and technologies change over time,
standards could be updated simultaneously for all codes with the
applicable clinical labor tasks instead of waiting for individual codes
to be reviewed.
In the CY 2016 PFS final rule with comment period (80 FR 70901), we
solicited comments on the appropriate standard minutes for the clinical
labor tasks associated with services that use digital technology. After
consideration of comments received, we finalized standard times for
clinical labor tasks associated with digital imaging at 2 minutes for
``Availability of prior images confirmed'', 2 minutes for ``Patient
clinical information and questionnaire reviewed by technologist, order
from physician confirmed and exam protocoled by radiologist'', 2
minutes for ``Review examination with interpreting MD'', and 1 minute
for ``Exam documents scanned into PACS'' and ``Exam completed in RIS
system to generate billing process and to populate images into
Radiologist work queue.'' In the CY 2017 PFS final rule (81 FR 80184
through 80186), we finalized a policy to establish a range of
appropriate standard minutes for the clinical labor activity,
``Technologist QCs images in PACS, checking for all images, reformats,
and dose page.'' These standard minutes will be applied to new and
revised codes that make use of this clinical labor activity when they
are reviewed by us for valuation. We finalized a policy to establish 2
minutes as the standard for the simple case, 3 minutes as the standard
for the intermediate 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
the 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, a
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.
[[Page 49277]]
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 final rule at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
b. Updates to Prices for Existing Direct PE Inputs
In the CY 2011 PFS final rule with comment period (75 FR 73205), we
finalized a process to act on public requests to update equipment and
supply price and equipment useful life inputs through annual
rulemaking, beginning with the CY 2012 PFS proposed rule. Beginning in
CY 2019 and continuing through CY 2022, we conducted a market-based
supply and equipment pricing update using information developed by our
contractor, StrategyGen, which updated pricing recommendations for
approximately 1300 supplies and 750 equipment items currently used as
direct PE inputs. Given the potentially significant changes in payment
that would occur, in the CY 2019 PFS final rule, we finalized a policy
to phase in our use of the new direct PE input pricing over a 4-year
period using a 25/75 percent (CY PFS 2019), 50/50 percent (CY PFS
2020), 75/25 percent (CY PFS 2021), and 100/0 percent (CY PFS 2022)
split between new and old pricing. We believe that implementing the
proposed updated prices with a 4-year phase-in would improve payment
accuracy while maintaining stability and allowing interested parties to
address potential concerns about changes in payment for particular
items. This 4-year transition period to update supply and equipment
pricing concluded in CY 2022; for a more detailed discussion, we refer
readers to the CY 2019 PFS final rule with comment period (83 FR 59473
through 59480).
For CY 2026, we proposed 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 (89 FR 97722).
The 42 supply and equipment items with updated prices are listed in the
valuation of specific codes section of the rule under Table A-B6, 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 PFS proposed rule (90 FR
32593 through 32597), as detailed in Table A-B6, CY PFS 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
updated pricing for this supply as shown in Table A-B6. Consistent with
our previously finalized policy associated with the February 10th
deadline (79 FR 67608), we noted in the proposed rule that we will
review these invoices during the comment period following the
publication of the CY 2026 PFS proposed rule (90 FR 32593) for
potential inclusion in this final rule.
The following is a summary of the comments we received and our
responses.
Comment: Several comments stated that they supported the proposed
changes to supply and equipment pricing and recommended CMS to finalize
these items as proposed. Supply and equipment items that commenters
supported in their proposed pricing included the flow cytometer
(EP014), Biodegradable Material Kit--PeriProstatic (SA126), Rezum
delivery device kit (SA128), Esketamine (56 mg vial) (SH109),
Esketamine (84 mg vial) (SH110), calibration beads (SL021), Isoton II
diluent (SL084), lysing reagent (FACS) (SL089), Antibody Estrogen
Receptor monoclonal (SL493), and 34 Beta E12 (SL496).
Response: We appreciate the support for our proposed pricing from
the commenters.
Comment: A commenter submitted a yearly sampling of invoices to
update the pricing of the ``extended external ECG patch, medical
magnetic tape recorder'' (SD339) supply. The commenter submitted 26
additional invoices which were all priced at $345 and suggested CMS to
update the SD339 pricing accordingly.
Response: We appreciate the submission of these additional invoices
from the commenter. Also, since we previously received eight invoices
associated with the SD339 supply at a price of $285, we will average
these two sets of invoices together and finalize a CY 2026 price of
$315 for this supply. We continue to welcome the submission of
additional pricing data for assistance in valuing the SD339 supply.
Comment: A commenter stated that they previously submitted a
request to CMS to update the pricing of the antigen, multi (pollen,
mite, mold, cat) (SH007) supply. The commenter stated that based on
their submitted invoices, they requested that the cost input for 1 mL
of SH007 be increased to $17.07 instead of the $13.00 proposed by CMS.
The commenter stated that while they appreciated the proposed increase
in pricing, they had significant concerns that the pricing for the
SH007 supply continued to be undervalued and was based on flawed
assumptions regarding purchase volumes. The proposed pricing was based
on averaging together the pricing of the 50 mL invoices while excluding
the submitted 5 mL invoices; the commenter stated that allergists often
purchase smaller quantities of allergens which may not require larger
50 mL purchases and allergy practices must observe a 1-year beyond-use
date which could require them to discard a significant volume at the
end of the year if their supplies were purchased in bulk.
Response: Although we appreciate the additional information
supplied by the commenter, we continue to believe that our proposed
pricing of $13.00 is a more accurate valuation for the SH007 supply.
The commenters noted that the SH007 supply is most commonly used in CPT
code 95165 (Professional services for the supervision of preparation
and provision of antigens for allergen immunotherapy; single or
multiple antigens), a high volume service that include 1 mL of the
SH007 supply. CPT code 95165 is typically administered in multiple
billings for the same patient on the same day; our claims data
indicates that 10 billings of CPT code 95165 on the same day is the
median result (with a mean of 12.54 billings). Given that each billing
of CPT code 95165 includes 1 mL of the SH007 supply, and roughly 10-12
billings are typical for each patient encounter, it strains credulity
to suggest that practitioners are typically purchasing the SH007 supply
in its more expensive 5 mL quantities. While we agree that some
practitioners will purchase the supply in 5 mL quantities, our PE
methodology prices supplies based on the typical case, and the larger
50 mL quantity appears far more likely to be typical. We are therefore
finalizing our proposed pricing of $13.00 for the
[[Page 49278]]
SH007 supply based on an average of the submitted 50 mL invoices. We
also note that the $13.00 price still represents a 45 percent increase
in the price of the SH007 supply over its previous $8.96 pricing.
Comment: A commenter stated that CMS should use the updated WAC
pricing for the Opfolda (65 mg capsule) (SH111) supply, which increased
in 2025 to $33.52 per capsule. The commenter stated that they did not
agree with the decision to use 3.5 capsules of the SH111 supply in
HCPCS code G0138 (Intravenous infusion of cipaglucosidase alfa-atga,
including provider/supplier acquisition and clinical supervision of
oral administration of miglustat in preparation of receipt of
cipaglucosidase alfa-atga) which presumed that the split between two
patient weight groupings (40-50 kilograms and 50+ kilograms) is even.
The commenter stated that the vast majority of patients (96 percent in
clinical trial and 91 percent in assembled data) receive 4 capsules of
OPFOLDA which aligns with the recommended dosage for patients weighing
50 kg or more. The commenter requested that CMS should update the SH111
supply quantity from 3.5 to 4 included in HCPCS code G0138 to match
these findings.
Response: We agree with the commenter that the SH111 supply should
be updated in pricing to match the most current WAC valuation;
therefore, we are finalizing an increase in its price from $33.00 to
$33.52. Regarding the quantity of the SH111 supply included in HCPCS
code G0138, we did not solicit comments regarding this code or nominate
it as potentially misvalued. As such, we stand by our previous
valuation of G0138, where this same topic of the SH111 supply quantity
was discussed and finalized in last year's CY 2025 PFS final rule (89
FR 97816 through 97817).
Comment: Several commenters stated that the price and useful life
of the platform mounted parallel bars (EQ201) equipment were out of
date. The commenters stated that parallel bars are much different today
than they were over 20 years ago and in order to best serve the
patient, it is typical and standard for clinics to purchase parallel
bars that have power adjustable heights and solid bases. The commenters
stated that these features are much more expensive to purchase;
however, they offer greater safety for patients who are at risk of
falling. The commenters requested that CMS update the pricing for the
EQ201 parallel bars to $18,956 and change the useful life to 5 years to
reflect its mechanical components; they also submitted four invoices to
support this pricing.
Response: We appreciate the additional information provided by the
commenters, especially the submitted invoices for assistance in
pricing. However, the motorized parallel bars described by the
commenters and priced on the submitted invoices represent a
fundamentally different type of equipment as compared with the platform
mounted parallel bars described by EQ201. Our review of current market
pricing for platform mounted parallel bars indicates that the current
EQ201 pricing of $1599.96 remains accurate for this equipment, as it
was readily available for order online at or below this pricing.
Therefore, we are not finalizing an update to the price of the EQ201
equipment; however, we will add a new equipment item for ``motorized
parallel bars'' (EQ414) priced at the requested $18,956 and with a
useful life of 5 years. This new EQ414 equipment is not currently
included in any CPT or HCPCS codes but is available for potential
future inclusion in services if the motorized version of the parallel
bars is determined to be the typical standard of care.
Comment: Several commenters recommended updating the price for the
treadmill (EQ243) equipment to $8,120.64. The commenters stated that
modern treadmills have multiple computerized and sensory components
that allow for adjustable programs and tracking of vitals, and
submitted five invoices to support this pricing update.
Response: Determining the typical market pricing for treadmill
equipment is a difficult task due to the wide range of treadmills
available for purchase; for example, the prices of the treadmills on
the five invoices submitted by the commenters ranged from a low of
$7,125.10 to a high of $26,064.00. Based on our review of the current
pricing of medical treadmills, it appears that the current EQ243 price
of $4,860.79 remains highly typical, including matching the pricing of
several other medical treadmill models available from the same
manufacturer listed on the submitted invoices. The specific model
listed on these invoices is the ``performance plus'' version of a
medical treadmill which appears to be situated at the high end of the
market; it does not appear to reflect typical pricing and therefore we
are not finalizing an increase to the price of the EQ243 treadmill
equipment.
Comment: Several commenters requested that CMS update and modify
the price of the exercise equipment (EQ118). The commenters stated that
the EQ118 equipment currently reflects exercise equipment and includes
a treadmill, bike, stepper, and upper body ergometer (UBE). The
commenters recommended removing the treadmill from this package and
having it as a stand-alone piece of equipment, while steppers and UBE's
are not typical pieces of exercise equipment in a physical therapy
clinic any longer. The commenters requested that CMS modify the
equipment included in item EQ118 to reflect a total gym, recumbent
bike, and cable columns. Commenters stated that pricing for this
equipment item should be increased to $16,700 and submitted a series of
invoices to support their requested pricing.
Response: The exercise equipment described by the commenters and
priced on the submitted invoices represent a fundamentally different
type of equipment as compared with the existing EQ118 item. The current
EQ118 equipment is based on pricing a treadmill, bike, stepper, UBE,
pulleys, and balance board; in contrast, the equipment collection
described by the commenters constitutes a total gym, recumbent bike,
and cable columns. Therefore, we are not finalizing an update to the
price of the EQ118 equipment; however, we will add a new equipment item
for ``exercise equipment (total gym, recumbent bike, and cable
columns)'' (EQ415) priced at the requested $16,700. This new EQ415
equipment is not currently included in any CPT or HCPCS codes but is
available for potential future inclusion in services if this alternate
version of exercise equipment is determined to be the typical standard
of care.
Comment: Several commenters stated that the practice of manual
therapy (CPT code 97140) and massage therapy (CPT code 97124) typically
includes the use of manual therapy hand instruments. The commenters
stated that these instruments are not included in the equipment for
these codes and requested that CMS add a new equipment item for manual
therapy instruments at a price of $1,795 and a useful life of 15 years
for CPT codes 97140 and 97124. Commenters submitted one invoice to
support this requested pricing.
Response: We concur with the commenters that the submitted invoice
at a price of $1,795 appears to be the current market price for manual
therapy hand instruments. We will therefore add a new equipment item
for ``manual therapy hand instruments'' (EQ416) priced at the requested
$1,795 and with a useful life of 15 years. However, since we do not
have any data at the moment
[[Page 49279]]
to support the claim from the commenters that the use of these manual
therapy hand instruments is typical in CPT codes 97140 and 97124, we
are not adding them to the equipment inputs for these two codes. The
new EQ416 equipment is not currently included in any CPT or HCPCS codes
but is available for potential future inclusion in services if the use
of manual therapy hand instruments is determined to be the typical
standard of care.
After reviewing the comments, we are finalizing our supply and
equipment pricing updates as proposed, with the modifications listed
above in response to the comments.
We proposed not to update the price of another eight supplies and
one equipment item, which were the subject of public submission of
invoices. Our reasons that we proposed not to update to these prices
are detailed in the proposed rule, and we solicited 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 (85 FR
84482 through 84483) 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 proposed 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 proposed not 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 proposed not 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 proposed
not 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 therefore proposed not 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 therefore proposed
not to update the pricing of the SM027 supply.
The following is a summary of the comments we received and our
responses.
Comment: A commenter stated that they supported the CMS decision
not to reduce the pricing on the surface electrode (SD062) supply from
$1.58 to $0.34. The commenter stated that it was their experience that
a single pack of electrodes includes 3-4 electrodes per pack; these
electrodes are sometimes sold in bulk orders of ten packs or twenty
packs, but not ten sets of ten packs of three electrodes as the
interested party indicated.
Response: We appreciate the support for our proposed pricing from
the commenter.
Comment: A commenter disagreed with the proposal to maintain the
current price of $773,104 for the radiation treatment vault (ER056)
equipment. The commenter stated that the radiation treatment vault is
unlike anything else in medicine as it is designed and constructed to
safely house a specific high-energy radiation treatment machine within
its space. The commenter stated that the vault must comply with
specific Federal and State licensing regulations to protect patients,
clinic staff, and the public from radiation exposure, and the Internal
Revenue Service rules treat radiation treatment vaults as medical
equipment. The commenter supported maintaining the classification of
the vault as a direct PE input and encouraged CMS to consider
alternative methods for identifying and valuing the vault separate from
general construction expenses.
[[Page 49280]]
Response: We appreciate the additional information supplied by the
commenter regarding the radiation treatment vault; we have also noted
many of the challenges associated with pricing this unusual equipment
and remain interested in different sources of data to assist in its
valuation.
After reviewing the comments, we are finalizing our proposal not to
update the pricing of these supply and equipment items.
(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 CY 2026 PFS proposed rule (90 FR 32593
and will consider any invoices received after February 10th or outside
of the public comment process as part of our established annual process
for requests to update supply and equipment prices. Interested parties
are encouraged to submit invoices with their public comments or, if
outside the notice and comment rulemaking process, via email at
[email protected].
(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 rule. 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 implementing 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 this
rule under Table A-B6, 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 eight new supply codes, including components
contained within previously existing supply packs. Aside from the SB056
supply, which is a replacement in several HCPCS codes for the deleted
SA046 supply pack, all of these new supplies are not included as
standalone direct PE inputs in any current HCPCS codes, as they are,
again, components contained within previously existing supply packs. We
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 0.55percent (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 in the rule under Table A-B8, CY 2025 PFS (89
FR 97722) 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
[[Page 49281]]
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),
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. The 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. The commenters requested that CMS either delay the pricing
update or phase-in the supply pack changes over a 4-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.
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 (83
FR 59475), 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. Based on this previously established policy,
we finalized the use of a pricing transition for three supply packs in
Table A-B4.
[GRAPHIC] [TIFF OMITTED] TR05NO25.003
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 PFS (89 FR 97722), one-third of the difference between the
CY 2025 PFS (89 FR 97722) price and the final price is implemented for
CY 2026 PFS, 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 previously in this section.
Therefore, we finalized each of them at their updated pricing for CY
2025 PFS (89 FR 97722) 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 A-B5:
[[Page 49282]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.004
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 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-
year pricing transition for three supply packs as described previously
in this section.
For CY 2026, we proposed to continue implementing the supply pack
pricing update and associated revisions as previously recommended by
the RUC's workgroup. We proposed to update the price of the 15 supply
packs detailed in Table A-B5 which were received too late in CY 2025
PFS (89 FR 97722) 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 proposed these
supplies move immediately to their final prices for CY 2026.
For the 12 other supply packs, we proposed 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 proposed 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 PFS (89 FR 97722) 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
proposed the total supply pack pricing update detailed in Table A-B6:
[[Page 49283]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.005
This table also includes the hydrophilic guidewire (SD089) supply
which we are proposing to transition in pricing over 3 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that they supported the
proposals associated with supply pack pricing. Commenters stated that
they appreciated the proposal to initiate correction of the remaining
packs pricing such that the sum of the individual components will match
the price of the corresponding pack by CY 2028. Commenters stated that
they supported the proposal to move the prices of the surgical
instruments cleaning pack (SA043), the moderate sedation pack (SA044),
and the small ortho drapes pack (SA081) to their final prices for CY
2026 due to their modest pricing changes. Commenters also stated that
they agreed with the inclusion of the SD089 hydrophilic guidewire
supply in the updated pricing transition.
Response: We appreciate the support for our proposals from the
commenters.
Comment: Several commenters stated that although they appreciated
the 4-year pricing transition for the SA051 pelvic exam pack, they
remained concerned that even a phased-in reduction will materially
decrease practice expense RVUs for a broad range of services furnished
by gynecologists. Commenters stated that the proposed reduction did not
reflect the realities of practice expenses in today's environment since
supply and labor costs continue to rise due to inflation and market
pressures. Commenters stated that they were considering submission of
updated invoices and cost data related to the pelvic exam supply pack
and would welcome the opportunity to engage with CMS further to ensure
pricing accurately reflects costs across a range of practice settings.
Response: We share the concerns of the commenters regarding the
large decreases in pricing associated with the SA051 and SA058 supply
packs, which is why we finalized the use of a phased-in transition
period in the CY 2025 PFS final rule (89 FR 97722). However, we also
believe in the importance of valuing supply items at the most accurate
market-based pricing available, and therefore we cannot continue to
price these supply packs at rates much higher than the cost of the
individual components that make up the total packs. We welcome the
submission of updated invoices and other cost data associated with
these supply packs for potential inclusion in future rulemaking.
Comment: A commenter stated that the proposal to reduce the value
of the SA048 minimum multi-specialty visit pack by $1.01 was not the
result of a formal, transparent process. The commenter stated that the
proposal represented a significant reduction in the PE value of
occupational therapy evaluation codes as well as the valuation of 4,565
other codes. The commenter stated that CMS should not finalize any
reduction to the SA048 supply pack pricing at this time given the lack
of transparency and the significant impact on reimbursement. Another
related commenter stated that CMS should not finalize any supply pack
pricing updates until invoices have been provided to support such a
change.
Response: We noted in last year's CY 2025 PFS final rule (89 FR
97722), that 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 delayed any proposals associated with the SA048 supply
pack until the CY 2026 PFS proposed rule (90 FR 32593, in the interests
of transparency and to create an opportunity for interested parties to
provide feedback. We agree with the commenter that a large number of
CPT and HCPCS codes will be affected by the proposed pricing changes to
the SA048 supply pack. However, as noted previously in this section, we
also believe in the importance of valuing supply items at the most
accurate market-based pricing available, and therefore we cannot
continue to price these supply packs at rates much higher than the cost
of the individual components that make up the total packs. We also
remind interested parties
[[Page 49284]]
that we are transitioning these pricing changes over the next three
years to help minimize any potential disruptive effects on valuation.
After consideration of the public comments, we are finalizing our
supply pack pricing policies as proposed.
c. Technical Corrections to Direct PE Input Database and Supporting
Files
Following the publication of the CY 2025 PFS final rule (89 FR
97722), 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 proposed not 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 2 decades and, given the very
small valuation associated with their use (such as the ED004 digital
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 solicited comments on whether to maintain or remove these
equipment items.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters continued to disagree with the CMS
proposal to retain these 11 historic equipment items in the ratesetting
database. The commenters stated that this was faulty reasoning and
relativity should be based on actual resource costs using standard
definitions, not historical inclusion. The commenters recommended that
CMS remove all equipment items under $500 from its equipment list and
from the specific codes to conform to the definition of direct medical
equipment.
Response: We proposed to maintain these 11 equipment items out of a
desire to maintain historical continuity with prior ratesetting and to
minimize any disruption on valuation of their associated services.
However, since we received no comments requesting that these historic
equipment items be maintained, we concur with commenters that these
equipment items should be removed from the ratesetting database and any
associated CPT and HCPCS codes. The affected equipment items are as
follows:
[GRAPHIC] [TIFF OMITTED] TR05NO25.006
We are finalizing the removal of these 11 equipment items priced
below $500 from the ratesetting database and their associated CPT and
HCPS codes.
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 products
or brand names and more accurately describe the items in question. We
agree with the RUC and we proposed naming changes for the following
supplies and equipment items:
EQ392: We proposed to rename the ``heart failure patient
physiologic monitoring equipment package'' to ``patient physiologic
monitoring equipment package''.
ER089: We proposed to rename the ``IMRT Accelerator'' to
``Radiation Treatment Delivery Linear Accelerator''.
SD253: We proposed to rename the ``atherectomy device
(Spectronetics laser or Fox Hollow)'' supply to ``atherectomy device''.
SD254: We proposed to rename the ``covered stent (VIABAHN,
Gore)'' to ``covered stent (VIABAHN)''.
[[Page 49285]]
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
(89 FR 97722); 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 proposed 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 non-
facility 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 non-facility
setting is an unintended technical error; we proposed to correct this
code by removing the non-facility PE RVUs for CY 2026.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter stated their support for all three technical
corrections. The commenter agreed that the name changes more accurately
describe the inputs and appreciated their implementation, as well as
appreciated the technical corrections to CPT codes 65780 and 15851. A
separate commenter agreed with the shift toward a generic name for the
EQ392 equipment and supported the CMS renaming proposal. Another
commenter also supported the technical correction to CPT code 65780 and
stated that it was appropriate to update the work time public use file
to reflect 35 minutes of intraservice time.
Response: We appreciate the support from the commenters for our
proposals.
Comment: Several commenters stated that CMS assigned a PC/TC
indicator of ``5'' (incident to) for CPT Code 38228 (Chimeric antigen
receptor T-cell (CAR-T) therapy; CAR-T cell administration, autologous)
when it was finalized in the CY 2025 PFS final rule. The commenters
stated that CPT Code 38228 is not an incident to service, as the
physician personally supervises the initiation of the product infusion
and is present for the first 15 to 30 minutes. The commenters
identified this as a potential technical error and recommended that CMS
update the PC/TC indicator for CPT code 38228 from a ``5'' to a ``0''
to appropriately capture the nature of the service and to align it with
other similar services such as CPT codes 38240 and 38242.
Response: We appreciate the feedback from the commenters and, after
reviewing the subject, we agree that this appears to be an unintended
technical error. We are therefore finalizing a change in the PC/TC
indicator for CPT code 38228 from ``5'' to ``0'' for CY 2026.
Comment: A commenter stated that CMS may have inadvertently removed
RVUs associated with 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). The commenter recommended CMS to restore the
RVUs associated with CPT code 62287 as non-CMS patients receive the
procedure regularly, and many private payers benchmark their physician
fee schedules against Medicare.
Response: CPT code 62287 was listed in the RUC recommendations as
being scheduled for deletion by the CPT Editorial Panel starting in CY
2026 due to low utilization. However, as identified by the commenter,
the CPT Editorial Panel later removed CPT code 62287 from the deletion
list and instead revised its descriptor. We will update our ratesetting
files accordingly to indicate that CPT code 62287 will remain in active
use for CY 2026.
Comment: A commenter stated that CMS revised the Medically Unlikely
Edit (MUE) for HCPCS code G0465 from ``1'' to ``2'' in April 2025,
acknowledging that when multiple blood-derived wound care treatments
are needed in one session, the administration, dressing, phlebotomy
centrifugation, mixing, etc. must be performed multiple times, and
multiple treatment kits are required. The commenter stated that HCPCS
code G0465 is subject to a Multiple Procedure (MPPR) indicator of ``2''
under which payment is generally based on the 100 percent of the
highest valued procedure and 50 percent of the fee schedule amount for
the remaining billed procedures. The commenter stated that this
indicator is designed to reflect efficiencies that typically occur in
either the PE or professional work or both when services are furnished
together, however this rationale was not supported for HCPCS code G0465
since over 90 percent of the valuation for the code is based on PE,
which is in turn almost wholly based on the cost for the blood-derived
wound care treatment kits used in the procedure. The commenter
recommended CMS to remove the MPPR by changing the Multiple Procedure
indicator from ``2'' to ``0'', which would align payment with the
corresponding change in the MUE and reflect the clinical resources
necessary to provide care using blood-derived wound care treatments.
Response: We appreciate the additional information supplied by the
commenter, however we continue to believe that HCPCS code G0465 has
been appropriately assigned a Multiple Procedure indicator of ``2''.
HCPCS code G0465 is not unique in having approximately 90 percent of
its valuation based in PE, and there are several dozen other such codes
which follow this pattern while also having a Multiple Procedure
indicator of ``2'' (such as CPT codes 19105, 27278, 33285, 47538,
55874, and HCPCS codes 0446T and 0448T). If the commenter has reason to
believe that HCPCS code G0465 is potentially misvalued, we encourage
them to consider once again formally nominating the procedure under the
misvalued code process.
Comment: Several commenters stated that CPT codes 76017, 76018, and
76019 were recommended by both the CPT Editorial Panel and the RUC to
be modifier -51 exempt. The commenters stated that to be consistent
with other modifier -51 exempt codes, the multiple procedure indicator
(MPPR) for these codes should be updated to ``0'' while the diagnostic
imaging family indicator should be updated to ``99''.
Response: We continue to believe that the indicators are
appropriately assigned for CPT codes 76017, 76018, and 76019, which
currently have a value of ``4'' for the MPPR indicator and ``88'' for
the diagnostic imaging family
[[Page 49286]]
indicator. The indicators for these codes were based on CPT codes 74183
and 75557, similar magnetic resonance imaging procedures that the RUC
recommended as source codes in the utilization crosswalk. The current
indicators for CPT codes 76017, 76018, and 76019 represent the standard
assignments for MR procedures, and as such we are not finalizing any
changes to these codes.
After consideration of the public comments, we are finalizing these
technical corrections as proposed along with the modifications noted
above in response to comments.
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 rule, 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 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 PFS
through 2014 PFS final rules (75 FR 73178 through 73179; 76 FR 73033
through 73034; 77 FR 98892; 78 FR 74272 through 74276).
In the CY 2011 PFS proposed rule, we requested comments on the
methodology for calculating indirect PE RVUs, explicitly seeking input
on using survey data, allocation methods, and potential improvements
(75 FR 40050). In our CY 2011 PFS final rule, we addressed comments
regarding the methodology for indirect PE calculations, focusing on
using survey data, allocation methods, and potential improvements (75
FR 73178 through 73179). We recognized some limitations of the current
PFS ratesetting methodology but maintained that the approach was the
most appropriate at the time. In the CY 2012 PFS final rule, we
responded to comments related to indirect PE methodology, including
concerns about allocating indirect PE to specific services and using
the AMA PPIS data for certain specialties (76 FR 73033 through 73034).
We indicated that CMS would continue to review and refine the
methodology and work with interested parties to address their concerns.
In the CY PFS 2014 final rule, we responded to comments about fully
implementing the AMA PPIS data. By 2014, the AMA PPIS data had been
fully integrated into the PFS, serving as the primary source for
determining indirect PE inputs (78 FR 74235). We continued to review
data and the PE methodology annually, considering interested party
feedback and evaluating the need for updates or refinements to ensure
the accuracy and relevance of PE RVUs (79 FR 67548). In the years
following the full implementation of the AMA PPIS data, we further
engaged with interested parties, thought leaders and subject matter
experts to improve our PE inputs' accuracy and reliability. For further
background, we refer readers to our discussions in final rules for CY
2016 PFS 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
[[Page 49287]]
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 PFS 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 PFS 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 stated 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 PFS 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 PFS and CY
2024 PFS 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 to work to improve the stability and
predictability of any future updates. Specifically, we 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' 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. The commenters recommended CMS
to collaborate closely with medical associations and incorporate broad
interested parties 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
[[Page 49288]]
payment under the PFS. We will continue to study possible alternatives
and have included analysis of the updated PPI and CPI Survey data in
the proposed rule, as part of our ongoing work.
As previously stated in this section and discussed in sections
II.N. and VI. of the proposed rule, we acknowledge that, at the time of
publication of the proposed rule, the AMA concluded their data
collection efforts and 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 previously in this section. 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.
---------------------------------------------------------------------------
\1\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf.
---------------------------------------------------------------------------
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 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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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 the 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
[[Page 49289]]
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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
\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 the 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 interested parties may concur with this statement 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 stated 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.
[[Page 49290]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.007
At the time of the publication of CY 2026 PFS proposed rule (90 FR
32593 through 32597), 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
earlier 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 proposed not to
implement the PE/HR data or cost shares from the AMA's survey data at
this time, and proposed instead to maintain the current PE/HR data and
cost shares for CY 2026 PFS (90 FR 32593) ratesetting. At the same
time, we remain focused on proposals that reflect evolutions in
practice, including the site of service payment differential discussed
later in this section, 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters opposed CMS' decision to continue using
18-year-old survey data from 2007, stating that it no longer reflects
current healthcare practice costs. Additionally,
[[Page 49291]]
many commenters expressed concern about CMS' proposal to delay
implementation of the PPI Survey data for CY 2026, emphasizing that
reliance on outdated data undermines CMS' stated goal of improving
payment accuracy and ignores the reality that the healthcare system has
fundamentally changed over the past two decades.
The commenters highlighted significant methodological improvements
in the 2024 survey that make it superior to the 2007 approach.
Commenters stated that the 2024 PPI Survey represented a fundamental
shift from individual physician-level data collection to practice-level
data collection, encompassing 18,086 physicians across 831 departments
in 380 practices compared to the original 2,795 individual physicians
surveyed in 2007. Commenters stated that this change emphasized
practice attributes such as size, ownership, and care delivery settings
rather than individual physician characteristics, reflecting the
evolution of healthcare delivery models. Commenters stated that the
survey implemented several improvements including better representation
through sampling focused on practice characteristics that correlate
with practice expense per hour, more sophisticated imputation
techniques to address missing data, and the ability to analyze
department-level data by specialty.
The commenters recommended that the practice-level approach
provides a more accurate representation of modern healthcare delivery.
They stated that the survey addressed methodological biases present in
the 2007 data, where MEI shares were skewed toward practices with
higher expense levels, and provided data for all physicians rather than
just those reporting expenses at the individual level. Many commenters
emphasized that continuing to use 18-year-old data systematically
undervalues current practice costs while ignoring significant changes
in healthcare infrastructure, including substantial new information
technology expenses.
Addressing response rates, a commenter stated that approach used to
calculate the 7 percent response rate ``was equivalent to the American
Association of Public Opinion Research (AAPOR) standard response rate
calculation'' as it relates to whether delivered but unopened email
invitations should be included in the denominator of the response
rates. A commenter stated that non-reporting of specific data requested
by the PPI Survey ``indicates that practices often do not organize
their financial data in a way that easily translates to the methodology
underlying the physician payment schedule.'' We agree with this point
and believe that this indicates that it may be necessary to implement a
change in the PFS ratesetting so that it only requires input that can
be measured reliably.
The commenters suggested that there was concrete evidence
demonstrating substantial cost changes over time. They emphasized that
the 2024 survey revealed important cost trends, with overall direct
practice expense per hour increasing by almost 40 percent from 2007
while indirect expenses only increased by 5 percent, providing valuable
insights into specific expense category changes that reflect the
reality of contemporary medical practice and justify the need for
updated payment methodologies. A commenter requested that CMS convene
listening sessions to validate and incorporate the 2024 PPI data and
ensure the methodology is fully vetted, transparent, and reflective of
real-world practice.
Several commenters supported CMS' cautious approach, with some
expressing concerns about inappropriate specialty grouping that
combined unrelated specialties in a category called ``Office Based
Proceduralists'' despite having no meaningful correlation in practice
economics. A commenter stated that the payment rates resulting from the
use of this combined category would be ``disastrous for practices'
financial sustainability and patient access to care'' and expressed
appreciation for CMS' decision to maintain current data while working
toward better methodological approaches. A commenter requested that CMS
phase in any future implementation of revisions to the practice expense
methodology or inputs.
Response: Regardless of how many physicians are members of the
responding practices, the new PE/HR estimates and standard errors are
compatible with a wide range of true underlying PE/HR measures.
According to our calculations, the survey data cannot rule out PE/HR
values that would imply a range of at least 10 percentage points of
specialty-level impacts for 22 of 56 specialties, when measured through
95 percent confidence intervals. While we agree that the purpose of new
data is not to test changes in underlying PE/HR measures, utilizing the
PPI data would mean, in some cases, changing a specialty's total PFS
payments by 10 percentage points or more based on data that cannot rule
out PE/HR values consistent with no underlying change.
These assessments of sampling variation all assume no selection
bias or measurement error. While we agree that the survey design itself
is an improvement over the 2007 PPI Survey in terms of weighting for
practice characteristics, we believe there still is substantial risk of
measurement error. As an example, physician headcounts were the one
survey data element that could be externally validated, and it appears
to be the case that those data were substantially misreported. In its
report to the RUC, Mathematica indicates that ``the total number of
physicians was estimated to be 2,056,784, nearly three times larger
than the total number of physicians from the two sample frames, which
was 693,502.'' \7\ The inaccuracy in the data of the one survey element
that could be externally validated raises concerns about the quality of
data elements that cannot be externally validated.
---------------------------------------------------------------------------
\7\ https://www.ama-assn.org/system/files/ppi-survey-methods-report.pdf, page 37.
---------------------------------------------------------------------------
Regarding the AAPOR response rate, we note that AAPOR publishes six
definitions for the response rate. The version that the commenters
reference as the ``most-common AAPOR response rate'' uses an estimate
of the proportion of unknown eligibility cases that would, in fact, be
eligible. The assumption by the RUC and its contractor, Mathematica,
that none of the emails that were delivered but left unopened were for
eligible practices results in an ``upper bound'' response rate, not the
``most common'' rate. Nonetheless, our primary concern is with the
total number of responses that the data collection effort produced.
Against a planned 3,188 responses, only 380 were obtained. This low
survey yield means that even after grouping many specialties together,
the estimates are still highly exposed to sampling variation.
Regarding the perceived biases of the 2007 methodology toward the
expense allocation of practices with higher levels of expenses (even if
they had the same number of physicians who worked the same number of
hours as in practices with lower levels of expenses), we note that, as.
it relates to the PFS, the MEI is used to establish the size of the
pools of work, PE, and MP. Because specialties that have higher expense
levels also receive a larger share of total PFS payments, data from
high-expense specialties should have greater influence on the pools
than data from low-expense specialties, when measured on a per-
physician basis. In summary, the MEI should produce a sensible split of
total PFS dollars
[[Page 49292]]
between work, MP, and MP. This is done by aggregating total expenses
across practices, not by averaging shares at the physician level.
After consideration of the comments we received, we are finalizing
our proposal not to implement the PE/HR data or cost shares from the
AMA's survey data at this time, and to maintain the current PE/HR data
and cost shares for CY 2026 PFS ratesetting. We remain interested in
further information that could help inform updates to the PE/HR data or
cost shares through future rulemaking.
c. Updates To Practice Expense (PE) Methodology--Site of Service
Payment Differential
While we proposed not to incorporate the PPI and CPI Survey data
into PFS ratesetting for CY 2026, we proposed a significant refinement
to our PE methodology to better reflect trends in physician practice
settings. As detailed previously in the description of the practice
expense methodology, many services have a site of service payment
differential between the facility (F) and non-facility (NF) settings
under the PFS. Services furnished in the non-facility 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.\8\ 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.\9\ In their June 2025 Report to
Congress,\10\ 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.
---------------------------------------------------------------------------
\8\ 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.
\9\ Kane CK. Physician Practice Characteristics in 2024: Private
Practices Account for Less Than Half of Physicians in Most
Specialties. American Medical Association.
\10\ 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.
---------------------------------------------------------------------------
We note that, in the AMA's comment letter on the CY 2023 PFS
proposed rule,\11\ 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''.\12\ 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 non-facility 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 non-facility. Within the PFS relative value
system, any overstatement of practice expenses in the facility setting
would affect the allocation of indirect costs in the non-facility
setting. This dynamic, in which relative resources involved in
furnishing PFS services may not be adequately reflected in facility and
non-facility 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.13 14 15 This could result in unnecessary costs for
payers and beneficiaries, and obstacles to physicians and other
professionals operating independent practices.
---------------------------------------------------------------------------
\11\ https://downloads.regulations.gov/CMS-2023-0121-2694/attachment_1.pdf.
\12\ 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.
\13\ https://pmc.ncbi.nlm.nih.gov/articles/PMC4191490/
#:~:text=Using%20generally%20accepted%20accounting%20practices,to%20m
ore%20intense%20resource%20use.
\14\ https://healthcostinstitute.org/hcci-originals-dropdown/all-hcci-reports/shifting-care-office-to-outpatient.
\15\ https://www.bcbs.com/dA/392da3b5a7/fileAsset/BHI%20Issue%20Brief%20December_121323_SiteNeutral.pdf.
---------------------------------------------------------------------------
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 non-facility setting may no longer reflect
contemporary physician practice trends. As we noted in the proposed
rule, data suggests that fewer than half
[[Page 49293]]
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 proposed to reduce the portion of the
facility PE RVUs allocated based on work RVUs to half the amount
allocated to non-facility PE RVUs beginning in CY 2026. This change
will 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 change to the methodology, where we will reduce the
portion of the facility PE RVUs allocated based on work RVUs to half
the amount allocated to non-facility PE RVUs, CPT code 33533 would have
approximately 7.2 indirect PE RVUs.
We noted in the proposed rule that this 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 non-facility settings. We compare this 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 in the proposed rule, 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 earlier 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 sought 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 also sought 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 non-facility PE RVUs
is an appropriate reduction or whether we should consider a different
percentage reduction for CY 2026 or in future years. While our 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 solicited 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 update will 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 the proposed rule for discussion of the
impacts of this proposal on CY 2026 PFS ratesetting.
We specifically solicited comments on whether and how this 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 non-facility setting, we also
solicited comment on whether we should include these services in our
policy to reduce the allocation of PE based on work in the facility
setting.
We requested comments on all aspects of this proposal, including
ways to improve the allocation of facility and non-facility PE RVUs in
the future. We also solicited 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).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Some commenters strongly supported CMS' proposal. These
supporters indicated that the proposed change increases the accuracy of
the PFS and/or advances site-neutral payments. These commenters
applauded CMS' efforts to align payments between sites of care, stating
that payment differentials by site of care increase costs without
accompanying quality improvements. The commenters also noted that
overall pay differences between hospital outpatient departments and
physician offices for the same services put independent practices at a
competitive disadvantage. Some commenters suggested that CMS should
reduce the allocation further, allocating only one third of the
indirect PE from the work RVU in developing PE RVUs, given that only
35.4 percent of physicians own their own practice.
Response: We appreciate these comments on the proposal. We agree
that updating these assumptions will improve the accuracy of the RVUs
assigned to different settings of care. We also recognize that reducing
unnecessary or unwarranted payment differences across settings of care
would likely have significant benefits in leveling the playing field.
We appreciate commenters' interest in reducing the allocation of
indirect PE RVUs beyond the proposal for the reasons the commenter
suggested. We note that we will continue to seek and be open to
information regarding how to refine the allocation methodologies in
future notice and comment rulemaking.
Comment: Several commenters opposed the proposal. Some of these
commenters stated that the proposal lacks face validity and is based on
arbitrary assumptions rather than empirical data. The commenters stated
that CMS should explore more sophisticated methodologies, grounded in
actual cost data and reflecting real-world complexity of physician
practice arrangements, rather than implementing the proposed blanket
reduction approach that relies on broad generalizations. Many
commenters requested that if CMS does implement this proposal, it
allocates 75 percent of the indirect PE based on the work RVUs, and/or
that the proposal be phased in over 3 to 4 years. Some of these
commenters noted that PE changes of similar magnitude have historically
been implemented over several years, such as clinical labor pricing
adjustments and supply/package corrections. A commenter stated that
[[Page 49294]]
CMS declined to adopt the 2024 AMA PPI survey data due to
representativeness concerns yet simultaneously proposed sweeping
methodological changes that also haven't been validated. Multiple
commenters stated that CMS should not finalize this provision without
conducting comprehensive additional data analysis to understand the
full implications of the proposed changes.
Response: We appreciate these commenters and their concerns. We
acknowledge that the proposal recognizes a change in the underlying
assumptions that are made in the PE methodology based on broad changes
in the marketplace that have occurred in the three decades since the
methodology was originally established. The underlying assumptions in
the methodology, both the status quo that assumes no variation
whatsoever in indirect costs per work RVU between settings of care and
under the proposal that would allocate half the amount of indirect
costs, are not driven by precise numbers, and the proposed change will
better recognize the relative resources involved in furnishing services
paid under the PFS in facility and non-facility settings. We are also
eager to consider more precise data to help refine the allocation
methodologies for future rulemaking, should such data become available.
We also recognize that we have historically phased in some significant
changes in PE data and methodology over several years. However, in the
case of this proposed change, we note that we consider our proposal
itself to be a tempered one, considering (as other commenters have
noted) that significantly fewer than 50 percent of practitioners own
their own practice. Furthermore, while a multi-year transition would
mean mitigating reductions for facility services, it would also reduce
the increases in payment that would otherwise be made for non-facility
services. Such a phase-in would perpetuate the overall site of service
payment disparities that have clearly contributed to significant
distortions in the market where the difference between overall payment
for services in facility settings compared to non-facility settings
continues to grow.
Comment: Some commenters raised concerns about disproportionate
impacts on providers in rural and underserved areas, stating that these
providers already face significant challenges in providing specialized
care to vulnerable Medicare populations. Other commenters specifically
noted that the proposal would improve access, particularly in rural
areas, where maintaining independent practices is often the only way
patients can access timely treatment. A commenter stated that the lack
of comprehensive impact analysis on different geographic regions,
practice types, and patient populations represents a significant
oversight that could lead to unintended access problems and practice
closures in areas where healthcare resources are already scarce.
Response: We share commenters' interest in the care of
beneficiaries in rural and underserved areas. We believe that updating
the assumptions that underly the methodology will result in more
accurate valuation across settings and agree with commenters that
improved valuation that better recognizes the costs of care in non-
facility settings will be beneficial to many of those that practice in
rural communities. We acknowledge that facility-based care can also be
an important part of care in rural and underserved communities, and we
note CMS' efforts to mitigate risks for rural providers in the context
of the OPPS and related policies. For these reasons we remain
interested in understanding the impact of PFS payment on both rural
providers and physicians and other practitioners. We believe that on
balance, this policy will support independent practices, including in
rural areas, and that for these practices, it may be all the more
urgent that we update the assumptions embedded in the PE methodology to
better reflect current practice. We did not receive comments addressing
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. While we received comments
suggesting that we should allow a higher percentage for indirect PE
allocation based on work RVUs, such as 75 percent, commenters did not
provide a justification for this figure. In contrast, commenters that
suggested that CMS only allocate one third of the indirect PE
allocation based on work RVUs in the facility setting stated that this
was justified given that 35.4 percent of physicians own their own
practice. As stated in the CY 2026 PFS proposed rule (90 FR 32593), we
believe that 50 percent is a conservative estimate of the actual
indirect practice expense that should be allocated based on the work
RVU. Several commenters acknowledged that they did not have any
evidence suggesting that the 50 percent reduction is inaccurate. We
note that we, as well as interested parties such as MedPAC, have long
been concerned about the allocation of indirect PE in the facility
setting given our imperative to establish RVUs that reflect the
relative resources involved in furnishing services, and have been
developing policy approaches to address this issue for several years.
We carefully considered analyses done over several years by MedPAC and
RAND and believe this proposal is a relatively measured step toward
addressing the overstatement of indirect costs incurred by facility-
based physicians.
Comment: Several commenters stated that CMS' fundamental
assumptions regarding employed physician costs are disconnected from
the reality of modern healthcare practice arrangements. These
commenters stated that despite the documented trend toward declining
private practice ownership and increasing physician employment by
larger health systems, the assumption that employed physicians do not
incur significant administrative and overhead costs is incorrect. The
commenters stated that physicians providing care in facility settings
continue to face substantial indirect costs including coding, billing,
scheduling, and administrative overhead, regardless of their employment
status. The commenters stated that the AMA's PPI survey data provides a
concrete quantification of these costs, with estimates of indirect
costs of $57 per hour for hospital-based medicine and $62 per hour for
hospital-based surgery. The commenters stated that many hospital-
employed physicians operate under arrangements where practice expense
costs are charged back to their departments, including rent or leasing
space based on square footage used, staffing costs, billing
infrastructure, and administrative support. Another commenter noted
that some independent medical groups have professional service
contracts with hospitals, rather than employment arrangements. The
commenters stated that the proposed flat 50 percent reduction to the
work RVU allocator fails to account for these varied arrangements and
represents an oversimplified approach to a complex issue. The
commenters requested that CMS focus on collecting up-to-date
information on the true cost of practicing in facility vs. non-facility
settings before assuming differences warrant a 50 percent reduction.
Response: We appreciate these comments, and we acknowledge that
practice arrangements vary significantly in current practice. Again, we
remain open to more specific data that addresses the variability, as
well as
[[Page 49295]]
feedback on how to update the valuation and payment methodologies to
better reflect the relative resources involved in furnishing the
services. In the meantime, we continue to believe the underlying
assumptions within the methodology should be reasonably grounded in the
best information available. We agree with commenters that physicians
generally incur indirect costs in the facility setting, and that is why
we retained allocating significant amounts of indirect PE RVUs per work
RVUs in the facility setting. As some commenters pointed out, in many
cases the proposed allocation may still overestimate indirect costs.
Under the current methodology, there are only two sites of service
where PE RVUs vary (nonfacility and facility). . We believe that the
proposed policy more accurately reflects indirect PE in the facility
setting compared with the previous assumption that the indirect costs
are relatively equal. With respect to comments about the PPI survey
data, as detailed in section II.B of this final rule, we are concerned
that given the low response rate of the PPI survey data, the indirect
cost estimates are not an accurate reflection of the typical indirect
PE costs faced by physicians who furnish most of their services in the
facility setting.
Comment: A commenter stated that CPT codes with bundled post-
operative visits often have follow-up visits performed in a physician
office even when surgery is performed in facility settings, and that
the proposal does not account for these indirect PEs. The commenter
also noted that CMS includes direct PE inputs for several thousand
services valued in the facility setting, and these direct costs
correlate with indirect costs, stating that the presence of these
direct costs indicate that indirect PEs are incurred for services
furnished in the facility setting.
Response: We did not propose to change the allocation of indirect
costs based on direct costs in the facility setting. Instead we
proposed that beginning in CY 2026 we would combine the direct PE
inputs with 50 percent of the work RVU, and we believe this provides a
reasonable basis on which to allocate the indirect PE for services
furnished in the facility, including those that have postoperative
visits that occur in the non-facility setting. We also note that we
retain interest in developing improved approaches to valuing and paying
for care furnished during global surgery periods, and we are
particularly interested in how to best address the lack of site of
service differential for post-operative visits under the current
construct.
Comment: Some commenters stated that the proposed reductions
threaten medical education infrastructure critical to addressing
physician shortages. The commenters indicated that many primary care
residencies, physician assistant programs, nursing education programs,
and behavioral health training sites operate in facility-affiliated
clinics and depend on current payment structures for financial
viability. The commenters expressed concern that given existing primary
care and behavioral health workforce shortages, the policy could lead
to program closures, reduced training capacity, and fewer healthcare
providers serving Medicare beneficiaries.
Response: We appreciate the concerns from commenters regarding
health care infrastructure costs. As a general matter, we believe that
the PE RVUs under the PFS are required to reflect the costs incurred by
physician and professional practices, not by larger institutions.
Comment: Several commenters recommended CMS consider exemptions for
particular services, such as for:
Services provided by training programs, to preserve the
educational mission while still achieving the policy's intended goals.
Specific behavioral health codes, which are critical for
developmental, neuropsychological, and chronic illness management.
Rural physicians who split time between office and
facility settings.
Retinal specialists requested an exception given that 76
percent of retinal specialists are in private practice.
Hospital inpatient and observation services (CPT codes
99221-99239) and nursing facility E/M services (CPT codes 99304-99316).
Commenters specifically noted the unexpected payment differential
between E/M services provided to patients in skilled nursing facility
(which is a facility setting under the PFS) versus nursing facility
(which is a nonfacility setting under the PFS) stays.
Response: We acknowledge the comments requesting exemptions for
specific services or providers. While we have reviewed these requests,
we are not persuaded that there are exceptions to be implemented that
are consistent with the assignment of PE RVUs that reflect the relative
resources involved in furnishing the services. However, we are
interested in objective data that would help us understand and improve
how indirect PE is allocated across settings of care, both in general
and for specific kinds of services. We would consider such information
in future rulemaking.
Comment: A commenter supported our proposal as a broad-based
improvement but also suggested that we work toward a more precise
process for adjusting valuations and payments over time. Some
commenters suggested policy alternatives, such as:
Utilizing targeted adjustments, such as a facility-based
physician modifier or separate reimbursement formulas for independent
physicians.
Eliminating indirect PE allocations for facility-based ZZZ
add-on codes, as these services would not require any additional
practice expense allocation beyond what is already captured in the base
procedure codes.
Establishing minimum indirect allocation thresholds for
codes, with requirements for detailed justification when amounts exceed
these minimums.
Considering the specific characteristics of different
procedure types, the actual resource utilization patterns, and the
varying practice arrangements under which these services are provided.
This could include developing separate allocation methodologies for
different categories of services, implementing minimum thresholds below
which indirect PE allocation would not apply, or creating specialty-
specific adjustments that better reflect the actual cost structures
within different medical disciplines.
Response: We appreciate the commenters' suggestions for policy
alternatives and are particularly interested in interested parties'
input regarding a facility-based physician modifier. We note that this
proposal supports our goals toward site neutrality and that we will
continue to consider other approaches that would further those goals.
As such, we may consider these suggestions in future rulemaking.
Comment: A commenter recommended that services billed with the 26
modifier should be exempt from the proposed reduction, as these
services incur similar indirect costs across both facility and non-
facility settings.
Response: At this time, services billed with the 26 modifier are
not impacted by the proposed change in the allocation of indirect PE in
the facility setting Our longstanding approach has been to value
services billed with the 26 modifier the same in the facility and
nonfacility setting, and we did not propose a change to this aspect of
our methodology... We could consider how this change might apply to
them in future rulemaking.
Comment: Several commenters recommended that CMS not apply the
[[Page 49296]]
proposed policy to codes with MMM global periods to avoid negatively
impacting access to maternity care services.
Response: We agree with commenters that, for the reasons indicated
in the CY 2026 PFS proposed rule (90 FR 32593), the indirect PE
reduction should not apply to codes with MMM global periods, and
therefore, we are finalizing excluding codes with MMM global periods
from this adjustment.
Comment: Some commenters stated that this proposal would create
substantial financial disruption across multiple medical specialties.
The commenters indicated that these impacts extend beyond individual
physician income to broader healthcare system effects, including
financial harm to independent physicians while simultaneously promoting
higher-cost, hospital-based service utilization across the United
States healthcare system. The commenters stated that this proposal
would create a perverse incentive structure that contradicts CMS'
stated goals of supporting independent practice and controlling
healthcare costs. The commenters suggested that the policy risks
accelerating physician employment by hospitals and health systems,
leading to increased utilization of hospital-based services that carry
higher facility fees and overall costs to the Medicare program. Other
commenters stated that the proposal supports small, independent
practices and mitigates hospital-driven cost escalation.
Response: We agree with the commenters who stated that the proposal
would be expected to mitigate hospital-driven cost escalation, and that
this proposal will incentivize utilization in the most appropriate
setting. Reducing overvaluation of physician services furnished in the
facility would be expected to reduce incentives to furnish these
services in the facility setting due to the higher payment in that
setting. Similarly, the increased valuation for services furnished in
the nonfacility setting would be expected to enable independent
practitioners to maintain their practices, rather than to facilitate
the acceleration of physician employment as the commenter suggests. We
note that the payment rates to hospitals under the OPPS are outside the
scope of PFS rulemaking and are not impacted by this proposal. We will
continue to explore site neutral payment policies in future rulemaking.
We appreciate commenters' perspectives regarding the complexity of
financial relationships between hospitals and physician practices and,
for those reasons among others, intend to continue to consider
appropriate refinements in future rulemaking. However, we believe
finalizing this policy represents a significant improvement in the
accuracy of payment for physician services furnished in the facility
setting overall.
Comment: Several commenters stated that the proposal fails to
account for the reality that many procedures cannot be safely performed
in office settings and that patient safety considerations, rather than
financial incentives, should drive site-of-service decisions.
Commenters stated that as currently written, the rule could
significantly reduce payments for services performed in Ambulatory
Surgery Centers (ASCs), most of which are owned and operated by
independent physicians and often function as extensions of physicians'
offices.
Response: We agree with the commenters that patient safety
considerations, rather than financial incentives resulting from
inaccurate valuation, should drive site-of-service decisions. We
believe that this proposal will avoid incentivizing site-of-service
decisions based solely on financial incentives. The statements
regarding ASC ownership by physicians support our understanding that
there are duplicative payments being made to the same entity for many
services furnished in the facility setting.
Comment: Several commenters emphasized that the main driver of
site-of-service payment differentials has been the lack of inflationary
updates to physician payment, unlike facility payment schedules.
Multiple commenters noted that hospitals receive routine market basket
updates while Medicare PFS updates have been far below inflation,
making this a structural problem that PE methodology changes alone
cannot resolve.
Response: We appreciate these comments and acknowledge that
differential payment updates can play a significant role in evolving
disparities in payment across settings of care. This proposal is not
intended to address those disparities in whole. Instead, this policy
would help offset the portion of the payment disparity that is driven
by outdated and inaccurate assumptions that drive the way indirect PE
RVUs are allocated by setting of care.
After consideration of the comments we received, we are finalizing
our proposal to reduce the portion of the facility PE RVUs allocated
based on work RVUs to half the amount allocated to non-facility PE RVUs
beginning in CY 2026.
d. Use of OPPS Data for PFS Ratesetting
For several kinds of PFS services, we proposed to deviate from the
use of the AMA survey data, and instead utilize data from auditable,
routinely updated hospital data to set either 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 the 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 the final rule for specific skin
substitutes. Although we proposed different methodologies for use of
OPPS data based on service type, we solicited comments 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.
We appreciate commenters' feedback on the use of OPPS data for PFS
ratesetting and refer readers to sections II.E.25 and II.E.32 of this
final rule for comment summaries and responses related to the proposals
for radiation treatment delivery and superficial radiation therapy
services and remote monitoring services respectively, and section II.K.
of this final rule for comment summaries and responses related to the
proposals for skin substitutes.
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
[[Page 49297]]
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 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 sought 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 the
proposed rule, many PFS services have a site of service payment
differential between the facility and non-facility settings under the
PFS. Services furnished in the non-facility 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 proposed a change in our PE RVU methodology to better recognize
variations in indirect costs between facility and non-facility settings
of care in section II.B. of the proposed 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 non-facility
settings of care. We requested 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.
We received public comments on this comment solicitation. We
appreciate the commenters for their comments. After consideration of
public comments, we will take the comments into consideration for
possible future rulemaking.
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 the 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
[[Page 49298]]
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 recent available data,
we assessed the results of physician surveys and specialty
recommendations submitted to us by the RUC for our review. We also
consider information provided by other interested parties such as from
the general medical-related community and the public. We conduct a
review to assess the appropriate RVUs in the context of contemporary
medical practice. We note that section 1848(c)(2)(A)(ii) of the Act
authorizes the use of extrapolation and other techniques to determine
the RVUs for physicians' services for which specific data are not
available and requires us to take into account the results of
consultations with organizations representing physicians who provide
the services. In accordance with section 1848(c) of the Act, we
determine and make appropriate adjustments to the RVUs.
In its March 2006 Report to the Congress (https://www.medpac.gov/document/report-to-the-congress-2006-medicare-payment-policy/), MedPAC
discussed the importance of appropriately valuing physicians' services,
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 emailbox at
[email protected], with the phrase ``Potentially
Misvalued Codes'' and the 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.''
[[Page 49299]]
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 5-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'' \16\). 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, low intensity codes. In the
fourth 5-Year Review of Work RVUs published in a separate notice (76 FR
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.
---------------------------------------------------------------------------
\16\ 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 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 12 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.
[[Page 49300]]
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 was 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 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 (for example, 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
proposed not to nominate these codes as potentially misvalued, we
requested public comments and recommendations, including those from the
RUC, to better understand these codes, particularly regarding typical
direct PE inputs and work values.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that the current PE inputs for
the maxillofacial prosthodontic codes are outdated and undervalued.
They emphasized that the codes have not been reviewed since 1995 and
stated that the technology and materials used to fabricate
maxillofacial prostheses have changed dramatically in the last 30
years. They stated that many of the supplies and equipment now required
are not reflected in the existing PE inputs, leading to undervaluation.
A commenter stated that if CMS declines to adopt their submitted
recommendations for direct PE inputs, they request that CMS at least
designate the codes as misvalued and refer them to the RUC for a full
review of both work and practice expenses. They also noted that
maxillofacial prosthodontists currently lack representation on the RUC,
which further underscores the need for CMS to step in to ensure proper
valuation.
Another commenter supported updating CPT code 21085, which is
commonly performed by oral and maxillofacial surgeons in conjunction
with orthognathic procedures and endorsed the nominator's PE
recommendations, noting that the submission was developed in alignment
with the RUC's traditional PE format.
Some commenters further suggested that CMS address the practice
expense inputs, since the submission followed the RUC's standard format
and provided sufficient detail; however, another commenter encouraged
CMS to engage with specialty interested parties before initiating
revisions. Overall, the commenters emphasized that leaving these codes
unreviewed for more than 30 years has limited access to life-altering
prostheses, and that updated valuation is needed in the near future to
restore fair access to care given technological advances.
Response: Upon review of the interested parties' request for CPT
codes 21076 to 21087, we identified several concerns with the proposed
PE inputs. The proposed clinical staff times, such as patient greeting,
room preparation, and instruction review, exceed standard times without
explanation. We note high and potentially overlapping clinical staff
time requests. Additionally, many of the suggested new supply items may
not be typically
[[Page 49301]]
necessary for all head prosthetic codes. Although commenters removed
dental X-rays from the PE inputs, they recommended retaining most
previous equipment items, supplies, and times, even with the addition
of new supplies and equipment. Overall, these substantial resource
additions were submitted without supporting documentation and did not
include corresponding adjustments to physician work values, despite the
integration of advanced technologies that could impact physician work
and time. Furthermore, the absence of input from other relevant medical
specialties could undermine the completeness and reliability of these
PE recommendations.
Comment: The RUC noted that these services are very low volume--
some with fewer than 100 Medicare claims annually--and are offered at
only a limited number of centers, making them difficult to survey.
However, because they are critically important, the RUC is willing to
support valuation and direct PE inputs. They also noted that CMS could
rely on the detailed and properly formatted PE data already submitted
by the commenter.
Response: We appreciate the RUC for its feedback.
After consideration of the public comments and our concerns
associated with the practice expense inputs, we are finalizing our
proposal not to nominate these codes as potentially misvalued. We
reiterate that the RUC expressed willingness to review the valuation
and direct PE inputs for maxillofacial prosthetic services and we look
forward to reviewing their recommendations in the future.
(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 the 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, the 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,\17\ 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 that the
overall cost of venom therapy has increased substantially and submitted
invoices to support this statement.
---------------------------------------------------------------------------
\17\ https://college.acaai.org/wp-content/uploads/2021/01/Section-21-USP-Compounding-Allergenic-Extracts.pdf.
---------------------------------------------------------------------------
At that time, we did not propose the CPT codes submitted by the
nominator as potentially misvalued. CPT codes 95145 to 95149 are
typically billed in conjunction with CPT codes 95115 and 95117. We
noted 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 to 95149. While the PE
inputs that overlap between CPT codes 95145 to 95149 and 95115 and
95117 may contain the necessary elements, we sought feedback regarding
these overlapping PE inputs in relation to billing frequencies and the
possibility of duplicative payment. Specifically, we requested comments
on whether these inputs overlap and what potential adjustments should
be made to avoid duplicative payment. We requested 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 sought 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,
[[Page 49302]]
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 sought 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 sought 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 requested additional invoices
and comments regarding the methodology for calculating venom prices
using mixture invoices. We requested 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters agreed with CMS that CPT codes 95145 to
95149, which were last reviewed by the RUC in 2001, should be
reassessed to accurately reflect physician work and practice expenses.
They emphasized the need to update the PE inputs to align with current
USP 797 sterile compounding standards and avoid overlap with injection
codes 95115 and 95117. Commenters stated that payment for compounding
services (CPT codes 95145 to 95149) should remain separate from
injection services (CPT codes 95115 and 95117) because compounding
occurs before or after injection visits, while injection codes capture
injection-room resources and observation only. According to commenters,
these are distinct clinical activities that often occur on different
days, demonstrating that the payments for compounding activities and
injection services are not duplicative.
Commenters identified specific new tasks per compounding session
required under USP 797 section 21, including routine cleaning and
disinfection, hand hygiene and garbing, daily temperature logging, and
periodic environmental cleaning, and recommended adding new clinical
activity codes to reflect these requirements. They proposed specific
time allocations for these activities, such as 2 to 5 minutes for
cleaning, 5 to 8 minutes for garbing and hygiene, and 15 minutes per
surface category for periodic environmental cleaning, amortized per
surface category.
Regarding clinical activity times and supervision, commenters
provided CMS with information that a typical sterile compounding
session for new-patient venom build requires approximately 46 minutes
of direct activity, extending to up to 86 minutes when periodic tasks
are included, with about 20 minutes involving physician supervision
during pre-service review and sterile preparation. They recommended
scaling assumptions to add an extra 2 or 3 minutes per vial beyond the
standard three-vial setup to account for the additional complexity of
multi-vial builds.
Overall, commenters recommended that CMS refine the PE inputs for
the codes describing compounding services to reflect USP 797 and avoid
overlap with injection services. Since the direct PE inputs have not
been reviewed in over 20 years, commenters recommended updating the PE
inputs and clinical activity codes to capture USP-required cleaning/
disinfection, garbing, temperature logging, and periodic environmental
cleaning. Commenters also recommended establishing scalable time
assumptions tied to vial counts and dose complexity and further
recognizing 20 supervised minutes per routine compounding session.
Response: We appreciate commenters for their feedback and the
information submitted.
After consideration of public comments, we have concerns regarding
the specific requests made by commenters. Regarding clinical activity
time, we received multiple data sources such as USP 797 standards,
commenters' requested additions, and RUC standard times.
We are also unsure as to whether USP standards are required in
physician offices. Furthermore, because billing is done on a per-test
basis and multiple tests may typically be performed at the same time,
we are unclear on the typical times associated with the USP 797
standards per code (as opposed to per batch). At present, we do not
have sufficient information to translate the commenters'
recommendations into direct PE inputs, and welcome additional
information on the typical number of tests performed for these
procedures.
We invited the original nominator or other interested parties to
resubmit their nomination with information providing additional clarity
for consideration in future rulemaking. Therefore, for CY 2026, we are
finalizing our proposal not to nominate these codes as potentially
misvalued.
(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 (e.g., 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 (e.g., 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 (e.g., 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
[[Page 49303]]
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 stated that we appreciated the nominator sharing their survey
results from high-volume sleep specialists, which may indicate
potential inaccuracies in the direct PE inputs for CPT codes 95970,
95976, and 95977. However, our review of the submitted information
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 proposed not
to consider these codes as potentially misvalued. We did, however, seek
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
the proposed rule, under ``Identification and Review of Potential
Misvalued Services,'' particularly regarding changes in practice
expense inputs for service delivery.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters highlighted that CMS correctly observed that
neurologists remain the dominant billing practitioners for these codes,
despite the nominator's claims. They noted that while sleep medicine
physicians frequently manage patient selection, diagnostic evaluation,
and longitudinal care, the initial technical electronic analysis of the
device is not generally performed by the sleep medicine physician. They
thanked CMS for not designating the codes as potentially misvalued
based on incomplete evidence and reiterated that the RUC process
remains the appropriate and transparent way to evaluate whether
services are misvalued and update PE inputs accordingly.
Commenters supported ensuring that the PE inputs reflect current
medical practice but stressed that any changes must be based on a
transparent and rigorous survey process. They stated that the data
submitted by the nominator was incomplete and recommended that CMS
request and review detailed survey data referenced by the nominator to
assess whether the codes appropriately reflect the intensity,
expertise, and time and engage multiple specialty societies in future
deliberations to ensure code valuations reflect clinical practice
realities.
Response: After consideration of public comments, we do not believe
CPT codes 95970, 95976, and 95977 are potentially misvalued. We believe
that the current valuation of PE inputs is still appropriate and that
neurologists remain the dominant billing practitioner type; therefore,
for CY 2026, we are finalizing our proposal not to designate these
codes as potentially misvalued. However, we appreciate the comments and
encourage interested parties to submit information, such as detailed
survey data, for consideration in future rulemaking to ensure accurate
valuation.
(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
[[Page 49304]]
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.\18\
---------------------------------------------------------------------------
\18\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf.
---------------------------------------------------------------------------
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 the proposed rule, 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.
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 percent 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 the 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, a variable maintenance factor for equipment cost
per minute pricing was not proposed as we did not believe that we had
sufficient information at that present time. Therefore, we reminded
readers that we did 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
[[Page 49305]]
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 stated that we continue to disagree that CPT codes 96920,
96921, and 96922 are potentially misvalued. We noted 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).\19\ Additionally, there
have been numerous CPT Editorial Panel applications and actions since
the withdrawn application at the September 2022 meeting,\20\ including
a February 2025 action.\21\ However, at the time of drafting the
proposed rule, the request for expanded indications does not appear to
have been re-submitted or revisited by the specialty societies. We
sought 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 also sought
information regarding possible barriers to coding changes undertaken
through the CPT Editorial Panel process. We sought 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,\22\ 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.
---------------------------------------------------------------------------
\19\ https://www.ama-assn.org/system/files/ap-2023-ruc-meeting-minutes.pdf.
\20\ https://www.ama-assn.org/system/files/september-2022-cpt-summary-panel-actions.pdf.
\21\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf.
\22\ https://www.ama-assn.org/system/files/feb-2025-summary-of-panel-actions.pdf.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters noted the FDA approval of the excimer
laser for vitiligo, including its proven safety and effectiveness, and
patients' reliance on the laser if they cannot tolerate stronger
systemic medicines. At its May 2025 meeting, the CPT Editorial Panel
approved revisions to these code descriptors to include inflammatory
and autoimmune skin indications beyond psoriasis, with the updates
effective January 1, 2027 and the majority of commenters supported the
CPT Editorial Panel process and affirmed support for the RUC's
valuation of physician services.
Many commenters expressed support for establishing an interim G-
code for excimer laser treatment (CPT codes 96920, 96921, 96922) to
ensure immediate patient access while permanent CPT code revisions are
being developed which would sunset upon implementation of the revised
CPT code descriptors. Without a G-code, commenters noted that they are
forced to bill under the unlisted CPT code 96999, which creates an
administrative burden for prior authorizations and results in
inconsistent reimbursement. Other recommendations included reassessing
utilization and maintenance inputs to reflect real-world conditions and
adding essential equipment items omitted in practice expense
calculations. Commenters stated that by making excimer laser therapy
financially unsustainable for dermatology practices, CMS is
unintentionally pushing patients toward more aggressive and
significantly more expensive treatments, such as biologics.
Response: We appreciate the support for the CPT editorial panel's
revisions and look forward to reviewing them, and the subsequent RUC
recommended values when we receive them for the subsequent years'
rulemaking (for CY 2027, this would be by February 10, 2026). Although
we recognize that there may be a ``gap'' in specific coding for these
services for the period of time between when the CPT editorial panel
completes their revisions and CMS is able to finalize updated
valuation, as of the publication of this final rule, the code
descriptor changes referenced by the commenters has not been finalized
by CPT and creation of a G-code may only cause further confusion.
Regarding valuation of the existing CPT codes, commenters stated
that excimer laser therapy typically requires around 15 sessions
(depends on patient response to treatment), with a national average
(current) reimbursement of $136.83 to $182.76 per treatment, which
brings the total cost of excimer laser therapy to $2,000 to $2,750.
Other commenters stated that average excimer treatments per site amount
to roughly 10 to 30 minutes (6 to 12 treatments x 40 to 45 minutes per
treatment) per year. Some commenters recommended CMS adopt the RUC-
recommended work RVUs and that the proposed work RVUs (0.83, 0.90, and
1.15 respectively) grossly undervalue the intensity of excimer therapy,
which some commenters stated requires 40 to 60 minutes of precise
dosing, repositioning, and sparing healthy skin--often in patients with
multiple comorbidities. Several commenters stated that the RUC's
practice expense values ($80, $83, and $100 respectively) align with
the real costs incurred and that CMS' standard assumption of 50 percent
utilization is unrealistic.
Other commenters requested that CMS update the PE inputs for the
existing CPT codes to reinstate the costs of the consumable gas
cylinder (EQ154) and optical delivery system (EQ155) into the direct
practice expense (PE) inputs for CPT codes 96920 to 96922. They
recommended CMS incorporate EQ154 and EQ155 into a supply-based
reimbursement structure that is applied only when excimer laser systems
are used when furnishing these services. A few commenters noted that
excimer lasers are gas-based lasers that rely on a mixture of noble
gases, including high-purity neon, to generate precise, targeted
monochromatic ultraviolet (UVB) light at wavelength of 308 nanometers.
This specific wavelength is critically important for the effective
treatment of vitiligo, psoriasis, and other dermatological conditions
by targeting and suppressing the autoimmune response in affected skin
areas without the need for broad-spectrum light therapy.
Response: We appreciate the information provided by commenters
regarding the valuation of the existing CPT codes describing these
services. As these codes are likely to be reviewed by the RUC, and
recommendations provided for future rulemaking, we will not be making
any changes to the valuation at this time.
After consideration of public comments, for CY 2026, we are
finalizing our proposal not to nominate
[[Page 49306]]
CPT codes 96920, 92921, and 96922 as potentially misvalued.
(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.23 24 According to the nominator, one of the
Medicare Administrative Contractors who priced the service did not
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 stated 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.
---------------------------------------------------------------------------
\23\ Holekamp, Nancy M., et al. ``Prospective trial of Home OCT
guided management of treatment experienced nAMD patients.'' RETINA
(2022): 10-1097.
\24\ Heier, Jeffrey S., et al. ``Clinical Use of Home OCT Data
to Manage Neovascular Age-Related Macular Degeneration.'' Journal of
VitreoRetinal Diseases (2024): 24741264241302858.
---------------------------------------------------------------------------
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 did not propose CPT code 0605T as a potentially misvalued code.
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 welcomed 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported establishing a national payment
rate for remote OCT technology (CPT code 0605T) that reflects its
clinical value and operational costs. The commenters emphasized that
while CPT codes exist for remote OCT services, current payment rates
are inadequate and payment implementation has lagged, limiting patient
access to this innovative technology. Commenters stated that
neovascular age-related macular degeneration (nAMD) is highly prevalent
in the Medicare population and that remote OCT technology allows retina
specialists to monitor patients more frequently while reducing in-
person visits by 40 to 50 percent. They noted that this remote OCT
enables earlier detection of disease reactivation, timely as-needed
treatment, and prevention of irreversible vision loss, thereby
preserving patients' vision and quality of life.
Many commenters supported the invoice provided by the nominator
indicating a price of $40,000 for the purchase of the remote OCT device
and stated that the current rate of $47.77 provided by some MACs was
inaccurate. Commenters stated that $40,000 is a reasonable cost for the
innovative technology which incorporates high-resolution imaging, AI
analysis, and secure data systems. Another commenter stated they
submitted an invoice for an OCT system that costs $44,500. Commenters
stated that for this technology to be widely available, CMS should
recognize its value through an appropriate national price for the
technical component 0605T.
Some commenters highlighted that RPM is not the right comparator
for OCT. They stated that CPT code 99454 pays for monitoring
physiologic metrics like blood pressure or weight and for longitudinal
care-management time; they are not diagnostic imaging tests with
acquisition, interpretation, and report requirements, which are not
comparable to OCT based remote monitoring. They suggested that using a
cardiology service is a more likely comparator, for example mobile
cardiovascular telemetry (MCT) CPT code 93229 (technical support for
connection and patient instructions for use, attended surveillance,
analysis and transmission of daily and emergent data reports as
prescribed by a physician or other qualified health care professional).
CPT code 93229 describes a 30-day diagnostic monitoring episode with
remote attended surveillance center analysis and reporting, which
commenters suggest would be an operational match to OCT's remote
surveillance center model.
Response: We appreciate the feedback from commenters and for
highlighting that this innovative remote in-home OCT device can be
particularly beneficial for patients with nAMD. We agree that the
comparator RPM code, CPT code 99454, may not fully account for the
resources and expertise involved, or the OCT devices and/or systems as
described by CPT code 0605T and that the current payment is inadequate
to reflect the OCT device used to monitor nAMD in patients in the home
setting. After consideration of public comments, for CY 2026, we are
finalizing national pricing for CPT code 0605T for CY 2026. We agree
with commenters that CPT
[[Page 49307]]
code 93229 has similar resources costs, and therefore, we are
establishing inputs for CPT code 0605T using CPT code 93229 as a direct
crosswalk for valuation.
(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.\25\ 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.
---------------------------------------------------------------------------
\25\ 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 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 proposed that CMS collaborate with the Department of
Labor 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 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 did not believe that
we had enough information to evaluate whether CPT code 36514 is
potentially misvalued, and thus we did not propose the code as
potentially misvalued at this time. To assist us in further considering
whether CPT code 36514 is potentially misvalued, we sought information
on the direct practice expense inputs, particularly regarding the
clinical labor code L056A and equipment code EQ084. Specifically, we
sought comments on whether to establish a new therapeutic apheresis
nurse clinical labor code in the non-facility setting. Also, we sought
invoices and other associated information that could be used to update
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 disagreed 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).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported CMS's decision in the CY 2025
final rule to adopt the RUC-recommended direct practice expense
[[Page 49308]]
inputs for CPT code 36514 (therapeutic apheresis, plasma pheresis),
which utilizes the L056A (RN/oncology nurse) clinical labor category,
affirming and assuming that the code is appropriately valued. They
encouraged CMS to continue reviewing and updating these codes as
necessary.
Response: After consideration of public comments, we are finalizing
our proposal not to nominate this code as potentially misvalued.
(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.
Additionally, according to the nominator, the service delivery for
CPT code 93296 has evolved significantly, requiring enhanced
organizational infrastructure and specialized clinical expertise. They
stated that modern service delivery involves complex data management,
with each transmission requiring 32 distinct tasks \26\ 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.
---------------------------------------------------------------------------
\26\ Aileen M. Ferrick et al., 2023 HRS/EHRA/APHRS/LAHRS Expert
Consensus Statement on Practical Management of the Remote Device
Clinic (2023), https://www.hrsonline.org/guidance/clinical-resources/2023-hrsehraaphrslahrs-expert-consensus-statement-practical-management-remote-device-clinic?gad_source=1&gclid=Cj0KCQiAkoe9BhDYARIsAH85cDOusU-vRRcEnwoXzUmN2COkX0_DiRVHuOM8cYMf8riBNXW-KrFagnAaAs5NEALw_wcB.
---------------------------------------------------------------------------
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).
[GRAPHIC] [TIFF OMITTED] TR05NO25.008
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
[[Page 49309]]
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 proposed not to nominate this code as potentially
misvalued. We requested that the nominator submit a complete report
detailing the associated direct practice expense input assessment data
to enable us to more fully consider whether the code is potentially
misvalued. Additionally, we requested 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Numerous commenters suggested that CMS re-evaluate and
accurately value CPT code 93296, noting that the current valuation
significantly understates the time, skill, and resources needed to
provide remote monitoring of pacemakers and implantable cardioverter
defibrillators (ICDs). Commenters stated that the CMS assumption of an
electrodiagnostic technologist (L037A) spending 28 minutes to complete
a full 90-day monitoring cycle does not reflect reality. Commenters
provided a number of recommendations regarding the time associated with
the electrodiagnostic technologist completing the full 90-day
monitoring cycle. The most commonly reported time was over 80 minutes,
while some commenters reported a range of 10 to 30 minutes. A few
commenters stated that clinicians may spend a minimum of 10 minutes or
up to 100 minutes per patient over a 90-day cycle, performing tasks
such as data review, triage of alerts, patient communication,
documentation, and integration with the electronic medical record.
Commenters also stated that these evaluations cannot be effectively
performed by electrodiagnostic technicians (L037A) alone but instead
require skilled professionals, at minimum certified cardiovascular
technicians (L038B), due to the complexity of interpreting cardiac
rhythms and device functionality with high levels of quality and
accuracy. They highlighted that this distinction impacts both labor
costs and the quality of care, as specialized expertise is necessary to
ensure timely intervention, prevent hospitalizations, and optimize
patient outcomes.
Commenters also stated that technology has evolved beyond the basic
transmitters assumed in the original valuation. According to the
commenters, pacemaker and ICD monitoring today requires the same
integrated hardware-and-software platforms used for implantable loop
recorders, systems capable of continuous data acquisition, algorithmic
event detection, alert management, and secure data sharing, but the
current equipment code (EQ320; pacemaker interrogation, system) does
not reflect this infrastructure. Some commenters stated that they use a
universal remote monitoring software, such as MURJ, EPIC, and Medtronic
CareLink, and noted that there is no functional difference in the tools
or infrastructure required for these services.
Overall, commenters suggested that CMS revise the valuation for CPT
code 93296 to more accurately reflect the actual time, technician
level, and tools required. They suggest CMS work with professional
societies to adopt valuations that better reflect the scope of care and
modern standards of practice and immediately update the PE inputs for
CPT code 93296 or refer the code to the RUC for full review.
Response: After considering public comments, we found significant
variation in the evaluation time estimates submitted by commenters,
ranging from 10 to 100 minutes per patient for a comprehensive 90-day
remote evaluation of a pacemaker or implantable cardioverter-
defibrillator (ICD), making it difficult to identify a typical
evaluation time. We welcome additional feedback from interested parties
on the typical times associated with this clinical labor activity.
Based on the supporting evidence, we agree with commenters that the
technician for this code should be a cardiovascular technician (L038B)
rather than an electrodiagnostic technician (L037A). In addition, we
agree that the current equipment code EQ320 should be updated to EQ198,
as suggested, and therefore, we are making these updates for CY 2026.
Comment: The RUC stated that it reviewed the direct PE inputs for
these services in January 2018. Since the RUC did not receive any
interest from the specialties that perform this service to review it
again, it has no plans to reassess CPT code 93296 or provide further
commentary on it at this time.
Response: We appreciate the RUC for their feedback.
Based on our review of public comments we are finalizing our
proposal not to nominate these services as potentially misvalued.
However, we are finalizing updates to the clinical labor types and
equipment types as described previously.
(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 stated 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
[[Page 49310]]
10005 was reduced by 10.5 percent (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,\27\ 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.
---------------------------------------------------------------------------
\27\ 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''.
---------------------------------------------------------------------------
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 maintained our position and were not proposing
this code family as potentially misvalued. We acknowledged the shift in
site of service for FNA procedures between 2018 and 2023. 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
requested 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: The RUC stated that it received notification of interest
from a specialty society to re-review CPT codes 10005 and 10006. While
the RUC indicated that it would place the fine needle aspiration codes
(CPT codes 10005 and 10006) on its next Level of Interest (LOI) to
review these services and submit recommendations for CY 2027, the RUC
strongly suggests CMS to correct the previous error in valuing these
services. The RUC reiterated that it has repeatedly commented on a
mathematical error by CMS in valuing the fine needle aspiration codes,
where CMS double-counted utilization data for codes with bundled image
guidance, leading to incorrect assertions about a 20 percent physician
work increase. The RUC suggested CMS to correct this computational
error and accept its previously recommended work RVU values of 1.63 for
CPT code 10005, 2.43 for CPT code 10009, and 1.20 for CPT code 10021. A
few commenters stated that the codes are undervalued due to a double-
counting error and expressed disapproval of CMS' refinement
methodology, emphasizing that CMS should correct the mathematical error
underlying the current work RVUs for CPT codes 10005, 10009, and 10021
and adopt the 2019 RUC-recommended values of 1.63, 2.43, and 1.20,
respectively, which would resolve the issue.
Response: We reiterate that our review of these codes and our
rationale for finalizing the current values were discussed in the CY
2019 PFS final rule (83 FR 59517 through 59521) and the CY 2021 PFS
final rule (85 FR 84602 through 84604). We further explained this issue
in the CY 2025 PFS final rule (89 FR 97743 through 97745).
Comment: A few commenters supported our proposal not to nominate
the fine needle aspiration code family as potentially misvalued.
Response: We appreciate commenters for this feedback.
We appreciate the RUC placing the fine needle aspiration codes on
its next LOI for CY 2026, and we are finalizing our proposal not to
nominate these codes as potentially misvalued.
(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.\28\
---------------------------------------------------------------------------
\28\ AMA RBRVS DataManager. American Medical Association. (2025,
January 15). https://www.ama-assn.org/.
---------------------------------------------------------------------------
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
[[Page 49311]]
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 proposed not to designate these codes as potentially
misvalued, we acknowledged 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 noted 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 noted 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 questioned whether
the Cyclone device is either typically used or necessary for the
performance of this procedure. We believed 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 requested public comments regarding these issues
concerning CPT codes 31000 and 31002. Interested parties were
encouraged to submit relevant documentation, such as invoices or other
evidence that demonstrates the typical resource costs for providing
these services.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters, including the RUC, supported our
proposal. The RUC stated that they did not receive any interest from
allergy/immunology or otolaryngology specialties that perform these
services. According to the RUC, the specialties noted that publicly
available CMS data suggest a single allergy practice is primarily
driving the use of CPT code 31002. If the allergy practice utilization
is removed, otolaryngology is still the dominant specialty for this
service. Additionally, the specialties agree with CMS that it is
unclear whether the Cyclone product is ``typical'' for these
procedures. Therefore, the RUC stated they will not review CPT codes
31000 and 31002 or comment on them further at this time. Another
commenter noted the absence of non-facility payment for CPT code 31002,
stating that this code should be valued in the non-facility setting.
Response: We appreciate the commenters for their feedback,
specifically as it relates to the lack of non-facility payment for CPT
code 31002 and may consider the commenters' feedback in future
rulemaking.
After consideration of public comments, we are finalizing our
proposal not to nominate nasal sinus irrigation (CPT codes 31000 and
31002) as potentially misvalued.
(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). 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 the proposed rule, we sought
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 believed 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 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 requested 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: All commenters mentioned they greatly appreciated CMS'
recent updates to the Medicare Claims Processing Manual (MCPM) Chapters
13 and 23, consolidating prior manual chapters into chapter 13, section
90.3. Commenters stated the updates to the MCPM on the periodic review
process, annual updates, and payment rate publication timelines, have
allowed for greater transparency and collaboration between PXR
suppliers and the MACs. However, given the recently updated MCPM
guidelines that both MACs and PXR are operating under, commenters urged
CMS to allow this process to proceed before establishing any national
payment rate for HCPCS codes R0070 and R0075. Commenters state that
establishing a national payment rate would fail to capture accurate
resource costs for PXR services in rural and underserved areas. They
also noted that national payment rates would not sufficiently account
for geographic cost differences and would rely on inaccurate cost data.
Furthermore, we received a few comments in response to our comment
solicitation to potentially crosswalk HCPCS codes R0070 and R0075 to
CPT codes 93243 and 92582, respectively. Commenters opposed the idea
and stated any attempt to crosswalk would not accurately reflect the
costs of these services and potentially prevent access for our
beneficiaries. In conclusion, all commenters were in support of
operating under our updated MCPM
[[Page 49312]]
guidelines for PXR services and oppose any establishment of national
rates for CY 2026.
Response: We appreciate commenters for their support on CMS' recent
updates to the Medicare Claims Processing Manual (MCPM) chapters 13 and
23, consolidating prior manual chapters into chapter 13, section 90.3.
We note that these recent MCPM manual updates are a result of
longstanding concerns with how payment is established for
transportation services related to PXR and we look forward to the
increased collaboration between PXR suppliers and the MACs.
Additionally, we recognize the MCPM manual updates for PXR services are
recent and understand the preference for the framework to operate
before establishing any national payment rates. However, we do want to
also acknowledge that historically, under the PFS, various sources of
information have helped inform payment for specific services used to
establish direct PE inputs. These different methods can be used to
derive pricing for specific products that are more reflective of their
costs, such as performing market research, utilizing the invoice
submission process, and reviewing cost information on Medicare claims.
Therefore, the flexibility to use a variety of cost information to
develop national rates under the PFS ratesetting methodology can help
maintain resource costs for services and access to care for our
beneficiaries.
After consideration of public comments, we will take into account
the concerns raised by commenters to help inform any establishment of a
national payment rate in future rulemaking. We also look forward to the
continued dialogue between the MACs and PXR suppliers under the updated
MCPM guidelines.
(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 to 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.29 30
---------------------------------------------------------------------------
\29\ 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.
\30\ 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.
---------------------------------------------------------------------------
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 (NO PAIN) Act \31\ 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 to 30 additional minutes of physician work
associated with the intraoperative administration and delivery of
cryoablation therapy.
---------------------------------------------------------------------------
\31\ CY 2025 OPPS Final Rule, 89 FR 93912, 94354 (Nov. 27, 2024)
(CMS specifically affirmed that ``the CryoNB System meets the
statutory requirements and should be paid separately under this
provision.'').
---------------------------------------------------------------------------
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.\32\ According to the nominator, while
CMS typically does 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.\33\ 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.
---------------------------------------------------------------------------
\32\ 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.
\33\ AHA Coding Clinic[supreg], Q3 2024 vol. 11, no. 3
(effective with discharges Aug. 1, 2024).
---------------------------------------------------------------------------
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 sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Numerous commenters were in favor of establishing a G-code
as they emphasized intraoperative intercostal nerve cryoablation being
a clinically valuable adjunct therapy that significantly improves
patient outcomes. Many commenters reported benefits to patients' post-
operative recovery and pain control, particularly in reducing opioid
use, and shorter length of stays. They emphasized that these benefits
extend well beyond the immediate postoperative period and contribute to
broader public health goals of reducing opioid dependence.
Commenters identified several significant barriers limiting their
ability to offer this therapy. Commenters reported that cryoablation
adds 20 to 40 minutes of surgical time, with most commenters noting an
average of 20 to 30 minutes of additional surgical and anesthesia time
per case that is not reflected in current coding. Commenters also
stated that the procedure requires specialized equipment and staff
training that is not reflected in the resource costs associated with
the primary surgical procedure. Also, the commenters stated that
misinterpretation of Medicare anesthesia rules and global surgery
package guidelines has led many providers to incorrectly believe that
cryoablation cannot be billed separately.
Based on this information, commenters made three recommendations:
(1) establish a G-code for intraoperative cryoablation that recognizes
the additional physician work and time required to perform this
procedure during surgery; (2) include clarifying language in the CY
2026 PFS
[[Page 49313]]
or OPPS proposed rules to align physician billing guidelines with
established American Hospital Association (AHA) coding guidance; and
(3) confirm that Medicare anesthesia rules and global surgery rules do
not apply to cryoablation performed for postoperative pain management.
Regarding the request that CMS establish a G-code to account for
the additional physician work and time required to perform
cryoablation, a commenter suggested CPT codes 32664 (Thoracoscopy,
surgical; with thoracic sympathectomy) or 64809 (Sympathectomy,
thoracolumbar) as reasonable crosswalks for establishing appropriate
valuation, given similarities in time, intensity, and resources.
Another commenter suggested valuing the code using crosswalk to an add-
on (ZZZ Global) code within 20 to 35 minutes of intra-service time such
as: CPT code 33268 (Exclusion of left atrial appendage, open, performed
at the time of other sternotomy or thoracotomy procedure(s), any method
(eg, excision, isolation via stapling, oversewing, ligation, plication,
clip) (List separately in addition to code for primary procedure)), CPT
code 32667 (Thoracoscopy, surgical; with therapeutic wedge resection
(eg, mass or nodule), each additional resection, ipsilateral (List
separately in addition to code for primary procedure)), CPT code 32507
(Thoracotomy; with diagnostic wedge resection followed by anatomic lung
resection (List separately in addition to code for primary procedure)),
CPT code 33509 (Harvest of upper extremity artery, 1 segment, for
coronary artery bypass procedure, endoscopic), CPT code 64643
(Chemodenervation of one extremity; each additional extremity, 1-4
muscle(s) (List separately in addition to code for primary procedure)),
CPT code 64645 (Chemodenervation of one extremity; each additional
extremity, 5 or more muscles (List separately in addition to code for
primary procedure)), and CPT code 64913 (Nerve repair; with nerve
allograft, each additional strand (List separately in addition to code
for primary procedure)).
In addition to creating a payment code, commenters requested that
CMS provide billing guidance in the CY 2026 PFS or OPPS Proposed Rules
that aligns with the established AHA coding guidance, explicitly
allowing surgeons to bill separately for cryoablation when performed
for postoperative pain management. According to the commenter, this
intervention serves a distinct therapeutic purpose with different
techniques, equipment, and clinical objectives than standard anesthesia
administration.
Commenters also recommended that CMS confirm that Medicare global
surgery rules and anesthesia rules do not restrict billing for
intraoperative cryoablation. These commenters explained that
cryoablation is a separate surgical objective from the primary
procedure and should not be bundled, noting that this procedure serves
a distinct clinical purpose separate from anesthesia.
Overall, commenters stated that, adopting these changes would align
with the intent of the NO PAIN Act (section 4135 of the Consolidated
Appropriations Act (CAA), 2023) and CMS' recognition of cryoablation
devices in recent payment rules, ultimately accelerating adoption of
evidence-based, non-opioid pain management strategies while supporting
innovation in patient care. Commenters noted that as cryoablation
represents a significant advancement in non-opioid care pain
management, removing these barriers by implementing their
recommendations can expand patient access to safe non-opioid
alternatives, and align payment policy with strong clinical evidence
supporting improved outcomes and reduced opioid use.
Response: We agree with commenters that an intraoperative
intercostal nerve cryoablation is a clinically valuable adjunct therapy
that significantly improves patient outcomes, with many reporting
benefits to patients' post-operative recovery and pain control. Thus,
we are finalizing the creation of a new add-on G code, HCPCS code G0571
(Intraoperative nerve(s) cryoablation for post-surgical pain relief
(list separately in addition to code for primary service)) to be billed
with a surgical procedure to account for additional time and resources
required to perform cryoablation. For an add-on G code, we believe that
CPT code 64645 (Chemodenervation of one extremity; each additional
extremity, 5 or more muscles (List separately in addition to code for
primary procedure)), with an intra-service time of 25 minutes and a
work RVU of 1.39, is an appropriate crosswalk reference to capture the
additional intraoperative time and complexity involved in furnishing
this service. As this service would only be furnished in the Facility
setting, we are not finalizing the direct PE inputs based on this
crosswalk reference.
Also, we note that the cryoablation device is paid as a qualifying
non-opioid treatment for pain relief under the OPPS/ASC as authorized
by the NO PAIN Act. In the context of and in accordance with the NO
PAIN Act, cryoablation for the purpose of postoperative pain management
is separately billable by the interventionalist/surgeon performing
another procedure.
(12) Sleep Study (CPT Code 95800)
For CY 2026, an interested party re-nominated CPT code 95800 (Sleep
study, unattended, simultaneous recording; heart rate, oxygen
saturation, respiratory analysis (e.g., by airflow or peripheral
arterial tone, and sleep time). This code was recently nominated two
times as potentially misvalued in the CY 2024 PFS proposed rule (88 FR
52283 through 52284) and the CY 2025 PFS proposed rule (89 FR 61618
through 61619).
For the CY 2024 and CY 2025 PFS final rules, we stated that we were
unable to properly assess whether CPT code 95800 is potentially
misvalued and further stated that we could not identify whether
disposable or reusable home sleep apnea testing (HSAT) devices are more
commonly used based on the evidence submitted with the original
nominations and subsequent comments that CMS received. To confirm
whether disposable devices were more commonly used, the nominator
commissioned a consulting group to conduct an independent survey of
sleep medicine providers, developed with input from the American
Academy of Sleep Medicine (AASM), which found that 60 percent of
procedures reported with CPT code 95800 used fully disposable HSAT
equipment among respondents who reported this service in 2023.
The nominator stated that CPT code 95800 is misvalued because there
has been a fundamental shift in clinical practice from reusable
equipment to disposable HSAT devices, but the current direct practice
expense (PE) inputs still reflect the older reusable technology
assumptions. The nominator stated that CMS currently models' payment
for CPT code 95800 based on the use of a reusable sleep testing device
(the WatchPAT 200) with a consumable component (WatchPAT probe), but
the survey data demonstrates that the majority of procedures now use
fully disposable devices like the WatchPAT ONE. According to the
nominator, this misalignment between current medical practice and the
direct PE inputs has resulted in inaccurate direct practice expenses
for CPT code 95800 and created access challenges for Medicare
beneficiaries, particularly in rural and remote areas, since the
payment structure does not accurately reflect the actual costs and
technologies used in contemporary sleep study practices. The
[[Page 49314]]
nominator recommended deleting the current equipment codes for reusable
devices and adding a new supply code for the disposable WatchPAT ONE
device to ensure that Medicare reimbursement rates align with the
``typical procedure'' methodology that now involves disposable rather
than reusable equipment. For more details, we refer to the CY 2025 PFS
final rule (89 FR 97741 through 97743). Also, 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.
[GRAPHIC] [TIFF OMITTED] TR05NO25.009
While we appreciate the survey, we note that there are several
limitations that can influence the survey's generalizability, validity,
and reliability. Some key limitations include a small sample of 25
complete responses with a low 12 percent survey engagement rate, and
methodological constraints such as the short 17-day survey period.
Given that we only have access to the nominator's summary of their
internal data and survey results with a few notable limitations, we
propose to maintain the current direct PE supply and equipment inputs
for CPT code 95800. We did not propose to nominate the code as
potentially misvalued. We welcomed public comments, published studies,
other surveys, and data on whether the typical procedure described by
CPT code 95800 now involves the use of a disposable HSAT device rather
than reusable equipment.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported our proposal to not nominate
CPT code 95800 as potentially misvalued and advised us to continue
monitoring this issue. They recommended CMS hold any adjustments to CPT
code 95800 until after the RUC submits its final recommendations for
the CY 2027 PFS proposed rule.
Response: We appreciate commenters for their feedback and look
forward to reviewing the RUC recommendations per our standard process.
Comment: A commenter stated that the manufacturer and distributor
of home sleep apnea testing (HSAT) devices conducted an independent
survey of HSAT providers that specifically evaluated the practices of
sleep medicine providers that billed CPT code 95800 in the prior year
(2023). The purpose of the Survey was to evaluate the relative
utilization of reusable vs. disposable HSAT devices used in procedures
reported with CPT code 95800. The survey, which was developed with the
input of the American Academy of Sleep Medicine (AASM) and was under
the control of KNG Health through its design and implementation,
concluded that 60 percent of procedures reported with CPT code 95800
used fully disposable HSAT equipment.
The commenter noted that there were 25 complete responses to their
provider survey, which CMS cited as a small sample size. The commenter
stated that CMS did not recognize that the 25 responses represented the
practices and volume of 35 sleep practitioners, since certain
respondents were practice administrators answering on behalf of
multiple sleep practitioners. The commenter noted that the number of
respondents is common in RUC surveys valuing new CPT codes. In
addition, the commenter pointed out that the provider survey targeted a
universe limited only to a random sample of accredited sleep providers
who billed CPT code 95800 in 2023 for a Medicare FFS patient. According
to the commenter, because of these specific parameters, the reported
device use of the 35 total clinician respondents was more
representative of the typical 95800 procedure. The commenter stated
that the survey response rate of 12 percent of a targeted survey
universe materially exceeds the typical RUC survey response rate used
by CMS to value new or modified services. The commenter cited a U.S.
Government Accountability Office (GAO) report found that the median
response rate of RUC surveys was 2.2 percent, and more than 10 percent
of RUC surveys had under 30 respondents.\34\ The commenter continued
noting CMS's concern on the short 17-day period in the field, which
according to the commenter is generally consistent with the in-field
period for a RUC survey, where surveys must be distributed, collected,
analyzed, and developed into recommendations to the RUC within
approximately one month. The commenter described the RUC surveys as in
the field for 2 to 3 weeks, consistent with their own survey. The
commenter stated that they engaged an independent health consulting
firm with experience in conducting provider surveys, as the manager of
the survey. They also stated that they received assistance from the
AASM CPT and RUC advisors, as well as health policy staff, who provided
updates and additions to the survey before it was distributed. They
stated that the survey was not overly restrictive in scope, as it
gathered data on types of devices used, device brands, practice size,
and typical HSAT volume across multiple HSAT testing codes and that
survey recipients were not limited to a specific manufacturer's
customers or sales contacts.
---------------------------------------------------------------------------
\34\ GAO, Medicare Physician Payment Rates: Better Data and
Greater Transparency Could Improve Accuracy, GAO15-434, Medicare
Physician Payment Rates: Better Data and Greater Transparency Could
Improve Accuracy, U.S. GAO.
---------------------------------------------------------------------------
In conjunction with the details of the survey, the same commenter
provided full-year sales data from 2024, which showed that more than 52
percent of WatchPAT tests were performed with
[[Page 49315]]
disposable devices. They also included data from the first half of
2025, which showed that more than 56 percent of WatchPAT tests used the
disposable device rather than a reusable device confirming the trend of
steadily increasing use of disposable HSAT devices. To reflect the
shift in clinical practice associated with the use of disposable HSAT
devices, the commenter provided an updated list of supply input
changes.
[GRAPHIC] [TIFF OMITTED] TR05NO25.010
They stated that establishing direct PE inputs consistent with the
adjusted equipment and supply inputs described previously for code
95800, while retaining current labor and malpractice inputs, would
result in an accurate valuation that reflects the costs associated with
disposable HSAT device services.
Response: We appreciate all of the information provided, both as
part of the initial request and alongside public comments. After
additional consideration, we agree with commenters that the survey
conducted by the device manufacturer provides additional data that
augments what we received as part of the RUC recommendation. As the
practice of medicine evolves to in some cases reflect a shift from
reusable to disposable HSAT equipment, we believe that the direct
practice expense inputs should reflect those changes. Therefore, based
on the information provided by commenters regarding the outdated nature
of the code and supply input pricing, and the additional information
provided in public comments, we are finalizing an update to the PE
inputs as described in Table A-C3 for CY 2026.
We inadvertently omitted the RUC requests listed below (see Table
A-C4) from the proposed rule. We acknowledge receipt of these requests;
however, because these codes were not addressed in the CY 2026 PFS
proposed rule, we may consider them in future rulemaking.
[[Page 49316]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.011
Lastly, we received several comments nominating codes as
potentially misvalued for review and revaluation by CMS. These code
families were not addressed in the CY 2026 PFS proposed rule;
therefore, these comments are out of scope for this final rule.
However, we note that commenters are welcome to submit these codes by
February 10 of the coming year for consideration as potentially
misvalued services in the CY 2027 PFS proposed rule. See the discussion
at (TO BE ADDED) for more information on how to submit a nomination for
a potentially misvalued code.
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 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
[[Page 49317]]
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. Update 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 proposed, 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.
Therefore, we proposed 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 later in this section). Under this update, 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, we 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 and (42 CFR
410.78(f)). We noted in the CY 2026 PFS proposed rule (90 FR 32593
through 32597), if finalized, that all codes currently on the list
(provisional or permanent) would remain on the Medicare Telehealth
Services List. Because we had 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 noted in the CY
2026 PFS proposed rule to 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.
We proposed 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 in the proposed
rule, 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 we update 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
[[Page 49318]]
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 update 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 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 in the proposed rule, 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 Sec. 410.78(a)(3). We proposed 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 in this section:
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 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-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 proposed 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 sought comments on our proposal to refine
the Medicare Telehealth Services List review process. We also invited
comments regarding safety and/or quality concerns. We
[[Page 49319]]
would like to re-emphasize that a service's presence on the Medicare
telehealth list does not indicate that we believe 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters generally supported our proposal to
simplify our review process to add services to the Medicare Telehealth
Services List, including removing steps 4 and 5 and eliminating the
provisional and permanent categories. The commenters appreciated that
this simplified process would reduce the administrative burden, enhance
provider flexibility, and provide greater clarity, stability, and
predictability for providers. The commenters also supported our
emphasis on clinical judgment and supporting practitioners in
practicing, to the extent possible, on the most clinically
sophisticated tasks and making the most of their professional training.
The commenters also supported that this policy change could improve
access for beneficiaries while preserving patient-centered care,
without compromising patient safety. Some commenters requested that we
monitor the impact of this policy change to ensure beneficiary safety,
quality, and access. A few commenters did not support our proposal
because they believe that the elimination of steps 4 and 5 of the
review process does not support a consistent, evidence-based safeguard
to ensure that the outcomes of telehealth services are comparable to
those of in-person services.
Response: We appreciate the commenters for their feedback. We
continue to believe that the 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
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
will continue to consider the feedback from interested parties for
future rulemaking.
After consideration of public comments, we are finalizing as
proposed.
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 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 in
section D(1)(b) of the proposed rule. The requested services are listed
in Table A-D1.
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 49320]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.012
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 (87 FR 69404), 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 proposed to add this
service to the Medicare Telehealth Services List. We requested public
comments on this proposal.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Commenters supported the addition of CPT code 90849
(Multiple-Family Group Psychotherapy) to the Medicare Telehealth
Services List. Commenters cited that the service described by CPT code
90849 demonstrates its ability to be furnished via telehealth due to
being similar to other forms of group psychotherapy that are included
on the Medicare Telehealth Services List. Commenters also cited that
telehealth platforms are well-equipped for this type of service and
that the availability of this service via telehealth particularly
benefits families in areas that do not have clinicians readily
available or for families that may have constraints that inhibit
coordinating in-person care.
Response: We appreciate the commenters for their feedback.
After consideration of public comments, we are finalizing as
proposed to add Multiple-Family Group Psychotherapy services (CPT code
90849) to the Medicare Telehealth Services List, beginning in CY 2026.
(2) Group Behavioral Counseling for Obesity
We received a request to add CPT code G0473 (Face-to-face
behavioral counseling for obesity, group (2 to 10), 30 minutes) to the
Medicare Telehealth Services List. This code includes a 30-minute group
session that consists of a
[[Page 49321]]
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 2 through 6, and one
face-to-face visit per month for months 7 through 12 (if an individual
loses 3kg in the first 6 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 Sec. 410.78(a)(3). Therefore,
we proposed to add this service to the Medicare Telehealth Services
List. We requested public comments on this proposal.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the addition of CPT code
G0473 (Face-to-face behavioral counseling for obesity, group (2 to 10),
30 minutes) to the Medicare Telehealth Services List, stating that this
service may be furnished via telehealth due to being similar to other
similar group counseling codes that are already included on the
Medicare Telehealth Services List. The commenters stated that when this
service is furnished via telehealth specifically, patients may
experience reduced stigma, enhanced privacy, improved adherence, and
family involvement that can enable dietary and lifestyle planning to
support long-term participation in the 12-month Intensive Behavioral
Therapy for Obesity program.
Response: We appreciate the commenters for their feedback.
After consideration of public comments, we are finalizing as
proposed to add Group Behavioral Counseling for Obesity (CPT code
G0473) to the Medicare Telehealth Services List, beginning in CY 2026.
(3) Infectious Disease Add-On
We received a request to add CPT code G0545 (Visit complexity
inherent to hospital inpatient or observation care associated with a
confirmed or suspected infectious disease by an infectious diseases
consultant, including disease transmission risk assessment and
mitigation, public health investigation, analysis, and testing, and
complex antimicrobial therapy counseling and treatment (add-on code,
list separately in addition to hospital inpatient or observation
evaluation and management visit, initial, same day discharge, or
subsequent)) 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 Sec. 410.78(a)(3). Therefore,
we proposed to add this service to the Medicare Telehealth Services
List. We requested public comments on this proposal.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the addition of HCPCS code
G0545 to the Medicare Telehealth Services List. The commenters
supported this addition because this service is similar to other add-on
codes that are currently on the Medicare Telehealth Services List and
stated that the presence of this service on the Medicare Telehealth
Services List would enhance beneficiary access. The commenters stated
that there is a gap in access to infectious disease clinicians, who
have expertise in risk assessment, public health investigation, and
complex therapies without unnecessary delays or travel for patients,
particularly in areas with limited in-person infectious disease
resources.
Response: We appreciate the commenters for their feedback.
After consideration of public comments, we are finalizing as
proposed to add the Infections Disease Add-on (CPT code G0545) to the
Medicare Telehealth Services List, beginning in CY 2026.
(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 Sec. 410.78(a)(3). Therefore, we proposed to add
these services to the Medicare Telehealth Services List. We requested
public comments on these proposals.
We received public comments on these proposals. The following is a
summary of the comments we received and our response.
Comment: Several commenters supported the addition of CPT codes
92622 and 92623 to the Medicare Telehealth Services List. The
commenters supported this addition because this service is similar to
other audiology codes that are currently on the Medicare Telehealth
Services List. Commenters also stated that telehealth platforms are
well-equipped for this type of service, eliminating barriers related to
geography, transportation, and physical mobility.
Response: We appreciate the commenters for their feedback.
After consideration of public comments, we are finalizing as
proposed to add Auditory Osseointegrated Sound Processor services (CPT
codes 92622 and 92623) to the Medicare Telehealth Services List,
beginning in CY 2026.
(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
[[Page 49322]]
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 proposed not 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 sought 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. 410.78(a)(3). We
also sought 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 through
90966, 90967 through 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 sought 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.'' We noted in
the proposed rule that we required 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: As requested, several commenters provided more information
about under what clinical circumstances this service could be furnished
via telehealth. The commenters provided information that these codes
are generally used to treat critically ill, potentially hospitalized
patients who are best treated in-person rather than via telehealth.
These commenters acknowledged that there may be extremely limited
circumstances in which patients in rural areas may benefit from these
services being on the Medicare Telehealth Services List, but that in
most cases, these patients would require an in-person visit. A
commenter who had originally supported the addition of these codes has
since determined that the addition of these services is no longer
necessary.
We received a few comments requesting that we add these services to
the Medicare Telehealth Services List, however, the commenters did not
provide more information under what clinical circumstances this service
could be furnished via telehealth and how all service elements would be
performed when furnished via telehealth. A few commenters further
requested the addition of these services, stating that some components
of the service can be furnished via telehealth, and that the addition
of these services can increase provider flexibility and increase access
to care.
Response: We continue to believe that these services do not meet
step 3 of the Medicare Telehealth review process. We are not persuaded
that all service elements could be furnished via telehealth, since we
did not receive this information. We look forward to reviewing
additional information and considering this for future rulemaking.
After consideration of public comments, we are finalizing as
proposed to not add these services to the Medicare Telehealth Services
List.
(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 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 proposed not adding HCPCS code
G0248 to the Medicare list of telehealth services. We requested public
comments on this proposal.
We received public comments on this proposal. The following is a
summary of
[[Page 49323]]
the comments we received and our responses.
Comment: Many commenters, including suppliers of home PT/INR
monitoring services, requested additional clarifications regarding
HCPCS code G0248 not meeting step 2 of the Medicare Telehealth Services
review process.
Response: We would like to clarify that HCPCS code G0248, falls
outside the scope of the definition of a Medicare telehealth service in
section 1834(m) of the Act and so does not meet step 2 of our review
process. This service is not subject to section 1834(m) of the Act.
This service may include activities, including initial set-up and
training, that are not typically or ordinarily furnished in-person.
Because this service is delivered by clinical staff employed or
otherwise providing services for a supplier, this service is not
subject to the same rules concerning telehealth services that apply to
physicians and practitioners.
After consideration of public comments, we are finalizing as
proposed to not add Home INR Monitoring (HCPCS code G0248) to the
Medicare Telehealth Services List.
(7) Telemedicine E/M Services
We received a request to add the telemedicine E/M services (CPT
codes 98000 through 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 proposed not to add them to the
Medicare list of telehealth services. We requested public comments on
this proposal.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Some commenters requested that we reconsider our proposal
to not add these services to the Medicare Telehealth Services List,
stating that reporting CPT codes with telehealth modifiers creates
confusion and increases the risk of billing errors. Others supported
our interpretation of section 1834(m) of the Act and our proposal not
to add these services to the Medicare Telehealth Services List, as our
interpretation of section 1834(m) of the Act requires that telemedicine
services be reimbursed at parity with in-person visits. These
commenters also appreciated maintaining equivalent billing requirements
across all telehealth services and stated that this reduces
administrative burden.
Response: These services do not meet Step 1 of our review process,
and are not eligible to be added to the Medicare Telehealth Services
List. We did not propose the removal of Step 1 of the review process.
While CMS appreciates the comment, Step 1 is vital to ensuring that CMS
is paying for telehealth services in accordance with section 1834(m) of
the Act.
After consideration of public comments, we are finalizing as
proposed to not add the telemedicine E/M services (CPT codes 98000
through 98015) to the Medicare Telehealth Services List.
(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
section 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.
Comment: A few commenters requested that we clarify if a telehealth
place of service should be used for these services.
Response: No, under current regulation, a telehealth place of
service would not be used for services that 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.'' We noted in the proposed rule that 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. Therefore, we
proposed to not make determinations to recategorize provisional codes
as permanent at this time. For CY 2026, we proposed to revise the
Medicare Telehealth Services criteria. We proposed to remove steps 4
and 5 from the review process. Using these revised criteria, we
proposed 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 previously, we believe that
these 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 proposed adding to the Medicare Telehealth Services
List are listed in Table A-D2.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Commenters supported our proposal to simplify our review
process to add services to the Medicare Telehealth Services List,
including removing steps 4 and 5 and eliminating the provisional and
permanent categories, and supported our proposal to utilize this
process for the CY 2026 PFS Final Rule. Commenters appreciated that
this simplified process would reduce administrative burden, enhance
provider flexibility, and provide greater clarity, stability, and
predictability for providers. Commenters also supported our emphasis on
clinical judgment and patient-centered care.
Response: We appreciate commenters for their feedback.
After consideration of public comments, we are finalizing as
proposed.
(10) Deleted Services
In section II.I. of the CY 2026 PFS proposed rule (90 FR 32593
through 32597), we proposed to delete HCPCS code G0136. We noted in the
proposed rule that this code is currently on the Medicare Telehealth
Services List, so it will also be deleted from the list if finalized.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters generally did not support the deletion of
G0136 from the Medicare Telehealth Services List.
[[Page 49324]]
Response: Please see section II.X.4.a.(1) of this final rule for
additional discussion of the HCPCS code G0136.
After consideration of public comments, we are not finalizing as
proposed to delete HCPCS code G0136 from the Medicare Telehealth
Services List.
[GRAPHIC] [TIFF OMITTED] TR05NO25.013
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 3 days, added in the CY 2011
PFS final rule (75 FR 73317 through 73318), one subsequent nursing
facility visit furnished through telehealth every 14 days, added in the
CY 2011 PFS final rule (75 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,
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 5 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 2 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 proposed 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
[[Page 49325]]
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 solicited comments on these proposals, specifically additional
information regarding potential concerns about patient safety and
quality of care.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally supported the permanent
removal of frequency limitations for Subsequent Inpatient Visits,
Subsequent Nursing Facility Visits, and Critical Care Consultation
Services. The commenters stated that removal of these frequency
limitations could enhance continuity of care, provide greater
flexibility for clinicians, and allow clinicians to use their judgment
in determining the appropriate cadence of telehealth interactions based
on patient needs. Some commenters did not support our proposal, citing
quality of care and safety concerns. One of these concerns was
specifically for nursing residents, who may have complex health
conditions that require careful monitoring and assessment, or
conditions that make telehealth visits difficult. A few commenters
supported our proposal but encouraged us to pair the removal of
frequency limitations with safeguards such as enhanced claims
monitoring or evidence-based utilization management.
Response: We appreciate the information from commenters regarding
both patient safety concerns and concerns regarding supporting
healthcare access. We believe that the complex professional judgment of
the physician or practitioner will better allow practitioners to
determine if the frequency of telehealth services are appropriate for
that specific Medicare beneficiary and that specific clinical scenario.
We may consider additional safeguards for future rulemaking.
After consideration of public comments, we are finalizing as
proposed.
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 at Sec. 410.32 and services incident to a
physician's (or other practitioner's) professional service described at
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 at Sec.
410.32(b)(3): General Supervision, Direct Supervision, and Personal
Supervision. Notwithstanding the temporary measures implemented in
response to the PHE for COVID-19 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 to 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 at Sec. 410.26, many
diagnostic tests at Sec. 410.32, pulmonary rehabilitation services at
Sec. 410.47, cardiac rehabilitation and intensive cardiac
rehabilitation services at Sec. 410.49, and certain hospital
outpatient services as provided at 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
[[Page 49326]]
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 providing
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
believe an incremental approach is warranted, particularly in instances
where unexpected or adverse events may arise for procedures which may
be riskier or more intense. In light of these potential safety and
quality of care implications, and exercising an abundance of caution,
we 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 provided ``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 rules (89 FR 97758), we proposed to
continue to build on this incremental approach to allow certain
services to be provided under direct supervision that allows
``immediate availability'' of the supervising practitioner using audio/
video real-time communications technology (excluding audio-only). We
proposed 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 at 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 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally supported the permanent
adoption of this policy and its revised definition, citing that virtual
direct supervision does not inherently give rise to patient safety
issues and that this policy could assist in a time of provider
shortages. Some commenters supported the exclusion of codes with 010
and 090 global surgery services, citing that clinical staff supervised
via virtual direct supervision do not perform complex, high-risk,
surgical, interventional, or endoscopic procedures, or anesthesia
procedures. A commenter requested that our definition be revised to
remove the exclusion of services with 010 or 090 global surgery
indicators and allow virtual direct supervision for all services paid
under the PFS, since we have revised many telehealth policies to defer
to clinical judgment throughout this final rule.
Some commenters suggested additional refinements to our proposal.
The commenters provided conflicting recommendations to revise our
definition to exclude services in which injected contrast is used. Some
commenters recommended that we ensure that trained and authorized staff
are present in the event of an adverse reaction to injected contrast,
while other commenters stated additional clarifications in the
definition are not needed, and submitted additional information
supporting that virtual supervision of contrast administration is as
safe as onsite supervision. The commenters also provided conflicting
recommendations for the creation of a billing modifier, medical record
[[Page 49327]]
documentation, or other means of data collection. Those who supported
this recommendation stated that this would allow for better tracking,
but those who did not support this recommendation stated that this
revision would increase administrative burden without any benefit for
patient care. The commenters provided other recommended revisions to
this policy, including allowing audio-only supervision for facilities
in low-connectivity regions. A few commenters did not support this
proposal, stating that they had patient safety and care concerns and
believe that virtual direct supervision increases the risk for adverse
outcomes.
Response: We appreciate the commenters for their support and
suggestions on how we may refine our policy and will take them under
consideration for future rulemaking. At this time, we believe that
excluding services with 010 or 090 global surgery indicators is
necessary to ensure 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.
Comment: Some commenters did not support our proposal, opposing
virtual direct supervision for auxiliary personnel who are authorized
under their own statutory benefit category to bill Medicare for their
services. Reiterating concerns previously expressed in comments in the
CY 2025 PFS final rule, some commenters opposed our proposal to
permanently allow for the virtual direct supervision because doing so
would increase the amount of physician ``incident to'' billing (a
Medicare outpatient provision that applies in the office or clinic
setting and allows medical services to be provided by auxiliary
personnel as an ``incident to'' the services of the billing
practitioner and under their supervision) for services provided by PAs
and NPs, which would obscure the extent to which PAs and NPs are
actually performing the services. These commenters suggested that CMS
allow for virtual supervision for only those medical professionals who
are unauthorized to bill Medicare or, alternatively, establish a method
through which CMS is able to collect information about the health
professional actually providing the service under ``incident to''
billing.
Response: We appreciate the commenter's input regarding the
appropriate attribution of services performed by PAs and NPs when those
services are billed ``incident to'' a physician's service. However, we
believe that any potential obscuration of the extent to which PAs and
NPs are providing virtual direct supervision resulting from ``incident
to'' billing is vastly outweighed by the flexibility and enhanced
access to services resulting from allowing these practitioners to
furnish virtual direct supervision. Regarding the commenters'
suggestion that CMS establish a method through which we would collect
the information of the health professional actually providing the
service under ``incident to'' billing, we thank the commenters for
their suggestion and may consider that through future rulemaking.
After consideration of public comments, we are finalizing as
proposed.
We noted in the CY 2026 PFS proposed rule (90 FR 32593) that,
similar to our guidance described in the proposed rule regarding
Medicare Telehealth services, our 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 at 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 proposed 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally supported the permanent
adoption of this policy and its revised definition.
Response: We appreciate commenters for their input.
After consideration of public comments, we are finalizing as
proposed.
We proposed to revise 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters generally supported the permanent adoption of
this policy and its revised definition.
Response: We appreciate the commenters for their input.
After consideration of public comments, we are finalizing as
proposed.
We noted in the proposed rule that because 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 solicited comments on applying this
definition to the applicable services at Sec. 410.32 and the
applicable cardiac, pulmonary, and intensive cardiac rehabilitation
services.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally supported the permanent
adoption of this policy and its revised definition.
Response: We appreciate the commenters for their input.
After consideration of public comments, we are finalizing as
proposed.
We solicited comments 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 at Sec. 410.26,
except for services that have a 010, or 090 global surgery indicator.
For each of the proposals, we also sought 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
[[Page 49328]]
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 noted that 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 solicited comments on these
proposals.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters requested that services with a 000-day
global period indicator to be excluded from virtual direct supervision
restrictions, as these services are minor and could potentially be
safely supervised virtually. Other commenters wanted us not to allow
virtual direct supervision for services with a 000-day global period
indicator, as some commenters believe that 000-day global services are
of similar risk as services with a 010-day indicator. The commenters
requested that we work with interested parties to categorize additional
procedures that would be appropriate for virtual direct supervision.
Response: We appreciated the commenters for their feedback.
Regarding concerns with the allowance of virtual direct supervision for
services with a 000-day global services indicator, we do not agree that
000-day global services represent a similar level of risk as those with
a 010-day indicator. 000-day global procedures are services that do not
include any follow-up care included in the valuation, where as 010-day
global services include the valuation of follow-up care extending out
10-days from the procedure. We believe this reflects significantly
higher clinical intensity than 000-day global services. We welcome
additional information from stakeholders on this policy.
After consideration of public comments, we are finalizing as
proposed to not exclude services with a 000 global surgery indicator
and to allow the presence of the physician (or other practitioner) to
include virtual presence through audio/video real-time communications
technology (excluding audio-only). 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.
b. 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 section
1842(b)(7)(A)(i)(I) of the Act 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.
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 solicited 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
[[Page 49329]]
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 proposed 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 proposed not 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 three-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 the proposed rule, we were 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 believe that permitting Medicare payment to continue for this PHE
flexibility is no longer necessary. As noted in the proposed rule, 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.
We noted in the proposed rule that 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
in the 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.
We noted in the proposed rule that the proposal to not extend
flexibilities for virtual services would not impact on 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported our proposal, stating that
stronger oversight of residents in teaching settings is appropriate
outside of a Public Health Emergency. However, the vast majority of
commenters did not support our proposal. The commenters stated that
over the past 5 years, this policy has proven to be effective, safe,
and educationally sound. Both residents and teaching physicians have
gained experience in providing virtual care, and continuation of this
policy would support residents in being fully educated and prepared for
virtual care in independent practice. In addition, continuation of this
flexibility allows the ability for practitioners to pivot to virtual
clinics for residents in cases of illness, inclement weather, or
physical clinic closures. Ending this flexibility would also reduce
care capacity, limit flexibilities in patient care, and would not allow
for the full professional judgment of the teaching physician.
Commenters also expressed concerns about the discontinuation of this
policy and its impact on provider shortages and filling Graduate
Medical Education slots for necessary vacancies in specialties such as
psychiatry or pediatrics. Commenters also requested that this policy be
expanded beyond services furnished as a 3-way telehealth visit, with
the teaching physician, resident, and patient in different locations,
and include services where the resident and patient are in the same
location with the teaching physician being present remotely. The
commenters stated that if we were to discontinue the current
flexibility, we should revise our proposed policy to include MSAs, as
there are significant provider shortages in suburban and urban areas,
or use a more expansive definition to include additional rural areas.
Other commenters stated that the MSA requirement is arbitrary, as few
teaching hospitals operate in rural areas.
Response: We agree with commenters 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, and that this policy benefits
teaching physicians, residents, and beneficiaries.
Comment: Commenters requested clarification regarding the proposed
supervision policy change that appears to introduce a more restrictive
standard for Medicare payment of resident-furnished services, imposing
stricter requirements than those required for in-person services.
Response: We would like to clarify that we are not making any
changes to the requirements currently in place for the supervision
policy for teaching physicians. In the case of evaluation and
management services, the teaching physician must be present during the
portion of the service that determines the level of service billed,
whether that service be furnished in-person or via telehealth.
After consideration of public comments, we are finalizing to
permanently allow teaching physicians to have a virtual presence in all
teaching settings, only in clinical instances when the service is (a 3-
way telehealth visit, with the teaching physician, resident, and
patient in different locations). This will continue to permit teaching
physicians to have a virtual presence during the key portion of the
Medicare telehealth service for which payment is sought, through audio/
video real-time communications technology, for all residency training
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
[[Page 49330]]
communications technology. In accordance with section
1842(b)(7)(A)(i)(I) of the Act, the teaching physician must have
personal oversight and involvement over the management of the portion
of the case for which the payment is sought.
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
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.
In the CY 2026 PFS proposed rule (90 FR 32593), we proposed to update
the MEI increase for CY 2026 based on historical data through the
second quarter of 2025. Therefore, for CY 2026, the payment amount for
HCPCS code Q3014 (Telehealth originating site facility fee) is $31.85.
Table A-D3 shows the Medicare telehealth originating site facility fee
and the corresponding MEI percentage increase for each applicable time
period.
[GRAPHIC] [TIFF OMITTED] TR05NO25.014
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter expressed concern about the proposed increase
to the telehealth originating site facility fee and its impact on
beneficiary cost-sharing. Other commenters appreciated the proposal, as
it accounts for inflation and maintains real value.
Response: We appreciated commenters for their feedback. Section
1834(m)(2)(B) of the Act established the Medicare telehealth
originating site facility fee for telehealth services 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.
After consideration of public comments, we are finalizing as
proposed.
4. Distant Site Requirements
We received many comments that requested CMS clarify policies
related to, but separate from, our telehealth proposals. The following
is a summary of the comments we received and our responses.
Comment: A few commenters expressed concerns regarding the
perception of an expiring flexibility for telehealth practitioners to
use their currently enrolled location instead of their home address
when providing services from their home due to a lack of a proposal to
extend this flexibility in the proposed rule. In these comments,
interested parties voiced concerns about the safety and privacy of
health professionals who work from home and furnish telehealth
services. The commenters requested that CMS take
[[Page 49331]]
steps to protect telehealth practitioners by adjusting enrollment
requirements so that individual practitioners did not have to list
their home addresses on enrollment forms. In the CY 2024 and CY 2025
PFS final rules we stated that, through CY 2025, we would permit a
distant site practitioner to use their currently enrolled practice
location instead of their home address when providing telehealth
services from their home.
Response: Given that CMS issued an FAQ (located at https://www.cms.gov/medicare/quality/physician-compare-initiative/frequently-asked-questions) providing additional information on how to suppress
street address details as providers continue to use their currently
enrolled practice location instead of their home address when providing
telehealth services from their home, we do not believe that additional
``extensions'' are required via rulemaking. We remind interested
parties that we defer to State law regarding licensure requirements for
distant site Medicare telehealth practitioners. In addition, we note
that a separate Medicare enrollment is required for each State in which
the practitioner furnishes and intends to bill for covered Medicare
services. We would also like to clarify that in the future any updates
to this policy will be issued via subregulatory guidance.
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 final 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 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
[[Page 49332]]
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 non-facility setting.
We have developed several standard building block methodologies to
value services appropriately when they have common billing patterns. In
cases where a service is typically furnished to a beneficiary on the
same day as an E/M service, we believe that there is overlap between
the two services in some of the activities furnished during the
preservice evaluation and postservice time. Our longstanding
adjustments have reflected a broad assumption that at least \1/3\ 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 concern over the years with our ongoing adjustment of work
RVUs based on changes in the best information we had regarding the time
resources involved in furnishing individual services. We have been
particularly concerned with the RUC's and various specialty societies'
objections to our approach given the significance of their
recommendations to our process for valuing services and since much of
the information we used to make the adjustments is derived from their
survey process. We note that we are obligated under the statute to
consider both time and intensity in establishing work RVUs for PFS
services. As explained in the CY 2016 PFS final rule with comment
period (80 FR 70933), we recognize that adjusting work RVUs for changes
in time is not always a straightforward process, so we have applied
various methodologies to identify several potential work values for
individual codes.
We 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
[[Page 49333]]
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.
We received several comments regarding our methodologies for work
valuation in response to the CY 2026 PFS proposed rule (90 FR 32593
through 32597) and the following is a summary of the comments we
received and our responses.
Comment: Several commenters disagreed with CMS' reference to older
work time sources and stated that their use led to the proposal of work
RVUs based on flawed assumptions. Commenters stated that codes with
``CMS/Other'' or ``Harvard'' work time sources, used in the original
valuation of certain older services, were not surveyed, and therefore,
were not resource based. Commenters also stated that it was invalid to
draw comparisons between the current work times and work RVUs of these
services to the newly surveyed work time and work RVUs as recommended
by the RUC.
Response: We agree that it is important to use the recent data
available regarding work times and note that when many years have
passed since work time has been measured, significant discrepancies can
occur. However, we also believe that our operating assumption regarding
the validity of the existing values as a point of comparison is
critical to the integrity of the relative value system as currently
constructed. The work times currently associated with codes play a very
important role in PFS ratesetting, both as points of comparison in
establishing work RVUs and in the allocation of indirect PE RVUs by
specialty. If we were to operate under the assumption that previously
recommended work times had been routinely overestimated, this would
undermine the relativity of the work RVUs on the PFS in general, in
light of the fact that codes are often valued based on comparisons to
other codes with similar work times. Such an assumption would also
undermine the validity of the allocation of indirect PE RVUs to
physician specialties across the PFS.
Instead, we believe that it is crucial that the code valuation
process take place with the understanding that the existing work times
that have been used in PFS ratesetting are accurate. We recognize that
adjusting work RVUs for changes in time is not always a straightforward
process and that the intensity associated with changes in time is not
necessarily always linear, which is why we apply various methodologies
to identify several potential work values for individual codes.
However, we reiterate that we believe it would be irresponsible to
ignore changes in time based on the best data available, and that we
are statutorily obligated to consider both time and intensity in
establishing work RVUs for PFS services. For additional information
regarding the use of old work time values that were established many
years ago and have not since been reviewed in our methodology, we refer
readers to our discussion of the subject in the CY 2017 PFS final rule
(81 FR 80273 through 80274).
Comment: Several commenters disagreed with the use of time ratio
methodologies for work valuation. Commenters stated that this use of
time ratios is not a valid methodology for valuation of physician
services. Commenters stated that treating all components of physician
time (preservice, intraservice, postservice and post-operative visits)
as having identical intensity is incorrect and inconsistently applying
it to only certain services under review creates inherent payment
disparities in a payment system, which is based on relative valuation.
Commenters stated that in many scenarios, CMS selects an arbitrary
combination of inputs to apply rather than seeking a valid clinically
relevant relationship that would preserve relativity. Commenters
suggested that CMS determine the work valuation for each code based not
only on surveyed work times, but also the intensity and complexity of
the service and relativity to other similar services, rather than
basing the work value entirely on time. Commenters recommended that CMS
embrace the clinical input from practicing physicians when valid
surveys were conducted and provide a clinical rationale when proposing
crosswalks for valuation of services.
Response: We disagree and continue to believe that the use of time
ratios is one of several appropriate methods for identifying potential
work RVUs for particular PFS services, particularly when the
alternative values recommended by the RUC and other commenters do not
account for survey information that suggests the amount of time
involved in furnishing the service has changed significantly. We
reiterate that, consistent with the statute, we are required to value
the work RVU based on the relative resources involved in furnishing the
service, which include time and intensity. In accordance with the
statute, we believe that changes in time and intensity must be
accounted for when developing work RVUs. When our review of recommended
values reveals that changes in time are not accounted for in a RUC-
recommended work RVU, the obligation to account for that change when
establishing proposed and final work RVUs remains.
We recognize that it would not be appropriate to develop work RVUs
solely based on time, given that intensity is also an element of work,
but in applying the time ratios, we are using derived intensity
measures based on current work RVUs for individual procedures. We
clarify that we do not treat all components of physician time as having
identical intensity. If we were to disregard intensity altogether, the
work RVUs for all services would be developed based solely on time
values and this would not be accurate, as indicated by the many
services that share the same time values but have different work RVUs.
For example, among the codes reviewed in this CY 2026 PFS final rule,
the following all share the same intraservice and total work time of 20
minutes: CPT codes 55715 (Biopsy, prostate, each additional, MRI-
ultrasound fusion or in-bore CT- or MRI-guided), 92973 (Percutaneous
transluminal coronary thrombectomy aspiration mechanical), 93571
(Intravascular Doppler velocity and/or pressure derived coronary flow
reserve measurement (coronary vessel or graft) during coronary
angiography), 98980 (Remote therapeutic monitoring treatment management
services,
[[Page 49334]]
physician or other qualified health care professional time in a
calendar month requiring at least 1 real-time interactive communication
with the patient or caregiver during the calendar month, first 20
minutes), and 99457 (Remote physiologic monitoring treatment management
services, clinical staff/physician/other qualified health care
professional time in a calendar month requiring 1 real-time interactive
communication with the patient/caregiver during the calendar month;
first 20 minutes). However, these codes had very different proposed
work RVUs of 1.05, 1.75, 1.80, 0.62, and 0.61, respectively. These
examples demonstrate that we do not value services purely based on work
time; instead, we incorporate time as one of multiple different factors
in our review process. Furthermore, we reiterate that we use time
ratios to identify potentially appropriate work RVUs and then use other
methods (including estimates of work from CMS medical personnel and
crosswalks to key references or similar codes) to validate these RVUs.
For more details on our methodology for developing work RVUs, we direct
readers to the discussion in the CY 2017 PFS final rule (81 FR 80272
through 80277).
We do not believe that our review process is arbitrary in nature.
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). Regarding the commenter's concerns regarding clinically
relevant relationships, we emphasize that we continue to believe that
the nature of the PFS relative value system is such that all services
are appropriately subject to comparisons to one another. Although codes
that describe clinically similar services are sometimes stronger
comparator codes, we do not agree that codes must share the same site
of service, patient population, or utilization level to serve as an
appropriate crosswalk.
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 purpose 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 made a
comparison to a CPT code with the identical work RVU (83 FR 59515). We
noted 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 A-E12 contains a list of codes and
descriptors for which we proposed work RVUs for CY 2026; this includes
all codes for which we received RUC recommendations by February 10,
2025. The finalized 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 final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeeSched/index.html).
b. Efficiency Adjustment
(1) Background
We have 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 final 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 receive data and recommendations from other
outside sources as well.
In the CY 2026 proposed rule (90 FR 32399 through 32400) we
discussed the challenges experienced with survey data. 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.\35\ 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.\36\
---------------------------------------------------------------------------
\35\ https://www.gao.gov/products/gao-15-434.
\36\ 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.
---------------------------------------------------------------------------
[[Page 49335]]
We stated that 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 percent), and appropriate characterization of non-responders to
ensure that nonresponse bias does not threaten the validity of the
findings.'' \37\ 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.\38\
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.\39\
And as detailed in section II.B. of this final 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.
We stated that 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.\40\
---------------------------------------------------------------------------
\37\ Journal of the American Medical Association, Instructions
for Authors. Available from: https://jamanetwork.com/journals/jama/pages/instructions-for-authors.
\38\ https://www.gao.gov/products/gao-15-434.
\39\ 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.
\40\ 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.
---------------------------------------------------------------------------
We noted that 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.
We explained that for several years, we have been concerned about
not accounting for the efficiencies gained in work RVUs for non-time-
based services. 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 highlighted, 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). We stated that 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 noted 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. We stated that 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.\41\
---------------------------------------------------------------------------
\41\ 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.
---------------------------------------------------------------------------
In the CY 2026 proposed rule (90 FR 32401) we explained how 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,\42\ 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.\43\
[[Page 49336]]
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.\44\ We noted that 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.\45\ For
reasons, as further described below in this section, we proposed a
modified version of MedPAC's third option for procedures, radiology,
and diagnostic tests.
---------------------------------------------------------------------------
\42\ 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.
\43\ 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.
\44\ Zuckerman et al, 2016.
\45\ 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.
---------------------------------------------------------------------------
We stated that 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 explained that 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. Therefore, to take into
account changes in medical practice and better reflect the resources
involved in furnishing services paid under the PFS, we proposed 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. We explained that our initial
proposed approach was designed to be conservative in nature, as we are
concerned about making too many changes at once to the current
methodology. We noted that we may, in the future, consider making
additional corresponding updates to the direct PE inputs for clinical
labor and equipment costs. Our proposal was 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.\46\ 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. We further noted
that 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. We explained that 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.\47\ We provided examples of 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.\48\ 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 percent) for lobectomy to 17.0 work
relative value units/hour (+50 percent) for segmentectomy.\49\ We
stated that 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.
---------------------------------------------------------------------------
\46\ 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.
\47\ https://pubmed.ncbi.nlm.nih.gov/25072442/.
\48\ 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.
\49\ https://pubmed.ncbi.nlm.nih.gov/37562675/.
---------------------------------------------------------------------------
(2) Methodology for the Efficiency Adjustment
In the CY 2026 PFS proposed rule (90 FR 32401 through 32403) we
described our proposed methodology to calculate the efficiency
adjustment. We proposed 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
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.\50\ 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. We stated that
the productivity adjustment to be applied to the proposed MEI percent
change moving average for CY 2026 was listed in Table A-E1 (0.8
percent) of the CY 2026 PFS
[[Page 49337]]
proposed rule, and it will be updated for the final rule based on the
most up to date data. We explained that 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.
---------------------------------------------------------------------------
\50\ 87 FR 69709.
---------------------------------------------------------------------------
For CY 2026, we proposed to apply the efficiency adjustment using a
look-back period of 5 years. We considered a couple initial look-back
periods. We explained that 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. Therefore, we also proposed 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
realized that adjusting for the efficiencies gained would be a change
in our payment methodology, and so as an initial conservative approach,
we proposed a look-back of 5 years. We stated that 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 recognized 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,51 52 we stated that we believe 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. We further stated that 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 that we may consider making refinements to the
efficiency adjustment in future rulemaking to better account for these
gains. To implement this efficiency adjustment, we proposed 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.
[GRAPHIC] [TIFF OMITTED] TR05NO25.015
In the CY 2026 PFS proposed rule we used the proposed methodology
described above, and included Table A-E2, which outlined examples of
two different CPT codes that would be subject to the proposed
efficiency adjustment. We noted that Table A-E2 was intended only as an
illustrative example.
---------------------------------------------------------------------------
\51\ Zuckerman et al, 2016.
\52\ 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.
---------------------------------------------------------------------------
In the CY 2026 PFS proposed rule (90 FR 32402) we explained that
this methodology yielded a proposed efficiency adjustment of 2.5
percent, which would be a downward (negative) adjustment for certain
codes, for CY 2026. Given the 5-year look back period, the formula
summed all productivity adjustments included in the final MEI updates
from CY 2022-CY 2026. We noted that 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.
[[Page 49338]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.016
We solicited 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 sought 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.
In the CY 2026 PFS proposed rule (90 FR 32403) we stated that if
the proposed methodology to calculate the efficiency adjustment was
finalized for CY 2026, we proposed to apply the efficiency adjustment
to the intraservice portion of physician time and work RVUs every 3
years. We stated that 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 also proposed 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, and explained that this
would allow for streamlining so that interested parties can expect
updates on a similar timeframe. We also sought comments as to whether
or not efficiencies stop accruing for services after a predefined
number of years.
In addition, we proposed applying this efficiency adjustment to
non-time-based services that we expect to accrue efficiencies over
time. We proposed 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 sought 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, we
noted that a list of the codes we proposed to apply this adjustment to
could be found under the Downloads section posted with the proposed
rule at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
Finally, in the CY 2026 PFS proposed rule we explained that we
understand that accruing efficiencies do not apply equally to all
services, and that efficiencies gained over time may often apply more
to services that take less time to perform. We further explained that
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
sought comments on whether and how we should consider additional
efficiencies for services that require less time to perform.
Additionally, we sought comments on whether the introduction of new
artificial intelligence has or will lead to otherwise unaccounted for
efficiencies gained in specific services.
We also proposed that the public may submit nominations via the
``Potentially Misvalued Codes'' process, as described in section II.C.
of this final rule, so going forward, if they believe the efficiency
adjustment will lead to inaccurate physician time and work RVUs for a
particular code. We stated that nominations submitted should include
supporting information. For the reasons discussed previously in this
section, we also proposed that CMS will place greater emphasis on
``empiric'' supporting information for the codes nominated, to avoid
the limitations of using survey data. We provided 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 solicited comments on what
kinds of data CMS should consider as valid, reliable, empiric
information for this purpose.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters stated that they believe we do not have
the authority to apply an efficiency adjustment to non-time-based
services, and that doing so would require a statutory change. The
commenters stated that the application of the efficiency adjustment
across all physician work RVUs is inconsistent with the approach
envisioned by section 1848(c)(2) of the Act. The commenters stated that
while section 1848(c)(2) of the Act may allow for extrapolation in some
circumstances, such as where data is not available, this would not be
the case with the physician work RVUs that have been evaluated by the
RUC on an ongoing basis. The commenters stated that reference to ``such
units'' at section 1848(c)(2)(B)(ii)(I) of the Act appears to be to
section 1848(c)(2)(B)(i) of the Act that states ``relative values
established under this paragraph for all physicians' services.'' The
commenters stated that the implication of the statute is that the
adjustments consider the individual circumstances of a procedure and
not be applied across the board. A few commenters also stated that the
efficiency adjustment proposal departs from the resource-based
methodology that they state the Congress established for the PFS. A few
commenters also stated the proposed efficiency adjustment undermines
congressional intent to provide an increase in payment for physicians
servicing Medicare beneficiaries.
Response: As stated in the CY 2026 PFS proposed rule (90 FR 32401),
[[Page 49339]]
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.
To take into account changes in medical practice and better reflect
resources involved in furnishing services paid under the PFS, we
believe that our proposal 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, is appropriate.
Comment: We received many comments regarding the efficiency
adjustment proposal. Concerns expressed by the commenters include:
That the proposed efficiency adjustment proposal does not
account for the complexities of individual procedures or the varying
efficiencies across different specialties. The commenters stated that
applying a uniform reduction could undermine the financial stability of
practices, especially in rural and underserved areas where access to
care is already limited. They state the proposed reduction could lead
to reduced patient access to essential services, particularly in
specialties facing workforce shortages. The commenters state the
proposed efficiency adjustment prioritizes speed over quality of care
and puts patients' safety at risk.
That the proposal lacks transparency as to the data and
methodology used to justify the efficiency adjustment. The commenters
stated the proposal is arbitrary and capricious under section 5 U.S.C.
706(2)(A) of the Administrative Procedure Act (APA).
That CMS should adopt a more targeted approach to
incorporate efficiency gains within specific services or code families.
That CMS should finalize a policy that will benefit all
specialties and not just those that frequently bill time-based codes.
That certain specialties have limited use of physician
extenders. While some specialties gain efficiencies through the use of
physician extenders, such as nurse practitioners and physician
assistants, others are unable to leverage these physician extenders,
thus limiting their potential for efficiency gains.
Why certain specialties and code families (for example, E/
M, behavioral health, care management, maternity, telehealth) are
exempt, and that clear justification for the exemptions were not
provided.
A letter published by the Journal of the American College
of Surgeons \53\ indicated that for inpatient only procedures, surgical
times are not declining, rather procedures had longer or similar
operative times. Therefore, surgical and procedural services are not
becoming more efficient over time, and in some cases, are becoming less
efficient. Another study showed that in Q2 2025, ``productivity is up
12% for physicians and 11% for advanced practice providers compared to
two years ago.'' \54\
---------------------------------------------------------------------------
\53\ Childers, Christopher P MD, Ph.D.; Foe, Lauren M MPH;
Mujumdar, Vinita JD; Mabry, Charles D. MD, FACS; Selzer, Don J MD,
MS, FACS; Senkowski, Christopher K MD, FACS; Ko, Clifford Y MD, MS,
MSHS, FACS, FASCRS; Tsai, Thomas C MD, MPH, FACS, Journal of the
American College of Surgeons, Longitudinal Trends in Efficiency and
Complexity of Surgical Procedures: Analysis of 1.7 Million
Operations Between 2019 and 2023, Aug. 13, 2025. https://journals.lww.com/journalacs/abstract/9900/longitudinal_trends_in_efficiency_and_complexity.1369.aspx.
\54\ https://medcitynews.com/2025/09/physician-healthcare-medicare-payment-reimbursement/.
---------------------------------------------------------------------------
Technology can, at times, increase the amount of physician
time and cognitive skill required to perform a service. For example, a
few commenters specifically mentioned that reading CT scans and MRIs
today requires reviewing more images than it did in past years.
Commenters stated CMS' assumption does not consider factors such as
increases in care complexity, patient acuity, staff salaries, AI-
generated insights, and the electronic health record (``EHR'') systems
that require the same or more resources than in the past.
Adjusting physician work RVUs and intraservice time for
all non-time-based codes, while exempting commonly performed services
that are often used as key reference services, will cause disruption in
the processes to update the Resource-Based Relative Value Scale (RBRVS)
and ensure appropriate relativity of new and revised codes, and there
would be rank-order anomalies within and across code families.
Response: We appreciate the commenters for their responses and
appreciate the additional information. We understand the concerns
raised by the commenters about the broad application of the proposed
efficiency adjustment and the potential impact on specific specialties,
patient access and care quality, particularly in rural and underserved
areas. However, existing processes to account for efficiencies have
been insufficient, as we described in the proposed rule (90 FR 32399
through 32403). Even when codes are revalued, it is based on survey
data, with the corresponding shortcomings that we have articulated. In
the CY 2026 PFS proposed rule (90 FR 32402), we recognized that while
efficiencies may accrue more in some services compared to others, the
fact that PFS intraservice time is higher than empirical intraservice
time on average for studied non-time-based services,55 56
means that applying the efficiency adjustment will more accurately
reflect empiric data compared to not doing so.
---------------------------------------------------------------------------
\55\ Zuckerman, Stephen, Katie Merrell, Robert Berenson, Susan
Mitchell, Divvy Upadhyay, Rebecca Lewis. ``Collecting Empirical
Physician Time Data: Piloting an Approach for Validating Work
Relative Value Units.'' Dec 14, 2016. Available from: https://www.urban.org/research/publication/collecting-empirical-physician-time-data-piloting-approach-validating-work-relative-value-units.
\56\ 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.
---------------------------------------------------------------------------
In response to commenters concerned about technological advances in
imaging and their impact on physician intraservice time, we note that
imaging and other test interpretations have some of the highest mean
empirical time to PFS intraservice time ratios of the services
studied.\57\ We appreciate that changes in technology may have varying
impacts on different services, and welcome empiric data from commenters
for future rulemaking.
---------------------------------------------------------------------------
\57\ Zuckerman, Stephen, Katie Merrell, Robert Berenson, Susan
Mitchell, Divvy Upadhyay, Rebecca Lewis. ``Collecting Empirical
Physician Time Data: Piloting an Approach for Validating Work
Relative Value Units.'' Dec 14, 2016. Available from: https://www.urban.org/research/publication/collecting-empirical-physician-time-data-piloting-approach-validating-work-relative-value-units.
---------------------------------------------------------------------------
In response to commenters' references to the published letter from
the Journal of American College of Surgeons, we reviewed the letter
\58\ and note that while operative times increased for approximately 51
percent of CPT codes evaluated, they remained the same for
approximately 38 percent of CPT codes
[[Page 49340]]
and declined for approximately 11 percent. Furthermore, the stated
increase in operative time given in the letter is 3.1 percent. We note
that this information was published in a research letter, and
therefore, we are not privy to the detailed methods used by the
authors. However, we point commenters to a recent review of PFS
intraservice times and times observed in the American College of
Surgeons National Surgical Quality Improvement Program (NSQIP), and
estimates derived from Medicare anesthesia claims which indicates that
NSQIP median operative and anesthesia times are on average, 16 to 17
percent lower than PFS intraservice times.\59\
---------------------------------------------------------------------------
\58\ Childers, Christopher P MD, Ph.D.; Foe, Lauren M MPH;
Mujumdar, Vinita JD; Mabry, Charles D. MD, FACS; Selzer, Don J MD,
MS, FACS; Senkowski, Christopher K MD, FACS; Ko, Clifford Y MD, MS,
MSHS, FACS, FASCRS; Tsai, Thomas C MD, MPH, FACS, Journal of the
American College of Surgeons, Longitudinal Trends in Efficiency and
Complexity of Surgical Procedures: Analysis of 1.7 Million
Operations Between 2019 and 2023, Aug. 13, 2025. https://journals.lww.com/journalacs/abstract/9900/longitudinal_trends_in_efficiency_and_complexity.1369.aspx.
\59\ Reid, Rachel O., Yu, Anthony, Hussey, Peter S., Hero,
Joachim O., Klig, Cameron, Crespin, Daniel J., Swabe, Gretchen,
Burgette, Lane F. ``Surgical Procedure Time Comparisons, Comparing
Physician Fee Schedule Intraservice Times with Real-World Times as
Observed in National Surgical Quality Improvement Program
Intraoperative Times and Anesthesia Claims, https://www.rand.org/pubs/research_reports/RRA3470-1.html.
---------------------------------------------------------------------------
Additionally, we have seen that even after a change in valuation
(such as a decrease in PFS time), the PFS intraservice time still is
above empirically-observed time.\60\ This is why, as we articulated in
the proposed rule, we had discussed that CMS would preferentially
consider empiric information submitted by interested parties, if they
believe the efficiency adjustment led to incorrect valuation of the
service. We believe that robust empiric data is important to avoid some
of the shortcomings of survey data in accounting for efficiencies over
time. We believe the efficiency adjustment will promote interested
parties to submit more precise empiric data, which means that there
will still be changes on a service-by-service basis, even if the
efficiency adjustment itself affects all non-time-based services. As we
proposed, interested parties can submit their requests as part of the
Potentially Misvalued Codes initiative, as described in section II.C.
of this final rule. We look forward to continued engagement with the
public on this topic and are interested in information that could
assist us in potentially refining this policy through future
rulemaking.
---------------------------------------------------------------------------
\60\ Reid, Rachel O., Yu, Anthony, Hussey, Peter S., Hero,
Joachim O., Klig, Cameron, Crespin, Daniel J., Swabe, Gretchen,
Burgette, Lane F. ``Surgical Procedure Time Comparisons, Comparing
Physician Fee Schedule Intraservice Times with Real-World Times as
Observed in National Surgical Quality Improvement Program
Intraoperative Times and Anesthesia Claims, https://www.rand.org/pubs/research_reports/RRA3470-1.html.
---------------------------------------------------------------------------
Comment: Several commenters state that the RUC process already
accounts for efficiency and applying an efficiency adjustment to codes
recently reviewed would be redundant. The commenters stated that CMS
should exempt newly established codes, codes established in recent
years, or codes that have been recently reevaluated by the RUC.
Response: We understand and appreciate the RUC for providing
recommendations to CMS over the years. For many years, we did not have
other sources of data to inform valuation of service paid under the
PFS, and the RUC recommendations derived from surveys have been
particularly important in the revaluation of services. However, studies
have demonstrated that CMS continues to overvalue non-time-based
services, with PFS time greater than mean procedure time by more than
20 percent,\61\ which is in part due to the lack of both regular
revaluing of all codes, and the nature of the survey data that has been
the foundation of many of the RUC recommendations. The survey data used
in RUC recommendations often have low response rates (as low as the
single digits, even when publications for research usually require a
response rate of at least 60, and appropriate characterization of non-
responders to ensure that nonresponse bias does not threaten the
validity of the findings \62\), the survey data is based on clinical
vignettes that have raised concerns for bias.\63\ This leads to the RUC
Relativity Assessment Workgroup's Potentially Misvalued Services
Project recommending the valuation of approximately 40 percent of
identified services be decreased.\64\ And even after a revaluation in
the PFS, recent data demonstrates that PFS time still is higher than
actual intraservice time.\65\ This is why, to better recognize
efficiencies gained, we proposed an efficiency adjustment. We welcome
interested parties to submit empiric data that is robust in nature
related to certain services, if they believe it is not correct to
assume that efficiencies are gained over time, and we will consider
whether or not reevaluation is needed as part of the Potentially
Misvalued Codes initiative.
---------------------------------------------------------------------------
\61\ 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.
\62\ Journal of the American Medical Association, Instructions
for Authors. Available from: https://jamanetwork.com/journals/jama/pages/instructions-for-authors.
\63\ Zuckerman, Stephen, Katie Merrell, Robert Berenson, Susan
Mitchell, Divvy Upadhyay, Rebecca Lewis. ``Collecting Empirical
Physician Time Data: Piloting an Approach for Validating Work
Relative Value Units.'' Dec 14, 2016. Available from: https://www.urban.org/research/publication/collecting-empirical-physician-time-data-piloting-approach-validating-work-relative-value-units.
\64\ 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.
\65\ Reid, Rachel O., Yu, Anthony, Hussey, Peter S., Hero,
Joachim O., Klig, Cameron, Crespin, Daniel J., Swabe, Gretchen,
Burgette, Lane F. ``Surgical Procedure Time Comparisons, Comparing
Physician Fee Schedule Intraservice Times with Real-World Times as
Observed in National Surgical Quality Improvement Program
Intraoperative Times and Anesthesia Claims, https://www.rand.org/pubs/research_reports/RRA3470-1.html.
---------------------------------------------------------------------------
Additionally, we are persuaded by the commenters' feedback that it
would not be appropriate to apply the efficiency adjustment to new
services, given that practitioners would not be able to accrue
efficiencies for services that are new in the first year. Therefore, we
are exempting codes new for CY 2026 from the efficiency adjustment for
CY 2026.
Comment: Several commenters provided feedback on the exemption of
E/M visits from the efficiency adjustment. Several commenters were in
support of exempting E/M visits from the efficiency adjustment. A
commenter stated that the current RVU evaluation process unduly favors
non-E/M services, due to a variety of factors, including methodological
and accuracy issues with the RUC surveys. Another commenter stated that
while some E/M codes may be chosen based on time or medical decision
making, they all heavily depend on time spent with the patient and thus
are not amenable to efficiencies that otherwise apply to procedural or
technology-oriented services. Since any given E/M code may be selected
based on time, they are akin to other time-based services and thus
properly excluded from the efficiency adjustment proposed by CMS.
Conversely, a commenter stated that the proposed policy penalizes
specialties with low time-based E/M utilization while benefiting
specialties that predominantly bill time-based E/M services. The
commenter continued to state that if finalized as proposed, the policy
could create significant relativity distortions across the PFS.
Several commenters highlighted that CMS has made several increases
to E/M work RVU values in recent years but did not make corresponding
increases to the E/M components of global surgical packages. The
commenters stated that this discrepancy has led to a loss of relativity
within the fee schedule and undervalues global surgical packages. A few
commenters stated the efficiency adjustment decreases the work value of
bundled E/M visits, creating a
[[Page 49341]]
discrepancy in payment between standalone and bundled E/M visits. They
recommended CMS correct this inequity to maintain the relativity of
code values.
Response: We appreciate the feedback and support from commenters.
Based on section 1848(c)(2)(C)(i) of the Act, which requires the
Secretary to determine a number of work relative value units for the
service or group of services based on the relative resources
incorporating physician time and intensity required in furnishing the
service, including global surgical services, we continue to believe
standalone E/M services should be exempt from the efficiency adjustment
as detailed in the CY 2026 PFS proposed rule (90 FR 32593 through
32597). We also wish to clarify that the E/M visits are exempt from the
efficiency adjustment, regardless of whether the E/M visit is billed
based on time or medical decision making.
Comment: Several commenters stated that CMS should forego the
efficiency adjustment, as intraservice times are increasing because
patient's conditions are becoming more complex, stating that as the
average age of patients increases, patient body mass index (BMI) rises,
and the number of chronic conditions patients are diagnosed with
increases.
Response: Over the last decade, we have updated PFS payment
policies as appropriate and remain committed to improving how Medicare
payment recognizes the resources involved in furnishing covered
services. As a part of the CY 2014 PFS final rule, we recognized care
management as a critical service contributing to better health outcomes
for individuals (78 FR 74414 through 74427). Since then, we have
implemented coding and payment for many care management services to
better recognize the resources involved in furnishing medically
necessary care management activities that generally are performed
outside the context of a face-to-face, in-person visit, most often by
the billing practitioner's clinical staff on behalf of patients with
complex health care needs, including transitional care management in
the CY 2013 PFS final rule (77 FR 68979); non-complex and complex
chronic care management (CCM) in the CY 2015, 2017, and 2019 PFS final
rules (78 FR 74414, 83 FR 58577, and 81 FR 80244); and principal care
management (PCM) in the CY 2020 PFS final rule (84 FR 62962). The CCM
and PCM code families now include five sets of codes which are reported
monthly on a timed basis, each set with a base code of 20 to 60 minutes
and an add-on code for each additional 30 minutes. The code sets vary
by the degree of complexity of patient conditions (that is, non-complex
and complex CCM for multiple chronic conditions or PCM for a single
high-risk condition), and whether the number of minutes spent by
clinical staff or the physician or non-physician practitioner (NPP) is
used to meet time thresholds for billing. We remind commenters of these
services which are available for care management and coordination, to
support beneficiaries with a variety of complex health needs.
Furthermore, we will continue to engage with interested parties on this
topic and are interested in information that could assist us in
estimating physician intraservice time for covered services.
Comment: Several commenters indicated that despite our stated
intention to exclude time-based services from the efficiency
adjustment, we included several time-based services including physical
medicine and rehabilitation services and remote therapeutic monitoring
(RTM) on the list of services which we proposed to apply this
adjustment.
A commenter stated that telehealth services are excluded from the
adjustment, but some telehealth codes are on the impacted efficiency
adjustment list.
Additionally, several commenters stated that diagnostic,
prophylactic, or therapeutic intravenous infusions, such as
chemotherapy, should not be subject to the efficiency adjustment, as
the infusion rates are recommended on the required FDA labeling, and
therefore cannot be made more efficient, or delivered at a faster rate.
Several commenters requested exclusions of:
Certain specialties, non-time-based codes, and/or services
(for example, specialties with workforce shortages, annual wellness
visits (AWVs), bariatric surgery codes, cataract codes, etc.).
Services where efficiencies would compromise patient
safety.
Codes for services valued through crosswalk rather than
RUC surveys.
Software-based services, such as Artificial Intelligence-
enabled Coronary Plaque Analysis (AI-CPA) and Fractional Flow Reserve
derived from Computed Tomography, as they do not yield efficiency gains
with increased use.
Response: We appreciate the commenters' diligence in reviewing the
list of services to which we proposed to apply the efficiency
adjustment. We agree with the commenters that time-based services and
services on the CMS telehealth list should be included in the list of
codes exempt from the efficiency adjustment list. We have removed the
time-based physical medicine and rehabilitation services and RTM
services and services on the CMS telehealth list from the list of codes
to which the efficiency adjustment will apply. Additionally, we
appreciate the information provided by the commenters with regard to
FDA labeling for diagnostic, prophylactic, or therapeutic intravenous
infusions. We are removing time-based, drug administration codes from
the list of codes to which the efficiency adjustment will apply in CY
2026. We continue to believe that applying the efficiency adjustment to
non-time-based services more broadly, instead of applying it only to
certain services, will help to improve the overall accuracy of our
valuation of these services under the +PFS. Given our commitment to
refining the efficiency adjustment over time, we look forward to
continued engagement with the public on future rulemaking for these
services. We welcome any empirical data regarding physician
intraservice work time for PFS services that commenters are able to
submit to us. Interested parties can submit their request as part of
the Potentially Misvalued Codes initiative, as described in section
II.C. of this final rule.
Comment: A commenter requested a hold harness policy for rural and
safety net providers.
Response: We appreciate the commenter's feedback and may consider
this for future rulemaking.
Comment: Several commenters requested that CMS conduct a more
targeted review of specific codes rather than applying a broad
application. Some commenters requested that CMS apply the efficiency
adjustment to only a subset of codes, that is, older codes that have
not been revalued for 17-25 years, exempting codes that take less time
to perform, focusing on high volume codes, etc. Several commenters
supported the efficiency adjustment, and some of these commenters urge
careful consideration of its implementation to avoid unintended
consequences. Several commenters recommend delaying implementation to
conduct specialty specific reviews, or to phase in implementation (that
is, over 3 years) to give organizations time to adjust to changes in
revenue. Some commenters stated CMS should use a shorter lookback
period, while other commenters stated CMS should use a longer lookback
period, such as a 10 year lookback period.
Response: We appreciate the commenter's feedback on the efficiency
adjustment proposal. As stated in proposed rule, the efficiency
adjustment
[[Page 49342]]
proposal reflects a conservative approach based on studies of
overvaluation, which is why we are using a conservative 5-year lookback
period. While we acknowledge the suggestions to delay or phase in
implementation and to conduct specialty-specific reviews, we continue
to believe the proposal is an appropriate balance between timely policy
implementation and the need for future refinement. We are committed to
continue engaging with the public and will continue to consider public
feedback on the efficiency adjustment policy, as we may need to make
refinements and would address through future rulemaking accordingly.
Comment: Many commenters also provided recommendations for CMS to
consider assisting with more accurate valuation of codes including:
Bundling related services into broader payment packages,
stating that CMS could decrease the administrative burden associated
with frequent code-specific revaluations, allowing greater focus and in
turn accuracy. Consolidating codes in this manner would streamline data
collection, code review, and payment adjustments, and better align the
PFS with established practices in other Medicare payment systems.
Establishing a Technical Advisory Panel to discuss and
advise on service packages, service valuation including the appropriate
collection and use of empirical data, code level estimates of physician
intraservice time, cadence for updates, and potential efficiency
adjustments while considering the potential impact on physicians,
beneficiaries, and the Trust Fund.
Consider implementing a modifier or HCPCS G-code for
surgical complexity so that surgeons will be able to identify the cases
that are more complex, which would more directly and appropriately
address CMS' interest in isolating the services that are truly more
efficient.
Also, the commenters recommended CMS work with medical
professionals to develop time and motion studies for high volume
procedures to determine if there are or have been any efficiency gains
over time. The commenters believe empirical data is needed to support
this policy, such as data points that may be captured by analyzing EHR
data.
Response: We appreciate the commenters for their feedback and may
consider these suggestions for future rulemaking.
Comment: Several commenters stated that CMS should not make
corresponding adjustments to direct PE input for clinical labor or
equipment because these costs have only increased. They also suggest
that CMS consult with interested parties and seek input from the RUC.
A few commenters recommended making corresponding updates to the
inputs for clinical labor and equipment costs and to factor all those
changes into CMS' indirect PE methodology, where appropriate. The
commenters stated that not making these changes creates a distortion in
which CMS is not fully accounting for the efficiencies garnered over
time as technology advances, workflows improve, and expertise develops.
The commenters continued to state that procedures that become more
efficient, for example, also reduce clinical labor time and costs and
equipment costs (for example, since the equipment is being used for
less time).
Response: We appreciate the comments submitted by the public and
may consider these suggestions for possible future rulemaking.
Comment: Several commenters stated that they were unable to
replicate the productivity adjustments that are used to derive the
proposed efficiency adjustment. They state that these productivity
adjustments for 2022 to 2026 are not listed in either of the CMS online
tables related to the MEI or in information available from the U.S.
Bureau of Labor Statistics (BLS). A few commenters requested that CMS
supplement the values posted in Table A-E1 of the CY 2026 PFS proposed
rule (90 FR 32593) with a brief narrative describing the calculation
methodology, any year-over-year rounding conventions, and the precise
source data (for example, Bureau of Labor Statistics series) used for
each input in a separate file to be posted to the CMS web page.
Response: Total factor productivity (TFP), as measured by the U.S.
Bureau of Labor Statistics (BLS), captures the portion of economic
growth that cannot be explained solely by increases in labor and
capital inputs. Instead, it reflects improvements in efficiency,
technology, organizational practices, and other factors that enhance
how inputs are combined to produce output. Unlike labor productivity,
which only looks at output per hour worked, TFP accounts for multiple
inputs, including labor (adjusted for composition), capital, and
intermediate goods, using cost-share weights to build combined input
indexes. Because it represents a residual, TFP is sensitive to
measurement quality but is widely viewed as an indicator of innovation
and long-term potential growth.
BLS TFP data are revised on a regular basis to incorporate updated
source data, methodological improvements, and benchmarking adjustments.
Because TFP relies on inputs from other agencies, such as Gross
Domestic Product and capital data from the Bureau of Economic Analysis
and labor data from Census surveys and the Current Population Survey,
revisions to those underlying sources flow into BLS TFP estimates. In
addition, changes in methodology, such as the 2022 update to labor
composition measurement, can lead to historical revisions. Typically,
BLS issues annual revisions for TFP in the private business, private
nonfarm business, and manufacturing sectors, as well as for detailed
industries to reflect any methodological changes and to incorporate
more recent data.
BLS typically publishes TFP data on an annual schedule, with an
initial preliminary release followed by revised (final) estimates once
more complete source data is available.
As stated in the CY 2026 PFS proposed rule (90 FR 32593), the
productivity adjustments used in the proposed efficiency adjustment are
based on the BLS TFP data for the private nonfarm business sector.
Preliminary TFP estimates for the private nonfarm business sector are
typically released in March for the prior year. For example, 2024
preliminary TFP data were released in March 2025. These estimates rely
on the most up to date but still incomplete data from the Bureau of
Economic Analysis (BEA), Census, and other sources. Final (revised) TFP
estimates are usually incorporated in the fall release cycle (often
around November to December), when more complete national accounts and
input data are available. At this point, BLS re-estimates the TFP
measures for the most recent year and may also revise prior years.
Table A-E3 lists the BLS TFP release dates for the years 2020 to
2024 for both the preliminary publication and the later revision
(``final'') date when BLS issued a formal revision.
[[Page 49343]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.017
The preliminary TFP estimates do not remain as a separate,
permanent data set. When BLS releases revised (or ``final'') estimates
later in the year, the new numbers overwrite the preliminary figures in
the public data tables. The archived TFP data can be obtained from the
archived TFP news releases at https://www.bls.gov/bls/news-release/home.htm#tfp.
To determine the productivity adjustment, we use the annual index
levels for total factor productivity from 1987 to the latest year of
data published by BLS at the three decimal level of precision. We then
calculate the 10-year moving average of the annual index levels to
derive the 10-year average TFP index level, unrounded. Next, we
calculate the growth rate of the current year to the prior year of the
10-year average index levels to derive the 10-year moving average
growth. Finally, this value is rounded to 1 decimal place to arrive at
the final applicable productivity adjustment. Questions related to the
methodology for how TFP is calculated should be directed to the Bureau
of Labor Statistics--Office of Productivity and Technology (OPT),
https://www.bls.gov/productivity.
We acknowledge commenters' concerns that the MEI update and
productivity adjustment have not been published separately in the
recent CY PFS regulations on a consistent basis since it is not used to
calculate PFS payment rates, with the exception of the telehealth
originating site facility fee; however, the relevant information is
available by reference to the FQHC market basket update, which is based
on the latest historical data at the time of the publication of the
final rule. The ``Actual Regulation Market Basket Updates (ZIP)'' link
in the downloads section of the following cms.gov web page contains a
spreadsheet that details the productivity adjustment applied for each
FQHC market basket update: https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-data. The productivity adjustment in the FQHC market basket for
the corresponding period would match that of the MEI and is consistent
with the information provided in the proposed rule.
We highlight that the productivity adjustment applicable to the CY
2026 MEI and FQHC market basket updates is finalized to be 0.8
percentage point, the same as was proposed. The productivity adjustment
corresponding to the payment update for CY 2026 incorporates the Bureau
of Labor Statistics' total factor productivity estimates through 2024,
published on March 21, 2025. This adjustment is determined by
calculating the 10-year moving average of changes in annual economy-
wide, private nonfarm business total factor productivity.
Table A-E4 presents the efficiency adjustment of 2.5 percent, which
is derived from the cumulative productivity adjustments finalized in
each PFS final rule from CY 2022 through CY 2026. Additionally, we
provide a comparison of the estimated productivity adjustment based on
the latest revised TFP data available from BLS at the time of this CY
2026 PFS final rule.
[GRAPHIC] [TIFF OMITTED] TR05NO25.018
While there are updated percentages based on revised BLS TFP data
at the time of drafting this final rule, as indicated in Table A-E4, we
note that our proposed approach was designed to be conservative in
nature, as we are concerned about making too many changes at once to
the current methodology. Therefore, as we discuss
[[Page 49344]]
in the summary for this section, we are finalizing the proposed
efficiency adjustment of 2.5 percent for CY 2026.
Comment: Several commenters stated that it is unreasonable for CMS
to apply the efficiency adjustment, essentially a productivity
adjustment, to reduce PFS payments when there is no corresponding
market basket or inflationary adjustment to increase PFS payments
annually. The commenters observed that, unlike other Medicare FFS
payment systems where a market basket percentage increase is calculated
and then reduced by a productivity adjustment to determine the final
payment rate update, CMS is proposing to apply a type of productivity
adjustment to decrease payment for the PFS without the associated
yearly payment increase of a market basket. The commenters suggested
that CMS should work with Congress to make sure there is a permanent
change to the PFS to ensure that there is a mechanism to account for
annual input price inflation, such as the MEI update. Several
commenters requested that CMS provide additional clarification
surrounding why the agency believes that this measure of overall
productivity growth across the economy is an adequate proxy for
service-level efficiency gains within the Medicare program and stated
their belief that it is unreasonable to extrapolate changes in
physician productivity from estimates of nonfarm business productivity
across the entire economy. Additionally, a commenter supported the use
of the MEI productivity adjustment as a basis for the efficiency
adjustment, stating that it is a good approximation of physician-
specific multifactor productivity.
Response: We appreciate the comments regarding using the MEI
productivity adjustment to calculate the efficiency adjustment. We
acknowledge that, unlike other Medicare payment systems where annual
payment updates are based on a market basket increase that is then
adjusted for productivity, the PFS does not include an automatic
mechanism to account for inflationary input cost growth.
However, we continue to believe that the productivity adjustments
used in the proposed efficiency adjustment, based on the BLS TFP data
for the private nonfarm business sector, is a reasonable and
appropriate proxy for productivity improvements that can be expected
over time in the provision of physician services. While we recognize
that the data reflects productivity growth in the broader nonfarm
business sector, it is the widely accepted and consistently measured
estimate of economy-wide productivity gains used to adjust the FFS
annual market basket updates as required by section 3401 of the
Affordable Care Act (ACA), These legislatively mandated payment
adjustments have been used across most FFS Medicare payment systems
since 2012.
We appreciate commenters' suggestions that CMS work with Congress
to explore statutory changes that would allow for a more comprehensive
update framework under the PFS, including mechanisms to account for
annual input price inflation. While CMS does not have the authority to
make such changes unilaterally, we understand the importance of these
concerns and will continue to consider commenter's suggestions as we
continue to make refinements to this policy through future rulemaking.
We also note that at a commenter supported the use of the MEI
productivity adjustment, stating that it represents a reasonable
approximation of physician-specific multifactor productivity. We
continue to believe that the MEI productivity adjustment provides a
useful and analytically supported approach to account for efficiency
gains and ensure consistency with broader Medicare payment policy. We
continue to welcome, review and consider the public's feedback on this
issue and will evaluate whether refinements or alternative approaches
may be appropriate in future rulemaking.
Comment: We received several comments regarding the cadence of the
efficiency adjustment proposal. Several commenters also requested that
CMS clarify its decision to continually apply the efficiency adjustment
every 3 years. A few commenters stated that anything more than a one-
time adjustment is unwarranted. Other commenters described that
efficiencies cannot continue to be gained year-over-year and that at
some point, there is a maximum efficiency that can be realized, and
going beyond that point will compromise patient care. A commenter
stated that the efficiency adjustment is different from the GPCI and MP
updates, in contrast to those updates, which have occurred every 3
years for decades with finite and consistent impact on affected
services, the efficiency adjustment has the potential to be
substantially disruptive to the fee schedule every year it is
implemented. The commenter recommended CMS to defer subsequent
efficiency adjustments until the impact on Medicare patient care can be
appropriately evaluated to ensure that it is not harmful. A commenter
stated that technological adoption is rarely linear and believes 3
years is insufficient to determine that innovation and efficiency have
been embedded across an entire procedure or service. The commenter
recommended CMS extend the adjustment period beyond 3 years to provide
adequate time to assess the impacts of innovative technologies on their
workflows and care delivery. Another commenter stated implementing a
consistent 2.5 percent reduction every 3 years indefinitely risks
causing ongoing cuts to payments for certain services, without clear
evidence that further efficiencies are actually achievable. Another
commenter stated that CMS did not specify an endpoint for the
efficiency reduction. The commenter continued to state that as
proposed, CMS would, theoretically, continue to apply the efficiency
adjustment until such time that the intraservice time is zero.
Response: We appreciate the commenters for their thoughtful input.
We acknowledge the concern that efficiencies may not accrue
indefinitely and that overly repeated application of the efficiency
adjustment could have cumulative effects over time. As such, we will
continue to monitor the impact of the efficiency adjustment. While we
proposed a 3-year cadence, we may revisit the frequency and consider
establishing a sunset provision or other refinements in future
rulemaking.
After consideration of public comments, for CY 2026 we are
finalizing 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, with refinements. We will
apply the efficiency adjustment to the intraservice portion of
physician time and work RVUs every 3 years. To calculate the efficiency
adjustment, we are finalizing the use of the MEI productivity
adjustment over a 5-year look back period from CY 2022 to CY 2026. We
note, as displayed in Table A-E4, using more recent historical data
from the BLS yielded an efficiency adjustment of 3.6 percent. As we
discussed in the CY 2026 PFS proposed rule (90 FR xxx), our approach in
applying an efficiency adjustment is to take into account changes in
medical practice and to better reflect resources involved, and it is
designed to be conservative in nature, as we are concerned about making
too many changes at once to the current methodology. Therefore, we are
finalizing the proposed efficiency adjustment of 2.5 percent. We are
exempting additional codes, specifically time-based codes, services on
the CMS
[[Page 49345]]
telehealth list, and new codes for CY 2026, as reflected in the Codes
Subject to Efficiency Adjustment file. This file can be found in the
public use files for CY 2026; the file is available on the CMS website
under downloads for the CY 2026 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. Methodology for the Direct PE Inputs To Develop PE RVUs
a. Background
On an annual basis, the RUC provides us with recommendations
regarding PE inputs for new, revised, and potentially misvalued codes.
We review the RUC-recommended direct PE inputs on a code-by-code basis.
Like our review of recommended work RVUs, our review of recommended
direct PE inputs generally includes, but is not limited to, a review of
information provided by the RUC, HCPAC, and other public commenters,
medical literature, and 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 non-facility 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 A-E13
details our refinements of the RUC's direct PE recommendations at the
code-specific level. In section II.B. of this final rule, Determination
of Practice Expense Relative Value Units (PE RVUs), we address certain
refinements that will be common across codes. Refinements to particular
codes are addressed in the portions of that section that are dedicated
to particular codes. We note that for each refinement, we indicate the
impact on direct costs for that service. We note that, on average, in
any case where the impact on the direct cost for a particular
refinement is $0.35 or less, the refinement has no impact on the PE
RVUs. This calculation considers both the impact on the direct portion
of the PE RVU, as well as the impact on the indirect allocator for the
average service. In this final rule, we also note that many of the
refinements listed in Table A-E13 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 final 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
[[Page 49346]]
RUC sometimes recommends a number of minutes either greater than or
less than the time typically allotted for certain tasks. In those
cases, we review the deviations from the standards and any rationale
provided for the deviations. When we do not accept the RUC-recommended
exceptions, we refine the proposed direct PE inputs to conform to the
standard times for those tasks. In addition, in cases when a service is
typically billed with an E/M service, we remove the preservice clinical
labor tasks to avoid duplicative inputs and to reflect the resource
costs of furnishing the typical service.
We refer readers to section II.B. of this final rule, 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 A-E13 and A-E14 detail the invoices received
for new and existing items in the direct PE database. As discussed in
section II.B. of this final rule, Determination of Practice Expense
Relative Value Units, we encourage interested parties to review the
prices associated with these new and existing items to determine
whether these prices appear to be accurate. Where prices appear
inaccurate, we encourage interested parties to submit invoices or other
information to improve the accuracy of pricing for these items in the
direct PE database by February 10th of the following year for
consideration in future rulemaking, similar to our process for
consideration of RUC recommendations.
We remind interested parties that due to the relativity inherent in
the development of RVUs, reductions in existing prices for any items in
the direct PE database increase the pool of direct PE RVUs available to
all other PFS services. Tables A-E13 and A-E14 also include the number
of invoices received and the number of non-facility allowed services
for procedures that use these equipment items. We provide the non-
facility 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 may 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 may 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 final 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
[[Page 49347]]
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 proposed 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 (that is, 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 (that is, 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, 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)), 70471 (Computed
tomographic angiography (CTA), head and neck, with contrast
material(s), including noncontrast images, when performed, and image
postprocessing), 70472 (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)), 70473
(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.
We appreciate commenters' feedback regarding CPT codes 92227
(Imaging of retina for detection or monitoring of disease; with remote
clinical staff review and report, unilateral or bilateral), 92228
(Imaging of retina for detection or monitoring of disease; with remote
physician or other qualified health care professional interpretation
and report, unilateral or bilateral), and 92229 (Imaging of retina for
detection or monitoring of disease; point-of-care autonomous analysis
and report, unilateral or bilateral), and may consider adding this code
to the OPPS cap list for future rulemaking, however as we did not make
a specific proposal regarding this service, we consider these comments
out of scope for this rule but we appreciate the additional information
and may consider it for future rulemaking. We did not receive public
comments on the proposed additions to the OPPS cap list for CY 2026. We
are finalizing the addition of the services listed above to the list of
codes to which the OPPS cap applies, as proposed.
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) may 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
sought comments on whether to nationally price both codes, and what
inputs for physician work, time, and direct
[[Page 49348]]
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 sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: The RUC indicated that CPT codes 0583T, 69433, and HCPCS
code G0561 will be placed on the next level of interest for review.
Response: We acknowledge and appreciate the AMA for the RUC's
placement of CPT code 0583T, 69433, and HCPCS code G0561 on their next
level of interest for review list and look forward to their input, as
well as input from the initial submitters of CPT code 0583T and all
other interested parties.
Comment: Many commenters supported national pricing for CPT code
0583T. These commenters stated that national pricing will improve
patient access to the procedure and align with time and resources
involved, ensuring accurate payment for practitioners performing this
procedure in the office setting. Commenters also supported a crosswalk
to CPT code 31295 to describe the resources associated with the
innovative tympanostomy tube delivery devices and/or systems described
by CPT code 0583T, stating that the physician work, time, and direct PE
inputs reflected in CPT code 31295 are similar to those of 0583T.
Response: We appreciate the commenters for their feedback.
Comment: A few commenters did not support national pricing for
HCPCS code G0561. These commenters recommended waiting until more data
and clinical experience become available to support national pricing.
Other commenters supported national pricing for HCPCS code G0561 and
requested different payment rates for CPT code 0583T and HCPCS code
G0561.
Response: We agree with commenters that it may be beneficial to
collect more data on the use of HCPCS code G0561 prior to proposing
national pricing. Therefore, we are finalizing to maintain contractor
pricing for HCPCS code G0561. Regarding pricing for CPT code 0583T, we
are persuaded by the comments that stated that the physician work,
time, and direct PE inputs reflected in CPT code 31295 are similar to
those of 0583T, therefore, we are finalizing a crosswalk to the input
values associated with CPT code 31295 for CPT code 0583T for CY 2026.
(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 (that is, 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 proposed 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 proposed the RUC-recommended direct PE inputs for both CPT codes
without refinement.
We did not receive any public comments on this policy, and
therefore, we are finalizing as proposed.
(3) Skin Cell Suspension Autograft
Comment: We received comments that requested CMS clarify policies
related to CPT codes 15011, 15012, 15013, 15014, 15015, 15016, 15017,
and 15018. The commenters recommended that CMS establish national
pricing for these services.
Response: At this time, our concerns expressed in the CY 2025 PFS
final rule (89 FR 97774 through 97776) have not been resolved regarding
these services. We continue to have concerns about the service times,
segmentation of the coding, and billing patterns of the add-on codes
based on the vignettes. We continue to believe contractor pricing is
appropriate for these services and look forward to reviewing these
codes again after reconsideration of the coding structure and re-survey
is complete. Additionally, we did not propose to nationally price these
services in the CY 2026 PFS proposed rule (90 FR 32593), so those
changes cannot be finalized. We encourage interested parties to work
with the MACs to develop the crosswalks for these services while they
continue to be contractor priced.
(4) Limb Lengthening-Shortening--Femur (CPT Codes 27465, 27466, 27468,
and 27458)
The CPT Editorial Panel created a new Category I code, CPT code
27458 (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 27458
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 proposed the RUC-recommended work RVUs of 26.65, 21.13, and
22.65 for CPT codes 27458, 27465, and 27466, respectively. We also
proposed the direct PE inputs for CPT codes 27458, 27465, and 27466
without refinement.
However, for CPT code 27468, we disagreed 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 instead proposed to maintain
the current work RVU and direct PE inputs for CPT code 27468 for CY
2026.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter, the AMA, stated at the May 2025 CPT Editorial
Panel meeting, CPT code 27468 was deleted for CY 2026 due to the
specialty request due to low volume. This was reflected in the CY 2026
RUC resource files submitted to CMS in May 2025. Therefore, the RUC
recommended the deletion of CPT code 27468 from Addendum B as the code
will not exist in 2026. The same commenter was in support of our
proposal of the RUC recommended values for CPT codes 27458, 27465, and
27466.
[[Page 49349]]
Response: We appreciate the commenter for their feedback and for
the additional information regarding CPT 27468.
After consideration of public comments, we are finalizing our
proposed values for CPT codes 27458, 27465, and 27466. For CPT code
27468, we are finalizing the deletion of this code as it will no longer
exist in 2026.
(5) Limb Lengthening-Shortening--Tibia (CPT Codes 27715 and 27713)
The CPT Editorial Panel created a new Category I code, CPT code
27713, (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 27713
and 27715 (Osteoplasty, tibia and fibula, lengthening or shortening)
were surveyed for the September 2024 RUC Meeting.
We proposed the RUC-recommended work RVU of 28.00 for CPT code
27713 and the work RVU of 22.50 for CPT 27715. We also proposed the
direct PE inputs for CPT codes 27713 and 27715 without refinement.
We did not receive public comments on this proposal, and therefore,
we are finalizing as proposed.
(6) 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 proposed the RUC-recommended work RVU of 8.75 for CPT code
28750.
We disagreed with the RUC-recommended work RVU of 7.50 for CPT code
28755 and we instead proposed 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 proposed 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 proposed the RUC-recommended direct PE inputs for all of the
codes in this family.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters generally agreed with CMS' proposal of the RUC-
recommended work and direct PE inputs for CPT code 28750.
Response: We appreciate the commenters for taking the time to
submit comments. After reviewing the comments, we are finalizing the
proposed work RVU and direct PE inputs for CPT code 28750.
Comment: A few commenters disagreed with CMS' proposal to lower the
work RVU to 6.64 for CPT code 28755. The commenters stated that the
Harvard study under which CPT code 28755 was previously valued did not
include podiatrists and was reviewed by only nine general orthopedic
surgeons. Additionally, the Harvard study did not survey pre- or post-
service work or time and instead estimated time based on an algorithm.
Additionally, no positioning time was assigned, and post-operative work
was underestimated based on this methodology.
Commenters disagreed with the selected crosswalk code, CPT code
28122, stating that the code under review is more intense and requires
more work than the selected crosswalk code and has more time, work,
effort, and risk involved. Commenters suggested CMS to finalize the
RUC-recommended work RVU of 7.50 for CPT code 28755.
Response: We appreciate the commenters for their suggestions. We
agree with the case made by commenters that CPT code 28755 is more
difficult to perform than CPT code 28122 because CPT code 28755
involves smaller bones. In addition, the RUC-recommended value is
supported by a search of similarly timed codes, with the value of 7.50
landing between the mid and upper third of values.
After consideration of public comments, we are not finalizing our
proposed work RVU of 6.76 for CPT code 28755 and we are instead
finalizing the RUC-recommended work RVU of 7.50. We are finalizing the
RUC-recommended direct PE inputs for all of the codes in this family.
(7) 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 proposed the RUC-recommended work RVU of 10.25 for CPT code
33340. We also proposed the RUC-recommended direct PE inputs for CPT
code 33340 without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters opposed the CMS proposal of the RUC-
recommended work RVU of 10.25 for CPT code 33340 because these
[[Page 49350]]
commenters believe that the decrease in work RVU from 14.00 to 10.25
was too drastic and could impact beneficiaries' access to these
services. A few commenters also disagreed with the comparison to CPT
code 49614, stating that it was an inappropriate choice for a valuation
crosswalk.
Response: While we understand commenters' concerns, we believe that
the RUC-recommended work RVU and direct PE inputs for CPT code of 33340
are appropriate choices for valuation. When CPT code 33340 was
surveyed, the intraservice time decreased from 90 minutes to 70 minutes
(about 28 percent) while the total time decreased from 183 minutes to
165 minutes (about 11 percent). Although we do not imply that the
decrease in time as reflected in survey values must equate to a one-to-
one or linear decrease in the valuation of work RVUs, we believe that
since the two components of work are time and intensity, significant
decreases in time should be reflected in decreases to work RVUs. We
believe that CPT code 49614 is an accurate crosswalk for work valuation
as it has comparable intraservice time to CPT code 33340 (75 minutes
against 70 minutes) and the two codes share the identical total time of
165 minutes.
After consideration of the public comments, we are finalizing our
proposed work RVUs and direct PE inputs for CPT code 33340.
(8) Thoracic Branch Endograft Services (CPT Codes 33880, 33881, 33883,
33886, 33882, and 35602)
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 33882 (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 35602 (Bypass graft, with
other than vein; carotid-contralateral carotid), CPT code 33880
(Endovascular repair of descending thoracic aorta (eg, 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
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 instead we proposed 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 instead proposed 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 instead proposed 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
[[Page 49351]]
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
33882 and we instead proposed 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 proposed a work RVU of 35.00
for CPT code 33882 based on a direct crosswalk to CPT code 33390
(Valvuloplasty, aortic valve, open, with cardiopulmonary bypass; simple
(ie, 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 instead proposed 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 proposed 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 disagree with the RUC recommended work RVU of 23.50 for CPT code
33886 and we instead proposed 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 proposed 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 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
35602and we instead proposed 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 proposed a work RVU of 23.53 for CPT
code 35602based on a direct crosswalk to CPT code 32669 (Thoracoscopy,
surgical; with removal of a single lung segment (segmentectomy)). We
note that CPT code 35602was 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 35602and 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 35602,
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 proposed the RUC-recommended direct PE inputs for all the codes
in this family.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters generally agreed with the CMS proposal of the
RUC-recommended direct PE inputs for CPT codes 33880, 33881, 33883,
33886, 33882 and 35602 without refinement.
Response: We appreciate the commenters' support for the CMS
proposal of the RUC-recommended direct PE inputs for CPT codes 33880,
33881, 33883, 33886, 33882 and 35602 without refinement.
Comment: Several commenters stated that there appeared to be an
issue regarding the correct valuation of CPT codes 33880, 33881, 33883
and 33886 resulting from a mathematical error in the utilization
crosswalk. The commenters stated that CMS double-counted the
utilization for the new codes, most likely due to a misinterpretation
attributable to the text in the RUC's utilization crosswalk
recommendations stating, ``Bundled into 33880'' instead of ``Savings''
(bundled into 33880). The commenters stated that there was a
discrepancy of 25,176 work RVUs included in the CMS utilization
assumptions compared to what the RUC originally submitted and suggested
CMS to correct the mathematical error on which the current work RVUs
for CPT codes 33880, 33881, 33883 and 33886 are based.
[[Page 49352]]
Response: We appreciate the feedback from the commenters on the
utilization crosswalk involving these codes. After reviewing the
subject, we agree that there was an unintended technical error
involving the utilization crosswalk for CPT codes 33880, 33881, 33883
and 33886 due to a misinterpretation of how the RUC made its
recommendations. We are therefore finalizing a correction to this
technical error in this final rule.
Comment: A few commenters disagreed with CMS' proposed direct
crosswalks and work RVU recommendations for all six codes in this
family. Commenters requested the need for CMS to adjust the work RVUs
for the Thoracic Endovascular Aortic Repair (TEVAR) code family to
reflect the complexity and intensity of these procedures. The
commenters expressed that these procedures incorporate significant pre-
service planning, intraoperative complexity, and extensive post-
operative care that were not fully captured in the original code set or
existing comparators. Additionally, the commenters stated that bundling
radiographic supervision and interpretation with selective catheter
codes into the primary TEVAR codes, along with the deletion of bypass
codes, simplifies coding but increases procedure complexity. Commenters
agreed with CMS that the two components of work are time and intensity,
and decreases in the surveyed work time should typically be reflected
in decreases to the work RVU, however, a commenter stated that with
TEVAR, the intensity has increased substantially, which they believe
should result in less reduction in the work RVU.
Response: We appreciate the commenters for their comments. We
continue to believe that the RUC-recommended work RVUs do not appear to
fully account for the overall decrease in the work times. We continue
to believe that the proposed values for the work RVUs for all of the
codes in this code family are accurate. The comparator codes selected
account for intensity as well as time required for this service; we
note, for example, that the intensity of each code in the family is
increasing over its current value at our proposed work valuations.
Comment: Several commenters disagreed with CMS' proposed direct
crosswalks and work RVU recommendations, stating that they do not
accurately reflect the work and intensity required, especially given
the risks such as paralysis and strokes associated with TEVAR. The
commenters suggested that CMS finalize the RUC-recommended work RVUs
that are based on robust survey data and detailed clinical vignettes,
reflecting modern practice and the elevated risks involved which were
not present when the codes were initially valued.
Another commenter expressed concerns about the proposed work RVUs
for the revised and new CPT codes within the TEVAR procedures. The
commenter noted that TEVAR procedures have grown in complexity and risk
profile since their initial FDA approval in 2005, and the recent
approval of thoracic branch endoprosthesis (TBE) in 2022 has expanded
the range of treatable aortic pathology. The commenter maintained that
time alone does not fully capture the complexity and intensity of TEVAR
procedures and urges CMS to finalize the RUC recommendations to ensure
accurate valuation of these life-saving procedures. Another commenter
noted with the improvement of device technology, a broader range of
patients are treated with TEVAR.
Response: We appreciate the commenters for their comments. We
understand the concerns raised by commenters stating that the new six-
code family for TEVAR was developed to align with current clinical
practices and CPT coding standards. We appreciate that the new
procedures incorporate significant pre-service planning, intraoperative
complexity, and extensive post-operative care that were not fully
captured in the original codes. While we appreciate the recommendations
presented by the commenters as it pertains to the work RVUs, several
recommendations rely more on the relativity among the subspecialty. We
continue to believe that looking at the relativity across the fee
schedule allows for better relativity between codes.
Comment: A few commenters noted that TEVAR codes appropriately
support automatic co-surgeon involvement due to the inherent complexity
and intensity of these interventions and pointed out in contrast, all
the crosswalk codes identified necessitate additional documentation to
justify co-surgeon involvement. Commenters felt this supported
increased intensity and thus a higher work RVU.
Response: With regard to the commenter's concerns regarding
clinically relevant relationships, we emphasize that we continue to
believe that the nature of the PFS relative value system is such that
all services are appropriately subject to comparisons to one another.
Although codes that describe clinically similar services are sometimes
stronger comparator codes, we do not agree that codes must share the
same specialty to serve as an appropriate crosswalk.
We continue to believe that our proposed valuations, based on the
crosswalks selected, more accurately value these codes since they do
not result in the sizable increases in intensity as recommended by the
RUC. We maintained relativity between the codes in this family with
similarly timed codes.
Comment: Several commenters disagreed with the proposed work RVU of
27.00 for CPT code 33880 and stated that CMS should finalize the RUC-
recommended work RVU of 30.00. Commenters stated that the CMS direct
crosswalk valuation based on CPT code 32672 relies too heavily on
decreases of intraservice time and does not accurately account for the
overall measured intensity required to perform this service. Commenters
stated that CPT code 33880 requires more than 100 minutes of pre-
service evaluation time which includes extensive imaging review and
advanced 3D planning due to risks which are not present in any other
surgery. Commenters stated that the intensity of the service was
reflected in the RUC's recommended valuation and pointed to the two key
reference codes from the RUC survey for support.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 27.00 for CPT code 33880 is a more
accurate valuation. As we stated in the proposed rule, the RUC's
recommended work RVU of 30.00 was higher than nearly all of the other
90-day global codes with similar time values and would not maintain
relativity with other 90-day global period codes with an intraservice
time of 120 minutes and similar total time around 546 minutes. The
surveyed intraservice time for CPT code 33880 is decreasing from 225
minutes to 120 minutes (47 percent) while the work RVU is would only
decrease from the current 34.58 to 30.00 (13 percent) if we were to
finalize the RUC's recommended value. Although we do not imply that the
decrease in time as reflected in survey values must equate to a one-to-
one or linear decrease in the valuation of work RVUs, we believe that
since the two components of work are time and intensity, significant
decreases in time should be reflected in decreases to work RVUs. We
believe that it is more accurate to propose a work RVU of 27.00 to
capture these decreases in surveyed intraservice time; we also note
that our proposed valuation maintains the current intensity for CPT
code 33880 instead of resulting in a significant
[[Page 49353]]
increase as under the RUC's recommended value.
Comment: Several commenters disagreed with the proposed work RVU of
22.53 for CPT code 33881 and stated that CMS should finalize the RUC-
recommended work RVU of 26.75. Commenters stated that the CMS direct
crosswalk valuation based on CPT code 43820 relies too heavily on
decreases of intraservice time and does not accurately account for the
overall measured intensity required to perform this service. Commenters
stated that the proposed valuation did not reflect the intensity of a
procedure with risks of permanent paralysis and anterior or posterior
circulation strokes; commenters also pointed to the two key reference
codes from the RUC survey for support.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 22.53 for CPT code 33881 is a more
accurate valuation. As we stated in the proposed rule, the surveyed
intraservice time for CPT code 33881 is decreasing from 200 minutes to
110 minutes (45 percent) while the work RVU is would only decrease from
the current 29.58 to 26.75 (10 percent) if we were to finalize the
RUC's recommended value. Although we do not imply that the decrease in
time as reflected in survey values must equate to a one-to-one or
linear decrease in the valuation of work RVUs, we believe that since
the two components of work are time and intensity, significant
decreases in time should be reflected in decreases to work RVUs. We
believe that it is more accurate to propose a work RVU of 22.53 to
capture these decreases in surveyed intraservice time for CPT code
33881.
Comment: Several commenters disagreed with the proposed work RVU of
35.00 for CPT code 33882 and stated that CMS should finalize the RUC-
recommended work RVU of 39.00. Commenters stated that the CMS direct
crosswalk valuation based on CPT code 33390 relies too heavily on
decreases of intraservice time and does not accurately account for the
overall measured intensity required to perform this service. Commenters
stated that the proposed valuation did not reflect the intensity/
complexity of the procedure that requires fenestration alignment and
selective catheterization of the subclavian artery, which reflects both
the technical sophistication and elevated risk of spinal cord ischemia
requiring surgeon-led monitoring. Commenters also pointed to the two
key reference codes from the RUC survey for support.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 35.00 for CPT code 33882 is a more
accurate valuation. As we stated in the proposed rule, we found that
the RUC-recommended work RVU of 39.00 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 also note that if
we were to finalize the RUC's recommended work RVU, CPT code 33882
would be assigned an intensity significantly higher than the rest of
this code family. While we agree with the commenters that all of these
procedures carry significant patient risks, which is reflected in high
intensity values for all of them, we do not agree that CPT code 33882
should have an anomalously high intensity relative to the other
Thoracic Branch Endograft Services procedures. By proposing a work RVU
of 35.00, our proposed intensity for CPT code 33882 maintains
relativity with the rest of its code family.
Comment: Several commenters disagreed with the proposed work RVU of
19.91 for CPT code 33883 and stated that CMS should finalize the RUC-
recommended work RVU of 24.25. Commenters stated that the CMS direct
crosswalk valuation based on CPT code 44320 relies too heavily on
decreases of intraservice time and does not accurately account for the
overall measured intensity required to perform this service. Commenters
stated that although the intraservice time was the same between CMS'
crosswalk code and the surveyed code, CPT code 44320 has very low
intensity/complexity comparatively whereas CPT code 33883 is an
extension endograft, so the risk of spinal cord ischemia and coverage
of the subclavian is similar or even more than CPT code 33881.
Commenters also pointed to the two key reference codes from the RUC
survey for support.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 19.91 for CPT code 33883 is a more
accurate valuation. As we stated in the proposed rule, 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. The surveyed
intraservice time for CPT code 33883 is decreasing from 120 minutes to
90 minutes (-25 percent) while the work RVU would increase from the
current 21.09 to 24.25 (+15 percent) if we were to finalize the RUC's
recommended value. Although we do not imply that the decrease in time
as reflected in survey values must equate to a one-to-one or linear
decrease in the valuation of work RVUs, we believe that since the two
components of work are time and intensity, significant decreases in
time should be reflected in decreases to work RVUs, not increases. We
believe that it is more accurate to propose a work RVU of 19.91 to
capture these decreases in surveyed intraservice time for CPT code
33883.
Comment: Several commenters disagreed with the proposed work RVU of
19.91 for CPT code 33886 and stated that CMS should finalize the RUC-
recommended work RVU of 23.50. Commenters stated that the CMS direct
crosswalk valuation based on CPT code 44320 relies too heavily on
decreases of intraservice time and does not accurately account for the
overall measured intensity required to perform this service. Commenters
stated that although the intraservice time was the same between CMS'
crosswalk code and the surveyed code, CPT code 44320 has very low
intensity/complexity comparatively whereas CPT code 33886 is an
extension endograft, so the risk of spinal cord ischemia and coverage
of the artery of Adamkiewicz was highest for the service. Commenters
stated that using a colostomy code as a comparator is inappropriate and
noted that endovascular major aortic surgery should not be compared
with straightforward intra-abdominal procedures; commenters also
pointed to the two key reference codes from the RUC survey for support.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 19.91 for CPT code 33886 is a more
accurate valuation. As we stated in the proposed rule, 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. The surveyed
intraservice time for CPT code 33886 is decreasing from 100 minutes to
90 minutes (-10 percent) while the work RVU would increase from the
current 18.09 to 23.50 (+30 percent) if we were to finalize the RUC's
recommended value. Although we do not imply that the decrease in time
as reflected in survey values must equate to a one-to-one or linear
decrease in the valuation of work RVUs, we believe that since the two
components of work are time and intensity, significant decreases in
time should be reflected in decreases to work RVUs, not increases. We
believe that it is more accurate to propose a work RVU of 19.91 to
capture these
[[Page 49354]]
decreases in surveyed intraservice time for CPT code 33886.
We also disagree with the commenters that the use of CPT code 44320
as a valuation crosswalk was inappropriate. We continue to believe that
the nature of the PFS relative value system is such that all services
are appropriately subject to comparisons to one another. Although codes
that describe clinically similar services are sometimes stronger
comparator codes, we do not agree that codes must share the same site
of service, patient population, or utilization level to serve as an
appropriate crosswalk.
Comment: Several commenters disagreed with the proposed work RVU of
23.53 for CPT code 35602 and stated that CMS should finalize the RUC-
recommended work RVU of 27.40. Commenters stated that the direct
crosswalk valuation based on CPT code 32669 does not accurately account
for the overall measured intensity required to perform this service;
commenters also pointed to the two key reference codes from the RUC
survey for support.
Response: As we stated in the proposed rule, 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. Our proposed work RVU of 23.53
for CPT code 35602 maintains similar intensity to the predecessor CPT
code (33891) as well as the rest of this code family which suggests
that it is a more accurate valuation.
After consideration of the public comments, we continue to believe
that the proposed valuation accurately reflects the typical work
involved in furnishing Thoracic Branch Endograft services. Therefore,
for CY 2026, we are finalizing our proposed work RVUs and direct PE
inputs for CPT codes 33880, 33881, 33883, 33886, 33882 and 35602.
(9) Lower Extremity Revascularization (CPT Codes 37254, 37255, 37256,
37257, 37258, 37259, 37260, 37261, 37262, 37263, 37264, 37265, 37266,
37267, 37268, 37269, 37270, 37271, 37272, 37273, 37274, 37275, 37276,
37277, 37278, 37279, 37280, 37281, 37282, 37283, 37284, 37285, 37286,
37287, 37288, 37289, 37290, 37291, 37292, 37293, 37294, 37295, 37296,
37297, 37298, and 37299)
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 (that is, 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 final rule. See
Table A-E5 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 proposed 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 encouraged commenters to submit additional data for our
consideration in determining the valuation of work and direct PE inputs
for these CPT codes. Table A-E5 also shows the proposed work RVUs for
the 46 CPT codes:
[GRAPHIC] [TIFF OMITTED] TR05NO25.019
[[Page 49355]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.020
[[Page 49356]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.021
[[Page 49357]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.022
[[Page 49358]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.023
[[Page 49359]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.024
[[Page 49360]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.025
We proposed 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 37263-37266 and 37271-37274. However, for CPT codes 37267-
37268 and 37275-37276, only one unit is listed for the initial vessel.
Furthermore, CPT codes 37269-37270 and 37277-37279 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 37263, 37265, 37271, and 37273, 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 37286, 37287, 37294, and 37295. 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 proposed to
reduce the quantity from two to one for supply code SD379 (drug eluting
stent, tibial) in each of the four CPT codes 37286, 37287, 37294, and
37295.
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 proposed 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 proposed the listed refinements above, we sought comments
on whether we should create G-codes to describe the use of high-cost
supplies. Alternatively, we sought 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 sought
comments on whether there is additional information we should consider
in establishing proposed payments for these services.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: We received many comments on our proposal to update the
initial vessel quantities to one unit of the SD382 drug-coated balloon
for CPT codes 37263, 37265, 37271, and 37273. Some commenters stated
that CPT codes 37263, 37265, 37271 and 37273 would typically require
two drug-coated balloons, whereas their corresponding add-on codes
(37264, 37266, 37272 and 37274) would typically only require one drug-
coated balloon for each additional vessel. For CPT codes 37263, 37265,
37271, and 37273, the commenters stated that the RUC recommendation of
two drug-coated balloons was necessary because drug-coated balloons can
only deliver their therapeutic payload to one area during a single
inflation according to FDA instructions, and these procedures involve
treating long segments of arterial disease in the superficial femoral/
popliteal region that typically require coverage by two separate
balloons. However, regarding CPT codes 37267, 37268, 37275, and 37276,
commenters stated that only one unit is appropriate for the initial
vessel. Commenters noted that these codes are most often reported for
procedures involving the common femoral artery or the profunda femoris
artery segment of the femoropopliteal region, which are shorter vessels
with shorter disease segments that can be effectively treated with a
single drug-coated balloon. Regarding CPT codes 37269, 37270, 37277,
and 37278, commenters stated that covered stents are typically used in
these procedures, making drug-coated balloons unnecessary since the
treated segments are covered by fabric-coated stents. For CPT code
37279, commenters stated that the practice expense inputs are limited
to the additional work associated with Intravascular Lithotripsy, which
is performed in addition to the base codes of the family. Therefore,
additional drug-coated balloons were not included in this portion of
the code family as they are already accounted for in the appropriate
base codes.
Response: We appreciate the commenters for the additional
information provided. After consideration of the public comments, we
agree that the direct PE inputs for CPT codes 37263, 37265, 37271, and
37273 should include two drug-coated balloons (SD382) per code, as we
are persuaded by commenters that two balloons are typically required
due to the length of disease in the superficial femoral and popliteal
segments.
Comment: We received comments supporting the RUC's recommended
quantity of two units for drug eluting stent, tibial (SD379) in the
tibial segment complex CPT codes 37286, 37287, 37294, and 37295.
Commenters stated that these procedures typically require two drug-
eluding stents each, whereas tibial segment straightforward taking
place in CPT codes 37284 and 37285 only require one drug-eluding stent
each. Commenters stated that the length of the vessel is the same
between
[[Page 49361]]
a straightforward and a complex lesion for CPT codes 37284-37287, but
that for tibial interventions, surgeons are typically working with
stents that are 38mm long. Commenters stated that complex lesions are
typically quite long and as such it is most typical to use 2 stents in
the tibial segment for the complex lesions described by CPT codes
37286-37287 and 37294-37295. Some commenters stated that closer to 4
stents would be appropriate for these two codes whereas other
commenters stated that in some cases 4 or 5 stents would be required in
the tibial segment.
Other commenters stated that since the time that the previous code
set was valued, the stents included in that coding's PE supply costs
(the self expanding 2-5 mm stent described by supply code SD266) have
been removed from the market and are no longer used, which is why the
RUC recommended the use of the SD379 tibial stent. Commenters stated
that the complex CPT codes (37286, 37287, 37294 and 37295) represent
the minority of tibial interventions and that it will be much more
likely for tibial interventions to not require stent placement.
Commenters concluded that many more of the treatments will be simple
stenoses (straightforward lesions) and if stent placement is performed
it will only require a single drug eluting stent in most cases.
Response: We appreciate the commenters for the additional
information provided. After consideration of the public comments, we
were convinced that the use of a second tibial stent would be typical
for CPT codes 37286-37287 and 37294-37295. We are therefore finalizing
the RUC-recommended two units for the drug eluting stent, tibial
(SD379) supply for CPT codes 37286, 37287, 37294 and 37295.
Comment: The commenters recommended CMS to adopt a clinically
grounded, evidence-based definition of ``complex lesions'' within the
new LER code set, aligned with clinical literature and professional
society guidelines, to ensure accurate coding and payment. According to
a commenter, the clinical literature and established professional
society guidelines characterize complex lesions in LER as involving one
or more of the following features: lesion length greater than 15 cm,
moderate to severe arterial calcification, chronic total occlusions
(CTOs), in-stent restenosis, prior failed endovascular intervention,
involvement of the popliteal artery (particularly P2/P3 segments),
multilevel or multivessel disease, and single-vessel runoff.
Response: We appreciate the commenters for the additional
information provided. We encourage them to work with the CPT Editorial
Panel to develop a clinically grounded, evidence-based definition of
``complex lesions'' within the new LER code set, consistent with
clinical literature and professional society guidelines.
Comment: Many commenters encouraged CMS to establish G-codes for
high-cost supplies as it could improve billing accuracy and ensure
appropriate reimbursement for expensive medical devices and supplies
used in patient care. Commenters also stated that, if CMS intends to
utilize Outpatient Prospective Payment System (OPPS) cost data to
establish pricing for services and supplies within the PFS the agency
should provide a comprehensive and detailed methodological proposal
through future rulemaking.
Response: We appreciate the commenters for their feedback regarding
the LER code set. We believe that the OPPS cost data might be a useful
source of information and will consider it for future rulemaking. We
are open to feedback from interested parties.
Comment: Several commenters thanked CMS for creating a new supply
pack for the angiography services (SA142) associated with this code
family. However, commenters stated that the SA142 supply pack was not
assigned to the applicable codes in the LER family (CPT codes 37254,
37256, 37258, 37260, 37263, 37265, 37267, 37269, 37271, 37273, 37275,
37277, 37280, 37282, 37284, 37286, 37288, 37290, 37292, 37294, 37296,
and 37298). Commenters provided a list of 20 supply components that
together constituted the SA142 supply pack and requested that CMS
remove these supply inputs from the LER code family, to be replaced by
the SA142 supply pack.
Response: The direct PE inputs recommended by the RUC for this code
family listed all of the individual components for the SA142 supply
pack separately, rather than bundling them into a supply pack, and at
the time it was not clear what supply components constituted the SA142
pack. However, in light of the additional information provided by the
commenters, we will remove the supply items that make up the SA142
supply pack from the associated LER codes and replace them with the
SA142 pack as requested.
In reviewing the information provided by commenters, we also
noticed that the supply components of the SA142 pack as listed by
commenters differed from the supply inputs contained within the LER
codes in a few places. Specifically, the codes only contained one
sterile basin (SJ079) instead of two, they only contained one plastic
towel clamp (SD208) instead of four, and they did not contain a
lidocaine control syringe (listed under SC051) at all. Since these
supplies were not recommended as typical for the LER codes, we have
removed them from the SA142 supply pack and updated its pricing to
$62.26. With these changes, the price of the SA142 supply pack now
matches the sum of its components, as well as matching the price of the
supply components removed from the LER codes. Therefore, there is no
change in the direct costs of the associated codes due to the
replacement of the individual supplies with the SA142 pack. The
contents of the SA142 supply pack are listed in this section for
reference:
[[Page 49362]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.026
After consideration of public comments, we are finalizing the
proposed work RVUs and direct PE inputs for the codes in the LER
family, with the previously mentioned increase to two drug-coated
balloon (SD382) supplies for CPT codes 37263, 37265, 37271, and 37273
as well as two drug eluting tibial stent (SD379) supplies for CPT codes
37286, 37287, 37294 and 37295. Lastly, we are also finalizing the
inclusion of a new supply pack for angiography services (SA142) as
previously described.
(10) Irreversible Electroporation of Tumors (CPT Codes 47384 and 55877)
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 47384
(Ablation, irreversible electroporation, liver, 1 or more tumors,
including imaging guidance, percutaneous) and 55877 (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 47384 and 13.50 for CPT
code 55877.
We proposed the following refinements to the direct PE inputs for
CPT code 47384. We disagreed with the RUC recommendation to use the
standard 90-day global pre-service clinical labor times in the facility
setting for CPT code 47384 since this is a 0-day global procedure. We
did 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 proposed the standard 000/010 global day
extensive pre-service clinical labor times in the facility setting,
resulting in 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 proposed the RUC-recommended direct PE inputs for CPT code 55877
without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported the proposed work RVU and direct
PE inputs for this code family.
Response: We appreciate the commenters for their support.
Comment: Some commenters stated that the level of clinical staff
work required for irreversible electroporation is extensive and
recommended CMS accept the times in the RUC recommended pre-service
package. The reference code selected to assist in establishing direct
PE inputs was CPT
[[Page 49363]]
code 33361 (Transcatheter aortic valve replacement (TAVR/TAVI) with
prosthetic valve; percutaneous femoral artery approach), which is also
a 0-day global code. Commenters stated that it serves as an example for
the pre-service clinical staff time package, which encompasses the
comprehensive use of clinical staff in a facility setting. Commenters
also stated that they believe the level of clinical staff work required
for irreversible electroporation is extensive and therefore suggested
CMS to accept the standard 90-day global pre-service clinical labor
times in the facility setting for CPT code 47384.
Response: After reviewing the comments, we remain unconvinced that
the information provided would support the need for the standard 90-day
global pre-service clinical labor times in the facility setting for CPT
code 47384 since this is a 0-day global procedure. We continue to
believe that the standard 000/010 global day pre-service clinical labor
times in the facility setting is appropriate, and that the recommended
standard 90-day global pre-service clinical labor times in the facility
setting for CPT code 47384 would not be typical for the procedure.
Therefore, we are finalizing the standard 000/010 global day pre-
service clinical labor times for CPT code 47384, as proposed.
After consideration of the public comments, we are finalizing the
work RVUs and direct PE inputs for the codes in the Irreversible
Electroporation of Tumors family as proposed.
(11) Endoscopic Sleeve Gastroplasty (CPT Code 43889)
In September 2024, CPT approved the addition of a new code to
report transoral gastric restrictive procedures using an endosurgical
approach. CPT code 43889 (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 43889 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 43889, 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
proposed a work RVU of 12.56 for CPT code 43889. 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 proposed the RUC-recommended direct PE inputs for CPT code 43889
without refinement.
We proposed a work RVU of 12.56 for CPT code 43889 based on
application of the 23-hour policy. We received several comments on our
proposals. The following is a summary of the comments we received and
our responses.
Comment: Several commenters supported the RUC recommended work RVU
and stated that the crosswalk value is most appropriate. Commenters
noted that the RUC recommendation was based on a crosswalk to CPT code
36832, which does not contain any inpatient hospital visits. Therefore,
the need for a visit to be removed is negated, as the underlying
crosswalked reference code also does not include inpatient hospital
visits. Other commenters recommended that CMS consider using the RUC
survey data instead of the crosswalk recommendation in determining the
appropriate valuation. A few commenters stated that should CMS decide
not to use the survey and base the value on the RUC-recommended
crosswalk, CMS should not apply the 23-hour policy since the crosswalk
CPT code 36832 already had the 23-hour policy applied. Overall, these
commenters were concerned that adjusting the work RVU for CPT code
36832 would increase costs and lead to access issues for beneficiaries.
Response: We appreciate the information provided by commenters. We
understand that the inpatient hospital visit was removed from the code
valuation and therefore not reflected in the resulting work RVU. We
continue to believe the value of these codes should not reflect work
that is typically associated with an inpatient service and that the 23-
hour policy should be applied in its entirety including the work RVUs
along with the immediate post service time.
After reviewing the public comments, we are finalizing the work RVU
and direct PE inputs for CPT code 43889 as proposed.
(12) Transurethral Robotic-Assisted Resection of Prostate (CPT Codes
52500, 52601, 52630, 52648, 52649, and 52597)
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 52597 (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 52597 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
[[Page 49364]]
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 52597,
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 proposed the RUC-recommended work RVU of 6.00 for CPT code
52500, the work RVU of 10.25 for CPT code 52597, 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 52597 on the New
Technology/New Services list and CPT code 52597 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 52597 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 52597 would not be accurate. The RUC's
valuation for CPT code 52597 is typical for a procedure code with the
same work time values (that is, 60 minutes intraservice 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 52597 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
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 proposed the RUC-recommended direct PE inputs for CPT codes
52500, 52597, 52601, 52630, and 52649 without refinement. For CPT code
52648, we proposed 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 proposed to remove it.
Comment: Many commenters disagreed with the proposed work RVU of
10.25 for CPT code 52601. Commenters stated that CPT code 52601 has
been the standard of surgical management for benign prostatic
hyperplasia (BPH) and that the typical operative time for the procedure
has not changed and it demands continuous mental focus, physical
effort, and advanced technical skill. Commenters stated that the
proposed work RVU constituted a reduction of nearly 25 percent in
payment and represented a serious miscalculation in the intensity and
complexity of performing the service. Commenters stated that a
reduction in payment risked disincentivizing urologists from providing
these services, could pressure physicians to alter treatment
recommendations, and undermined quality care for patients. Commenters
recommended CMS to maintain the current work RVU of 13.16 for CPT code
52601 and to increase the work RVU of all other codes in the family by
31.6 percent (13.16 divided by 10.00) to provide fair and equitable
compensation for the broad range of BPH treatments that urologists
deliver.
Response: We disagree with the commenters and continue to believe
that the proposed work RVU of 10.00, based on the RUC recommendation,
remains the most accurate valuation for CPT code 52601. The surveyed
intraservice work time for CPT code 52601 is decreasing from 75 minutes
to 60 minutes, and although we do not imply that the decrease in time
as reflected in survey values must equate to a one-to-one or linear
decrease in the valuation of work RVUs, we believe that since the two
components of work are time and intensity, significant decreases in
time should be appropriately reflected in decreases to work RVUs. Given
this reduction in surveyed work time, we do not believe that it would
be appropriate to maintain the current work RVU of 13.16 for CPT code
52601; it is therefore not the case that the typical operative type for
the procedure is unchanged as many commenters suggested. Similarly, we
do not agree that it would be accurate or maintain relativity to
increase the work RVU of all other codes in this family by 31 percent
which would result in anomalously high intensity values. We also note
that the proposed work RVU of 10.00 brings the intensity of CPT code
52601 into alignment with the rest of this code family, as well as into
alignment with many other 90-day global services elsewhere on the PFS.
Comment: Several commenters disagreed with the proposed work RVU of
13.00 for CPT code 52649 based on a crosswalk to CPT code 53500.
Commenters stated that the 30-minute decrease in intraservice time from
when this code was last surveyed in 2010 is the result of the diffusion
of skilled surgeons performing this procedure nationally, and the
increase in the size of the typical prostate being treated with laser
enucleation has led to a significant increase in procedural intensity.
A commenter stated that the reduction in time likely reflects
advancements in technology and surgeon efficiency starting at month 1
of follow-up and remained improved for the entire follow-up period,
rather than diminished work intensity. Commenters stated that CPT code
52649 should not be crosswalked to CPT code 53500, as CPT code 52649 is
much more intense and complex to perform since it requires careful
preservation of the prostatic capsule and bladder neck to prevent the
formation of recto-urethral fistulae and bladder neck injury resulting
in significant patient morbidity. Commenters stated that visualization
is typically far superior when performing
[[Page 49365]]
CPT code 53500 compared to CPT code 52649, and that there is no
component of tissue morcellation with a rotational sharp-bladed device
at all in CPT code 53500. Commenters requested that CMS finalize the
RUC's recommended work RVU of 14.56 for CPT code 52649.
Response: We disagree with the commenters and continue to believe
that the proposed work RVU of 13.00 is the most accurate valuation for
CPT code 52649. The surveyed intraservice work time for CPT code 52649
is decreasing from 120 minutes to 90 minutes, and although we do not
imply that the decrease in time as reflected in survey values must
equate to a one-to-one or linear decrease in the valuation of work
RVUs, we believe that since the two components of work are time and
intensity, significant decreases in time should be appropriately
reflected in decreases to work RVUs. Given this reduction in surveyed
work time, we do not believe that it would be appropriate to maintain
the current work RVU of 14.56 for CPT code 52649, which would result in
a significant increase in intensity and place the code out of alignment
with the rest of its family.
We also disagree with the commenters that CPT code 53500 is an
inappropriate choice for a crosswalk code at the proposed work RVU of
13.00. CPT code 53500 is a transvaginal urethrolysis procedure
including cystourethroscopy, with the same intraservice time of 90
minutes and a slightly longer total time (289 minutes as compared with
263 minutes) than CPT code 52649. CPT code 53500 typically requires
sutures to close its transvaginal incision and carries risk of
complications such as bleeding and urethral or bladder injury; we
disagree that this procedure constitutes significantly less intensity
as the commenters suggested. Furthermore, we continue to believe that
the nature of the PFS relative value system is such that all services
are appropriately subject to comparisons to one another. Although codes
that describe clinically similar services are sometimes stronger
comparator codes, we do not agree that codes must share the same site
of service, patient population, or utilization level to serve as an
appropriate crosswalk. As such, we continue to believe that CPT code
53500 is an appropriate choice to use as a valuation crosswalk for CPT
code 52649.
Comment: A commenter stated that CPT code 52649 should have a work
RVU more aligned with the work RVU of CPT code 55867 at 19.53. The
commenter stated that this valuation would appropriately reflect its
technical complexity, equivalent anatomical outcomes to CPT code 55867,
and alignment with cross-specialty benchmarks like knee arthroplasty
(CPT code 27447), while accounting for the procedure's high skill
demands, precision in endoscopic enucleation, and proven long-term
efficacy in symptom relief and durability. The commenter also requested
that CMS not increase the work valuation for CPT codes 52441 and 52442
which would penalize value and durability and encourage use of an index
service that offloads costs into future episodes.
Response: As we stated previously in this section, we continue to
believe that the proposed work RVU of 13.00 is the most accurate
valuation for CPT code 52649. CPT code 55867 was also reviewed in this
same CY 2026 PFS final rule, with a surveyed intraservice time of 180
minutes and a total time of 372 minutes. These work times are
substantially longer than the intraservice time (90 minutes) and total
time (263 minutes) of CPT code 52649; since the two components of work
are time and intensity, and CPT code 55867 has double the intraservice
work time, this accounts for the difference in the proposed work RVUs
(13.00 and 19.53) of these two codes. Assigning a work RVU of 19.53 to
CPT code 52649 would not be typical for this service and would create a
rank order anomaly in terms of intensity. As for CPT codes 52441 and
52442, we did not make any proposals associated with them in this rule.
Comment: A commenter disagreed with the proposed work RVU of 10.25
for CPT code 52597 and requested a work RVU of 13.00 or 14.00 instead.
The commenter stated that they were providing a new, robust empiric
source of information based on an independent survey that yielded 163
responses with broad geographic representation from 33 jurisdictions.
The commenter stated that the work RVUs aligned very closely between
the 2024 targeted AMA RUC survey respondents and the independent 2025
real world attestation survey across the full spectrum of percentiles,
with 25th percentile work RVUs of 13.00 and 14.00 respectively. The
commenter also stated that additional empiric information from the
clinical literature highlights the similarities in the duration and
intensity of physician work between CPT code 52597 and laser
enucleation of the prostate, which is typically performed with a
Holmium laser (HoLEP), and coded as CPT code 52649. The commenter
stated that these clinical similarities suggested that CPT code 52597
should be valued similarly to CPT code 52649 at a work RVU around 13.00
and not similarly to CPT code 53854 (Transurethral destruction of
prostate tissue; by radiofrequency generated water vapor thermotherapy)
at a work RVU of 5.93.
Response: We appreciate the submission of this additional survey
data by the commenter. However, we disagree with the commenters and
continue to believe that the proposed work RVU of 10.25, based on the
RUC recommendation, remains the most accurate valuation for CPT code
52597. The RUC has a long history of using a mixture of targeted and
random survey respondents for their survey process, as the targeted
survey respondents who have personal experience with the procedure in
question tend to overestimate its intensity. Our intention in seeking
additional information is not to privilege once source over the other.
Prioritizing the results of a targeted survey over the data from the
data generated by random respondents would not be methodologically
appropriate and could lead to inaccurate valuations.
We also have serious concerns about the specific independent survey
data submitted by the commenter regarding CPT code 52597. It appears
that this survey did not investigate the work times associated with CPT
code 52597 and instead questioned the respondents what work RVU their
hospital had paid them for performing the procedure. This is a reversal
of our methodology for work valuation, in which the work RVU is derived
based on both surveyed time data and the intensity of furnishing the
service itself. Although we appreciate that the commenter attempted to
achieve a broad geographic representation, we also have concerns that
this survey methodology overlooks potential geographic variations in
payment as well as potential payment markups applied by hospitals.
We continue to believe that the proposed work RVU of 10.25 remains
the most accurate valuation for CPT code 52597. Assigning a work RVU of
13.00 or 14.00 for CPT code 52597 as requested by the commenter would
create a rank order anomaly within the rest of the code family, as CPT
code 52597 would have roughly double the intensity of its peer codes.
We do not believe that this would be typical for the procedure and
therefore continue to believe that the proposed valuation of 10.25 is
most accurate.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter stated that they were concerned that updating
the price of the cystoscopy visit supply
[[Page 49366]]
pack (SA058) from $113.70 to $37.63 would cause drastic decreases in
payment for physicians performing cystoscopy services in the office
setting. The commenter stated that even though CMS finalized a 4-year
phased transition of the SA058 pricing to soften the impact, the cut
remains severe and that CMS should ensure the updated supply pack and
equipment times accurately reflect true office costs.
Response: We agree with the commenter on the importance of ensuring
accuracy in the pricing of supplies and supply packs. This is why we
finalized an update to the pricing of the SA058 supply pack in the CY
2025 final rule to ensure that the price of the full pack matched the
price of its individual components. We also finalized the use of a 4-
year transition to allow practitioners to adjust to the updated pricing
of these supplies (89 FR 97727). We remain open to the submission of
additional data regarding the pricing of the SA058 supply pack from
interested parties.
Comment: Several commenters agreed with our direct PE refinements
to CPT code 52648.
Response: We appreciate the support for our proposals from the
commenters.
After consideration of the comments, we are finalizing the work
RVUs and direct PE inputs for the codes in the Transurethral Robotic-
assisted Resection of Prostate family as proposed.
(13) Cystourethroscopy (CPT Code 52443)
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 52443, 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
52443 (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 proposed the RUC-recommended work RVU of 3.62 for CPT code
52443. For direct PE, we proposed to refine the clinical labor
associated with clinical activity CA023 (Monitor patient following
procedure/service, no multitasking) to 0 minutes for CPT code 52443. We
note that the RUC-recommended a direct crosswalk of most clinical labor
times for CPT code 52443 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 52443 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 therefore proposed to remove this
clinical labor time.
We also disagreed with the RUC-recommended 40 minutes for the
clinical labor associated with clinical activity CA025 (Clean scope)
and proposed 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 52443
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 did not
propose 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 52443.
For medical supplies, we proposed 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 proposed 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 proposed 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 proposed all other direct PE inputs for CPT
code 52443.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters supported our proposal of the RUC recommended
work RVU for CPT code 52443 and the non-standard clinical activity
times of 5 minutes for CA016 and CA017, compared to the standard time
of 2 minutes.
Response: We appreciate the commenters for their support.
Comment: Many commenters disagreed with our proposed work RVU of
3.62 for CPT code 52443. The commenters claimed that the proposed 3.62
work RVU did not accurately reflect the complexity, time, and expertise
required to perform this procedure safely and effectively. Commenters
noted that compared to other minimally invasive BPH treatments, balloon
dilation requires careful patient selection and precise execution
during and immediately after the procedure. For example, the physician
must perform a transrectal ultrasound before the procedure to measure
the length of the prostate. Commenters claimed that without fair and
adequate compensation, many urologists may not be able to provide this
treatment option to patients who stand to benefit. Some commenters
recommended changing the work RVU to 6.84, which they said better
aligns with experience performing the Urolift procedure described by
CPT code 52441 and should be used as a direct crosswalk. Other
commenters referenced the American Urological Association's (AUA)
recommendation of 4.50 work RVUs as a better reflection of the work
associated with CPT code 52443. Another commenter disagreed with the
work RVU crosswalk from CPT code 52443 to CPT code 52441, stating that
it should not have been included on the RSL (reference service list)
because the valuation of CPT code 52441 is too low.
Response: We appreciate the commenters for their feedback. However,
we continue to believe that our proposed work RVU of 3.62, based on the
RUC recommendation, remains the most accurate valuation for CPT code
52443. We received a wide range of possible work RVUs for CPT code
52443. Some commenters recommended work RVUs of 4.50 to as high as
8.50. The majority of commenters recommended work RVUs at or above
7.44, which is more than double the RUC's recommended value, higher
than the RUC survey's 75th percentile value, and would break relativity
with an anomalously high intensity value. We note that procedures with
30 minutes of intraservice time typically are not
[[Page 49367]]
valued at a work RVU of 7.44 or higher, and the cystourethroscopy
procedure described by CPT code 52443 does not contain the kind of
life-threatening patient morbidities which would warrant an outlier
intensity valuation.
We wish to clarify for the commenter who claimed that CPT code
52441 should not have been included on the RUC survey for CPT code
52443 that RUC survey respondents did not have to match CPT code 52443
with CPT code 52441; they had the option to match CPT code 52443 to a
code with a higher value, if warranted. It is also important to note
that the RSL does not dictate what value comes out of the survey or
what value gets recommended to CMS, its purpose is to serve as a tool
for the individuals filling out the surveys. We remind commenters that
CMS has no involvement with the choice of RSL codes or the
administration of the RUC's surveys.
Comment: Commenters disagreed with the CMS proposal to refine the
clinical labor associated with clinical activity CA023 (Monitor patient
following procedure/service, no multitasking) from 5 minutes to 0
minutes. Commenters stated that like the reference code, CPT code
52441, CPT code 52443 is a cystoscopic procedure for the treatment of
benign prostatic enlargement. The commenters claimed the typical
patient needs to be closely monitored for bleeding, uncontrolled pain
and other post-procedural complications in the immediate post-service
period when performed in the non-facility setting. Commenters stated
that due to the invasive nature of the procedure, typical patients will
also need to have their vital signs closely monitored post-service. The
commenters recommended 5 additional minutes of non-multi-tasking time
to allow clinical staff to best monitor the typically elderly patient
having an invasive non-facility procedure to open the prostate.
Response: We appreciate the additional information provided by the
commenters regarding the clinical activities associated with CA023. We
agree with the commenter that 5 minutes would be more appropriate to
closely monitor for bleeding, uncontrolled pain and other post-
procedural complications, therefore, we are finalizing the RUC-
recommended 5 minutes for CA023 for CPT code 52443.
Comment: Commenters disagreed with the CMS proposal to refine
clinical activity CA025 (Clean scope) from the RUC-recommended 40
minutes to the CMS standard of 30 minutes for a flexible scope. They
stated that two scopes are used during this procedure, including a two
scopes are a transrectal ultrasound probe, therefore the 10 additional
minutes was needed for CA025 to clean the second scope, . The
commenters stated that the extra 10 minutes is directly tied to the
second scope used.
Response: After reviewing the comments, we appreciate the
additional information provided about the second scope to support the
need for 10 minutes beyond the standard 30 minutes for CA025 for CPT
code 52443, and note that 10 minutes of CA025 conforms with our
standard cleaning time for a rigid scope, such as a transrectal
ultrasound probe. Therefore, we are finalizing 40 minutes total of
clinical activity time for CA025 for CPT code 52443 to account for the
30 minutes to clean ES018 and 10 minutes to clean the transrectal
ultrasound probe. Upon initial review of the PE SOR and RUC-recommended
PE inputs, we note that a second scope was not included in the direct
PE for CPT code 52443. Given the additional information provided by the
commenter, we assume that EQ250 (ultrasound unit, portable) was used as
a substitution because there is not a specific equipment code for a
transrectal ultrasound probe (rather than recommending a new equipment
type for this code only), therefore, we are finalizing 59 minutes for
EQ250 instead of the RUC-recommended 64 minutes to conform with the
standard scope equipment formula, which includes the 10 minutes of
CA025 attributable to cleaning that rigid scope. We are also finalizing
the proposed equipment time of 79 minutes for ES018, which includes the
30 minutes of CA025 attributable to cleaning that flexible scope.
Comment: Commenters disagreed with the removal of the SM021
(sanitizing cloth-wipe (patient)) supply, which they stated was
appropriate for this input. They clarified that SM022 refers to
sanitizing wipes for surfaces and equipment, noting that four wipes are
included to wipe down all surfaces involved in the delivery of patient
care, including patient beds, equipment tables, and ultrasound
equipment at the conclusion of the procedure. An additional SM021
sanitizing cloth-wipe (patient) is included instead of the five patient
wipes included in the standard cystoscopy pack due to the requirement
for this procedure to also place a transrectal ultrasound probe.
Notably, the additional wipe is utilized to clean the perirectal area,
which is not typically required in standard cystoscopy.
Response: We appreciate the additional information provided by the
commenters. In response to public comments, we are not finalizing our
proposed refinement and instead are finalizing the RUC-recommended
inclusion of a single SM021 supply, due to the use of the transrectal
ultrasound probe which requires an additional cloth wipe for the
patient.
Comment: Commenters disagreed with the scope video system (ES031)
equipment time refinement from 64 minutes to 52 minutes and requested
that CMS finalize the RUC recommendation of 64 minutes, which they
stated was the appropriate value for this input. They also disagreed
with the CMS proposal to refine the equipment times for the flexible
cystoscopy fiberscope (ES018) from 64 minutes to 79 minutes for CPT
code 52443. A commenter recommended 64 minutes of equipment time for
both ES031 and ES018.
Response: After reviewing the comments, we are still not convinced
that the information provided would support the need for equipment time
to increase from a standard equipment time of 52 minutes to 64 minutes
for ES031. Also, based on standard scope equipment time for ES018, we
continue to believe that 79 minutes is appropriate, and that the
recommended 64 minutes would not be typical for the procedure. The
equipment time requested by the commenters was based on the RUC
recommendations for this code family, which improperly applied the
default equipment time formula by including all of the clinical labor
associated with tasks that take place in the preservice portion of the
service period. We instead proposed to apply our standard equipment
time formula for scopes (ES018) and scope video systems (ES031), which
we note resulted in a decrease for the ES031 equipment but an increase
for the ES018 equipment. Therefore, for CPT code 52443, we are
finalizing our proposed equipment time refinement of 52 minutes for
ES031 and equipment time refinement of 79 minutes for ES018.
After consideration of the public comments, we are finalizing the
RUC-recommended work RVU and direct PE inputs for CPT code 52443 as
proposed with the following exceptions where we are finalizing the
following RUC recommended direct PE inputs: 5 minutes for CA023 and the
inclusion of a single SM021 supply.
(14) Prostate Biopsy Services (CPT Codes 55705, 55706, 55707, 55708,
55709, 55710, 55711, 55712, 55713, 55714, 55715, and 76872)
At the April 2022 Relativity Assessment Workgroup (RAW), prostate
biopsy services were reviewed and
[[Page 49368]]
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), 55707 (Biopsy, prostate, transrectal, ultrasound-guided (ie,
sextant), ultrasound-localized), 55708 (Biopsy, prostate, transrectal,
ultrasound-guided (ie, sextant) with MRI-fusion guidance), 55709
(Biopsy, prostate, transperineal, ultrasound-guided (ie, sextant),
ultrasound-localized), 55710 (Biopsy, prostate, transperineal,
ultrasound-guided (ie, sextant) with MRI-fusion guidance), 55711
(Biopsy, prostate, transrectal, MRI-ultrasound-fusion guided, targeted
lesion(s) only), 55712 (Biopsy, prostate, transperineal, MRI-
ultrasound-fusion guided, targeted lesion(s) only, first targeted
lesion), 55713 (Biopsy, prostate, in-bore CT- or MRI-guided (ie,
sextant), with biopsy of additional targeted lesion(s), first targeted
lesion), 55714 (Biopsy, prostate, in-bore CT- or MRI-guided targeted
lesion(s) only, first targeted lesion), and 55715 (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 proposed the RUC-recommended work RVUs for all twelve CPT codes
in this family. We proposed a work RVU of 1.93 for CPT code 55705, a
work RVU of 4.27 for CPT code 55706, a work RVU of 2.63 for CPT code
55707, a work RVU of 3.39 for CPT code 55708, a work RVU of 3.23 for
CPT code 55709, a work RVU of 3.81 for CPT code 55710, a work RVU of
2.61 for CPT code 55711, a work RVU of 3.10 for CPT code 55712, a work
RVU of 4.00 for CPT code 55713, a work RVU of 3.62 for CPT code 55714,
a work RVU of 1.05 for CPT code 55715, and a work RVU of 0.67 for CPT
code 76872.
We proposed the RUC-recommended direct PE inputs for all of the
codes in this family.
We received public comments on prostate biopsy services. The
following is a summary of the comments we received and our responses.
Comment: The commenters supported our proposed values for prostate
biopsy services and stated that CMS' changes recognized the added
complexity and equipment involved in modern prostate cancer diagnosis.
Commenters recommended that CMS monitor the use and outcomes of these
new procedures and be ready to make refinements.
Response: We appreciate the comments and after consideration of
public comments, we are finalizing the work RVUs and direct PE inputs
for the codes in the Prostate Biopsy Services family as proposed.
(15) Laparoscopic Prostatectomy (CPT Codes 55840, 55842, 55845, 55866,
55867, 55868, and 55869)
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 55868 (Laparoscopy, surgical prostatectomy, retropubic radical,
including nerve sparing, includes robotic assistance, when performed;
with lymph node biopsy(ies) (limited pelvic lymphadenectomy) and 55869
((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 proposed the RUC's recommended work RVU for five of the six
codes in the Laparoscopic Prostatectomy family. We proposed 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 55868, 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 55869 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 55869 (608 minutes as
compared with 434 minutes), due to the inclusion of five inpatient
office visits in its global period. CPT code 55869 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 55869 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 55869. We also note that the intensity of CPT code 55869 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
[[Page 49369]]
than any of its peer codes. While we agree that CPT code 55869 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 proposed 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 proposed 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 proposed the direct PE
inputs as recommended by the RUC in all other cases for this code
family.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters disagreed with the proposed work RVU of
27.41 for CPT code 55869 and stated that CMS should instead finalize
the RUC-recommended work RVU of 29.35. Commenters stated that CPT code
55869 is significantly more intense than the other services in this
code family and the RUC proposed value accurately accounted for this.
Commenters stated that the complete extended bilateral pelvic lymph
node dissection described by CPT code 55869 adds significant technical
complexity and explains the increase in intraservice time for this
procedure compared to CPT code 55868. Commenters stated that CPT code
55869 involves not only removal of an organ (prostatectomy) but it also
involves a comprehensive lymph node dissection. Commenters also stated
that the typical patient population for CPT code 55869 have more
advanced prostate cancer compared to patients undergoing other
procedures in this code family. Commenters acknowledged that there is a
relative dearth of potential crosswalk codes to match CPT code 55869
but still maintained that the RUC's selection of CPT code 27059 was a
better crosswalk choice at a work RVU of 29.35.
Response: We disagree with the commenters and continue to believe
that our proposed work RVU of 27.41, based on a crosswalk to CPT code
50543, is the most accurate valuation for this service. As we noted in
the proposed rule, the RUC-recommended crosswalk (CPT code 27059) has
nearly 200 minutes of additional total time higher than the surveyed
work time for CPT code 55869 (608 minutes as compared with 434
minutes). This crosswalk code is also a radical resection of a tumor,
which is less of a clinical match than our choice of CPT 50543 (another
type of surgical laparoscopy). While we continue to believe that the
nature of the PFS relative value system is such that all services are
appropriately subject to comparisons to one another, and that codes do
not necessarily need to share the same site of service, patient
population, or utilization level to serve as an appropriate crosswalk,
we believe that our choice of crosswalk code is a better match both in
terms of total time and clinical similarity. We also continue to
believe that the intensity of CPT code 55869 is anomalously high in
relation to the rest of this code family at the RUC's recommended work
RVU of 29.35. While we agree that CPT code 55869 should have the
highest intensity amongst this group of codes, we do not agree that the
intensity should be roughly 30 to 40 percent higher than any of its
peer codes. At our proposed work RVU of 27.41, the intensity of CPT
code 55869 is approximately 15 to 20 percent more intense than the
other codes in the family which we believe more accurately captures the
relationship between these procedures.
Comment: Several commenters concurred with the technical
corrections proposed to the direct PE inputs for CPT code 55867 and
stated that they appreciated the proposal of the direct practice
expense inputs in all other cases for this code family.
Response: We appreciate the support from the commenters for our
proposals.
After consideration of the comments, we are finalizing the work
RVUs and direct PE inputs for the codes in the Laparoscopic
Prostatectomy family as proposed.
(16) 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 [that is., 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 proposed 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 reflect the actual work involved in performing these
services. As a result, we sought 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 proposed 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 intraservice 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
[[Page 49370]]
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 proposed 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 intraservice 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 also proposed 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 proposed 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 also proposed 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 proposed 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 proposed 152 minutes after rounding up from
151.5 minutes.
Although we proposed 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 proposed the direct PE inputs as
recommended by the RUC; however, due to the concerns mentioned above,
we sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters disagreed with the CMS proposed work
RVU of 17.06 for CPT code 61624 and stated that CMS should instead
finalize the RUC-recommended work RVU of 20.00. Commenters stated that
the RUC's recommendation of the survey median work RVU of 20.00 more
accurately described the physician work involved in furnishing this
service, as CMS proposed a lower work RVU of 17.06 based on a crosswalk
to CPT code 49622. Commenters noted that CPT code 49622 is not an
appropriate crosswalk for CPT code 61624 because these two procedures
are fundamentally different. Commenters emphasized that CPT code 61624
involves precise catheter-based embolization of cranial or spinal
arteries and requires substantially greater physician work, specialized
equipment, and highly trained neurointerventional nurses and
technologists with expertise in radiation safety and neuro-monitoring.
The commenters further noted that the procedure carries higher
malpractice risk due to potential severe and permanent neurological
injury. In contrast, CPT code 49622 is a straightforward intra-
abdominal procedure of lower complexity that relies on standard
operating room equipment and does not require similarly specialized
staffs. They commenters stated that crosswalking CPT code 61624 to CPT
code 49622 significantly undervalues the physician work, practice
expense, and malpractice expense of this complex neurointerventional
procedure. A commenter also noted that the survey value for CPT code
61624 is supported by its similarity in intensity to CPT code 61635,
which involves vessel stenosis requiring stenting and has an
intraservice time of 150 minutes and a total work RVU of 24.28. Many
commenters recommended CMS to finalize the RUC-recommended work RVU of
20.00 for CPT code 61624, stating that this value more accurately
reflects the physician work and intensity of this complex intracranial
procedure.
Response: We appreciate the commenters for the additional
information, and we agree with the commenters that crosswalking CPT
code 61624 to CPT code 49622 undervalues the physician work, practice
expense, and malpractice expense of this complex neurointerventional
procedure. Therefore, we are finalizing a work RVU of 20.00 for CPT
code 61624.
Comment: Several commenters also disagreed with the CMS proposed
work RVU of 13.46 for CPT code 61626 and stated that CMS should instead
finalize the RUC-recommended work RVU of 15.31. Commenters stated that
the RUC's recommendation of the survey median work RVU of 15.31 more
accurately described the physician work involved in furnishing this
service. CMS proposed a lower work RVU of 13.46 based on a crosswalk to
CPT code 49594 and commenters disagreed with this proposed work RVU;
commenters stated that CMS' proposed crosswalk of CPT code 61626 to CPT
code 49594 was inappropriate because the work of CPT code 61626 is much
more intense than the proposed crosswalk of CPT code
[[Page 49371]]
49594. Specifically, commenters stated that CPT code 61626 is a complex
neurointerventional embolization involving delicate head and neck
vessels, requiring advanced angiographic imaging, microcatheter
navigation, and management of catastrophic neurological complication
risks, while CPT code 49594 is a standard hernia repair using standard
operating room (OR) equipment and has minimal imaging needs. They also
stated that CMS relied on inaccurate time estimates rather than the
robust physician survey that supports a higher work RVU; therefore,
commenters recommended CMS adopt the surveyed valuation and finalize a
work RVU of 15.31.
Response: We appreciate the commenters for the additional
information they provided. After consideration of public comments, we
agree that CPT code 61626, which involves highly specialized
neurovascular procedures performed under advanced imaging, entails
substantially greater complexity and professional liability than CPT
code 49597. The two procedures differ fundamentally in anatomy,
technique, resource requirements, physician work, and risk. Thus, the
RUC-recommended work RVU of 15.31 is appropriate and we are finalizing
this work RVU for CPT code 61626.
Comment: Regarding CPT codes 75894 and 75898, commenters noted that
these services were not surveyed in the Harvard Study and had never
been reviewed by the RUC or CMS. Instead, the assigned times were input
by CMS over 30 years ago at the inception of the RBRVS using an unknown
methodology and, therefore, were not valid for relative comparison to
the current survey or to other codes. Commenters emphasized that the
current survey provides the most valid and accurate data appropriately
capturing the work involved and suggested CMS finalize the recommended
values of 2.25 for CPT code 75894 and 1.85 for CPT code 75898.
Response: We appreciate the commenters for the additional
information they provided. With regards to codes with older time
values, we agree that it is important to use the most recent data
available regarding time, and we note that when many years have passed
between time is measured, significant discrepancies can occur. However,
we also believe that our operating assumption regarding the validity of
the existing values as a point of comparison is critical to the
integrity of the relative value system as currently constructed. The
times currently associated with codes play a very important element in
PFS ratesetting, both as points of comparison in establishing work RVUs
and in the allocation of indirect PE RVUs by specialty. If we were to
operate under the assumption that previously recommended work times had
routinely been overestimated, this would undermine the relativity of
the work RVUs on the PFS in general, given the process under which
codes are often valued by comparisons to codes with similar times and
it undermine the validity of the allocation of indirect PE RVUs to
physician specialties across the PFS. Instead, we believe that it is
crucial that the code valuation process take place with the
understanding that the existing work times, used in the PFS ratesetting
processes, are accurate. We recognize that adjusting work RVUs for
changes in time is not always a straightforward process and that the
intensity associated with changes in time is not necessarily always
linear, which is why we apply various methodologies to identify several
potential work values for individual codes. However, we want to
reiterate that we believe it would be irresponsible to ignore changes
in time based on the best data available and that we are statutorily
obligated to consider both time and intensity in establishing work RVUs
for PFS services. For additional information regarding the use of old
work time values in our methodology, we refer readers to our discussion
of the subject in the CY 2017 final rule (81 FR 80273 through 80274).
After consideration of public comments, we continue to agree with
the commenters that the RUC-recommended values at the 25th percentile
accurately reflect the work involved in performing these services. We
proposed the work RVU for both CPT code 75894 and CPT code 75898 at the
RUC's recommended values, and we are finalizing as such for both codes.
Comment: Several commenters supported CMS' proposal of the
recommended direct PE inputs for CPT codes 61624, 75894, and 75898. In
addition, a commenter agreed with CMS' correction of the equipment
formula inputs by adjusting 3 minutes to the equipment time for the
angiography room (EL011), and agreed that the equipment time for the
professional PACS workstation (ED053) should be half of the physician
preservice time plus the full physician intraservice time leading to
152 minutes.
Response: We appreciate the support of our proposed policies from
the commenters.
Comment: For CPT code 61626, commenters emphasized that 5 minutes
of clinical staff time for the CA011 activity ``Provide education/
obtain consent'' was necessary, explaining that informed consent for
CPT code 61626 requires detailed discussion of complex anatomy, high-
risk complications, and procedure-specific considerations, making it
far more time-intensive than the standard 2 minutes. On the other hand,
another commenter agreed that clinical staff time for the CA011 code
should be 2 minutes.
Response: We appreciate the commenters for their feedback. After
reviewing the additional information received during the comment
period, we agree with commenters that obtaining informed consent for
neurovascular embolization procedures of the head and neck (CPT code
61626) requires additional time beyond the standard allocation. As
commenters stated, these procedures involve comprehensive discussions
of complex anatomy, serious potential risks including stroke,
hemorrhage, and cranial nerve injuries, as well as high-stakes clinical
conditions that necessitate thorough patient education. Therefore, we
are finalizing the RUC-recommended 5 minutes of clinical labor time for
the CA011 task for CPT code 61626; we note that this also increases
most of the finalized equipment times by an additional 3 minutes.
Comment: Several commenters disagreed with the proposed deletion of
the SD172 guidewire, cerebral (Bentson) supply in CPT code 61626.
Commenters stated that the SD172 supply should be retained for patient
safety, however if CMS insisted on its removal, then it should be
replaced with an additional SD089 (guidewire, hydrophobic) supply.
Response: We disagree with the commenters and continue to believe
that use of the SD172 guidewire would not be typical for CPT code
61626. Commenters did not explain why the use of a cerebral guidewire
would be typical for a non-central nervous system procedure. However,
due to the patient safety concerns identified by the commenters, we
will add an additional SD089 guidewire to the direct PE inputs for CPT
code 61626. This raises the total quantity of SD089 guidewires to two
since CPT code 61626 already included one in its direct PE inputs.
Comment: For CPT codes 75894 and 75898, commenters provided
additional information regarding CA021 (Perform procedure/service--NOT
directly related to physician work time). They stated that the vascular
interventional technologist works closely with the
[[Page 49372]]
physician to ensure appropriate imaging, adequate contrast to identify
and review vessel details, and proper documentation of images.
Commenters explained that technologists assist with imaging, supplies,
and other tasks not directly associated with physician work time. The
RUC stated that the recommended clinical staff times were supported by
the RUC process, compelling evidence, and valid survey data for both
codes. Commenters believe that the RUC-recommended times of 60 minutes
for 75894 and 45 minutes for 75898 for CA021 were appropriate.
Response: We appreciate the additional information provided by the
commenters regarding these clinical labor times. We proposed the RUC-
recommended direct PE inputs for CPT codes 75894 and 75898, and we
agree with commenters that the typical time for clinical activity CA021
(Perform procedure/service--NOT directly related to physician work
time) is 60 minutes for CPT code 75894 and 45 minutes for CPT code
75898.
After consideration of the comments, we are finalizing the RUC-
recommended work RVUs of 20.00 for CPT code 61624 and 15.31 for CPT
code 61626, as well as work RVUs of 2.25 for CPT code 75894 and 1.85
for CPT code 75898. For CPT code 61626, we are finalizing a 5-minute
allocation for clinical activity CA011 (providing education/obtaining
consent). We are also finalizing the removal of supply item SD172 while
adding an additional SD089 supply for CPT code 61626. Finally, we are
finalizing the proposed direct practice expense inputs for CPT codes
75894 and 75898, including 60 and 45 minutes of CA021 clinical staff
time, respectively.
(17) 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 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 sought 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
[[Page 49373]]
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 sought 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 sought comments on national pricing
options in the non-facility setting to address it permanently. We also
sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters stated that the proposed reduction in
malpractice RVUs from 7.54 to 1.31 for CPT code 61715 represented a
dramatic decrease of more than $200 per procedure without clear
justification. Commenters stated that this procedure is a complex,
high-liability procedure involving stereotactic targeting within the
brain under MRI guidance and that a drastic reduction underestimated
the real-world malpractice risk physicians assume. The commenters
suggested that CMS to maintain the 2025 malpractice RVUs until
sufficient claims data and longer-term safety profiles became available
to inform any downward adjustment.
Response: The proposed reduction to the MP RVU for CPT code 61715
was an unanticipated byproduct of the introduction of PC/TC splits that
took place during CY 2025. CPT code 61715 was previously valued as a
global service without professional and technical component splits;
when we introduced these splits, we maintained the current RVUs
(including the MP RVU) for the professional component even though it no
longer included the technical component portion. When we calculated the
proposed CY 2026 valuation for the professional component of CPT code
61715, the MP RVU underwent a significant decrease as the specialties
in the claims data reporting only the professional service were
different from the specialties that had been reporting the prior global
version of the code. This decrease was also magnified as CPT code 61715
is a low volume service where small shifts in the specialty reporting
can have an outsized effect on valuation.
To minimize these shifts in the allocation of indirect PE and MP
RVUs, we therefore believe it would be more accurate to assign an
expected specialty as part of our low volume services list as detailed
in section II.B of this final rule. We are finalizing the addition of
CPT code 61715 to this list with an expected specialty assignment of
Neurosurgery, the most commonly reported specialty for its predecessor
CPT code 0398T. We believe that this assignment will result in a more
accurate and most stable MP RVU valuation for CPT code 61715.
Comment: Many commenters supported the establishment of non-
facility PE RVUs for CPT code 61715 but did not offer specific
information about the typical direct PE inputs or appropriate crosswalk
codes that we could consider to establish PE RVUs in the non-facility
setting. Many commenters expressed concern with non-facility pricing
for this service, and stated that the service is not typically
performed in the non-facility setting and should only be performed in a
tertiary care hospital. Another commenter suggested that we should wait
to address payment for CPT code 61715 until the AMA RUC is scheduled to
review this code again in 2027. A commenter stated that, based on a
detailed simulation of the PE inputs involved with CPT code 61715 in
the non-facility setting, the PE RVU should be calculated at 606.74.
The commenter stated that this calculation was based on 210 minutes of
registered nurse (RN) labor and 240 minutes of MRI technologist labor,
along with a series of additional supply and equipment items in
addition to the ones that CMS had finalized in CY 2025 rulemaking. The
commenter stated that if CMS declined to adopt this PE RVU, the
commenter instead recommended that CMS set non-facility PE RVU for CPT
code 61715 via a crosswalk to CPT code 27278 or CPT code 37277.
Response: We appreciate the commenters' feedback regarding non-
facility PE RVUs for CPT code 61715. We welcome opportunities to
discuss establishing non-facility pricing for this code but remind
interested parties that more information is needed regarding typical
direct PE inputs and/or more information about appropriate crosswalk
codes to price CPT code 61715 in the non-facility setting. We disagree
with the commenter that the direct PE inputs and recommended PE RVUs
requested by the commenter would be typical for CPT code 61715. The
commenter's valuation for this procedure would result in the highest PE
RVU on the entire PFS, at approximately $21,000 after applying the
proposed conversion factor, while the two suggested crosswalk codes
would have a valuation around $13,000. We stated in the proposed rule
that a requested $9,750 payment from an interested party appeared to be
a major outlier for this service, and the range of reported payments in
the facility setting reported by the MACs in April 2022 for predecessor
CPT code 0398T was $1,554.58 to $2,036.75 when the highest and lowest
outliers were removed. We remind interested parties that valuation
under the PFS is based on the typical case which does not support
valuations in this range for CPT code 61715.
Comment: Many commenters stated that the proposed efficiency
adjustment should not be applied to CPT code 61715, as this code only
received its initial valuation in 2025, and standard CMS practice has
been to allow 3 years of real-world data before reassessing efficiency
gains.
Response: We appreciate the feedback on the proposed efficiency
adjustment; we note for the commenters that our discussion of the
efficiency adjustment can be found above in section II.E.2.b.
After consideration of the comments, we did not receive enough
information about typical non-facility direct PE inputs or reasonable
crosswalk codes to finalize non-facility pricing for CPT code 61715 for
CY 2026, therefore we are finalizing to maintain the facility pricing
and coding structure for CPT code 61715 as proposed. We are also
finalizing the addition of this code to the low volume services list
with an expected specialty assignment of Neurosurgery as detailed
above. We welcome opportunities to discuss establishing non-facility
pricing, but remind interested parties that valuation under the PFS is
based on the typical case.
[[Page 49374]]
(18) Percutaneous Interlaminar Lumbar Decompression (CPT Codes 62330
and 62331)
In September 2024, CPT created two new Category I codes to replace
existing Category III code 0275T. CPT codes 62330 (Decompression,
percutaneous, with partial removal of the ligamentum flavum, including
laminotomy for access, epidurography, and imaging guidance (i.e., 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 (i.e., 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 proposed the RUC-recommended work RVUs for both CPT code 62330
(8.00) and CPT code 62331 (4.25) without refinement. We also proposed
the RUC-recommended direct PE inputs without refinement for both CPT
code 62330 and 62331.
We received comments on our proposals for this code family. The
following is a summary of the comments we received and our responses.
Comment: Commenters were generally supportive of CMS' proposal of
the RUC-recommended work RVUs and direct PE inputs for CPT codes 62330
and 62331. A commenter requested that CMS restore the RVUs for CPT code
62287, stating they believe it was inadvertently removed. Another
commenter also encouraged CMS to ensure that the Medicare practitioner
community is aware of the availability of these new codes by including
them in the annual MLN Matters educational article containing a summary
of the final PFS rule.
Response: We appreciate the commenters for their comments.
Regarding the comment pertaining to CPT code 62287, we note that we
have addressed this as a technical correction under the PE section of
this final rule.
After consideration of the public comments, we are finalizing the
work RVU values for the Percutaneous Interlaminar Lumbar Decompression
code family (CPT codes 62330 and 62331) as proposed. We are also
finalizing the direct PE inputs for CPT codes 62330 and 62331 as
proposed.
(19) Percutaneous Decompression of Median Nerve (CPT Code 64728)
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 dilation device while
transecting the transcarpal ligament: CPT code 64728 (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 64728.
We proposed the RUC-recommended work RVU of 2.70 for CPT code
64728. We would like to note that CPT code 64728 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 64728 is very typical for a
procedure code with the same work time values (that is, 20 minutes
intraservice time and 57 minutes of total time) and has a typical
intensity for this kind of procedure.
We proposed the RUC-recommended direct PE inputs for CPT code 64728
without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters agreed with CMS' proposal of the RUC-
recommended work RVU and direct PE inputs for CPT code 64728.
Response: We appreciate the support for our proposals from the
commenters.
Comment: Several commenters stated that the payment associated with
the proposed work RVU of 2.70 for CPT code 64728 would not adequately
reimburse practitioners for the time, effort, complexity, and expertise
that go into providing this service. Commenters stated that given the
profound impact ultrasound guided CTR procedures has on patients, it is
crucial to maintain patient access to this minimally invasive approach
that gives patients long-term relief, while allowing them to return to
their daily activities due to the lack of a need for general or
regional anesthesia and minimal recovery time. Commenters stated that
this minimally invasive approach does not mean that the procedure
itself is low effort and requested that the payment rate for CPT code
64728 be increased to c reflect the time, complexity and intensity of
the work involved in performing this procedure.
Response: We appreciate the additional feedback from the
commenters, many of whom described their firsthand experience with this
procedure. However, we did not receive additional data from these
commenters to indicate that CPT code 64728 typically requires
additional time or intensity beyond what was provided by the RUC
recommendations. As we noted in the proposed rule, a review of
similarly timed procedures does not support a work RVU greater than the
RUC recommendation of 2.70 and the RUC's valuation for CPT code 64728
is very typical for a procedure code with the same work time values.
Therefore, we continue to believe that the proposed work RVU of 2.70
remains the most accurate valuation for CPT code 64728.
Comment: Several commenters stated that the RUC-recommended work
RVU was unreliable because it was based in significant part on input
from survey respondents with no experience performing this procedure,
which skewed the credible survey responses from physicians with
substantial real-world experience. Commenters stated that this resulted
in a work RVU recommendation that was based on the incorrect assumption
that a minimally invasive procedure takes less time and is less
intensive to perform, which is not true and is the exact opposite of
the situation for CPT code 64728. Commenters stated that using data
from survey respondents with no experience performing CPT code 64728
skewed the data and led the RUC to select CPT code 51102 (Aspiration of
bladder, with insertion of suprapubic catheter) for its valuation
crosswalk, which was highly problematic because CPT code 51102 lacks
critical elements of the survey procedure. Commenters stated that this
was an inaccurate comparison for many reasons, including entirely
different anatomy, risks, skills, and time required, but most
foundationally, because continuous imaging is an integral part of CPT
code 64728 and which is not an element of CPT code 51102.
Response: We disagree with the commenters and continue to believe
[[Page 49375]]
that the RUC's recommended work RVU of 2.70 is the most accurate
valuation for CPT code 64728. The RUC has a long history of using a
mixture of targeted and random survey respondents for their survey
process, as the targeted survey respondents who have personal
experience with the procedure in question tend to overestimate its
intensity. Our intention in seeking additional information is not to
privilege once source over the other. Prioritizing the results of a
targeted survey over the data generated by random respondents would not
be methodologically appropriate and could lead to inaccurate
valuations.
We also believe that the RUC's use of CPT code 51102 for a
valuation crosswalk was an accurate choice for CPT code 64728. CPT code
51102 shares the same intraservice work time of 20 minutes and a highly
similar total work time (60 minutes against 57 minutes) when compared
with CPT code 64728. While the procedures have significant clinical
differences, we continue to believe that the nature of the PFS relative
value system is such that all services are appropriately subject to
comparisons to one another. Although codes that describe clinically
similar services are sometimes stronger comparator codes, we do not
agree that codes must share the same site of service, patient
population, or utilization level to serve as an appropriate crosswalk.
Since the two components of work are time and intensity, and these two
codes share highly similar work times along with comparable intensity,
we believe that CPT code 51102 is an accurate choice for use as a
valuation crosswalk.
Comment: Several commenters pointed to additional data sources
separate from the RUC survey conducted for CPT code 64728. Commenters
stated that there was additional randomized controlled trial data from
the Walter Reed Medical Center which reported a mean intraservice time
of 32.2 minutes as compared with 20 minutes from the RUC survey. In
addition, commenters stated that an independent physician survey of CPT
code 64728 was performed by a third party following the AMA RUC meeting
in January 2025. Commenters stated that this independent survey had a
robust response rate of 63 percent% with a median intraservice time of
25 minutes and a median total time of 65 minutes. Commenters stated
that these times were similar to the targeted respondents from the RUC
survey and stated that the participating physicians from the
independent survey recommended a work RVU of 6.00 for CPT code 64728.
An additional commenter stated that the work RVU for this code should
be comparable to CPT codes 64721 at 4.85 or CPT code 29848 at 6.23.
Response: We appreciate the submission of these additional sources
of data by the commenters. However, as stated above, we disagree with
the commenters and continue to believe that the proposed work RVU of
2.70 remains the most accurate valuation for CPT code 64728. While we
are intrigued by the use of randomized controlled trial data from
institutions such as the Walter Reed Medical Center, we are skeptical
that a mean intraservice time of 32 minutes is typical for CPT code
64728. This value would be higher than the 75th percentile results of
the RUC survey, in both the random and targeted categories, as well as
higher than the median intraservice time of the independent survey at
25 minutes. The patient population at Walter Reed may not be typical of
the broader Medicare community which could explain this disparity in
surveyed work time, we would be interested in additional information
from interested parties as to the generalizability of data from Walter
Reed to the Medicare population. As for the independent survey, we
believe that its surveyed times are broadly comparable to the RUC's
recommended times, with a finding of 25 minutes of intraservice time
(against 20 minutes from the RUC) and 65 minutes of total time (against
57 minutes from the RUC). We believe that this additional data
reinforces the notion that CPT code 64728 typically takes approximately
20-25 minutes of intraservice time and 60-65 minutes of total time to
be performed. We greatly appreciate having this additional data source
and we believe that these additional survey times support and reinforce
the time values from the RUC's survey.
Regardless of whether we were to finalize 20 minutes or 25 minutes
as the intraservice time for CPT code 64728, in neither case would the
work RVU of 6.00 requested by the commenters be an accurate
representation of the work associated with performing this procedure.
As we noted in the proposed rule, a review of similarly timed
procedures does not support a work RVU greater than the RUC
recommendation of 2.70 and the RUC's valuation for CPT code 64728 is
very typical for a procedure code with the same work time values.
Assigning a work RVU of 6.00 would result in an anomalously high
intensity for CPT code 64728 as compared to other services on the fee
schedule. This valuation would create a major rank order anomaly and
would not maintain relativity with other services on the PFS.
Similarly, the suggested comparator codes from the commenter (CPT codes
64721 and 29848) are not appropriate choices for valuation crosswalks
as they have greatly differing work time values. CPT code 64721 has 171
total minutes of total time while CPT code 29848 has 179 minutes of
total time; by comparison, CPT code 64728 has 57 minutes of total time
in the RUC survey and 65 minutes of total time in the independent
survey. Since we are tasked by the statute with valuing work based on
time and intensity, we do not believe it would be accurate to value CPT
code 64728 comparably to other codes with so much greater work time.
We believe that the availability of these kinds of additional data
sources can be a great asset in determining the valuation of service.
We also believe that the specific case of CPT code 64728 highlights the
importance of collecting data as part of a wider family of related
codes, which allows for the assessment of relativity between related
services. We want to emphasize that although we do not privilege the
RUC's recommendations over other data sources, the requested work RVUs
from the independent survey do not maintain relativity with other
related services on the PFS, which is why we believe that the RUC's
recommended work RVU of 2.70 is more accurate in this case. We welcome
the submission of additional data regarding the work RVU and work time
of CPT code 64728 for use in potential future rulemaking.
Comment: Several commenters stated that the proposed MP RVU for CPT
code 64728 was extremely low and out of line with the malpractice
expense for other carpal tunnel release procedures. Commenters stated
that all three approaches--open, endoscopic, and ultrasound guided--
require avoiding injury to the same nerves and nerve branches adjacent
to the transverse carpal ligament and involve the same risks.
Commenters stated that the MP RVU for CPT code 64728 should be
comparable to the MP RVUs for CPT codes 64721 and 29848, and
recommended CMS to increase the MP RVU for 64728 to 1.25.
Response: We can clarify for the commenters that our valuation
methodology does not attach a specific MP RVU to specific codes in the
way that we propose and finalize work RVUs. MP RVUs are instead derived
annually based on a formula that primarily utilizes the code's work RVU
and the risk factors associated with the specialties that bill the code
in the
[[Page 49376]]
claims data; for more information on the MP RVU methodology, we direct
interested parties to Section II.M, Determination of Malpractice
Relative Value Units (RVUs). In the specific case of CPT code 64728,
this code has a significantly lower proposed work RVU (2.70) as
compared with CPT codes 64721 (4.85) and 29848 (6.23), along with
significantly lower total work time as detailed above, which explains
why its proposed MP RVU was lower.
After consideration of the comments, we are finalizing the work RVU
and direct PE inputs for CPT code 64728 as proposed.
(20) Baroreflex Activation Therapy (CPT Codes 64654, 64655, 64656,
64657, 64658, 64659, 93145, and 93146)
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: 64654 (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), 64655
(Revision or replacement of baroreflex activation therapy (BAT)
modulation system, with intraoperative interrogation and programming;
lead only), 64656 (Revision or replacement of baroreflex activation
therapy (BAT) modulation system, with intraoperative interrogation and
programming; pulse generator only), 64657 (Removal of baroreflex
activation therapy (BAT) modulation system; total system, including
lead and pulse generator), 64658 (Removal of baroreflex activation
therapy (BAT) modulation system; total system, including lead and pulse
generator; lead only), 64659 (Removal of baroreflex activation therapy
(BAT) modulation system; total system, including lead and pulse
generator; pulse generator only), 93146 (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 93145 (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 proposed 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 64654, a work RVU of 11.30 for CPT code
64655, a work RVU of 8.01 for CPT code 64656, a work RVU of 12.13 for
CPT code 64657, a work RVU of 8.95 for CPT code 64658, a work RVU of
8.23 for CPT code 64659, and a work RVU of 0.90 for CPT code 93146.
We disagree with the RUC's recommended work RVU of 0.79 for CPT
code 93145 and we instead proposed 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 93145 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 93145, stating that CPT code 93145 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 93145 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 93145
which is close to 40 percent higher than the intensity for peer CPT
code 93146. We do not believe that this results in an accurate
valuation for the two new codes given that CPT code 93145 describes
cases where the BAT device is working properly and does not require
adjustment, whereas CPT code 93146 describes cases where the BAT device
is working properly but requires additional device programming. We
believe that CPT code 93146 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 proposed a work
RVU of 0.65 for CPT code 93145, which we believe reflects more accurate
relativity between CPT code 93145 and CPT code 93146.
We proposed the direct PE inputs as recommended by the RUC for CPT
codes 64654-64659. For CPT codes 93145 and 93146, 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
proposed to refine the clinical labor for CPT codes 93145 and 93146
from RN (L051A) to the RN/LPN/MTA blend (L037D); we proposed that the
numerical values for each clinical labor input will remain the same,
with only the staff type changing from L051A to L037D. We proposed the
rest of the RUC-recommended PE inputs without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that they appreciated CMS
proposing the RUC-recommended work RVU and direct practice expense
recommendations for CPT codes 64654, 64655, 64656, 64657, 64658 and
64659.
Response: We appreciate the support for our proposals from the
commenters.
Comment: Several commenters disagreed with the proposed work RVU of
0.65 for CPT code 93145 and stated that CMS should instead finalize a
work RVU of 0.79 based on the RUC recommendation. Commenters stated
that the proposed work RVU of 0.65
[[Page 49377]]
relies too heavily on the comparison of measured intensity/complexity
between CPT codes 93145 and 93146 and does not accurately account for
the survey results. Commenters stated that a direct crosswalk to CPT
code 93279 is inappropriate as CPT code 93145 is a new service for
patients with chronic heart failure that was placed on the RUC's New
Technology list to be re-reviewed in 3 years to ensure correct
valuation, patient population and utilization assumptions. Commenters
stated that CPT code 93145 has a higher estimated intensity/complexity
than both key reference services and that the RUC recommended work RVU
of 0.79 maintains relativity within this code family and across other
similar codes.
Response: We disagree with the commenters and continue to believe
that the proposed work RVU of 0.65 is a more accurate choice for CPT
code 93145. We remind commenters that we are tasked by the statute with
valuing work based on time and intensity; therefore, we believe that it
is entirely appropriate to compare CPT codes 93145 and 93146 based on
their respective intensities. Commenters did not explain why CPT code
93145 should be valued close to 40 percent higher than the intensity
for peer CPT code 93146 despite being the version of the procedure that
does not require additional device programming; we believe that this
provides strong evidence that the RUC's recommended work RVU of 0.79 is
overvalued. We also note for commenters that we are not ignoring the
survey results, as the survey for CPT code 93145 resulted in identical
time values as compared with the top reference code, CPT code 93279.
Given their identical time values and clinically similar nature of both
being device evaluation procedures, we believe that it is more accurate
to value CPT codes 93145 and 93279 at the same work RVU of 0.65. We
also note that this valuation assigns the same intensity to CPT codes
93145 and 93146, as opposed to the RUC recommendation that anomalously
assigns CPT code 93145 significantly higher intensity.
Comment: Several commenters disagreed with the proposal to refine
the clinical labor for CPT codes 93145 and 93146 from RN (L051A) to the
RN/LPN/MTA blend (L037D). Commenters stated that CPT codes 93145 and
93146 must be performed by registered nurses (RNs) with specialized
expertise in advanced heart failure management as the patients
receiving BAT are not typical device patients. Commenters stated that
evaluating and managing these patients during BAT device interrogation
or programming requires a deep understanding of hemodynamics,
pharmacology, and device interactions, which are all skills that are
well beyond the scope of licensed practical nurses (LPNs) or medical
technician assistants (MTAs). Commenters stated that the reprogramming
and assessment during BAT follow-up visits are a complex and high-risk
process, and it is not uncommon for patients to develop presyncope or
syncope while settings are titrated. Commenters stated that the role of
clinical staff under CPT codes 93279 and 93281 is fundamentally
different and there is minimal independent clinical assessment or
medical decision-making required; the difference in skill,
responsibility, and clinical risk is dramatic. The commenters
recommended CMS to finalize the original RUC recommendation that
included the L051A RN clinical labor time for CPT codes 93145 and
93146.
Response: Based on the additional information provided by the
commenters, we agree that there is a difference in the technical skill
required for the clinical labor in CPT codes 93145 and 93146 as
compared with CPT codes 93279 and 93281, and that the use of the RN
clinical labor type would be typical for these procedures. We are
therefore not finalizing our proposed refinement to convert the
clinical labor for CPT codes 93145 and 93146 from RN (L051A) to the RN/
LPN/MTA blend (L037D) and will instead finalize the RUC-recommended RN
clinical labor type for all of their clinical labor tasks.
After consideration of the comments, we are finalizing the work
RVUs for all of the codes in the Baroreflex Activation Therapy family
as proposed. We are also finalizing the direct PE inputs as proposed,
with the exception of the change in clinical labor type for CPT codes
93145 and 93146 described above.
(21) Percutaneous Electrical Nerve Field Stimulation (CPT Code 64567)
In September 2024, the CPT Editorial Panel created a new CPT code
to report percutaneous electrical nerve field stimulation of cranial
nerves: CPT code 64567 (Percutaneous electrical nerve field
stimulation, cranial nerves, without implantation). For CY 2026, the
RUC-recommended a work RVU of 1.50 for CPT code 64567.
We proposed the RUC-recommended work RVU of 1.50 for CPT code
64567, and the RUC-recommended direct PE inputs without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter stated that they appreciated the CMS proposal
of the RUC recommendations for the work RVU, work time, and direct PE
inputs for CPT code 64567.
Response: We appreciate the support for our proposals from the
commenter.
After consideration of the comments, we are finalizing the work RVU
and direct PE inputs for CPT code 64567 as proposed.
(22) Laminotomy--Repair of Disc Defect (CPT Code 63032)
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 63032 (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 63032, 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 63032.
For CY 2026, we proposed the RUC-recommended work RVU of 2.50 for
CPT code 63032. There are no direct PE inputs for CPT code 63032.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter recommended that CMS increase the proposed
malpractice RVU for CPT code 63032 to 2.19 as opposed to the proposed
0.78. The commenter
[[Page 49378]]
described the clinical tasks performed in CPT code 63032, involving the
implantation of a novel FDA PMA-approved bone-anchored annular closure
implant following a laminectomy/discectomy. The commenter stated that
considering the additional risk not associated with the primary code
(CPT code 63030), which does not involve the implantation of a
permanent annular closure implant, the MP RVU should be increased for
CPT code 63032.
Response: We would like to clarify that our valuation methodology
does not attach a specific MP RVU to specific codes in the way that we
propose and finalize work RVUs. MP RVUs are instead derived annually
based on a formula that primarily utilizes the code's work RVU and the
risk factors associated with the specialties that bill the code in the
claims data; for more information on the MP RVU methodology, we direct
interested parties to section II.M, Determination of Malpractice
Relative Value Units (RVUs). In the specific case of CPT code 63032,
this code has a significantly lower work RVU (2.50 compared to 12.00)
and total work time (21 minutes compared to 305 minutes) as compared
with CPT code 63030 which explains why its MP RVU is lower than the
base code that it is billed with.
After consideration of the comments, we are finalizing the work RVU
of 2.50 for CPT code 63032 as proposed. We proposed and we are
finalizing no direct PE inputs for this code.
(23) Cerebral Perfusion & CT Angiography-Head & Neck (CPT Codes 70496,
70498, 70471, 70472, and 70473).
In May 2024, the CPT Editorial Panel created three new codes for
cerebral perfusion and CT angiography of the head and neck: CPT code
70471 (Computed tomographic angiography (CTA), head and neck, with
contrast material(s), including noncontrast images, when performed, and
image postprocessing), CPT code 70472 (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 70473 (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 70471, 70472, and 70473 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 proposed the RUC-recommended work RVU of 2.50 for CPT code
70471, the work RVU of 0.77 for CPT code 70472, the work RVU of 1.00
for CPT code 70473, and the work RVU of 1.75 for both CPT codes 70496
and 70498.
We proposed the RUC-recommended direct PE inputs for CPT codes
70471, 70472, 70473, 70496, and 70498 without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that they agreed with the
proposal of the RUC-recommended work RVUs and direct PE inputs for the
codes in this family.
Response: We appreciate the support for our proposals from the
commenters.
After consideration of the comments, we are finalizing the work
RVUs and direct PE inputs for the codes in the Cerebral Perfusion & CT
Angiography-Head & Neck family as proposed.
(24) Coronary Atherosclerotic Plaque Assessment (CPT Code 75577)
In September 2024, the CPT Editorial Panel created new Category I
CPT code 75577 (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 proposed the RUC-recommended work RVU of 0.85 for CPT code
75577. 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 75577
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 proposed to crosswalk the PE RVU
for CPT code 75577 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 75577 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 75577, which would not
typically be considered direct PE under our current methodology (86 FR
65038 and 65039).
We received public comments on coronary atherosclerotic plaque
assessment services. The following is a summary of the comments we
received and our responses.
Comment: Commenters supported the proposed work RVU and use of a
valuation crosswalk to CPT code 77373 to determine the PE RVU for CPT
code 75577. Commenters also requested that this CPT code be excluded
from the proposed efficiency adjustment policy.
Response: We appreciate the commenters for their support. We
acknowledge commenters' request to exclude CPT code 75577 from our
proposed efficiency adjustment policy and we refer readers to that
discussion
[[Page 49379]]
in the valuation of specific codes section in this rule for more
information regarding CPT codes excluded from the efficiency adjustment
policy.
Comment: A commenter expressed concern regarding the 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. They stated that this is a high-cost supply item and
expressed concerns that a crosswalk is an ad hoc approach that could
lead to instability if it is changed in future years.
Response: We acknowledge the commenter's broader policy concerns
regarding the supply-item, Plaque Characterization Analysis Software,
and we refer readers to the comment solicitation regarding high-cost
supply items contained within the discussion for the Lower Extremity
Revascularization code family for additional information on this topic,
as well as our prior discussion in the CY 2011 PFS final rule with
comment period (75 FR 73251) where we discuss broader challenges
regarding our ability to price high cost disposable items.
After consideration of the comments, we are finalizing our policies
for CPT code 75577 as proposed.
(25) 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 non-facility setting, such as a physician's
office, or a facility setting, such as a hospital. The non-facility PE
RVUs reflects all the direct and indirect practice expenses involved in
furnishing a particular service when the entire service is furnished in
a non-facility 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 non-
facility 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 non-facility
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 non-facility 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 non-
facility 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
may 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
did not propose to utilize this new data in our practice expense
methodology due to concerns we identified in section II.B. of this
final 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 non-facility 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 non-facility 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
non-facility settings. For example, the sum of the current
[[Page 49380]]
prices for the equipment inputs used in the PE calculations for
radiation treatment delivery services (that is, $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 non-facility 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 the 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 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 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 non-facility 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.66 67 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, the 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.
---------------------------------------------------------------------------
\66\ 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.
\67\ 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.
[[Page 49381]]
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 non-facility
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
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 proposed 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 proposed 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 also proposed 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 final 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 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 approximate 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 sought comments on this aspect of the
methodology in particular, especially given our interest in
transparency in rate setting.
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.
We sought 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported our proposal, stating that
utilizing OPPS data will facilitate long-term payment stability,
mitigate payment volatility and is better suited for capital-intensive
radiation oncology services, noting that the current PE methodology was
not designed for expensive equipment like linear accelerators.
Other commenters opposed our proposal. Some commenters were
fundamentally opposed to using OPPS data for PFS rate-setting, stating
that hospital charge data lacks the granularity of physician practice
costs and stating the approach violates Balanced Budget Act of 1997
(BBA) requirements for cost accounting principles. A commenter
emphasized that the current methodology's ``bottom-up'' granular
approach is preferable to hospital ``averaging'' systems. Commenters
questioned whether hospital cost data accurately reflects physician
practice costs given concerns about charge compression, which occurs
when hospitals a lower markup to relatively high cost items and a
higher markup to relatively lower cost items. Commenters stated that
these hospital charging practices may undervalue high-cost services.
Commenters also expressed concern that hospitals may not be accurately
accounting for Intensity modulated radiation treatment delivery(IMRT)
costs, with some requesting that hospitals directly allocate radiation
oncology equipment costs to appropriate cost centers. Some commenters
stated that APC groupings result in a loss of granularity due to the
averaging of multiple unrelated procedures.
[[Page 49382]]
Response: We appreciate commenters support for our proposal. We
agree that the use of OPPS APC relative weights to establish the
relative relationship of PE RVUs for radiation treatment delivery
services is more suited for capital-intensive services. We disagree
with commenters who stated that CMS does not have the authority to
utilize OPPS data in PFS ratesetting. 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
acknowledge commenters' concerns about charge compression and the
averaging nature of the OPPS payment system. However, we believe the
relationship between the APC relative weights reasonably approximates
the relationship between the resource costs required to furnish these
services under the PFS.
Comment: Many commenters expressed concerns about payment reduction
impacts, citing estimated reductions ranging from 9 percent to 52.5
percent for various combinations of services. Some commenters stated
that the economic and policy implications of these proposed changes
extend far beyond immediate payment adjustments, with significant
market consolidation risks including financial strain that may force
more independent practices into hospital systems. Commenters stated
that reduced payments could result in migration to hospital outpatient
departments, resulting in reduced competition and increased Medicare
expenditures. Commenters expressed concern that reduced payments could
potentially limit adoption of advanced treatment technologies, risk
compromising access to IMRT and other advanced modalities, and result
in workforce instability that could affect treatment quality and
safety.
Response: As we described in the proposed rule, 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. Therefore, while the RVUs for certain combinations of
services may differ between CY 2025 and CY 2026, in aggregate, the
total PE and MP RVUs for these services were calculated to be similar.
Comment: Some commenters requested that CMS delay implementation to
allow more robust data collection from freestanding practices. These
commenters suggested this data could include practice-specific surveys
to gather more comprehensive cost data from freestanding centers,
better capture actual equipment usage and depreciation, and more
accurately assess indirect practice expenses.
Response: Because we believe that using the OPPS data in setting
the relative rates for these kinds of services represents the best
source for improved valuation, we do not believe it is prudent to delay
implementation of this proposal. However, we remain open to additional
information, such as that cited by commenters, that could help us
inform future proposals that address these services.
Comment: Some commenters expressed concern that image guidance
costs will no longer be recognized. A commenter expressed concern that
not all RVUs were redistributed from deleted codes.
Response: As we stated in the proposed rule, the valuation of the
PE RVUs for the newly valued CPT codes includes a redistribution of the
PE RVUs from the newly bundled services to the other services in that
family. Therefore, while image guidance costs will not be separately
payable, the payment for the treatment delivery services includes the
resource costs associated with furnishing the image guidance services.
Regarding the concern that not all RVUs were redistributed from deleted
codes, we are confirming that we are including the volume for all of
these services in calculating the share of PE and MP RVUs that these
services represented in CY 2025.
Comment: Several commenters stated that CMS did not demonstrate
what the PE RVUs would have been had it applied the standard PE
methodology using the RUC's recommended direct PE inputs. Commenters
stated that without this comparison, interested parties could not
meaningfully assess the impact of CMS' proposal to base PE RVUs on
OPPS-derived relative cost data which undermined transparency in
policymaking.
Response: We acknowledge the concerns of the commenters and agree
that additional information regarding alternatives considered would
have assisted in providing opportunities for feedback from interested
parties. However, due to the concerns that we outlined in the proposed
rule, we believe that the volatility associated with small sample
surveys, the unique dynamic of capital-intensive costs, and voluntarily
submitted invoice data all contributed to making these services
unusually difficult to value through our traditional PE methodology.
The coding for these services has also proven to be problematic over
the past decade, which previously led to the creation of 17 HCPCS G-
codes as discussed below. Any discussion of alternatives considered
would have required also publishing valuations for the maintenance of
the G-code set, since maintaining these codes would have represented
the continuation of current policy. Therefore, we chose to focus on our
proposed valuation based on the use of OPPS cost data due to our stated
belief that it would be methodologically more accurate for these
services. Given the long-standing problems associated with using
bottom-up input recommendations for these kinds of services, the
inherent alternative to our proposal, of course, would be to maintain
the existing set of G-codes and inputs for use under the PFS for CY
2026.
Comment: A commenter recommended that once utilization data becomes
available, CMS use the geometric mean of each CPT code rather than APC
payment rates to establish the relativity of the PE RVUs.
Response: We may consider this commenter's request in future
rulemaking.
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 A-E7 for the current and CY 2026 code
descriptors (where applicable) for the CPT codes in this family.
[[Page 49383]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.027
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 A-E8 includes the HCPCS G-codes and their long
descriptors.
[[Page 49384]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.028
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 because the inputs for these services
were last reviewed in 2014, CMS did not accept the RUC recommendations,
and the inputs may not represent the services as they are currently
performed. 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 proposed 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 proposed 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
[[Page 49385]]
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 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 in this section.
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 final 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 proposed 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 proposed 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 also sought 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,
it is packaged under the OPPS.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: We received many comments requesting that CMS change the
APC assignment for CPT codes 77407 and 77412.
Response: We consider comments regarding APC assignments to be
outside the scope of this final rule. We refer commenters to the CY
2026 OPPS final rule for responses to comments regarding APC
assignment.
Comment: Many commenters disagreed with the proposed utilization
crosswalk for CPT codes 77407 and 77412. Commenters stated that
although CMS estimated that CPT codes 77407 and 77412 will represent 50
percent and 45 percent of billed charges respectively, commenters
anticipated that CPT code 77407 will be billed at a much higher
frequency and CPT code 77412 at a lower frequency. A commenter stated
that if use of CPT code 77412 is limited to cases involving breath-hold
or gating technology, the commenter anticipated that it would
constitute approximately 15 percent of billed charges instead of the
proposed 45 percent, and the Medicare program will pay substantially
more for radiation treatment than intended.
Response: We appreciate the commenters input on the proposed
utilization crosswalk. It is important that the utilization crosswalks
be as well-founded as possible in order to value the services
appropriately. We We also recognize that in many cases, it is difficult
to ascertain how services furnished in the past would be most
accurately reported using a future code set. We have reviewed the
disparate information and recommendations presented by relevant
specialty groups and experts as reflected in public comments and
through the AMA RUC recommendations, and are finalizing a modified
crosswalk that specifically adjusts downward the estimated portion that
77412 would be reported compared to 77407 based on commenters' who
represent those who provide care in the non-facility setting.
Specifically, we are modifying the utilization crosswalk to crosswalk
35 percent of the utilization to CPT code 77412 and 55 percent of the
utilization to CPT code 77407.
Comment: Some commenters described congressional action to remove
radiation oncology services from the PFS entirely. Other comments
requested site-neutral adjustments to ensure equivalent payment across
settings.
Response: As commenters are aware, we do not have the statutory
authority to remove radiation oncology services from the PFS entirely.
The statutory authorities and formulas that govern the PFS and OPPS,
especially for annual updates, are unique. At this time, we do not
believe that the accuracy of PFS payment is necessarily improved by
ensuring equivalent payment across settings . However, we remain open
to additional data that could help us as we develop further policies
with respect to these services.
Comment: Some commenters recommended displaying only the
professional component for CPT code 77387 to avoid billing confusion. A
commenter requested that CMS update the Medicare Claims Processing
Manual to include language explaining that CPT codes 77387-26 should be
reported regardless of the place of service, when performed. Another
commenter stated that it is confusing to allow the professional
component of CPT code 77387 to be billed with the treatment delivery
codes, since the code description states, ``including imaging guidance,
when performed''.
Response: We appreciate the commenters' response to our request for
strategies to mitigate billing confusion. We do not believe that a
change to billing guidance is needed at this time, especially given the
lack of consensus regarding the best approach to this novel
circumstance. Because the RVUs assigned to CPT 77387-26 and 77386
billed globally will be the same, any initial confusion as to which of
these codes should be reported will not have an impact on payment. In
the alternative, if we were to eliminate use of one or the other of
these billing mechanisms in advance, then any entity not conforming to
our envisioned approach would be unable to receive payment. Once a
consensus approach to reporting these services under this construct
emerges, we anticipate updating the guidance. We refer the commenter to
the CPT Editorial Panel for additional information regarding the
decision to allow billing CPT code 77387 with the treatment delivery
codes.
After consideration of comments received, we are finalizing our
proposal 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, with the additional
refinement to the utilization crosswalk described earlier in this
section.
[[Page 49386]]
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 proposed the RUC-recommended work RVU for the two codes in the
family that have a work RVU. We proposed 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 proposed to use this relationship to
establish the RVUs for the PE portion of these services.
We proposed 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 (for example, 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 proposed 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 sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposal of the RUC-
recommended work RVUs for CPT codes 77X05 and 77X09. Commenters stated
their appreciation that CMS was proposing to delete the 17 HCPCS G
codes (G6001-G6017) and recognize the newly revised CPT codes for
payment under the PFS.
Response: We appreciate the support for our proposed policies from
the commenters.
Comment: Several commenters disagreed with the proposed work RVUs
for CPT codes 77X05 and 77X09 stating that the proposed work valuations
did not accurately capture the actual workflow or resource intensity
associated with these SRT services. Commenters stated that planning and
simulation are not a one-time event and that ultrasound imaging is
performed at every fraction to verify depth, confirm margins, monitor
treatment response and repopulation, and guide adjustments. Commenters
also stated that by limiting both planning and imaging to ``per
course'' and assigning minimal work RVUs with no payable technical
component for ultrasound, the proposed structure undervalued the time,
clinical judgment, and specialized equipment required for SRT.
Commenters recommended CMS revalue these services with direct input
from SRT interested parties so that payment policy aligns with real-
world clinical practice.
Response: While we appreciate the feedback from the commenters, we
continue to believe that our proposed work RVUs for CPT codes 77X05 and
77X09, based on the RUC recommendations, are accurate. The proposed
work RVU of 0.77 for CPT code 77X05 was based on a RUC crosswalk to CPT
code 95991 (Refilling and maintenance of implantable pump or reservoir
for drug delivery, spinal (intrathecal, epidural) or brain
(intraventricular), includes electronic analysis of pump, when
performed; requiring skill of a physician or other qualified health
care professional) which shares nearly-identical time values and has an
intensity value which would be typical for radiation therapy. CPT code
77X09 was valued based on the 25th percentile from the RUC survey and
has a work RVU that falls in the median range of other add-on services
with roughly 10 minutes of intraservice and total time on the PFS. In
both cases, we believe that the proposed work RVUs accurately capture
the work and intensity of these services.
We also note that while the technical component for ultrasound
guidance is not separately payable, it is bundled into the valuation
for 77X05 and 77X09. Specifically, we redistributed the PE RVUs that
were previously assigned to the G codes describing ultrasound guidance
into the valuation for the other codes in the SRT code family.
Comment: Several commenters disagreed with the proposal to utilize
the relationship between the payment rates for APCs 5621 and 5732 to
inform the valuation of PE-only CPT codes 77X07 and 77X08, and for the
technical component of CPT code 77X05. Commenters stated that SRT
services are overwhelmingly performed by
[[Page 49387]]
dermatologists in office-based settings and that the shielding
requirements and equipment required to furnish SRT differ significantly
from other modalities of radiation therapy and treatment delivery.
Commenters stated that capital-intensive resources attributable to
other radiation services are not applicable to office-based SRT and
therefore the relative weights of the OPPS APCs for for CPT codes
77X05, 77X07, and 77X09 are irrelevant to the PE costs associated with
performing these services; commenters stated that the RUC's recommended
direct PE inputs more accurately measure typical costs for providing
care in the office setting than do nonexistent OPPS data.
Response: We acknowledge these concerns from the commenters, as SRT
services are infrequently provided in the hospital setting. However,
the PFS claims data indicates that there is a minority of SRT services
that do take place in the hospital setting, approximately 2 percent of
the overall total.. As we stated in the proposed rule, we believe that
using the relationship between the relative weights of the OPPS APCs to
which codes in this family are assigned more accurately reflect the
actual costs of these services compared to use of the direct PE inputs
as recommended by the RUC and CMS' PE allocation methodologies. We
reiterate that 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. Therefore, while the RVUs
for certain combinations of services may differ between CY 2025 and CY
2026, in aggregate, the total PE and MP RVUs for these services were
calculated to be similar.
Comment: Many commenters disagreed with the use of PE associated
with ultrasound image guidance being bundled into the CPT code 77X07
through the use of the OPPS crosswalk. Commenters stated that not all
SRT machines are equipped with ultrasound capabilities and even when
radiation devices include an integrated ultrasound wand, ultrasound is
not necessarily performed with each fraction of radiation delivery.
Commenters stated that CMS has proposed PE RVUs for CPT code 77X07 that
incorporated the cost of ultrasound, resulting in payment regardless of
whether ultrasound is actually furnished. Commenters cited two peer-
reviewed studies that found no demonstrated clinical benefit of using
ultrasound guidance for superficial radiation treatment,\68\ and stated
that ultrasound is not medically necessary for the treatment of
superficial skin cancers and is widely considered low-value care.
Commenters cited two peer-reviewed studies that found no demonstrated
clinical benefit of using ultrasound guidance for superficial radiation
treatment,69 70 and stated that ultrasound is not medically
necessary for the treatment of superficial skin cancers and is widely
considered low-value care. Commenters also stated that the National
Comprehensive Cancer Network (NCCN) Guidelines states that ``The use of
IGRT for other types of radiotherapy to treat skin cancer is considered
unnecessary.'' Commenters stated that this would provide payment for a
service that five of the MACs have proposed to exclude from coverage,
citing a lack of medical necessity. Commenters stated that this could
lead to inconsistencies between coverage and payment policy as well as
increase the potential for billing confusion among physicians. Other
commenters cited studies supporting the efficacy of
IGSRT.71 72 73 74
---------------------------------------------------------------------------
\68\ Gronbeck, C., et al. (2025). Image guidance contributes
substantial cost and rarely informs dosimetry management in
superficial radiotherapy: A national Medicare analysis. Journal of
the American Academy of Dermatology, 93 (3), 795-797.
\69\ Gronbeck, C., et al. (2025). Image guidance contributes
substantial cost and rarely informs dosimetry management in
superficial radiotherapy: A national Medicare analysis. Journal of
the American Academy of Dermatology, 93 (3), 795-797.
\70\ Gronbeck, Christian, et al. (2024) Volume and distribution
of radiotherapy performed by dermatologists from 2016 to 2021: A
national Medicare trend analysis. Journal of the American Academy of
Dermatology, 91(2), 341-344.
\71\ Yu, L, et al (2021). The Treatment of Non-Melanoma Skin
Cancer with Image-Guided Superficial Radiation Therapy: An Analysis
of 2917 Invasive and In Situ Keratinocytic Carcinoma Lesions.
Oncology and Therapy, 9(1), 153-166.
\72\ Tran, A et al. (2023). Analysis of image-guided superficial
radiation therapy (IGSRT) on the treatment of early-stage non-
melanoma skin cancer (NMSC) in the outpatient dermatology setting.
Journal of Cancer Research and Clinical Oncology, 149(9), 6283-6291.
\73\ McClure, E.M., et al. (2023). Image-guided superficial
radiation therapy has superior 2-year recurrence probability to Mohs
micrographic surgery. Clinical and Translational Radiation Oncology,
43.
\74\ Yu, L et al. (2022). Local control comparison of early-
stage non-melanoma skin Cancer (NMSC) treated by superficial
radiotherapy (SRT) and external beam radiotherapy (XRT) with and
without dermal image guidance: a meta-analysis. Discover Oncology,
13(1):129.
---------------------------------------------------------------------------
Response: While we appreciate the concern from the commenters, we
believe that one of the advantages of bundling in the payment for
ultrasound guidance, consistent with the OPPS, would eliminate
financial incentives to provide ultrasound guidance where it may be of
questionable value. As we stated earlier in this section, 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. We will assign the procedure status of ``B'' to
the CPT code describing ultrasound guidance; this will mean that the
use of ultrasound guidance will not vary the payment made under the
PFS.
Comment: Some commenters disagreed with the coding revision to
collapse image-guided superficial radiation therapy (IGSRT),
superficial radiation therapy (SRT), and electronic brachytherapy into
one ``surface radiation'' code family, stating that this misrepresents
how these services are delivered. The commenters stated that combining
these services obscures differences in personnel, workflow, and
outcomes, and will lead to undervaluation of IGSRT. Commenters
suggested that CMS adopt a series of G-codes describing IGSRT.
Response: We do not agree with commenters that the CPT code set
reflects an inappropriate grouping of services, and we do not see a
Medicare program need to develop G-codes in order to reflect the
variations described by commenters.
Comment: Many commenters disagreed with the coding revisions to CPT
code 77X09 which would restrict its billing to a single use per
treatment course. Commenters stated that under these billing
restrictions, patients face a higher risk of recurrence from
underdosing (leading to recurrence) or avoidable toxicity from
overdosing. Commenters stated that the proposed coding change would
particularly harm rural and underserved patients and force many
dermatology practices to discontinue offering SRT services.
Response: The coding revisions to CPT code 77X09 described by the
commenters were adopted by the CPT Editorial Panel as part of its
revision of superficial radiation services. We direct concerns over the
``per course of treatment'' aspect of CPT code 77X09's code descriptor
to the CPT Editorial Panel for additional explanation. We believe that
on balance, the new coding set represents an improvement from the
current coding, much as we believe that the use of OPPS cost data for
these services will be more accurate than other valuation
methodologies, and that the alternative to using CPT's coding would be
to maintain the current set of G-codes. We remind the commenters that
CMS does not have the authority to change the code descriptors for CPT
[[Page 49388]]
codes, and we believe that the SRT codes were designed to function
together as a group which would not warrant creating a separate G code
with a modified code descriptor to replace CPT code 77X09.
For the comments that this coding revision would harm rural and
underserved patients, we do not agree. Since ultrasound guidance is
bundled into the valuation for CPT code 77X09, the valuation reflects
the resource costs associated with furnishing the ultrasound guidance.
Comment: Commenters expressed concern about a gap in the new coding
structure and coding instructions. Specifically, commenters stated that
the new coding will create barriers to well-established use of
orthovoltage radiation treatment for non-malignant musculoskeletal
disorders.
Response: We remind commenters that, in cases where a service is
not described by an existing CPT code, unlisted codes may be reported.
Comment: Some commenters stated that CMS failed to provide a
transparent and comprehensive analysis supporting its proposed PE RVUs
for SRT services. The commenters stated that CMS should publish the PE
RVUs that would result under the standard PE methodology alongside the
OPPS-derived PE RVUs.
Response: We note that an alternative to our proposal to value the
new CPT codes would be to establish G-codes to maintain the pre-
existing coding and valuation. We have previously taken this approach
with regard to certain radiation therapy services.
[[Page 49389]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.029
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
[[Page 49390]]
establish RVUs for the new and revised CPT codes for Radiation Oncology
and Superficial Radiation Treatment Delivery Services, we sought
comments on whether we should adopt a similar approach to establish
RVUs for 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 specifically seek comments
on how we may 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.
Comment: We received many thoughtful comments in response to this
comment solicitation.
Response: We appreciate the commenters for their feedback and will
consider it as part of future rulemaking.
(26) Combination COVID-19 Vaccine Administration (CPT Codes 90480 and
90481)
In September 2024, the CPT Editorial Panel created a new add-on
code, 90481 (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 90481. 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 proposed to maintain procedure status ``X'' for CPT code 90480
and assign procedure status ``X'' to CPT code 90481.
We received public comments on combination COVID vaccine
administration services. The following is a summary of the comments we
received and our responses.
Comment: Commenters supported our proposal to maintain procedure
status ``X'' for CPT code 90480 and assign procedure status ``X'' to
new CPT code 90481.
Response: We appreciate the commenters for their support.
Comment: Some commenters stated that they have concerns with
combination COVID vaccines being procedure status ``X'' on the PFS as
they believe it could create confusion with payment should combination
COVID vaccines become available to the market in the future and there
are no administration codes. Commenters were also concerned with
inadequate payment for the counseling portion of vaccine administration
and requested that CMS create a G code for vaccine administration of
combination COVID vaccines.
Response: We acknowledge commenters' concerns and appreciate
feedback regarding broader COVID vaccine payment policy. We did not
propose any policy changes for preventative vaccine administration for
the CY 2026 PFS final rule, and we therefore consider those topics out
of scope for the purposes of this discussion. We also acknowledge
commenters' request for a HCPCs G code for combination covid vaccine
administration. We remind commenters that CPT code 90481 is meant to be
a tracking code only, so we do not believe the creation of a HCPCs G
code for administration would be appropriate at this time.
Comment: Several commenters requested that CMS publish the RUC-
recommended work RVU of 0.25 and PE and MP RVUs for CPT code 90480 in
Addendum B on a display basis so other payors could utilize these
relative values.
Response: We agree with commenters' request to display RVUs for CPT
code 90480 and will update Addendum B to reflect the RVUs for this
service for display purposes only. We will publish the RVUs for its
add-on CPT code 90481 as well, should any exist, also for display
purposes only.
After consideration of the public comments, we are finalizing as
proposed.
(27) Immunization Counseling (CPT Codes 90482, 90483, and 90484)
In May 2024, the CPT Editorial Panel created three new time-based
CPT codes 90482, 90483, and 90484 to report vaccine counseling
performed where a vaccine is not administered. CPT code 90482
(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 90483
(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 90484 (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''.\75\ The six HCPCS codes are:
---------------------------------------------------------------------------
\75\ 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
[[Page 49391]]
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 90482, 90483, and 90484. However,
we proposed 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.
Comment: We received many comments requesting that CMS make CPT
codes 90482, 90483, and 90484 payable under the PFS, or at least
provide details on what other CPT codes are available to report these
services.
Response: As we stated in the proposed rule, (90 FR 32593 through
32597) Medicare uses other coding for reporting of and payment for
immunization counseling. Under the PFS practitioners may report and
receive payment for immunization counseling where an immunization is
not administered under evaluation and management visits (E/M) coding.
Practitioners may select the level of E/M visit based on the visit's
level of medical decision making or report these visits based on time
as appropriate.
Comment: Several commenters requested that CMS publish the RUC-
recommended work RVUs and PE and MP RVUs for CPT codes 90482, 90483,
and 90484 in Addendum B on a display basis so other payors could
utilize these relative values.
Response: We agree with commenters' request to display RVUs for CPT
codes 90482, 90483, and 90484 and will update Addendum B to reflect the
RVUs for this service for display purposes only. After reviewing all
the other public comments we are finalizing as proposed.
(28) Colon Motility Services (CPT Codes 91124 and 91125)
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 bundling solution. In May 2024, the CPT Editorial Panel
created two new codes, CPT code 91124 (Rectal sensation, tone, and
compliance study (for example, barostat)) and CPT code 91125 (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
91124 and 2.70 for CPT code 91125. We are proposing these RUC
recommendations without refinement.
For the direct PE inputs, we disagreed with the RUC-recommended 17
minutes of clinical labor associated with CA013 (Prepare room,
equipment and supplies) for CPT code 91125. We proposed a time of 2
minutes for CA013, which is the standard time for this PE input. We
proposed the RUC recommendation of 17 minutes of clinical labor time
for CA013 for CPT code 91124 to account for a previous 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 disagreed with the RUC-recommended 30 minutes of clinical labor
associated with CA024 (Clean room/equipment by clinical staff) for CPT
91124 as we stated that we believed this is unnecessarily long and does
not match similar services. We proposed a CA024 time of 10 minutes for
both codes (CPT 91124 and 91125) based off reference CPT code 45300
(Proctosigmoidoscopy, rigid; diagnostic, with or without collection of
specimen(s) by brushing or washing (separate procedure)).
We also proposed to refine the SM015 supply (Enzymatic detergent)
to a quantity of 4 ounces for both codes, to match similar inputs for
similar services. We sought 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters were generally supportive of our
proposal of the RUC-recommended work RVU of 3.05 for CPT code 91124 and
2.70 for CPT code 91125.
Response: We appreciate the commenters for their support, and we
are finalizing our proposed work RVUs for CPT code 91124 and 91125.
Comment: Several commenters disagreed with the PE refinement from
17 minutes to 2 minutes for the CA013 clinical labor time for CPT code
91125. The commenters noted that CMS may have missed the supporting
materials in the PE summary of recommendations (SOR). Commenters noted
that 17 minutes of clinical labor time is recommended for both codes to
prepare and calibrate the equipment and to test the catheter to ensure
there is no leakage; commenters stated that this was true for both CPT
codes 91124 and 91125. For CPT code 91124, commenters listed out four
specific activities associated with this clinical labor time, and for
CPT code 91125, commenters listed out the nine specific activities
required to adequately prepare the room, equipment, and supplies.
Response: We appreciate the commenters for providing clarification
and delineating the steps that are necessary to prepare the room,
equipment, and supplies. After consideration of public comments, and a
re-review of the PE SOR, we were persuaded by commenters that 17
minutes would be appropriate for this direct PE input. We are therefore
finalizing 17 minutes of CA013 clinical labor time for CPT code 91125.
Comment: For the CA024 clinical labor time (clean room/equipment by
clinical staff), commenters disagreed with the proposed direct PE
refinements for CPT codes 91124 and 91125. Commenters clarified that
the catheter used in both procedures is flexible, not rigid and that
flexible scopes typically require more time for cleaning than rigid
scopes. A commenter suggested CMS to finalize the direct PE inputs for
CPT codes 91124 and 91125 as recommended by the RUC. A commenter
disagreed specifically with the reduction of clinical labor time
associated with cleaning the room, equipment and supplies, as well as
the proposed amount of cleaner. The
[[Page 49392]]
commenter suggested finalizing 30 minutes of cleaning time for
consistency with cleaning standards for flexible scopes. The commenter
also suggested a crosswalk to the direct PE inputs for CPT code 45378
(Colonoscopy, flexible; diagnostic, including collection of specimen(s)
by brushing or washing, when performed (separate procedure)).
Additionally, the commenter pointed out an inconsistency in CMS'
recommendations for room and equipment preparation time for CPT codes
91124 and 91125, requesting CMS review supporting materials.
Response: We appreciate the clarification provided by commenters
regarding the cleaning time associated with these procedures. However,
we continue to believe that 30 minutes of CA024 clinical labor time
would not be typical for these procedures. The standard cleaning time
for a rigid scope is 10 minutes and the standard time for a flexible
scope is 30 minutes; however, CPT codes 91124 and 91125 include
catheters, not scopes. While these two codes do contain an SD216
balloon catheter among their direct PE inputs, we do not typically
assign 30 minutes of CA024 cleaning time for cleaning the catheter;
instead, our standard time for catheter cleaning is 3 minutes. We agree
that CPT codes 91124 and 91125 require more time than the standard
value for the cleaning tasks associated with the CA024 clinical labor
activity, which is why we proposed 10 minutes for this task. When
evaluating the crosswalk code (CPT code 45378) suggested by commenters,
we also noted that this code had only 3 minutes of CA024 cleaning time,
which did not support the requested increase in cleaning time.
Therefore, we continue to believe that our proposed 10 minutes of CA024
clinical labor time is accurate for these two codes, and we are
finalizing as proposed. We did not see sufficient rationale provided to
support a change in valuation at this time, however, we welcome
additional information regarding this supply.
Comment: A few commenters also requested CMS to restore the
(enzymatic detergent) supply to 120 ounces, based on the vendor's
cleaning instructions.
Response: We disagree with commenters that 120 ounces would be
appropriate based on the vendor instructions. Among the approximately
70 other codes on the PFS that use the SM015 supply, the typical
quantity in use is 4 ounces and no codes use more than 8 ounces. We do
not agree that 120 ounces of this product would be typically required
for routine cleaning activities. However, we will increase the SM015
supply input for this code from 4 to 8 ounces to match the highest
supply quantity amongst codes currently paid under the PFS (CPT codes
30300 and 30560) to reflect the concerns of the commenters.
After consideration of public comments, we are finalizing the work
RVUs and direct PE inputs for CPT codes 91124 and 91125 as proposed,
with the modification to the CA017 clinical labor time for CPT code
91125 and the modification to the SM015 supply quantity, as previously
detailed.
(29) Dark Adaptation Diagnostic and Screening Services (CPT Codes 92284
and 92288)
In 2023, specialty societies prepared and submitted a Category I
Code Change Application to the CPT Editorial Panel to create CPT code
92288 (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).
The CPT Editorial Panel also added a parenthetical to CPT code 92284,
to describe how the diagnostic dark adaptation test is conducted 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 92288 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 intraservice
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 for CY 2026, we disagree
with the RUC-recommended work RVU of 0.32 and proposed a work RVU of
0.29 for CPT code 92284 based on a crosswalk 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 was also supported by reference to
CPT code 71110 (Radiologic examination, ribs, bilateral; 3 views), with
a work RVU of 0.29. Both codes have intraservice work times of 6
minutes and total times of 8 minutes. While the intraservice 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 intraservice work
time and work RVU are overstated relative to the current intraservice
work time and work RVU for CPT code 92284. Additionally, we also
searched for crosswalks to CPT codes with the same intraservice 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 proposed the RUC-recommended direct PE inputs for CPT code 92284
without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Some commenters opposed the CMS proposed work RVU of 0.29
for CPT code 92284. These comments recommended that CMS revisit the
proposal and finalize the RUC-recommended work RVU of 0.32 for CPT code
92284. Commenters maintained that the CMS proposed work RVU of 0.29
does not accurately account for the necessary time and overall measured
intensity/complexity arising from increased medical decision-making
[[Page 49393]]
related to the advanced analysis to interpret the test results. Several
commenters requested that CMS publish the RUC-recommended work RVUs and
PE and MP RVUs for CPT code 92288 in Addendum B on a display basis so
other payors could utilize these relative values.
Response: We appreciate the commenters for their comments. We
continue to believe it is more appropriate to use our proposed work RVU
of 0.29 for CPT code 92284 than the RUC-recommended crosswalk to CPT
92282 with a work value of 0.32 RVU. As we stated in the proposed rule,
when we searched for other CPT codes with similar time values to CPT
code 92284, the RUC's recommended work RVU fell near the top of this
range which would not maintain relativity of the work values among the
identified CPT codes. We do not believe that the diagnostic dark
adaptation examination service being performed in CPT code 92284 would
typically have high enough intensity to warrant the RUC's recommended
work RVU.
After consideration of these comments, we are finalizing the work
RVU and direct PE inputs for CPT code 92284 as proposed, along with
finalizing the proposed non-covered status indicator for CPT code
92288. We agree with commenters' request to display RVUs for CPT code
92288; however, we note that the proposed rule already displayed RVUs
for this service in Addendum B. We will continue to display these RVUs
for the final rule and in future rulemaking.
(30) Coronary Therapeutic Services and Procedures (CPT Codes 92920,
92924, 92928, 92933, 92937, 92941, 92943, 92973, 92930, 92945, 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 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)), 92930 (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), 92945 (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 proposed the RUC-recommended work RVU for
all twelve codes in the family. We proposed 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 92930, a work RVU of 15.00 for
CPT code 92945, 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 92930 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
[[Page 49394]]
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 did not propose any direct PE
inputs for these facility-based services.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that they appreciated and
supported the CMS proposal of the RUC-recommended work RVUs for all 12
codes in the family. A commenter also requested CMS exclude these codes
from the proposed efficiency adjustment as these codes were just
revalued and contained several new codes.
Response: We appreciate the support for our proposed valuations
from the commenters; our discussion of the efficiency adjustment can be
found in section II.E.2.b of this final rule.
After consideration of the comments, we are finalizing the work
RVUs for all 12 codes in the Coronary Therapeutic Services and
Procedures family as proposed. We did not propose, and we are not
finalizing any direct PE inputs for these codes.
(31) 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 proposed the RUC-recommended work RVU of 0.28 for CPT code 96380
and 0.17 for CPT code 96381. We proposed the RUC-recommended direct PE
inputs without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposed RUC-recommended
work and PE inputs for RSV monoclonal antibody administration services.
Commenters recommended that CMS engage in ongoing monitoring of payment
adequacy as more data is gathered on this service over time. Commenters
requested that CMS publish the RUC-recommended work RVUs and PE and MP
RVUs for CPT code 96380 and CPT code 96381 in Addendum B on a display
basis so other payors could utilize these relative values.
Response: We appreciate the commenters for their support. We agree
with commenters' request to display RVUs for CPT code 96380 and 96381;
however, we note that the proposed rule already displayed RVUs for
these services in Addendum B as both codes have an active status code.
We will continue to display these RVUs for the final rule and in future
rulemaking.
After consideration of the public comments, we are finalizing the
work RVUs and direct PE inputs for CPT codes 96380 and 96381 as
proposed.
(32) Remote Monitoring (CPT Codes 98975, 98976, 98977, 98978, 98980,
98981, 98984, 98985, 98986, 98979, 99091, 99453, 99454, 99457, 99458,
99473, 99474, 99445, and 99470)
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 A-E10). 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 99445 and
99470. 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 A-
E11). None of the RPM codes (CPT codes 99091, 99474, 99470, 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, 99470, 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 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 A-E10). 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 98984, 98985, and 98979. 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 A-E11). All of the codes in the
RTM family are considered new technology (CPT codes 98975, 98984,
98976, 98985, 98977, 98979, 98979, 98980, and 98981) and will be placed
on the New Technology list to be reviewed after 3 years of data are
available (April 2030).
[[Page 49395]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.030
[[Page 49396]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.031
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters overwhelmingly supported the creation
and adoption of CPT codes describing 2 to15 days of monitoring and the
first 10 minutes of treatment management services. Commenters stated
that these services could be valuable for beneficiaries with acute
conditions or are more stable in their treatment. Some commenters did
not support the creation of these codes, as they believe that more days
of monitoring could deliver greater clinical value and that these codes
may increase the potential for inappropriate billing practices.
Response: We appreciate the commenters for their support in our
proposal to adopt the new CPT codes. While we understand the concerns
presented by commenters who were apprehensive about the adoption of
these new codes, we would like to emphasize that services paid under
the Physician Fee Schedule, including the new remote monitoring codes,
must be reasonable and necessary for the diagnosis and treatment of
illness or injury. We continue to believe that the new remote
monitoring CPT codes may be reasonable and necessary for some
beneficiaries who require remote monitoring services.
Comment: Many commenters did not support any of our proposals for
valuation that were lower than the RUC recommendations, and many
commenters believe that RTM and RPM are generally undervalued.
Response: We appreciate the commenters for this information. We
will consider additional refinements in future rulemaking.
Comment: Several commenters requested clarification around the
coding structure of the new CPT codes, specifically around the base and
add-on code structure.
[[Page 49397]]
Response: We would like to offer further clarification on the
coding structure of the new remote monitoring codes. The 2 to 15 day
codes (99445, 98984, 98985, and 98986) and 16 to 30 day codes (99454,
98976, 98977, 98978) are not additive and are not a base and add-on
code structure. Billing practitioners would only bill for one of those
codes for the appropriate number of days of data transmission per 30
days. In addition, the treatment management services describing the
first 10 minutes (99470 and 98979) and first 20 minutes (99457 and
98980) of service are also not additive. Billing practitioners would
choose the most appropriate code for the time spent that calendar
month. In instances where more than 20 minutes of treatment management
is needed after either 99457 or 98980 is billed, 99458 or 98981 can be
used. Please refer to the CPT codebook for additional information on
the structure of these CPT codes.
Comment: Commenters noted that they found Table A-E11 in the
proposed rule unclear.
Response: We would like to clarify to commenters that Table A-E11
was intended to display the long descriptors for the Remote Therapeutic
and Remote Physiologic Monitoring code families. It was not meant to
encompass all edits that were made to the CPT codebook language. We
will be adopting all descriptors, guidelines, prefatory language, and
parenthetical changes made to the Remote Monitoring section of the 2026
edition of the CPT codebook. Please refer to the CPT codebook for
additional information.
Comment: Several commenters requested a variety of changes to the
requirements for RPM and RTM, including allowing both new and
established patients to receive RPM services, allowing RPM and RTM to
be billed concurrently, allowing payment for multiple devices, and
allowing billing during the global period. Commenters requested that
additional data collection be required for billing (including greater
specificity about the types of data that can be collected),
implementing duration limits, and adding additional technology and EHR
requirements. Commenters also requested changes to the coding for RPM
and RTM, including revising code descriptors to align all codes to
account for calendar months as opposed to 30-days, creating condition-
agnostic RTM coding, creating additional RTM coding for other
conditions, and creating coding specific to Software as a Service
(SaaS) or AI-generated analysis instead of just provider analysis.
Response: We appreciate the commenters for this information and
will consider for future rulemaking. We would also like to refer
interested parties to the CY 2024 PFS final rule (88 FR 78882 through
78883), where some of this information was clarified.
Comment: Several commenters requested that we allow additional
billing practitioners and clinical staff to furnish remote monitoring
services, such as pharmacists, registered dieticians, and athletic
trainers.
Response: We appreciate the commenters for their input. As these
practitioners do not have the appropriate benefit category to furnish
these services, we lack the statutory authority to expand the benefit
categories for billing practitioners.
Comment: Several commenters requested that we eliminate geographic
adjustments or develop a national price floor for remote monitoring
services, as technology costs are fixed and do not vary geographically
like labor or practice expense.
Response: Section 1848(e)(1)(A) of the Act requires us to develop
separate Geographic Practice Cost Indices (GPCIs) to measure relative
cost differences among localities compared to the national average for
each of the three fee schedule components (that is, work, practice
expense (PE), and malpractice (MP)). 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 and are comprised of
four component indices (employee wages; purchased services; office
rent; and equipment, supplies and other miscellaneous expenses). 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.
Comment: Several commenters requested that we update practice
expense inputs for remote physiologic and remote therapeutic monitoring
to account for software such as a medical device, hardware, and
additional technology inputs as direct PE. Commenters recommended CMS
make revisions to PE inputs to account for both the device and the
supporting infrastructure, software (including Software as a Service
(SaaS), or other technology inputs.
Response: We appreciate the commenters for this information and we
will consider input and recommendations to update practice expense
inputs for future rulemaking. Please see section I(1)(b) of this rule
for additional discussion of software as a service.
Comment: Several commenters requested clarification on whether time
spent providing audio-only communication with the patient/caregiver
(for example, telephone calls) could count towards the time counted for
the interactive communication portion of CPT codes 98979, 98980, 98981,
99470, 99457, and 99458. Commenters also requested that we clarify that
technological communications, such as secure messaging, asynchronous
chat, automated bi-directional messaging, and AI prompts, count towards
time for the interactive communication portion of CPT codes 98979,
98980, 98981, 99470, 99457, and 99458. Commenters requested that
documented in-clinic discussions meet the interactive communication
requirement.
Response: We are clarifying that we are adopting the CPT language
around this requirement. The CPT code book states that CPT Codes 98979,
98980, 98981, 99470, 99457, and 99458 ``require a live, interactive
communication with the patient/caregiver. The interactive communication
contributes to the total time, but it does not need to represent the
entire cumulative reported time of the treatment management service.''
We are not specifying further exclusions for the types of
communications that can be had with the patient/caregiver, so long as
they meet the CPT specifications. For in-clinic discussions, no time or
effort should be counted more than once toward the required time for
any services.
Comment: A few commenters requested clarification regarding new RTM
CPT codes and the ``sometimes therapy'' designation.
Response: We note that the new RTM codes 98979, 98984 and 98985
will be designated as ``sometimes therapy'' codes since they are based
on RTM codes we designated as sometimes therapy in the CY 2022 PFS
final rule. The ``sometimes'' therapy designation means that the
services can be billed outside a therapy plan of care (POC) by a
physician and certain NPPs, when appropriate; and always require a POC
therapy modifier when furnished by a physical therapist (PT) or
occupational therapist (OT), or by a therapy assistant under the PT's
or OT's supervision, or speech-language pathologist. When
[[Page 49398]]
furnished by a physical therapist assistant (PTA) or occupational
therapy assistant (OTA), RTM codes generally also require the CQ or CO
modifier, respectively, in addition to the POC therapy modifier (GP or
GO) when the threshold established via the de minimis or 10 percent
standard is met or exceeded for the statutorily required payment
adjustment that applies to therapy services provided in whole or in
part by PTAs and OTAs. The de minimis standard policy including how to
determine when the CQ/CO modifiers are applied including an RTM billing
example is found on the Therapy Services website in a document titled:
Billing Examples Using CQ/CO Modifiers for Services Furnished In Whole
or In Part by PTAs and OTAs at: https://www.cms.gov/medicare/coding-billing/therapy-services/billing-examples-using-cq/co-modifiers-services-furnished-whole-or-part-ptas-and-otas.
For the RTM codes designated as sometimes therapy, we are
clarifying our policy about the appropriate use of the CQ/CO modifiers
for services of PTAs and OTAs apply to the new RTM code 98979. However,
the CQ/CO are not applicable to the RTM device codes 98984 and 98985 as
they are based on the exiting codes 98976 and 98977. We previously
clarified this CQ/CO modifier RTM device code policy for codes 98976
and 98977 in the CY 2022 PFS final rule (86 FR 65116 and 65176) and
provided an educational article (MM12446) with the release of
Transmittal R11118CP (Change Request 12446) in addition to the above
document link on the Therapy Services web page. The related policy for
the new and revised RTM codes will also be available after the CY 2026
PFS final rule is issued via a Transmittal for the CY 2026 Annual
Update of Therapy Codes.
Comment: A commenter requested that CMS default to State law as it
relates to who can assist therapists in the provision of RTM services.
Response: While we appreciate the commenters' concern regarding the
shortage of therapy professionals, we remind readers that Medicare
regulatory requirements allow for coverage and payment of outpatient
occupational and physical therapy services in Sec. Sec. 410.59(a) and
410.60(a), respectively, only if they are furnished by OTs and their
supervised OTAs or by PTs and their supervised PTAs to meet the
requirements in 42 CFR part 484.
A. Valuation for Remote Physiologic Monitoring (RPM)
For CPT code 99091, we disagree with the RUC's recommendation of
0.70 work RVUs and proposed 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 it, and we did not propose any
direct PE inputs for CPT code 99091.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters were generally supportive of our
proposal to maintain the work RVU and the corresponding physician time
inputs for CPT code 99091.
Response: We appreciate the commenters for their support. After
consideration of public comments, we are finalizing as proposed.
For CPT code 99470, we disagreed with the RUC's recommendation of
0.39 work RVUs and proposed a work RVU of 0.31, with 10 minutes or
intraservice/total time. We disagreed with the recommended value and
proposed a work RVU of 0.31 for CPT code 99470 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 99470. 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 99470, 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 proposed using this time ratio with the current PE
inputs for CPT code 99457 for clinical staff time. We proposed 5
minutes of CA021 intraservice clinical labor time and 15 minutes of
CA037 post-service clinical labor time for CPT code 99470.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters had mixed views on our proposed refinements to
CPT code 99470. While some commenters supported our proposal, many
commenters did not support the proposal based on the time ratio
compared to CPT code 99457, as the RPM platform and staffing expense is
fixed and does not decrease based on minutes of treatment management
services provided. Many commenters requested that CMS finalize the RUC
recommendations or align all the direct PE inputs with CPT code 99457.
Response: We continue to 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. Although commenters pointed out that RPM platform and
staffing expenses are fixed, there are no RPM platform-related inputs
in CPT codes 99457 or 99470. The only PE input for these codes are
clinical staff time, which does change based on the minutes of
treatment management services provided.
After consideration of public comments, we are finalizing as
proposed.
For CPT code 99457, we disagreed with the RUC's recommendation of
0.45 work RVUs and proposed 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 disagreed with the
RUC's recommended direct PE inputs and proposed to maintain the current
inputs. We proposed 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 was 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
[[Page 49399]]
RPM and RTM codes describing equivalent amounts of treatment management
time and effort.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters supported the CMS proposal not to propose the
RUC recommendation and maintain the current valuation for CPT code
99457. Commenters supported the proposed 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. A few commenters requested that CMS
require 16 to 30 days of data (CPT code 99454) to be collected to bill
for additional treatment management services (CPT code 99458).
Response: We appreciate the commenters for their support for our
proposal for CPT codes 99457 and 99458. While we understand that
additional treatment management time may be less common for
beneficiaries with fewer days of data collection, we do not believe it
is necessary at this time to restrict treatment management services
based on days of data collection. We will monitor these concerns by
monitoring claims data and may address them in future rulemaking if
needed.
After consideration of public comments, we are finalizing as
proposed.
For CPT code 99474, we proposed 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported CMS' proposals for CPT code
99474.
Response: We appreciate the commenters for their support.
After consideration of public comments, we are finalizing as
proposed.
For CPT code 99473, which is a PE-only code, we proposed 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters supported CMS' proposals for CPT code 99473.
Response: We appreciate the commenters for their support.
After consideration of public comments, we are finalizing as
proposed.
For CPT code 99453, which is a PE-only code, we proposed the RUC-
recommended PE inputs without refinement.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported CMS' proposals for CPT code
99453. Commenters also requested clarification that CMS will adopt
parenthetical changes for this code, specifically the requirement that
this service now requires 2 days of monitoring in a 30-day period for
reporting, as opposed to 16.
Response: We appreciate the commenters for their support. We will
be adopting all descriptors, guidelines, prefatory language, and
parenthetical changes made to the Remote Monitoring section of the 2026
edition of the CPT codebook, including for CPT code 99453.
After consideration of public comments, we are finalizing as
proposed.
For the PE-only CPT codes 99445 and 99454, the RUC's
recommendations included 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 99445 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 may 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 direct 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 99445 and 99454 may more accurately reflect the actual costs of
these technologies. 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 proposed to use OPPS
cost data to establish the valuation for the practice expense portion
of Remote Physiologic Monitoring CPT codes 99445 and 99454. We believe
that the OPPS cost data is more accurate than the direct 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 proposed to utilize the OPPS total geometric mean
cost for CPT code 99454 to inform the valuation of CPT codes 99445 and
99454 when paid under the PFS. We proposed 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 the PE RVU for CPT codes 99445 and 99454. We proposed the same
valuation for both CPT codes 99445 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 received public comments on these proposals. The following is a
[[Page 49400]]
summary of the comments we received and our responses.
Comment: Several commenters had mixed support for CMS' proposal for
the same valuation for CPT codes 99445 and 99454. The commenters who
supported the proposal stated that this would reduce administrative
burden and the risk of coding confusion. Some commenters supported the
reasoning that the device is supplied to the beneficiary for the full
30-day period, regardless of the number of days that data is
transmitted. We received confirmation of this information from
practitioners who furnish RPM services and vendors who supply RPM
devices, stating that this aligns the actual technology costs, as these
costs are tied to the number of patients receiving these services in a
given 30-day period, not the number of days of data collected in those
30 days. The commenters who supported this proposal stated that the
proposed valuation more accurately represents the reality of practice
expense for these services. Commenters who did not support this
proposal stated that a lower valuation for CPT code 99445 would pay for
the actual use of the equipment and allow CMS to further ensure program
integrity by accurately tracking spending. These commenters also
believe that a lower valuation for CPT code 99445 would also
incentivize more days of data collection, which would provide more
value when determining a plan of care and reward adherence.
Response: We appreciate the commenters for this feedback on our
proposal. With the additional information provided by commenters, we
continue to believe that practice expense costs for these services
remain the same, regardless of the number of days of data collected. We
will continue to look into OPPS hospital cost reporting data and may
consider changes for future rulemaking.
Comment: Several commenters appreciated the proposal to utilize
OPPS data due to PE inputs that have not traditionally been included as
a form of direct PE. Many commenters requested additional clarification
and additional information on why CMS believes this data is more
accurate. The commenters requested that CMS provide detailed data on
how PE RVU inputs were derived from OPPS claims. Some commenters did
not support the proposal to utilize OPPS data to value these services,
as there are different statutory frameworks for payment under OPPS and
PFS. Other commenters who did not support the proposal suggested that
CMS value these services based on supplier invoices, not OPPS data.
Response: We appreciate the commenters for their support of our
proposal to use OPPS data. As we stated in the proposed rule, we have
authority to establish or adjust PE RVUs using cost, charge, or other
data from suppliers or providers of services. Although the use of
invoice data may be beneficial when valuing certain services,
exclusively using invoices for the valuation of these PE-only services
may not result in objective and accurate prices because each interested
party that submits invoices has a financial stake in the process. By
using OPPS practice expense data, we have built in guardrails since the
data obtained from cost reports is regularly updated, auditable, and
required to adhere to national standards for reporting.
Comment: Many commenters did not believe that the use of OPPS data
was appropriate for these services when paid under the PFS, as the PE
costs incurred in furnishing these services may not be the same across
physician office and hospital outpatient settings of care. Commenters
were concerned that the correlation between OPPS costs and physician
costs has not been established. Also, the commenters stated that
physician offices operate on less favorable economies of scale than
hospital outpatient departments, and using OPPS data assumes hospital-
level infrastructure, purchasing power, and cost-sharing that do not
equate to those of physician offices. Commenters cautioned against
direct reliance on OPPS data for PE valuation without adjustments, as
hospital outpatient departments and physician offices operate under
different cost structures and suggested an adjusted PE methodology for
physicians and private practices as compared to larger health systems
and corporations. Commenters also suggested that CMS incorporate site-
neutral adjustment factors when using OPPS data to establish PE
relativity. Commenters were concerned that directly transferring costs
data between payment systems could potentially lead to inaccurate
valuations and that using hospital cost data may lead to overpayments.
Other commenters were concerned that hospital cost reports represent
bundled purchasing arrangements that do not capture specific device
costs, which may not be available to physician offices.
However, some commenters believe that the input costs incurred in
furnishing PE-only device supply codes are the same across settings of
care.
Response: We continue to believe that 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. We welcome additional forms of
data to assist us in refining PE methodology for future rulemaking.
Comment: Many commenters noted difficulty understanding CMS'
proposal to use OPPS cost data to value CPT codes 99445 and 99454. Many
commenters pointed out that the payment rates for CPT codes 99453 and
99454 under the OPPS differ drastically from the proposed PFS payment
rates.
Response: Under the OPPS, we calculate a geometric mean cost for
HCPCS codes paid under the OPPS. HCPCS codes are assigned to APCs using
clinical criteria and geometric mean cost data. While we proposed to
value the PE-only device supply codes using the OPPS cost data, we
proposed the RUC-recommended direct PE inputs for CPT code 99453. We
consider comments related to the OPPS payment rate for CPT code 99453
to be out of the scope of the proposed rule. Regarding the differing
payment amounts for CPT code 99454 under the PFS and OPPS, we note that
given that the APC payment rates are calculated using a system of
averages, the geometric mean cost for HCPCS codes will often differ
from the geometric mean cost for all services assigned to the APC.
Differences in the payment systems explain the 20 percent difference in
the proposed payment rate for CPT code 99454 under the PFS and the
OPPS, since the PFS is using GMC to inform the valuation of CPT code
99454.
Comment: Several commenters requested more information about how
the use of OPPS data will be updated over time and how the use of OPPS
data will impact reimbursement. Commenters requested that, if
finalized, CMS utilize OPPS data as an interim measure until updating
the PE methodology to account for inputs associated with technology and
digital platforms, such as subscription, data storage, and
cybersecurity costs. Commenters also requested that CMS utilize the
2026 GMC for remote monitoring services, as finalized in the CY 2026
OPPS. Commenters requested that, if use of the 2026 GMC is finalized,
this value remains static until the PE methodology is updated and does
not get updated based on subsequent GMC changes.
Response: We appreciate the commenters for their input on this
issue. We believe that it would be appropriate to utilize the most up-
to-date cost data by using the CY 2026
[[Page 49401]]
GMC values in our calculations for CPT codes 99445 and 99454. We agree
with commenters that the use of OPPS data, where appropriate, is a
potential solution to a much larger challenge within the current PE
methodology. We are interested in feedback and additional data from
interested parties that could assist us in improving PE inputs and
methodology for services that are primarily valued through technology
costs for future rulemaking.
After consideration of public comments, we are finalizing
calculating this value by dividing the CY 2026 OPPS Geometric Mean Cost
(GMC) for CPT code 99454, which is represented in a dollar amount, by
the CY 2026 non-qualifying APM PFS conversion factor (CF), which
represents the dollar value of an RVU, to convert the GMC dollar amount
into RVUs. The resulting value will be our finalized PE RVU for CPT
codes 99445 and 99454.
B. Valuation for Remote Therapeutic Monitoring (RTM)
For CPT code 98979, we disagreed with the RUC's recommendation of
0.66 work RVUs and proposed a work RVU of 0.31, with 10 minutes or
intraservice/total time. We proposed this work RVU for CPT code 98979
based on the total time ratio between CPT code 98980's time of 20
minutes and CPT code 98979'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 98979. 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 98979, 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 also proposed
using this time ratio with the current direct PE inputs for CPT code
98980. We are proposing 5 minutes of CA021 intraservice clinical labor
time and 15 minutes of CA037 post-service clinical labor time for CPT
code 98979. We proposed 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters had mixed views on the proposed
refinements to CPT code 98979. While some commenters supported the
proposal, many commenters did not support our proposal based on the
time ratio compared to CPT code 98980, as they stated that the RTM
platform and staffing expense is fixed and does not decrease based on
minutes of treatment management services. The commenters who did not
support the proposal believe that there was strong relativity to the
reference code. Many commenters requested that CMS finalize the RUC
recommendations, including increased clinical labor and revision of the
clinical labor type from RN/LPN/MTA to PTA.
Response: We continue to 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. After reviewing Medicare claims data for this service, we
continue to believe that clinical labor using the RN/LPN/MTA (L037D)
blend is currently the typical clinical labor type for CPT codes 98980
and 98981, which we believe will also be the same for CPT code 98979.
After consideration of public comments, we are finalizing as
proposed.
For CPT code 98980, we disagreed 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 intraservice/total work time, and the
current direct PE inputs. For CPT code 98981, we disagreed with the
RUC's recommendation of 0.70 work RVUs and proposed 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
intraservice/total work time. These proposals were 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters requested that CMS finalize the RUC
recommendations, including increased clinical labor and revision of the
clinical labor type from RN/LPN/MTA to PTA. Some commenters did not
support the proposal to maintain relativity with RPM codes, since this
survey data showed growth in provider experience of furnishing RTM
services. Commenters specified that therapists now have more experience
with RTM services and can more accurately answer surveys than when the
codes were created.
Response: We appreciate the commenters for their feedback. After
reviewing Medicare claims data for this service, we continue to believe
that clinical labor using the RN/LPN/MTA (L037D) blend is currently the
typical clinical labor type for CPT codes 98980 and 98981. We continue
to believe that it is important to maintain relativity between RPM and
RTM treatment management services.
After consideration of public comments, we are finalizing as
proposed.
For the PE-only CPT code 98975, the RUC's recommendations include a
``Remote musculoskeletal therapy monitoring program enrollment fee.''
We did not propose 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 98985 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 proposed to maintain the current direct PE inputs for
CPT code 98975.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally did not support CMS'
[[Page 49402]]
proposals for CPT code 98975, specifically not proposing the RUC's
recommended changes to the clinical labor type and the program
enrollment fee for CPT code 98975. Commenters also requested
clarification that CMS will adopt the parenthetical changes for this
code, specifically the requirement that this service now requires 2
days of monitoring in a 30-day period for reporting, as opposed to 16.
Response: We appreciate the commenters for their feedback. The RUC
recommended ``Remote musculoskeletal therapy monitoring program
enrollment fee'' does not constitute a form of direct PE under our
methodology. After reviewing Medicare claims data for this service, we
are not finalizing our proposal to retain the current clinical labor
type, as physical therapists are currently the dominant specialty that
furnishes this service, and the PTA (L039B) blend is the typical
clinical labor type. We will be adopting all descriptors, guidelines,
prefatory language, and parenthetical changes made to the Remote
Monitoring section of the 2026 edition of the CPT codebook, including
for CPT code 98975.
After consideration of public comments, we are finalizing as
proposed, with the exception of revising the clinical staff type to PTA
from RN/LPN/MTA.
For the PE-only CPT codes 98985 and 98977, the RUC's
recommendations included 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 98985 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 may 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 98985
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 proposed to use OPPS cost data to establish
the valuation for the practice expense portion of Remote Therapeutic
Monitoring CPT codes 98985 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 proposed to
utilize the OPPS total geometric mean cost for CPT code 98977 to inform
the valuation of CPT codes 98985 and 98977 when paid under the PFS. We
proposed 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 98985 and 98977. We proposed the same valuation for both CPT
codes 98985 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 also proposed 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 solicited comments specifically on data to support the
recommended PE inputs for this code, including invoices, additional
data, or evidence to support the position. We received public comments
on these proposals. The following is a summary of the comments we
received and our responses.
Comment: Several commenters had mixed support for CMS' proposal for
the same valuation for CPT codes 98985 and 98977. The commenters who
supported the proposal stated that this would reduce administrative
burden and the risk of coding confusion. Some commenters supported the
reasoning that the device is supplied to the beneficiary for the full
30-day period, regardless of the number of days that data is
transmitted. We received confirmation of this information from
practitioners who furnish RTM services and vendors who supply RTM
devices, stating that this aligns the actual technology costs, as these
costs are tied to the number of patients receiving these services in a
given 30-day period, not the number of days of data collected in those
30 days. Commenters who supported this proposal stated that the
proposed valuation more accurately represents the reality of practice
expense for these services. Commenters who did not support this
proposal stated that a lower valuation for CPT code 98985 would pay for
the actual use of the equipment and allow CMS to further ensure program
integrity by accurately tracking spending. These commenters also
believe that a lower valuation for CPT code 98985 would also
incentivize more days of data collection, which would provide more
value when determining a plan of care and reward adherence.
Response: We appreciate the commenters for this feedback on our
proposal. With the additional information provided by commenters, we
continue to believe that practice expense costs for these services
remain the same, regardless of the number of days of data collected. We
will continue to look into OPPS hospital cost reporting data and other
forms of data and may consider changes for future rulemaking.
[[Page 49403]]
Comment: Several commenters appreciated CMS' proposal to utilize
OPPS data due to PE inputs that have not traditionally been included as
a form of direct PE. Many commenters requested additional clarification
and additional information on why CMS believes this data is more
accurate. The commenters requested that CMS provide detailed data on
how PE RVU inputs were derived from OPPS claims. Some commenters did
not support the proposal to utilize OPPS data to value these services,
as there are different statutory frameworks for payment under OPPS and
PFS. Other commenters who did not support the proposal suggested that
CMS value these services based on supplier invoices, not OPPS data.
Response: We appreciate the commenters for their support of our
proposal to use OPPS data. As we stated in the proposed rule, we have
authority to establish or adjust PE RVUs using cost, charge, or other
data from suppliers or providers of services. Although the use of
invoice data may be beneficial when valuing certain services,
exclusively using invoices for the valuation of these PE-only services
may not result in objective and accurate prices because each interested
party that submits invoices has a financial stake in the process. By
using OPPS practice expense data, we have built in guardrails since the
data obtained from cost reports is regularly updated, auditable, and
required to adhere to national standards for reporting. We note that we
did not develop direct PE inputs for these services from OPPS claims.
We proposed to calculate the PE RVU 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 was our proposed PE RVU for CPT codes
98985 and 98977. There are no separate PE inputs for these services
outside of this RVU calculation.
Comment: Many commenters did not believe that the use of OPPS data
was appropriate for these services when paid under the PFS, as the PE
costs incurred in furnishing these services may not be the same across
physician office and hospital outpatient settings of care. Commenters
were concerned that the correlation between OPPS costs and physician
costs has not been established. Commenters cautioned against direct
reliance on OPPS data for PE valuation without adjustments, as
physician offices operate on less favorable economies of scale than
hospital outpatient departments, and using OPPS data assumes hospital-
level infrastructure, purchasing power, and cost-sharing that do not
equate to physician offices, and suggested an adjusted PE methodology
for physicians and private practices as compared to larger health
systems and corporations. Commenters also suggested that CMS
incorporate site-neutral adjustment factors when using OPPS data to
establish PE relativity. Commenters were concerned that directly
transferring costs data between payment systems could potentially lead
to inaccurate valuations and that using hospital cost data may lead to
overpayments. Other commenters were concerned that hospital cost
reports represent bundled purchasing arrangements that do not capture
specific device costs, which may not be available to physician offices.
A few commenters also believe that since CPT code 98977 requires
using Food and Drug Administration (FDA)-regulated medical devices,
which involve higher costs than non-device, app-only alternatives,
using OPPS cost data would not appropriately reflect the costs of
furnishing this service.
However, some commenters believe that the input costs incurred in
furnishing PE-only device supply codes were the same across settings of
care.
Response: We continue to believe that 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. We welcome additional forms of
data to assist us in refining the PE methodology for future rulemaking.
Comment: We received many comments confusing the OPPS cost data CMS
proposed to use to value CPT codes 98985 and 98977. Many commenters
pointed out that the payment rates for remote monitoring services using
Ambulatory Payment Classifications under the OPPS differ drastically
from the current and RUC-recommended payment rates for the PFS.
Response: Under the OPPS, we calculate a geometric mean cost for
HCPCS codes paid under the OPPS. HCPCS codes are assigned to APCs using
clinical criteria and geometric mean cost data. We would like to
clarify that our proposal for using OPPS cost data to inform the
valuation of CPT codes 98985 and 98977 is using the Geometric Mean Cost
(GMC) from the OPPS, not the Ambulatory Payment Classifications (APC).
Comment: A commenter requested that, since CPT code 98977 has
limited OPPS cost-reporting, CMS should utilize the more frequently
reported cost-reporting for CPT code 99454 to inform the PFS valuation
for CPT codes 98985 and 98977. The commenter stated that this would
align with CMS' proposal to maintain relativity between RPM and RTM
services, since PE costs for these services are similar.
Response: We appreciate the additional information provided around
the use of the OPPS GMC to inform the valuation of CPT codes 98985 and
98977. We believe that it would be appropriate to utilize the most up-
to-date cost data by using the CY 2026 GMC value for CPT code 98977 in
our calculations for CPT codes 98985 and 98977. The CY 2026 GMC values
are more comparable than the CY 2025 GMC values used to inform the
valuation of these services in the PFS proposed rule and will assist in
maintaining relativity between RPM and RTM.
Comment: Commenters requested more information about how the use of
OPPS data will be updated over time and how the use of OPPS data will
impact reimbursement. Commenters requested that, if finalized, CMS
utilize OPPS data as an interim measure until we update PE methodology
to account for inputs associated with technology and digital platforms,
such as subscription, data storage, and cybersecurity costs. Commenters
also requested that CMS utilize the 2026 GMC for remote monitoring
services, as finalized in the CY 2026 OPPS. Commenters requested that,
if use of the 2026 GMC is finalized, this value remain static until PE
methodology is updated and does not get updated based on subsequent GMC
changes.
Response: We appreciate commenters for their input on this issue.
We believe that it would be appropriate to utilize the most up-to-date
cost data by using the CY 2026 GMC values in our calculations for CPT
codes 98985 and 98977. We agree with commenters that the use of OPPS
data, where appropriate, is a potential solution to a much larger
challenge within the current PE methodology. We are interested in
feedback and additional data from interested parties that could assist
us in improving PE inputs and methodology for services that are
primarily valued through technology costs for future rulemaking.
After consideration of public comments, we are finalizing
calculating this value by dividing the CY 2026 OPPS Geometric Mean Cost
(GMC) for CPT code 98977, which is represented
[[Page 49404]]
in a dollar amount, by the CY 2026 non-qualifying APM PFS conversion
factor (CF), which represents the dollar value of an RVU, to convert
the GMC dollar amount into RVUs. The resulting value will be our
finalized PE RVU for CPT codes 98985 and 98977.
The RUC recommended and CMS proposed to contractor price the PE-
only CPT codes 98984 and 98976.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: The majority of commenters did not support CMS' proposal
to contractor price CPT codes 98984 and 98976. The commenters suggested
CMS retain the current active pricing for these codes as finalized in
the CY 2022 PFS final rule.
Response: We appreciate the commenters for their input. In the CY
2022 PFS final rule, we finalized actively pricing CPT code 98976 by
crosswalking to the PE RVU for comparable RPM CPT code 99454, since
that code includes payment for the device used to collect and transmit
data. We agree with commenters that this crosswalk methodology would
still be appropriate to value CPT code 98976. We are finalizing the
same valuation for CPT codes 99445 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, and more accurately
represents the reality of practice expense for these services. We
believe the same coding structure exists with CPT codes 98976 and 98984
and believe that using the same valuation for both codes would be
appropriate.
After consideration of public comments, we are finalizing actively
pricing CPT codes 98976 and 98984 by crosswalking the PE RVU to CPT
code 99454.
CPT codes 98986 and 98978 are PE-only codes. We proposed to
contractor price CPT code 98986 and proposed to maintain contractor
pricing for CPT code 98978.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters did not support CMS' proposal to
contractor price CPT codes 98986 and 98978. Many commenters requested
these codes be actively priced and finalize the RUC recommendation for
the device supply. Commenters requested that CMS crosswalk these codes
to CPT codes 98976 and 98977. Commenters requested that CMS actively
price these codes and review them in the future after more data is
collected. A few commenters did not support payment under the PFS for
these services, as they believe that there is limited evidence that CBT
RTM services will meaningfully improve clinical outcomes and that
utilization of these services may reduce direct clinical time that
patients receive.
Response: We continue to believe that the technologies for this
service are still evolving and there is significant pricing variability
for these technologies. We will continue to work with our Medicare
Administrative Contractors (MACs) to better understand the kinds of
devices and device costs they are encountering as they review claims
for payment.
After consideration of public comments, we are finalizing as
proposed.
C. Comment Solicitation
We solicited 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 proposed 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 we were 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 were particularly interested in comments that
include data or evidence to support the position.
Comment: Several commenters had mixed views on whether there are
differences in the valuation of remote physiologic and remote
therapeutic monitoring. Commenters who believe these services were
similar stated that equal valuation of RTM and RPM codes will promote
consistency and fairness in reimbursement and support broader adoption
of remote monitoring services. These commenters also believe that
clinical workflows, physician oversight, and labor requirements are
essentially identical across both service types. Commenters who believe
the services were similar were concerned that one service being valued
higher than the other would discourage use of the service. Commenters
who believe these services do not have similar valuation believe so due
to different clinical use cases, the evolving nature of the
technologies involved, and the relatively new nature of RTM coverage. A
few commenters requested that CMS extend relativity between RTM and RPM
codes to all codes within these code families, such as the device
supply codes.
Response: We appreciate the commenters for providing further
information about the differences in remote physiologic and remote
therapeutic monitoring, and how these services could be improved in the
future. We will consider this information for future rulemaking.
(33) Hearing Device Services (CPT Codes 92628, 92629, 92631, 92632,
92634, 92635, 92636, 92637, 92638, 92639, 92641, and 92642)
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 92628-92642 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 92628 (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 92629 (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 92631 (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
[[Page 49405]]
minutes), CPT code 92632 (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 92634 (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 92635 (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 92636 (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 92637 (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;
each additional 15 minutes), CPT code 92638 (Behavioral verification of
amplification including aided thresholds, functional gain, speech in
noise, when performed), CPT code 92639 (Hearing-aid measurement,
verification with probe-microphone), CPT code 92641 (Hearing device
verification, electroacoustic analysis), and CPT code 92642 (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 proposed to maintain the same policy of assigning non-
payable status codes to each of the twelve new CPT codes in this
family.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters stated that although they appreciated
the opportunity to comment on the payment status of these codes, they
disagreed with CMS' proposal to continue to assign non-payable status
codes to each of these codes. Commenters stated that they had concerns
with potential scope of practice limitations that may impact
implementation, certain codes in the family contain services that are
not suitable for pediatric cases, and the bundled codes pose challenges
for documenting medical necessity. Some commenters suggested CMS to
finalize contractor pricing for each of these codes, as the RUC
recommended, while other commenters requested that CMS pause the
deletion of CPT codes 92590-92595 and the implementation of CPT codes
92628-92641 until these potential issues could be addressed.
Response: As we stated in the proposed rule, 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. We therefore
continue to believe that the 12 new CPT codes in this family should
maintain the same non-payable status as their predecessor codes. With
regards to CPT codes 92590-92595, the CPT Editorial Panel will be
deleting these codes for CY 2026 which is outside the control of CMS.
We did not propose to maintain the current coding through the creation
of G codes, as we believe that the new code set creates a more granular
structure to describe these services and which will maintain the same
non-payable status under which the predecessor codes were valued.
Comment: Several commenters expressed concerns with provider
education associated with the codes in this family. Commenters stated
that the CY 2026 effective date may not provide sufficient time for
health systems, commercial payers, and state Medicaid programs to
update their systems to accommodate the new codes. Commenters stated
that several of the new codes would benefit from greater specificity
and clarification and expressed concerned about the time-based
structure of certain codes which could allow for potential overlap
between codes.
Response: We appreciate the concerns of the commenters with the
need for provider education associated with these new codes, as well as
their concerns with the structure of the coding as designed by the CPT
Editorial Panel. However, these issues are outside the scope of this
rule as we do not address provider education associated with new coding
in the PFS final rule.
After consideration of the comments, we are finalizing our proposal
to assign non-payable status codes to each of the twelve new CPT codes
in this family.
(34) Scalp Cooling Services (CPT Codes 97007, 97008, and 97009)
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 97007 (Mechanical Scalp cooling, including individual cap supply
with head measurement, fitting, and patient education), 97008
(mechanical scalp cooling; including hair preparation, individual cap
placement, therapy initiation, and pre-cooling period), and 97009
(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
97007. We proposed 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
[[Page 49406]]
for CPT code 97007. We are also proposing all direct PE inputs,
supplies, and equipment as recommended by the RUC for CPT codes 97008
and 97009 without refinement.
We received public comments on scalp cooling services. The
following is a summary of the comments we received and our responses.
Comment: Some commenters supported the proposed direct PE inputs
for CPT code 97007 and recommended that CMS finalize as proposed.
Commenters stated that they appreciated CMS deviating from the RUC-
recommended values for this code and the allotted additional clinical
staff time for clinical activity CA021.
Response: We appreciate the commenters for their support.
Comment: Several commenters disagreed with our proposed increase in
clinical staff time for CPT code 97007 and requested that CMS finalize
the RUC-recommendations for this code. Commenters stated that this
portion of clinical staff work, which CMS increased to 27 minutes based
off reference CPT code 99453, is more complex for the reference code
than the setup and patient education required in CPT code 97007 since
the reference code requires the explanation of outputs and obtaining
the initial readings for the remote physiologic device. The cap for
scalp cooling does not require any data elements to be processed and
recorded by the patient for CPT code 97007 and therefore would only
require 5 minutes for CA021 as recommended by the RUC.
Response: We acknowledge the commenters' feedback. However, we
continue to believe that our proposed increase in CA021 clinical staff
time for CPT code 97007 is appropriate for the required clinical
activities during this portion of the scalp cooling service. We stated
in the proposed rule that this additional clinical staff time better
accounts for the full duration of time required to educate, measure,
fit, and calibrate the cap, as suggested initially by interested
parties and then repeated again by commenters. Based on the additional
information that we have received on this topic, we do not believe that
these tasks could typically be carried out in 5 minutes as recommended
by the RUC.
Comment: Several commenters disagreed with the proposed direct PE
inputs for all the codes in this family. The commenters requested CMS
to increase the direct PE inputs for CPT code 97007 from the proposed
36 total clinical staff minutes to 103 total clinical staff minutes.
Commenters also requested an increase in total clinical staff minutes
for CPT code 97008 from the RUC-recommended value of 9 minutes to 52
minutes with the addition of the following equipment items: scalp
cooling system and a medical recliner chair (EF009) for 30 minutes. For
CPT code 97009, commenters requested an increase in total clinical
staff minutes from the RUC-recommended value of 6 minutes to 23 minutes
and the same equipment items: scalp cooling system and a medical
recliner chair (EF009) for 30 minutes. The commenters stated that this
service utilizes infusion center resources for lengthy periods of time
and that the requested clinical staff times are based on a time and
motion study of 10 cancer centers; commenters disagreed with the RUC-
recommended values and believe that the RUC did not include all
necessary resources and were under-reported. Commenters also had
concerns regarding equity and access for this service and requested
that CMS set the medically unlikely edits for CPT code 97009 to 6.
Response: We acknowledge commenters' request for additional
clinical staff time for all the codes in this family as well as
additional equipment for CPT codes 97008 and 97009. We also acknowledge
that the commenters are basing this request from a time and motion
study that they are relying on to be an additional data source beyond
the RUC review process to validate their request. We are interested in
and open to alternate data sources other than the RUC review and survey
process when making valuation decisions for CPT codes. However, for
this code family, we continue to believe that the proposed clinical
staff time for CPT code 97007 sufficiently accounts for the clinical
activities of cap fitting and calibration and patient education. We
also continue to believe that the RUC-recommended direct PE inputs
sufficiently account for the clinical activities described in CPT code
97008 and 97009.
For the requested equipment item, the medical recliner chair
(EF009), 60 minutes of time is included for the chemotherapy infusion
codes, such as CPT code 96365 (Intravenous infusion, for therapy,
prophylaxis, or diagnosis (specify substance or drug); initial, up to 1
hour) and CPT code 96366 (Intravenous infusion, for therapy,
prophylaxis, or diagnosis (specify substance or drug); each additional
hour (List separately in addition to code for primary procedure)),
which would be billed during the same patient encounter and account for
portions of the time in the chair used by the patient. We agree with
commenters that this does not account for the full time in the medical
recliner chair for each chemotherapy with scalp cooling service
session. Therefore, we are adding 30 minutes of equipment time for the
medical recliner chair (EF009) for CPT code 97008 and 97009.
For the scalp system coolant, we did not receive any RUC-
recommendations for the system equipment and interested parties have
reported that the system is leased equipment and could be shared by
multiple patients. As such, we believe that this cost can be accurately
captured with our indirect PE methodology. We acknowledge commenters'
concerns regarding access to this service and are open to further
discussions in the future. The request for medically unlikely edits is
out of scope for the PFS rule but can be addressed via the National
Correct Coding Initiative (https://www.cms.gov/national-correct-coding-initiative-ncci).
After consideration of the public comments, we are finalizing the
direct PE inputs for the scalp cooling services as proposed, with the
addition of 30 minutes of equipment time for the medical recliner chair
in CPT codes 97008 and 97009. We did not propose, and we are not
finalizing a work RVU for the three codes in this family.
[[Page 49407]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.032
[[Page 49408]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.033
[[Page 49409]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.034
[[Page 49410]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.035
[[Page 49411]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.036
[[Page 49412]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.037
[[Page 49413]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.038
[[Page 49414]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.039
[[Page 49415]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.040
[[Page 49416]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.041
[[Page 49417]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.042
[[Page 49418]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.043
[[Page 49419]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.044
[[Page 49420]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.045
[[Page 49421]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.046
[[Page 49422]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.047
[[Page 49423]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.048
[[Page 49424]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.049
[[Page 49425]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.050
[[Page 49426]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.051
[[Page 49427]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.052
[[Page 49428]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.053
[[Page 49429]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.054
[[Page 49430]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.055
[[Page 49431]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.056
[[Page 49432]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.057
[[Page 49433]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.058
[[Page 49434]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.059
[[Page 49435]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.060
[[Page 49436]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.061
[[Page 49437]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.062
[[Page 49438]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.063
[[Page 49439]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.064
[[Page 49440]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.065
[[Page 49441]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.066
[[Page 49442]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.067
[[Page 49443]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.068
[[Page 49444]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.069
[[Page 49445]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.070
[[Page 49446]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.071
[[Page 49447]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.072
[[Page 49448]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.073
[[Page 49449]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.074
[[Page 49450]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.075
[[Page 49451]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.076
[[Page 49452]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.077
[[Page 49453]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.078
[[Page 49454]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.079
[[Page 49455]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.080
[[Page 49456]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.081
[[Page 49457]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.082
[[Page 49458]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.083
[[Page 49459]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.084
[[Page 49460]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.085
[[Page 49461]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.086
[[Page 49462]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.087
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
[[Page 49463]]
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 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 these reasons, we believed it was appropriate to
extend the application of HCPCS code G2211 to home and residence E/M
visits in the CY 2026 MPFS. Therefore, we proposed 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 refined
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))''.
The following is a summary of the comments we received and our
responses.
Comment: Many comments supported our proposed refinement to HCPCS
code G2211 to make this add-on code payable when reported with home
residence E/M visits. Many commenters recommended that we make the add-
on code applicable to other or all types of E/M visits and to home
visits reported by community health centers and rural health clinics. A
commenter also suggested making the transitional care management (TCM)
services codes new base codes for HCPCS code G2211. Another handful of
commenters opposed our proposal.
Many commenters, including those who supported our proposal,
expressed concerns over the CY 2024 PFS final rule estimate of the
utilization of HCPCS code G2211 resulting in a negative impact to the
conversion factor for that year. Some commenters expressed concern that
our proposal to make the home residence E/M visit codes base codes for
the HCPCS code G2211 add-on code would trigger larger budget neutrality
adjustments going forward. Many commenters recommended a prospective
budget neutrality adjustment to the 2026 Conversion Factor (CF) to
account for the estimated utilization that was not realized in CY 2024.
Response: We appreciate the commenters for their feedback that this
policy will support ongoing, longitudinal care relationships with
primary care providers for populations with complex co-morbidities. We
also acknowledge receipt of recommendations beyond the scope of this
proposal, requesting additional service codes be designated base codes
to which the HCPCS code G2211 add-on code would apply, requesting that
we revisit the modifier 25 payment policy restriction on certain
services or procedures reported on the same day by the same
practitioner, and recommendations to provide patient education about
applicability of patient co-pays.
Regarding the concerns about utilization estimates, we acknowledge
that the CY 2024 utilization estimate exceeded actual reporting of
HCPCS code G2211 in CY 2024. We remind commenters that we do not make
retrospective budget neutrality adjustments and would not compare
actual claims reported for new coding against the utilization estimates
made in the PFS final rule for the year in which such reporting began.
As noted in the CY 2024 PFS final rule (88 FR 78975), CMS makes budget
neutrality calculations on a prospective annual basis and uses claims
data for the services as they become available in subsequent years, to
inform budget neutrality adjustments. Utilization is variable and for
new coding, estimates sometimes do not anticipate the volume of
reporting that is actually realized.
We continue to anticipate that utilization of the inherent
complexity add-on code will continue to increase over time, consistent
with utilization patterns for other new services, and we remain
interested and appreciative of feedback regarding how to encourage its
appropriate use.
After reviewing all the comments, we are finalizing as proposed, to
allow HCPCS code G2211 to be billed as an add-on code with the home or
residence E/M visits code family (CPT codes 99341, 99342, 99344, 99345,
99347, 99348, 99349, 99350). We are also finalizing refinement of the
HCPCS code G2211 code descriptor to 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
[[Page 49464]]
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)) ''.
Lastly, we note that the add-on code for inherent complexity
intends to address the lack of distinction between E/M codes used to
describe visits that involve a longitudinal relationship between the
practitioner and patient compared to visits that do not. Similar to the
discussion in section II.B. of this final rule regarding site of
service payment differentials, we look forward to ongoing feedback on
improved approaches to recognize those differences more holistically
without use of an add-on code and recognize that there continues to be
an imbalance in payment for E/M visits that are part of ongoing care.
At the same time, we recognize we would need to address any potential
changes through future notice and comment rulemaking.
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).
[[Page 49465]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.088
[[Page 49466]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.089
[[Page 49467]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.090
[[Page 49468]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.091
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, facilitating and
coordinating treatment such as psychotherapy, pharmacotherapy,
counseling and/or
[[Page 49469]]
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.'' \76\
Integrating behavioral health with primary care has been shown to
improve outcomes like reduced depression severity, and enhancing
patient's experience of care.\77\ 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.
---------------------------------------------------------------------------
\76\ https://integrationacademy.ahrq.gov/about/integrated-
behavioral-
health#:~:text=Integrated%20behavioral%20health%20offers%20many,these
%20concerns%20are%20also%20addressed.
\77\ 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 proposed 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'' at 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 to bill.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported that these proposed optional
add-on codes for APCM services would be considered a ``designated care
management service'' at Sec. 410.26(b)(5) and, as such, could be
provided by auxiliary personnel under the general supervision of the
billing practitioner.
Response: We appreciate the commenters for their supportive
comments.
2. Behavioral Health Integration Add-On Codes for APCM (HCPCS Codes
G0568, G0569, G0570)
We proposed 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 G0568, an add-on code based on CPT code 99492, HCPCS code G0569,
an add-on code based on CPT code 99493 for CoCM services delivered to
patients also receiving APCM services, and HCPCS code G0570, an add-on
code for general behavioral health integration services based on CPT
code 99484. We did not propose 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 G0568: 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 in addition to
the Advanced Primary Care Management code).
HCPCS code G0569: 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
[[Page 49470]]
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 (list separately in addition to Advanced Primary Care
Management code).
HCPCS code G0570: 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 in addition to Advanced Primary Care Management code).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported our proposal to create 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. They stated that this change will
encourage primary care practices to provide integrated mental health
care, including BHI and CoCM services, and improve Medicare
beneficiaries' access to whole person, team-based care.
Response: We appreciate the commenters for their supportive
comments.
Comment: Several commenters expressed support for the fact that
these codes do not require the counting of minutes. The commenters
stated that counting minutes is administratively burdensome and takes
away time that practitioners would otherwise spend on patient care.
However, a few commenters stated that the counting and documentation of
minutes of service provided is necessary to ensure the appropriate
services are delivered to beneficiaries and were concerned that without
this requirement beneficiaries would not receive the care they need.
Response: We appreciate the commenters for their thoughtful
comments. While we proposed not to require the counting of minutes for
these add-on codes, we would expect that the care delivered to Medicare
beneficiaries would be appropriately documented in the medical record,
regardless of whether the counting of minutes is required.
Comment: A commenter stated that continuing to document the
behavioral health services delivered and patient interactions
associated with billing the add-on codes was unnecessarily burdensome
and recommended that we allow practitioners to attest that they have
the ability to provide integrated behavioral health services without
documenting each required element of the service.
Response: We appreciate the commenter for the feedback and
acknowledge that some administrative burden remains to bill the
proposed add-on codes. However, at this time, we continue to believe
that it is important that the elements of the particular add-on service
are documented in the medical record, though we may consider this
comment in future rulemaking.
Comment: A few commenters expressed concern that the creation of
add-on codes would be confusing and unnecessarily burdensome when
similar, standalone CPT codes already exist. The commenters suggested
that we work with the American Medical Association to remove the time-
based thresholds for the associated CPT codes: 99492, 99493, and 99484.
Additionally, a few commenters questioned why we had not created an
add-on code based on CPT code 99494.
Response: We appreciate the commenters for the suggestion. While we
understand that there is always a learning curve when new HCPCS codes
are introduced, we continue to believe that removing the time-based
requirements for HCPCS codes G0568, G0569, and G0570 when billed in
conjunction with an APCM base code (HCPCS codes G0556, G0557, and
G0558) will ultimately reduce administrative burden, as it aligns the
documentation requirements of the APCM codes with the add-on codes. The
time-based requirements for CPT codes 99492, 99493, and 99484 remain in
the instance these CPT codes are billed on a standalone basis, outside
of the provision of APCM services.
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 proposed a direct crosswalk to the current work RVU values of
CPT code 99492 for HCPCS code G0568 (work RVU 1.88), CPT code 99493 for
HCPCS code G0569 (work RVU 2.05), and CPT code 99484 for HCPCS code
G0570 (work RVU 0.93). We also proposed 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
G0568, G0569, and G0570, respectively. We solicited comments on this
approach.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Several commenters expressed their support for the
proposed direct crosswalk to the current work RVU values and direct PE
inputs to CPT code 99492 for HCPCS code G0568, CPT code 99493 for HCPCS
code G0569, and CPT code 99484 for HCPCS code G0570. A commenter stated
that instead of directly crosswalking the work RVU and direct PE inputs
for the add-on codes, we should pay more than the current CPT codes.
Response: We appreciate the commenters for their responses to our
proposal. 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 continue to believe it is appropriate to directly
crosswalk to the existing work RVUs and direct PE inputs for these
services.
After consideration of the public comments, we are finalizing 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 G0568, an add-on
code based on CPT code 99492 for an initial month of CoCM services
delivered to patients also receiving APCM services, HCPCS code G0569,
an add-on code based on CPT code 99493 for CoCM services delivered to
patients also receiving APCM services, and HCPCS code G0570, an add-on
code for general behavioral health integration services based on CPT
code 99484, and are
[[Page 49471]]
finalizing the valuation of these codes as proposed.
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 \78\ and
effective management of chronic disease,\79\ which per the Trump
Administration's Executive Order, ``Establishing the President's Make
America Healthy Again Commission,'' \80\ 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.
---------------------------------------------------------------------------
\78\ 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.
\79\ 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.
\80\ 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).\81\ 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.
---------------------------------------------------------------------------
\81\ 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.
---------------------------------------------------------------------------
Given these factors, we solicited comments on how CMS should
consider the 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?
We received public comments on this solicitation.
While we appreciate the commenters for their feedback, we will take
the comments into consideration for possible future rulemaking.
H. Outpatient Therapy Services and KX Modifier Thresholds
In the CY 2026 PFS proposed rule, we inadvertently omitted the
following section regarding Outpatient Therapy Services and KX Modifier
Thresholds. However, we included this section as part of the CY 2026
PFS correcting document (90 FR 39158).
1. Technical Correction (Sec. 410.62(a))
In the CY 2009 PFS final rule (73 FR 69874 through 69875) we
finalized the addition of a new paragraph at Sec. 410.62(c) for the
services of speech-language pathologists (SLPs) in private practice
(SLPPPs) allowed through the amendments in section 143 of the Medicare
Improvement for Patients and Providers Act of 2008 (MIPPA); and, we
also finalized a new condition of payment at Sec. 410.62(a)(3)(ii)
requiring these SLPPPs to meet the qualifications of SLPs at 42 CFR
part 484 that is specified in the basic rule for outpatient speech-
language pathology services at Sec. 410.62(a).
During a recent review of the regulations at Sec. 410.62, we
noticed an error in Sec. 410.62(a). That is, the basic rule at Sec.
410.62(a) does not correctly reflect the policy that for Medicare Part
B to pay for outpatient speech-language pathology services, those
services are required to be delivered only by SLPs--including the
SLPPPs specified at paragraph (a)(3)(ii)--meeting the requirements for
an SLP at Sec. 484.115. Instead, Sec. 410.62(a) states that except as
specified in paragraph (a)(3)(ii) of this section rather than paragraph
(a)(3)(iii) which was paragraph (a)(3)(ii) before being redesignated as
paragraph (a)(3)(iii) when the condition of payment was added for the
services of SLPPPs. We inadvertently did not update the exception
paragraph during CY 2009 PFS rulemaking to reflect the correct policy
under which the
[[Page 49472]]
individual furnishing services incident to the services of physicians,
physician assistants (PAs), clinical nurse specialists (CNSs), or nurse
practitioner (NPs) does not have to meet the state licensure
requirement at Sec. 484.115 (although they are required to meet the
other standards and conditions that apply to SLPs). Therefore, we
proposed to revise Sec. 410.62(a) to reflect the policy related to
qualifications for individuals furnishing services incident to the
services of physicians, PAs, CNSs, and NPs by correctly referencing
paragraph (a)(3)(iii) in place of paragraph (a)(3)(ii). We also
proposed to make a conforming regulatory change at Sec. 410.26(c)(2)
to refer readers to Sec. 410.62(a)(3)(iii) instead of Sec.
410.62(a)(3)(ii) for the correct policy related to the qualifications
for individuals providing speech-language pathology services furnished
incident to the services of physicians, PAs, CNSs, and NPs.
We did not receive public comments on this provision, and
therefore, we are finalizing as proposed.
2. KX Modifier Thresholds
The KX modifier thresholds were established through section 50202
of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9,
2018) (BBA) and were formerly referred to as the therapy cap amounts.
These per-beneficiary amounts under section 1833(g) of the Act (as
amended by section 4541 of the Balanced Budget Act of 1997) (Pub. L.
105-33, August 5, 1997) are updated each year based on the percentage
increase in the Medicare Economic Index (MEI). Specifically, these
amounts are calculated by updating the previous year's amount by the
percentage increase in the MEI for the upcoming calendar year and
rounding to the nearest $10.00. Thus, for CY 2026, we proposed to
increase the CY 2025 KX modifier threshold amount by the most recent
forecast of the 2017-based MEI. For CY 2026, the proposed MEI increase
is estimated to be 2.7 percent and is based on the expected historical
percentage increase of the 2017-based MEI. Multiplying the CY 2025 KX
modifier threshold amount of $2,410 by the proposed CY 2026 percentage
increase in the MEI of 2.7 percent ($2,410 x 1.027) and rounding to the
nearest $10.00 results in a proposed CY 2026 KX modifier threshold
amount of $2,480 for physical therapy and speech-language pathology
services combined and $2,480 for occupational therapy services. We also
proposed to update the MEI increase for CY 2026 based on historical
data through the second quarter of 2025, and we proposed to use such
data, if appropriate, to determine the final MEI percentage increase
and the CY 2026 KX modifier threshold amounts in the CY 2026 PFS final
rule.
Section 1833(g)(7)(B) of the Act describes the targeted medical
review (MR) process for services of physical therapy, speech-language
pathology, and occupational therapy services. The threshold for
targeted MR is $3,000 through CY 2027. Effective beginning with CY
2028, the MR threshold levels will be annually updated by the
percentage increase in the MEI, per section 1833(g)(7)(B) of the Act.
Consequently, for CY 2026, the MR threshold is $3,000 for physical
therapy and speech-language pathology services combined and $3,000 for
occupational therapy services. Section 1833(g)(5)(E) of the Act states
that CMS shall identify and conduct targeted medical review using
factors that may include the following:
The therapy provider has had a high claims denial
percentage for therapy services under this part or is less compliant
with applicable requirements under this title.
The therapy provider has a billing pattern for therapy
services under this part that is aberrant compared to peers or
otherwise has questionable billing practices for such services, such as
billing medically unlikely units of services in a day.
The therapy provider is newly enrolled under this title or
has not previously furnished therapy services under this part.
The services are furnished to treat a type of medical
condition.
The therapy provider is part of a group that includes
another therapy provider identified using the factors described
previously in this section.
We track each beneficiary's incurred expenses for therapy services
annually and count them towards the KX modifier and MR thresholds by
applying the PFS rate for each service less any applicable multiple
procedure payment reduction (MPPR) amount for services of CMS-
designated ``always therapy'' services (see the CY 2011 PFS final rule
at 75 FR 73236). We also track therapy services furnished by critical
access hospitals (CAHs), applying the same PFS-rate accrual process,
even though they are not paid for their therapy services under the PFS
and may be paid on a cost basis (effective January 1, 2014) (see the CY
2014 PFS final rule at 78 FR 74406 through 74410).
When the beneficiary's incurred expenses for the year for
outpatient therapy services exceed one or both of the KX modifier
thresholds, therapy suppliers and providers use the KX modifier on
claims for subsequent medically necessary services. Using the KX
modifier, the therapist and therapy provider attest that the services
above the KX modifier thresholds are reasonable and necessary and that
documentation of the medical necessity for the services is in the
beneficiary's medical record. Claims for outpatient therapy services
exceeding the KX modifier thresholds without the KX modifier included
are denied.
We received public comments on these updates. The following is a
summary of the comments we received and our responses.
Comment: A commenter stated their appreciation of issuing the KX
modifier threshold amounts and the MR threshold amount for CY 2026.
Response: We appreciate the commenter for their remarks.
Comment: A commenter requested that we issue the CY 2026 KX
modifier thresholds in time to ensure consistent education by the A/B
MACs that they believe will reduce claim denials and simplify the
therapist's care planning.
Response: We would like to clarify that the A/B MACs are notified
through our usual subregulatory change management process allowing them
sufficient time to update the allowed dollar amount for CY 2026
outpatient KX modifier thresholds to $2,480. As such, claims from
providers or therapists for therapy services above the CY 2026 KX
modifier threshold amounts will not be denied unless the provider does
not believe them to be medically necessary and foregoes the inclusion
of the KX modifier on the claim for services as is appropriate.
We stated in the correction notice to the CY 2026 PFS proposed rule
that we would use the MEI update based on historical data through the
second quarter of 2025 to determine the final MEI percentage increase
and the CY 2026 KX modifier threshold amounts in the CY 2026 PFS final
rule. Since the projected 2026 MEI update based on historical data
through the 2nd quarter of 2025 remains at 2.7 percent, we are
finalizing the CY 2026 KX modifier threshold amounts as proposed; that
is $2,480 for physical therapy and speech-language pathology services
combined and $2,480 for occupational therapy services.
[[Page 49473]]
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.\82\ 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.
---------------------------------------------------------------------------
\82\ Sec. 201(h)(1) of the Federal Food, Drug, and Cosmetic Act.
---------------------------------------------------------------------------
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 information related
to the use of the DMHT device, including 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 information related to the use
of the DMHT device, including 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.
(List separately in addition to HCPCS code G0553)). We note that in the
CY 2026 PFS proposed rule (90 FR 32593 through 32597), we inadvertently
transcribed the code descriptors for HCPCS codes G0553 and G0554 with
the wording we had proposed in the CY 2025 PFS proposed rule, rather
than as refined and finalized (89 FR 97927).
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 21 CFR 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. In the CY 2026 PFS proposed rule (90 FR
32352, 32503), we clarified 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 21 CFR 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 21 CFR 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 21 CFR 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 21 CFR 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.
As stated in the CY 2025 PFS final rule (89 FR 97926) and in the CY
2026 PFS proposed rule (90 FR 32503), 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.\83\
---------------------------------------------------------------------------
\83\ https://www.samhsa.gov/data/sites/default/files/NSDUH%202023%20Annual%20Release/2023-nsduh-main-highlights.pdf.
---------------------------------------------------------------------------
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
[[Page 49474]]
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 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 noted 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 proposed 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 21 CFR 882.5803, Digital therapy
device for Attention Deficit Hyperactivity Disorder (ADHD). The 21 CFR
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 21 CFR 882.5801 Computerized behavioral therapy device
for psychiatric disorders, the 21 CFR 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 21
CFR 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 21 CFR 882.5801 device classification, the 21
CFR 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 21 CFR 882.5803 to more fully reflect the range
of behavioral health disorders treated by FDA-authorized products. We
also proposed that all the conditions of payment for HCPCS codes G0552,
G0553, and G0554 finalized in the CY 2025 PFS final rule (89 FR 97927)
would apply to DMHT devices classified at 21 CFR 882.5803. These
conditions of payment for DMHT device coding are that the billing
practitioner is incurring the cost of furnishing the DMHT device to the
beneficiary as a supply, that furnishing of the DMHT device is incident
to the billing practitioner's professional services in association with
ongoing behavioral health treatment under a plan of care by the billing
practitioner, and that payment may only be made for DHMT devices for
mental health treatment in accordance with the use indicated in their
FDA classification (89 FR 97927).
Additionally, we solicited 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 21 CFR 876.5960; Digital therapy
devices to reduce sleep disturbance for psychiatric conditions at 21
CFR 882.5705; and Computerized behavioral therapy device for the
treatment of fibromyalgia symptoms to be codified at 21 CFR 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 one of
the conditions 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 did not propose 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
have recognized that 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 recognized 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.\84\ We
recognized that digital therapeutic devices may offer innovative means
to access certain behavioral health care services. We acknowledged 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 have continued to aim to both provide access to vital
behavioral health services and to gather further information about the
delivery of digital behavioral health therapies, their effectiveness,
their adoption by practitioners as complements to the behavioral health
care that they furnish, and their use by patients for the treatment of
behavioral health conditions. We have continued to seek information and
may consider national pricing through future rulemaking.
---------------------------------------------------------------------------
\84\ https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand.
---------------------------------------------------------------------------
We sought 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 sought 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
[[Page 49475]]
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 anticipated that the
corresponding valuation for any additional coding would be
appropriately lower than G0552. We solicited comments on these
potential crosswalks or any other services that 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 solicited 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 sought 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 A-I1), 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 solicited 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters reported inconsistency among Medicare
Administrative Contractors (MACs) in setting payment rates for HCPCS
code G0552. Many of these commenters stated that they believe
uncertainty among practitioners about adequate payment has resulted in
a barrier to practitioners' adoption of this technology. The
overwhelming majority of these commenters recommended that we adopt a
national rate for HCPCS code G0552. Other commenters recommended that
CMS provide guidance to the MACs regarding the appropriate
considerations for evaluating the medical necessity of a DMHT device
and for establishing pricing data sources specific to DMHT devices.
They also recommended that CMS instruct the MACs to develop a timely
and transparent process for claims review and require that individuals
with behavioral health expertise be involved in the coverage
determination and claims review processes.
Response: We appreciate the commenters for their recommendations.
In response to the comments, we will work with the CMS MACs to improve
the understanding of the billing rules for HCPCS code G0552. As we
stated in the CY 2025 PFS final rule (89 FR 97928), we still do not
believe that we have enough information to appropriately price all the
DMHT devices for which we propose to make payment. As we have noted,
the technologies and DMHT therapies are evolving rapidly. 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
under HCPCS code G0552 at this time. However, we continue to welcome
information on this and may consider national pricing through future
rulemaking.
Comment: Many commenters made specific comments about our proposal
to 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 21 CFR 882.5803, Digital therapy device for Attention
Deficit Hyperactivity Disorder (ADHD). The majority of commenters
supported this proposal. Some commenters opposed including devices from
any other FDA classification in addition to devices classified at 21
CFR 882.5801 as finalized in the CY 2025 PFS final rule.
The commenters stated that adding more devices under HCPCS code
G0552 would lead to a misleading code descriptor, confusion for the
provider community with uncertainty about which devices would be
payable, imprecise valuations, and increased variability in pricing
among the MACs. These commenters instead suggested that CMS assign a
national price for all devices under HCPCS code G0552. Others were
opposed to allowing payment of devices specifically classified at 21
CFR 882.5803, Digital therapy device for Attention Deficit
Hyperactivity Disorder (ADHD) because they believe these devices were
not representative of the Medicare population.
Response: We appreciate commenters for their feedback. As we stated
in the
[[Page 49476]]
CY 2026 PFS proposed rule, we believe that it is important to expand
our coding and payment policies to include such devices classified at
21 CFR 882.5803 to more fully reflect the range of behavioral health
disorders treated by FDA-authorized products. The classification at 21
CFR 882.5803 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
under 21 CFR 882.5801, Computerized behavioral therapy device for
psychiatric disorders, the 21 CFR 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
under 21 CFR 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 21 CFR 882.5801 device
classification, the 21 CFR 882.5803 device classification is intended
to provide therapy as an adjunct to clinician supervised treatment. We
believe it is appropriate to group these devices under a single HCPCS
code, G0552. We are finalizing 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 21 CFR 882.5803, Digital therapy
device for Attention Deficit Hyperactivity Disorder (ADHD), as
proposed. Furthermore, 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. As
proposed, all HCPCS code G0552 billing requirements applicable to
devices classified at 21 CFR 882.5801 will be applicable to devices
classified at 21 CFR 882.5803, that is:
The billing practitioner is incurring the cost of
furnishing the DMHT device to the beneficiary as a supply,
That furnishing of the DMHT device is incident to the
billing practitioner's professional services in association with
ongoing behavioral health treatment under a plan of care by the billing
practitioner, and
Payment may only be made for DHMT devices for mental
health treatment in accordance with the use indicated under their FDA
classification.
Comment: Many commenters recommended CMS to expand the number of
devices payable under our DMHT payment policy, HCPCS code G0552, to
include, ``Computerized behavioral therapy devices for treating
symptoms of gastrointestinal conditions'' classified under 21 CFR
876.5960; and for ``Computerized behavioral therapy device for the
treatment of fibromyalgia symptoms'' to be codified at 21 CFR 882.5804.
A few commenters offered their support for making payments for
``Digital therapy devices to reduce sleep disturbance for psychiatric
conditions'' classified under 21 CFR 882.5705. The commenters, who did
not mention these devices' classifications, suggested instead expanding
coding and payment for digital treatment of mental health and medical
conditions through alternative approaches. Some suggested the creation
of a code specific to each device, others suggested developing future
coding according to device indications, others suggested coding by FDA
classification, others suggested relying on CPT coding, and others
suggested payment for devices under bundled services. Some commenters
further suggested various criteria or processes by which to evaluate
and decide which devices to make eligible for payment. Some commenters
offered their suggestions for approaching coverage determinations.
Response: We appreciate commenters who responded to our
solicitation regarding whether we should establish coding and payment
policies for devices classified under the three FDA regulations
discussed earlier. At this time, we are not further expanding payment
under our DMHT payment policy. We will continue to solicit input from
interested parties for coding and payment policies to expand payment
for FDA cleared and authorized digital mental health treatment devices.
We may consider expanding our payment policy to include them under
future rulemaking.
Comment: Many commenters were opposed to 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. These
commenters believe that no payment should be made for digital tools
which have not been cleared or authorized by the FDA as devices. A few
commenters stated they were encouraged by our comment solicitation and
shared how they believe clinical practices may rely on information to
form clinical judgments about using such digital tools and whether such
use may be warranted and beneficial to patient care. Some commenters
expressed concern that we intended to finalize payment for these tools
under HCPCS code G0552.
Response: We appreciate all the comments we received. At this time,
after consideration of all these comments we are not finalizing any new
coding and payment for such digital tools. To reiterate, HCPCS code
G0552 makes payment available for the supply of digital mental health
treatment devices and initial education and onboarding, per course of
treatment that augments a behavioral therapy plan. Devices paid for
under HCPCS code G0552 must be cleared or authorized by the FDA and
classified under either 21 CFR 882.5801, or beginning January 1, 2026,
under 21 CFR 882.5803.
Comment: We received public comments on the comment solicitation
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.
Response: We appreciate the commenters for their comments. After
consideration of public comments, we express appreciation for the
feedback from commenters and will take the comments into consideration
for possible future rulemaking.
[[Page 49477]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.092
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 final 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 typically used in furnishing services at that time. 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 final rule,
due to several limitations with the data, we did not propose 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
[[Page 49478]]
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. 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 sought 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 solicited 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 final 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 proposed to do in this final 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 final
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 welcomed input in the proposed rule 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 noted that there is a comment
solicitation in the CY 2026 OPPS proposed rule regarding SaaS devices
furnished in hospital outpatient departments and ASCs.
We received public comments on this comment solicitation on how we
should consider paying for SaaS under the PFS.
After consideration of public comments, we express appreciation for
the feedback from commenters and may consider them for possible future
rulemaking.
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.\85\ 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.\86\
Although Medicare Part B covers many preventive services,\87\ as
defined in section 1861(ddd)(3) of the Act, Medicare preventive
services have some restrictions.\88\
---------------------------------------------------------------------------
\85\ 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.
\86\ 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.
\87\ https://www.medicare.gov/coverage/preventive-screening-services.
\88\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c18pdf.pdf.
---------------------------------------------------------------------------
Per the Trump Administration Executive Order, ``Establishing the
President's Make America Healthy Again Commission,'' \89\ 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.
---------------------------------------------------------------------------
\89\ https://www.whitehouse.gov/presidential-actions/2025/02/establishing-the-presidents-make-america-healthy-again-commission/.
---------------------------------------------------------------------------
We sought feedback to help us better understand how we could
enhance our support management for prevention and management of chronic
disease. Specifically, we sought 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
[[Page 49479]]
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 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,\90\ 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.
---------------------------------------------------------------------------
\90\ Administration for Community Living. ``Health Promotion.''
https://acl.gov/programs/health-wellness/disease-prevention.
---------------------------------------------------------------------------
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.\91\ 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,\92\ increased weight loss, and reduction in blood
pressure.\93\ 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.\94\ We considered 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
[[Page 49480]]
involved in furnishing this care. Furthermore, we understand that in
many practices, health coaches can help support the provision of
motivational interviewing services. We noted that the Category III CPT
codes (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.
---------------------------------------------------------------------------
\91\ Miller, W.R. & Rollnick, S. (2013) Motivational
Interviewing: Helping people to change (3rd Edition). Guilford
Press.
\92\ 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/.
\93\ 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/.
\94\ 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.
---------------------------------------------------------------------------
We solicited comments from the public regarding motivational
interviewing and health coaches. Specifically, we requested that
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 welcomed feedback from interested parties 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.
We received public comments on this comment solicitation 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.
After consideration of public comments, we express appreciation for
the feedback from commenters and will take the comments into
consideration for possible 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
[[Page 49481]]
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 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 further clarified 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 solicited comments on this
clarification.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported our clarification, stating
that behavioral health practitioners, including CSWs, MFTs, and MHCs,
meet the necessary certification and training to deliver all CHI and
PIN service elements. The commenters informed us that this
clarification is a meaningful step toward expanding workforce capacity
that may assist in reducing care bottlenecks and enhancing patient
access to much needed support.
Response: We appreciate the commenters for their feedback.
Comment: Some commenters requested that we further broaden the
scope of auxiliary personnel to include other professionals that were
not explicitly named in this clarification.
Response: As we stated previously in the CY 2024 PFS final rule (88
FR 78926), the codes do not limit the types of other health care
professionals, such as registered nurses and social workers, that can
perform CHI services (and PIN services, as we discuss in the next
section) incident to the billing practitioner's professional services,
so long as they meet the requirements to provide all elements of the
service included in the code, consistent with the definition of
auxiliary personnel at Sec. [thinsp]410.26(a)(1).
After consideration of public comments, we are finalizing as
proposed.
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 proposed in the CY 2026 PFS proposed rule 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters generally supported our proposal to
allow for CPT code 90791 (Psychiatric diagnostic evaluation) or the
Health Behavior Assessment and Intervention (HBAI) services described
by CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and 96168 (and
any subsequent HBAI codes) to serve as initiating visits for CHI, as
this proposal allows behavioral health practitioners to conduct
critical initiating assessments for CHI, leveraging their training in
behavioral health, psychosocial evaluation, and patient navigation. The
commenters stated that these initiating visits are well-matched to the
training of non-physician mental health practitioners and may encourage
stronger care coordination, earlier intervention, and improved patient
experience through improved access and efficiency. The commenters
requested that we allow all psychotherapy services to serve as
initiating visits for CHI (for example, CPT codes 90791-90853).
Response: We appreciate commenters for their support for our
proposal. Also, we appreciate the additional suggestions and
information regarding the inclusion of all psychotherapy services as
CHI initiating visits, however, we continue
[[Page 49482]]
to believe that CPT code 90791 (Psychiatric diagnostic evaluation) and
the Health Behavior Assessment and Intervention (HBAI) services
described by CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and
96168 are most analogous to E/M services.
After consideration of public comments, we are finalizing our
proposal to allow CPT code 90791 (Psychiatric diagnostic evaluation) or
the Health Behavior Assessment and Intervention (HBAI) services
described by CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and
96168 (and any subsequent HBAI codes) to serve as initiating visits for
CHI.
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, not more often than every 6 months).
After further review of utilization information, we stated in the
proposed rule that we had 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 proposed
deleting this code for CY 2026. Accordingly, we proposed to remove this
code from the Medicare Telehealth Services list.
Additionally, we proposed conforming regulation text updates at 42
CFR 410.15. We proposed 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
paragraph (xiii) and redesignating paragraph (xiv) as (xiii); and, in
revising the definition of Subsequent annual wellness visit providing
personalized prevention plan services by removing paragraph (xi) and
redesignating paragraph (xii) as (xi).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters did not support our proposal to delete
HCPCS code G0136. Commenters identified that this service may have low
utilization since it is still fairly new, and increased uptake for
codes often takes a few years. The commenters stated that early low
utilization is not evidence of lack of value, but rather, may reflect a
more typical billing pattern for a new code.
The commenters did not agree that associated resource costs are
accounted for in existing codes, including but not limited to E/M
visits. The commenters stated that E/M services focus only on the known
needs of patients and that the SDOH risk assessment is a time-consuming
service that often prompts many questions and discussions that exceed
the scope of a routine office visit. Commenters stated that the time
and resources involved in a SDOH risk assessment are separate from the
services performed as part of E/M visits. Commenters cited that 25
percent or more of primary care activities may already go without
reimbursement, and this would be adding additional activities to those
that are not reimbursed. The commenters stated that removing
reimbursement for this work and assuming the work of HCPCS code G0136
occurs in an E/M visit undervalues the work of whole-person care and
places the most vulnerable beneficiaries at risk.
Some commenters believe that the deletion of HCPCS code G0136 would
result in practitioners no longer providing this service if CMS payment
is no longer made. Commenters stated that this could result in
providers being unaware of barriers to care, resulting in medical care,
care plans, and patient outcomes being hindered with little
understanding of the cause. The commenters were also concerned about
the continuity of data from patients who have received the SDOH risk
assessment in the past and may need a follow-up assessment, noting this
would not allow data comparisons over time to be accurate and valid.
The commenters believe that the deletion of this code may negatively
impact patient care, since many patients do not report every relevant
symptom or SDOH risk factor without first being prompted by a
physician. They stated that this may be due to patients feeling
reluctant, fearful, and distrustful about disclosing the risks they
face, whereas the SDOH risk assessment may mitigate these factors.
The commenters additionally noted that elements of SDOH risk
assessment may align with the Administration's efforts to combat
chronic disease. Many commenters cited HCPCS code G0136 as a tool used
for supporting the prevention and management of chronic disease in
response to the RFI on improving care for chronic illness in the CY
2026 PFS proposed rule. The commenters also believe that the removal of
this code may hinder efforts to address the root causes of chronic
illness and recognize the comprehensive approach required for holistic
health care. The commenters believe the removal of this service may
make prevention and treatment of chronic disease more difficult, as
health behaviors and social determinants of health are inextricably
intertwined. The commenters also stated that HCPCS code G0136 assists
in the identification of environmental impacts, which may allow for
early interventions that prevent or mitigate chronic disease.
The commenters stated that the removal of this code may result in
increased costs to the Medicare Trust Fund, noting their review of
evaluation findings for a previous CMS Innovation Center model,
Accountable Health Communities (AHC), which integrated a social
determinants of health risk assessment and which showed an 8 percent
reduction in emergency department visits for patients on Traditional
Medicare, as well as demonstrating lower total expenditures and fewer
inpatient admissions and unplanned readmissions (for conditions like
uncontrolled diabetes or hypertension). We are summarizing commenters'
discussion of this evidence, which indicates SDOH factors can be
predictors of health outcomes, health care utilization, and cost.
The commenters stated the deletion of this code conflicts with CMS'
statutory obligation to make payment for the resource costs involved in
furnishing physician services. Since this is a service that physicians
(and non-physician practitioners) are currently performing, commenters
did not agree that CMS would meet its statutory obligation to establish
payment amounts for all physician services that reflect the resources
used in furnishing the service if the code were deleted. The commenters
stated that CMS removing payment for this service would result in
practitioners no longer providing this service, which may negatively
impact chronic disease treatment. The commenters believe that by
identifying high-risk patients and conducting risk assessments under
HCPCS code G0136, practitioners can prioritize and streamline
assessments, resulting in less waste.
Some commenters who did not support the deletion of this service
requested that, to resolve some of the issues we identified with this
code in the proposed rule, we make the code a stand-alone code as
opposed to an add-on code. Some commenters also suggested we
recharacterize the code to align with the Administration's efforts to
address the root causes of chronic illness.
[[Page 49483]]
A few commenters supported our proposal to delete this code,
stating that patients' 'upstream drivers' or `social determinants of
health' are already identified via routine screening, and that the
deletion of HCPCS code G0136 would alleviate the unnecessary
administrative burden of capturing SDOH assessments. A few commenters
also supported deleting this code, as the CPT E/M guidelines were
revised in 2021 to reflect that SDOH factors can influence the level of
medical decision-making when selecting the most appropriate level E/M
visit.
Response: We appreciate the commenters for their feedback on our
proposal to remove HCPCS code G0136. We recognize commenters wish to
utilize future versions of HCPCS code G0136 to address root causes of
disease. While the root causes of chronic disease are often multi-
factorial and holistic, tailored interventions may be optimal, and
assessing risk related to the root causes of many chronic conditions
begins with assessing essential, common behaviors such as physical
activity levels and nutrition (that is, diet composition). These two
essential areas both support disease prevention, and improvement in
these areas are the first step in chronic disease management (for
example, hypertension and diabetes). We agree with the commenters'
suggestions to recharacterize the code to align with the
Administration's efforts to address the root causes of chronic illness.
As such, we are finalizing retaining HCPCS code G0136 and revising the
code descriptor to read ``Administration of a standardized, evidence-
based assessment of physical activity and nutrition, 5-15 minutes, not
more often than every 6 months.''
While there may be some overlap between the previous version of the
SDOH risk assessment in that they are addressing areas relevant to an
individual's health, we believe this change reflects a return to more
clinically salient areas of risk assessment. Physical activity and
nutrition risk assessment refers to a review of the individual's
identified risk factors related to physical activity and/or nutrition
that influence the diagnosis and treatment of medical conditions.
Beginning in CY 2026, we are finalizing that the purpose of HCPCS code
G0136 is to identify and value the work involved in the administering
of a physical activity and/or nutrition risk assessment as part of a
comprehensive medical history when medically reasonable and necessary
in relation to the associated E/M or behavioral health visit. HCPCS
code G0136 may be reasonable and necessary when used to inform the
patient's diagnosis or treatment and the treatment plan established
during the associated E/M or behavioral health visit. We expect that
the practitioner furnishing HCPCS code G0136 would, at a minimum, refer
the patient to relevant resources and take into account the results of
the assessment in their medical decision-making, or diagnosis and
treatment plan for the visit. Physical activity and nutrition risk
assessment, through a standardized, evidence-based tool, can more
effectively and consistently identify unmet physical activity and/or
nutrition needs and enable comparisons across populations. The
administration of a standardized, evidence-based physical activity and/
or nutrition risk assessment tool must be tested and validated through
research. Examples of evidence-based tools to assess nutrition include,
but are not limited to, the Mini-EAT tool,\95\ the Starting the
Conversation: Diet tool,\96\ and Short Dietary Assessment
Instruments.\97\ Examples of evidence-based tools to assess physical
activity include, but are not limited to, the Physical Activity Vital
Sign tool,\98\ the CHAMPS Physical Activity Questionnaire for Older
Adults,\99\ and the Rapid Assessment of Physical Activity (RAPA) or
Telephone Assessment of Physical Activity (TAPA).\100\ HCPCS code G0136
is payable when both a physical activity and nutrition risk assessment
are performed, or when either a physical activity or risk assessment is
performed if there is a clinical scenario where only one is reasonable
and necessary. For example, if a beneficiary has recently started a new
diet but their physical activity levels have not been assessed, only a
physical activity risk assessment may be reasonable and necessary.
---------------------------------------------------------------------------
\95\ Lara[hyphen]Breitinger, K.M., Medina Inojosa, J.R., Li, Z.,
Kunzova, S., Lerman, A., Kopecky, S.L., & Lopez[hyphen]Jimenez, F.
(2022). Validation of a brief dietary questionnaire for use in
clinical practice: Mini[hyphen]eat (eating assessment tool). Journal
of the American Heart Association, 12(1). https://doi.org/10.1161/jaha.121.025064.
\96\ Paxton, A.E., Strycker, L.A., Toobert, D.J., Ammerman,
A.S., & Glasgow, R.E. (2011). Starting the conversation. American
Journal of Preventive Medicine, 40(1), 67-71. https://doi.org/10.1016/j.amepre.2010.10.009.
\97\ EGRP/DCCPS/NCI/NIH Short dietary assessment instruments.
Short Dietary Assessment Instruments. https://epi.grants.cancer.gov/diet/screeners/.
\98\ Exercise is Medicine. Physical Activity Vital Sign Sheet.
https://www.exerciseismedicine.org/wp-content/uploads/2021/04/EIM-Physical-Activity-Vital-Sign.pdf.
\99\ Stewart, A.L., Mills, K.M., King, A.C., Haskell, W.L.,
Gillis, D., & Ritter, P.L. (2001). CHAMPS physical activity
questionnaire for older adults: outcomes for interventions. Medicine
and science in sports and exercise, 33(7), 1126-1141. https://doi.org/10.1097/00005768-200107000-00010.
\100\ University of Washington Health Promotion Research Center.
(2006). Rapid Assessment of Physical Activity (RAPA). https://depts.washington.edu/hprc/programs-tools/tools-guides/rapa/.
---------------------------------------------------------------------------
All billing rules for HCPCS code G0136 will remain the same,
including that in addition to an outpatient E/M visit (other than a
level 1 visit by clinical staff), HCPCS code G0136 can also be
furnished with CPT code 90791 (Psychiatric diagnostic evaluation) and
the Health Behavior Assessment and Intervention (HBAI) services,
described by CPT codes 96156, 96158, 96159, 96164, 96165, 96167, and
96168. HCPCS code G0136 also remains an optional, additional element of
the Annual Wellness Visit (AWV) with an additional payment and no
applicable beneficiary cost sharing.
We reiterate, as stated in the CY 2024 PFS final rule (88 FR
78936), that HCPCS code G0136, when performed in conjunction with an E/
M or behavioral health visit is not intended to be a routine screening
at standard intervals or every visit, but rather tied to one or more
known or suspected physical activity and/or nutrition needs that may
interfere with the practitioners' diagnosis or treatment of the
patient. Although it is not required for the risk assessment to be
performed on the same date as the associated E/M or behavioral health
visit for the operational ease of practitioners, we continue to believe
that in most cases, HCPCS code G0136 would not be performed in advance
of the associated E/M or behavioral health visit. We are retaining the
limitation on payment for HCPCS code G0136 of once every 6 months per
practitioner per beneficiary.
We are also retaining the current valuation for HCPCS code G0136,
which is assigned a work RVU of 0.18. HCPCS code G0136 will also remain
on the Medicare Telehealth Services List. We may consider information
from interested parties for future rulemaking.
For Rural Health Clinics (RHCs) and Federally Qualified Health
Centers (FQHCs) the payment policy for HCPCS code G0136 remains as
stated in the CY 2024 PFS final rule. When the assessment, as described
by HCPCS code G0136, is furnished as an optional element of the AWV,
only one visit is paid, that is, it will be paid under the AIR or the
lesser of charges or the PPS rate with the AWV adjustment. Beneficiary
cost sharing is not applicable when this assessment is furnished as an
optional element of the AWV. Consequently, when this assessment is
furnished with a billable visit (other than an AWV) on the same day in
an RHC, only the visit will be paid under the AIR and coinsurance and
deductible will be applied. For FQHCs,
[[Page 49484]]
this assessment is not considered a qualifying visit. When the
assessment is furnished in conjunction with a qualifying visit (other
than an AWV) on the same day in a FQHC, only the visit will be paid
under the FQHC PPS and coinsurance will be applicable (88 FR 79073
through 79076).
(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 proposed 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 proposed the following changes to HCPCS codes G0019, and
proposed 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 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Some commenters agreed that the term ``upstream drivers''
encompasses a wider range of root causes of the problems that
practitioners are addressing through CHI services, such as potential
dietary, behavioral, medical, and environmental drivers to lessen the
impacts of the problem(s) addressed in the initiating visit.
Other commenters did not support our proposal, as the term
``upstream drivers'' is not as widely used in healthcare or coding
contexts as the terms ``social determinants of health'' or ``social
drivers of health.'' The commenters thought that this language change
may create ambiguity or disruption in documentation, billing, data
collection, reporting, and care planning. Some commenters stated that
current literature on the term ``upstream drivers'' describes
approaches or interventions to improve patient health that may be
impacted by social determinants of health and does not generally
include patient behaviors. Other commenters were concerned that this
language change could result in emphasis being placed on individual
behavioral change, without sufficient attention to social, economic,
and structural barriers that prevent the diagnosis or treatment of
illness or injury. Many commenters supported retaining the term
``social determinants of health'' or changing the language to ``social
drivers'' as opposed to ``upstream drivers.''
Response: We appreciate commenters for their feedback. At this
time, we continue to believe that the term ``upstream driver(s)'' is
more comprehensive and includes a variety of factors that can impact
the health of Medicare beneficiaries, such as smoking, poor nutrition,
low physical activity, substance misuse, or potential dietary,
behavioral, medical, and environmental drivers that when addressed, may
lessen the impacts of
[[Page 49485]]
the problem(s) addressed in the initiating visit.
Comment: Several commenters requested that we remove the term ``E/
M'' from the CHI code descriptor to conform with our revisions proposed
and finalized in this final rule to allow for CPT code 90791
(Psychiatric diagnostic evaluation) or the Health Behavior Assessment
and Intervention (HBAI) services described by CPT codes 96156, 96158,
96159, 96164, 96165, 96167, and 96168 (and any subsequent HBAI codes)
to serve as initiating visits for CHI.
Response: We appreciate the commenters' recommendation for
revision. We agree that the term ``E/M'' should be removed when
describing CHI initiating visits to align with all initiating visits.
After consideration of public comments, we are finalizing the code
descriptor for HCPCS code G0019 as follows:
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 diagnose or treat
problem(s) addressed in an initiating 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 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.
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 appreciate 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
[[Page 49486]]
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 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 did not make any proposals in response to the
submissions that we received and will take the information and
recommendations submitted into consideration for the future.
While we did not have proposals or a comment solicitation, we
received public comments on section II.J. of the CY 2026 PFS proposed
rule (90 FR 32511 through 32512). We appreciate commenters for their
comments and will take them into consideration for potential future
rulemaking.
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.\101\
---------------------------------------------------------------------------
\101\ https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000894.asp.
---------------------------------------------------------------------------
We outlined our HCPCS Level II coding and payment policy objectives
for skin substitutes in the CY 2023 Medicare Physician Fee Schedule
(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
[[Page 49487]]
with professional guidelines for appropriately managing these wounds.
All of the MACs have delayed the effective date of the final LCDs for
cellular and tissue-based products for wounds, 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, 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/basket/basket.aspx?loadBasketLink=Y&basketLinkId=552. 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,
section 1833(e) of the Act (42 U.S.C. 1395l(e)), section 1862(a)(1)(A)
of the Act (42 U.S.C. 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.) Coverage
is a threshold determination that must be satisfied before payment
considerations arise. The inclusion of a product in this payment rule
or in any payment file 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. Any
skin substitute could not be covered if it were determined to be
unreasonable or unnecessary for a particular beneficiary. Similarly,
the use of short descriptors and associated FDA regulatory categories
\102\ may reflect current FDA 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.
---------------------------------------------------------------------------
\102\ The term ``FDA regulatory categories'' is used in this
final rule when referring to the basis for CMS's payment policies
but is not intended to reflect or imply that the products discussed
within this final rule are characterized as such or grouped together
by FDA.
---------------------------------------------------------------------------
Medicare coverage and payment are also governed under separate
statutory authorities and serve fundamentally different purposes.
Coverage determinations under section 1862(a)(1)(A) (and related
provisions) of the Act establish whether a service is reasonable and
necessary while payment methodologies under section 1848 of the Act
(and other applicable payment provisions) of the Act establish the
amount Medicare will pay for covered physician services based on
considerations such as resource similarity. CMS has determined that
setting payment rates on a prospective basis is a different inquiry and
exercise with a different set of considerations and that it makes sense
here to consider how FDA regulates skin substitute products as a factor
in grouping those products in various categories as described later in
this section.
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 \103\ 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 developed a proposal that addressed our stated objectives
as well as many of the comments we have received.
---------------------------------------------------------------------------
\103\ 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).
---------------------------------------------------------------------------
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
We have 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 (42 U.S.C. 1395w-3a). 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 (42 U.S.C.
1395u(o)(1)(C)) (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 (42
U.S.C. 1395rr(b)(14)(B)), 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.
[[Page 49488]]
Subparagraph (I) of such section defines the term ``reference
biological product'' as a biological product licensed under section 351
of the PHS Act (42 U.S.C. 262). Subparagraph (H) of section 1847A(c)(6)
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 (42 U.S.C. 1396r-8), 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) of section 1927(k)(2) 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 Ambulatory Payment Classification (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.
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
A-K1 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] TR05NO25.093
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
[[Page 49489]]
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 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
applicable 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 and
approval. 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 final 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.\104\ 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.
---------------------------------------------------------------------------
\104\ 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.
---------------------------------------------------------------------------
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,
[[Page 49490]]
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 marketed. Table A-K2
lists several other notable differences between the relevant FDA
regulatory categories for products CMS considers to be skin
substitutes.
[GRAPHIC] [TIFF OMITTED] TR05NO25.094
D. Payment of Skin Substitute Products Under the PFS and OPPS
---------------------------------------------------------------------------
\105\ No premarket authorization is required for 361 HCT/Ps.
\106\ https://www.fda.gov/industry/fda-user-fee-programs/medical-device-user-fee-amendments-mdufa.
\107\ 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.
\108\ 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.
\109\ https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments.
---------------------------------------------------------------------------
1. Payment for Skin Substitute Products as Incident-To Supplies
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 proposed, 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
[[Page 49491]]
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
the outcomes of this 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 solicited 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported CMS' goal of aligning payment
and coding policies across different sites of care. They agree that a
consistent, site-neutral payment system empowers providers to choose
the most clinically appropriate setting based on patient needs rather
than financial incentives. Commenters noted this would reduce the
confusion, administrative burden, and disparities in care caused by the
current system. They see this policy as a way to establish a fair and
uniform standard that centers treatment decisions around the patient.
Many commenters also supported CMS' proposal to pay for skin
substitutes separately from the application procedure. Several stated
that these products are separately reimbursable and add significant
clinical value. They noted that separate payment ensures consistent
treatment availability, preserves access for patients, and avoids
disincentives for treating larger wounds. Several commenters expressed
appreciation that CMS did not move forward with a previous proposal to
bundle the products, which they believe would have harmed patients with
large wounds. They regarded the proposed policy as a more clinically
and operationally sound approach.
Several commenters specifically supported discontinuing the
bundling of skin substitute payments in the Hospital Outpatient
Department (HOPD) and Ambulatory Surgical Center (ASC) settings. The
commenters suggested the current system, which bundles payment in the
HOPD but pays separately in the office, has created a disincentive to
treat larger wounds in facilities, pushing those cases
disproportionately into the physician's office or even more expensive
inpatient settings. They applauded the per-square-centimeter
methodology for aligning payment with wound size and expanding access
across all sites.
Response: We appreciate the commenters for their support.
Comment: Other commenters opposed the move away from bundled
payments. MedPAC, for example, did not support unbundling skin
substitutes in the facility setting, stating that paying for items
separately undermines payment bundles, can lead to overuse, and shifts
financial burden from providers to Medicare and its beneficiaries.
Another commenter supported maintaining a bundled approach to align
with longstanding policy and statutory authority.
Several commenters recommended that CMS delay any changes to the
HOPD payment methodology. They suggested that CMS should first assess
the impact of the payment reforms in the non-facility setting before
applying them to the hospital outpatient setting to avoid unintended
consequences, such as shifting care to more expensive settings.
Response: While we acknowledge the concerns about unbundling raised
by commenters, ensuring a consistent payment approach for skin
substitute products across the physician office and hospital outpatient
department settings has been a long-stated policy objective. As noted
previously in this section, 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 the outcomes of this 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.
Comment: Many commenters warned that the proposed payment rate for
the application codes create a new, major disparity between care
settings. They pointed out the large gap between the proposed physician
application payment rate of ~$150 in an office/mobile setting and the
combined facility and physician facility setting payment rates of over
$800 in an HOPD. They stated this disparity will create a strong
financial incentive to shift patient care to the more expensive HOPD
setting, which could strain hospital capacity, create access issues for
rural and underserved patients, and cause physician offices and mobile
practices to shutter. Several commenters highlighted the unique
challenges and higher costs faced by providers serving rural and
homebound patients. They recommended CMS offer financial incentives,
enhance telemedicine reimbursement, and provide add-on payments or
grants to ensure these vulnerable populations do not lose access to
care. To achieve true site neutrality, they strongly suggested CMS
increase the application fee for clinicians in non-facility settings to
close this gap.
Other commenters supported the proposed RVUs and payment rates for
the application procedure codes in both the HOPD and MPFS settings,
finding them to be a fair assessment of clinical resource utilization.
Another commenter stated that CMS should increase the proposed APC
payment rates for these procedures in the HOPD setting, as the proposal
demotes some codes to lower-paying APCs, which exacerbates existing
disincentives for treating wounds in the hospital.
Response: We acknowledge the disparities in the payment rates for
the application codes between settings. As described in section II.B.
of this final rule, we are open to exploring alternative data sources,
including use of OPPS cost data, to inform PFS rate setting for certain
services. We also recognize the possibility raised by interested
parties that some of the excessive payment for the skin substitute
products may have been useful in subsidizing costs associated with
providing these services in beneficiaries' homes. We look forward to
continued dialogue on this point as well as on the point of access to
care for homebound and other beneficiaries for whom care is reasonable
and necessary.
After careful consideration of the comments, we are finalizing our
proposal to pay separately for the provision of certain groups of skin
substitute products as well as our proposal to implement this policy in
both the non-facility and hospital outpatient settings as proposed.
We proposed, under the PFS, to pay separately for the use of
specific skin substitute products (that is, skin
[[Page 49492]]
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, among other requirements at 42 CFR 410.26(b).
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 sought comments on our
proposal to separately pay for provision of skin substitutes as
incident-to supplies under the PFS in the non-facility setting.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Many commenters opposed reclassifying skin substitutes,
particularly amniotic and placental-derived products, as supplies. The
commenters stated this classification is a misstep that diminishes the
products' clinical value, calling the products advanced, life-changing
biologic therapies, not simple bandages or dressings. Some stated CMS
lacks legal authority, as skin substitutes do not meet the statutory
definition of an ``incident-to supply.'' They stated the
reclassification is legally, clinically, and definitionally incorrect,
as these products are the primary intervention, not an incidental part
of a service, and interact directly with body tissues.
Response: Section 1861(s)(2)(A) of the Act defines ``medical and
other health services'' as services and supplies furnished incident to
a physician's professional service that are commonly furnished in
physicians' offices and provided either without charge or as part of a
physician's bill. As stated previously in this section, 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,
including class III medical devices requiring premarket approval, which
is the most rigorous review required of a skin substitute that is also
a medical device. ``Incident-to supplies'' refers to supplies that are
furnished as an integral part of the physician's professional services
in the course of diagnosis or treatment of an injury or illness, among
other requirements at 42 CFR 410.26(b). 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.
Comment: Many commenters supported the reclassification of non-BLA
skin substitutes as incident-to supplies. They see it as an essential,
overdue, and rational approach to realign incentives away from overuse
and toward more clinically appropriate care. They stated that this
change is expected to curb the significant fraud, waste, and abuse that
has plagued the current system.
Response: We appreciate the commenters for their feedback on our
proposal to treat and pay for all covered skin substitute products as
incident-to supplies. CMS agrees that this proposal will help to
resolve issues such as exorbitant price increases and curb fraud,
waste, and abuse.
Comment: Several major physician groups expressed concerns that
paying for these high-cost supplies within the PFS relative value
system would have a devastating impact on payments for all other
physician services. These commenters argue that due to PFS budget
neutrality, introducing billions of dollars in supply costs into the
practice expense (PE) pool would distort relativity and inevitably
trigger across-the-board reduction in RVUs for other services. Many
commenters stated that even if unit costs decrease under the new
pricing methodology, the overall magnitude of aggregate spending means
inclusion in the PFS relative value system could have long-term
consequences for payment adequacy of other unrelated services. These
groups strongly suggested CMS to create a separate payment mechanism
outside of the PFS relative value system to avoid this instability,
similar to payment for Part B drugs.
Response: We recognize the significance of reclassifying these
products as incident-to supplies under the PFS, especially considering
the dramatic increases in spending on this category of products in
recent years. However, we disagree that this change is inappropriate
since, as previously articulated, we maintain that these products are
more appropriately categorized as incident-to supplies rather than as
drugs and biologicals. We also acknowledge the longstanding concerns
many commenters have noted regarding the inclusion of disposable
supplies, especially those with high costs, as part of payment under
the PFS, especially relevant for PFS budget neutrality and relativity.
However, we do not believe it would be consistent with current
statutory authority for such concerns to drive the appropriate
classification of particular kinds of products.
We would also point out that the PFS budget neutrality, as
implemented on an annual basis consistent with the statute, adjusts
RVUs to account for changes in pricing and coding, not overall changes
in volume between years. Consequently, the assigning of codes
describing the provision of these products' PE RVUs does not have a
direct, initial impact on the calculation of other PE RVUs. Instead,
the future changes in rates for these services will be incorporated
into PFS relativity and budget neutrality once data become available.
By grouping these products for payment purposes, we expect that market
competition will likely result in lowering prices for most skin
substitutes products. For example, once data becomes available for CY
2027 and is incorporated into PFS ratesetting, overall reductions in
payment amounts for skin substitutes could have a positive result on
PFS relativity and budget neutrality for other services paid under the
PFS by CY 2028.
After careful consideration of the comments, we are finalizing our
proposal to pay separately for the provision of skin substitutes as
incident-to supplies under the PFS in the non-facility setting as
proposed.
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 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
[[Page 49493]]
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 biological products 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 most
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 uses 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 the volume-
weighted average sales price 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.\110\ However, the use of an alternative identification method
is not required by the statute, and the calculation of a payment limit
under section 1847A of the Act for these products is otherwise not
possible.
---------------------------------------------------------------------------
\110\ https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf.
---------------------------------------------------------------------------
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 prior to
marketing. The self-determined 361 HCT/Ps are also self-determined to
be 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 FDA's regulatory frameworks
used for these products, and the skyrocketing increase in Medicare
spending for such products, we proposed to pay separately for 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 policy is to limit some of the current
profiteering practices occurring in this industry. For example, as
reflected in the last several years of CMS' 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 allegedly minimally manipulated tissues. Our
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 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
proposed 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 sought comments on our proposal to
limit the 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.
We received divided comments on our proposal to codify the
definition of ``biological'' in regulation. The following is a summary
of the comments we received and our responses.
Comment: Several commenters stated that CMS' proposal to narrow the
definition of ``biological'' to only include products licensed under
section 351 of the PHS Act is a misapplication of the law and conflicts
with the Act. They contend that the Act itself provides a broader
definition in section 1861(t)(1) of the Act, which includes products
listed in the U.S. Pharmacopoeia (USP) or approved by hospital P&T
committees, a definition that many skin substitutes meet, including
section 361 products. Commenters state that if Congress had intended to
limit the term ``biological'' to section 351 products in the payment
statute (Section 1847A of the Act), it would have done so explicitly,
as it has in other parts of the law. Furthermore, they noted that the
Consolidated Appropriations Act of 2021 referred to these products as
``drugs and biologicals,'' signaling that Congress considers them as
such for payment purposes. The commenters stated that for decades CMS
has appropriately classified and paid for skin substitutes as drugs or
biologicals under section 1847A of the Act. They stated that the
proposal to abruptly reclassify them is an unexplained reversal of this
long-standing policy and is therefore ``arbitrary and capricious.''
Response: Section 1861(t)(1) of the Act states, in relevant part,
that the term ``drugs'' and the term ``biologicals'' include only
products that are included (or approved for inclusion) in the (USP),
the National Formulary, or the United States Homeopathic Pharmacopoeia,
or in New Drugs or certain products listed in the Accepted Dental
Remedies, or as are approved by the pharmacy and drug therapeutics
committee (or equivalent committee) of the medical staff of the
hospital furnishing such drugs and biologicals for use in such
hospital; subparagraph (t)(2) adds that the term ``drugs'' includes any
drugs or biologicals used in certain anticancer
[[Page 49494]]
chemotherapeutic regimens in the definition. The definition of these
terms does not include certain medical supplies. Reliance on this
provision to determine that a skin substitute is a biological payable
under section 1847A of the Act is problematic for several reasons. To
begin, we note that this provision does not require that all products
included in the listed compendia are deemed drugs and biologicals.
Instead, it states that ``drugs'' and ``biologicals'' include only such
drugs and biologicals as are included in the compendia. Second, only
one of the listed compendia in section 1861(t)(1) of the Act that is
still in publication: a combination compendium containing USP and the
National Formulary (USP-NF), which contains standards for medicines,
dosage forms, drug substances, excipients, biologics, compounded
preparations, medical devices, dietary supplements, and other
therapeutics.\111\ The compendia issued a statement in 2018 that it
would no longer develop new monographs for biologics unless there is
consensus from interested parties supporting its creation, including
the support of FDA.\112\ As a result, very few of CMS's paid
biologicals actually have product-specific monographs in that
compendium. Instead of product-specific monographs, the USP primarily
develops performance standards and general guidelines to support the
quality assessment of biologics. This is also true in the case of skin
substitutes. References to these types of products in the USP are not
product-specific monographs. Instead, these references are general
descriptions of product types. As the source and manufacture of
products with biological activity can dramatically change their safety
and efficacy, these general references are not sufficient to describe
any product with specificity. Therefore, CMS relies on the language in
section 1847A of the Act to authorize payment for products described
therein.
---------------------------------------------------------------------------
\111\ https://www.uspnf.com/purchase-usp-nf.
\112\ https://www.usp.org/news/statement-on-monographs-for-
biologics#:~:text=Rockville%2C%20MD%20%E2%80%93%20April%202%2C,About%
20UPS.
---------------------------------------------------------------------------
The Consolidated Appropriations Act, 2021, Public Law 116-260,
division CC, section 401(c), amended section 1847A(f)(A) to state that,
manufacturers of drug or biological including items, services,
supplies, and products that are payable under Medicare Part B as a drug
or biological that have not entered into a National Medicaid Drug
Rebate Agreement are required to report ASP (and WAC) data to CMS.
Under this policy, as finalized, skin substitute products (other than
those approved via BLA under section 351 of the PHS Act) will no longer
be payable as drugs or biologicals under Medicare Part B and will no
longer be required to report ASP data to CMS.
Finally, as noted previously, we outlined our HCPCS Level II coding
and payment policy objectives for skin substitutes in the CY 2023 PFS
proposed rule (87 FR 46249) and stated we believed that our existing
payment policies were unsatisfactory, unsustainable over the long term,
and rooted in historical practice established two decades ago prior to
significant evolutions in medical technology and practice. CMS also
hosted a town hall \113\ to provide an opportunity for public input,
including discussion of potential approaches to the methodology for
payment of skin substitute products, and reviewed several years of
comments in response to CY rules in 2023, 2024, and 2025 on this
subject before developing this proposal to address our stated
objectives.
---------------------------------------------------------------------------
\113\ 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).
---------------------------------------------------------------------------
Comment: Other commenters agreed with CMS' interpretation. The
commenters supported the proposal to reserve payment methodology under
section 1847A of the Act for products that have undergone the rigorous
FDA Biologics License Application (BLA) process under section 351 and
agreed that non-BLA products do not meet the statutory definition of
biologicals contemplated for payment under section 1847A of the Act,
making the ``incident-to supply'' classification a rational approach.
They believe this accurately reflects the statutory definition of a
biological and rightly rewards manufacturers who invest in the highest
level of regulatory review. Other commenters requested that CMS clarify
that skin substitute products do not fall under the discarded drug or
inflation rebate policies.
Response: We appreciate the commenters for their support. We
clarify that skin substitute products that are not regulated as drugs
or biological products under section 351 of the PHS Act and that are
paid as incident to supplies are not subject to the Medicare discarded
drug policy. At this time, skin substitutes are excluded from Part B
inflation rebates as described at Sec. 427.101(b)(5) and as finalized
in the CY 2025 PFS final rule (89 FR 98235).
Comment: A commenter warned that continuing to pay for the few BLA-
approved products under section 1847A of the Act while moving all
others to a flat rate would create a perverse incentive for those
manufacturers to continue increasing prices.
Response: As previously described, we believe that the payment
methodology described in section 1847A of the Act applies to drugs and
biological products approved under a BLA when they are provided in the
non-facility setting. Further, such licenses are issued only after
showing that the product is safe, pure, and potent and may justify a
higher payment rate. Finally, between the longer time required to bring
these products to market, potential rebate requirements, and the
changes to ASP reporting described in section XX of this final rule, we
believe opportunities for dramatic pricing increases will be
significantly curtailed. However, we will continue to monitor pricing
trends for products approved under a BLA.
Comment: A commenter requested that CMS codify in regulation that
biological products licensed by the FDA under the section 351 BLA
process are not considered skin substitutes, are not considered
incident-to supplies under the proposed rule, and will continue to be
eligible for separate payment under section 1847A of the Act
(generally, ASP+6 percent).
Response: While products licensed under section 351 of the PHS Act
may properly be used along with skin substitute application codes, they
will continue to be separately paid as biological products using the
methodology described in section 1847A of the Act.
CMS also received many comments on the growth in payments for this
class of products.
Comment: Many commenters, including ACOs, primary care providers,
and health systems, stated that they have witnessed an explosive and
unsustainable growth in skin substitute spending, which they attribute
to fraud, waste, and abuse. They report seeing products used in
clinically questionable circumstances, often by third-party mobile
wound clinics that operate without coordination with the patient's
primary care team. The commenters identified the ASP-based payment
limits as a primary driver of abuse, as it creates financial incentives
to use more expensive products, regardless of
[[Page 49495]]
clinical need. They described a system where manufacturers can launch
new, clinically undifferentiated products at inflated prices and offer
deep discounts to providers, who then profit from the spread between
their acquisition cost and the high Medicare reimbursement rate. The
commenters provided examples of significant patient harm resulting from
this misuse, including failure to treat the underlying causes of
wounds, unnecessary applications, severe infections, sepsis, and even
death. They noted a troubling pattern of skin substitutes being applied
to vulnerable and terminally ill patients, including those on hospice,
where such treatment is inappropriate.
Response: We appreciate the commenters for their input. We believe
this policy will dramatically reduce these problematic behaviors in
both the physician office and hospital outpatient settings. We also
believe this policy has the potential to prevent these harmful
practices from occurring in different settings of care, including
hospice and home health.
Comment: Several commenters referenced analyses indicating that the
vast majority of the spending is driven by a very small number of
outlier providers. Commenters referenced one analysis by Tettelbach et
al.\114\ that found that in 2023, fewer than 3 percent of providers
accounted for nearly two-thirds of all Medicare spending on these
products. The commenters suggested the problem is not broad utilization
but isolated misuse by a few bad actors. Based on the concentration of
abuse, some commenters stated that CMS should use targeted program
integrity measures, such as audits of outlier providers, NPI-level
analytics, and stricter enforcement--rather than implementing sweeping
payment cuts that penalize all providers and risk harming patient
access. Beyond targeted enforcement, commenters recommended systematic
oversight mechanisms. A commenter suggested CMS recognize site
accreditation through a self-regulatory organization (SRO) to verify
adherence to standard of care, documentation protocols, and product
handling, analogous to DMEPOS and CLIA accreditation models. The SRO
would conduct inspections, publish outcomes dashboards, and impose
sanctions. The commenters contend that slashing payment rates is not a
fraud control measure and will disproportionately harm compliant
providers and the patients who need these products.
---------------------------------------------------------------------------
\114\ Tettelbach W, Armstrong DG, Driver V, et al. Safeguarding
access, fiscal responsibility and innovation: a comprehensive
reimbursement framework for CAMPs to preserve the Medicare Trust
Fund. J Wound Care. 2025;34(10):Ahead of Print. doi:10.12968/
jowc.2025.0396.
---------------------------------------------------------------------------
Some commenters caution that increased use of skin substitutes is
not, in itself, a negative trend. They stated that the growth also
reflects expanded access to care for previously underserved populations
(like homebound patients) and increased provider awareness of the
products' efficacy in healing chronic wounds.
Response: We agree that not all increased use of skin substitutes
is improper. However, it is clear that the dramatic growth in spending
is not statutorily required and comes without a clear, consistent, and
corresponding benefit. The Agency has a responsibility to the public to
be good stewards to the Medicare Trust Fund, so CMS has implemented a
coordinated effort across several Centers, such as the Center for
Medicare, the Center for Clinical Standards and Quality, and the Center
for Program Integrity, to address this issue.
Comment: Several commenters offered feedback on skin substitute
billing as it relates to value-based care programs such as the Medicare
Shared Savings Program. These comments acknowledged support for the
proposals relating to the changes in skin substitute payment policy,
but expressed concern related to negative impacts to some ACOs who may
be disproportionately impacted by skin substitute billing compared to
the national trend. Some commenters also made recommendations for
revisions to value-based care programs that could address skin
substitute billing and similar future scenarios that may not be
captured by the Significant, Anomalous, and Highly Suspect (SAHS)
billing activity policy which was finalized in the calendar year (CY)
2025 Medicare Physician Fee Schedule (PFS).
Response: As the commenters referenced, on November 1, 2024, we
issued the CY 2025 PFS final rule (89 FR 97710), which included
policies discussed under the ``Mitigating the Impact of Significant,
Anomalous, and Highly Suspect (SAHS) Billing Activity on Shared Savings
Program Financial Calculations in Calendar Year 2024 or Subsequent
Calendar Years'' section of the final rule (89 FR 98191). These
policies give CMS the ability to determine that the billing of one or
more HCPCS or CPT codes represents significant, anomalous, and highly
suspect billing activity for a calendar year that warrants adjustment
to calculations made under 42 CFR part 425. Generally, a level of
billing for a given HCPCS or CPT code is considered SAHS billing
activity when a given HCPCS or CPT code exhibits a level of billing
that represents a significant claims increase, either in the volume or
dollars, with national or regional impact, and represents a deviation
from historical utilization trends that is unexpected and is not
clearly attributable to reasonably explained changes in policy or the
supply or demand for covered items or services. The billing level must
be significant and represent billing activity that would cause
significantly inaccurate and inequitable payments and repayment
obligations in the Shared Savings Program if not addressed (89 FR
98195).
We assessed the impact of an increase in billing to Medicare for
skin substitutes and determined that the billing activity for these
services does not represent SAHS billing activity for Performance Year
(PY) 2024. Skin Substitute billing can have varying impacts on ACOs'
performance and could either contribute to increasing or decreasing
shared savings and losses, dependent on ACO-level expenditures and
national/regional billing activity impacts.
We established the SAHS billing policy to address certain
unexplained billing anomalies that could impact program wide
calculations, to be invoked in rare and extreme cases when CMS
identifies a code that meets the high bar to be defined as SAHS billing
activity (89 FR 98196). Payments that are not excluded under the SAHS
policy are also reviewable at the ACOs' request if improper payments
are identified after the initial determination is made under the
reopening policy (42 CFR 425.315).
We will continue to monitor this area with our program integrity
partners and to explore options that could mitigate extreme deviations
in costs that are outside of the ACOs' control and not addressed
through the SAHS policy.
Comment: Some commenters acknowledged that truncation in Medicare
Shared Savings Program calculations greatly mitigates a significant
amount of outlier billing for skin substitutes. A portion of these
commenters also suggested that CMS should apply a lower stop loss
truncation threshold in the Medicare Shared Savings Program to address
skin substitutes.
Response: To minimize variation in catastrophically large claims,
the Medicare Shared Savings Program truncates an assigned beneficiary's
total annual Medicare Parts A and B FFS per capita expenditures at the
99th percentile of national Medicare Parts A and B FFS expenditures as
determined
[[Page 49496]]
for the applicable performance year for assignable beneficiaries
identified for the 12-month calendar year corresponding to the
performance year. (42 CFR 425.605(a)(3) and 425.610(a)(4)(ii)).
For all benchmark years and performance years, CMS provides ACOs
with the number of assigned beneficiaries with truncated expenditures,
the total dollar amounts truncated, and the percentage of total
annualized expenditures truncated. We also provide this truncation
information for the National Assignable FFS population. We have
examined the impact of the truncation policy on skin substitute
expenditures and found that over 50 percent of PY 2024 Part B
expenditures for skin substitutes were addressed by truncation. Skin
substitute expenditures, on average for PY 2024, represent roughly 1
percent of total Parts A and B expenditures for ACOs, and with
truncation applied, the average skin substitute expenditures equate to
less than 0.5 percent of total Parts A and B expenditures for ACOs.
This information indicates that truncation effectively mitigates large
spending associated with skin substitute billing.
Comment: Some commenters also provided feedback requesting a formal
process and direct channel for ACOs to report fraud.
Response: Medicare Shared Savings Program ACOs are encouraged to
report potential fraud or abuse by submitting a complaint to the CMS
Center for Program Integrity (CPI), Fraud Investigations Group (FIG),
Division of Provider Investigations (DPI) at [email protected].
ACOs can also report potential fraud or abuse by submitting a complaint
to the Office of Inspector General (OIG) website at https://oig.hhs.gov/fraud/report-fraud/, OIG hotline at 1-800-HHS-TIPS (1-800-
447-8477), TTY at 1-800-377-4950, by fax at 1-800-223-8164, or by
mailing to: Office of Inspector General ATTN: OIG HOTLINE OPERATIONS,
P.O. Box 23489, Washington, DC 20026. ACOs suspecting healthcare fraud,
waste, or abuse are encouraged to visit the CMS Center for Program
Integrity (CPI) website at https://www.cms.gov/medicare/medicaid-coordination/center-program-integrity for more information.
After careful consideration of public comments, we are finalizing
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 as proposed.
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
previously in this section. 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.
We proposed that only skin substitute products licensed under
section 351 of the PHS Act will be considered drugs and biologicals for
Medicare payment purposes. Furthermore, we proposed that, to reflect
relevant product characteristics, we would group skin substitutes that
are not drugs or biologicals (that is, anything that is not a section
351 product) 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 and that categorizing products based on these categories
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 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'
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.\115\ 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.
---------------------------------------------------------------------------
\115\ See Regulatory Considerations for HCT/Ps: Minimal
Manipulation and Homologous Use, July 2020 (pg. 19).
---------------------------------------------------------------------------
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.\116\ Instead, products for
such
[[Page 49497]]
intended uses generally are subject to PMA or BLA requirements.
---------------------------------------------------------------------------
\116\ 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 proposed 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 of a device
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 sought comment on our proposal to group skin substitutes
(other than those approved via BLA under section 351 of the PHS Act)
into three FDA categories, PMA, 510(k), and 361 HCT/P, to set payment
rates.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Many commenters support grouping skin substitutes based on
their FDA regulatory categories, viewing it as a clear, logical, and
transparent approach. They believe this method acknowledges the
different levels of scientific rigor and evidence required for each
pathway and can serve as a surrogate for CMS' own evidence review. This
framework would allow CMS to differentiate payment over time based on
product characteristics and clinical value, which could incentivize
competition and innovation. Some suggest a tiered payment structure
where products with more rigorous review (like PMA) receive the highest
rates, followed by 510(k) and then 361 HCT/P products. A commenter
noted that utilizing FDA's existing regulatory paths and associated
compliance activities avoids unnecessary duplication of product
assessment resources.
Response: We appreciate the commenters for their support.
Comment: Many commenters opposed using FDA pathways to determine
payment, stating that regulatory status does not correlate with
clinical effectiveness, outcomes, or resource use. Some commenters
noted that none of the skin substitute products approved via the PMA
pathway has indications for wound healing in their Instructions for Use
or FDA intended use/indications. They point out that some older PMA
devices have outdated clinical data and may not be superior to newer
361 HCT/P products or products cleared via the 510(k) pathway. Several
commenters stated that 510(k) clearance follows a less intensive
pathway than PMA but emphasized that the FDA would never permit any
device for market use unless the 510(k) submission sufficiently
demonstrates patient safety and clinical efficacy. Some commenters
noted that receiving 510(k) clearance does not imply inferior quality
to a PMA product, and that it is inappropriate to consider a PMA
product superior simply because it went through more testing. Another
commenter explained that a 510(k) device can sometimes be superior to a
PMA device for the same indication despite the less rigorous approval
process, due to technological advancements, improved materials and
design, real-world data, and improved usability and safety features.
Several commenters stated that establishing payment based on regulatory
pathways creates potential for instability over time because FDA
pathway choice is not voluntary--FDA determines which pathway is
appropriate for which product. A commenter stated that CMS already
determined that FDA approval pathways are not appropriate for Medicare
payment policy decisions in its CY 2014 OPPS Final Rule, referencing
the discussion at 78 FR 74933 regarding CMS' decision not to use the
FDA regulatory pathway to determine OPPS skin substitute payment
policy. Overall, some commenters believed this policy could entrench
outdated classifications, create perverse incentives to choose products
based on reimbursement instead of clinical evidence, and penalize
innovative products that use newer, more streamlined regulatory
pathways.
Response: We disagree. The FDA's regulatory framework in this
context provides an objective and consistent basis on which to group
these products for purposes of developing payment rates. Each
regulatory path is distinct and provides a specific level/type of
information regarding product content and activity that CMS can
leverage to inform payment rate decisions. For example, registered 361
HCT/Ps are not approved, cleared or licensed by FDA. There is no
premarket review and manufacturing controls are focused on prevention
of infectious disease transmission. These products are often dressings
generally intended only to cover and protect a wound. They are not
intended to act on the wound to mediate, facilitate, or accelerate
wound healing. Similarly, 510(k)-cleared devices \117\ relevant to this
policy
[[Page 49498]]
generally are dressings intended only to act as a physical cover to
protect a wound, to absorb exudate, and to maintain appropriate
moisture balance within the wound. As for 361 HCT/Ps relevant to this
policy, activity claims are typically limited to that of a physical
covering or wrap. They are also not intended to act on the wound to
mediate, facilitate, or accelerate wound healing. The 510(k) review
assesses equivalence to other 510(k) products and generally does not
evaluate activities that otherwise require a PMA or BLA. PMA-approved
wound care products generally are intended to go beyond a simple wound
cover to provide some type of direct treatment effect. The intended
uses of these products may include physical scaffold claims or
reference to structural matrix attributes that promote endogenous cell
binding, migration, differentiation, or proliferation. Currently, wound
care products intended to interact with the wound to facilitate,
promote, or accelerate wound healing generally require approval of a
BLA or a PMA when it meets the statutory definition of a device. As an
example, Integra[supreg] Wound Matrix is indicated for the treatment of
certain wounds. Approval of these products requires demonstration of
safety and efficacy for the intended use, which generally requires the
performance of clinical studies. A determination of pathway is
informed, in part, by a sponsor's desired indications and ability to
prove them.
---------------------------------------------------------------------------
\117\ A 510(k) is a premarket submission made to the FDA
generally by the manufacturer of a new device 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).
---------------------------------------------------------------------------
Notably, unless a product has obtained approval through a BLA, non-
homologous use marketing claims are not allowed. Such claims would
directly contradict the regulatory status of registered 361 HCT/Ps,
because of the criteria in 21 CFR 1271.10(a)(2). Similarly, 510(k)-
cleared devices relevant to this policy generally are dressings
intended only to act as a physical cover to protect a wound, to absorb
exudate, and to maintain appropriate moisture balance within the wound.
Descriptions of purported biological healing factors in these products
have not been evaluated by FDA; and there is no guarantee that these
factors are present or active and, if present, their concentration
because these products are not required to have undergone purity or
potency assessment performed by FDA. Biological products can differ
greatly based on their source material and manufacturing, and it is
therefore difficult to generalize any conclusions about their safety
and effectiveness beyond those allowed by FDA.
Finally, while we have no obligation to categorize products based
on the FDA's current regulatory framework, 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 for purposes of setting
payment rates. This methodology can ultimately improve the accuracy of
the relative value units under the PFS while also being predictable and
efficient.
Comment: Several commenters emphasized that CMS should acknowledge
post-FDA clinical investment if considering FDA pathways as a basis for
categorization. A commenter noted investing more than $7.5 million over
6+ years for two seminal RCTs, stating such investment in post-FDA
studies alone exceeds application fees of both PMA and BLA products but
is not captured in CMS' FDA pathway analysis. Commenters stated that if
an overly generalized distinction is drawn between products approved
under different pathways, CMS risks disincentivizing manufacturers from
further developing clinical evidence and continuing to innovate
improved skin substitute products.
Response: We encourage those entities that have made investments in
clinical research to work with the FDA to determine if these studies
are sufficient to support approval or clearance through the appropriate
FDA regulatory pathway and to ensure that essential manufacturing
information and controls are available to support approval of a PMA or
BLA.
Comment: Several commenters noted that regulatory pathways for skin
substitutes have evolved significantly over time, and since CMS does
not oversee FDA regulatory pathways, future changes by FDA could
inadvertently affect categorization.
Response: We understand that refinements in categorizations for
this policy could be warranted in the future and would, at a minimum,
address any potential changes through notice and comment rulemaking.
After careful consideration of the comments, we are finalizing our
proposal to group skin substitutes (other than those approved via BLA
under section 351 of the PHS Act) into three FDA categories, PMA,
510(k), and 361 HCT/Ps, for purposes of developing payment rates in
future notice and comment rulemaking, as proposed.
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 sought 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 sought 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, similar to those approved via BLA under section 351
of the PHS Act, under the PFS. We sought 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 sought 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.
We received public comments on this comment solicitation. The
following is a summary of the comments we received and our responses.
Comment: Many commenters suggested several mechanisms for CMS to
recognize and reward innovation. Several commenters recommended CMS to
leverage existing programs like New Technology Add-on Payments (NTAP)
and Transitional Pass-Through (TPT) or create a new, parallel program
to NTAP/TPT that would provide temporary add-on payments for innovative
products used in the physician office setting to ensure site neutrality
for new technologies. Also, several commenters suggested payment
adjustments could be triggered by specific designations like FDA
Breakthrough Device status or by meeting a substantial clinical
improvement standard.
Response: We appreciate the comments. We will take them into
consideration as we consider how to
[[Page 49499]]
incentivize innovation in future rulemaking.
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 could potentially 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 sought 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 received public comments on this comment solicitation. The
following is a summary of the comments we received and our responses.
Comment: Many commenters advocated establishing a single payment
rate for all non-BLA skin substitutes. They stated that a single group
creates a level playing field, encouraging product selection based on
clinical evidence and patient need rather than on which category
receives the highest reimbursement. This approach is seen as simpler
and avoids the alleged perverse incentives created by past high/low-
cost buckets.
Response: While a single rate would result in an administratively
simpler policy and likely would result in the most savings, the
differentiation of the products in this space supports subgrouping to
better ensure access to products in each group. A flat payment rate
also reduces the incentive to innovate, perform relevant studies, and
seek an FDA approval requiring proof of wound treatment or healing.
Comment: Many commenters oppose a single flat rate, characterizing
it as a ``one-size-fits-all'' approach that fails to recognize the
clinical complexity and diversity of products. They believe it would
force providers to use less effective products, stifle innovation, and
lead to worse patient outcomes, such as higher amputation rates. The
commenters state that a single rate below acquisition costs for many
products will destabilize office-based care and restrict access.
The commenters suggested various alternative categorization
schemes:
Several commenters suggested a tiered system with 2 to 3
tiers based on product technology, clinical evidence, or cost
thresholds. For example, a basic collagen matrix could be in a lower
tier, while a cellular product with strong RCT data could be in a
higher tier. Another proposal suggested tiers based on whether a
product requires one or multiple applications to achieve wound closure.
Several commenters suggested grouping products based on
their composition (for example, human tissue, animal-derived,
synthetic) rather than just their FDA pathway. Specific proposals
included creating a distinct category for amniotic/placental tissue
products or sub-categorizing 361 HCT/P products based on the number of
tissue layers (for example, single-layer vs. multi-layer) to better
reflect complexity and resource costs.
A commenter suggested greater aggregation into broader
categories like ``synthetic'' vs. ``non-synthetic'' would be
sufficient.
A commenter requested a reimbursement framework that
provides higher payment for products supported by product-specific
randomized clinical trial (RCT) data.
A commenter suggested implementing a tiered system based
on the strength of clinical evidence (for example, number of RCTs)
rather than just regulatory pathway.
Another commenter suggested using the product's FDA
cleared/approved label information (for example, product description,
including mechanism of action, and indications for use) as well as
supporting level 1 human clinical data.
Response: We agree that long-term use of a single, flat rate has
the potential to create access issues for specific types of products
and reduces the incentive to innovate. However, the options suggested
are also problematic. 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
[[Page 49500]]
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.
In addition, we have concerns about the quality of many of the
product-specific randomized clinical trial (RCT) data that are being
produced as well as whether the results can accurately be extrapolated
more broadly. As previously discussed, unless a product has obtained
approval through a BLA, non-homologous use marketing claims are not
allowed. Such claims would directly contradict the regulatory status of
registered 361 HCT/Ps, because of the criteria in 21 CFR 1271.10(a).
Similarly, 510(k)-cleared devices relevant to this policy generally are
dressings intended only to act as a physical cover to protect a wound,
to absorb exudate, and to maintain appropriate moisture balance within
the wound. Descriptions of purported biological healing factors in
these products have not been evaluated by FDA; and there is no
guarantee that these factors are present and active or, if present,
their concentrations, because these products have undergone no purity
or potency assessment. Biological products can differ greatly based on
their source and manufacturing, and it is therefore difficult to
generalize any conclusions about their safety and effectiveness beyond
those allowed by FDA. While section 1862(a)(1)(A) of the Act directs
CMS to make determinations about what is reasonable and necessary for
Medicare coverage, FDA's statutorily-defined mandate includes
determining the safety, purity, and potency of products such as these.
We have neither the resources nor the authority to replicate these
functions for payment purposes, and we believe it would be an
inefficient administration of government resources to duplicate them.
Comment: A few commenters suggested ways to further subdivide the
three FDA categories such as:
Creating subcategories for 361 HCT/P products based on
tissue composition or number of layers to better reflect resource
costs.
Creating a separate category for amniotic/placental tissue
products.
Creating separate categories for products using one or
more of FDA device product codes.
Response: We will take these comments into consideration for future
rulemaking as we implement this policy and begin to gather new cost
data.
We also sought comments on whether products that are not in sheet
form are appropriately considered skin substitutes for the purpose 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 requested 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 sought comments on whether other administration
codes could be used to appropriately describe services performed using
products with units other than cm\2\.
We received public comments on this comment solicitation. The
following is a summary of the comments we received and our responses.
Comment: Many commenters recommended CMS include non-sheet product
forms (gels, powders, liquids, injectables, 3D-printed constructs etc.)
in the definition of skin substitutes eligible for separate payment.
The commenters state these products perform similar functions to
sheets, offer additional treatment options for irregularly shaped or
tunneling wounds, and excluding them from separate payment would stifle
innovation and limit physician choice.
The commenters highlighted the following significant challenges
with billing for non-sheet products under the proposed framework:
The proposed per-cm\2\ payment does not align with
products billed by volume (mL) or weight (mg). Commenters stressed the
need for a standardized and fair unit conversion methodology (for
example, mL to cm\2\ of coverage) to ensure equitable payment and
prevent reimbursement misalignment. A commenter suggested that 1 mL of
a particular flowable product should be paid at the rate equivalent to
10 cm\2\ of a sheet product.
It is unclear if current surgical application codes (CPT
15271-15278) can be used for non-sheet products, creating a risk they
may not be payable at all. The CPT manual explicitly excludes powders
and injectables from these codes. The commenters recommended CMS either
confirm their eligibility, create alternative CPT/HCPCS G-codes for
their application, or develop a crosswalk framework pairing product
form with appropriate procedure codes.
Response: We agree that it is important to maintain access to non-
sheet products performing similar functions to sheet skin substitutes,
in cases where application of these products is part of reasonable and
necessary care. These products have the potential to be payable as skin
substitutes; but we agree that units, as expressed in a product's
coding, are difficult to standardize for payment purposes. Therefore,
we will maintain the current coding mechanism for these products and
will direct the Medicare Administrative Contractors to determine
appropriate payment, which is generally consistent with how these
products are currently paid. However, we will continue to evaluate
payments for these products to determine if an alternative payment
methodology may be better suited to non-sheet products. For now, we are
also revising HCPCS code A4100 (Non-sheet form skin substitute, fda
cleared as a device, not otherwise specified (list in addition to
primary procedure) to allow billing for non-sheet form skin substitute
products that do not yet have a more specific code.
Comment: A commenter recommended that CMS not pay separately for
non-sheet products as skin substitutes. They stated that procedures for
these products are reported with different CPT codes and including them
could introduce new opportunities for gaming the system. Another
commenter stated that for products cleared via the 510(k) pathway that
are classified as gels, liquids, or particulates, reimbursement should
follow the existing DME pathway, as these products are not skin
substitutes and should not be reimbursed under the skin substitute
payment framework.
Response: We disagree that form should be the singular determinant
of payment for these products.
Comment: Several commenters stated that CMS has never established a
formal definition of ``skin substitutes,'' leading to inconsistent
policy, and recommended the agency to develop a comprehensive,
clinically grounded definition. Several commenters advocated for
defining products based on their clinical function rather than their
initial physical form. The commenters cited the cellular, acellular,
and matrix-like products (CAMPs) initiative, which defines products by
their ability to support tissue regeneration. They stated that a
product that forms a ``sheet scaffolding for skin growth'' in situ (in
the wound bed)
[[Page 49501]]
should be considered functionally equivalent to a product pre-packaged
as a sheet. Several commenters recommended that the CPT definition and
CAMPS definition be adopted as standard references for skin substitute
classification, eliminating outdated distinctions based on initial
product form, aligning with scientific consensus, and supporting value-
based care focused on clinical outcomes and regenerative functionality.
Many commenters stated that the American Medical Association CPT
definition of skin substitute grafts explicitly includes ``biological
products that form a sheet scaffolding for skin growth,'' specifying
the operative standard as whether the product forms a sheet
scaffolding, not whether it is originally formulated as a sheet.
Response: We recognize that skin substitutes have been described
but not defined in previous rulemaking. While a formal definition would
provide certain advantages, it may also prematurely and unnecessarily
limit an evolving category of products. For example, definitions that
require products to obtain claims of treatment or healing of wounds or
scaffold claims would exclude large numbers of even sheet-form products
currently considered by CMS to be skin substitutes for payment
purposes. However, we will continue to consider whether a definition or
one or more defining characteristics should be identified in future
rulemaking.
After careful consideration of the comments, we are finalizing a
policy to consider products that are not in sheet form to be skin
substitutes for the purpose of providing separate payment as incident-
to supplies under this policy. To address the need to establish a
payment mechanism for non-sheet form products in the non-facility
setting without delay, we will maintain the current coding mechanism
for these products and will direct the Medicare Administrative
Contractors to determine appropriate payment, which is generally
consistent with how these products are currently paid.
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 establish practice expense RVUs and
initial payment rates for skin substitute products in each of the three
FDA regulatory categories finalized 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 final 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 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 sought 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 sought comments on whether these calculations, if
finalized, should be updated with the most recently available data at
the time the final rule is drafted.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported prioritizing ASP data but
raised concerns about the reliability of MUC data as a fallback option.
These commenters stated that hospital outpatient MUC is less accurate
than ASP data submitted in compliance with statute and regulation,
citing longstanding challenges with hospital charge compression where
reported charges often do not reflect actual acquisition costs. A
commenter noted that in some cases CMS did not use ASP data reported to
CMS to set Medicare payment limits and recommended the agency to rely
on reported ASP data whenever available, given that manufacturers
submit this information quarterly in accordance with statutory
requirements established by the Consolidated Appropriations Act (CAA),
2021.
Response: When ASP is available and accurately reported, we
generally agree that it may serve as a better estimate of acquisition
cost across both settings as the ASP reflects sales to physicians as
well as hospitals and is net of certain discounts. However, as
discussed in section III.A.2 of this final rule, we have had concerns
about the accuracy of some reported ASP data; specifically, that
manufacturers could be classifying certain costs as bona fide service
fees (BFSFs) when they should instead be classified as price
concessions, which could artificially inflate ASP. Therefore, we cannot
expect that all manufacturers of skin substitute products will continue
to report ASP data to CMS each quarter. We disagree with the statement
that the outpatient hospital MUC is an inaccurate measure of actual
acquisition costs. CMS uses cost-to-charge ratios specifically to
account for variations in hospital markup, and our use of MUC in this
case is consistent with how we price other products in hospital
outpatient departments. MUC is a useful alternative based on actual
claims data when the ASP is not available. Generally, with limited
exceptions, when ASP data was available for a product, it was used to
calculate a Medicare Part B payment limit and published on the ASP drug
pricing files. An exception is for synthetic skin substitutes, which
are contractor priced. However, for the purposes of this policy,
payment rates were determined using pricing for the 361 HCT/P products
only.
Comment: A few commenters expressed concern that using ASP without
markup removes appropriate overhead and handling costs. The commenters
noted that drugs and
[[Page 49502]]
biologicals payable under Medicare Part B are statutorily paid at
ASP+6%, and using ASP alone eliminates legitimate indirect costs from
both OPPS and MPFS systems.
Response: We appreciate these comments and note that overhead costs
related to application of these products are included in the facility
fees or PE RVUs for the application procedures. A recent Office of the
Inspector General report \118\ found that, in the third quarter of
2024, a typical beneficiary received 82 units of skin substitutes,
meaning that the typical $74 add-on amount per unit alone was worth
over $6,000 per patient. Notably, hospitals have been managing these
products without separate markup for years through bundled payments.
---------------------------------------------------------------------------
\118\ Office of Inspector General, U.S. Department of Health and
Human Services. Medicare Part B Payment Trends for Skin Substitutes
Raise Major Concerns About Fraud, Waste, and Abuse. September 10,
2025.
---------------------------------------------------------------------------
Comment: A commenter recommended using the arithmetic mean unit
cost (AMUC) for products without an ASP, rather than the MUC, which is
geometric mean unit cost, to better align with the ASP calculation
methodology. Conversely, another commenter recommended using a volume-
weighted geometric mean for the overall calculation because it is less
influenced by extreme outliers.
Response: We appreciate the commenters for the additional
information and may consider these alternatives in future rulemaking.
Comment: A few commenters supported using Q4 2024 ASP data as the
foundation for CY 2026 rate calculations.
Response: We appreciate the commenters for their support.
Comment: Several commenters criticized the use of Q4 2024 ASP data.
Some suggested using data from before the recent price explosion (for
example, CY 2019, 2022, 2023, or Q4 2023) to establish a more
reasonable baseline free from market distortions. Other commenters
stated that more current data (for example, Q3 2025) should be used to
reflect real-time market conditions reasoning that using older data
could introduce a systemic underpayment.
Response: We agree that much earlier datasets (for example, CY 2019
PFS) do not reflect a significant portion of the recent growth in
products and payments for this class of products. However, these
datasets also do not reflect many new products that may represent
quality additions to the market. To avoid this issue, we instead
calculated initial rates using hospital outpatient utilization to
weight how much each product's price contributes to the proposed
payment rates for skin substitutes. In this setting, skin substitutes
are currently paid in two groups (high- and low-cost) to incentivize
cost-effective product selection. No similar incentive currently exists
in the non-facility setting for physicians and other suppliers billing
under the PFS. That is why we consider hospital outpatient utilization
a better source to weight the average among the products. We used the
fourth quarter of 2024 because it was the most recent, substantially
complete quarter of data and the most complete ASP reporting is
typically in the fourth quarter of each year. Finally, use of a later
quarter's file would not have allowed us to match up time periods for
utilization patterns, and interested parties were given an opportunity
to review and comment on that proposed rate.
After careful consideration of the comments, we are finalizing 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 as proposed.
As we proposed 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 previously in this section has resulted in a
decoupling of actual resource costs from the ASP. To address this, as a
short-term measure, we proposed to weight the product-specific
utilization in calculating the 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 policies for non-facility
settings because, similar to our final policy, 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 policies are intended
to mitigate the 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 have been
skewed by aggressive and/or improper billing practices that would be
less likely to exist under our policies. For these reasons, we proposed
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, registered 361 HCT/Ps,
or approved under a PMA. We sought comments on the use of the hospital
outpatient product utilization patterns to set payment rates for these
products under the PFS.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Several commenters, including MedPAC, strongly support
using only OPPS utilization data to set the initial rate. They agree
with CMS that utilization data from the physician office setting (PFS)
has been distorted by the profiteering practices of certain skin
substitute product manufacturers. They believe OPPS data is a better
predictor of use patterns under a grouped payment approach because
hospitals are already incentivized to choose lower-cost products within
the existing high/low-cost categories.
Response: We appreciate the commenters for their support.
Comment: A majority of commenters strongly opposed the exclusion of
physician office data, stating that this methodology is flawed, biased,
and not representative of real-world practice. The commenters make
several key points:
The vast majority of skin substitute utilization (nearly
90 percent in Q4 2024) occurs in the physician office setting, so
excluding data from the predominant site of service is unreasonable.
OPPS data is itself skewed. The current bundled payment
system in hospitals disincentivizes the treatment of larger wounds in
the hospital setting
[[Page 49503]]
and the use of more advanced, higher-cost products, artificially
driving down the average cost in that setting.
Hospitals can negotiate lower prices through GPOs, which
are unavailable to smaller physician offices. Basing a national rate on
hospital acquisition costs will create a payment rate that is
unsustainable for non-facility providers.
Using data from only one setting to create a site-neutral
rate for all settings is methodologically unsound and works against the
stated goal of a consistent payment approach.
The prevailing recommendation from those opposed to the OPPS-only
method is to use a blended approach that incorporates utilization data
from both the physician office and hospital outpatient settings. To
address CMS' concerns about distorted office data, they suggest using
safeguards like trimming outliers or using data from a time period
before the recent spending explosion (for example, 2019 or 2022).
Response: Although skin substitute products are more commonly used
in the physician office setting, as we stated in the CY 2026 PFS
proposed rule (90 FR 32593), we believe that separate payment for these
products in the non-facility setting has led to problematic practices
that are mitigated by the current OPPS policy of paying for skin
substitute products in either high-cost or low-cost groupings. We
believe OPPS utilization data better reflects the utilization
associated with grouping these products into categories for purposes of
payment. As we stated in the CY 2026 PFS proposed rule, 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. Once updated use patterns reflecting
this policy are available to calculate rates, we proposed to use 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.
Comment: A few commenters recommended using guardrails to ensure
the methodology does not inadvertently embed misaligned historical
incentives. These commenters believe CMS has several options to
mitigate fraudulent and abusive practices, including trimming for
outliers that may signal falsely high utilization, using data only from
claims that meet established criteria for completeness and accurate
coding, and capping counted square centimeters at 120 to150 percent of
the CPT-implied wound size.
Response: Because we are using OPPS utilization patterns and the
OPPS does not currently stratify payment for each individual product,
and, by doing so, promote more efficient care, we believe many of these
problematic claims will be mitigated. However, as this policy unbundles
skin substitutes from their application codes and pays for them
separately, we are concerned about the potential for overuse and waste.
We invite additional thoughts about how best to mitigate these issues
while products are separately paid and note that we will be monitoring
usage as compared to CPT coding moving forward.
Comment: A commenter questioned why all outpatient facility volumes
were not used for this policy, including critical access hospitals and
other providers, noting that coding for products would be on those
claims as well.
Response: We appreciate the comment. We developed the proposed rate
using hospital outpatient data based on PPS data since, as we stated
previously in this section, we believe the structure of payment under
the OPPS with payment for these products grouped into two categories
best reflects use not potentially influenced by the previous system.
Using OPPS data only allows for a consistent data set that reflects the
majority of Medicare hospital outpatient services, across a wide
variety of geographies and areas of the country.
After careful consideration of the comments, we are finalizing our
proposal on the use of the hospital outpatient product utilization
patterns to set payment rates for these products under the PFS as
proposed.
We also proposed for CY 2026 to establish the same initial rate for
each group of skin substitutes, including 510(k)-cleared devices,
registered 361 HCT/Ps, and PMA-approved devices. 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)-cleared devices, 361
HCT/Ps, and PMA-approved devices 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 sought
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 can be
stabilized. We sought 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 did not propose 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 final rule), we instead proposed 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 final
[[Page 49504]]
rule available on the CMS website under downloads for the CY 2026 PFS
final 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 proposed
an MP RVU of 0.01 for these supplies consistent with the rounding
convention. We also sought 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 final 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-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 final rule. We sought comments on these proposed
initial values.
We determined these values using product pricing and volume for
skin substitutes from paid claims with dates of service in the fourth
quarter of 2024 because it was 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 sought comments on our proposed process to calculate
initial payment rates as well as these alternatives.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Many commenters stated that the proposed payment rate of
approximately $125 per square centimeter is far too low and
unsustainable. The commenters state this rate is well below the actual
acquisition and operational costs for most providers, especially
smaller practices and mobile units without hospital purchasing power.
If implemented, they warn it will make offering these therapies
financially impossible, forcing practices to close and severely
restrict patient access to care, particularly for homebound, rural, and
underserved populations. This could lead to worse outcomes, including
more amputations, infections, and hospitalizations, ultimately
increasing overall Medicare costs.
Instead, many commenters proposed higher rates. A frequently cited
alternative, based on independent analyses, was a payment range of
approximately $478 to $704/cm\2\. The commenters stated that this range
would still generate over $100 billion in Medicare savings over a
decade while preserving patient access and innovation. Other
suggestions fell within a similar range, such as $500/cm\2\, $500 to
$640/cm\2\, or up to $973/cm\2\. Another commenter suggested that CMS
calculate the payment rate for skin substitute products using a trimmed
mean approach, excluding the top and bottom 10 percent of reported
prices of 130 skin substitute products, to eliminate outliers and
better reflect fair value. They suggested that the resulting average
price of $865/cm\2\ would reflect a fair market average and suggested
CMS set a higher allowed amount of approximately $1,080/cm\2\ to ensure
providers can sustain services under Medicare's 80 percent payment
structure. A few commenters also suggested that the 20 percent
copayments should be waived for treatment with skin substitute
products. Several commenters supported reimbursement methodology
outlined in Senate Bill 2561 (Skin Substitute Access and Payment Reform
Act of 2025), which would establish rates based on Q4 2023 ASP data
volume-weighted according to actual utilization in both the
professional and hospital outpatient settings. The commenters stated
that the methodology prescribed in the legislation would result in a
payment range of approximately $500 to 700/cm\2\. Some commenters
proposed tiered pricing structures for HCT/P 361 products based on
configuration, with recommendations ranging from $400 to $500/cm\2\ for
single-layer amniotic products to $800 to $900/cm\2\ for full-thickness
grafts. Other commenters recommended tiered frameworks incentivizing
manufacturers to pursue rigorous FDA pathways with reimbursement
increases of 25 to 100 percent over base pricing of $400 to $900/cm\2\.
Several commenters cited crosswalks to similar products as valid data
points. Commenters noted that CPT codes for placing amniotic membrane
on ocular surfaces (65778 and 65779) use amniotic membrane allograft
supplies paid at $835 and $1,149 in CY 2025. Since typical amniotic
tissue grafts placed in eyes are 14mm diameter discs with surface area
of approximately 1.5 cm\2\, commenters calculated these rates equal
$557 to $776 per square centimeter, stating it would be arbitrary and
capricious for CMS to price amniotic tissue grafts for eyes at
significantly higher rates than same tissues used for chronic wounds.
Some suggest using the higher rate CMS calculated for one of the other
FDA categories ($259.47/cm\2\) as a more reasonable starting point.
Response: We appreciate the many detailed comments we received on
this issue, but we do not agree that higher payment rates are warranted
at this time for several reasons. First, most of these payment rates
use non-facility utilization patterns that have been significantly
distorted in recent years by problematic practices. Incorporating this
data into the payment rate would embed these practices into the policy.
These practices have largely been mitigated in the OPPS utilization
patterns, which is why they were used to develop an initial rate for
this policy. Second,
[[Page 49505]]
manufacturers have demonstrated the ability to offer products well
below current ASP levels, which indicates that current prices have
considerable room for compression without risking product availability
or access. Third, there are a significant number of products with
current ASPs below this policy's payment rate already. Finally, many of
the more expensive products on the market fall into our 361 HCT/P and
510(k) product categories, but their function is typically limited to
that of a physical covering or wrap. These products are not intended to
act on the wound to mediate, facilitate, or accelerate wound healing
and the justification for these rates is unclear. However, we do not
agree that a product used to cover the cornea and prevent scarring and
others used to prevent infection should necessarily be priced at the
same rate. Once updated use patterns reflecting this policy are
available to calculate rates, we will use 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, and we will continue to
monitor this product class and propose additional adjustments to the
policy as necessary in future rulemaking.
Comment: Many commenters expressed concern that a low, uniform
payment rate would stifle innovation. They stated that it would
discourage investment in research and development for next-generation
products, as manufacturers would be unable to recoup the significant
costs associated with bringing novel therapies to the market. They
stated that this could penalize innovative therapies, favor older and
lower-cost alternatives, and ultimately limit patient access to more
effective technologies. In contrast, some commenters believe the
proposed changes will rightly shift the focus to value-based
innovation. They stated that true innovation lies in making highly
efficacious products at a reasonable price, not just launching
increasingly expensive ones. They contend that manufacturers should be
required to show robust clinical evidence to justify payment, and the
current proposal encourages this shift.
Response: We agree that our policy should incentivize innovation in
this class of products. As previously noted, in future notice and
comment rulemaking, we intend to use claims data to set separate
payment rates for products in the three categories, which would likely
result in payment valuations that diverge based on the updated data. As
the PMA category is by far the smallest, we would anticipate less
competition and potentially higher payment rates for those products. In
addition, products marketed under the BLA pathway would continue to
receive separate payment under the ASP methodology described in section
1847A of the Act. We also welcome continued dialogue on ways to
differentiate a truly innovative product from another that offers no
true clinical advance as well as 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.
Comment: A smaller group of commenters supported the proposed rate,
and some even advocated for a lower one. Some commenters cited
published cost-effectiveness analyses. A commenter noted a study
concluding that interventions using skin substitutes with payment
limits below $140 per square centimeter were dominant (less costly,
better outcomes) compared to typical care; and, based on cost-
effectiveness threshold of $100,000 per quality-adjusted life year,
interventions were cost-effective with payment limits up to $430 per
square centimeter. A commenter stated that a rate of $125/cm\2\ seems
``more than reasonable'' given that manufacturing costs for some
products are much lower. Several ACOs and provider groups recommended
that CMS use a ``pooled'' average across all product categories, which
would result in an even lower rate of ~$65/cm\2\, to more accurately
reflect resource costs and further curb overspending. Another commenter
recommended a rate of $75/cm\2\.
Response: We appreciate the commenters for their feedback. We
disagree that further reduction of the initial payment rate is prudent
before updated claims data reflecting the results of this policy can be
gathered and evaluated.
Comment: There was a split on whether to use a single rate for all
products. Many commenters supported finalizing a single, standardized
payment rate for all non-BLA products. They stated this creates a level
playing field, where clinical choice is driven by evidence and patient
need, not by which category has the highest reimbursement. This
approach is seen as simpler and less likely to repeat the high-cost/
low-cost bucket system of the past. Some commenters requested that
after setting an initial rate for 2026, CMS should maintain that single
rate for two additional rulemaking cycles before recommending any
changes, allowing time to carefully evaluate claims data. Some comments
requested moving to tiered payment rates in CY 2027 after setting an
initial flat payment rate for CY 2026. Other commenters suggested for
immediate implementation of a tiered or differentiated payment system
in 2026, rather than waiting until 2027. They believe this better
reflects product complexity and clinical evidence and avoids treating
all products as if they are the same.
Response: While a single rate would result in an administratively
simpler policy and likely would result in the most savings, the
differentiation of the products in this space suggest for subgrouping
to better ensure access to products in each group. A flat payment rate
may also reduce the incentive to innovate, perform relevant studies,
and seek an FDA approval requiring proof of wound treatment or healing.
While we do intend to use claims data to set separate payment rates for
products in the three categories in future notice and comment
rulemaking, we are concerned that use of the novel pricing practices
noted previously in this section has resulted in a decoupling of actual
resource costs from the ASP. To address this, as a short-term measure,
we proposed to weight the product-specific utilization in calculating
the 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
will propose rates for these three categories through notice and
comment rulemaking once updated use patterns reflect this policy.
Comment: To avoid sudden market disruption and access issues, some
commenters recommended phasing in the payment reduction over several
years (for example, 3 years). This would blend the old ASP+6% payment
with the new flat rate over time, giving providers and manufacturers a
chance to adapt.
Response: We do not agree that a phased-in approach is necessary.
The nearly 40-fold increase in spending on these products has been
concentrated in just the past several years. To allow these damaging
practices to continue, even in part, for years longer may only serve to
unnecessarily delay efficient purchasing, appropriate utilization, and
product selection based on clinical need.
Comment: Several commenters opposed applying geographic adjustments
to skin substitute product payments, stating that product costs do not
vary by location as manufacturer pricing remains consistent regardless
of clinical site or geography. Several
[[Page 49506]]
commenters stated that geographic adjustments would create access
disparities, particularly harming rural and underserved communities
where patients may have greater needs but providers face lower
reimbursement rates. Commenters recommended that CMS exclude skin
substitutes from geographic RVU adjustments, noting that while
professional service costs may vary by location, product costs do not.
Response: Section 1848(e) of the Act requires that the PFS include
geographic adjustment factors and account for geographic variations in
the costs of furnishing services. As discussed in section II.N of this
final rule, the PE GPCIs are designed to measure the relative cost
difference in the mix of goods and services comprising PEs among the
PFS localities as compared to the national average of these costs. We
recognize that the variations in relative resource costs based on
geography are not necessarily proportionately the same across all kinds
of PFS services. We appreciate the information provided by the
commenters as these dynamics apply specifically for these products and
may consider adjustments for future rulemaking.
Comment: Some commenters suggested that CMS' alternative approach
of establishing payment for skin substitute products as an add-on code
to current CPT application codes could have the added benefit of
eliminating the bifurcated HCPCS coding system for skin substitute
products (that is, Q-codes vs. A-codes, two different types of
Healthcare Common Procedure Coding System (HCPCS) codes used for
billing and administrative purposes), which has created significant
administrative burdens and confusion for physicians and MACs, and
streamlining administrative requirements when physicians utilize and
submit claims for skin substitute products. MedPAC supported paying for
skin substitute products as an add-on service rather than as a
standalone service, noting that paying for these products as a
standalone service would require CMS to assign 0.01 MP RVUs to the
payment for each unit of the skin substitute the clinician applies.
MedPAC stated that while 0.01 is a small amount per unit, these
products are often billed in multiple units, which could result in too
many malpractice RVUs being allocated to these products. As an add-on
code, the service would have its own PE RVUs but would be assigned 0 MP
RVUs. Some commenters stated that CMS inappropriately assigned a MP RVU
of 0.01 to each of the 235 supply codes and strongly rejected this
proposal, recommending that CMS convert the global period for the
supply codes to reflect a ZZZ add-on code and eliminate the MP RVUs
entirely, stating it is unfair to dilute the distribution of MP RVUs
away from physicians to supply codes.
Response: We appreciate all of the information provided by
commenters as to whether skin substitute codes should be considered
add-on codes and therefore would not have any MP RVUs assigned. We
agree that the resource costs associated with malpractice insurance
would be reflected in the MP RVUs associated with the application code,
and so we are finalizing conversion of all skin substitute products
codes to add-on codes. The RVUs and indicator statuses can be found in
Addendum B in the Download files for this final rule under CY 2026 PFS
Final Rule Addenda at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
Comment: Several commenters raised concerns about maintaining
payment consistency between PFS and OPPS. Commenters noted that OPPS
receives annual market basket adjustments while PFS does not,
questioning how CMS would prevent the rates from diverging over time
and creating site-of-service incentives.
Response: We appreciate the commenters bringing these concerns to
our attention, and while we remind readers that variations in the
annual update mechanisms for Medicare payment systems are generally
determined by statute, we may consider the interaction between the
update factors and the development of future proposed rates for these
products for future rulemaking.
Comment: Several commenters highlighted minor discrepancies in the
RVUs displayed in the proposed rule addendum and the dollar amounts
described in the proposed methodology. For example, the proposed rule
addendum shows 3.71 RVUs (or $124.61) per square centimeter for QPs and
$123.99 for non-QPs, both below the proposed $125.38 as described in
the rule. The commenters questioned which conversion factor CMS
intended to use, noting that many practitioners do not qualify as QPs.
Response: We appreciate the commenters for this feedback. We agree
that many practitioners would not qualify as QPs, therefore we would
generally view the non-QP conversion factor as the default conversion
factor. Additionally, we acknowledge the minor arithmetic discrepancies
between the dollar amounts described in this final rule and the RVUs in
the addendum. These slight discrepancies, smaller than 1 percent of the
overall rate, were the result of uneven incorporation of refined data
in the development of the addendum files. The proposed rates included
several data points and reflected an approximate rate. We appreciate
the commenters pointing these out, and we will ensure the addendum are
appropriately updated.
Comment: Several commenters raised concerns about transparency in
CMS' rate calculation. The commenters stated that the information
provided was insufficient to understand or recreate CMS' calculations.
Some commenters were unable to replicate the $125.38 rate, while others
replicated it within 1 percent. A commenter noted that a supplemental
document posted August 11, 2025, created additional confusion by
describing steps the proposed rule indicated were not performed and
contradicting information in the rule itself. The commenters stated CMS
did not publish comparison files showing ASP versus MUC values for each
product, which are important for evaluating the proposal. Many
commenters recommended CMS provide complete methodology details to
enable meaningful comment, with some stating that the lack of
transparency violates APA requirements for well-reasoned analysis.
Response: We disagree with the commenters' statement that CMS was
unclear in the description of the methodology used to calculate the
proposed initial payment rate of $125.38/cm\2\. We provided a
substantial amount of detail on our calculations in the proposed rule,
including the HCPCS codes that were pulled and the data sources to
provide even more detail. We released a supplemental document,
``Additional Description of Calculation of Proposed Payment Rates for
Skin Substitutes'' on the CMS website at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1832-p,
which further explains the methodology used to calculate the payment
rates for skin substitute products. Several commenters were able to
replicate our methodology and stated that they were able to approximate
the proposed payment rate based on the information provided.
Comment: Commenters identified several products that CMS had
incorrectly categorized in its published lists, suggesting the agency
correct these errors before finalizing any rate-setting based on the
categories. Commenters
[[Page 49507]]
noted that HCPCS codes Q4107, Q4108, Q4116, Q4122, Q4142, Q4146, Q4147,
Q4159, Q4198, Q4201, Q4225, Q4226, Q4232, Q4238, Q4276, Q4282, and
Q4297 were misclassified into the wrong FDA categories. The commenters
stated these errors lead to inaccurate payment rates for all products
in affected categories and suggested CMS correct all assignments before
finalizing the rule.
Response: We appreciate the comments. We reviewed the information
provided and acknowledge there were some discrepancies in the grouping
of some HCPCS codes for particular products in the proposed rule. We
conducted additional analyses shifting those FDA categorizations,
including those suggested by commenters, some of which caused
volatility resulting in significant reductions compared to the proposed
rule rates.
After careful consideration of the comments, for CY 2026 we are
finalizing rates consistent with the groupings illustrated in the
proposed rule in the interest of transparency and consistency.
Prospectively, however, we will designate these HCPCS to the groupings
suggested by commenters. We are finalizing our proposal to use the 361
HCT/P volume-weighted average payment amount, based on the grouping of
HCPCS codes in the proposed rule, to set the initial payment rates for
products in all three categories and calculate the initial payment
rates as proposed. We also note, that consistent with the proposed
rule, we maintained use of hospital claims volume from services
incurred during the fourth quarter 2024. We used an updated version of
the hospital claims volume as this is the most recent data available as
of the time of drafting this final rule. We also used fourth quarter
2024 ASP data and 2026 MUC data (based on 2024 claims data), when ASP
data was not available, as proposed. Given the volatility around skin
substitute products due in part to gaming and the proliferation of
coding already discussed in this final rule, even small changes to the
methodologies, such as using a different quarter of ASP data or
updating the regulatory categories of only 17 of over 200 skin
substitute products, can result in significant changes to the payment
rate. Accordingly, we believe maintaining the same framework for
setting the payment rate that was used for the proposed rule, including
the FDA regulatory categorizations and the same time periods for
pricing, is consistent with the proposed rate on which the public had
an opportunity to comment on compared to the volatility that could
occur using different definitions. Prospectively, one of our policy
goals is to promote greater stability in the payment for skin
substitute products. Therefore, consistent with the framework for the
methodology proposed in the CY 2026 PFS proposed rule, we are
finalizing a final payment rate for CY 2026 of $127.28/cm\2\.
The full list of codes with the payment groupings used in
developing the proposed and final rate calculations are available on
the CMS website. Likewise, the full list of codes and their payment
groupings prospectively are available on the CMS website and in
Addendum B.
After careful consideration of the comments, we are finalizing 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 and
calculate the initial payment rates as proposed with the exception of
updates to several code classifications and updated with the most
recent data available as of the time of drafting this final rule, which
resulted in a final payment rate for CY 2026 of $127.19/cm\2\.
Specifically, we used 2026 MUC data (based on 2024 claims data) for the
fourth quarter 2024 ASP data, weight by hospital outpatient claims
volume.
We proposed 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 final 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 proposed that new HCPCS codes describing skin substitutes would
be categorized based on whether they are PMA-approved, 510(k)-cleared,
or registered 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 proposed 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
[[Page 49508]]
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) HCPCS codes Q4431 (Unlisted PMA skin
substitute product), Q4432 (Unlisted 510(k) skin substitute product),
and Q4433 (Unlisted 361 HCT/P skin substitute product) would be used
and the CMS MACs would assign the appropriate payment based on the
product's FDA regulatory category.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: Many commenters supported CMS' proposal to maintain the
current structure of HCPCS codes for skin substitutes. Several
commenters recommended that CMS eliminate the bifurcated coding system
where some products have ``Q'' codes and others have ``A'' codes. They
recommended CMS to reassign all skin substitute products to ``Q'' codes
to reduce administrative burden and confusion for providers and MACs.
Response: We appreciate the feedback. We will take comments about
the coding differences between the products into consideration for
future rulemaking.
Comment: Several commenters opposed CMS' proposal to shift the
HCPCS Level II coding application review for 361 HCT/P products from a
quarterly to a biannual cycle. Commenters stated that maintaining the
quarterly cycle is essential for timely patient access to new
therapies, supporting innovation, and aligning with the faster review
cadence used for drugs and biologics. Commenters stated a biannual
cycle would create lengthy delays (18 months or more) for new products
to get a code and be reimbursed, creating a barrier to market entry.
Commenters stated that all skin substitutes, regardless of regulatory
status, should have the same quarterly review process to maintain a
level playing field.
Response: We disagree. We post our coding decisions for all non-
drugs and non-biologicals on a biannual basis. While we have been
reviewing skin substitutes marketed as 361 HCT/Ps in the quarterly
drugs and biologicals coding cycle, under this policy, unless a skin
substitute is approved as a drug or as a biological product under
section 351 of the PHS Act, we would consider it an incident-to supply
for payment and coding purposes under the PFS. Beginning January 1,
2026, we will 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 will continue to be evaluated in the
biannual HCPCS Level II coding cycles.
After careful consideration of the comments, we are finalizing our
proposal to evaluate all complete HCPCS Level II applications for skin
substitutes in our biannual cycles as proposed. 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 previously in this section, 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 proposed 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 sought
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 proposed
using the MUC data. If MUC is not available, we proposed to use the
product's WAC or 89.6 percent of AWP if WAC is also unavailable,
similar to other products for which ASP is used to calculate a payment
rate.\119\ Once updated use patterns reflecting this policy are
available to calculate rates, we proposed 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 sought
comments on our proposed methodology to set and update the payment
rates for skin substitutes as well as the rates themselves.
---------------------------------------------------------------------------
\119\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: The most common recommendation was that CMS should update
the payment rates annually using an inflation index, such as the
Consumer Price Index for Urban Consumers (CPI-U) or the Producer Price
Index (PPI), rather than recalculating them based on new ASP data. The
commenters stated that an inflationary update would provide stability
and predictability for providers and manufacturers, avoiding the
significant rate variability that would occur with annual ASP
recalculations, and reduce the regulatory burden on both manufacturers
and CMS. Also, since the proposal would no longer require manufacturers
to report ASP data for these products, commenters stated there would be
very little reliable data to use for future updates. They stated that
relying on ASP would perpetuate the same system that has been
susceptible to gaming and abuse.
Several commenters recommended CMS to abandon any reliance on ASP
data for setting future payment rates. They stated that the ASP system
itself is flawed and has led to the pricing distortions and
``profiteering'' that CMS is trying to correct. Because the data is
distorted, using it to set future rates--even if based on claims--will
perpetuate the problem. In contrast, a commenter encouraged CMS to
continue collecting ASP data for transparency and to support future
reimbursement refinements, even if it is not the primary basis for
payment.
Response: We appreciate the commenters for their input. We believe
that, over time, the ASP data will more accurately reflect the market
impacts of our policy to treat skin substitute products as incident-to
supplies. By relying on ASP, payment updates will be responsive to
changes in the actual cost of skin substitute products as a result of
market pressures, whereas an index like the CPI-U is a general
inflation measure that does not account for pricing dynamics.
Therefore, we believe that updating the payment rates based on ASP data
will more likely result in payment rates that reflect the changing
dynamics of the market rather than anchoring the cost to the initial
payment rate for CY 2026 based on data
[[Page 49509]]
collected prior to the implementation of this policy.
Comment: Several commenters expressed concern that using a single,
scheduled quarter of ASP data for updates would encourage gaming.
MedPAC recommended that if ASP data is used, it should be from a longer
timeframe, such as 4 calendar quarters, to avoid manipulation.
Response: We agree that, moving forward, using a longer timeframe
for collection of ASP data would reduce the opportunity for
manipulation. While we may be unable to use a longer timeframe if we
propose updated rates for 2027, we will look to additional quarters of
data to set rates in future years.
Comment: Several commenters stated the proposal may violate the
Administrative Procedure Act (5 U.S.C. 706(2)(A)), which requires well-
reasoned analysis for major policy changes. A commenter stated the
drastic reimbursement reduction constitutes a de facto adverse National
Coverage Determination without following statutory NCD requirements:
public notice, consultation with advisory committees, evidence
consideration, and clear basis statements (42 U.S.C. 1395y(l)(3)-(4)).
Response: This rule finalizes a proposed change of payment policy.
It neither constitutes nor is akin to a national coverage determination
as it does not make any coverage determinations but merely makes a
change to the amount of payment made for certain covered skin
substitutes. Section 1869(f)(1)(B) (i.e., 42 U.S.C. 1395ff(f)(1)(B))
defines the term ``national coverage determination'' as ``a
determination by the Secretary for whether or not a particular item or
service is covered nationally under this subchapter, but does not
include a determination of what code, if any, is assigned to a
particular item or service covered under this subchapter or a
determination with respect to the amount of payment made for a
particular item or service so covered.'' The provision the commenters
cite, 42 U.S.C. 1395y (section 1862 of the Act) expressly incorporates
this definition of the term. See 42 U.S.C. 1395y(a)(25) (section
1862(a)(25) of the Act). Because this is not a ``national coverage
determination,'' the requirements set forth in 42 U.S.C. 1395y(l)(3)-
(4) do not apply on their own terms.
Moreover, we believe our proposal satisfies the requirements of the
Administrative Procedure Act and it is not arbitrary and capricious
because we have, for example:
Explicitly considered and responded to a dramatic increase
in Medicare spending for this class of products,
Provided a reasoned explanation for our classification of
non-section 351 products as incident-to supplies rather than
biologicals separately payable under section 1847A of the Act,
Articulated our rationale for using OPPS utilization data
and excluding non-facility utilization because of the profit-maximizing
incentives distorting the latter,
Explained the methodology for calculating the final
payment rate with sufficient detail to allow verification by the
public,
Offered and analyzed several alternatives and explained
why our final approach better serves statutory objectives,
Acknowledged potential access concerns while reasonably
concluding that a sufficient number of manufacturers have demonstrated
the ability to provide these products at or below the final payment
rate and assuring that we will monitor and adjust the policy in future
rulemaking as necessary, and, finally,
Described and responded to the comments CMS received in
response to the proposed rule.
Several comments, including those related to coverage and the skin
substitute LCDs and requests to change how the FDA regulates products
CMS considers skin substitutes for payment purposes, were out of scope
for purposes of this rulemaking.
5. Summary
To implement this policy, we are finalizing, starting January 1,
2026, to separately pay for covered skin substitute products as
incident-to supplies in both the non-facility and hospital outpatient
settings. We are finalizing our policy to create three groups to pay
for covered sheet 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. If a skin substitute is licensed
under section 351 of the PHS Act, as described earlier in this section,
the payment methodology under section 1847A would continue to apply. We
are finalizing our policy to calculate initial payment rates for
covered 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 are finalizing to use the
hospital outpatient utilization patterns to set the payment rates for
all three categories of skin substitutes, which we are finalizing to
pay at a single rate for CY 2026. For CY 2026, the PE and MP RVUs would
result in an initial payment rate of approximately $127.28/cm\2\ (prior
to the application of the geographic adjustments) for PMA approvals,
510(k)s, and registered 361 HCT/Ps. This rate reflects updates to
several code classifications and uses the most recent data available as
of the time of drafting the proposed rule. We will accomplish this by
maintaining the current HCPCS codes for skin substitutes and then
applying this rate to each code. We are finalizing a policy to consider
products that are not in sheet form to be skin substitutes for purposes
of providing separate payment as incident-to supplies under this policy
and to price these products by the MACs. We are finalizing to update
the rates for the skin substitute categories annually through
rulemaking using one or more recently available calendar quarter(s) of
ASP data, when available. In the event ASP data is not available for a
particular product, we are finalizing to use the hospital outpatient
MUC data. If MUC is not available, we will use the product's WAC or
89.6 percent of AWP if WAC is also unavailable. We are finalizing to
include all covered 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. Additionally, we are finalizing the
conversion of all skin substitute products codes to add-on codes with
an indicator of ZZZ. We are finalizing our policy to evaluate all
complete HCPCS Level II applications for skin substitutes in our
biannual cycles. Finally, we are finalizing our proposal 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
[[Page 49510]]
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 (79 FR 67548) 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 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 the 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 is
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 PFS proposed rule (89 FR
61596) on how best to determine the appropriate shares used to split
total global surgical package valuations into discrete portions for the
purpose 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 received feedback 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
[[Page 49511]]
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 that 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 again solicited public comments on strategies to improve the
accuracy of payment for global surgical packages, specifically related
to the procedure shares. We sought public comments on what the
procedure shares should be based on for the 90-day global packages. We
also sought 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.
We received public comments on this comment solicitation. After
consideration of public comments, we express appreciation for the
feedback from commenters and will take the comments into consideration
for possible future rulemaking.
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 final
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 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 sought 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,
[[Page 49512]]
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 sought comments on replacing the current procedure shares using
the second approach described previously (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 sought comments again
on whether we should consider, first, whether these codes are
appropriately categorized as 90-day global package codes, and if so, we
sought comments on what the assigned percentages should be for each
portion of the service.
We received public comments on this comment solicitation. After
consideration of public comments, we express appreciation for the
feedback from commenters and will take the comments into consideration
for possible future rulemaking.
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 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 the specialty mix we use for
calculating PE RVUs and for PFS budget neutrality. We continue to use
the work RVU or clinical labor RVU to adjust the MP RVU for each code
for intensity and complexity. In finalizing this policy, we stated that
the specialty-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 Revision of Resource-Based Malpractice (MP) RVUs
a. General Discussion
We calculated the MP RVUs that we proposed 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
[[Page 49513]]
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 proposed 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-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.
b. Methodological Refinements
For the CY 2026 update, we did not propose 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 Malpractice RVUs
Calculation of the 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-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 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
[[Page 49514]]
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 A-M1. 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 A-M1)
that typically do not distinguish premiums as previously described, 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] TR05NO25.095
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 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 requested comments regarding the risk index value for TC-
only services. Table A-M2 shows the risk index values by specialty type
and service risk group.
[GRAPHIC] [TIFF OMITTED] TR05NO25.096
[[Page 49515]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.097
[[Page 49516]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.098
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-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
[[Page 49517]]
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 solicited public comment on the list of expected
specialties. The list of codes and expected specialties is available on
our website under downloads for the CY 2026 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
We received public comments on the list of expected specialties.
The following is a summary of the comments we received and our
responses.
Comment: Commenters recommended some additional CPT codes to be
added to the CY 2026 PFS Proposed Rule Anticipated Specialty Assignment
for Low Volume Services lists.\120\
---------------------------------------------------------------------------
\120\ https://www.cms.gov/files/zip/cy-2026-pfs-proposed-rule-anticipated-specialty-assignment-low-volume-services.zip.
---------------------------------------------------------------------------
Response: We appreciate commenters' suggested additions of low
volume services CPT codes to the CY 2026 PFS Proposed Rule Anticipated
Specialty Assignment for Low Volume Services list. We refer readers to
the PE RVU Methodology section of this final rule for a discussion
regarding the list and the suggested additions for CY 2026.
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 final rule, Determination of Practice Expense Relative Value
Units, we discuss specialties that are excluded from ratesetting for
the purposes of calculating PE RVUs. We proposed 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 proposed 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/payment/fee-schedules/physician/federal-regulation-notices.
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 are detailed in section VII. of this final
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 final rule at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Commenters were supportive of the 2026 update to the risk
index values used in the calculation of the MP RVUs. They commend CMS'
continued work to expand data collection efforts by collecting as much
specialty-specific data as possible to reflect the most accurate trends
in malpractice premiums. Commenters requested that CMS continue to use
more specialty-specific data not subject to imputation as well as
increased transparency in the overall MP RVU update methodology.
Response: We appreciate the commenters for their feedback and
support. We will continue to expand our data collection efforts for
future updates of the Malpractice Risk Index. For an in-depth analysis
and transparency of the MP RVU update process, we remind commenters of
the interim and final reports referenced earlier in this section of the
rule that outlines all steps of the update process and data imputation
methodologies.
Comment: Commenters requested that CMS revisit their 2016 policy
regarding exemptions for add-on codes and establish a minimum floor for
MP RVUs where the practicing specialty's RVUs are significantly low.
Commenters stated this would prevent a 0 MP RVU value for specialties
that have a low, but still measurable, malpractice risk.
Response: For the CY 2026 PFS proposed rule, we did not make any
proposals regarding our policy to implement an MP RVU floor of 0.01
with an exemption for add-on codes, as finalized in the CY 2016 PFS
final rule (80 FR 70908). We direct readers to the CY 2016 PFS final
rule (80 FR 70908) for further discussion on this exemption for add-on
codes and we may consider modifications to this policy for future
rulemaking.
Comment: A commenter suggested that CMS make changes to the
specialty premium data source for a few specialties that they believe
are incorrectly mapped for the purposes of
[[Page 49518]]
data imputation. The commenter also noted that they believe CMS could
improve the imputation methodology by publishing impacts for all CMS
specialties instead of mapping to related specialties in the regulatory
impact table included in all PFS Federal Register notices.
Additionally, the commenter stated that they would like CMS to work
with the RUC to better identify appropriate crosswalks when necessary.
The commenter's requested changes to mappings used in data imputation
are as follows: 72-Pain Management to 11-Internal Medicine, 98-
Gynecologist/oncologist to 91-Surgical oncology, C0-Sleep Medicine to
13-Neurology, and 85-Maxillofacial surgery (ALL) to 04-Otolaryngology
(SURG).
Response: We appreciate the commenter's revised mapping suggestions
for some specialties that require imputation of premium data. We also
note that we will continue to work with all interested parties to
improve the data used for calculating risk index values. We continue to
believe that the list of CMS specialties contained in the regulatory
impact table (Table 92 CY 2026 PFS Estimated Impact on Total Allowed
Charges by Specialty) (90 FR 32803) is a useful tool to assist with
mapping premium data when specialty-specific premium data are not
included in a filing. However, as we previously discussed in this rule,
we have adopted policies to improve our data imputation and employ
partial imputation based on available data to approximate the premiums
when we do not have complete specialty-specific premium data, as
reflected in Table 8.C (Source Specialty/Service Risk Group for
Imputation for Updated PLI Premium Data) of the interim report ``CY2026
Medicare Physician Fee Schedule (PFS) Update to the Geographic Practice
Cost Indices (GPCIs) and Malpractice (MP) Risk Index''. For the
suggested mapping of 72-Pain Management to 11-Internal Medicine, we
disagree with the commenters, because for the 2026 update of the MP
risk index values for 72-Pain Management, we were able to collect
sufficient premium data such that data imputation was not required and
we were therefore able to use the actual premium data to formulate a
risk index value for this specialty. For the suggested mappings of 98-
Gynecologist/oncologist to 91-Surgical oncology and C0-Sleep Medicine
to 13-Neurology, we also disagree with the commenter and believe this
comment was an error. 98-Gynecologist/oncologist is already mapped to
91-Surgical oncology and C0-Sleep Medicine is already mapped to 13-
Neurology. We made these mapping changes for the last update of the MP
Risk Index values in the CY 2023 PFS final rule (87 FR 69641) and
continued with the mappings for the CY 2026 update. Lastly, for the
suggested mapping of 85-Maxillofacial surgery (ALL) to 04-
Otolaryngology (SURG), after further consideration and review of the
commenter's request, we are finalizing a change for these specialties
for the purposes of data imputation to reflect that 85-Maxillofacial
surgery (ALL) is now mapped to 04-Otolaryngology (SURG).
After consideration of public comments, we are finalizing the CY
2026 update as proposed with a modification to one specialty mapping
used in data imputation as described previously.
N. Geographic Practice Cost Indices (GPCIs)
1. Background
Section 1848(e)(1)(A) of the Act requires us to develop separate
Geographic Practice Cost Indices (GPCIs) to measure relative cost
differences among localities compared to the national average for each
of the three fee schedule components (that is, work, practice expense
(PE), and malpractice (MP)). We discuss the localities established
under the PFS later 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-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, the proposed 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 one-half
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 proposed to phase in one-half of the proposed
GPCI adjustment in CY 2026 and the remaining one-half of the adjustment
for CY 2027.
We have completed our review of the GPCIs and are finalizing new
GPCIs beginning for CY 2026 in this final 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 downloads section of the CY 2026 PFS final rule at
https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
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
[[Page 49519]]
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
noted 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 noted that the changes in the proposed GPCIs
reflect the statutory floors and limitations on variation previously
discussed that may advantage some rural localities. We describe the
data sources and methodologies we use to calculate each of the three
GPCIs later 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 downloads section for the CY 2026 PFS final rule at
https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
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 later in this section, 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.
[[Page 49520]]
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 Malpractice Expense (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 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 noted 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 proposed 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 \121\ (PPI) and
Clinician Practice Information \122\ (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 final rule
for more discussion regarding a possible derivation of cost share
weights for use in the PE GPCI from the PPI and CPI Survey.
---------------------------------------------------------------------------
\121\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf.
\122\ 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 final rule for additional discussion on
this issue and the estimated impacts as it relates to PFS ratesetting
and the GPCI update for
[[Page 49521]]
CY 2026. We also refer readers to the discussion regarding the PPI and
CPI survey data in section II.B. of this final 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 sought 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 final rule. We also sought 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 sought
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 (one-half 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 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 one-half of the adjustment
that otherwise would be made. Therefore, we sought 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 1 year would have elapsed
since this CY 2026 GPCI adjustment. Therefore, we also sought 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 a later
calendar year, we would be required under section 1848(e)(1)(C) of the
Act to phase in the GPCI adjustments over 2 years. We sought 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
final 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 Table AN-1. We note that the 2017-based MEI cost share weights as
finalized in section II.M. of the CY 2023 PFS final rule (87 FR 69688
through 69708) are also displayed in Table AN-1 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 final 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] TR05NO25.099
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 Hospital Inpatient Prospective Payment System (IPPS)/Long-
term Care Hospital PPS 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
[[Page 49522]]
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 in the rest-
of-state locality or locality 3 and are now in MSAs were a blend of
two-thirds of the GPCI value calculated for the year under the MSA-
based locality structure, and one-third 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 one-sixth in each
subsequent year so that, by CY 2021, the applicable GPCI values for
counties within transition areas were a blend of five-sixths of the
GPCI value for the year under the MSA-based locality structure, and
one-sixth 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 one-half 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
[[Page 49523]]
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 noted 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, 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
exists 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. A 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
[[Page 49524]]
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 in
Table AN-2.
[GRAPHIC] [TIFF OMITTED] TR05NO25.100
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 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 in Table AN-3.
[GRAPHIC] [TIFF OMITTED] TR05NO25.101
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 sought 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
[[Page 49525]]
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. 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 published 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 proposed 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 final rule web page at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices.
We noted 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, a
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/payment/fee-schedules/physician/federal-regulation-notices. 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
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 downloads section
for the CY 2023 PFS proposed and final rules at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices. 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 under the Downloads section for the PFS,
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
sought comments 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 sought feedback related to specific information and data
that would aid transparency in a GPCI update.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters expressed concerns over the expiring
1.0 GPCI work floor. Some of the commenters stated that if the 1.0 GPCI
work floor is not extended, this would result in negative impacts,
especially in rural and underserved areas. A commenter also stated that
CMS should apply any claim adjustment automatically should there be a
delay in enactment of an extension of the GPCI work floor policy, with
a retroactive implementation date.
Response: The 1.0 work GPCI floor is established by statute and
expired on September 30, 2025 (NOTE: If necessary, this date may be
changed after the next round of clearance). CMS does not have the
authority to extend the 1.0 work floor beyond the September 30, 2025
expiration and will process claims in accordance with statutory and
regulatory requirements.
Comment: Several commenters opposed CMS' proposed CY 2026 GPCI
decreases for Arkansas. Several of these commenters requested that CMS
maintain the work floor of 1.0 and freeze Arkansas' 2025 GPCI values
while a comprehensive review is conducted, or recalculate the Arkansas
PE GPCI using current, disaggregated data that reflects real regional
cost variation within the state, or at a minimum appropriately weighs
the rate based on the population centers experiencing the highest
costs, which service the majority of the state's population. The
commenters also stated that the current GPCI methodology ignores
regional variations within Arkansas, particularly in metropolitan areas
like Washington, Benton, and Pulaski Counties. A commenter requested
that we establish a timeline for evaluating Medicare localities to
align with Core Based Statistical Areas (CBSA) designations, to
automate county-level locality splits (that is, split any country >10
percent above statewide PE input cost for 2 consecutive years), and to
meet with interested parties to collaborate on solutions. The commenter
also requested that we update data annually to shorten the lag for
fast-growing regions, and to apply the frontier-state PE floor to HRSA-
designated Health Provider Shortage Areas (HPSAs). The
[[Page 49526]]
commenter requested that we recognize geographic variation in the
supplies and equipment component of the PE GPCI and use commercial
medical office rent surveys (that is, CoStar, CBRE) instead of ACS rent
data.
Some of the commenters referenced the Arkansas House Concurrent
Resolution 1007 (HCR1007) and stated that the Arkansas General Assembly
adopted HCR1007 during the 2025 Regular Session and urged CMS to
reevaluate Arkansas' GPCI treatment and create distinct PFS localities
for Little Rock-North Little Rock-Conway (CBSA 30780) and Fayetteville-
Springdale-Rogers (CBSA 2220). Some of the commenters also stated that
the undervaluation of Arkansas' GPCI makes it challenging to recruit
and retain physicians, particularly in rural and underserved areas.
While a commenter recommended that CMS recognize Central Arkansas as a
distinct locality to better align payment with actual costs, another
commenter opposed regional Arkansas evaluation, arguing it would strain
rural providers and exacerbate workforce challenges.
Response: We appreciate the commenters' feedback. However, we
reiterate that the GPCIs are based on nationally-representative and
publicly-available wage data from the BLS OEWS for the work GPCI and
employee wage and purchased services components of the PE GPCI, and the
Census Bureau's ACS data for the rent index component of the PE GPCI.
We reiterate that the GPCIs are not an absolute measure of practices
costs. Rather, they are a measure of relative resource cost differences
among localities compared to the national average as informed by the
data and are not intended to represent or measure changes in GDP or
migration. We also remind the commenters that section 1848(e)(1)(I) of
the Act defines Frontier State and sets the permanent PE GPCI floor of
1.0, therefore CMS does not have the authority to apply the 1.0
Frontier State PE GPCI floor to HPSAs. Additionally, section
1848(e)(1)(C) of the Act requires us to review, and if necessary,
adjust the GPCIs at least every 3 years, therefore CMS does not have
the authority to freeze the CY 2025 GPCIs. We note that the CY 2026
GPCI update was calculated using current, disaggregated data that
reflects regional cost variation within each state, as requested by the
commenter, and therefore the published CY 2026 PE GPCI in Addendum E
does account for county-level differences weighted by Medicare PFS RVUs
and population by country (as described in the ``Interim Report for the
CY 2026 Update of GPCIs and MP RVUs for the Medicare Physician Fee
Schedule,'' available on the CMS website under the downloads section of
the CY 2026 PFS proposed rule at https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices).
We appreciate the suggestions for revisions to the PFS locality
structure. We did not propose any changes to the PFS locality structure
and therefore will not finalize any changes to the PFS locality
structure for CY 2026. However, we may consider changes to the PFS
locality structure through future rulemaking.
Additionally, we would like to reiterate that the current PFS
locality structure was developed and implemented in 1997 with minor
modifications over the years. We have also considered more
comprehensive changes to locality configurations. In 2008, we issued a
draft comprehensive report detailing four different locality
configuration options (www.cms.gov/physicianfeesched/downloads/ReviewOfAltGPCIs.pdf) and we refer readers to the CY 2010 PFS proposed
rule (74 FR 33534) and subsequent final rule with comment period (74 FR
61757) for a detailed discussion of the public comments on the
contractor's 2008 draft report detailing different locality
configurations. All four of the potential alternative payment locality
configurations reviewed in the report would increase the number of
localities and separate higher cost, typically urban areas from lower
cost, typically rural ``Rest of State'' areas. In general, payments to
urban areas would increase while rural areas would see a decrease in
payment under each of the options studied because they would no longer
be grouped with higher cost ``urbanized'' areas. Disaggregation of a
statewide payment locality into multiple localities would generally
result in urban physicians experiencing an increase in payment and
rural physicians experiencing a decrease in payment. For this reason,
we have stated that we would consider a petition from a state medical
association that could demonstrate that it had the overwhelming support
of physicians in both winning and losings areas. We did not set
absolute numerical levels of support because of the uniqueness of the
locality structure in each state; we said that setting a numerical
level of support would limit the discretion required to properly
evaluate each request. We have employed a consistent process in
evaluating each request. As stated in the CY 1995 PFS rule (59 FR
63416), upon receiving a preliminary contact from a State medical
society, we inform the society that at a minimum we require: (1) A
formal request for the change from the State medical society, along
with a copy of a recently adopted resolution requesting the change; (2)
the number of licensed actively practicing physicians in the State and
the number that are society members; (3) the number of society members
in each local (county) society; and (4) letters from the local
societies representing physicians in the losing areas indicating the
level of support for the change. After evaluating this material, if we
believe that the material demonstrates overwhelming support among both
winning and losing physicians, we announce the proposed change in the
Federal Register. If the public comments received demonstrate this
overwhelming support, we announce the change in a final rule in the
Federal Register. We reiterated in the CY 2010 PFS final rule (74 FR
61758), that in the event we decide to make a specific proposal for
changing the locality configuration, we would also provide extensive
opportunities for public input (for example, Town Hall meetings or Open
Door Forums, as well as opportunities for public comments afforded by
the rulemaking process).
Regarding alternative data sources for office rent data, we note
that our efforts are ongoing to identify a publicly available, robust,
nationally representative commercial rent data source that could be
made available to CMS for this purpose. We refer readers to the CY 2023
PFS final rule (87 FR 69625 through 69630) where we undertook a
comprehensive analysis of alternatives to the ACS data and concluded
that there is still no acceptable national data source available for
physician office or other comparable commercial rents, and therefore,
we proposed to continue to use county-level residential rent data from
the ACS as a proxy for the relative cost differences in commercial
office rents for the proposed CY 2023 update, and have done so in
calculating the CY 2026 GPCIs as well.
With regard to the supplies, equipment, and miscellaneous expense
cost index component of the PE GPCIs, we note that we made no proposals
regarding our current policy for this component of the PE GPCI. We have
stated that we believe there is a national market for these items and
there is not significant geographic variation in those costs, and as
such we assign a value of 1.00 for this component for each locality,
consistent with the national average. The commenter did not provide any
data or information to quantify the variation of costs of supplies, the
amount of supplies lost to expiration
[[Page 49527]]
dates, or national suppliers' order minimums in contrast to a rural
specialty practice's demand for these supplies. We encourage the
commenter and other interested parties to submit data supporting their
assertions for consideration in future rulemaking; specifically, we
would be interested in information regarding potential data sources for
shipping costs and the costs of medical equipment and supplies for
different geographic regions. Ideally, the potential data sources are
accessible to the public, available on a national basis for both urban
and rural areas and updated regularly. Similarly, we have previously
attempted to locate data sources specific to geographic variation in
shipping costs, and we found no comprehensive national data source for
this information, and therefore, we have not been able to quantify
variation in costs specific to islands or rural communities.
Comment: A few commenters provided feedback on the proposed CY 2026
GPCIs for California. One of the commenters expressed support for the
smooth transition to the new physician geographic payment localities in
California and supported the proposed GPCIs for 2026 based on accurate
data analysis. Another commenter stated concerns that the GPCI fails to
capture the true variation in physician compensation and practices in
high-cost regions, like Northern California. The commenter also stated
that by statute, the work GPCI only accounts for 25 percent of local
cost differences compared to the national average, systemically
understating costs in high-cost areas.
Response: We appreciate the commenters' feedback and support of our
proposals and locality transitions over the last decade. We would also
like to reiterate that the GPCIs are based on nationally representative
and publicly available wage data from the BLS OEWS for the work GPCI
and employee wage and purchased services component of the PE GPCI, and
the Census Bureau's ACS data for the rent index component of the PE
GPCI. The GPCIs are a measure of the relative resource of cost
differences among localities compared to the national average as
informed by data (not a measure of absolute costs).
Comment: A commenter stated that the GPCIs for Hawaii do not
account for the unique costs of providing medical services in Hawaii, a
non-contiguous state. The commenter stated that the work GPCI is flawed
for Hawaii due to the State's high cost of living, significant health
workforce shortages and issues with the proxy professional wages used
by CMS to calculate payments. The commenter also stated that in 2008,
section 134 of Public Law 110-275 implemented a 1.5 GPCI work GPCI
floor for all counties in the Alaska locality. However, despite facing
similar challenges as a non-contiguous state, Hawaii did not receive a
similar GPCI adjustment. The commenter recommends that CMS institute a
1.5 work GPCI floor for the Hawaii PFS locality to address these issues
and ensure parity for non-contiguous states. The commenter stated that
this adjustment would help reflect the true cost of physician services
in Hawaii and support the recruitment and retention of healthcare
professionals in the state.
Response: We reiterate that the GPCIs are based on nationally
represented and publicly-available wage data from the BLS OEWS for the
work GPCI. The GPCIs are a measure of relative resource cost
differences among localities compared to the national average as
informed by the data (not a measure of absolute costs). We remind
commenters that the work GPCI value for Alaska is not based on the data
for that State, instead section 1848(e)(1)(G) of the Act sets a
permanent 1.5 work GPCI floor for Alaska. Similarly, section
1848(e)(1)(I) of the Act sets a permanent PE GPCI floor of 1.0 for the
Frontier States. These statutory requirements are State-specific, and
therefore we do not have the authority to extend a work GPCI floor to
Hawaii.
Comment: A commenter expressed concern about the proposed CY 2026
GPCI decreases for some localities in Texas. The commenter requested
that we recalculate the GPCIs for Texas using accurate, localized
economic data that reflects the State's economy and inflationary
pressures. They also requested that we revise the GPCI methodology to
reflect real-world, region-specific economic conditions.
Response: Because Medicare is a national program, and section
1848(e)(1)(A) of the Act requires us to establish GPCIs to measure
relative cost differences among localities compared to the national
average, we believe it is important to use the best data sources that
are available on a nationwide basis. These data sources should be
regularly updated and retain consistency area-to-area, year-to-year. We
welcome opportunities to discuss alternative data sources with
interested parties and to incorporate such data, as appropriate in the
GPCI calculation process, through our standard annual rulemaking
process.
Comment: A commenter raised concerns about the GPCI for Rhode
Island. The commenter stated that Medicare reimburses Rhode Island at
the lowest rate compared to Connecticut and both regions of
Massachusetts. This has led to the healthcare workforce leaving Rhode
Island and increasing financial burdens to practices in Rhode Island.
The commenter suggested that CMS review the GPCI for Rhode Island to
prevent further loss of professionals, diminishing access to care, and
impacts on healthcare costs.
Response: We reviewed the Rhode Island GPCI value and believe it is
appropriate based upon the data sources and methodology used to
calculate the GPCIs. We would like to reiterate that the GPCIs are
based on nationally representative and publicly available wage data
from the BLS OEWS for the work GPCI and employee wage and purchased
services components of the PE GPCI, and the Census Bureau's ACS data
for the rent index component of the PE GPCI. The GPCIs are a measure of
relative resource cost differences among localities compared to the
national average as informed by the data (not a measure of absolute
costs). We welcome opportunities to discuss alternative data sources
with interested parties and to incorporate such data, as appropriate in
the GPCI calculation process, through our standard annual rulemaking
process.
Comment: A commenter stated that the ``rural vs non-rural
distinctions'' in the GPCI locality structure are outdated, especially
in the post-pandemic employment landscape. The commenter noted two
significant shifts: the predominance of remote work in healthcare and
the widespread nature of travel work in clinical areas. Additionally,
the commenter stated that Mississippi is the most medically underserved
state, with most counties designated as a HPSA. The commenter requested
that the current GPCI locality structure be reevaluated and replaced.
Response: We appreciate the commenter's feedback regarding the
evolving healthcare landscape and may consider changes to the PFS
locality structure through future rulemaking. We welcome any additional
feedback from interested parties regarding the changing landscape of
healthcare, specifically regarding how to appropriately account for
remote work and travel work in the PFS locality structure and GPCI
methodology, through our standard annual rulemaking process.
Additionally, section 1848(e)(1)(A) of the Act requires us to
develop separate GPCIs to measure resource cost differences among
localities compared to the national average for each of the three GPCI
components, and section 1848(e)(1)(C) of the Act requires us to
[[Page 49528]]
review and, if necessary, adjust the GPCI at least every 3 years. Based
on new data, GPCI values may increase or decrease.
Comment: A commenter expressed concerns regarding the disparities
in the GPCI that affect healthcare providers in rural and underserved
areas. The commenter stated that Iowa ranks 47th out of 50 states for
total GPCI, leading to inequitable payment for providers in the region.
The commenter recommended that CMS either remove the GPCI altogether or
implement a national GPCI floor to ensure minimum equitable payment.
The commenter states that this change is essential to support
recruitment, retention, and access to care in rural states like Iowa,
as the current methodology does not accurately reflect the costs of
operating clinical practices in low-GPCI areas and undermines health
equity goals.
Response: Section 1848(e)(1)(C) of the Act requires us to review,
and if necessary, adjust the GPCIs at least every 3 years. They are a
measure of relative resource cost differences among localities compared
to the national average as informed by the data. Section 1848(e)(1)(E)
of the Act provides for a 1.0 floor for the work GPCIs, which was
extended by many successive amendments to the statute through September
30, 2025. Given these statutory requirements, CMS does not have the
authority to remove the GPCI altogether or implement a national GPCI
floor.
Comment: Several commenters provided feedback on the 2017-based MEI
cost share weights and the weights based on Physician Practice
Information \123\ (PPI) and Clinician Practice Information \124\ (CPI)
Survey data for purposes of alternatives considered for the CY 2026 PE
GPCIs and PFS ratesetting and for future rulemaking.
---------------------------------------------------------------------------
\123\ https://www.ama-assn.org/system/files/table-1-results-from-ppi.pdf.
\124\ https://www.ama-assn.org/system/files/table-1-results-from-cpi-final.pdf.
---------------------------------------------------------------------------
A couple of commenters suggested using the PPI and CPI data to
update the MEI cost share weights. They expressed concerns regarding
using outdated 2006-based MEI cost share weights and recommend using
more recent data. One of the commenters requested that CMS reconsider
using the 2006 MEI cost share weights and incorporate the AMA's
Physician Practice Information Survey (PPIS) data into the CY 2026
update. The commenter requested CMS to provide a clear timeline and
plan for addressing gaps identified in the PPI and CPI Survey dataset.
The other commenter stated for the CY 2026 MEI and GPCI weights, CMS
should use PPI and CPI Survey data to implement updated shares of work,
practice expense, and professional liability insurance (PLI), which
results in the following distribution: work = 54.4 percent; PE = 43.8
percent; and PLI = 1.7 percent. The commenter recommended that the
updated CY 2026 GPCIs be phased in over 2 years. Additionally, the
commenter recommended that CMS modify its proposed mapping of the PPI
and CPI survey data categories for use in updating the PE GPCI.
A couple of commenters support maintaining the current 2006 MEI
cost share weights to update the CY 2026 GPCI. One of these commenters
reviewed the alternative derived weights from the most recent PPI and
CPI survey data for the GPCIs and found them problematic and agreed
with CMS' reasons for maintaining the current 2006 MEI cost share
weights. The commenter was troubled by the significant difference
between the current and 2017-based cost share weights and found that
the 50 percent mapping of administrative, overhead and other categories
of the PPI and CPI survey to the purchased services and office rent
component of the PE GPCI to be arbitrary. The commenter continued to
state that the revised cost weights are not supported by other data and
cited a recent Medical Group Management Association (MGMA) survey of
group practices which estimated provider income (that is, physician
work) to account for 30 to 40 percent of revenue, labor (support staff)
was the largest component of practice expenses, accounting for 25 to 30
percent of revenue, rent accounting for 5 to 10 percent of costs (6
percent of revenue) and malpractice accounting for 3 to 5 percent of
costs. The commenter stated they would not expect CMS to use MGMA data
to develop weights but believe proposed weights should align with such
findings. Therefore, the 2017-based MEI cost share weights and the
weights based on PPI and CPI survey data more closely align with the
MGMA data and their understanding of practice costs in California.
However, the commenter stated that rather than supporting one of the
two proposed MEI alternatives, they recommended that CMS convene a new
technical advisory panel to make recommendations for reconciling the
differences in work and practice expenses between physician and non-
physician owned practices, safeguarding accurate payment to the
physician owned practices without overpaying non-physician owned
practices. The commenter stated that the technical advisory panel
should make recommendations on the practice expense weights and, if
there are significant differences in the purchased service component
cost shares, the panel should review and make recommendations regarding
the labor-related share. In addition, the commenter recommended that
updates to the cost share weights occur simultaneously with updates to
the GPCIs to provide greater consistency and stability between updates
and maintaining the 2-year phase in.
A couple of commenters recommended using the 2017-based MEI cost
share weights. A commenter recommended that CMS implement the 2017-
based MEI cost share weight with a multi-year transition period to help
physician practices and other Part B providers adjust to any
redistributive effects. Another commenter expressed concerns with using
the 2006-based MEI cost share weights, stating that relying on nearly
20 years old data would significantly mispresent current practice
costs. The commenter stated that continuing to base payments on
outdated inputs risked widening the gap between actual costs and
Medicare payments, threatening the financial sustainability of
providers and ultimately access to care. The commenter recommended for
CMS to use more recent data sources, such as the 2017-based MEI cost
share.
Response: We appreciate the commenters for their support of our
proposal and may consider the feedback for possible future rulemaking.
We remind commenters that, for the CY 2026 GPCI update, we had concerns
about the potential redistributive effects that implementing the 2017-
based MEI would have on PFS payments. Additionally, we received data
from the AMA's PPI and CPI Surveys. However, these data lack the
specific breakdown of practice expense that we needed to consider its
use to weight the four components of the PE GPCI for CY 2026. 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.
Comment: Several commenters commended CMS for exploring
alternatives to simplify the work GPCI development by reducing the
number of occupations used. A commenter stated that of the two
scenarios investigated, they favor the 75 percent bachelor's degree or
higher and the greater than 75 percent county wage data availability
due to its greater simplicity and similar accuracy, which are the
criteria we use
[[Page 49529]]
to assess alternatives. The commenter questioned why the greater than
90 percent criteria were not reported regarding accuracy relative to
the current GPCIs, as these criteria would further simplify the
methodology by reducing the number of occupation codes included in the
calculations. The commenter stated that if these more stringent
criteria had similar accuracy in measuring relative cost differences,
the commenter would favor them. Additionally, the commenter requested
the specific derived BLS OEWS national level files and cross industry
MSA level wage files for the work GPCI, and the wage and purchased
services PE GPCI as described in the Interim Report's methodology of
Work and PE GPCI formation be made publicly available. The commenter
also requested additional information as to whether the purchased
services indices included a non-labor related adjustment and, if so,
what that adjustment was. The commenter appreciated CMS' willingness to
provide additional data to verify the GPCI methodology.
Response: We appreciate the commenters for their support of our
efforts and may consider the feedback for possible future rulemaking.
We appreciate the commenter's requests for additional information and
data files and welcome the opportunity to discuss these requests in
more detail with the interested party. We note that we may consider
modifications to the list of occupation codes used in the calculation
of the work GPCI, which would simplify the calculation and provide
opportunity to improve clarity of our documentation.
Comment: A few commenters supported the proposed updates to the
GPCIs.
Response: We appreciate the commenters for the support of our
proposed CY 2026 GPCI updates.
After consideration of public comments, we are finalizing the CY
2026 GPCI updates as proposed. The final GPCIs and summarized GAFs are
displayed in Addenda D and E to this final rule.
III. Other Provisions
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 (87 FR 69731), we adopted an increased applicable
percentage of 35 percent for drugs reconstituted with a hydrogel and
with variable dosing based on patient-specific characteristics. 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.\125\
---------------------------------------------------------------------------
\125\ https://www.cms.gov/medicare/payment/part-b-drugs/discarded-drugs.
---------------------------------------------------------------------------
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.126 127 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 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 final rule.
---------------------------------------------------------------------------
\126\ https://www.cms.gov/files/document/drugs-increased-applicable-percentage.pdf.
\127\ https://www.cms.gov/files/document/orphan-drugs-increased-applicable-percentage-calendar-quarters-2023.pdf.
---------------------------------------------------------------------------
As we discussed in the CY 2026 PFS proposed rule (90 FR 32538
through 32540), we received two applications for increased applicable
percentage for consideration. Both applicants submitted the information
required at Sec. 414.940(e)(1), including, as applicable, the FDA-
approved labeling for the drug, justification for consideration for
increased applicable percentage, and
[[Page 49530]]
justification for the requested applicable percentage.
The first application for increased applicable percentage for CY
2026 was from the manufacturer of Leukine[supreg] (sargramostim),\128\
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 later in this paragraph) due to
ongoing cancer vaccine adjuvant trials. The applicant reemphasized 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. We noted that
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.\129\ The applicant stated 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. They further explained that the
estimated completion dates for Phase III clinical trials vary, with the
earliest expected in late 2025 \130\ and the latest in March 2029.\131\
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. The applicant notes that
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.
---------------------------------------------------------------------------
\128\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/103362s5249lbl.pdf.
\129\ https://www.cancer.org/cancer/managing-cancer/treatment-types/immunotherapy/cancer-vaccines.html.
\130\ https://clinicaltrials.gov/study/NCT04229979.
\131\ https://clinicaltrials.gov/study/NCT05100641.
---------------------------------------------------------------------------
In the CY 2026 PFS proposed rule (90 FR 32539), we explained that
as part of CMS' 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 1 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 did not
follow a statistical distribution similar to that considered for
rarely-utilized orphan drugs meeting the criteria at 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 \132\ 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.
---------------------------------------------------------------------------
\132\ https://www.cancerresearch.org/treatment-types/cancer-vaccines.
---------------------------------------------------------------------------
As we stated in the CY 2026 PFS proposed rule (90 FR 32539),
because we are maintaining our determination from the CY 2025 PFS
proposed rule, we did not propose 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.
In the CY 2026 PFS proposed rule (90 FR 32539), we also discuss
that the second application was from the manufacturer of
Jelmyto[supreg] (mitomycin for pyelocalyceal solution) \133\ who
requested 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. We noted that 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 \134\ 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
[[Page 49531]]
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 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. We
noted that 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.
---------------------------------------------------------------------------
\133\ https://www.accessdata.fda.gov/drugsatfda_docs/label/2024/211728s010lbl.pdf.
\134\ https://www.urologyhealth.org/urology-a-z/u/upper-tract-urothelial-carcinoma-(utuc).
---------------------------------------------------------------------------
The applicant contended 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 claimed meet the patient-specific characteristics outlined in
Sec. 414.940(d)(2). The applicant explained that since kidney volume
cannot be determined until the pharmacy has prepared the drug and the
patient is ready for administration of the initial treatment, and
stated that patients with smaller-than-average kidney volumes may lead
to a higher amount of drug being discarded. Additionally, they stated
that 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.\135\ \136\ \137\ We
noted that these patient-specific characteristics, combined with the
requirement for hydrogel reconstitution, were considered when
establishing the current 35 percent applicable percentage.
---------------------------------------------------------------------------
\135\ https://bjui-journals.onlinelibrary.wiley.com/doi/full/10.1111/bju.15925.
\136\ https://www.sciencedirect.com/science/article/pii/S2405456923001232.
\137\ https://www.jelmyto.com/hcp/pdf/jelmyto-antegrade-instillation-overview.pdf.
---------------------------------------------------------------------------
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 did not
propose an increase in the applicable percentage of 45 percent for the
drug. Consistent with the CY 2023 PFS final rule, we proposed that the
applicable percentage for Jelmyto[supreg] continue to be 35 percent (90
FR 32540).
The following is a summary of the comments we received and our
responses.
Comment: A commenter provided feedback related to the applications
received for an increased applicable percentage beginning in CY 2026.
The manufacturer of Leukine[supreg] agreed with CMS' rationale, noting
that there was insufficient information to determine whether
Leukine[supreg] had unique circumstances that would warrant an
increase, and indicated that they plan to reapply in a future cycle
when more data are available. CMS did not receive any comments
regarding the application for Jelmyto[supreg].
Response: We appreciate the commenter's feedback and support for
our assessment of the application and decision to not propose an
increased applicable percentage at this time for Leukine[supreg]. As
discussed previously in this section, the application, including
reapplication, for an increased applicable percentage is due by
February 1 of the calendar year prior preceding the year in which the
increased applicable percentage would apply, as described at Sec.
[thinsp]414.940(e).
Comment: A commenter supported the ongoing refinement to discarded
drug refund policy, which the commenter stated will help reduce waste
and spending within the Medicare program.
Response: We appreciate the commenter for their support.
Comment: Several commenters provided feedback regarding categories
and products that the commenters believed should be considered for
increased applicable percentages due to unique circumstances. A
commenter suggested: (1) cell and gene therapies and other personalized
therapies, given their distinct manufacturing and administration
requirements; (2) a new category providing a minimum of an additional
18 months of increased applicable percentage for newly approved drugs
that are developing new delivery methods and sizes; (3) drugs that
treat multiple indications across diverse patient types and
characteristics; and (4) exclusion of discarded units from medically
unlikely edits (MUEs).
Response: We note that these comments are out of scope and direct
commenters to Sec. 414.940(e) for details regarding the application
for increased applicable percentage and encourage interested
stakeholders to utilize this process to submit requests for CY 2027 and
future years.
Comment: Several commenters provided feedback related to
information provided in the discarded refund reports. Some of these
commenters recommended that CMS expand the data elements included in
the report and standardize formats beyond the statutory minimum to
improve transparency and support accurate verification. Commenters
stated that the current report lacks sufficient granularity and
consistency for manufacturers to independently validate refund
calculations, creating compliance risks and administrative burdens.
They further noted that reports have varied in format, completeness,
and data elements, often requiring manufacturers to engage in dispute
resolution to obtain missing information. In addition, commenters
explained that publicly available Medicare datasets are inadequate due
to significant time lags and requested that CMS provide claims-level
data through a secure mechanism that protects beneficiary privacy.
Suggested elements include the date of service, National Drug Code
(NDC), HCPCS code, the ASP for the HCPCS code, allowed charges for both
administered and discarded billing
[[Page 49532]]
units with the corresponding percentage of allowed payment by CMS, and
anonymized provider identifiers. Access to standardized and
comprehensive data, they emphasized, would not only facilitate
verification and reduce administrative burden but also enable
manufacturers to identify opportunities to minimize discarded amounts
of drugs through optimized packaging and vial sizes. Another commenter
stated that they cannot confirm calculations, determine excess
discarded amounts, or verify the accuracy of invoiced amounts in the
discarded drug refund report because invoices do not specify the
applicable percentage used for each drug.
A commenter recommended that CMS provide an annual, comprehensive
report for all products, including those not eligible for refunds under
the discarded drug refund policy or with zero refund amount, and to
publish the report sooner to reduce the data lag. The commenter stated
that such reporting would help manufacturers make informed decisions
about post-market optimization of drug vials or packaging in alignment
with the policy goals.
Response: We appreciate the commenters' input about information
included in the report and the format of the report. Comments
requesting expansion of data elements and a comprehensive report for
all products--including those not eligible for refunds under the
discarded drug refund policy--are out of scope for this final rule.
However, we may take this information into consideration for future
policy development and potential operational enhancements, including
formatting consistency. Regarding the applicable percentage for each
drug, we maintain a publicly available website \138\ that lists drugs
for which an increased applicable percentage applies and updates that
information periodically. Drugs not identified for an increased
applicable percentage remain subject to the 10 percent applicable
percentage described in section 1847A(h)(3)(B)(i)(I) of the Act. Each
manufacturer has an opportunity to dispute information in the discarded
drug refund report by submitting an error report as described at Sec.
414.940(f).
---------------------------------------------------------------------------
\138\ https://www.cms.gov/files/document/drugs-increased-applicable-percentage.pdf.
---------------------------------------------------------------------------
In summary, after consideration of the public comments, we are
finalizing no changes to the applicable percentages for Leukine[supreg]
and Jelmyto[supreg].
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 Medicare Part B Drug Payment
Limit File or Not Otherwise Classified (NOC) payment limit 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 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
[[Page 49533]]
December 2022 OIG report).\139\ 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. One manufacturer specified 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.
---------------------------------------------------------------------------
\139\ 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.
---------------------------------------------------------------------------
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, one
manufacturer noted that CMS has not defined the term fair market value
(FMV) for the purposes of the BFSF. The report indicated that the
manufacturer would like additional guidance from CMS on the methodology
that manufacturers should use to assess FMV and clarification about 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 by
manufacturers as BFSFs when they should instead be classified as price
concessions. 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, we proposed policies to provide additional
guidance on two aspects of the calculation of manufacturer's ASP.
First, we proposed 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 proposed
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,\140\ client, or customer
of an entity. We also proposed 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 FMV and periodic reviews of FMV. We proposed 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, we provided
certain non-exhaustive examples of fees that CMS considers to be price
concessions and not BFSFs.
---------------------------------------------------------------------------
\140\ Affiliate meaning the affiliate of an entity that is
receiving the fee that is providing the service.
---------------------------------------------------------------------------
The goal of these proposals was to avoid inaccurate calculation of
the manufacturer's ASP that is used to determine Part B drug payment
limits. These proposed policies would also 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 ASP statute and
regulations require that the manufacturer's ASP deduct price
concessions, including 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 Payments for Part B Drugs,'' \141\ 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
[[Page 49534]]
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.
---------------------------------------------------------------------------
\141\ 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.
---------------------------------------------------------------------------
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 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, we proposed 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 proposed 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 proposed adding paragraphs (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 aligned 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.
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed definition of
bundled arrangement, citing that aligning with Medicaid's approach is
reasonable and will promote consistency in how ASP is calculated across
manufacturers.
Response: We thank the commenters for their support.
Comment: Many commenters generally supported the proposed
definition of bundled arrangement but were concerned with the inclusion
of ``purchasing patterns'' and ``prior purchases'' in the proposed
definition as examples of performance requirements, not only because of
misalignment with MDRP, but commenters stated that these words create
ambiguity because they are not defined in the proposed rule nor
explained why they were included. A commenter requested CMS clarify
that purchasing patterns, prior purchases, or any other purchase or
performance requirement applicable to the same product cannot create a
bundled arrangement requiring reallocation of discounts across
reporting periods.
Response: It is our objective to adopt a consistent definition of
bundled arrangements that is consistent with MDRP. We are persuaded by
the commenters and believe removing ``purchasing patterns'' and ``prior
purchases'' from the definition of bundled arrangement is reasonable
and as such, reallocation is not applicable.
Comment: A commenter requested that CMS clarify that certain
phrases create objective standards based on contract text and that
bundles across ASP, AMP, and BP should be verifiable and text-based.
Response: This comment is outside the scope of the final rule at
this time.
Comment: A few commenters did not agree with finalizing a
definition of bundled arrangement. A commenter stated that finalizing a
definition of bundled arrangement would expand the universe of price
concessions that would be included in ASP and therefore
[[Page 49535]]
lower ASPs relative to where they are today. Another commenter
encouraged CMS to engage in discussions before finalizing the
definition to evaluate whether a universal definition of this term
results in a more accurate ASP calculation. A few commenters also
opposed the January 1, 2026 implementation for price concessions
involved in bundled arrangements.
Response: We do not agree with the commenters' concerns regarding
finalizing a definition of bundled arrangement. We believe that the
adoption of a standardized definition will enhance transparency,
promote consistency across interested parties, and support more
accurate ASP calculations. Moreover, because many manufacturers have
stated in their submitted reasonable assumptions that they currently
utilize the Medicaid definition of bundled arrangements in calculating
ASP, we believe the finalized policy would not be overly burdensome to
implement and would better reflect current industry practice. Regarding
delaying implementation, because manufacturers have used the Medicaid
bundled sale definition as a reasonable assumption when calculating
ASP, we are not persuaded that these new requirements would be
difficult to implement. Therefore, we are not convinced that delayed
implementation of this definition is necessary.
After consideration of public comments, we are finalizing the
proposed bundled arrangement definition, excluding the terms
``purchasing patterns'' and ``prior purchases.'' The finalized
definition is effective for sales occurring on or after January 1,
2026, which is reflected in the Medicare Part B Drug Payment Limit File
beginning July 2026. We believe this aligns with our stated intent to
support program alignment with MDRP and reduces administrative
complexity.
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 the discounts'' in the bundled arrangement
should be proportionally allocated. We proposed 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. Therefore, we proposed the same
regulatory language be added to Sec. 414.804(a)(2)(iii) and (iv).
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported CMS' proposal to allocate
discounts under a bundled sale proportionally across all products.
Response: We thank the commenters for their support.
Comment: Many commenters opposed the reallocation of all non-
contingent discounts in bundled arrangements, stating that the 2016
MDRP final rule does not require this. They believed that different
standards between ASP and MDRP would create administrative burdens for
manufacturers, contradicting CMS' intent to align these policies. A
commenter noted that reallocating non-contingent discounts would not
consistently affect ASPs, while others claimed it could distort ASP
values. Commenters urged CMS to allow manufacturers to make reasonable
assumptions about discounts in bundled arrangements. They also
requested clarification that products without financial relationships
should not require reallocation of non-contingent discounts. If CMS
deems reallocation necessary, commenters recommended clear regulatory
language and explanations.
Response: Consistent with the 2007 Medicaid Program final rule (72
FR 39142), which was reiterated in the 2016 Medicaid Program final rule
(81 FR 5181 through 5183), we consider all drugs to be within the
bundled sales if: (1) Any drug must be purchased to get a discount on
any drug in the bundle regardless of whether any drug is purchased at
full price; (2) there is a performance requirement (such as inclusion
or tier placement on a formulary or achieving a certain level or
percentage of sales for one drug to receive a discount on another
drug); or (3) price concessions are greater than those which would have
been available had the bundled drugs been purchased separately or
outside the bundled arrangement. When a manufacturer offers discounts
on multiple products under a single contract (for example, to minimize
the administrative burden of developing several single contracts which
offer separate discounts on the multiple products) no bundled sales
arrangement exists as long as all of the following conditions are met:
(1) A discount or price concession is established independently for
each product within the contract; (2) the purchase price under the
contract is not contingent upon any other product in the contract or
upon some other performance requirement (such as the achievement of
market share or inclusion or tier placement on a formulary); and (3)
the discount provided for any product under the contract is no greater
than if the product was purchased outside of the contract.
After consideration of public comments, we are finalizing as
proposed to direct 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.
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 proposed 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 solicited comments on
whether there are other methods of allocating discounts in these
circumstances that would more accurately represent ASP.
The following is a summary of the comments we received and our
responses.
Comment: MedPAC encouraged CMS to consider use of a ``lower-of
approach'' to prevent the allocation of discounts from Part B drugs to
other products. They explained that under this
[[Page 49536]]
approach ASP could be the lower of (1) ASP with price concessions
allocated across all products in the bundle; or (2) ASP with price
concessions allocated only among Part B drugs in the bundle that are
required to report ASP data.
Response: We may re-examine this policy consideration in future
rulemaking.
Comment: A commenter affirmed that bundles across Part B-covered
and non-covered products should be subject to standard bundling
requirements. However, the commenter encouraged CMS to clarify that
drug delivery devices that are approved under the drug approval (NDA or
BLA) should be considered part of the drug, and not another product
that could create a bundled arrangement, even if the delivery device is
not packaged within the same National Drug Code.
Response: The suggestion that drug delivery devices approved under
a drug application should be treated as part of drug to be outside the
scope of this rulemaking.
After consideration of public comments, we are finalizing as
proposed that for bundled sales containing both Medicare Part B-covered
and non-covered products, manufacturers allocate discounts
proportionally.
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 did not propose 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 solicited 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.
Comment: A commenter encouraged CMS to monitor value-based
purchasing arrangements going forward to help ensure this policy does
not have unintended consequences. Specifically, the commenter
recommended CMS consider monitoring for the prevalence of value-based
purchasing arrangements via the reasonable assumptions manufacturers
submit to CMS.
Response: We intend to review reasonable assumptions to monitor
this policy going forward. If we have concerns with manufacturer's
reasonable assumptions, we may follow up with the manufacturer. The
requirement that manufacturers submit their reasonable assumptions does
not change that manufacturers are responsible for submitting accurate
ASP reports, and that we rely on and uses manufacturers' submission as
submitted to calculate payment limits. Reasonable assumptions will be
used to review industry-wise issues for potential future policy
development and, in certain instances, to make referrals to law
enforcement partners. Manufacturers should not expect individual
feedback from us on their reasonable assumptions submissions, nor
should they interpret a lack of response from us as an approval of
those submissions. If we determine that a manufacturer has
misrepresented information in the reporting of its ASP, CMS may refer
the issue to HHS's Office of Inspector General (OIG) to determine
whether a civil monetary penalty should be imposed, in accordance with
section 1847A(d)(4) of the Act.
Comment: A few commenters supported CMS' decision to exclude value-
based purchasing arrangements from the ASP bundled arrangement
definition, citing this decision reflects structural differences
between ASP and MDRP frameworks. Specifically, while manufacturers can
revise pricing data to address time-based bundled discounts in MDRP,
the ASP framework lacks a routine process for retrospective payment
adjustments.
Response: We thank the commenters for their support.
Comment: A few commenters opposed CMS' proposal to not adopt the
portion of the Medicaid definition of bundled sale stating that value-
based purchasing arrangements may qualify as a bundled sale. These
commenters recommend CMS adopt a consistent approach in the context of
ASP.
Response: We believe not adopting this definition at this time
provides the agency the opportunity to monitor and assess how such a
definition may affect ASP, especially as we intend to finalize
mandatory submission of reasonable assumptions.
Comment: A commenter noted that the most likely type of bundle is a
temporal or cross period bundle, thus the commenter urged temporal
bundles should not be considered bundled arrangements for purposes of
calculating ASP. Rather, price concessions in one period that are based
on a purchase or performance requirement in a different period should
be handled as a lagged eligible price concession.
Response: We will consider this suggestion as we continue to refine
this policy area.
After consideration of public comments, we are finalizing as
proposed to not adopt the portion of the Medicaid definition of bundled
sale stating that value-based purchasing arrangements may qualify as a
bundled sale.
Comment: We received one out-of-scope comment. In this comment,
MedPAC encouraged CMS to monitor the issue of bundled price concessions
in the context of products without an alternative, citing concerns in
which manufacturers could use the bundle discount to pressure buyers
into also purchasing a second product that does have competition.
Response: We consider this issue to be outside the scope of the
proposed rule; however, we will take it under consideration for
potential future rulemaking.
c. Bona Fide Service Fees
As described previously in the background section, 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.\142\ 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. 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 we consider to be
sufficient evidence of whether or not a fee is passed on in whole or in
part to an affiliate, client, or customer of an entity. We are also
proposing that in the absence of specific guidance,
[[Page 49537]]
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.
---------------------------------------------------------------------------
\142\ 42 CFR 414.802.
---------------------------------------------------------------------------
(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 previously in the background section, 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' four-part test to make these
determinations. In some cases, service fees that are very high could
mask price concessions that are passed on by the entity performing some
bona fide services so that the product's ASP can remain high.
Conversely, certain fees that should be classified as 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 recommended additional
guardrails to ensure that BFSFs are correctly classified, and that the
manufacturer's ASP is not manipulated to be artificially increased or
decreased.
Accordingly, we (1) proposed 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 proposed additional requirements for the
standards and methodology that should be used to determine FMV.
Specifically, we proposed 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 FMV 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 proposed 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, we proposed 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 proposed 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). We stated that
documentation of this update should be included in the reasonable
assumption documentation that corresponds with the quarter when the
update is conducted. We agreed that implementing standards and defining
the methodology manufacturers must use to determine FMV would better
establish uniform industry practices and provide the desired clarity
requested by manufacturers in the December 2022 OIG report.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters stated support for enhanced guidance,
accountability, and transparency for BFSFs, and affirmed support for
ensuring the accurate calculation of FMV.
Response: We thank the commenters for their support.
Comment: Many commenters did not agree with CMS' proposed FMV
standards and methodology, arguing the rule overemphasizes cost-based
methods and limits flexibility. They stated that CMS should allow
multiple valuation approaches (cost-, market-, income-based, or hybrid)
to reflect market realities and maintain that well-documented service
fees should not be presumed price concessions.
Some commenters stated that the current FMV framework is adequate
and that the proposal departs from longstanding CMS policy and industry
practice. They cited past rulemaking (for example, 2016 MDRP, 2007 PFS)
supporting manufacturer discretion and noted limited industry demand
for additional FMV guidance in the December 2022 OIG report.
Several commenters stated that CMS' proposed definition of BFSFs
exceeds its statutory authority and diverges from ASP/AMP alignment.
They contended that percentage-based fees are not inherently improper
and that rigid formulas conflict with existing standards under Stark
and Anti-Kickback Statute (AKS). A commenter suggested aligning
percentage-based fees with existing precedents, such as the GPO safe
harbor to the AKS at 42 CFR 1001.952(j).
Others noted the new BFSF test adds regulatory burden and that
extending the no pass-through requirement to ``affiliates'' is overly
broad, ambiguous, and unauthorized. They noted that unclear definitions
could disrupt legitimate business arrangements and conflict with MDRP
treatment of affiliates.
Response: We agree that it would be time-intensive to implement a
new FMV methodology under the proposed timeline. We acknowledge
commenters' concern about extending the no pass-through requirement to
``affiliates'' and would like to further engage with manufacturers
regarding determination of FMV that could address these concerns while
also achieving the goal of accuracy and transparency when classifying
costs for the calculation of ASP. As such, we are not finalizing the
proposed requirements for the standards and methodology that should be
used to
[[Page 49538]]
determine FMV in this final rule. However, we encourage manufacturers
to document in their reasonable assumptions which service fees are tied
to costs that do not depend on the drug's price or volume and which
service fees do. As we plan to engage with manufacturers, this
information will aid with informing future policy development.
For comments noting the proposed FMV methodology requirements
depart from established CMS policy, we recognize that this marks a
shift from prior policy interpretation. However, as new services enter
the market, policy updates are occasionally required to ensure
appropriate regulation and oversight. We also take recommendations
outlined in OIG reports seriously and are committed to addressing them
effectively.
We also acknowledge commenters' other concerns, including whether
we have the statutory authority to impose BFSF standards that conflict
with MDRP and the FMV requirements conflict with FMV frameworks under
other law in our purview. In light of these comments, we intend to
continue to evaluate and consider this issue in next year's rulemaking
cycle. We also recognize that although this proposal would impose an
additional regulatory burden on manufacturers, we anticipate that it
would support the Administration's priorities of increased transparency
and potentially lower drug prices.
Further, we appreciate commenters' feedback regarding the exclusion
of the term ``affiliates'' and will further consider whether to
incorporate this term in future rulemaking.
Finally, we agree with commenters about limiting the scope of the
BFSF analysis to fees directly tied to drug sales. We will use
information from manufacturers' reasonable assumption to inform future
policy development concerning whether a flexible FMV approach is
appropriate and to evaluate whether certain fees exceed FMV.
Comment: A commenter stated concerns about pharmacy benefit
managers (PBMs), group purchasing organizations (GPOs), and related fee
reform, citing the proposed rule allows these intermediaries to demand
or require payments directly linked to drug costs.
Response: These issues fall outside the scope of the proposed CMS
BFSF rule as the proposed rule does not directly regulate PBMs or GPOs.
Comment: A commenter stated support for the proposed frequency of
FMV determinations and submission of FMV assessments, affirming that
these requirements would give CMS increased visibility into how ASP is
calculated and greater ability to monitor differences in approaches
across manufacturers and the potential need for future guidance.
Response: We thank the commenters for their support.
Comment: Several commenters did not agree with the proposed
requirement for manufacturers to conduct periodic updates of FMV. They
cited ambiguities regarding both the scope and frequency of the
reassessments. Commenters noted that FMV reassessment is unduly
burdensome due to the complexity of the process, which requires
reviewing detailed contract terms, compiling and analyzing historical
and projected data, and engaging in multiple rounds of consultation to
clarify service scope and pricing structures. Given that many contracts
are short-term in nature, commenters stated that requiring a new FMV
analysis upon every renewal could introduce unnecessary inefficiencies
without meaningfully improving compliance or accuracy.
Several commenters requested at a minimum the FMV reassessment for
ongoing service arrangements needs more flexibility. For example,
manufacturers could rely on FMV ranges established by third party
evaluators for common service types to ensure fees remain within an
inflation-adjusted FMV range. They also could apply existing FMV
assessments to new contracts involving similar services and vendors for
a reasonable period of time (for example,--3 to 5 years), unless there
is a material change in the scope or costs of the services provided or
a significant shift in market conditions. Another commenter suggested
that FMV reassessments need not be conducted for minor contract
modifications and not more than once every 3 years. Furthermore, a
commenter suggested allowing manufacturers to submit summary
information in the form of reasonable assumptions regarding their
approach to determine FMV.
Response: We agree that manufacturers should provide summary
information on FMV assessments as part of their reasonable assumptions,
as we are finalizing that portion of the proposal. We will use
reasonable assumptions to better understand the scope and frequency of
FMV reassessments, and this information will aid with informing future
policy development. As such, we are not finalizing the proposal that
manufacturers reassess FMV upon contract renewal in this final rule.
Comment: A few commenters supported the requirement that the FMV
assessment must be conducted by an independent third party for
percentage-based fees.
Response: We thank the commenters for their support.
Comment: Many commenters did not agree with the requirement that
manufacturers obtain independent third-party FMV assessments for BFSFs.
They stated that the terms ``independent'' and ``financial
relationship'' are not defined, which could result in an overly broad
and unintended interpretation. Commenters further expressed concern
that the proposal might disqualify accounting, actuarial, and transfer
pricing firms with which manufacturers already maintain business
relationships. Collectively, commenters stated that, as drafted, the
proposal could significantly reduce the number of firms with experience
in pharmaceutical FMV assessments, thereby causing delays.
Additionally, commenters noted that requiring third-party assessments
for every agreement could substantially increase compliance costs,
while also incentivizing valuators to demand shorter contract terms and
higher fees.
Several commenters requested that CMS clarify the criteria by which
an FMV evaluator would be considered ``independent''. Other comments
requested alternatives to the FMV evaluator. For example, CMS could
require personnel conducting valuations to exercise independent
judgment, supported by mechanisms such as ethical screens between teams
or that CMS allow manufacturers to identify independent third-party
verification services. Another commenter requested CMS authorize
established vendors with subject matter expertise to conduct FMV
assessments. Lastly, a commenter requested CMS allow FMV reassessment
to be conducted internally by applying an inflation adjustment to the
valuation.
Response: We are persuaded by these comments that more information
is needed to determine which parties may determine FMV and if there are
circumstances in which an internal determination may be appropriate. We
will engage with interested parties to better understand these issues
and consider them in future rulemaking.
After consideration of public comments, we are not finalizing the
proposed language regarding FMV methodology standards, FMV
reassessments, and independent third-party valuator requirement. We
will engage with interested parties to better understand current
practices and challenges related to FMV methodologies, reassessments,
and the use of third-party valuators.
[[Page 49539]]
(2) Fees Presumed To Be Price Concessions
We proposed revisions to Sec. 414.804(a)(2) to specify when
certain fees should be presumed to be price concessions. Specifically,
we proposed 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 (1) percentage-based fees or (2) 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.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters did not agree with the proposal to
presume that certain fee arrangements do not qualify as BFSFs. They
noted that percentage-based fees are widely used across the
pharmaceutical supply chain and highlighted the Congress's explicit
recognition of percentage-based BFSFs in the context of AMP reporting.
They further cited that in amending the AMP definition, the Congress
provided examples of fees it considered to be BFSFs that should be
excluded from AMP calculations, and those examples clearly encompass
percentage-based fees. Furthermore, commenters stated that this
presumption would result in the under-exclusion of BFSFs ASP
calculations.
Other commenters requested clarification that only those service
fees which reduce the acquisition cost for a purchaser should be
treated as price concessions. They claimed that what is relevant is
whether the arrangement ultimately lowers the price paid by the
provider who will be reimbursed based on the product's ASP.
Response: We will take these comments and the related issues under
consideration in future rulemaking.
After consideration of public comments, we are not finalizing the
proposed regulatory text to specify when fees are presumed to be price
concessions.
(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
proposed 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 specified 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 is providing the service. We proposed the
addition of the word affiliate to more comprehensively address the type
of arrangements that may exist between certain entities.
In addition, we proposed 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 proposed to add new 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 proposed 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 proposed 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 proposed 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 the entity takes
title to the drug.
We stated that, these data submission requirements, if finalized,
would be effective for sales occurring on or after January 1, 2026, and
that data would be due to CMS by April 30, 2026, and used in the July
2026 Medicare Part B Drug Payment Limit File. The newly proposed
certification letter would be submitted in the current reporting portal
and uploaded under reasonable assumptions. Lastly, we explained that
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
[[Page 49540]]
third parties, including any affiliates, clients, and governmental
agencies.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters supported mandatory submission of
reasonable assumption letters. A commenter encourages CMS to read these
closely and provide feedback on them for purposes of driving greater
consistency. The commenter requests CMS confirm that reasonable
assumptions letters are covered by the ``Confidentiality'' provision in
the ASP statute. The commenter further requested CMS should also
confirm that it will treat these reasonable assumptions as confidential
and proprietary financial information within the meaning of the Freedom
of Information Act (FOIA), the relevant Federal criminal statute, the
FOIA regulations, and other applicable laws, regulations, or policies.
Specifically, this information is subject to exemption from mandatory
disclosure under Exemption of FOIA across manufacturers in the
calculation and interpretation of ASP.
Response: We agree that these submissions are an important tool for
promoting transparency, consistency, and accuracy in ASP reporting. As
noted above, we intend to review reasonable assumptions, and if any
concerns are identified, we will reach out to the manufacturer.
Regarding confidentiality, data collected through the ASP module will
be protected from disclosure to the extent required by the law. We
cannot release information about specific manufacturers or wholesalers
or prices charged by such manufacturer or wholesaler for specific
products due to statutory confidentiality provisions that limit the
release of ASP data as specified in section 1847A(f)(2)(D) of the Act,
and in section 1927(b)(3)(D) of the Act.\143\
---------------------------------------------------------------------------
\143\ Average Sales Price (ASP) Quarterly Publication Process,
Centers for Medicare and Medicaid Services. January 17, 2025.
https://www.cms.gov/files/document/frequently-asked-questions-faqs-asp-data-collection.pdf.
---------------------------------------------------------------------------
Comment: A commenter did not agree with the mandatory submission of
ASP reasonable assumption letters and recommended CMS maintain the
practice of voluntary submission of reasonable assumptions and stated
that if CMS is concerned with variances in reasonable assumptions then
CMS should standardize a template.
Response: We do not agree with the commenter and believe that
mandatory submission of ASP reasonable assumption letters is necessary
to enhance transparency, promote consistent application of ASP
methodologies, and strengthen program oversight. Although there is not
currently a standardized format for reasonable assumption letters, as
the commenter noted, there is a template form under review with PRA.
Comment: Several commenters did not agree with the proposal that
manufacturers provide documentation of the methodology used to
determine FMV. Commenters cited concerns with the administrative and
financial burden that quarterly FMV submissions would impose on
manufacturers and added that this requirement contradicts the
Administration's stated aim of reducing unnecessary paperwork. A few
commenters noted that FMV analyses involve proprietary valuation
methods, market data, and sensitive business strategies not meant for
disclosure. A few commenters highlighted the absence of corresponding
regulatory text to codify the preamble's proposals, which could lead to
confusion and inconsistencies. Finally, another commenter stated the
FMV documentation requirement provides no clear benefit to the
healthcare system.
Response: We do not believe that the requirement to document FMV
determinations will impose an undue burden on manufacturers.
Manufacturers should already maintain sufficient internal documentation
to support their FMV assessments. To clarify, FMV documentation is not
due quarterly; effective January 1, 2026, manufacturers must document
the methodology used to determine FMV for all current, new, and renewed
contracts. For example, all FMV determinations for current contracts
are due by April 30, 2026 with their submission of ASP for first
quarter of sales in 2026. If a service arrangement is newly signed or
renewed between January 1, 2026 through March 31, 2026, the FMV
determination data is also due by April 30, 2026. To minimize
administrative burden, we will accept well-detailed summaries of FMV
methodologies that clearly describe the data sources, assumptions, and
rationale supporting the determination. While this would be an
additional reporting requirement, this supports the Administration's
priorities of lowering drug prices. Further, in reference to the
statement that FMV data is proprietary, as we noted previously, data
collected through the ASP module will be protected from disclosure to
the extent required by law. Lastly, we do not agree that requiring FMV
documentation does not provide a clear benefit to the healthcare
system. This information can enhance transparency, accountability, and
program integrity. Following publication of the final rule, we will
provide a template of the reasonable assumptions letter for
manufacturers to document FMV analyses.
Comment: A few commenters recommended modifications to the FMV
documentation requirement to reduce administrative burden. A commenter
suggested that CMS require manufacturers to maintain FMV documentation
supporting BFSFs, consistent with existing MDRP guidance that requires
manufacturers to retain records for 10 years from the date of reporting
the BFSF to CMS. Commenters stated that this approach would minimize
paperwork while preserving CMS' ability to request and review FMV
analyses as necessary. Another commenter requested that CMS adopt a
flexible approach in its review of FMV documentation and operate under
the presumption that manufacturers are complying in good faith.
Response: We do not agree with the commenters' suggestion to
require manufacturers only to maintain, rather than submit, FMV
documentation. We believe that requiring submission promotes greater
transparency and consistency across manufacturers and enables us to
conduct more effective oversight of FMV determinations. Regarding the
suggestion we adopt a flexible approach in its review of FMV
documentation, because we did not propose a policy for CMS's review of
reasonable assumptions, this comment is out of scope. We will review
reasonable assumptions to inform future policy development. However, if
we determine that a manufacturer has misrepresented information in the
reporting of its ASP, we may refer the issue to HHS's Office of
Inspector General (OIG) to determine whether a civil monetary penalty
should be imposed, in accordance with section 1847A(d)(4) of the Act.
Comment: Many commenters did not agree with CMS' proposed
certification requirement for BFSFs. Commenters stated that the change
would impose substantial administrative, contractual, and operational
burdens on manufacturers, who often manage hundreds of service
agreements. They emphasized that manufacturers cannot compel third-
party vendors to provide certifications, which risks misclassifying
legitimate BFSFs as price concessions. Commenters further questioned
CMS' legal authority to impose this obligation, stating it is
inconsistent with existing statutory frameworks, Medicaid rules, and
longstanding CMS policy that presumes
[[Page 49541]]
BFSFs are not passed on. Many highlighted that the proposal undermines
the Administration's stated goal of reducing regulatory burden and
paperwork.
Response: We do not agree that the required certification would add
substantive burden. This measure targets transparency and is not a
fundamental change in how manufacturers calculate FMV. The
certification ensures accountability and documentation that payments
reported as BFSFs are consistent with regulatory definitions. Until we
observe evidence that service providers are unwilling to provide such
certifications, we do not find these concerns to be substantiated.
Finally, while this proposal adds some additional regulatory and
paperwork requirements, it supports the Administration's priorities to
lower drug prices and increase transparency.
After consideration of public comments, we are finalizing as
proposed to require manufacturers submit reasonable assumptions
including documentation of the methodology used to determine FMV for
current, new, and renewed contracts. We are also finalizing as proposed
to require certification letters from the recipient of a BFSF for
prospective contracts that the fee is not passed on in whole or in part
to a client or customer of the recipient of the fee, whether or not the
entity takes title to the drug.
(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 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 believed that constructing an exhaustive list could be
prohibitive over time. However, in the CY 2026 proposed rule we
proposed some specific, non-exhaustive examples of fees and how they
should be considered in the calculation of manufacturer's ASP for the
following reasons.
First, we noted 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.\144\ 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.
---------------------------------------------------------------------------
\144\ 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.
---------------------------------------------------------------------------
Second, as discussed in our Autologous Cell-based Immunotherapy and
Gene Therapy Payment proposal, we also proposed 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
appeared to exceed the FMV for the service or were 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 proposed 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 discussed previously in this section, we proposed 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 appeared 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 proposed 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 discussed previously in this section, we proposed that
such certification or warranty should be submitted by the manufacturer
to CMS as part of the quarterly ASP data submission.
The following is a summary of the comments we received and our
responses.
Comment: Many commenters did not agree with CMS' proposed non-
exhaustive list of excluded fees, saying the list is confusing and
ambiguous, creates uncertainty and compliance risks, and could reduce
provider reimbursement. Commenters did not agree with CMS'
characterization that certain data sharing and distributor service fees
are not BFSFs. They cited that the Congress explicitly excluded
distribution and inventory management fees from AMP, suggesting they
are not price concessions, and therefore, CMS is overreaching by
reclassifying them. Commenters requested that CMS identify specific
problematic fees, solicit input through targeted questions, and issue
clear guidance to avoid confusion. Commenters also object to the
inclusion of credit card processing fees as an example, noting that CMS
has not provided sufficient justification for excluding them. A
commenter does not believe that an isolated example of credit card
processing fees is sufficient justification for providing the list.
Response: We do not agree that we have not provided sufficient
justification for excluding credit card fees to distributors as BFSFs,
as described in the proposed rule. However, we are persuaded by some of
the commenters' concerns that providing examples of fees could have
unintended implications and are not finalizing a list of example of
fees at this time.
After consideration of public comments, we are not finalizing the
list of fee examples and how they should be considered in the
calculation of manufacturer's ASP.
Comment: Many commenters expressed concern regarding CMS' proposed
implementation of January 1, 2026 for the BFSF proposals, asserting
that the proposed timeline is too aggressive and does not allow
sufficient time for interested parties to adjust. Commenters
highlighted the extensive contract renegotiations, valuations, system
updates, and compliance
[[Page 49542]]
procedures required. Commenters stated concerns with the rushed
timeline, including reporting inconsistencies, compliance risks, and
administrative inefficiencies, potentially exposing manufacturers to
audits and penalties. Commenters requested more time for CMS to fully
evaluate operational and policy implications, conduct additional
engagement and analysis, and ensure that the rulemaking does not result
in unintended consequences. Some commenters recommended that, if
finalized, the policy should apply only to new contracts moving
forward.
Response: We agree with commenters that the proposed implementation
timeline for the BFSF definition proposals does not provide sufficient
time for manufacturers to make the necessary system and operational
changes. Accordingly, we intend to address this policy area in
rulemaking next year. To clarify, the proposed certification
requirement applies to new contracts. However, documentation of the FMV
methodology applies to current as well as new contracts. As stated
previously, manufacturers are expected to document and submit the FMV
methodology used for any current BFSF arrangements by April 30, 2026
(that is, the due date for ASP data submission to us for sales
occurring in the first quarter of CY 2026) and reflected in the July
2026 Medicare Part B Drug Payment Limit File.
Comment: Many commenters recommended CMS conduct additional
research and create more opportunities for dialogue between interested
parties before implementation. Commenters noted CMS could host
listening sessions, establish a technical advisory panel to work with
providers and interested parties and develop technical guidance, or
conduct a survey of manufacturer practices.
Response: Thank you for this feedback and methods of future
engagement.
Comment: A few commenters did not agree with the proposal because
there is no regulatory impact analysis assessing the costs associated
with the proposed changes. A commenter requested that CMS withdraw BFSF
proposal and produce an analysis showing costs and benefits of changing
the FMV methodology. A commenter requested a two-pronged approach: (1)
conduct a comprehensive study of BFSF impacts on ASP before rulemaking,
considering scenarios where fees increase or decrease ASP, treatment
discrepancies, contract timelines, potential drug shortages, and
interactions with other legislative/regulatory actions; (2) determine
whether changes should apply universally or in a more targeted manner.
Response: We do not agree that a separate regulatory impact
analysis or additional study is necessary. We believe that engaging
directly with manufacturers and reviewing reasonable assumptions
letters provides sufficient information to assess current practices and
inform policy decisions.
Comment: We received a few comments outside the scope of the
proposed rule. A commenter requested that CMS convene a public-private
interested parties' group to develop recommendations for
comprehensively reforming Part B drug payments to align payment to
services provided and outcomes achieved versus the cost of the drug.
Another commenter requested CMS gather physician costs on drugs where
payment is reported to be below or less than allowed 6 percent and
recommended CMS review the costs associated with administering drugs in
the office where ASP is less than five percent above acquisition price
or where ASP does not meet acquisition price.
Response: We note that the recommendations are outside the scope of
this rulemaking.
d. Summary
In summary, we are finalizing a definition of bundled arrangement
at Sec. 414.802 with the removal of the phrases of purchasing patterns
and prior purchases and amending Sec. 414.804(a)(2) with new
paragraphs (iii) and (iv) as proposed to provide guidance to
manufacturers regarding pricing of bundled price concessions. We are
not finalizing the proposed new regulatory text at Sec.
414.804(a)(2)(i) to specify when certain fees are considered price
concessions. We are not finalizing the proposed revised definition of
BFSFs at Sec. 414.802. We are finalizing the revisions at Sec.
414.804(a)(5) to update requirements for ASP data submissions as they
relate to reasonable assumptions letters, FMV documentation for
current, new, and renewed contracts in reasonable assumption letters,
and evidence that BFSFs are not passed on with some modifications in
(ii) and (iii). Finally, we are not finalizing 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)
\145\ 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.
---------------------------------------------------------------------------
\145\ 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 Medicare Part B
Drug Payment Limit 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; \146\
and there is an agreed-upon renegotiated MFP. We note that the guidance
was updated on September 30, 2025; however, there were no changes to
this policy in section 130.2.\147\
---------------------------------------------------------------------------
\146\ See: https://www.cms.gov/files/document/ipay-2028-draft-guidance.pdf.
\147\ See: www.cms.gov/files/document/ipay-2028-final-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 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
[[Page 49543]]
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 clarified in the CY 2026 PFS proposed rule (90 FR 32545 through
32546) 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 has commonly been 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)(3)(C) of the
Act); and
For a selected drug, 106 percent of MFP (section
1847A(b)(1)(B) of the Act).
In such circumstances, only the actual payment limit is published
on the file (and no ASP information is displayed). Therefore, we now
refer to it as the Medicare Part B Drug Payment Limit File.
While we did not make a proposal or solicit comments on the policy
statement clarifying that (1) units of selected Part B or Part D drugs
sold at the MFP are included in the manufacturer's ASP and (2) when the
Medicare payment limit is based on MFP, the Medicare Part B Drug
Payment Limit File will display the MFP-based payment limit, we
received comments. Commenters mentioned statutory framework and its
relationship to ASP, AMP, and best price; operational and reporting
considerations; the role and publication of ASP values in CMS files;
and potential implications across Medicare fee-for-service, Medicare
Advantage, Medicaid, and commercial arrangements. Submissions also
discussed biosimilar market dynamics, inflation-rebate calculations,
and transparency and labeling in public files. We appreciate the
thoughtful and robust feedback on this policy statement.
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.148 149 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.150 151 152 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.
---------------------------------------------------------------------------
\148\ 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.
\149\ 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.
\150\ 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.
\151\ 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.
\152\ 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 the CY 2026 PFS
proposed rule (90 FR 32546 through 32547), we proposed policies for how
Medicare pays for the manufacturing steps across all types of
autologous cell-based immunotherapies and gene therapies and proposed
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
[[Page 49544]]
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).
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 (eg, 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.
We proposed 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. The
proposal would continue the current payment policies for CAR T-cell
therapies and would extend the same payment policy to other autologous
cell-based therapies. In our evaluation of each therapy, we noted there
are similar sequences of steps as we described in the background
section. Consistent with previous rulemaking, we proposed that Medicare
not pay separately for each step used to manufacture an autologous
cell-based immunotherapy or gene therapy. In other words, Medicare
would 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
would be included in the payment of the drug or biological itself,
using the billing and payment code for the product.
We solicited 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 therapy.
The following is a summary of public comments we received and our
responses.
Comment: Some commenters supported including manufacturing-related
costs in the payment for the product (that is, bundled payment) and
recognizing manufacturer-paid procurement activities in pricing and
reporting. They stated this approach reflects true acquisition costs,
reduces uncompensated expenses, and aligns with current policy for CAR
T-cell therapies.
Response: We thank the commenters for their support.
Comment: Many commenters did not agree with CMS' current payment
policy for CAR T-cell therapies, under which services described by CPT
codes 38225, 38226, and 38227 are bundled into the payment for the
product, and the proposal to extend that approach to other autologous
cell-based immunotherapy and gene therapy. They stated that preparatory
procedures such as cell collection, apheresis, laboratory processing,
and dose preparation are clinician-ordered, resource-intensive, and
medically necessary, and therefore should be reimbursed separately
rather than treated as manufacturer COGS. Commenters further stated
that the current bundling policy for CAR T-cell therapies
oversimplifies the nature of cell and gene therapies, undervalues
physicians' work (for example, clinical oversight and coordination),
and is inconsistent with CMS' approach for stem cell transplants and
other therapies in which analogous services are paid separately.
Several commenters were concerned that continued bundling could worsen
``underwater reimbursement,'' leading to practice closures,
consolidation, and shifts to higher-cost inpatient settings or to
integrated centers that can absorb unreimbursed costs, thereby
increasing overall system costs.
Response: We appreciate commenters' feedback regarding the
characterization of preparation services, such as cell collection by
apheresis and local processing, for CAR T-cell therapies. Consistent
with prior rulemaking under both the OPPS and the PFS--ranging from the
CY 2019 OPPS/ASC final rule (83 FR 58904 through 58908) to the most
recent CY 2025 OPPS/ASC final rule (89 FR 94080 through 94082) and the
CY 2025 PFS final rule (89 FR 97778 through 97780)--we continue to view
these services as integral preparatory steps in the manufacturing of
the therapy and, therefore, included in the payment for the product.
Medicare does not pay separately for each step used to manufacture a
drug or biological product; these manufacturing-related services are
accounted for in the drug payment code, while administration services
are separately recognized.
We do not agree with commenters' comparisons to payment for stem
cell transplant services and other therapies where collection and
processing may be separately payable, as we do not consider those
frameworks directly analogous to CAR T-cell therapies and other
autologous cell-based immunotherapy and gene therapy products. In the
stem cell transplant context, payment policies established under
section 1886(d)(5)(M) of the Act and related implementing regulation at
Sec. 412.113(e) address clinical services furnished to the beneficiary
and, in some cases, provide a distinct reasonable-cost cell-acquisition
payment to subsection (d) hospitals. By contrast, for CAR T-cell
therapies and other autologous cell-based
[[Page 49545]]
immunotherapy and gene therapy paid under section 1847A of the Act,
patient-specific collection and local processing are steps used to
manufacture the labeled biological product and are reflected in the
product payment, while the administration service is separately
payable. Maintaining this approach across payment systems promotes
consistency in the treatment of these complex therapies.
Accordingly, we are finalizing 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, consistent with the existing payment policy for CAR T-cell
therapies. For concerns about potential payment adequacy, practice
viability, and site-of-service shifts, we will continue to evaluate and
monitor claims data, clinical practice patterns, and site-of-service
trends to determine whether additional refinements may be warranted in
future rulemaking.
Comment: Several commenters requested a clearer definition of
``tissue procurement'' and suggested that ``cell collection'' more
accurately describes the procedures involved in autologous cell-based
immunotherapy and gene therapy. They noted that ``tissue procurement''
is a broad term that could cause confusion, as it may encompass
clinical activities (for example, diagnostic tissue biopsies) beyond
those intended for payment and ASP reporting. Commenters also noted
that, in some cases, a finalized CAR T-cell product is never
administered to the beneficiary due to factors such as manufacturing
failure or disease progression that may render the patient ineligible
or result in death during the production period. They recommended
complementary payment tools for preparatory procedure payment and
requested clarification on how payment policy applies in these
circumstances.
Response: We agree with commenters that ``cell collection'' is a
more precise term than ``tissue procurement'' to describe the
preparatory procedures such as apheresis or other collection of patient
cells used as starting material for autologous cell-based immunotherapy
and gene therapy, and we will adopt this terminology where appropriate
for clarity. We further clarify that when the required procurement
procedure does not involve apheresis (for example, when starting
material is obtained via procedures including, but not limited to,
surgical biopsy, tumor harvest, or tumor resection), the term ``tissue
procurement'' remains appropriate in the context of manufacturing
autologous cell-based immunotherapy and gene therapy. This
clarification promotes consistent terminology and reporting and does
not expand nor narrow existing payment scope. This finalized policy
applies to patient-specific procurement and associated processing
required by the product's manufacturing and release specifications. We
thank commenters for providing their unique perspectives and
experiences in situations where the manufacturing process does not
result in a final product being administered to a beneficiary and
recommendation on complementary payment tools; these issues are out of
scope for this final rule.
Comment: Several commenters requested CMS consider additional
protections to ensure appropriate reimbursement for autologous cell
immunotherapy and gene therapy services. They recommended mechanisms
such as add-on codes for preparatory procedures and strengthened
outlier protections under the OPPS to address cases with exceptionally
high costs, including but not limited to severe toxicity-related
hospital admissions. Commenters also noted that some hospitals may face
unfunded costs such as anesthesia, intensive care unit readiness,
registry reporting, and long-term monitoring, while community practices
expressed concern about losing the ability to provide these therapies
locally. A few commenters requested that CMS monitor ASP volatility in
low-volume markets, where quarterly sales data may fluctuate
significantly and create reimbursement uncertainty.
Response: As part of establishing the Part B payment limit based on
the quarterly submission of all sales under section 1847A(c)(5) of the
Act, we will continue to monitor pricing changes and patient volumes
for autologous cell-based immunotherapies and gene therapies. For
recommendations for additional protections such as add-on codes or
enhanced outlier adjustments, this final rule addresses only (1)
continuation of bundled payment for manufacturing steps under the PFS
and OPPS and (2) the manufacturer-paid preparatory procedures for ASP
reporting. These recommendations are therefore out of scope for this
rule.
Comment: Many commenters did not agree with the assignment of PC/TC
indicator ``5'' to CPT code 38228, which describes the administration
of autologous CAR T-cell therapy. They stated that CAR T-cell
administration should not be categorized as an ``incident to'' service
and recommended revising the indicator from ``5'' to ``0 (physician
service),\153\'' consistent with similar services such as autologous
stem cell transplant infusion (CPT code 38241). Several commenters also
requested that this correction be applied retroactively to January 1,
2025, and that CMS direct MACs to reprocess affected claims.
---------------------------------------------------------------------------
\153\ https://www.cms.gov/status-indicators.
---------------------------------------------------------------------------
In addition, commenters objected to CMS' bundling of preparatory
services described by CPT codes 38225 (cell collection), 38226 (cell
processing/cryopreservation), and 38227 (receipt and dose preparation),
which CMS has assigned status indicator ``B'' under both the OPPS and
PFS, making them non-payable. They noted that this approach is
inconsistent with CMS' payment policies for stem cell transplants,
where collection and processing are separately reimbursed. Commenters
recommended assigning status indicator ``S'' and place these codes in
appropriate APCs to reflect the clinical complexity and resource
intensity of these services.
Response: We made no specific proposal related to the CAR-T cell
administration codes. Therefore, these comments are out of scope.
Similarly, we did not propose changes to status indicators for CPT
codes 38225 (cell collection), 38226 (cell processing/
cryopreservation), and 38227 (receipt and dose preparation). As
discussed above in this section, we are finalizing 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, consistent with the existing payment
policy for CAR T-cell therapies.
Comment: Several commenters requested clarification on how the
policy would apply to allogeneic cell and gene therapies that require
donor search, evaluation, and cell procurement. They explained that
these steps--such as identifying and matching donors through national
registries, performing compatibility testing, coordinating donor cell
collection and transport, and monitoring donor health--are critical for
patient and donor safety, can vary widely by case, and may occur even
when the therapy is not ultimately administered. Commenters requested
CMS to separately reimburse for these steps to reflect their complexity
and variability. Alternatively, commenters requested for clarification
whether these steps paid by manufacturers qualify as BFSFs.
Response: This rule addresses autologous cell-based immunotherapy
[[Page 49546]]
and gene therapy manufacturing steps only. Policies specific to
allogeneic donor procurement or transplant services are outside the
scope of this rule. That said, as discussed earlier in this preamble,
procurement of starting material--whether patient-derived (autologous)
or donor-derived (allogeneic)--is integral to the manufacturing process
and a component of a manufacturer's COGS. If, in the future, allogeneic
therapies are scaled and a manufacturer makes payments to non-
purchasing third parties for donor search, evaluation and cell
procurement services, such payments may qualify as BFSFs and be
excluded from ASP when they satisfy the four-part test at Sec.
414.802. This final rule does not establish new payment policy specific
to allogeneic donor search, evaluation, or cell procurement, nor does
it alter existing transplant-related procurement policies. We may
consider whether additional clarification is warranted in future
rulemaking as allogeneic cell-based therapy evolves.
Therefore, after consideration of public comments, we are
finalizing as proposed to continue the existing payment policy for CAR
T-cell therapies and to extend it to autologous cell-based
immunotherapy and gene therapy. Under this policy, the costs of
patient-specific cell or tissue procurement and processing remain
bundled into the payment for the product.
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 final 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 proposed 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 proposed 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.
The following is a summary of the comments we received and our
responses.
Comment: Several commenters requested additional details on
documentation expectation for classifying payments for preparatory
procedures as BFSFs for autologous cell-based immunotherapy or gene
therapy.
Response: General BSFS documentation standards are addressed in
section III.A.2.c. of this final rule. The policy in this section
pertains only to the ASP reporting classification of manufacturer-paid
preparatory procedures for autologous cell-based immunotherapy and gene
therapy manufacturing and does not establish new submission
requirements.
Comment: Many commenters did not agree with CMS' proposal to treat
preparatory procedures--such as cell collection and local processing--
as not BFSFs and to require their inclusion in the calculation of ASP.
Commenters stated that payments for these procedures meet the
regulatory BFSF criteria and that treating them as price concessions
would artificially lower ASP and reimbursement, create operational
burdens, and limit patient access. Some commenters requested CMS to
address potential interactions between ASP and other pricing metrics.
Commenters also stated that, for many beneficiaries, cell collection
occurs at a different facility and by a different provider than the
entity that ultimately administers and bills for the product.
Commenters further stated that CMS lacks explicit statutory
authority to redefine ASP inputs in this manner because section 1847A
of the Act ties ASP to sales to purchasers, not payments to non-
purchasing service providers, and the Congress has not directed
manufacturers to add specific manufacturing costs into ASP. Some
commenters recommended that CMS delay implementation by 12 to 24
months, requested clarification that payments to non-purchasing third
parties (for example, the American Red Cross) should not affect ASP
calculations, and suggested for clearer guardrails for manufacturer-
provider arrangements if manufacturers pay for cell collection or
processing.
Response: We are persuaded by the commenters that when a
manufacturer pays for a preparatory procedure, it could be classified
as a bona fide service. Therefore, after consideration of public
comments, we are not finalizing our proposal that such payments cannot
be classified as BFSFs. Likewise, we are not finalizing the proposal to
require inclusion in ASP, beginning January 1, 2026, of manufacturer-
paid preparatory procedures for tissue procurement (including ``cell
collection'') required for manufacturing an autologous cell-based
immunotherapy or gene therapy product. Instead, we agree that
manufacturer payments for preparatory procedures--such as cell
collection and local processing--may meet the four-part regulatory
criteria for BFSFs under Sec. 414.802 when they are itemized,
represent FMV, are performed on behalf of the manufacturer, and are not
passed through to a purchaser. These payments compensate for services
integral to the manufacturing process and are not discounts or rebates
that reduce the cost to the purchaser. When these criteria are
satisfied, such payments are excluded from price concessions under
Sec. 414.804(a)(2)(ii); because ASP is calculated net of price
concessions under section 1847A(c)(3) of the Act, these amounts are not
deducted from ASP. These clarifications apply regardless of whether
collection and infusion occur at the same or different facilities.
We believe this interpretation is most consistent with the
statutory framework for ASP and the regulatory definition at Sec.
414.802, and it avoids unintended downward pressure on ASP-based
reimbursement that could impede beneficiary access. Because
manufacturers already maintain documentation relevant to BFSF analyses,
this clarification aligns ASP reporting with existing requirements and
does not impose new burden. We reiterate that payments properly
classified as BFSFs are not price concessions in ASP calculations, and
manufacturers must continue to maintain documentation supporting their
BFSF determinations and reasonable assumptions.
For payments made to non-purchasing third parties, payments that
[[Page 49547]]
meet the BFSF criteria are excluded from ASP. More broadly, ASP
represents the manufacturer's sales to all purchasers; therefore,
payments to entities that do not purchase the product are not price
concessions to a purchaser and, when properly classified as BFSFs, do
not affect ASP.
This policy addresses only how manufacturer-paid amounts are
reflected in ASP; it does not require hospitals or physicians to enter
financial arrangements with manufacturers or dictate commercial terms.
By not mandating such arrangements, we provide interested parties
flexibility to structure relationships consistent with operational
needs and applicable law, supporting site-specific decisions and
reducing administrative burden. Except for the ASP reporting
clarification described in this section, this final rule does not
change any statutory or regulatory price-reporting definitions or
methodologies, including AMP and best price.
d. Summary
In summary, we proposed 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.
After consideration of public comments, we are finalizing, as
proposed, continuation of the existing bundled payment policy for CAR
T-cell therapies and extending that policy to autologous cell-based
immunotherapy and gene therapy, such that preparatory procedures for
patient-specific cell or tissue procurement required for manufacturing
are included in the payment for the product itself. However, we are not
finalizing the proposal to prevent these payments from qualifying as
BFSFs or to require their inclusion in ASP beginning January 1, 2026.
Instead, we conclude that such payments may be treated as BFSFs when
the four-part test at Sec. 414.802 is satisfied and therefore excluded
from ASP, consistent with section 1847A(c)(3) of the Act and Sec.
414.804(a)(2)(ii). This final rule maintains cross-setting alignment
under the OPPS and PFS--where Medicare does not pay separately for each
step used to manufacture a drug or biological but does pay separately
for the administration service--and ensures that ASP reporting remains
consistent with statutory and regulatory requirements.
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 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
[[Page 49548]]
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. We remain committed to improving how Medicare payment
recognizes the resources involved in furnishing covered services. These
services encompass aspects of advanced primary care furnished by
interprofessional care teams and typically concentrate 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 coding for APCM incorporates elements of several existing
care management services into a bundle that we have already considered
to be care coordination services paid separately to RHCs and FQHCs
using HCPCS code G0511 (for example, CCM and PCM). In addition, the
coding for APCM incorporates elements of communication technology-based
services (CTBS) into a bundle that we have already considered to be
virtual communications paid separately to RHCs and FQHCs using HCPCS
code G0071. 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 adopted the three new APCM codes
G0556, G0557, and G0558 as being payable in addition to the otherwise
billable visit.
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 or 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).
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.
In the CY 2026 PFS proposed rule (90 FR 32549), we discussed how 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.''
\154\ Integrating behavioral health with primary care has been shown to
improve outcomes like reduced depression severity, and enhancing
patient's experience of care.\155\ We further explained that in
response to comments received for CY 2025 rulemaking, for services paid
under the PFS, we proposed to create optional add-on codes for APCM
services that would facilitate providing complementary BHI services.
Section II.G.1. of this final rule provides more detail on the final
policies under the PFS.
---------------------------------------------------------------------------
\154\ https://integrationacademy.ahrq.gov/about/integrated-
behavioral-
health#:~:text=Integrated%20behavioral%20health%20offers%20many,these
%20concerns%20are%20also%20addressed.
\155\ 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 also discussed how 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. In
addition, and similarly to the discussion in section II.G of this final
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 proposed to adopt the add-on
codes for APCM that would facilitate billing for BHI and CoCM services
when RHCs and FQHCs provide advanced primary care. As we stated, 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
[[Page 49549]]
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 final rule.
We further discussed that 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, we
explained that since we proposed using 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 would
also need to unbundle HCPCS code G0512 to effectuate that policy. We
stated that 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 proposed 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 would 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 B-BA1, titled ``Psychiatric Collaborative Care Model HCPCS Codes
and Descriptors.'' Payment for these services would 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 proposed to revise Sec. 405.2464(c) to reflect our
proposal on payment of CoCM services for RHCs and FQHCs.
[GRAPHIC] [TIFF OMITTED] TR05NO25.102
[[Page 49550]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.103
[[Page 49551]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.104
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Most commenters supported our proposal to adopt the
optional add-on codes for APCM that would facilitate billing for BHI
and CoCM services when RHCs and FQHCs provide advanced primary care
management. Commenters agreed that adoption of the optional add-on
codes would facilitate billing for BHI and CoCM services provided by
RHCs and FQHCs, incentivize RHCs and FQHCs to adopt integrated care
services, strengthen integrated behavioral health in primary care,
minimize documentation requirements, increase access to critical
behavioral health services and provide flexibility for RHCs when
choosing the most appropriate care management option for their patients
and clinic's capacity.
A few commenters expressed their support for these proposals but
had concerns. Some commenters were concerned about the RHC uptake of
the new codes. These commenters requested CMS to provide additional
support via resources, education, guidance and training on the billing
codes to effectuate the use of these services and to minimize billing
and compliance barriers. Other commenters requested CMS provide clarity
around payment, duplication and assignment, and requested that CMS
provide a table in the final rule that would summarize when APCM may be
billed with CCM, PCM, RPM, RTM, and CTBS across settings. These
commenters stated that RHCs are small healthcare providers with limited
resources and capacity to provide new, innovative services.
A few commenters requested clarity on how the BHI and CoCM services
will be categorized for RHCs with regard to the 50 percent threshold.
They explained that RHCs are currently surveyed based on the total
number of hours spent providing primary care versus behavioral health
care and can be cited if their hours spent providing the latter exceed
50 percent. These commenters expressed concern that counting BHI and
CoCM as behavioral health services would discourage RHCs from providing
these services and requested that CMS count BHI and CoCM as primary
care, given that they are add-on codes for APCM, and that CMS provide
sub-regulatory guidance to that effect.
A few commenters had concerns about cost-sharing and indicated that
beneficiaries receiving care at RHCs and FQHCs are often financially
unstable and the monthly cost for some of these recurring services may
discourage them from seeking them out. These commenters supported the
proposal to allow for billing of BHI and CoCM codes in conjunction with
APCM codes but urged CMS to remove cost-sharing from all APCM codes.
Another commenter expressed concerns about cost-sharing requirements
stating that for many Part B beneficiaries, these costs may discourage
patients from accessing behavioral health services, generally. Lastly,
these commenters recommended that CMS categorize components of APCM and
behavioral health services as preventive services which they believe
would eliminate the cost-sharing barrier for underserved RHC and FQHC
patients.
A commenter urged CMS to delay the implementation of the proposal
to adopt the add-on codes for APCM that would facilitate billing for
BHI and CoCM services for RHCs and FQHCs, stating that creating
optional add-on codes could cause the conversion factor to decrease and
reduce payment. The commenter urged CMS to delay implementation and
requested that CMS engage interested parties in conversation on
potential implications to budget neutrality and the downstream impacts
on the PFS conversion factor.
A few commenters stated that they did not agree with the proposal
until the current APCM codes have been widely implemented and
researched. Other commenters recommended CMS not create optional add-on
codes for behavioral health services with APCM stating that FQHC's have
varying levels of integration, which include coordination and co-
location of primary care and behavioral health facilities and services.
These commenters stated that add-on codes for APCM may be difficult for
FQHCs to implement and would not encourage increased utilization. They
requested that CMS ensure adequate payment for BHI and CoCM services,
if we move forward with finalizing this proposal.
Response: We thank commenters for their supportive comments.
Regarding commenter concerns for additional support via guidance on new
billing codes to effectuate the use of these services, we plan to issue
sub-regulatory guidance and other educational resources that will help
RHCs and FQHCs minimize billing and compliance barriers by providing
clarity around payment, assignment and duplication of codes.
Regarding the comments about the categorization of BHI and CoCM
[[Page 49552]]
services and the total hours spent providing primary care versus
behavioral health services, we note that in the CY 2025 PFS final rule
we discuss finalized policy around primary care and behavioral health
services. In the discussion we explain that CMS will no longer
determine or enforce the standard of RHCs ``being primarily engaged in
furnishing primary care services.' This policy was implemented via the
sub-regulatory guidance contained in the State Operations Manual
Appendix G--Guidance for Surveyors: Rural Health Clinics (RHCs). In the
CY 2025 PFS final rule, we stated that we believe this change would
provide RHCs with additional flexibility to provide outpatient
specialty services on-site or hire additional providers with
specialized expertise to meet the needs of their community (89 FR 98518
and 98519).
Regarding commenters' requests for waiving coinsurance costs, we
are aware that the copayment and/or deductible in RHCs and the
copayment in FQHCs can be a barrier for some beneficiaries, but we do
not have the statutory authority to waive these charges. Because these
services are typically furnished non-face-to-face, and therefore, are
not visible to the patient, it is important that adequate information
is given to patients during the consent process on cost-sharing
responsibilities and the benefits of care management services. RHCs and
FQHCs should also provide information on the availability of assistance
to qualified patients in meeting their cost-sharing obligations, or any
other programs to provide financial assistance, if applicable.
Regarding the comment about preventive services, as we discuss in
section II.G.4 of this final rule, we solicited comments on how CMS
could consider including preventive services within the APCM bundles.
We thank the commenter for this feedback, and we may take the comments
into consideration for possible future rulemaking.
About commenters' concerns on the impact this proposal may have on
budget neutrality and downstream impacts on the PFS conversion factor,
we note physicians and practitioners are paid under the PFS. Section
1848 of the Act is the section of the statute that governs payment
under the PFS and, the provisions related to budget neutrality and the
conversion factor (CF) are under the PFS in subsections (c) and (d) of
this section. Payments to RHCs and FQHCs are not governed by section
1848 of the Act; instead, they are governed by sections 1833(f),
1833(a)(3) and 1834(o) (FQHC PPS), of the Act. Under these sections,
generally, RHCs are paid under an all-inclusive rate (AIR) methodology
and FQHCs are paid under the FQHC PPS for all medically necessary
medical and mental health services and qualified preventive health
services furnished on the same day (with some exceptions). Both the RHC
AIR and FQHC PPS rates were initially designed to reflect the cost of
all services and supplies that an RHC or FQHC furnished to a patient in
a single day. Given this, neither payment structure is subject to
budget neutrality under statute, and it is important to reiterate that
our proposal was to pay for these services as add-on services to APCM
which is paid separately from the RHC AIR and FQHC PPS and is based on
the PFS national non-facility payment rate.
After consideration of public comments, we are finalizing our
proposal to adopt the add-on codes for APCM that would facilitate
billing for BHI and CoCM services when RHCs and FQHCs provide advanced
primary care, as proposed. For CY 2026, RHCs and FQHCs furnishing APCM
services may report HCPCS code G0568, G0569, or G0570 when they
integrate behavioral health services with these services.
Comment: A commenter stated that they appreciated CMS's proposal to
allow FQHCs and RHCs to bill APCM codes along with mental health and
substance use disorder (SUD) services. They noted that these types of
facilities have different models for and types of integration, and as
such, they recommended CMS work with interested parties from these
facilities before finalizing coding or payment policies to ensure that
any new policies are not inadvertently limiting access to these types
of services or creating additional burdens for FQHCs and RHCs. The
commenter also encouraged CMS to revisit and expand the codes that can
be used to meet the definition of a qualifying behavioral health visit.
Response: We appreciate the commenter's feedback regarding the
billing of APCM codes by FQHCs and RHCs in conjunction with mental
health and SUD services. CMS is committed to ensuring that policies do
not inadvertently limit access to essential healthcare services or
impose undue burdens on providers and suppliers. We agree with
commenters that there are FQHCs and RHCs that have established models
of care planning and integration of behavioral health services. We
believe that the policies we are finalizing for CY 2026 allow these
settings flexibility to furnish APCM with BHI or CoCM or they can
continue to furnish these services as they currently do. As we discuss
in the CY 2025 PFS final rule (89 FR 97999--98010), for care
coordination services, FQHCs and RHCs must bill the individual CPT or
HCPCS codes that describes the service they furnish, which includes BHI
services. Payment for these services is 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.
With regard to HCPCS code G0512 (RHC/FQHC psychiatric CoCM, 70 min+),
please see below for our final policy to unbundle this code.
Comment: A commenter supported CMS' proposal to recognize Mental
Health Counselors (MHCs) and Marriage and Family Therapists (MFTs) as
Medicare practitioners and to make their services mandatory FQHC
benefits. The commenter stated that this aligns with New York State
Medicaid policy and will significantly expand the behavioral health
workforce available to Medicare patients, particularly in rural and
underserved communities.
Response: We appreciate the commenters' support of MHCs and MFTs
being recognized as Medicare practitioners in FQHCs. We remind
commenters, in the CY 2024 PFS final rule (88 FR 79067-79060), we
discuss how section 4121(b) of CAA, 2023 amended section 1861(aa)(1)(B)
of the Act by extending the scope of RHC services to include those
furnished by MFTs and MHCs as eligible for payment, which is
incorporated into FQHC services through section 1861(aa)(3)(A) of the
Act. Therefore, effective January 1, 2024, RHC and FQHCs are paid under
the RHC AIR and FQHC PPS, respectively, when MFTs and MHCs furnish RHC
and FQHC services defined in Sec. Sec. 405.2411 and 405.2446.
We also received several comments on our proposal to require RHCs
and FQHCs to unbundle HCPCS codes G0512 and bill the respective
individual codes that make up G0512, beginning January 1, 2026. We did
not receive comments on our proposal to revise Sec. 405.2464(c) to
reflect changes for payment of CoCM services for RHCs and FQHCs. The
following is a summary of the comments we received and our responses.
Comment: Many commenters largely supported our proposal to unbundle
HCPCS code G0512 and bill for the respective individual codes that make
up G0512. Commenters stated that this change would eliminate barriers
to providing CoCM services in the RHC and FQHC settings. Commenters
stated
[[Page 49553]]
that this change would enhance transparency by giving clinics and
policymakers better insight into utilization patterns across different
practice types, geographic regions, and patient populations. Other
commenters stated that this change will better capture clinical
complexity, strengthen financial sustainability for safety-net
providers and expand access to evidence-based collaborative care in
underserved communities. Some commenters stated that this change will
allow for greater streamlining of work for FQHCs, RHCs, and CMS. Other
commenters stated that this proposal would support quality improvement
initiatives and outcome measurement efforts.
A commenter supported the proposal stating that this change will
likely improve payment accuracy and more accurately reflect the diverse
range of services furnished in these settings and aligning payment more
closely with the actual care delivered; however, the commenter
requested CMS to clearly state which clinical staff may perform these
services under physician direction and explore opportunities to enhance
transparency, service attribution and outcomes tracking by rendering
provider or clinical staff, while minimizing additional administrative
burden for billing the individual codes for CoCM rather than relying on
the bundled HCPCS G0512 code.
A few commenters recommended that CMS provide robust guidance,
education and technical assistance to avoid undue administrative burden
and potential unbundling billing confusion. Other commenters urged CMS
to prioritize timely updates and resources to RHCs to ensure full
participation in chronic care management programs. Some commenters
discussed the issues that they experienced with unbundling HCPCS code
G0511 which was finalized in the CY 2025 PFS final rule and noted how
this policy's implementation has been extended twice (that is, July 1,
2025 and then September 1, 2025). The commenters requested that CMS
provide technical support with the current unbundling process and apply
lessons learned to the proposal for unbundling HCPCS code G0512.
Response: We thank commenters for their supportive comments. With
regard to which clinical staff may perform psychiatric CoCM, these
services are team-based collaborative approaches to care that focus on
integrative treatment of patients with primary care and mental or
behavioral health conditions. Psychiatric CoCM is a specific model of
care provided by a primary care team consisting of a primary care
provider and a health care manager who works in collaboration with a
psychiatric consultant. CPs, CSWs, MFTs, and MHCs are RHC and FQHC
practitioners and furnish medically necessary, face-to-face services
that may be stand-alone billable visits in RHCs and FQHCs. They can
also serve as the behavioral health care manager for psychiatric CoCM
services. In order to facilitate the integration and coordination of
the patient's primary care and mental or behavioral health conditions,
these care management services are furnished under the direction of the
RHC or FQHC primary care practitioner. Only services furnished by an
RHC or FQHC practitioner or auxiliary personnel that are within the
scope of service elements can be counted toward the time that is
required to bill for psychiatric CoCM services and does not include
administrative activities such as transcription or translation
services. More information regarding psychiatric CoCM services
furnished in RHCs and FQHCs is available in Pub. 100-02 Medicare
Benefit Policy Manual, Chapter 13, section 230.4.
For the commenters who expressed a need for robust guidance on
billing and the unbundling HCPCS code G0512, we plan to issue sub-
regulatory guidance via updating multiple resources including the RHC
and FQHC Medicare Benefit Policy Manual, MLN publications and the RHC
and FQHC web pages to help RHCs/FQHCs understand how to navigate the
unbundling process. Regarding commenters who noted the implementation
issues of unbundling HCPCS code G0511, we acknowledge that there were
Medicare claim processing issues that presented billing challenges for
RHCs and FQHCs. We have since resolved those issues and intend to use
lessons learned from those issues and apply to the unbundling process
for HCPCS G0512.
After consideration of public comments, we are finalizing our
proposal to require RHCs and FQHCs to report the individual codes that
make up the CoCM HCPCS code, G0512 beginning January 1, 2026. That is,
HCPCS code G0512 will 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 B-BA1,
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 also finalizing the revisions to Sec. 405.2464(c) to reflect the
change for payment of CoCM services for RHCs and FQHCs.
We note, in Table 34 of the CY 2026 PFS proposed rule (90 FR 32550-
32551) we included two codes in the current list of base codes and add-
on codes that make up HCPCS code G0512 that we haven't recognized for
payment for RHCs and FQHCs previously. Specifically, CPT code 99494
(1st/subesq psyc collab care; Add-on CoCM (any month), each additional
30 minutes per calendar month) and HCPCS code G2214 (Init/sub psych
care m 1st 30; Initial or subsequent psychiatric collaborative care
management, 30 minutes of behavioral health care manager time per
calendar month).
As discussed in the CY 2025 PFS final rule (89 FR 98000-98010),
RHCs and FQHCs are required to bill using the individual codes that
made up G0511 to receive separate payment for care coordination
services. As part of the payment policy, we stated that RHCs and FQHCs
can bill the add-on codes for additional time spent once the minimum
threshold of time was met to account for a complete encounter. For this
final rule, we clarify and to be consistent with how we paid for the
services that made up HCPCS code G0511, beginning January 1, 2026, RHCs
and FQHCs can bill CPT code 99494.
In the CY 2021 PFS final rule (85 FR 84547-84548), for
practitioners billing under the PFS, we established a G-code to
describe 30 minutes of behavioral health care manager time. That is,
HCPCS code G2214 (Initial or subsequent psychiatric collaborative care
management, first 30 minutes in a 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) was established to capture shorter increments of time
spent. For example, when a patient is seen for services, but is then
hospitalized or referred for specialized care, and the number of
minutes required to bill for services using the current coding is not
met. At the time of the CY 2021 PFS rulemaking we did not address the
applicability of G2214 for RHC and FQHC purposes. For this final rule,
we clarify and to be consistent with how we pay for CoCM, beginning
January 1, 2026, RHCs and FQHCs can bill CPT code G2214.
Comment: A commenter urged CMS to implement a policy to allow FQHCs
[[Page 49554]]
and RHCs to bill for Community Health Integration (CHI) and Principal
Illness Navigation (PIN) services, using the same set of HCPCS codes
available to traditional healthcare providers. The commenter further
stated that FQHCs and RHCs should be afforded the opportunity to bill
for CHI and PIN services with no cap or limit on the volume of services
rendered to a beneficiary per calendar month.
Response: We refer the commenter to the CY 2025 PFS final rule (89
FR 97999-98010) where we discussed and finalized the policy to bill
individual HCPCS code for CHI and PIN services.
Comment: We received comments that were out of scope for these
proposals. Several commenters encouraged CMS to revise the definition
of a behavioral health visit for RHCs and FQHCs to expand the types of
HCPCS codes that can be billed as a qualifying visit. Another commenter
would like CMS to allow Opioid Treatment Programs that have formal care
coordination agreements with RHCs and FQHCs, to bill the CoCM add-on
codes for team-based care, including medications for opioid use
disorder.
Response: We thank the commenters for their feedback; however,
these comments are outside the scope of these proposals. We may take
these comments into consideration for further evaluation.
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
B-BA2. 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.
In the CY 2026 PFS proposed rule (90 FR 32551--32553), we noted
that at the time of the CY 2021 PFS rulemaking we did not address the
applicability of G2250 for RHC and FQHC purposes. However, we
acknowledged 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. We explained that 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 proposed to consider HCPCS code G2250 as billable for separate
payment when this service is furnished in an RHC or FQHC.
We also discussed that in the CY 2025 PFS final rule (89 FR 97791
through 97794), for practitioners billing under the PFS, 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.
In the CY 2026 PFS proposed rule (90 FR 32552), we stated that 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) CTBS and Remote Evaluation Services
In the CY 2026 PFS proposed rule (90 FR 32552--32554) we discussed
the connection between APCM, CTBS and remote evaluation services. 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). We stated that 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. We explained
that 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 proposed to require RHCs and FQHCs to report the
individual codes that make up HCPCS code G0071 beginning January 1,
2026. Payment for these services would 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
proposed revising 405.2464(e) to reflect our proposal for payment of
CTBS and remote evaluation services for RHCs and FQHCs.
[[Page 49555]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.105
We received several comments on our proposals to require RHCs and
FQHCs to report the individual codes that make up the CTBS and Remote
Evaluation Services HCPCS code G0017 beginning January 1, 2026. We did
not receive
[[Page 49556]]
comments on our revisions to Sec. 405.2464(e) to reflect changes for
payment of CTBS and remote evaluation services for RHCs and FQHCs. The
following is a summary of the comments we received and our responses.
Comment: Many commenters were supportive of our proposal to
unbundle G0071 and require RHCs and FQHCs to report and bill for the
individual codes (HCPCS G2210, G2250, and CPT 98016) that make up
G0071. Some of the commenters stated that unbundling G0017 would
provide a streamlined framework for adding other care coordination
services and improve transparency. Commenters thanked CMS for their
efforts to ensure that RHCs and FQHCs are appropriately paid. Some
commenters stated that allowing RHCs and FQHCs to bill individual codes
would create payment parity while other commenters believe that the
proposal would improve care access.
A few commenters expressed their support for unbundling G0071 but
had some concerns. Commenters recommended that CMS provide robust
guidance and resources, apply lessons learned with unbundling HCPCS
G0511 and provide technical assistance to help RHCs and FQHCs implement
the change, mitigate issues, and avoid service disruption, undue burden
and confusion. A commenter requested clear guidance on overlap with
APCM months to know when standalone CTBS codes are ineligible due to
APCM bundling. Another commenter recommended CMS delay the unbundling
of G0071 to allow more time to engage interested parties and give
consideration to primary care physicians already facing a complex array
of coding options for care management. The commenter expressed concern
that the unbundling of G0071 alongside the introduction of new time-
based CPT codes under APCM risks adding further confusion, particularly
for smaller practices and could exacerbate administrative burden,
reduce reimbursement for providers, and create confusion. This
commenter recommended that CMS finalize this update and invest in
targeted education and technical assistance to support the adoption of
G2250. A few commenters believed that there would be an increase in
utilization and urged CMS to increase the payment rate for APCM
bundling to better account for patient care costs and the loss of
concurrent billing with G0071.
Response: We thank commenters for their supportive comments.
Regarding commenters' requests for robust guidance, we will issue sub-
regulatory guidance via updating multiple resources including the RHC
and FQHC Medicare Benefit Policy Manual, MLN publications and the RHC
and FQHC web pages to help RHCs and FQHCs understand how to navigate
the unbundling process and mitigate potential implementation, billing
and compliance issues that could accompany the unbundling of HCPCS
G0071.
For those commenters who expressed concern about the loss of
concurrent billing with G0071 and requested an increase in APCM payment
rates, similar to our decision about the payment rate for HCPCS codes
G0511 and our proposal for HCPCS code G0512 payment rate, HCPCS code
G0071 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.
After consideration of the public comments, we are finalizing
requiring RHCs and FQHCs to report the individual codes that make up
HCPCS code G0071. That is, beginning January 1, 2026, RHCs and FQHCs
furnishing these services must report HCPCS codes G2010, G2250, and CPT
code 98016 to receive separate payment. 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 finalizing revisions to Sec.
405.2464(e) to reflect the changes for payment of CTBS and remote
evaluation services for RHCs and FQHCs.
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, 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 proposed 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
In the CY 2026 PFS proposed rule (90 FR 32554-32555) we observed
that over the last several years we have been increasing our focus on
care coordination. We explained that these services have evolved to
focus on preventing and managing chronic
[[Page 49557]]
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 noted our acknowledgement 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 noted 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). We explained that since this is the case, 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.
We noted that 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 the presence of the patient. We
stated that 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. We noted that
there is a detailed history on the payment for care coordination
services available in the CY 2025 PFS final rule (89 FR 97998 through
98010).
We further explained that the increase in frequency of this
complementary rulemaking has prompted us to 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. We stated that our
goal is to classify care coordination services established under the
PFS that extend to RHCs and FQHCs. We also 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. We further stated that 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.
In the CY 2026 PFS proposed rule (90 FR 32555), we noted that 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 proposed 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 stated that we believe this
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, we noted that service and supplies
furnished incident to TCM and care coordination services can be
furnished under general supervision.
In the CY 2026 PFS proposed rule (90 FR 32555), we discussed the
proposed process but first reiterated what happens under the PFS to
help explain the connection between that payment system to the proposed
payment policy for RHCs and FQHCs. 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.'' We stated
that under our proposal, services designated as care management
services and added to the list of designated care management services
would 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 proposed to update RHC and FQHC sub-
regulatory guidance to reflect the new care coordination services. We
stated that we expect to 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.
We then clarified how the payment for these services would be based
and made. That is, 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 noted that some of the current RHC and FQHC care
coordination services are not listed on the current list of designated
care management services, however, we confirmed the continuation of
making separate payments for these RHC and FQHC care coordination
services since 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 solicited comments on whether the proposed process which is 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.
We received several public comments on our proposal to adopt
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
[[Page 49558]]
RHCs and FQHCs. The following is a summary of the comments we received
and our responses.
Comment: Commenters were very supportive of the proposal and our
proposed process. Commenters believe aligning with the PFS will allow
familiarity with the same set of codes across settings of care,
streamline documentation requirements, reduce provider stress and staff
time, lower both administrative barriers and financial burdens for
healthcare providers, ensure providers are adequately paid for these
services, increase clarity, improve efficiency, and promote care
coordination.
Response: We thank the commenters for their support of this
proposal. We agree that adopting services that are established and paid
under the PFS and designated as care management services as care
coordination services that can be furnished in RHCs and FQHCs will
address potential barriers for healthcare providers and promote
transparency across settings of care.
We received a few comments on our comment solicitation on whether
the proposed process is sustainable moving forward or if there is a
more effective approach for adopting new care coordination codes.
Comment: A commenter suggested that any services which are
partially paid for under the PFS and partially paid for under the RHC
AIR or FQHC PPS rate be considered care coordination and be paid under
one payment system. The commenter believed that this structure would
streamline work, and CMS would no longer have to include separate
proposals for updates to coding and payments related to care
coordination. Some commenters suggested CMS consider all care
coordination services as health promotion services and stated that
these services are not subject to copayments. Another commenter
suggested we provide clear implementation guidance for RHC and FQHC
practitioners. A commenter recommended that CMS conduct an evaluation
to separately pay remote patient monitoring (RPM) and remote
therapeutic monitoring (RTM) services from the RHC AIR and FQHC PPS to
better support the scope and value of these services.
Response: We thank the commenters for their suggestions. We are
unclear about what the commenter meant by partially paid services, but
note that we are finalizing this proposal so that we do not have to
make separate proposals for updates to coding and payments related to
care coordination services in future rulemaking. We are also unclear
about what another commenter meant by health promotion services,
however we do not have the statutory authority to waive co-payments for
care coordination services. We agree that it is important to
communicate any changes made to the list of care coordination services
and will update the list on an annual basis through sub-regulatory
guidance to provide transparency and clarity for RHCs and FQHCs. We
note that RPM and RTM services are currently paid separately from the
RHC AIR and FQHC PPS as care coordination services.
After consideration of public comments, we are finalizing our
proposal to adopt 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 that this alignment with designated care management services
under the PFS promotes transparency across settings of care.
When new care management/coordination services are proposed under
the PFS and are also proposed to be added to the list of designated
care management services, RHC and FQHC interested parties should look
for opportunities to review and comment on these new services in the
respective sections of the PFS proposed and final rules. Under this
process, services designated as care management services and added to
the list of designated care management services would also be furnished
in RHCs and FQHCs and paid separately as described in Sec.
405.2464(c). When these services are finalized under the PFS, we will
update the list of care coordination services annually through sub-
regulatory guidance to provide RHCs and FQHCs the clarity needed to
accurately submit claims for Medicare payment.
We note, as discussed in section II.G. of this final rule, the
optional add-on codes for APCM services are considered a ``designated
care management service'' under Sec. 410.26(b)(5) and, as such, can be
provided by auxiliary personnel under the general supervision of the
billing practitioner. Therefore, exemplifies the alignment with our
final policy discussed in section III.B.2.b of this final rule.
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 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
[[Page 49559]]
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.
We stated in the CY 2026 PFS proposed rule (90 FR 32555-32556) that
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;
therefore we are implementing conforming regulatory changes as
discussed in section III.B.3.d. of this final 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 final 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) CY 2026 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 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.
In the CY 2026 PFS proposed rule (90 FR 32556-32557) we explained
that given the information presented by interested parties on safety
and effectiveness, we believe direct supervision provided via two-way
real
[[Page 49560]]
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
noted that for services paid under the PFS, we proposed 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 (90 FR 32394 and 32395). 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.
We stated that in the interests of aligning our approach toward
direct supervision for RHCs and FQHCs with that for services paid under
the PFS, we believed that we should permanently adopt this flexibility
in RHCs and FQHCs, as such flexibility continues to support access and
preserve workforce capacity. However, we noted that, as we discussed 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 proposed 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).
The following is a summary of the comments we received on the
proposal and our responses.
Comment: Commenters supported our proposal to permanently allow
``direct supervision'' in RHCs and FQHCs through real-time, interactive
audio-video technology. Commenters state that this policy will expand
access to care, particularly in rural and underserved areas and will
address workforce shortages, improve continuity of care, and help
modernize service delivery. Several commenters emphasized the benefits
of enhanced patient access, physician-led team-based collaboration, and
interdisciplinary coordination facilitated by virtual supervision.
Response: We appreciate the support of commenters.
Comment: A commenter requested that CMS permanently amend
regulations for RHCs and FQHCs that require physician supervision of
nurse practitioners in these facilities, and which do not allow,
pursuant to 42 CFR 491.7(a), for an RHC or FQHC to be under the medical
direction of a nurse practitioner, even when authorized under state
law. The commenter stated these requirements are burdensome and
unnecessary.
Response: This comment is out of scope for this final rule because
it does not relate to this specific proposal included in the proposed
rule, however we appreciate the feedback and may evaluate further.
After consideration of public comments, we are finalizing our
proposal to permanently adopt a definition of ``direct supervision''
that allows ``immediate availability'' of the supervising practitioner
using audio/video real-time communications technology (excluding audio-
only). Specifically, we are finalizing revisions at Sec. 405.2401(b)
to include a definition of ``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
In the CY 2026 PFS proposed rule (90 FR 32557-32558), we discussed
how 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. We stated
that 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 explained that 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 authorized
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
proposed, 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, we proposed that RHCs and
FQHCs would continue, in accordance with 42 CFR 405.2464(g), 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 for the period beginning with the PHE for COVID-19 and ending
on December 31, 2026. Since the costs associated with medical visit
services furnished via telecommunications
[[Page 49561]]
technology are not included in the calculations for the RHC AIR
methodology and FQHC PPS, we proposed the need for a a proxy that would
represent such resources used when furnishing these services.
Therefore, we proposed, similar to the methodology described in section
1834(m)(8) of the Act, 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
believed that continuing to use this weighted average is appropriate
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 proposed to facilitate payment for non-behavioral health visits
furnished via telecommunications technology and pay for such services
in accordance with such methodology through December 31, 2026.
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 noted that this is
a temporary stopgap approach to preserve access concerns.
(1) Alternative Payment of Medical Visits Furnished Via
Telecommunication Technology
As we discussed in the CY 2026 PFS proposed rule (90 FR 32558), 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 explained that 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 solicited 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.
The following is a summary of the comments we received and our
responses.
Comment: Commenters supported continuing to pay for non-behavioral
services in RHCs and FQHCs furnished via telecommunications technology,
stressing that virtual care is essential for rural and underserved
populations. They highlighted that for many beneficiaries, particularly
those who are elderly, homebound, or living in isolated areas,
telehealth is not simply a convenience but the only practical way to
access care. Several commenters also emphasized the need for CMS to
work with Congress to make current flexibilities permanent, including
allowing patients to receive telehealth from their homes, to avoid
confusion and prevent disruptions in access once temporary waivers
expire.
Commenters diverged, however, on how CMS should structure payment.
Some commenters supported CMS' proposal to continue to pay RHCs and
FQHCs with HCPCS code G2025 which reflects a weighted average of the
PFS rates of all services on the telehealth list. MedPAC stated this
approach preserves access while preventing unnecessary increases in
beneficiary cost-sharing and Medicare spending. They warned that paying
higher rates under the RHC AIR and FQHC PPS would not only raise
taxpayer costs but could also create incentives for providers to
overuse telehealth or shift away from in-person care. They further
stated that paying for medical visits furnished via telehealth would
often result in beneficiaries and taxpayers paying much more for the
same service than they currently do because the FQHC PPS and RHC AIR
payment system rates are higher than the PFS-equivalent rate. In
addition, because beneficiary coinsurance for services billed under the
RHC AIR methodology is set based on RHC charges and not payment rates,
rural beneficiaries would experience especially high increases in
coinsurance if CMS switched from paying PFS-equivalent rates to those
based on the RHC AIR methodology.
Some commenters, in contrast, expressed preference for our
alternative approach, arguing that telehealth visits should be paid at
the PPS or AIR rates. They emphasized that the costs of operating FQHCs
and RHCs such as staffing, facilities, compliance, and IT systems, are
the same regardless of whether visits are in person or virtual. The
current payment rate for HCPCS code G2025, typically around $90 per
visit, was described as inadequate to cover these costs, undermining
clinics' ability to sustain telehealth infrastructure in the long term.
These commenters argued that treating telehealth visits as full
encounters would ensure payment equity, reduce administrative burdens,
and support the financial stability of safety-net providers serving the
most vulnerable communities.
Response: We recognize that many commenters supported the
alternative proposal to permanently redefine an RHC or FQHC ``visit''
to include audio-video telecommunication technology and to pay such
services at the AIR or PPS rates, and reiterate, that our proposal was
intended as a temporary, stopgap measure; we believe that continuing to
pay for these visits using HCPCS code G2025 which reflects PFS rates is
preferable to preserve access to services furnished via
telecommunication technologies for beneficiaries, while avoiding sudden
payment disruptions to maintain predictability for providers and
allowing CMS time to consider permanent policies informed by additional
data and experience.
[[Page 49562]]
Extending this methodology through December 31, 2026 also provides
flexibility for CMS to respond to any statutory changes Congress may
enact regarding telehealth in these settings.
After consideration of public comments, we are finalizing our
proposal to continue to pay for RHC and FQHC medical visit services
furnished using telecommunications technology, including services
furnished using audio-only communications technology, with HCPCS code
G2025 through December 31, 2026 in accordance with Sec. 405.2464(g).
d. 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 therefore
proposed to make conforming regulatory text changes to the applicable
RHC and FQHC regulations in 42 CFR part 405, subpart X, specifically,
at Sec. 405.2463, ``What constitutes a visit,' we proposed to amend
paragraph (b)(3) and, at Sec. 405.2469 ``FQHC supplemental payments,''
we proposed 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.
Comment: Some commenters requested that these in-person
requirements continue to not apply beyond 2025, stating that many
patients seen virtually are at a distance that would make an in-person
session impossible.
Response: After considering public comments, we are finalizing
technical changes to the regulatory text that we believe more closely
align with statutory requirements. Specifically, we are amending the
applicable RHC and FQHC regulations in 42 CFR part 405, subpart X,
specifically, at Sec. 405.2463, ``What constitutes a visit,' we
proposed to amend paragraph (b)(3) and, at Sec. 405.2469 ``FQHC
supplemental payments,'' to clarify that the in-person visit
requirements will not apply to any services furnished before October 1,
2025.
We wish to clarify that the intent of these edits is solely to
conform the regulations to the statutory delay of the in-person visit
requirements prior to October 1, 2025. More broadly, we believe it is
important to maintain consistency across care settings when applying
requirements of this nature. CMS will address the approach to these in-
person visit requirements for RHCs and FQHCs in future guidance.
Comment: Some commenters requested that CMS extend the delay of the
implementation of these requirements specifically for Certified
Community Behavioral Health Clinics (CCBHCs), Community Mental Health
Centers (CMHCs), and other licensed behavioral health clinics beyond
2026.
Response: These comments are out of scope for this final rule
because they do not relate to this specific proposal included in the
proposed rule.
After consideration of comments, we are finalizing revisions to 42
CFR part 405, subpart X, specifically, at Sec. 405.2463(b)(3), ``What
constitutes a visit,'' and, at Sec. 405.2469(d), ``FQHC supplemental
payments,'' to clarify that the in-person visit requirements will not
apply to any services furnished before October 1, 2025.
e. Miscellaneous Comments
We received several comments that were out of scope from what we
proposed in the CY 2026 PFS final rule for RHCs and FQHCs. The
following is a summary of the comments we received and our response.
Comment: A few commenters suggested that CMS amend Sec.
405.2463(c)(1)(iii) to allow RHCs to bill a medical or mental health
visit and an Annual Wellness Visit (AWV) separately when furnished on
the same day and allow RNs to furnish and bill AWVs. If this is not
feasible, commenters suggested CMS consider, at minimum, an add-on
payment when an AWV is performed on the same day as a medical visit.
Some commenters requested that CMS permit RHCs to bill and receive an
additional payment for HCPCS code G2211 like practitioners that are
paid under the PFS, which they believe would fully account for
additional time, intensity, and practice expense inherent to the
longitudinal care that HCPCS code G2211 was designed to capture. A
commenter recommended that CMS evaluate the adequacy of the RHC AIR and
FQHC PPS base rates under the Medicare Economic Index (MEI) methodology
and consider supplemental adjustments where necessary to support the
long-term sustainability of these safety-net providers. Another
commenter would like to see simplified billing or bundled options for
any new codes to reduce administrative barriers for RHCs that may not
have dedicated billing staff. A commenter recommended that CMS conduct
an evaluation to separately pay medical nutrition therapy (MNT)
services from the RHC AIR and FQHC PPS to better support the scope and
value of these services. A few commenters wanted CMS to support
healthcare in rural settings by allowing registered nurses (RNs) to
bill the CPT codes for care coordination. A commenter would like CMS to
permit pharmacists the authority to bill directly under Medicare and
not refer to pharmacists as ``auxiliary personnel'' as they play a role
behind the scenes for care coordination services.
Response: We thank the commenters for their feedback; however,
these comments are outside the scope of what we proposed for CY 2026
for RHCs and FQHCs. We will take these comments into consideration for
further evaluation.
C. Ambulatory Specialty Model (ASM)
1. Overview of 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
proposed 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 will 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 will be
established as a mandatory model focused on the care provided by select
specialists to Medicare beneficiaries with the chronic conditions of
heart
[[Page 49563]]
failure and low back pain. Under the model, clinicians will 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 will 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 will 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.\156\
---------------------------------------------------------------------------
\156\ 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.
---------------------------------------------------------------------------
In line with the updated Innovation Center principles, this final
rule finalizes a new mandatory model that we believe will improve
beneficiary and provider engagement, incentivize preventive care, and
increase financial accountability for certain specialists. The model
will 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 will 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
will 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 will also seek to prevent deterioration and complications
associated with established chronic conditions. To empower patients,
the model will promote direct accountability for the quality of
specialty care specific to heart failure and low back pain. By
featuring patient-reported outcome measures in the finalized 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 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 finalized model is intent on
removing the onus from patients with heart failure and low back pain to
act as the go-between among clinicians they see for their care by
incentivizing clinicians, specifically specialists, to coordinate care
for their patients more seamlessly. For this reason, we believe that
patients will be able to focus on solutions to their health, rather
than resolving information and guidance they have received from
multiple clinicians.
Finally, the model will 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 will 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 will 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 an ambulatory setting, develop longitudinal relationships
with patients, and co-manage beneficiaries with primary care providers
(PCP). 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 proposed 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 interested parties
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.\157\ 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.\158\ 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 is an appropriate chronic condition
for this specialty care model.
---------------------------------------------------------------------------
\157\ 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.
\158\ Ibid.
---------------------------------------------------------------------------
ASM will be a mandatory model that begins on January 1, 2027 and
ends December, 31, 2033. There will be 5 performance years, beginning
January 1, 2027 and ending December 31, 2031. Final data submission of
measures and activities will be in CY 2032, with final model payment
adjustments in CY 2033.
To measure clinician performance in ASM, we will 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 final rule. ASM aims to assess the quality and
cost performance of ASM participants providing care for Medicare
beneficiaries with the targeted chronic
[[Page 49564]]
conditions at the individual clinician level (TIN/NPI) while measuring
practice transformation and interoperability strengthening at the group
level. Specifically, ASM will 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 will 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, improvement activities, and Promoting Interoperability
(which refers to the meaningful use of Certified Electronic Health
Record Technology (CEHRT). In accordance with section 1848(q) of the
Act, CMS calculates a composite performance score (a ``final score'' as
defined at 42 CFR 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 calculates and applies
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' calculations of positive MIPS payment adjustment
factors for each MIPS eligible clinician are limited by CMS'
calculations of negative MIPS payment factors for each MIPS eligible
clinician. In other words, CMS' estimated amounts of positive MIPS
payment adjustment factors for MIPS eligible clinicians performing
above the performance threshold must be offset by CMS' 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 option, specialty type, or the
services they provide.
As CMS discussed in a 2024 Request for Information (RFI) (89 FR
61596),\159\ 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, will produce scores and subsequent payment adjustments
that are more reflective of clinician performance. We believe that a
more targeted approach to measurement will also offer more insight into
how clinical decisions and processes, such as care coordination, affect
patient outcomes. This targeted approach will 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 will 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 finalized mandatory model leverages
the existing MVP policies, deviating from MVP policies in specific
ways, as applicable.
---------------------------------------------------------------------------
\159\ 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 will require clinicians
to report on a set of measures and activities clinically relevant to
their specialty type and the chronic condition of interest. This will
ensure a more analogous comparison between clinicians. Second, while
clinicians reporting under MVPs are scored against the entire pool of
MIPS clinicians, ASM will assess performance against only those
clinicians treating the same chronic condition. Each clinician will
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 final
rule, we describe the finalized requirements in the quality, cost,
improvement activities, and Promoting Interoperability ASM performance
categories.
Third, we will 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 will broaden
the distribution of final scores and increase the magnitude of payment
adjustments, which we believe will incentivize performance improvements
that will 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 final rule, we will 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 will apply potential negative scoring adjustments for
non-reporting or poor performance. We are also finalizing 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 final rule for additional details on
the finalized 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 will
also retain a percentage of the payments rather than distributing all
funds as clinicians' payment adjustments. ASM participants will 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 will continue to
[[Page 49565]]
bill Medicare under the traditional fee for service (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 final rule. However, MIPS eligible clinicians participating in
this model will 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.160 161 Primary care teams must
now coordinate with more specialists than ever before,\162\ despite
persistent barriers to specialist access for certain
patients.163 164 We believe there are opportunities to
improve coordination between specialists and PCPs and increase
beneficiary engagement in care decisions, particularly with respect to
preventing the onset and progression of disease.
---------------------------------------------------------------------------
\160\ 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.
\161\ Lori Timmins, Ph.D., Carol Urato, MA, Lisa M. Kern, MD,
MPH, Arkadipta Ghosh, Ph.D., Eugene Rich, MD. Primary Care Redesign
and Care Fragmentation Among Medicare Beneficiaries. The American
Journal of Managed Care, March 2022, Volume 28, Issue 3.
\162\ 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.
\163\ 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.
\164\ 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.
---------------------------------------------------------------------------
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.\165\ This 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 model to use the MVP framework as the foundation for a model
test.
---------------------------------------------------------------------------
\165\ 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.
---------------------------------------------------------------------------
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, will
encourage meaningful specialty care engagement with PCPs 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 final rule, so it may
provide a foundation to potentially expand this approach to other
specialist cohorts treating other chronic conditions. While there are
twenty-one 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, will 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
will 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 will 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.
We received several comments about ASM's clinical focus on heart
failure and low back pain. The following is a summary of these comments
and our responses.
Comment: A few commenters supported ASM because of the focus on
value-based care for high-cost conditions like heart failure and low
back pain, citing the importance of potential improvements in care
quality, cost reduction, and specialist engagement. Several commenters
supported the proposed chronic disease focus of ASM since heart disease
and low back pain are leading causes of hospitalizations, readmissions,
and high costs in the United States where care fragmentation can
negatively impact patient outcomes; a commenter believes that ASM can
be a critical step for addressing chronic illness burden. A few
commenters commended the model's engagement of independent clinicians.
Response: We appreciate the commenters' support of ASM, including
its focus on heart failure and low back pain. We agree that ASM creates
opportunities for increasing specialist participation in value-based
care to create improvements in care quality and reductions in cost. We
also appreciate commenters' support for a model that engages
independent clinicians.
Comment: A few commenters did not support the proposed focus on low
back pain for ASM because of the broad and diverse range of specialties
that care for low back pain at different stages of disease progression.
Another commenter shared a concern with the focus on low back pain
because it can often be a symptom of a variety of underlying clinical
diagnoses and treating it as a single condition ignores physiological
aspects of the disease, increases heterogeneity of patients, and
underestimates the complexity of evaluating and treating the underlying
diseases that cause low back pain.
Response: We appreciate commenters' feedback on including low back
pain as a chronic condition of focus in ASM. As
[[Page 49566]]
we discuss in section III.C.2.c.(2).(b) of this final rule, we believe
that several types of specialists can be held accountable for ongoing
chronic condition management for low back pain. In the CY 2026 PFS
proposed rule, we proposed to include these relevant specialty types in
our ASM participant eligibility criteria to identify low back
participants; we proposed to include anesthesiology, pain management,
interventional pain management, neurosurgery, orthopedic surgery, or
physical medicine and rehabilitation clinicians in the low back pain
ASM cohort (90 FR 32564). We agree that low back pain can often be a
symptom of other underlying clinical diagnoses; however, as many
patients receive low back pain care from specialists, in addition to
care for underlying and contributing diagnoses, we believe increasing
accountability for low back pain care management presents opportunities
for improving patient outcomes regardless of the heterogeneity of
patients receiving care for low back pain. We believe that the
collective measurement framework for low back pain will comprehensively
evaluate the quality and cost of care related to low back pain
regardless of the physiological aspects or complexity of the causes of
low back pain, while creating incentives for practice improvements,
such as stronger integration with PCPs and improving interoperability
of EHRs.
Comment: A commenter acknowledged that heart failure and low back
pain are significant chronic conditions, but requested more specific
reasoning, information and justification for why heart failure and low
back pain were selected as the focus of the model when other conditions
may similarly satisfy the goals of the model.
Response: We appreciate this commenter's request for additional
information and justification as to why heart failure and low back pain
were selected for the model. We believe that low back pain and heart
failure serve as ideal cohorts for ASM because these chronic
conditions, in particular, present clinical complexity, financial
impact, measurable outcomes, and improvement opportunities while
maintaining sufficient volume and predictability for successful model
implementation and evaluation. Heart failure affects millions of
Americans and is one of the leading causes of Medicare
hospitalizations. It accounts for significant Medicare spending due to
frequent readmissions and complex care needs. Low back pain is one of
the most common reasons for physician visits and disability claims. It,
too, is the cause of substantial healthcare spending. Both conditions
have well-defined roles for the specialists that treat them, clear
quality measures and treatment pathways that can be measured and
improved. Both conditions present opportunities for improvement with
strong coordination between specialty and primary care. We believe both
heart failure and low back pain will provide lessons learned for other
chronic conditions. The model could expand to other chronic conditions
if success in quality improvement and cost reduction is found with the
treatment of heart failure and low back pain under the parameters of
ASM.
Comment: Several commenters offered feedback on alternative chronic
conditions, such as chronic obstructive pulmonary disease (COPD) and
chronic kidney disease (CKD) for inclusion in ASM.
Response: We appreciate commenters for their feedback on other
chronic conditions that may be suitable for inclusion in ASM. We did
not consider COPD or CKD, and their related specialties, for inclusion
in ASM at this time. Should we consider expanding ASM to include
additional chronic conditions, we would do so through notice-and-
comment rulemaking.
Comment: A commenter recommended that CMS should provide additional
details on how ``low value'' services within ASM are defined to ensure
complex patients are not excluded from appropriate interventions.
Response: We appreciate the commenter for their input. For the
purposes of ASM, 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.
We also received several comments about making ASM a voluntary
model instead of mandatory. The following is a summary of these
comments and our responses.
Comment: Several commenters recommended that CMS ensure ASM is
voluntary, patient-centered, and adequately resourced to avoid
unintended negative impacts on clinicians and patient access to care. A
few commenters recommended exploring voluntary, evidence-based
alternatives, tied to stronger evidence of potential patient benefits.
Response: We appreciate commenters for their suggestion to make ASM
voluntary. As we discuss in this section and in section III.C.2.c.(1)
of this final rule, we believe mandatory participation is necessary to
test ASM due to concerns that selection bias in a voluntary model would
undermine ASM's incentives. Furthermore, we are finalizing several
provisions that we believe will help avoid unintended negative impacts
on clinicians and patient access to care. Such provisions include, but
are not limited to, not subjecting ASM participants to payment
adjustments if they cannot meet case minimums for required quality and
cost measures, providing scoring adjustments to ASM participants that
serve a high volume of medically or socially complex patients, and
providing advance notification of mandatory participation to allow
participants time to prepare. Several features of this model are
patient-centered, including incorporating patient voice into quality
measurement through patient-reported outcome measures and beneficiary
incentives that can support upstream chronic condition management for
heart failure and low back pain. As with all Innovation Center models,
we will also monitor for potential unintended consequences and adjust
model designs as necessary.
Comment: Many commenters advised CMS to pause implementation,
collaborate with specialty societies, and redesign the model to better
support specialists in voluntary and patient-centered models. A few
commenters recommended pilot programs or iterative testing instead of
mandatory participation.
Response: We appreciate the commenters for their feedback. As part
of ASM's design, we received feedback from many interested parties. We
received input from public comments to the 2024 Request for Information
(RFI) (89 FR 61596), which included input from interested parties,
provider groups, specialty societies, health systems, academics, and
others. We believe that ASM's design incorporates feedback received by
interested parties that allows for a reliable model test. We refer
readers to section III.C.2.c.(1) of this final rule for more discussion
on the rationale for ASM's mandatory nature.
We received several comments about ASM's alignment with the Quality
Payment Program's MVP framework. The following is a summary of these
comments and our responses.
Comment: Several commenters broadly support the goals of ASM but
recommended CMS to closely monitor the Quality Payment Program MVP
framework and other value-based care models to incorporate lessons-
learned to mitigate potential unintended consequences of the model.
Response: We appreciate the commenters' support for ASM's goals.
[[Page 49567]]
We discuss throughout this section and in section III.C.2.d of this
final rule, ASM's performance measurement approach and our rationale
for aligning with the MVP framework. We believe that 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 clinicians.
We have collaborated with the Quality Payment Program in the
development of ASM and will continue to do so throughout the
implementation of ASM to ensure appropriate alignment. As part of the
ecosystem of condition-specific value-based care models, we also intend
to learn from other models' implementation experiences to adjust ASM
requirements if the need arises. As part of our monitoring and
evaluation efforts, we will also monitor unintended consequences and
adjust ASM's design if necessary.
Comment: Many commenters shared concerns and made recommendations
about ASM's design about the reliance on the MVP framework and that ASM
would not provide an on-ramp into Advanced APMs. A few commenters
supported building off the MVP framework, which may offer a scalable
approach to specialty model designs.
Response: We appreciate the commenters who voiced support for ASM
building off the MVP framework. We also appreciate the commenters for
their recommendations and for detailing their concerns about relying on
the MVP framework, especially when it would not provide an on-ramp into
Advanced APMs. While the concern about ASM not providing a direct on-
ramp to Advanced APMs for individual clinicians is valid, it should not
overshadow the substantial value that ASM provides in building the
foundational capabilities necessary for successful value-based care
participation. ASM participation should be considered as one component
of a comprehensive value-based care strategy. Organizations should
leverage clinician participation in ASM to build internal capabilities
while simultaneously pursuing other pathways to Advanced APM
participation. This multi-pronged approach maximizes the benefits of
current opportunities while positioning ASM participants for future
Advanced APM success.
We received comments concerning participant burden that may be
introduced by ASM. The following is a summary of these comments and our
responses.
Comment: Many commenters emphasize the need for refinement to avoid
unintended negative impacts on providers and patients. While ASM's
goals are broadly supported, many commenters voiced concerns with
administrative complexity and burden on clinicians at a time of
workforce shortages, limited evidence of effectiveness of the model on
improvement of health outcomes, and the mandatory nature of the model
tied to a ``tournament model'' and potential financial penalties.
Response: We appreciate comments highlighting the concern of
providers' burden with participating in ASM. We acknowledge that
healthcare providers face many administrative burdens, and that
workforce shortages can make additional requirements particularly
challenging. The timing of new model implementation during staffing
constraints is a legitimate operational concern. For this reason, ASM
will not be implemented until January 1, 2027, and data submission for
the model will not be required until the first quarter of 2028.
Additionally, we will make every effort to alleviate provider burden
with robust technical support and implementation guidance.
Comment: A commenter expressed concerns about ASM, noting that it
could unintentionally encourage further consolidation in the health
care market. The commenter also shared their belief that the financial
and administrative burdens associated with ASM may push independent
practices to join larger hospital systems or networks.
Response: We appreciate the commenter for stating their concern
that ASMs may encourage independent practices to consolidate. However,
we disagree because many of the clinicians that will be selected for
participation in ASM, including those in independent practices, have
experience with other value-based purchasing programs, such as MIPS, or
alternative payment models, such as participating in an ACO, and likely
have processes in place that can be used to meet ASM data submission
requirements. Furthermore, as described in section III.C.2.e.(4) of
this final rule, we provide a positive scoring adjustment to recognize
the unique challenges faced by smaller and oftentimes independent
providers to provide guardrails.
We received several comments about the effects of ASM on
participants in small practices, rural areas, or that serve medically
and socially complex patient populations. The following is a summary of
those comments and our responses.
Comment: Several commenters raised concerns that participation in
ASM could potentially negatively impact solo and small practices,
safety net providers, and other vulnerable providers because of
mandatory participation and the high financial risk associated with
ASM. Many commenters emphasized that participation in ASM must be
matched with adequate financial and technical support from CMS to avoid
undermining its goals.
Response: We appreciate the commenters for raising their concerns
related to participation of small practices and safety net providers in
ASM. We recognize that these types of clinicians and practices have
specific challenges that may make it more difficult for more of them to
perform well in ASM without additional support. For these reasons, ASM
will include specific positive scoring adjustments for ASM participants
who we determine have a high degree of medically or socially complex
patients, as well as scoring adjustments for participants in small
practices or who are solo practitioners. We note that eligibility for
these scoring adjustments would be evaluated separately, so ASM
participants can qualify for both the complex patient scoring
adjustment and small practice scoring adjustment. We refer readers to
sections III.C.2.e.(3) and III.C.2.e.(4) of this final rule for further
discussion on these provisions. While we did not consider specific
financial support to any ASM participant (for example, an upfront
infrastructure payment), we note that we will provide advanced
notification of mandatory participation for the first ASM performance
year beginning in CY 2027 and intend to provide educational resources
in CY 2026 to help ASM participants prepare for ASM's requirements.
Comment: Several commenters recommended that CMS refine ASM to
better reflect the realities of rural healthcare delivery and
recommended that CMS provide targeted support to rural practices, help
rural providers develop infrastructure and care partnerships for care
coordination, and limit the administrative and financial burdens
associated with participation in ASM. Another commenter advised CMS to
provide adequate risk adjustment for rural populations. A commenter
noted that often rural areas lack the broadband and high-speed internet
infrastructure necessary to support telehealth and other technology-
dependent components of ASM. A few commenters voiced concerns that
mandating participation in ASM may force small,
[[Page 49568]]
rural practices to close or consolidate into hospital-affiliated
systems, which may reduce patient access to specialists or reduce
competition and increase costs for beneficiaries.
Response: We appreciate the commenters for raising feedback about
participation of rural clinicians in ASM. We recognize that these types
of clinicians and practices have specific challenges that may make it
more difficult for more of them to perform well in ASM without
additional support. For these reasons, ASM will include several scoring
adjustments for which we believe rural ASM participants would likely be
eligible. While we did not propose a rural-specific scoring adjustment,
as we discussed in the CY 2026 PFS proposed rule (90 FR 32604), we
observed that a high proportion of likely ASM participants in small
practices were in rural areas, and that an additional rural adjustment
on top of small practice scoring adjustments would potentially be
duplicative and inappropriately skew the distribution of final scores.
We also believe that some rural ASM participants will also qualify for
the complex patient scoring adjustment. We refer readers to sections
III.C.2.e.(3) and III.C.2.e.(4) of this final rule for further
discussion on the small practice and complex patient scoring
adjustments and how we expect some rural ASM participants to qualify
for this adjustment. As part of ASM's monitoring efforts, we will
monitor potential challenges for rural ASM participants and adjust
ASM's provisions if necessary.
While we acknowledge the challenges that clinicians in rural areas
may have in high-speed internet infrastructure and their ability to
provide telehealth, we note that ASM does not require use of
telehealth; ASM offers a telehealth waiver as described in section
III.C.2.h.(3) of this final rule. ASM will require all participants to
meet Promoting Interoperability requirements as described in section
III.C.2.d.(5) of this final rule. We note that MIPS does not provide a
specific Promoting Interoperability exception for eligible clinicians
in rural practices; however, they may qualify for other Promoting
Interoperability reweighting should they qualify as small practices as
described at Sec. 414.1380(c)(2)(ii)(G). For these reasons and because
we account for the Promoting Interoperability ASM performance category
score through a possible negative scoring adjustment of up to 10 points
to the final score, we believe that the small and solo positive scoring
adjustment of 10 or 15 points, respectively, would likely offset any
reductions in scores that a rural ASM participant may receive because
of ASM's Promoting Interoperability requirements. As we discuss in
section III.C.2.e.(4) of this final rule, we will monitor the
sufficiency of these scoring adjustments throughout ASM's model test
period.
We appreciate the commenters for sharing their concern that ASM may
encourage independent rural practices to consolidate or lead to
practice closures. However, we disagree because many of the clinicians
that will be selected for participation in ASM, including those in
independent practices, have experience with other value-based
purchasing programs, such as MIPS, or alternative payment models, such
as participating in an ACO, and likely have processes in place that can
be used to meet ASM data submission requirements. While we acknowledge
that ASM will introduce new requirements, we believe that clinician-
level measurement and incentives are important for increasing
accountability for chronic condition management for conditions like
heart failure and low back pain. Further, we specifically designed ASM
with several features to support diverse practice participation,
including advanced notification of mandatory participation, scoring
adjustment mechanisms, and planned technical resources. We believe
these design elements help address the commenters' concerns while
maintaining the model's core objective of improving care quality and
reducing costs for Medicare beneficiaries.
Comment: Many commenters provided feedback on the technology and
infrastructure implementation required to meet ASM requirements. A few
commenters voiced concerns and challenges associated with meeting
interoperability and other program requirements at an individual
clinician or small group practice level. A few commenters noted their
belief that meeting interoperability requirements can threaten the
financial viability of some practices, especially small practices. A
commenter noted that if patient-reported outcome measures (PROs) are
central to the future of the model, some clinicians will need to build
an infrastructure to support the collection and analysis of data.
Response: We appreciate commenters' feedback regarding the
challenges associated with meeting interoperability requirements of the
model. We believe investment in interoperability is a strategic
imperative that enables healthcare organizations and their clinicians
to deliver better patient care, operate more efficiently, and succeed
in value-based care arrangements. We believe investing in
interoperability could vastly improve outcomes and operational
efficiency, laying the foundation for sustainable healthcare delivery.
We acknowledge the upfront costs of interoperability can be
significant, particularly for smaller practices, and so, we have
designed the payment methodology to account for this potential
challenge. The Promoting Interoperability performance category accounts
for only a fraction of the final score from which the ASM payment
adjustment is calculated. As described in section III.C.2.e of this
final rule, final scores in ASM will be calculated based on equal
weighting of quality (50 percent) and cost (50 percent) performance
categories with potential for negative scoring adjustments based on
improvement activities (up to negative 20 points) and Promoting
Interoperability (up to only negative 10 points) performance category
scores. Furthermore, ASM participants in practices between 2 to 15
total clinicians will also receive an automatic 10-point positive
adjustment on their final score; solo practitioners receive an
automatic 15-point positive adjustment on their final score. If an ASM
participant is unable to meet ASM's interoperability requirements and
is in a small practice, the small practice scoring adjustment negates
the penalty of not meeting interoperability requirements in the model.
We received several comments and suggestions on providing guidance
and support to ASM participants before and during ASM's implementation.
The following is a summary of those comments and our responses.
Comment: Several commenters recommended that CMS provide more
guidance to interested parties about the model structure and
requirements for ASM participants. A few commenters recommended that
CMS provide resources to ASM participants to increase their
preparedness, specifically by offering technical assistance, including
a preview of model results for claims-based measures and providing
baseline performance reports for ASM EBCMs prior to the start of the
first ASM performance year.
Response: We appreciate commenters for their suggestions for
providing more guidance on ASM's requirements to interested parties and
participants. We intend to provide publicly available educational
resources for ASM participants in CY 2026 to help participants prepare
for meeting model requirements beginning in CY 2027. We will also
respond to email or phone inquiries related to ASM:
[[Page 49569]]
[email protected], or 1-844-711-2664 (Option 4). We
also appreciate the suggestions related to baseline data and ongoing
performance data that could be shared with ASM participants. We refer
readers to section III.C.2.j. of this final rule for further discussion
on the types of data sharing and data feedback that we intend to
provide ASM participants once ASM begins.
Finally, we received comments providing suggestions on how we
should engage interested parties in the implementation of ASM. The
following is a summary of those comments and our responses.
Comment: A few commenters recommended collaborating with patients
who live with the chronic condition relevant to ASM. A few commenters
recommended ongoing interested parties engagement with specialty
societies and practicing clinicians.
Response: We appreciate commenters for the suggestions on possible
interested parties engagement approaches as we implement ASM. We intend
to engage with specialty societies and groups that represent patients
living with heart failure and low back pain as part of ASM's ongoing
implementation.
We refer readers to the remainder of ASM's section of this final
rule for detailed discussion on comments we received on specific
proposals, our responses to those comments, and our finalized
provisions and policies for ASM.
2. Provisions of the Ambulatory Specialty Model
a. Definitions
In the CY 2026 PFS proposed rule (90 FR 32561), we proposed at 42
CFR 512.705 to define certain terms for ASM. We described the proposed
definitions in context throughout section III.C.2 of the CY 2026 PFS
proposed rule. We proposed to codify the definitions and policies of
ASM at 42 CFR part 512 subpart G. In addition, we proposed 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 policies set forth at
Sec. 512.705 through Sec. 512.780. We sought comments on the proposed
definitions for ASM and respond in context throughout section III.C.2
of this final rule.
b. Length of Model Test
In the CY 2026 PFS proposed rule (90 FR 32561 through 32562), we
proposed 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 B-D1. We proposed at
Sec. 512.705 to define ``ASM performance year'' as a 12-month period
beginning on January 1 and ending on December 31 for each year of the
first 5 calendar years of the ASM test period. We proposed 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.
In the 2026 PFS proposed rule (90 FR 32561), we proposed that,
similar to MIPS, an ASM payment year would occur 2 calendar years
following the ASM performance year. We explained that the ASM
participant's final score and ASM payment adjustment factor would be
determined for an ASM performance year and applied 2 years later in the
corresponding ASM payment year. For instance, the CY 2027 ASM
performance year would correspond to the CY 2029 ASM payment year. This
will 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
the CY 2026 PFS 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 the CY 2026 PFS proposed rule. We stated that the final
data submission of measures and activities would occur in CY 2032, with
final model payment adjustments in CY 2033. We explained that 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 stated our belief that 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.
[GRAPHIC] [TIFF OMITTED] TR05NO25.106
We believe that an 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 determine the next steps regarding
potential expansion or
[[Page 49570]]
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 ASM's evaluation
approach, please see section III.C.2.l of this final rule.
In the CY 2026 PFS proposed rule (90 FR 32562), we proposed an ASM
start date of January 1, 2027. We also considered proposing an earlier
January 1, 2026 ASM start date, but, given the rulemaking process, we
believe an earlier start date would not give ASM participants enough
time to prepare for participation.
We invited public comments on the proposal at Sec. 512.705 to
define the ``ASM test period'' as the 7-year period from January 1,
2027 to December 31, 2033, ``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 the ASM test period, and ``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. The following is a summary of the comments we received and our
responses.
Comment: A commenter supported the proposed test period of the
model, noting that the length of time is an adequate period for
participation and CMS data collection.
Response: We appreciate the commenter for their support.
Comment: A few commenters did not support the proposed 2-year gap
between the ASM performance year and ASM payment year. The commenters
recommended that the ASM payment be as close to real-time as possible,
noting that reducing the gap would enhance the relevance of ASM to
specialists, create a more effective incentive structure, and provide
clinicians with the ability to reinvest in practice transformation,
especially for small practices.
Response: While we understand the value in real-time data, ASM
participants must be allowed ample time to submit the required data for
each of the ASM performance categories. We are adopting a single data
submission period to minimize burden for ASM participants and data
submission will occur during the calendar year following the ASM
performance year. Following data submission, we will need time to
generate final scores and determine payment adjustments. Similar to
MIPS, we believe EBCMs are the most appropriate and objective criteria
by which to assess cost performance. Because EBCMs are constructed at
the completion of each calendar year, the data will only become
available in the year following the ASM performance year, at which time
we will determine scores and payment adjustments. As the adjustments
are applied on an annual basis, the soonest we could apply those ASM
payment adjustments will be in the following calendar year. This policy
is similar to MIPS in that Medicare Part B fee-for-service payment
adjustments occur 2 years after the corresponding MIPS performance
period. For these reasons, we are finalizing the ``ASM performance
year'' and ``ASM payment year'' definitions as proposed. As we discuss
in section III.C.2.j of this final rule, we intend to share data and
provide data feedback with ASM participants during an ASM performance
year to help participants better understand their potential
performance.
Comment: A commenter supported the proposed start date of ASM on
January 1, 2027, stating it allowed a satisfactory lead time for ASM
participants. Another commenter supported January 1, 2027 as a
reporting-only year with no incentives or penalties to allow clinicians
time to build a baseline understanding of the model. Another commenter
suggested CMS to release specific model requirements as soon as
possible to help clinicians prepare for ASM implementation.
Several commenters indicated that additional time is needed for CMS
to analyze MVP performance data to further inform model development,
identify potential methodological flaws, and engage with interested
parties. Many commenters recommended a delayed start date to ensure
readiness and minimize technical and administrative disruptions to
clinicians who will be required to build infrastructure to train staff,
support clinical workflows, and submit data using eCQMs. Several
commenters indicated that additional time is needed for third-party
vendors to prepare for reporting requirements, such as developing and
testing eCQM collection types for each required measure to allow full
electronic submissions. A commenter called attention to the
requirements for the improvement activities performance category and
the care coordination that will be required. The commenter noted that
if a final list of participants is not released until the middle of
2026, a start date of January 1, 2027 could create a burden for
clinicians required to participate.
The commenters stated that the complexity of these tasks,
especially for organizations with multiple reporting entities and
systems, makes a 2027 deadline unrealistic for successful
implementation. A few commenters stated that ASM should first be
instituted as a pilot test. Another commenter stated implementation
should be delayed allowing for comprehensive testing with appropriate
safeguards and engagement with interested parties, particularly with
rural providers and heart failure specialists. Another commenter stated
that, because ASM directly targets clinicians who are deeply integrated
into the established MIPS and MVP frameworks, ASM will be like a
mandatory replacement for their current reporting structure, as such
the more accelerated timelines adopted for other recent Innovation
Center models, such as the Increasing Organ Transplant Access (IOTA)
and Guiding an Improved Dementia Experience (GUIDE) models are less
appropriate for ASM.
A commenter stated health IT vendors need adequate lead time to
program, test, and deploy the necessary software solutions for data
capture and submission. The commenter stated that because participant
eligibility and lookup tools will require significant time to develop
and stabilize, CMS should take additional time to conduct a robust,
multi-year educational campaign to ensure clinicians and their support
staff fully understand eligibility, data collection requirements, and
the scoring methodology. The commenter suggested a 2028 or 2029 start
date would allow time to finalize all rules and the technical
infrastructure for data submission for ASM.
Response: We acknowledge the commenters' concerns regarding the
time needed to prepare for ASM implementation. We introduced the model
in the CY 2026 PFS rulemaking cycle, rather than the CY 2027 rulemaking
cycle, to give clinicians an additional year to prepare for
implementation. In addition, for the first year of the model, we will
notify preliminarily eligible clinicians of their expected selection
for the model to provide additional time to prepare and anticipate
operational updates. We note that many of the clinicians that will be
eligible for ASM are already familiar with MIPS reporting or have
experience with other alternative payment models and have processes in
place that can be used to meet ASM data submission requirements.
With respect to a pilot test of ASM, we note that ASM is itself a
model test and disagree that it needs to be piloted
[[Page 49571]]
before implementation. We developed the model after learning from
previous Innovation Center models and MIPS, public comments to the 2024
Request for Information (RFI) (89 FR 61596),\166\ and extensive input
from provider groups, health systems, academics, and other interested
parties. We agree with the commenter that ASM is purposely directed at
clinicians who are already familiar with the MIPS framework. ASM is in
part a direct response to input from interested parties regarding the
need for more targeted cohorts and peer-to-peer comparisons. We believe
ASM will provide valuable, pertinent, and actionable feedback to
clinicians who have previously doubted the relevance of their
performance scores.
---------------------------------------------------------------------------
\166\ 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.
---------------------------------------------------------------------------
With respect to the time needed to update technical requirements to
meet the reporting requirements of the model, we note that we plan to
use the Quality Payment Program portal to reduce disruptions to current
reporting processes.
Comment: A commenter stated that the proposed launch of ASM
represents a departure from the established and historically successful
precedent of a phased-in approach to transition clinicians to new
models. A few commenters suggested a staged approach to ASM
implementation would mitigate risk and ensure readiness. A commenter
suggested allowing MVPs to become the primary quality reporting program
for most specialists following the planned sunset of traditional MIPS.
They suggested that launching ASM as a voluntary alternative to MVPs
for eligible clinicians in its first 2 years to allow clinicians,
vendors, and CMS to test the model in a real-world environment, gather
crucial data, and resolve operational issues without penalizing
unprepared participants.
Response: We acknowledge that we have previously staged
implementation of model requirements when such an on-ramp was
warranted. However, as value-based payment models have become more
common, more providers have established processes in place that can be
leveraged to meet ASM requirements. Therefore, ASM may not require
entirely novel operational processes for all ASM participants, and we
believe the advanced notice described in the CY 2026 PFS proposed rule
is sufficient. We do not believe an alternative timeline for
transitioning from MIPS to ASM is necessary as we did not propose a
full-scale transition from MIPS or MVPs. As stated in the CY 2026 PFS
proposed rule (90 FR 32593), we believe ASM can potentially inform
updates to the Quality Payment Program and the MVP reporting option.
While many participants who are assigned the specific specialty codes
we have selected for ASM may shift between MIPS and ASM, depending on
whether they meet the ASM eligibility criteria for a given year, ASM is
only testing a small subset of provider types for the ASM heart failure
and low back pain cohorts. That is, the majority of MIPS providers will
not be eligible for ASM and will continue to report through MIPS
throughout the ASM test period. As an Innovation Center model test, ASM
will require evaluation and would need to meet the requirements for
Innovation Center model certification to be expanded.
After consideration of public comments, we are finalizing our
proposed definitions for ``ASM test period'' and ``ASM payment year''
as proposed at Sec. 512.705. We are also finalizing January 1, 2027 as
the ASM start date as proposed. We did not receive any comments related
to our proposed ``ASM performance year'' definition and are, therefore,
finalizing as proposed at Sec. 512.705.
c. ASM Participants
(1) Mandatory Participation
In the CY 2026 PFS proposed rule (90 FR 32562 through 32563), we
discussed our belief 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.
We stated that mandatory participation in ASM would also ensure a
sufficient volume of participants to produce a diverse, representative
evaluation of clinicians providing specialty care to Medicare
beneficiaries with heart failure and 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 and future Innovation Center
models. Finally, we stated mandatory participation is necessary to
generate a statistically robust test of ASM with results that are
reliable, generalizable, and able to support potential model expansion.
Therefore, we proposed 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) and for any year that an ASM
participant meets the ASM eligibility criteria, they would subject to
the ASM requirements. Specifically, the ASM participant would be
required to submit data in accordance with Sec. 512.720, would be
assessed in accordance with Sec. 512.715, would be scored in
accordance with Sec. 512.745, and would receive an ASM payment
adjustment in accordance with Sec. 512.750. In addition, for any such
year, the ASM participant would be eligible for any waivers described
in section III.C.2.h. of this final rule. We also proposed that once a
clinician meets the ASM participant eligibility criteria, they would be
considered an ASM participant for the duration of the model. We also
proposed that clinicians would be exempt from MIPS reporting for any
ASM performance year that they meet ASM participant eligibility
criteria.
We proposed at Sec. 512.710(a)(2) that for any subsequent ASM
performance year that a previously selected ASM participant does not
continue to meet the ASM participant eligibility criteria, the ASM
participant would not be subject to the ASM requirements. Specifically,
the ASM participant would not be required to submit data in accordance
with Sec. 512.720, would not be assessed in accordance with Sec.
512.715, would not be scored in accordance with Sec. 512.745, and
would not receive an ASM payment adjustment in accordance with Sec.
512.750. In addition, for any such year, the ASM participant would not
be eligible for any waivers described in section III.C.2.h. of this
final rule. Because the 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 an ASM participant meets
the ASM participant eligibility criteria, the ASM participant would be
subject to any MIPS reporting obligations, if applicable, and would
receive a MIPS payment adjustment 2 years later, in accordance with
current regulations for any performance year
[[Page 49572]]
that they do not meet the ASM participant eligibility criteria. Because
ASM participants may 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.
Specifically, we proposed for the--
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 solicited public comments on our proposals at Sec. 512.710(a)
to require mandatory participation in ASM, to consider ASM participants
as ASM participants for the duration of the model, and to exempt ASM
participants from reporting under MIPS for only those years that they
meet ASM participant eligibility criteria. The following is a summary
of the comments we received and our response.
Comment: Several commenters supported ASM as a mandatory model,
noting that it would increase transparency, participation, and
competition; minimize selection bias in terms of who participates and
which measures are reported; and improve outcomes, reduce costs and low
value care, and transform care delivery. A few commenters shared their
belief that mandatory participation is necessary for ASM to gain the
critical mass of participating clinicians required for robust data
collection and improve the generalizability of model findings. A
commenter noted that the low voluntary adoption rates of programs and
reporting options, such as MVPs, suggest that mandatory participation
is necessary for full adoption.
Response: We appreciate commenters for their support of ASM as a
mandatory model.
Comment: Many commenters did not support mandatory participation
for ASM, noting their belief that the model could impose significant
financial risks and administrative burdens which are inappropriate
since this is a new, untested performance framework that still has
measures in development. A commenter recommended excluding clinicians
who specialize in heart failure from mandatory ASM participation in the
model. Another commenter recommended that CMS develop an optional track
for physicians who treat potential conditions of focus. Many commenters
shared concerns that mandatory ASM participation may destabilize
practices, increase practice consolidation, and reduce patient access
to community-based specialty care. They believe this is a particular
risk for the rural, solo, and small practices, without the bandwidth
for successful participation. They stated that vulnerable rural
communities would not be able to overcome the administrative burden of
ASM, potentially triggering hospital closures or result in physicians,
such as cardiologists, dropping participation in Medicare altogether.
Another commenter generally supported integrating rural clinicians into
value-based care models but recommended that CMS allow an opt-out
option for rural clinicians, if needed, because of additional burden
related to a lack of bandwidth or readiness to participate. Another
commenter shared a concern that mandatory participation may not uphold
the statutory intent of the Medicare Access and CHIP Reauthorization
Act of 2015 (MACRA). A few commenters raised concerns about overlapping
reporting and payment programs. Another commenter stated that a
mandatory model with two-sided financial risk would require expensive
technology investments. Many commenters recommended ASM participation
incentives paired with voluntary participation to build trust between
CMS and clinicians, ease administrative burdens, and allow time for
adaptation. Another commenter recommended allowing ASM participants to
opt-out of the model if their patient population within a cohort
declined significantly since the attribution year.
Response: We acknowledge these comments but believe that the
language in Section 1115A(d)(2) of the Act gives the Innovation Center
the authority to implement and test ASM. Specifically, we believe that
the preclusion of administrative or judicial review of the specific
policies was intended to ensure our ability to implement mandatory
models. We proposed ASM as a mandatory model because allowing voluntary
participation would likely result in only high performers joining the
model, rather than incentivizing all clinicians to improve care. As
previously stated in this section of the final rule, 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. Allowing clinicians to opt-out of ASM would
undermine the model test given concerns about selection bias. We note
that if an ASM participant has a significant decline in patient
population and does not meet the required case minimums for quality or
cost measures during ASM performance year, described in sections
III.C.2.d.(2).(h) and III.C.2.d.(3).(f) of this final rule, they would
not generate a performance score or receive a subsequent payment
adjustment. We believe this is a fair approach to preventing undue
penalties due to unexpectedly lower case volumes. We refer readers to
further discussion on this provision in section III.C.2.e.(2).(b) of
this final rule.
Including participants in rural areas is necessary to evaluate the
impacts of the model were it to be expanded to rural areas. We note
that CBSAs with a low volume of eligible episodes (that is, CBSAs with
no eligible clinicians with at least 20 episodes in the reference
year), which includes some rural areas, would be excluded from the
model. Additionally, rural areas not assigned to a CBSA would be
excluded. For a full discussion on the selection of mandatory
geographic areas, please see section III.C.2.c.(4) of this final rule.
[[Page 49573]]
We previously noted that many of the clinicians that will be
eligible for ASM, including those in rural areas, are experienced with
other value-based payment models and have processes in place that can
be used to meet ASM data submission requirements. In addition, ASM
reporting can be done through the established MIPS portal to minimize
disruptions to current reporting processes and reduce additional costs
to providers. We do not anticipate that ASM participants will need to
make significant technological investments to meet the reporting
requirements of the model. We refer readers to sections
III.C.2.d.(2)(b) and III.C.2.d.(2)(c) of this rule for a discussion of
the finalized quality measure sets for the ASM heart failure and ASM
low back pain cohorts. We also refer readers to section III.C.2.c.(4)
of this rule where we discuss the model geography, including rural
mandatory geographic areas.
Comment: A few commenters did not support the proposal requiring
clinicians, once selected for ASM, to remain ASM participants for the
entire duration of the model. A few commenters requested clarification
on the proposed requirement that clinicians who meet ASM participant
eligibility criteria for an ASM performance year would be considered an
ASM participant for the remainder of the model. The commenters believed
there was a discrepancy between the policy that clinicians who are ASM
participants will remain participants for the duration of the model at
Sec. 512.710(a)(1) and the proposed policy to reassess ASM participant
eligibility each performance year and exclude clinicians who no longer
meet the eligibility criteria for the upcoming ASM performance or
payment year, making them eligible for MIPS. Another commenter
requested clarity on MIPS exemptions if an ASM participant does not
meet ASM eligibility criteria during a performance period.
Response: We are happy to provide further clarification regarding
ASM participation. An ASM participant is any clinician who meets the
ASM participant eligibility criteria for any ASM performance year. Once
a clinician meets the ASM participant eligibility criteria for a given
year, the clinician will remain an ASM participant for the remaining
years of the model. We defined ASM participants this way because ASM
participants will be considered ASM participants when submitting ASM
data and receiving ASM payment adjustments during non-performance
years.
The first ASM performance year that a clinician is selected as an
ASM participant, the clinician would be required to meet ASM
requirements and would be exempt from MIPS reporting requirements, if
applicable. However, all ASM participants will be reassessed on an
annual basis to determine whether they still meet the ASM participant
eligibility criteria for each subsequent ASM performance year. Any
subsequent year that an ASM participant meets the ASM participant
eligibility criteria, the ASM participant must meet ASM model
requirements, and is exempt from MIPS reporting requirements, if
applicable. If an ASM participant does not meet the ASM participant
eligibility criteria for a subsequent ASM performance year, they will
remain an ASM participant but will not be required to meet ASM
requirements for the applicable ASM performance year. For example, if a
cardiologist meets the ASM participant eligibility criteria for the CY
2027 ASM performance year, that cardiologist is an ASM participant for
the duration of the model. The cardiologist would be required to meet
the ASM reporting requirements during CY 2027 and would be exempted
from MIPS participation, if applicable, during CY 2027. However, when
reassessed the following year, if the cardiologist does not meet the
ASM participant eligibility criteria for the CY 2028 ASM performance
year, while still considered an ASM participant, the cardiologist will
not be required to meet ASM requirements in CY 2028 and will be
required to report under MIPS in CY 2028, if applicable. The
cardiologist would then be reassessed for the CY 2029 ASM performance
year, and if they meet the ASM participant eligibility criteria for the
CY 2029 ASM performance year, the cardiologist will be required to meet
the ASM reporting requirements during CY 2029 and will be exempted from
MIPS participation, if applicable, during CY 2029. (For information on
the ASM participant notification process, please see section
III.C.2.c.(5) of this final rule.)
Comment: A commenter suggested a defined process for clinicians to
correct their ASM participation status. Another commenter noted that
allowing a clinician to correct their participation status would help
address potential discrepancies arising from administrative data or
misalignment between PECOS specialty information and actual clinical
practice.
Response: We appreciate the commenters' concerns. We note that ASM
will not assign specialties to clinicians directly. Rather, we will
rely on the specialty code assigned to a clinician's Medicare Part B
claims, which is based on PECOS information provided by clinicians
themselves, or, in the case that a clinician has listed more than one
primary specialty in PECOS, the specialty assigned most frequently to
their Part B claims. As we will be unable to correct ASM participation
status, to avoid potential errors, clinicians should confirm and
provide necessary updates to their PECOS information if they believe
that their current specialty designation does not reflect their actual
clinical practice.
Comment: A few commenters supported the proposed exemption of ASM
participants from MIPS during the performance periods when they are
eligible for ASM, thereby avoiding duplicative work and alleviating
provider burden. Another commenter noted that although an ASM
participant is exempt from MIPS requirements, ASM measures, scoring
policies, and payment adjustments largely mirror those of MIPS.
Response: We appreciate the commenters who support our proposal to
exempt ASM participants from MIPS reporting for years that they meet
the ASM participant eligibility requirements. We agree with the
commenter that ASM mirrors MIPS in many ways. However, ASM will employ
a more targeted approach by using the same performance measures to
evaluate clinicians furnishing the same services. ASM leverages the
existing MVP policies, while deviating from MVP policies in specific
ways. To ensure a more analogous comparison between specialists, unlike
the voluntary measure and activity selection permitted under the MVP
reporting option, ASM will require clinicians to report on a specific
set of measures and activities clinically relevant to their specialty
type and either heart failure or low back pain. Also, while clinicians
reporting under MVPs are scored against the entire pool of MIPS
clinicians, ASM will assess performance against only those clinicians
treating the same chronic condition.
Comment: A commenter did not support the proposed exemption of ASM
participants from participating in MIPS and recommended that CMS allow
clinicians the option of reporting in MIPS rather than ASM if only a
small portion of their patients are receiving chronic care for heart
failure or low back pain. The commenter recommended that clinicians
retain the ability to report on different quality measures within MIPS
if the clinician believes those measures better reflect the types of
services delivered for the majority of the patients they treat.
[[Page 49574]]
Response: We believe that the specialties selected for the ASM
cohorts are targeted so that they would be unlikely to comprise
providers caring for only a small portion of patients with low back
pain or heart failure. The EBCM episode volume ASM participant
eligibility criterion described in section III.C.2.c.(3)(b) must be met
to ensure ASM participants provide a sufficient amount of care for
heart failure or low back pain. Additionally, our intention in creating
this model is to create like-to-like comparisons between similar
providers and avoid the selection of disparate quality measures. This
requires participants to report on the same measures related to the
same condition. Continuing to allow providers to report on different
quality measures would not be different than the current MIPS reporting
option and obviates the goals of ASM.
Comment: A few commenters requested clarification on the interplay
between MIPS and ASM. A commenter questioned whether group practices
can still be submitted at the TIN level for MIPS if the group also has
an identified ASM participant and supports ASM group submissions.
Another commenter stated that exempting ASM participants from MIPS
creates significant ambiguity regarding impacts for clinicians who are
part of larger group reporting structures, such as those submitting
under an MVP or as part of the Shared Savings Program reporting the APP
measure set. The commenter stated that there are implications for group
reporting requirements in other programs with respect to data
completeness, and whether removing clinicians from the reporting pool
would make it mathematically impossible for that group to meet its own
program requirements. The commenter pointed to additional burden if an
ASM-eligible clinician is expected to ``dually report'' for both ASM
and an MVP/APP to satisfy Shared Savings Program ACO/APP data
completeness obligations. Another commenter requested that CMS
establish a clear program hierarchy for ASM participation and other
reporting obligations. They also requested whether CMS would adjust the
denominator for a group's data completeness calculation in its MVP or
APP if ASM participation supersedes all other reporting obligations.
Another commenter recommended that ASM participants not include
clinicians who were part of a group practice for the QPP submission in
CY 2024 or 2025.
Response: We appreciate the comments and will take them into
consideration when determining how to address ASM participant overlap
with subgroup-level or group-level reporting under MIPS. We will also
ensure appropriate guidance is provided prior to model implementation.
After consideration of public comments, we are finalizing without
modification our proposal at Sec. 512.710(a) that clinicians who meet
the ASM participant eligibility criteria for any year of the model will
remain ASM participants for the duration of the model. We are also
finalizing our proposal to exempt ASM participants from reporting under
MIPS for only those years that they meet ASM participant eligibility
criteria as proposed.
(2) ASM Participants
In the CY 2026 PFS proposed rule (90 FR 32563 through 32564), we
proposed that only certain clinicians who treat heart failure and low
back pain would be required to participate in ASM. We proposed 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
the CY 2026 PFS proposed rule and has been selected for participation
in the model as described in section III.C.2.c.(5). of the CY 2026 PFS
proposed rule. For ASM specifically, we proposed 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 proposed 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 final
rule). We note that the definition of ``model participant'' contained
in Sec. 512.110 should be interpreted to include each ASM participant.
We proposed to define an ``ASM targeted chronic condition'' as a
medical condition that is a core focus of ASM; that is, heart failure
or low back pain. We proposed to define an ``ASM cohort'' as a group of
ASM participants who treat the same ASM targeted chronic condition;
specifically, we proposed an ASM heart failure cohort and an ASM back
pain cohort for this model. We proposed 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 noted that the proposed ASM cohorts would not
include nonphysician practitioners (NPP) because Medicare does not
currently assign specialty codes to NPPs. Therefore, NPPs would not
meet the ASM participant eligibility criteria proposed at Sec.
512.710(b)(2), which states that only clinicians identified by one of
the specialty types at Sec. 512.710(d) may be ASM participants.
We stated in the CY 2026 PFS proposed rule (90 FR 32563) that we
also considered defining an ASM participant as a group of clinicians
within a single practice, provided each clinician individually meets
the ASM participant eligibility criteria. However, including groups of
specialists would result in fewer ASM participants overall and add
complexity to comparing performance across the ASM performance
categories and determining final scores. We also believe 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 the 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 the
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 solicited comments on our proposed definitions at Sec. 512.705.
We also sought 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.
The following is a summary of the comments we received on the
proposed definitions for ``clinician,'' ``ASM targeted chronic
condition,'' ``ASM cohort,'' and ``ASM low back pain
[[Page 49575]]
participant'' and our responses. We did not receive comments on the
``ASM heart failure participant'' definition. Because there was
significant overlap between comments received regarding the ``ASM heart
failure cohort'' definition and the proposals related to the ASM heart
failure cohort, we have consolidated those comments and responses and
included them in the ASM Heart Failure Cohort section at
III.C.2.c.(2).(a) of this final rule. Similarly, because there was
significant overlap between comments received regarding the ``ASM low
back pain cohort'' definition and the proposals related to the ASM low
back pain cohort, we have consolidated those comments and responses and
included them in the ASM Low Back Pain Cohort section at
III.C.2.c.(2).(b) of this final rule.
Comment: A few commenters supported the proposed definition of
``ASM participant'' to include only physicians in the model and exclude
nonphysician practitioners from ASM. Another commenter supported
excluding physical therapists and recommended that CMS explore future
iterations of value-based models that allow direct participation by
physical therapists in ways that are financially and structurally
feasible.
Response: We appreciate the commenters for their support.
Comment: Many commenters did not support the proposed ``ASM
participant'' definition to include only select specialty physicians.
They shared their belief that non-physician practitioners and post-
acute care providers should be included in the definition, as they have
a role to potentially improve outcomes and reduce costs. Many
commenters recommended the ``ASM participant'' definition be expanded
to nurse practitioners, physician assistants, physical therapists,
occupational therapists, psychologists, social workers, pharmacists and
other health care professionals who should have the ability to
participate and receive financial adjustments from inclusions in the
program. Another commenter recommended including advanced practice
registered nurses because they provide care in underserved rural areas.
A few commenters recommended creating a voluntary pathway for
participation for NPPs through the secondary or tertiary specialty
designations in PECOS. Another commenter recommended including primary
care and chiropractic physicians in the ``ASM participant'' definition.
A few commenters also referenced Medicare's existing regulatory
authority and specialty codes for advanced practice providers, stating
that CMS has the capacity to include these professionals under the
model. Another commenter recommended CMS recognize the important role
that athletic trainers play in the delivery of specialty care,
particularly in musculoskeletal and orthopedic care settings.
Response: We note that the proposed definition for ``ASM
participant'' is an individual clinician who, for at least one ASM
performance year, satisfies the ASM participant eligibility criteria
and has been selected for participation in the model. We did not
receive comments specific to the definition. Comments related to the
selected specialties and other ASM participant eligibility criteria are
discussed individually in section III.C.2.c.(3) of this final rule. We
acknowledge the important role of NPPs, post-acute care providers, and
other clinicians and agree that the subset of physicians selected for
ASM are not the only provider types who deliver low back pain and heart
failure care to Medicare beneficiaries. However, ASM aims to build
cohorts of like providers who deliver similar services with a
comparable ability to drive care improvements. To ensure appropriate
comparison among peers, we are limiting ASM to specific physicians.
Providers who do not bill Medicare Part B claims or are not
assigned a Medicare specialty code related to a particular chronic
condition are not evaluable and are, therefore, not appropriate
candidates for this particular model. Operationally, as described in
section III.C.2.c.(3).(a).(iii) of this final rule, we have elected to
identify ASM participants based on the medical specialty code assigned
to Medicare Part B claims. While physicians may be assigned a specialty
code specific to their medical specialty, NPPs (such as occupational
therapists, physician assistants, nurse practitioners, and physical
therapists) are assigned a Medicare Part B claim specialty code that
denotes provider type. For instance, the Medicare Part B claim
specialty code assigned to an occupational therapist is the same,
regardless of whether they treat patients with low back pain or
traumatic brain injury. In addition, we are not relying on PECOS
directly for reasons described in section III.C.2.c.(3).(a).(iii) of
this final rule, so would not be able to use secondary or tertiary
PECOS specialty designations for NPPs. Therefore, we are only able to
identify physicians for ASM.
We do not believe it is appropriate to include chiropractors in the
model, as we would be unable to score chiropractors on all of the ASM
performance metrics and chiropractic training and treatment modalities
are not as comprehensive as for other physicians. For example,
chiropractors cannot prescribe all medications or order additional
testing, such as imaging. We are also unable to include providers, such
as athletic trainers, who are not currently recognized as Medicare Part
B providers and do not submit Medicare Part B claims. Through ASM, we
aim to incentivize specialists directly to work with PCPs to improve
outcomes; therefore, including PCPs as participants is outside the goal
of the model.
Comment: A commenter recommended refining the ``ASM low back pain
participant'' definition to a specific diagnosis such as stenosis or
lumbar disc herniation and adding specialists to the participant
definition based on the diagnosis. A few commenters did not support the
proposed definition for ``ASM low back pain participant'' because
attribution of a patient's care in a group practice can often start
with non-physician practitioners, primary care physicians, or other
specialty physicians not identified in the definition. A few commenters
agreed with the specialists identified in the proposed ``ASM low back
pain participant'' definition and recommend CMS consider adding
additional specialists who oversee non-procedural interventions.
Another commenter recommended adding primary care and post-acute care
providers to the definition.
Response: We note that the proposed definition for ``ASM low back
pain participant'' is an ASM participant who meets the ASM participant
eligibility criteria related to low back pain. Comments related to the
selected specialties and other ASM participant eligibility criteria are
discussed individually in section III.C.2.c.(3) of this final rule.
Comment: A few commenters supported the proposed alternative to add
a group participation option to ASM because of their belief that ASM
participants work in multidisciplinary teams to deliver guideline-
directed care and manage patients. They stated that allowing group
participation would align incentives across the care team, reduce
administrative complexity, broaden patient inclusion and increase data
submissions. A commenter believed that team-based care is the only
sustainable model for managing chronic conditions and that moving to
individual-level assessment adds no value. Another commenter noted that
[[Page 49576]]
TIN level participation supports smaller practices, increasing the
likelihood they can make investments in new staff or programs to drive
improvements. Another commenter noted that specialty societies
recommend multidisciplinary teams providing care for heart failure
patients. A few commenters supported allowing groups the option to add
or remove participants from ASM during a performance year because they
believed it would ensure accurate reporting and fairness since
clinicians often change practices. Another commenter believed not
allowing for updates during the performance year would create
inequities. Another commenter expressed a belief that clinicians
practicing in groups should not be part of any ASM cohorts.
Response: We appreciate comments on the alternative approach of
allowing group ASM participants and whether, under this alternative
policy, groups should be allowed to add or remove ASM participants
during an ASM performance year. We disagree that individual-level
assessment adds no value and remind commenters that ASM is partly in
response to interested parties requesting more targeted and individual
performance feedback. We also believe that individual-level performance
assessment can create a strong incentive for performance improvement.
We will take these comments into consideration should we propose to
include group participants in future years of the model. Any change
would be undertaken under a notice and comment rulemaking.
After consideration of public comments, we are finalizing the
definitions for ``ASM participant'' and ``ASM low back pain
participant'' as proposed at Sec. 512.705. We did not receive public
comments on the definitions for ``clinician,'' ``ASM targeted chronic
condition,'' ``ASM cohort,'' or ``ASM heart failure participant'' and
are, therefore, finalizing the definitions as proposed at Sec.
512.705. For comments and responses related to the ``ASM heart failure
cohort'' and ``ASM low back pain cohort'' definitions, please see the
ASM Heart Failure Cohort section III.C.2.c.(2).(a) and ASM Low Back
Pain Cohort section III.C.2.c.(2).(b) of this final rule, respectively.
(a) ASM Heart Failure Cohort
We proposed at Sec. 512.710(d)(1) to only select clinicians who
have been assigned a specialty code of cardiology on the plurality of
their Medicare Part B claims for the ASM heart failure cohort, provided
they meet all applicable ASM participant eligibility criteria under
Sec. 512.710(b) for an ASM performance year. We stated that, although
other clinicians may treat heart failure, only cardiologists would be
selected 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 stated our belief that 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 also considered
including clinicians identified by additional cardiac specialty codes,
as Medicare uses distinct specialty codes for subspecialists in cardiac
electrophysiology, intensive cardiac rehabilitation, cardiac surgery,
interventional cardiology, and advanced heart failure and transplant
cardiology. Depending on the etiology of heart failure, a beneficiary
could receive care from an interventional cardiologist or cardiac
electrophysiologist. 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.\167\ 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 did not propose to include clinicians with specialty codes other
than cardiology as ASM participants.
---------------------------------------------------------------------------
\167\ 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.
---------------------------------------------------------------------------
We solicited comments on our proposed definition of ``ASM heart
failure cohort'' at Sec. 512.705 and our proposal at Sec.
512.710(d)(1) to only include in the ASM heart failure cohort
clinicians with a cardiology specialty code on the plurality of their
Medicare Part B claims. We also sought comments on including additional
subspecialist cardiology codes in the ASM heart failure cohort.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters supported the proposed eligibility
criteria to include only heart failure clinicians who have used a
cardiology specialty code. One supported excluding heart failure
subspecialists because they believed that cardiologists may provide the
bulk of care for exceptionally complex patients.
Response: We appreciate the comments in support of the proposed
eligibility criteria for the ASM heart failure cohort, particularly the
use of the cardiology specialty code for those clinicians treating
heart failure. We agree that cardiologists are in the best position to
co-manage patients and share responsibilities with primary care and the
exclusion of cardiology sub-specialists is appropriate given that they
are more apt to treat complex patients.
Comment: A few commenters stated that the ASM heart failure cohort
comprised only of cardiologists is overly narrow and excludes relevant
cardiology subspecialists who provide essential components to heart
failure care and clinicians who see sufficient volume of heart failure
beneficiaries. They stated that excluding these clinicians from ASM
would undermine the clinical validity of performance comparison
fairness. Several commenters recommended that more cardiology
subspecialties be included in the heart failure cohort. A commenter
believed that treating heart failure takes multiple team-based
approaches and should include specialties like cardiac surgery,
interventional cardiology, allied health providers, post-acute care
providers, primary care, and advanced primary care providers who manage
heart failure patients longitudinally. Another commenter believed
additional specialties should be included in the proposed eligibility
criteria because they believed that the released EBCM heart failure
data shows that half of patients with heart failure are attributed to
other types of physicians and nonphysician providers, including
cardiologists with subspecialty designations. Another commenter
recommended CMS to reconsider the methodology to ensure that clinicians
whose Part B payments are at risk can meaningfully participate in the
model.
Response: We acknowledge that the subset of clinicians selected for
ASM are not the only provider types who deliver care to Medicare
beneficiaries and the important role of other clinicians in the
treatment of heart failure. ASM is designed to test whether comparing
to clinicians who are furnishing similar
[[Page 49577]]
services for a specific chronic condition improves our ability to
assess performance and provides more pertinent and actionable
information to specialists. ASM could broaden the pool of participants
treating heart failure in future notice and comment rulemaking if it is
determined that patterns of care exhibited by other subspecialty types
make for fair comparison on the same set of measures.
Subspecialists such as cardiac surgeons and interventional
cardiologists treat particularly complex patient populations that would
create challenges for comparing performance, as they primarily function
as proceduralists rather than comprehensive care managers. Their
interactions with heart failure patients are often limited in scope and
to a specific area of technical expertise. This contrasts sharply with
general cardiologists who often provide ongoing, comprehensive
management of heart failure patients. Allied health providers and post-
acute providers represent a diverse group of providers who help
patients manage their chronic condition(s). Yet, as they typically work
under physician supervision, they may not have the clinical authority
to make independent treatment decisions or the ability to assume
financial risk for patient outcomes. Although some primary care and
advanced primary care providers manage heart failure patients
longitudinally, ASM focuses on the role of specialists in the treatment
of chronic conditions and coordination with PCPs. It is true that EBCM
heart failure data shows many patients with heart failure are
attributed to subspecialty types and will, therefore, be excluded from
the model. The goal of ASM is not to compare performance of all
specialist types who have been attributed patients with heart failure.
Rather, the goal is to measure the performance of a subset of those
clinicians who are most alike in the pattern of care that they provide
so that performance is aptly measured and scored.
Comment: A commenter requested that essential data be presented,
analyzed, and supported for determining the composition of the ASM
heart failure cohort, with discussion of the rationale for including
and excluding clinicians who provide essential care for beneficiaries
who require heart failure care.
Response: We appreciate the commenter for the response. We believe
that we have provided sufficient rationale for determining the
composition of the ASM heart failure cohort both in the CY 2026 PFS
proposed rule and in this section in response to comments.
Comment: A commenter requested clarity on what ``plurality'' means
within the context of the proposal at Sec. 512.710(d)(1) to only
include in the ASM heart failure cohort clinicians with a cardiology
specialty code on the plurality of their Medicare Part B claims.
Response: We appreciate the opportunity to clarify what is meant by
plurality. Plurality captures the specialty code applied most
frequently to a clinician's claims. Majority refers to the specialty
code listed on more than 50 percent of claims. In the case that a
clinician has more than one specialty code applied to their Medicare
Part B claims, the specialty code applied most often would be the
specialty code accepted for the purposes of the ASM participant
eligibility criteria.
After consideration of public comments, we are finalizing without
modification our proposal at Sec. 512.705 to define the ``ASM heart
failure cohort'' as all ASM heart failure participants. We are also
finalizing without modification our proposal at Sec. 512.710(d)(1) to
include only clinicians with a cardiology specialty code on the
plurality of their Medicare Part B claims in the ASM heart failure
cohort.
(b) ASM Low Back Pain Cohort
In the CY 2026 PFS proposed rule (90 FR 32564), 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.\168\ However, some low back pain treatments,
including spinal fusion for the treatment of non-complex low back pain,
may be contributors to low-value care.\169\ For this reason, we believe
that it would be prudent for ASM to include the specialists who most
commonly perform these procedures.
---------------------------------------------------------------------------
\168\ 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.
\169\ 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.
---------------------------------------------------------------------------
While surgical specialists are proceduralists, they are also
commonly involved in the longitudinal management of Medicare
beneficiaries with low back pain. We stated in the CY 2026 PFS proposed
rule that we examined whether ASM would meet its goal of comparing like
participants if we elected to include both nonsurgical and surgical
specialists in the same ASM cohort.
As discussed in the CY 2026 PFS proposed rule (90 FR 32593 through
32597), 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 B-D2.
[[Page 49578]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.107
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 final rule would screen out
specialists who are not treating low back pain longitudinally in the
outpatient setting.
We proposed 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 noted that there may be some overlap between pain
management, interventional pain management, and anesthesiology.
However, we proposed 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 proposed that
only those specialists listed would be selected to participate in ASM.
We also considered other specialists who could trigger higher volumes
of low back pain episodes. For example, chiropractors and physical
therapists work closely with both PCPs and specialists to treat low
back pain, often providing first-line therapy. However, we believe the
proposed 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 solicited 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
also sought comments on including alternative low back pain-related
specialty types that were considered for the ASM low back pain cohort.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters agreed with the proposed ASM low back
pain participant and ASM low back pain cohort definitions. A few
commenters supported the specialties included in the ASM low back pain
cohort with no need to expand to other specialties and believed that
surgical care providers are better positioned to assume full
accountability for low back pain episodes. A commenter believed that
many orthopedic practices manage chronic musculoskeletal conditions,
and it is realistic for specialty surgical practices to be included in
the model.
Response: We appreciate the comments in support of the ASM low back
pain participant definition and the specialties selected for the ASM
low back pain cohort. We appreciate the commenters for agreeing that
orthopedic surgeons are appropriate provider types for the ASM low back
pain cohort.
Comment: A commenter requested clarification and reasoning for
including the proposed identified clinicians within the ASM low back
pain cohort while excluding other clinicians who provide essential care
for beneficiaries. Another commenter said the collection of specialty
types is too broad to be statistically useful because clinicians who
are not focused on changing the course of lower back pain as a
specialty focus area would not meaningfully contribute to the goal of
improving lower back pain care. A couple of commenters recommended
excluding surgeons from ASM. Another commenter stated that chronic low
back pain is managed through long-term multidisciplinary approaches
rather than surgical interventions. Another commenter recommended
excluding neurosurgeons. A couple of commenters suggested CMS work with
specialty societies for clinicians who treat spine patients to develop
a more appropriate value-based opportunity that focuses on the aspects
of care where spine surgeons have more direct control.
A commenter expressed a belief that the ``ASM low back pain
cohort'' definition does not foster team-based management of a
patient's care over the trajectory of a condition. A few commenters
believed attribution of a patient's care in a group practice can often
start with non-physician practitioners, primary care physicians, or
other specialty physicians not identified in the definition.
Response: We selected the specialties that commonly manage, treat,
and maintain long-term relationships with patients with low back pain
in the ambulatory setting for the ASM low back pain cohort. We refer
readers to section III.C.2.c.(2).(b) of this final rule for a more
comprehensive discussion on the reasoning and justification for
selecting the specialties for the ASM low back pain cohort. We disagree
with the comment that ASM participants who are not clinically or
academically focused on changing the course of lower back pain would
not meaningfully contribute to improving lower back pain care. We
believe this model would incentivize those providers to do so. We also
understand that patient care may be transferred between providers in
group practices, particularly when utilizing a team-based approach to
care for low back pain patients. However, ASM will only focus on
providers who meet the ASM participant eligibility criteria,
[[Page 49579]]
including those related to the volume of episodes for the low back pain
EBCM described in section III.C.2.c.(3).(b) of this rule. Providers who
see a patient once and refer them to another provider would be unlikely
to meet the criteria for an EBCM episode for that patient, as an EBCM
episode is only attributed to a clinician when they bill at least 30
percent of the Part B codes for the episode. We disagree that surgeons,
including neurosurgeons, should be excluded from the model for the
reasons stated in this section III.C.2.c.(2)(b) of the final rule.
Specifically, we believe that it would be prudent for ASM to include
the specialists who commonly perform spinal fusions.
Comment: A few commenters recommended CMS define ASM low back pain
participant and the ASM low back pain cohort based on specific lumbar
spine diseases and conditions rather than grouping all low back pain
together. A commenter recommended refining the definition to a specific
diagnosis such as stenosis or lumbar disc herniation and adding
specialists to the participant definition based on the diagnosis. A
commenter encouraged CMS to include a more common set of procedures and
workflows that could be more applicable to specialties and groups.
Response: We acknowledge the recommendation to define ASM low back
pain participant and ASM low back pain cohort at the diagnosis-level
for a subset of low back pain patients. However, such episodes would
not be appropriate for ASM because the conditions covered must have an
associated MIPS EBCM. In addition, narrower definitions would reduce
the volume of episodes and ASM participants in the model. We believe a
broader low back pain category will encourage greater coordination
among providers caring for patients with a chronic condition that is
both complex and multi-factorial, often with overlapping diagnoses.
We also understand that several clinicians are involved when
utilizing a team-based approach to care for low back pain patients.
Although MIPS will continue to evaluate groups, where handoffs between
providers in the same group are common, ASM will only focus on
providers who meet the ASM participant eligibility criteria, including
those related to the volume of episodes for the low back pain EBCM
described in section III.C.2.c.(3).(b) of this final rule. We remind
readers that an EBCM episode is only attributed to a clinician when
they bill at least 30 percent of the Part B codes for the episode.
Therefore, unless the clinician is sufficiently involved in the care
for that episode, they would not be attributed to the episode, and the
episode would not count toward the EBCM episode volume eligibility
criteria.
Comment: A few commenters recommended CMS include additional
specialties for the low back pain cohort. A few commenters did not
support limiting the low back pain cohort to specialists, such as
neurosurgeons and orthopedic surgeons, and recommended instead adding
primary care physicians who manage patients with low back pain. A
commenter recommended including primary care physicians because a
substantial portion of patients are managed solely by PCPs. Another
commenter recommended adding NPPs and believed that ASM should capture
the chiropractors, behavioral health providers, physical therapists,
occupational therapists, massage therapists, or acupuncturists employed
in many physician practices. Another commenter believed that excluding
physical therapists will limit ASM's ability to capture the true
drivers of value in low back pain care. A few commenters believed the
proposed methodology excludes clinicians who see sufficient volume of
low back pain beneficiaries. They stated that, according to data
released when the low back pain EBCM was being developed, most Medicare
patients with low back pain are treated by chiropractors, physical
therapists, and primary care physicians who are not included in the
``ASM low back pain cohort'' definition. Another commenter suggested
CMS to ensure that clinicians whose Part B payments are at risk can
meaningfully participate in the model. A commenter stated that
additional specialists would increase opportunities to achieve Medicare
cost savings while providing a more comprehensive, patient-centered,
and longitudinal approach for beneficiaries experiencing low back pain.
A commenter recommended that, if CMS were to add additional
specialties, CMS should examine whether methodological adjustments are
necessary to ensure appropriate comparison groups, especially since
certain specialists inherently treat more complex, higher-cost
conditions.
Response: We acknowledge the important role of other clinicians in
the treatment of low back pain and that the subset of physicians
selected for ASM are not the only provider types who deliver care to
Medicare beneficiaries. While expanding the cohort to include
additional provider types and specialties could increase greater cost
savings, we remind commenters that ASM is a model test to determine
whether comparing specific providers on similar services improves our
ability to assess performance and provide more pertinent and actionable
information to specialists. ASM also aims to include providers with a
comparable ability to drive care improvements and the operational
capacity to meet model requirements. Should ASM evaluations confirm its
effectiveness in meeting its goals, broadening the pool of participants
could certainly be considered in the future. We agree that if
additional specialties were added to the model, we would need to
consider whether other methodological adjustments were necessary to
ensure appropriate comparison groups. At this time, we are not adding
additional specialties or provider types.
Through ASM, we aim to incentivize specialists directly to work
with PCPs to improve outcomes; therefore, including PCPs as
participants is outside the goal of the model. To ensure appropriate
comparison among peers, we are limiting ASM to specific specialists.
We do not believe it is appropriate to include chiropractors in the
model, as we would be unable to score chiropractors on all of the ASM
performance metrics and chiropractic training and treatment modalities
are not as comprehensive. For example, chiropractors cannot prescribe
all medications or order additional testing, such as imaging.
Operationally, as described in section III.C.2.c.(3).(a).(iii) of
this final rule, we have elected to identify ASM participants based on
the medical specialty code assigned to Medicare Part B claims. While
physicians may be assigned a specialty code specific to their medical
specialty, NPPs are assigned a Medicare Part B claim specialty code
that denotes provider type. For instance, the Medicare Part B claim
specialty code assigned to a physical therapist is the same, regardless
of whether they treat patients with low back pain or traumatic brain
injury. Therefore, we are only able to identify physicians for ASM.
Comment: A few commenters believed that anesthesiologists, pain
management, and interventional pain management should be excluded
because most of the clinicians would be at a significant disadvantage,
have a low volume of low back pain patients, do not have control over
the costs associated with caring for low back pain patients, and will
receive negative payment adjustments. A commenter requested
clarification in defining roles when the services fall outside a
specialist's control, particularly in the case that an anesthesiologist
is
[[Page 49580]]
providing anesthesia services, where the surgeon has primary control
over the episode. They believed that pain management and integrated
pain management are tertiary referrals, and these types of specialists
do not have control of any of the expenses.
Response: We acknowledge comments regarding the perception that
some care decisions may be outside of the control of an ASM
participant. In fact, one of the aims of ASM is to increase engagement
and communication between specialists and their referral sources,
typically PCPs. By including specialists who have historically operated
in silos, we hope to incentivize those specialists to work together
with referring providers to improve care coordination and outcomes for
Medicare beneficiaries with low back pain. We disagree that
anesthesiologists, pain management, and interventional pain management
should be excluded from the model, as these specialists commonly
provide long-term care to beneficiaries and perform non-operative
interventions to address low back pain. With respect to anesthesia, the
EBCM methodology excludes the anesthesia billing codes commonly used
when provided services in tandem with a surgical procedure, so those
services would not trigger an episode. While some post-operative pain
management codes are included in the EBCM methodology, we would not
expect these services to trigger an episode as an EBCM episode is only
attributed to a clinician when they bill at least 30 percent of the
Part B codes for the episode. In this case, that episode would likely
be attributed to the surgeon.
Comment: Several commenters did not support the proposed
alternative to include additional specialists in the low back pain
cohort because they believe the types of specialists currently selected
align with the model's goals of managing patient's chronic disease.
Another commenter did not support the proposed alternative to include a
subset of orthopedic surgeons who treat low back pain.
Response: We appreciate the comments received on the alternative
low back pain-related specialty types that were considered for the ASM
low back pain cohort. Should we determine that additional provider
types would be appropriate for inclusion in ASM, changes would be
undertaken under a notice and comment rulemaking.
After consideration of public comments, we are finalizing the ``ASM
low back pain participant'' and ``ASM low back pain cohort''
definitions as proposed at Sec. 512.705. We are also finalizing
without modification our proposal at Sec. 512.710(d)(2) to include in
the ASM low back pain cohort only 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.
(3) ASM Participant Eligibility Criteria
As discussed in the CY 2026 PFS proposed rule (90 FR 32564 through
32568), when selecting participants for ASM, we sought 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 final
rule; and (4) the model test results will be statistically valid,
reliable, and generalizable to the 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 proposed 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 proposed 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.
At Sec. 512.705, we proposed 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 noted 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 noted 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 participant eligibility criteria. We also
stated that 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 participant eligibility criteria,
given that such services are paid under the Medicare PFS. Further, we
stated that clinicians who provide services at CAHs that are paid under
Method II, and meet all ASM participant eligibility criteria, 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. As
stated in the CY 2026 PFS proposed rule, MIPS uses 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 would only use professional claims to trigger
EBCMs, and, therefore, would not capture claims for clinicians who have
reassigned their billing rights to a Method II CAH.
We sought comments on our proposed ``ASM participant eligibility
criteria'' and ``mandatory geographic area'' definitions at Sec.
512.705. We also solicited comments on the proposed ASM participant
eligibility criteria at Sec. 512.710(b). Specifically, we solicited
comments on the proposals at Sec. 512.710(b)(1) that the clinician
must bill claims under the Medicare Physician Fee Schedule; at Sec.
512.710(b)(2) that the clinician would be identified by TIN/NPI as a
selected specialty type; at Sec. 512.710(b)(3) that the clinician must
meet the EBCM episode volume threshold applicable to an ASM targeted
chronic condition; and at Sec. 512.710(b)(4) the clinician must be
[[Page 49581]]
located in one of the selected mandatory geographic areas.
The following is the public comment we received on the ``ASM
participant eligibility criteria'' definition and our response We did
not receive comments on the ``mandatory geographic area'' definition or
the criteria at 512.710(b)(1) that the clinician must bill claims under
the Medicare Physician Fee Schedule. The remaining ASM participant
eligibility criteria proposed at Sec. 512.710(b)(2), Sec.
512.710(b)(3), and Sec. 512.710(b)(4) are discussed in sections
III.C.2.c.(3)(a), III.C.2.c.(3)(b), and III.C.2.c.(4) of this final
rule, respectively.
Comment: A commenter supported the ``ASM participant eligibility
criteria'' definition since they believed the criteria to be clear.
Response: We appreciate the commenter for their support of the
``ASM participant eligibility criteria'' definition.
We are finalizing the ``ASM participant eligibility criteria'' and
``mandatory geographic area'' definitions as proposed at Sec. 512.705.
We are also finalizing the ASM participant eligibility criteria at
Sec. 512.710(b)(1) that the clinician must bill claims under the
Medicare Physician Fee Schedule as proposed. The remaining ASM
participant eligibility criteria proposed at Sec. 512.710(b)(2), Sec.
512.710(b)(3), and Sec. 512.710(b)(4) are discussed in sections
III.C.2.c.(3)(a), III.C.2.c.(3)(b), and III.C.2.c.(4) of this final
rule, respectively.
(a) ASM Participant and Specialty Type Identification
As discussed in section III.C.2.c.(2) of this final rule, we
proposed 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 proposed to
align the Quality Payment Program policies for identifying clinicians
and clinical specialty. Specifically, we proposed at Sec.
512.710(b)(2) that the clinician would be identified by TIN/NPI as a
selected specialty type.
(i) ASM Participant Identification
As discussed in the CY 2026 PFS proposed rule, Medicare claims are
processed using TINs, which may represent an individual clinician or
may represent a hospital or group practice. Because we proposed that
ASM would evaluate performance at an individual clinician level (TIN/
NPI), TIN alone would not be useful for ASM. Individual providers are,
however, identifiable by their unique NPI. We stated that 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.
We noted that 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) and
stated our belief 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. We stated that this level
of participation would also produce more granular performance analysis
and useful feedback for clinicians. Second, we also proposed to use
TIN/NPI to determine whether clinicians meet the other ASM participant
eligibility criteria. Specifically, we proposed to use TIN/NPI 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 final 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 stated our belief 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 will allow for like-to-like performance assessment of
clinicians who meet ASM participant eligibility criteria. We believe
this performance comparison approach will provide granular and
actionable insights into best practices and specialty care delivery.
As discussed in the CY 2026 PFS proposed rule, we recognize that an
individual clinician may assign their billing rights to multiple TINs
(that is, practice across multiple TINs). Such an arrangement will 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 stated 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 final
rule. We stated that 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) of this final rule 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 solicited public comment on our proposal at Sec. 512.710(b)(2)
to identify ASM participants at the TIN/NPI level. We also sought
comments 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.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters did not support requiring an individual
clinician to participate in ASM separately under all applicable TIN/NPI
combinations. They stated that clinicians who assign billing rights to
multiple TINs should not be treated as separate participation entities
who must meet reporting requirements for each applicable TIN/NPI
combination.
Response: Identifying ASM participants at the TIN/NPI level will
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 believe
[[Page 49582]]
identifying ASM participants at the TIN/NPI level will drive direct
accountability for outcomes that are clearly attributed to each setting
in which an ASM participant practices. We note that an ASM participant
would only be held accountable for the care they provide under the TIN/
NPIs that meet the ASM participant eligibility criteria. Based on our
internal analysis performed to inform this policy, we expect this to be
a rare occurrence. Moreover, the proposed approach aligns with the ASM
performance assessment policies and mirrors the methodology used in the
Quality Payment Program. For comments and responses related to data
submission for ASM participants who bill under multiple TINs, please
see section III.C.2.d.(1) of this final rule.
Comment: A commenter supported the proposed policy to allow ASM
participants affiliated with multiple TINs to determine which TIN/NPI
combination would be reported to the model.
Response: We appreciate the comment on the alternative method
considered for 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. To clarify, this
alternative was not related to reporting but identifying clinicians for
participation in ASM. We will take this comment into consideration if
we propose changes to the policy in future years of the model.
After consideration of public comments, we are finalizing without
modification our proposal at Sec. 512.710(b)(2) to identify ASM
participants at the TIN/NPI level.
(ii) Participant Exclusion Due to Change in TIN During an ASM
Performance Year
In the CY 2026 PFS proposed rule (90 FR 32593 through 32597), we
recognized that ASM participants may change practices (as reflected by
a change in TIN) during an ASM performance year. In such circumstances,
we stated that 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 proposed 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 proposed 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 proposed 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. We stated that 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 annually whether clinicians meet
ASM participant eligibility criteria for each applicable ASM
performance year, we believe that we would naturally identify the
movement of individual clinicians to a different TIN between ASM
performance years. However, as discussed in the CY 2026 PFS proposed
rule, 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
final rule) under the new TIN. Without complete data to evaluate
whether the ASM participant continues to meet the ASM participant
eligibility criteria, we proposed, for that ASM performance year, we
would not assess the ASM participant in accordance with Sec. 512.715,
would not require the ASM participant to submit data in accordance with
Sec. 512.720, would not score the ASM participant in accordance with
Sec. 512.745, and the ASM participant would not receive an ASM payment
adjustment in accordance with Sec. 512.750. Because the proposed
Medicare waiver at Sec. 512.775 would only waive the requirements of
section 1848(q) of the Act, and its implementing regulations, for an
ASM performance year that an ASM participant meets the ASM participant
eligibility criteria, we stated that the ASM participant would be
required to satisfy any MIPS reporting obligations and would receive a
MIPS payment adjustment 2 years later, in accordance with current
regulations. In the CY 2026 PFS proposed rule, we stated we intend to
monitor TIN changes in each ASM cohort within each ASM performance year
and across the ASM model test period. If we determine that changes to
this policy are warranted for future ASM performance years, we will
propose those changes through notice and comment rulemaking.
We also 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 final 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,
as we stated in the CY 2026 PFS proposed rule, 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
final rule, and (2) meet the requirements to receive a final score as
discussed in section III.C.2.e.(2) of this final 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) of this final rule, 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 requiring the ASM participant to meet all model
[[Page 49583]]
requirements under the original TIN/NPI combination for the applicable
ASM performance year and, therefore, not requiring the ASM participant
to notify CMS of a change in TIN during an ASM performance year.
However, we believe that it would be challenging for an 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 accountable
for ASM requirements under the original TIN in this situation.
We solicited 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 sought comments on the alternatives of requiring the ASM
participant to meet model requirements under their new TIN or under the
original TIN/NPI combination that identified them as an ASM
participant.
The following is a summary of the comments we received and our
responses.
Comment: A commenter agreed with the policy to exclude participants
who change TIN during the performance year from ASM requirements. The
commenter advised CMS to require participation in the model for
subsequent years with their new TIN/NPI combination.
Response: We appreciate the support of our policy to exclude ASM
participants who change TIN during an ASM performance year. As
discussed in section III.C.2.c.(1) of this rule, ASM participants will
be reassessed annually using the ASM participant eligibility criteria
to ensure all eligible clinicians are selected for participation in the
model.
Comment: A commenter requested clarification on how CMS would
handle a change in clinical practice during a measurement year if ASM
participant eligibility is decided prior to the measurement year. For
example, an anesthesiologist no longer manages low back pain and now
only provides anesthesia services in an operating room based on
practice decisions.
Response: We understand that, although infrequent, it would be
possible for a clinician to change practice settings or service lines
based on practice decisions, while remaining under the same TIN. If the
ASM participant no longer provides the services that resulted in the
provider meeting the ASM participant eligibility criteria, we do not
expect they would trigger an adequate number of EBCMs to meet the
episode volume criteria to receive a score during the ASM performance
year. Therefore, although still an ASM participant, they would not
receive a score for that ASM performance year or receive a payment
adjustment in the applicable ASM payment year. For a more in-depth
discussion on cost ASM performance category scoring, see section
III.C.2.d.(3)(g). An ASM participant who changes clinical practice
setting during an ASM performance year would be required to notify CMS
within 30 days of a change in TIN in a form and manner determined by
CMS.
After consideration of public comments, we are finalizing without
modification 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.
(iii) ASM Specialty Identification
In the CY 2026 PFS proposed rule (90 FR 32593 through 32597), we
proposed to define ``specialty type'' as the medical specialty
determined by the specialty code indicated on the plurality of a
clinician's Medicare Part B claims. We also proposed to identify
specialty 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 final rule to ensure that all clinicians
meeting the specialty requirements described at Sec. 512.710(d) are
included in the model. Specifically, we proposed to use the same
specialty codes used for the Quality Payment Program to identify the
specialty of MIPS eligible clinicians as defined at Sec.
414.1305.\170\
---------------------------------------------------------------------------
\170\ https://www.federalregister.gov/d/2022-23873/page-70039.
---------------------------------------------------------------------------
As discussed in CY 2026 PFS proposed rule, 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 proposed to use the specialty code assigned most frequently to 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, as discussed in
the CY 2026 PFS proposed rule, the PECOS specialty codes are self-
reported, and a single clinician may list more than one primary
specialty, making 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).\171\
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.\172\ We 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 both
of the ASM 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.\173\ We stated that 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.
---------------------------------------------------------------------------
\171\ https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855i.pdf.
\172\ https://data.cms.gov/resources/medicare-provider-and-supplier-taxonomy-crosswalk-methodology.
\173\ https://data.cms.gov/provider-characteristics/medicare-provider-supplier-enrollment/medicare-provider-and-supplier-taxonomy-crosswalk/data.
---------------------------------------------------------------------------
We solicited 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 sought
comments on the alternative
[[Page 49584]]
approach of using PECOS specialty codes alone and Health Care Provider
Taxonomy Codes for the purpose of determining specialty type for ASM.
The following is a summary of the comments we received and our
responses.
Comment: A commenter requested clarification on the use of the term
``plurality'' in determining specialty identification for mandatory ASM
participation. They recommended that CMS provide a quantitative
threshold or clear criteria for what constitutes plurality, such as a
specific percentage of claims or patient volume because they believe
this will ensure transparency and consistency in provider inclusion and
reduce ambiguity in compliance. Another commenter recommended CMS
identify clinicians who have a relevant specialty type on the majority
of their claims instead of a simple plurality. They believe this
approach could prevent some clinicians with relatively low procedure
volume in the ASM specialties from being included in the model. Another
commenter supported using specialty codes on the plurality of Medicare
Part B claims to support the proposed specialty type definition. The
commenter also recommended that CMS reevaluate this methodology after a
period of time and provide detailed reports back to clinicians to help
provide insights into why or how clinicians are being included in ASM.
Response: As previously discussed with respect to the ASM heart
failure cohort in section III.C.2.c.(2)(a), we believe using plurality
is a more appropriate criteria to use for the purpose of identifying
ASM participants as it captures the specialty code applied most
frequently to a clinician's claims. Using the majority, on the other
hand, would imply that a particular specialty code is present on more
than 50 percent of claims. In the case that a clinician has more than
one specialty code applied to their Medicare Part B claims, the
specialty code applied most often would be the specialty code accepted
for the purposes of the ASM participant eligibility criteria. Because
using the majority would require that a single specialty code be
applied to more than half of all Medicare Part B claims, a clinician
changing their specialty mid-year may not meet this threshold. Using
plurality ensures all clinicians are assigned a specialty for the
purposes of the ASM participant eligibility criteria. Using plurality
is also aligned with how specialty is assigned for the purposes of the
Quality Payment Program. As with all Innovation Center models, we will
perform annual evaluations that will be made public on the ASM website.
Comment: A commenter recommended CMS clarify the source of the
clinician's specialty designation assigned by the MACs. Another
commenter requested clarification on how ASM will handle clinicians who
have multiple specialty codes designated in PECOS. Specifically, they
want to know if clinicians would be considered eligible if any of their
specialty codes align, or if only their primary specialty code would be
considered. Another commenter believed that physicians do not update
their specialty designation when starting at new practices and thus the
specialty codes can be misleading, especially for multispecialty
providers or those working across multiple locations. Another commenter
expressed concerns on how CMS would capture specialty designations,
noting that many interventional cardiologists are enrolled in Medicare
under the designation of cardiology, potentially resulting in
inadvertent attribution of heart failure patients. The commenter
recommended that CMS review the model to ensure transparency in
physician selection and patient attribution. Another commenter
recommended allowing specialists to attest to their subspecialty in
determining eligibility because Medicare Part B claims do not always
accurately reflect the type of care provided and do not reliably
identify clinician specialty. Another commenter recommended CMS update
PECOS to support the proposed specialty type definition to display
specialty codes in addition to specialty description in order to
increase transparency and provide guidance on how clinicians with
multiple specialties will be handled under ASM eligibility criteria.
Another commenter requested clarification on what ``specialist'' means
within the context of low back pain care for ASM.
Response: Clinicians will be assessed for ASM eligibility based on
the specialty code applied most frequently to their Medicare Part B
claims. We agree with the commenter that clinicians should attest to
and ensure that their specialty is correctly entered in PECOS. As
discussed in the CY 2026 PFS proposed rule, the specialty codes used on
Medicare Part B claims are derived from PECOS. However, we agree with
commenters that the PECOS codes alone are unreliable for identifying a
clinician's primary specialty. The PECOS specialty codes are self-
reported, and a single clinician may list more than one primary
specialty or may be delayed in updating their specialty code. In the
case that PECOS has more than one primary specialty code listed, the
MAC will assign a single specialty code to the claim. As explained in
the Medicare Claims Processing Manual, the MAC assigns the code that
corresponds to the greater amount of allowed charges for the previous
year.\174\ For example, if the TIN/NPI is 50 percent cardiology and 50
percent interventional cardiology, the MAC compares the total allowed
charges for cardiology and interventional cardiologist services and
assigns the code with the greater amount of allowed charges. We
recognize the recommendation that CMS update PECOS, but that is out of
the scope of this model. We refer the commenter requesting
clarification on what ``specialist'' means within the context of low
back pain to the ASM low back pain cohort section III.C.2.c.(2)(b) of
this final rule.
---------------------------------------------------------------------------
\174\ Medicare Claims Processing, Manual Chapter 26, 10.8.1
Assigning Specialty Codes by A/B MACs (B) and DME MACs. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c26pdf.pdf.
---------------------------------------------------------------------------
Comment: A few commenters did not support using specialty to
include or exclude a physician from being an ASM participant.; the
commenters believed that physicians who provide the same type of
services to similar patients should not be subject to different payment
rules simply because of the specialty code assigned to them. Another
commenter believed that participation should be based on the types of
patients treated rather than specialty code. Another commenter believed
that ASM may inadvertently affect subspecialists who focus on treating
other conditions in their practice and recommended adequate
notification period for these subspecialities to object to
classification and petition for removal.
Response: We disagree that specialty should not be used as one of
the eligibility criteria. As explained elsewhere in this final rule,
the policies proposed for ASM are, in part, a direct response to
previous learnings from the Quality Payment Program and other
Innovation Center models, as well as input from interested parties
input regarding the need for more targeted cohorts and peer-to-peer
comparisons. We have received feedback that in order for quality
measurement and performance feedback to be accurate and actionable,
clinician performance should be assessed among other clinicians of the
same specialty treating similar conditions. We believe focusing on
selected specialties will enable us to
[[Page 49585]]
compare like-to-like care delivery and provide clinicians with more
salient data and performance feedback. We agree that ASM should focus
on specific types of patients and have, therefore, focused ASM on
patients with heart failure and low back pain. We do not expect ASM to
affect subspecialists who treat other conditions, as the ASM cohorts
only include specific Medicare Part B specialty codes. In addition,
EBCMs will only attribute episodes to clinicians with more than 30
percent of episode spending. We encourage subspecialists to ensure
their specialty code in PECOS is accurate and up to date to avoid the
need to confirm or object to their specialty classification.
Comment: A commenter suggested CMS to consider supplementing the
use of specialty codes in determining the specialty type definition and
ASM participation with additional information, such as diagnosis,
evaluation and management service mix, patient relationship codes,
relevant board certification, etc.
Response: We appreciate the suggestion to supplement specialty
codes with other sources of data. While clinicians will be assessed for
ASM eligibility based on the specialty code applied most frequently to
their Medicare Part B claims, we do rely on clinicians to ensure their
specialty is accurate in PECOS. We also note that to account for
service mix, MACs rely on the greater amount of allowed charges for the
previous year to assign specialty codes to Medicare Part B claims. We
stated in the CY 2023 PFS final rule that Medicare Part B claims data
would be the best data source to use to identify clinical specialty (87
FR 70039). 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.
After consideration of public comments, we are finalizing without
modification our proposal at Sec. 512.705 to define ``specialty type''
as the medical specialty determined by the specialty code indicated on
the plurality of a clinician's Medicare Part B claims. We are also
finalizing without modification 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.
(b) Episode-Based Cost Measure (EBCM) Episode Volume
In the CY 2026 PFS proposed rule, we discussed our belief that the
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
related costs for those conditions. We proposed to identify ASM
participants using volume of services related to heart failure and low
back pain furnished by clinicians who have a specialty designation that
corresponds with the specialty types discussed in III.C.2.c.(2) of the
CY 2026 PFS proposed rule (90 FR 32567). We stated that only clinicians
with the proposed specialty types who 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 who are assigned one of the proposed specialty types
related to heart failure or low back pain would be required to
participate in ASM.
We proposed to use MIPS EBCMs to determine service volume, rather
than assess volume based on claims for individual services.
Specifically, we stated that 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 proposed at Sec. 512.710(b)(3) to use an EBCM episode volume
threshold applicable to an ASM targeted chronic condition as an ASM
participant eligibility criterion. We proposed 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 proposed 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 final
rule for a discussion of the processes and specific years of data that
we will use to assess EBCM volume to identify ASM participants.
As discussed in the CY 2026 PFS proposed rule, 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 (90 FR
32567) . 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.\175\
---------------------------------------------------------------------------
\175\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf.
---------------------------------------------------------------------------
As further described in the CY 2026 PFS proposed rule, 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
(90 FR 32567). 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.\176\ 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, which could prevent
certain clinician types from being attributed episodes.\177\
---------------------------------------------------------------------------
\176\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0.
\177\ https://www.cms.gov/files/zip/mips-chrcondition-episode-based-cost-measures-attribution-methodology-2023-zip.zip.
---------------------------------------------------------------------------
CMS began development and field testing of the heart failure and
low back pain measures in 2022.\178\ 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).
---------------------------------------------------------------------------
\178\ https://www.cms.gov/files/document/wave-4-measure-development-process-macra.pdf.
---------------------------------------------------------------------------
[[Page 49586]]
In the CY 2026 PFS proposed rule, we stated our belief 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 (90 FR 32568).
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 also 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
final 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 did not propose 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 solicited public comments on our proposed ASM participant
eligibility criteria at Sec. 512.710(b)(3) stating that the clinician
must meet the EBCM episode volume threshold applicable to an ASM
targeted chronic condition. We solicited public comments on our
proposals at Sec. 512.710(e)(1) to use the heart failure EBCM as
specified under MIPS to identify potential ASM heart failure
participants and that clinicians who have 20 or more heart failure EBCM
episodes attributed to them 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 participant
eligibility criterion at Sec. 512.710(b)(3). We solicited public
comments on our proposal at Sec. 512.710(e)(2) to use the low back
pain EBCM as specified under MIPS to identify potential ASM low back
pain participants and clinicians who have 20 or more low back pain EBCM
episodes attributed to them in accordance with the low back pain EBCM
under MIPS during the calendar year 2 years prior to the applicable ASM
performance year would meet the ASM participant eligibility criterion
at Sec. 512.710(b)(3). We requested feedback 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.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters supported the use of the heart failure
EBCM to determine ASM participant eligibility in order to promote
consistency between MIPS, MVPs and ASM and align specialist incentives.
Another commenter supported the proposal to use low back pain EBCM,
noting alignment of specialty incentives with value-based care. A
couple of commenters stated that the use of EBCMs has the potential to
improve care coordination and reduce unnecessary spending.
Response: We appreciate the commenters for supporting use of EBCMs
in the ASM participant eligibility criteria. We agree that it promotes
consistency between MIPS and the alignment of specialist incentives. We
also agree that the use of EBCMs could help reduce unnecessary
spending, and we will include the measure as part of the cost ASM
performance category.
Comment: A few commenters expressed concerns with the proposal to
use the heart failure and low back pain EBCMs for determining ASM
participation, particularly with attribution of the measure to
clinicians. A few commenters stated that EBCMs may not attribute the
right clinician or may capture short, high-complexity episodes and hold
specialists accountable despite a lack of longitudinal control. Another
commenter suggested that CMS add inclusion/exclusion criteria, such as
geographic restriction, combination of care patterns or other options
to remove episodes that are consultative or tertiary.
Response: We appreciate commenters sharing their concerns on the
use of the EBCMs in determining ASM participation. We recognize that
episodes based on visits may not pick up all beneficiaries with heart
failure or low back pain, but do not agree that the included EBCMs
would only capture short, high-complexity episodes. We also disagree
that the EBCM episodes would purely be consultative in nature as they
require an ongoing care relationship for attribution. We also do not
agree that it would be necessary to add exclusion criteria for EBCMs,
such as the ones suggested by the commenter. The triggering and
confirming codes for the heart failure and low back pain EBCMs focus on
care provided by clinicians practicing in non-inpatient hospital
settings, so we would not expect to pick up episodes that are
[[Page 49587]]
primarily tertiary in nature.\179\ We remind commenters that the EBCM
attribution methodology for the purposes of assessing performance is
more complex in its use of triggering and confirming claims than for
determining participation. We refer readers to our discussion of the
EBCM attribution methodology in section III.C.2.d.(3) of this final
rule.
---------------------------------------------------------------------------
\179\ https://qpp.cms.gov/docs/cost_specifications/2025-06-py2025-mif-ebcm-heart-fail.pdf.
---------------------------------------------------------------------------
Comment: A commenter expressed concern about using the low back
pain EBCM for ASM eligibility, noting the measure is still new and
scores have not been released to determine current performance.
Response: The Quality Payment Program began identifying clinicians
that provide low back pain services using the low back pain EBCM in the
CY 2024 performance period. We believe it is appropriate to similarly
include it as an ASM participant eligibility criterion. We do not
believe the newness of the measure reduces its effectiveness for ASM
participant identification. EBCMs are developed through an extensive
process in concert with a panel of clinicians with expertise related to
the applicable condition or procedure, including those to whom the
measure would be attributed once implemented. More information on the
EBCM development process can be found in the annual MIPS Summary of
Cost Measures.\180\
---------------------------------------------------------------------------
\180\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
---------------------------------------------------------------------------
Comment: A commenter expressed concern that the use of EBCMs
introduces a complex and potentially burdensome attribution method for
an ASM participant to determine which patients would be attributed to
an EBCM. The commenter recommended that CMS study the applicability and
utilization of patient relationship codes to indicate their level of
involvement in the patient's care to factor into patient attribution.
Response: We acknowledge concerns around understanding which
patients would be attributed to a particular clinician. We note that
the use of EBCMs for determining ASM eligibility would be done
retroactively and would simply determine whether a particular clinician
saw a sufficient number patients with low back pain or heart failure to
be appropriate for inclusion in ASM. The ASM participant eligibility
criteria are not reflective of the patients treated by the clinician.
We acknowledge the commenter's recommendation to consider patient
relationship codes in the ECBM attribution methodology. However,
multiple programs and initiatives use the EBCMs and adjustments to the
EBCM attribution methodology are out of scope of the ASM provisions.
Should we consider incorporating patient relationship codes in the ASM
participant eligibility criteria in the future, we would do so through
notice and comment rulemaking.
Comment: A couple of commenters supported the proposal for a
minimum annual threshold of 20 episodes per EBCM. A commenter stated
that EBCMs are specifically designed to assess the conditions of
interest and using them to identify participants seems appropriate. The
commenter recommended that a case minimum of 20 episodes over 2 years
be used, at a minimum, but requested CMS to consider a threshold of 25
to ensure at least one applicable patient per month.
Response: We appreciate the commenters for their support of the
proposed 20 EBCM episode threshold in the ASM participant eligibility
criteria. We would like to clarify that the 20-episode threshold would
be determined within the applicable calendar year used to evaluate
clinicians for the ASM participant eligibility criteria. As we discuss
in the participant selection and notification process in section
III.C.2.c.(5) of this final rule, we will use 2 years of EBCM data to
identify the first group of ASM participants for the 2027 ASM
performance year. We will use data from CY 2024 to identify
preliminarily eligible ASM participants for the 2027 ASM performance
year and then confirm their continued eligibility using EBCM data from
CY 2025 before the model start. Beginning with the 2028 ASM performance
year, we will continue to evaluate eligibility and identify potentially
new ASM participants, including NPIs that may change TINs between ASM
performance years, using 1 year of EBCM data.
Comment: Several commenters did not support the proposed minimum
annual threshold of 20 episodes for EBCM to identify ASM participants.
They stated that the proposed minimum of 20 episodes does not ensure
statistical adequacy, particularly with practices with a small
caseload. A commenter recommended that CMS consult actuaries and
program evaluation experts to determine the appropriate volume cut off.
Many commenters expressed concern that the proposed volume of 20
episodes would represent a small subset of the ASM participant patient
populations and would put ASM participants at a disproportionate amount
of risk for an unrepresentative sample of patients.
Response: We acknowledge the commenters' concerns regarding the 20
EBCM episode volume threshold. However, we disagree that it is an
inappropriate volume of cases for determining ASM participant
eligibility. A 20 EBCM episode threshold is consistent with the
established case volume finalized for scoring of EBCMs in MIPS as
described at Sec. 414.1350(c)(6). As we discussed in the CY 2018 PFS
proposed rule (82 FR 30050 through 30051), increasing the case minimum
to improve measure reliability would reduce the number of clinicians
assessed by the measure. This would, therefore, limit the applicability
of the episode measures to larger group practices with sufficient case
volume at the expense of individual providers who we wish to include in
ASM. For measures to have the potential to improve performance, they
should apply to as many clinicians as can be reliably measured. For a
full discussion of the reliability of the 20-episode case minimum for
the chronic condition EBCM measures, we refer readers to the CY 2022
PFS final rule (86 FR 65453 through 65455). We acknowledge that not all
FFS beneficiaries with ASM targeted chronic conditions may be captured
by the applicable EBCM given the EBCM attribution methodology. However,
we believe that using an objective threshold based on these episode-
based measures would appropriately identify clinicians who provide a
higher volume of services related to heart failure or low back pain
that would make it appropriate to hold them accountable for quality and
spending. Therefore, we disagree with the comment that the 20-episode
threshold would identify ASM participants who would have an
underrepresented number of beneficiaries with ASM targeted chronic
conditions. In the analysis we conducted to propose the 20-episode
threshold, we found that the average historical EBCM episode volume for
clinicians that would likely meet the ASM participant eligibility
criteria was typically 2 to 6 times higher than the 20-episode
threshold.
Comment: Several commenters recommended that CMS adopt higher
minimum thresholds for EBCMs. A few commenters suggested increasing the
threshold to 50 episodes at the individual or practice level. Another
commenter suggested 30 episodes. A commenter referenced an Agency for
Healthcare Research and Quality (AHRQ) recommendation of 30 to 50
patients per physician for calculating individual performance measure
scores,
[[Page 49588]]
noting that larger samples are required for reliable comparisons; the
commenter also stated that research in healthcare quality measurement
confirms at least 35 to 45 observations are needed to make valid
comparisons for physician quality assessment. Finally, another
commenter shared their belief that given the complexities of heart
failure management and the potential for multiple influencing factors,
a more appropriate minimum sample size should be in the range of 100 to
200 encounters.
Response: We appreciate the commenters for their feedback on a
potentially higher EBCM episode threshold in the ASM participant
eligibility criteria. We acknowledge the commenter citing AHRQ's
recommendation to use 30 to 50 patients per physician to calculate
individual measure scores, as well as the suggestion that 35 to 45
observations would allow for valid physician-level measurement. While
these recommendations are relevant to the measurement of ASM
participants at the individual level, as we discussed earlier in this
section of this final rule, we believe that the 20-episode threshold
would be a reliable threshold to identify ASM participants who could be
scored on ASM performance and, ultimately, held accountable for quality
and spending. We based this threshold on the current minimum case
volume for scoring the applicable EBCMs under the MIPS cost performance
category described at Sec. 414.1350(c)(6). Therefore, the proposed 20-
episode threshold under ASM aligns with the MIPS/MVP measurement
framework that determines when a MIPS-eligible clinician should be held
accountable on EBCMs. As we discussed in the CY 2026 PFS proposed rule,
increasing the episode threshold in the ASM participant eligibility
criteria to 30 or 50 episodes could significantly reduce the number of
potential ASM participants and create a less reliable model test (90 FR
32568). Finally, given the average number of applicable EBCM episodes
that were attributed to potential ASM participants, we believe that a
100 to 200-episode threshold would be limiting and exclude a high
number of potential ASM participants that we believe should be held
accountable for heart failure and low back pain outcomes and spending.
Comment: A few commenters acknowledged the CMS estimates of 43
percent of the cardiologists in the ASM heart failure cohort and 35
percent of specialists in the ASM low back pain cohort had only 20 to
29 heart failure and low back pain episodes, respectively.
Response: We appreciate the commenters for their input but would
like to flag that their comments do not correctly reflect the data we
provided in the CY 2026 PFS proposed rule. In the CY 2026 PFS proposed
rule, we stated that increasing the EBCM episode from 20 episodes to 30
episodes 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 (90 FR 32568). These
figures represent percentage changes of eligible ASM participants
between two different episode thresholds and not the percentage of
likely ASM participants that had between 20 and 29 applicable EBCM
episodes.
Comment: A commenter noted that the proposed 20-patient threshold
for EBCMs systematically excludes rural clinicians from quality
programs because rural cardiology practices maintain significantly
smaller patient panels.
Response: We acknowledge the concern of potential exclusion of
clinicians in small rural practices from ASM due to the size of their
patient panels. We note that we have not proposed any specific
exclusions for rural practices beyond that of rural areas that do not
meet our definition of a mandatory geographic area; we refer readers to
section III.C.2.c.(4) of this final rule for further discussion on the
mandatory geographic area definition and potential exclusions. While we
understand that some clinicians in small rural practices may not meet
the 20 EBCM episode threshold, we believe that it would not be fair to
include clinicians in ASM if we could not reliably score them on the
applicable EBCM.
Comment: A commenter requested that CMS clarify eligibility related
to the low back pain 20 EBCM episodes and requested CMS to publish
draft ICD-10 and CPT inclusion lists at least 12 months prior to the
first ASM performance year. The commenter shared their belief that
early code transparency enables accurate EHR logic, clearer clinician
communications, and seamless reporting for clinicians.
Response: We appreciate the commenter requesting additional clarity
on the ICD-10 and CPT codes used in the EBCMs. We maintain a current
Operational List of Care Episode & Patient Condition Codes with the
ICD-10 and CPT/HCPCS codes used to construct EBCM episodes on the
Quality Payment Program Cost Measures page of CMS website.\181\
---------------------------------------------------------------------------
\181\ 2026 Operational List of Care Episode & Patient Condition
Codes (XLSX). https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
---------------------------------------------------------------------------
After consideration of public comments, we are finalizing without
modification our proposal at Sec. 512.710(b)(3) to use the EBCM
episode volume threshold applicable to an ASM targeted chronic
conditions as an ASM participant eligibility criterion. We are also
finalizing without modification our proposal at Sec. 512.710(e)(1) to
use the heart failure EBCM as specified under MIPS to identify
potential ASM heart failure participants and clinicians who have 20 or
more heart failure EBCM episodes attributed to them during the calendar
year 2 years prior to the applicable ASM performance year would meet
the ASM participant eligibility criterion at Sec. 512.710(b)(3). We
are similarly finalizing without modification our proposal at Sec.
512.710(e)(2) to use the low back pain EBCM as specified under MIPS to
identify potential ASM low back pain participants and clinicians who
have 20 or more low back pain EBCM episodes attributed to them during
the calendar year 2 years prior to the applicable ASM performance year
would meet the ASM participant eligibility criterion at Sec.
512.710(b)(3).
(4) Mandatory Geographic Areas
(a) Identification of Geographic Areas
We proposed 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 proposed
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
[[Page 49589]]
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 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 proposed that we would select the CBSAs and metropolitan
divisions through the stratified random sampling methodology described
later in this section of this final rule to participate in ASM.
Although CBSAs are revised periodically, we proposed 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
final rule, we proposed 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 final 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, we proposed that IP
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 final 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 solicited comments on our proposal to use CBSAs and metropolitan
divisions as the geographic unit from which ASM participants are
identified. We sought 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 final 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 sought 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 final rule to participate in ASM. Finally, we
sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters did not support the mandatory
geographic area proposal citing concerns about the mandatory nature of
the model, clinician inability to voluntarily opt-in, differential
physician payment rates and access to quality patient care. A few
commenters raised concerns about mandating rural clinicians to
participate in the model. A commenter suggested that CMS finalize a
voluntary participation option for clinicians within the FORHP-
designated rural area. A commenter expressed concern that the model had
not been piloted on a voluntary basis to assess operational
feasibility, resource needs, and potential unintended consequences.
Another commenter shared their belief that the proposed ASM geographic
selection is too broad to test a mandatory model and encouraged CMS to
limit its geographic scope initially and expand after conducting
statutorily required evaluations. Another commenter voiced concern that
mandatory ASM participation for specialists in selected geographic
regions could stifle innovation. A few commenters recommended excluding
specific states, Kentucky and Indiana, from mandatory geographic
selection and cited rural health care challenges for clinicians.
Response: We appreciate commenters for their feedback on our
proposed random selection of CBSAs and metropolitan divisions for
mandatory participation in ASM. Mandatory participation in the model is
important for ensuring a valid and robust model evaluation; allowing
clinicians to opt in or opt out of the model would undermine the
comparability between the intervention and comparison groups. The
proposed geographic scope of ASM is important to ensure adequate
statistical power to measure the effects of ASM on key outcomes.
Including participants in rural areas is necessary to evaluate the
impacts of the model if it were to be expanded to rural areas. We note
that CBSAs with low volume of eligible episodes (that is, CBSAs with no
eligible clinicians with at least 20
[[Page 49590]]
episodes in the reference year), which includes some rural areas, will
be excluded from the model. Additionally, rural areas not assigned to a
CBSA will be excluded.
Comment: A commenter recommended a voluntary approach to ASM to
allow hospitals outside designated regions to participate. Another
commenter recommended including the Los Angeles, Long Beach and Anaheim
CBSA in Cohort 1, and shared their belief that diverse population,
concentration of specialists, and healthcare environment would serve as
an environment to test the model.
Response: We appreciate the commenters for their feedback on
allowing hospitals outside designated regions to participate in ASM.
Allowing participants to voluntarily opt into the model would allow
participants to self-select into the model; hospitals, practices, or
providers who voluntarily opt in would likely differ from those who do
not opt in in important but unobservable ways and would therefore
undermine the comparability between the intervention and comparison
groups, which would weaken the model evaluation.
Comment: A commenter supported the proposal and shared their belief
that it allows for real value comparisons.
Response: We appreciate the commenter for their feedback. Allowing
for meaningful comparison between the model participants and a
comparison group where the model is not being implemented is an
important aspect of the model design and will help us to conduct a
reliable evaluation of the model.
Comment: A commenter did not support the proposal and shared their
belief that the heart failure EBCM attribution method assigns patients
to cardiologists practicing at a distant location, even when the
patients receive most of their care locally. The commenter recommended
CMS to reconsider geographic attribution when patients live over 50
miles away and are primarily treated by clinicians locally.
Response: We appreciate the comment regarding patient attribution
in the heart failure EBCM. This approach is used by MIPS to attribute
episodes of care to a clinician or clinician group. This method is
intended to reflect meaningful clinical involvement in an episode of
care but does not directly account for the geographic location of the
clinician and beneficiary; we acknowledge that in some cases, it may
assign an episode to a clinician practicing at a distant location.
Unfortunately, this is a limitation of the claims data available for
episode attribution, and CMS does not have available any viable
alternative data sources for attributing episodes.
Comment: Several commenters did not support the proposed mandatory
geographic area sampling procedure for various reasons. A commenter
expressed concern on whether CMS' proposed approach of mandating
physician participation in randomly selected regions and prohibiting it
in others would produce comparable groups for evaluation over time.
Another commenter recommended allowing physicians in all CBSAs to
participate, noting it would ensure fair evaluation and a more accurate
quality performance assessment. A commenter suggested that CMS'
proposal to randomly select a stratified sample of CBSAs for mandatory
participation could raise fairness concerns, as practices in chosen
regions could face unequal challenges or benefits. The commenter
recommended that CMS implement risk adjustment approaches to address
differences in patient populations and resources across regions. A
separate? commenter shared their belief that the proposed geographic
selection was too large for a mandatory model and encouraged CMS to
narrow the geographic scope initially. Another commenter expressed
concern that mandatory participation in ASM based on geographic
location and specialty code could include physicians whose practices or
patient populations are not relevant to the model's goals, such as
proceduralists who lack longitudinal patient relationships necessary to
impact patient outcomes. Another commenter expressed concerns about the
potential impact of a mandatory design without adequate voluntary
testing, particularly on smaller, independent, and rural specialists,
who may often lack resources to manage two-sided risk and absorb
financial losses.
Response: We appreciate the commenters for their feedback on our
proposed geographic area sampling procedure. We acknowledge that
participants may exit or enter the model from performance year to
performance year based on changes in episode volume, but we do not
anticipate that this will reduce the comparability of the comparison
group over time because both intervention and comparison areas should
be evenly affected.
Allowing participants to voluntarily opt into the model would
undermine the comparability between the intervention and comparison
groups, which would undermine the model evaluation. We acknowledge that
clinicians and practices in selected regions could face challenges or
benefits as part of the ASM test, but this is necessary to ensure a
valid evaluation of the model test. The evaluation will use appropriate
risk adjustment approaches to account for differences in patient
populations and resources across regions.
We considered options for the geographic scope of the model and
determined that the proposed model size is appropriate to maximize
statistical power for evaluating the impacts of the model on spending
and quality of care, and the proposed model size also aligns with CMS
policy goals. The model limits participation to specific specialties
identified as the most relevant and appropriate for inclusion for the
model's goals. As ASM is a CMS model test and based on an existing MIPS
and MVP framework, we do not agree that a voluntary model test of ASM
is necessary before testing a mandatory design.
After consideration of public comments, we are finalizing our
proposed policy to use CBSAs and metropolitan divisions as the
geographic unit for selection and to use the ZIP Codes of the service
locations of each clinician as discussed in section III.C.2.c.(4).(e)
of this final 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
are finalizing our proposed policy 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
final rule to participate in ASM. Finally, we are finalizing our
proposed policy 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. We are
finalizing these provisions at Sec. 512.710(f) and Sec.
512.710(f)(2).
(b) Exclusion of Certain CBSAs and Metropolitan Divisions
We proposed at Sec. 512.710(f)(1) that we would not consider
certain CBSAs or metropolitan divisions for selection. Specifically, we
proposed 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 proposed at Sec. 512.710(f)(1)(i) to exclude any
CBSAs
[[Page 49591]]
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) of this final
rule. 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 sought 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 sought comments on the
alternative to exclude AHEAD geographies from ASM's mandatory CBSA or
metropolitan divisions.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters wanted clarification on whether Maryland
providers, historically excluded from other CMS models, would be
included or excluded from ASM.
Response: We appreciate the commenters for seeking clarification on
the reason for including Maryland providers in ASM. Maryland providers
will not be excluded from ASM; CBSAs and metropolitan divisions that
are in Maryland (either partially or completely) will be included for
random selection. We acknowledge that other CMS models have excluded
Maryland from participation because of concerns about model overlap
(for example, with Maryland's all-payer model). We considered excluding
CBSAs that overlap with Maryland from selection for ASM but determined
that concerns about model overlap were not significant enough to
justify exclusion from ASM.
Comment: A commenter recommended that CMS consider excluding CBSAs
in states subject to CMS' new Wasteful and Inappropriate Service
Reduction (WISeR) Model. The commenter expressed concern that this
would create additional burden because the WISeR Model focuses on
similar low back pain services.
Response: We appreciate the commenters for their feedback on our
proposed geographic area exclusions. We considered exclusions on the
basis of overlap with other Innovation Center models including WISeR.
Like ASM, WISeR also seeks to reduce the use of low-value services.
Participants in WISeR will be companies using technologies to try to
improve the review process for select services. Clinicians, including
ASM participants, will not directly participate in WISeR, but may be
required to interact with the model when seeking prior authorization.
However, we do not agree that overlap with WISeR will create
significant burden on ASM participants to justify excluding these
states from ASM.
After consideration of public comments, we are finalizing our
proposed policy 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 are finalizing these provisions at Sec.
512.710(f)(1).
(c) Geographic Selection Methodology
To determine which CBSAs and metropolitan divisions would be
included in the model, we proposed 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 final rule. We proposed at Sec. 512.710(f)(2) to
stratify CBSAs and metropolitan divisions into mutually exclusive
groups based on three CBSA/metropolitan division-level characteristics:
average total Parts A and B episode spending, volume of eligible
episodes, and metropolitan division status. We proposed at Sec.
512.710(f)(2)(i) 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 proposed 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
proposed 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 proposed 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 proposed 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
[[Page 49592]]
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 proposed 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 proposed 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
proposed 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 proposed 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 sought comments on our proposed selection strata as
well as alternatives considered.
We did not receive public comments on this provision, and
therefore, we are finalizing these provisions as proposed at Sec.
512.710(f)(2).
[GRAPHIC] [TIFF OMITTED] TR05NO25.108
(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 proposed 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 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 proposed 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 B-D3 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 final 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
[[Page 49593]]
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 solicited 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter recommended that CMS should consider improving
the ASM methodology to support the delivery of higher quality care for
patients by eliminating the proposed limit of 240 for the number of
randomly selected CBSAs and metropolitan divisions.
Response: We did not propose a limit of 240 CBSAs and metropolitan
divisions but instead proposed to select about 40 percent of CBSAs and
metropolitan divisions that meet the criteria for inclusion in the
selection, which we estimate will result in approximately 240 CBSAs and
metropolitan divisions being selected. This approach helps ensure as
high a degree of statistical power as possible for the evaluation while
also ensuring that we have an adequate number of CBSAs and metropolitan
divisions not selected into the model to draw from for the comparison
group.
Comment: A commenter recommended that CMS conduct certain
statistical analyses (for example: power analysis) consistent with AHRQ
guidelines and international standards to achieve at least 80 percent
power to detect clinically meaningful differences.
Response: We appreciate the commenter for their feedback on our
statistical approach. Our approach to conducting power analyses is
consistent with AHRQ guidelines and we designed the model to maximize
our ability to detect meaningful differences in total spending and
relevant claims-based quality measures.
After consideration of public comments, we are finalizing our
proposed policy for random selection of CBSAs and metropolitan
divisions from our proposed selection strata as proposed at Sec.
512.710(f)(3).
(e) Assignment of Geographic Areas to Clinicians
We proposed at Sec. 512.710(b)(4) that, to meet the ASM
participant eligibility criteria, clinicians must be located in one of
the selected mandatory geographic areas. We proposed 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 final 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
proposed 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 proposed 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
proposed to use ZIP Code and CBSA/metropolitan division crosswalks
published quarterly by the U.S. Department of Housing and Urban
Development.\182\ 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.\183\
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.
---------------------------------------------------------------------------
\182\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
\183\ https://www.huduser.gov/portal/datasets/usps_crosswalk.html.
---------------------------------------------------------------------------
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
[[Page 49594]]
equal number of episodes assigned to multiple CBSAs or metropolitan
divisions, we will 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 solicited 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed use of episode-
claims-based service ZIP Code to assign a CBSA or metropolitan division
code to clinicians. A commenter recommended making the attribution
method easier to track and identify ASM areas and patients. Another
commenter acknowledged CMS for detailing the steps to assign providers
performing services under multiple TINs within the same ZIP Code and
participation requirements based on CBSA selections.
Response: We appreciate commenters for their support of our
proposal to use the ZIP Code on claims used to construct EBCM episodes
in assigning a CBSA or metropolitan division code to clinicians.
Regarding the suggestion to make it easier to track and identify ASM
areas and patients, the selected CBSAs and metropolitan divisions will
not change during the model test period. Regarding the comment on how
geographic area assignments would work for providers performing
services under multiple TINs with the same ZIP Code, we would treat
each TIN and NPI combination as separate entities to which we would
assign a geographic area. We would assign each TIN and NPI combination
a CBSA or metropolitan division based on the ZIP Code on the claims
used to construct each EBCM episode that is attributed to each TIN and
NPI combination. Under this approach, it is possible that an NPI could
be assigned to the same or different geographic area for each TIN to
which they have reassigned billing rights. We believe that this
approach is preferable since our goal with using the ZIP Code from
claims is to identify where clinicians are furnishing services the
most.
Comment: A commenter supported the proposed approach to use a
specialist's geographic location with a stratified sampling methodology
to identify mandatory ASM participants
Response: We appreciate the commenters for their feedback on our
proposed policy for assigning geographic areas to clinicians. We
believe this is the most accurate and reliable approach given data and
other constraints.
After consideration of public comments, we are finalizing the ASM
participant eligibility criterion at Sec. 512.710(b)(4) as proposed.
We are also finalizing our proposed policy 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 as proposed at Sec. 512.710(f)(4).
(5) Selection and Notification Process for ASM Participants
We proposed to identify ASM participants on an annual basis. At
Sec. 512.710(g) we proposed 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 final rule using
applicable data from 2 calendar years prior to each ASM performance
year. We also proposed that a clinician selected for participation for
any ASM performance year would be considered an ASM participant for the
remainder of the model.
We proposed 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 proposed to make public preliminarily eligible ASM
participants in a form and manner determined by CMS. We expected 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 proposed at 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 proposed 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 will provide ample time to become familiar with ASM
requirements, make practice adjustments, and prepare for reporting of
the required measures and data.
We also 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 reduces the amount of
time for ASM participants to prepare for the first ASM performance year
and would potentially increase the operational burden for clinicians
selected for the model.
We proposed at Sec. 512.710(g)(2)(i), for each ASM performance
year beginning with the 2028 ASM performance year/2030 ASM payment
year, 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 meet applicable
ASM reporting requirements for the applicable ASM performance year.
Further, waivers, including the MIPS waiver described at Sec. 512.775,
would no longer apply to the ASM participant, and, if applicable, the
ASM participant would be required to participate in MIPS.
Beginning with the 2028 ASM performance year/2030 ASM payment year,
we proposed at Sec. 512.710(g)(2)(ii) to identify additional
clinicians not previously identified as ASM participants 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 proposed that CMS would make public the final list of ASM
participants for a given ASM performance year annually in a form and
manner determined by CMS. We stated our
[[Page 49595]]
intention to release this information by the end of July in the year
preceding the start of the applicable ASM performance year. We believe
that annually identifying clinicians who meet the ASM participant
eligibility criteria will ensure we are accurately selecting ASM
participants. That is, ASM participants will continue to be of the
required specialty type and meet the EBCM episode volume thresholds
year-over-year. This 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
will 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 stated 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. We stated
that 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 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 solicited comments on our proposed approach for selecting and
notifying ASM participants at Sec. 512.710(g). We also sought comments
on not producing a preliminary list of ASM participants using 2024 data
for the 2027 ASM performance year/2029 ASM payment year and only
identifying the final ASM participants using applicable data from the
2025 calendar year. We also sought comments on whether we should use a
fixed list of ASM participants for all ASM performance years.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposal to evaluate the
selection criteria for ASM participants on an annual basis.
Response: We appreciate the commenters for their support of
evaluating ASM participant eligibility criteria annually.
Comment: A commenter recommended CMS to provide additional guidance
on how clinicians would be selected for mandatory participation in ASM.
Response: We intend to release additional guidance about the ASM
participant eligibility criteria following the publication of this
final rule. We also intend to release the list of preliminarily
eligible ASM participants for the CY 2027 ASM performance year in early
2026 through the CMS website. We refer the commenter to the ASM
participant eligibility criteria review section III.C.2.c. of this
final rule and the accompanying regulations at Sec. 512.710 for the
final provisions related to mandatory participation.
Comment: A commenter supported the proposed release of a
preliminary ASM participant list using data from CY 2024, noting that
it would provide useful information for potential ASM participants. The
commenter recommended that CMS provide multiple data snapshots
throughout the year, similar to the Quality Payment Program Qualifying
APM Participant status approach, to provide more accurate and timely
participant data. Another commenter expressed concerns of a 2-year lag
on episode attribution for the proposed preliminary ASM participant
list using data from CY 2024. The commenter also noted that historical
data may be insufficient to assess clinician practice patterns for a
prospective model.
Response: We appreciate the support of our proposal to release the
preliminary ASM participant list in advance. We recognize that
releasing multiple data snapshots through the year, similar to the
Quality Payment Program, would provide more timely data on potential
eligibility to a clinician. We also recognize the challenges of lagged
data. However, we believe that EBCM data is the most appropriate and
objective criteria by which to identify clinicians for ASM
participation. Because EBCMs are constructed at the completion of each
calendar year, the data only becomes available on an annual basis. In
order to provide as much advanced notice as possible to ASM
participants, we must rely on EBCM data produced using data two years
prior to the ASM performance year. Specifically, we will use the EBCM
data from the year prior to notification, which takes place the year
prior to the ASM performance year.
Comment: A few commenters expressed concern that ASM participants
with only a few EBCM episodes may change ASM participation status year
over year and not know if they were eligible until the end of the year.
A commenter shared their belief that this could be confusing for ASM
participants and possibly deter potential ASM participants from taking
on more beneficiaries with heart failure or low back pain.
Response: We appreciate the commenters for their input. Use of an
objective criteria, such as the 20 EBCM episode threshold, would mean
that ASM participation status could change year-over-year depending on
the volume of applicable EBCM episodes attributed to the clinician. We
believe that this is inherent to a model that requires mandatory
participation and reevaluates eligibility for each performance year.
Beyond the first ASM performance year, for which we would give
approximately 1 year notice of mandatory participation, we note that we
intend to notify clinicians of their mandatory ASM participation status
for all subsequent ASM performance years at least 6 months prior to the
start of the ASM performance year, depending on data availability. This
approach would prevent clinicians from being notified of mandatory
participation at the end of a given ASM performance year. We do not
agree that this threshold alone would create an incentive to drop or
refuse to take on more FFS beneficiaries with heart failure or low back
pain. As ASM is focused on specialists whose patient panels would
include a high number of FFS beneficiaries with heart failure or low
back pain, we believe decisions to avoid taking on additional
beneficiaries with these conditions could lead to
[[Page 49596]]
downstream effects on the specialist's practice. Further, we believe
that the potential for positive Part B payment adjustments through ASM
would create an incentive for the clinician to continue to furnish
services to FFS beneficiaries. We also note that we will monitor
potential issues with patient access as part of ASM monitoring efforts.
Comment: A few commenters recommended CMS identify ASM participants
with advance notice, establishing a clear and direct notification
process for communicating to selected ASM participants. Another
commenter requested CMS clarify how the Agency would communicate (for
example, mail, email) with ASM participants about their inclusion in
the model, considering ASM is a new model. Another commenter
recommended CMS proactively reach out to solo and small practices with
limited resources who may be disadvantaged by participating in a 5-year
model. Another commenter recommended CMS clarify the types of data that
would be included in the ASM preliminary eligibility notification.
Response: We appreciate commenters for their input. We are
committed to ensuring potential ASM participants are appropriately
notified through a variety of mechanisms. We expect to post the lists
of ASM participants on the ASM website, contact selected ASM
participants by email using the contact information on file with CMS,
and work with the appropriate specialty societies to publicize the
notification processes and communicate to their members the importance
of ensuring their contact information is accurate and up to date. In
addition, we intend to offer resources and webinars to preliminary ASM
participants beginning in CY 2026. For the 2027 ASM performance year
only, we will notify preliminarily eligible ASM participants using the
ASM participant eligibility criteria and applicable data from CY 2024.
Although we originally expected to release this information by the end
of CY 2025, we now anticipate that the list will be made public in
early 2026 in a form and manner determined by CMS. We anticipate
subsequently notifying the final ASM participants for the 2027 ASM
performance year around July 2026 using the ASM participant eligibility
criteria and applicable data from calendar year 2025. We note that only
clinicians on the preliminary eligible list will be considered for
inclusion on the final participant list for the 2027 ASM performance
year. For subsequent years, we expect to post the list of ASM
participants on the ASM website and email ASM participants
approximately 6 months before the start of the applicable ASM
performance year using the ASM participant eligibility criteria and
applicable data from the calendar year 2 years prior to the ASM
performance year. Final lists will be maintained on the ASM website and
selected ASM participants will be notified by email using the person of
contact and contact information on file. We expect that the participant
list will include at minimum, clinician NPI, state, and applicable ASM
cohort. CMS will evaluate annually whether a clinician meets the ASM
participant eligibility criteria using the information available in
PECOS and specialties assigned to Medicare Part B claims. To avoid
potential errors, clinicians can update their PECOS information if they
believe that their specialty designation does not reflect their actual
clinical practice.
Comment: A few commenters did not support the proposal to notify
ASM participants only 6 months prior to the start of the first ASM
performance year, noting an insufficient time for clinicians to prepare
for model implementation. Another commenter requested CMS finalize the
ASM participant list more than 6 months before the beginning of the
first ASM performance year and notify both the individual clinicians
and their TIN-level entity. Another commenter expressed concern that a
6-month advance notice would not be enough for ASM participants to
prepare for new Electronic Clinical Quality Measure (eCQM) reporting.
Response: We appreciate the feedback on the timing of the release
of the lists of ASM participants for each ASM performance year and the
time that it would provide ASM participants to prepare for the model.
As we discuss throughout this section of this final rule, we anticipate
releasing the preliminary list of clinicians selected for participation
for the 2027 ASM performance year based on CY 2024 data in early 2026;
we would then reassess only clinicians on that list for the ASM
participant eligibility criteria using CY 2025 data. We then plan to
release that list 6 months before the start of the 2027 ASM performance
year, providing nearly 12 months notice to potential ASM participants
for the first ASM performance year. While we recognize that we intend
to release the updated participant lists for subsequent ASM performance
years, which could include new clinicians to the model, at least 6
months prior to the start of a given ASM performance year, we believe
that clinicians who practice within a mandatory geographic area and
would potentially be eligible for mandatory participation would likely
be familiar with the model given our planned outreach and communication
strategies. As we have discussed throughout this section of this final
rule, we intend to provide educational resources throughout CY 2026 so
that clinicians on the final 2027 ASM performance year participant list
would be familiar with ASM's requirements and begin making the
necessary adjustments, such as for eCQM reporting, to their workflows
and systems.
After consideration of public comments, we are finalizing our
proposed provisions related to identification and notification of ASM
participants as proposed at Sec. 512.710(g). In particular, we are
finalizing our proposal to produce a preliminary list of ASM
participants using 2024 data for the 2027 ASM performance year/2029 ASM
payment year as well as identifying the final ASM participants using
applicable data from the 2025 calendar year as proposed. We are also
finalizing as proposed to reassess clinicians for ASM participation
annually, rather than use a fixed list of ASM participants for all ASM
performance years.
d. Performance Assessment Approach, Data Submission Requirements, and
ASM Performance Category Requirements and Scoring
As discussed in the CY 2026 PFS proposed rule (90 FR 32560 through
90 FR 32561), we proposed 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 final rule, we
discuss the performance measures and activities that will 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 proposed to define at Sec. 512.705
in the CY 2026 proposed rule the ``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
[[Page 49597]]
in section III.C.1 of this final 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 would incentivize stronger integration between specialist and PCPs.
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 in the CY 2026 proposed rule (90 FR 32576
through 32586), we proposed 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 the required measures and activities proposed in each of
the ASM performance categories. However, as discussed in the CY 2026
PFS proposed rule (90 FR 32574 through 32576 and 90 FR 32604 through
32615), 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 proposed 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 proposed 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 the CY 2026 PFS
proposed rule (90 FR 32589 through 32594), includes ASM-specific
improvement activities.
We also discussed how we proposed to score each ASM performance
category within each of the ASM performance category sections within
this section of this final rule. While many of the proposed scoring
policies draw from MIPS, we proposed 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 final 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 final rule, we
first discuss the ASM performance assessment approach. We then discuss
data submission requirements applicable across the ASM performance
categories in section III.C.2.d.(1).(b) of this final rule. Finally, we
discuss specific requirements and scoring policies for each of the four
ASM performance categories in sections III.C.2.d.(2) through
III.C.2.d.(5) of this final rule.
(1) Performance Assessment and Data Submission Requirements
(a) ASM Performance Categories
We proposed in the CY 2026 proposed rule 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 final 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
[[Page 49598]]
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. Measuring 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 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 final 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 proposed at Sec. 512.715(a), as further described in Sec. Sec.
512.725, 512.730, 512.735, and 512.740, that 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 proposed 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 later in this section of this final 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 proposed 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 proposed 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 solicited 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 sought 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
points received across all four ASM performance categories as described
at Sec. 512.745. Finally, we sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposal to use the four
ASM performance categories for assessing the performance of ASM
participants, noting that this approach would align the ASM performance
framework with existing reporting programs and promote consistency in
reporting. The commenters shared their belief that the proposed
alignment would facilitate a smoother transition to ASM for clinicians
and developers and increase participation in ASM.
Response: We appreciate the commenters for their support of the
four ASM performance categories assessing performance. We, like the
commenters, believe that aligning our performance framework with
existing quality reporting programs will facilitate an easier
transition into ASM.
Comment: A few commenters supported the proposed approach for ASM
performance assessment and recommended that CMS should fully align ASM
measure sets and scoring methodology with current MIPS reporting
requirements, where feasible, to prevent duplicative reporting and
ensure consistency across programs. A commenter recommended that CMS
exclude from ASM any measure not included in MIPS or MIPS MVPs, to
ensure alignment of measures for specialists across all reporting
programs.
Response: We appreciate the commenters for their support of ASM's
performance assessment framework. We note that all quality and cost
measures being finalized for use in ASM in this final rule are already
used in MIPS. However, we proposed different scoring policies for ASM
performance categories compared to MIPS. Given ASM is a mandatory model
that requires the reporting of a specific set of measures, compared to
MIPS that allows for more flexibility in which measures a MIPS eligible
clinician chooses to report, we believe that our scoring policies are
fit-for-purpose so ASM participants will more easily understand how
their performance will be determined under ASM. As a mandatory model,
we also designed our scoring policies so that we ensure that quality
and cost performance is factored into every participant's final score,
which we believe aligns with holding all ASM participants accountable
for quality and cost.
Comment: A few commenters did not support the proposed approach for
ASM performance assessment using the four ASM performance categories. A
commenter expressed concerns regarding ASM's approach to measuring
specialist care, noting that a one-size-fits-all method is inadequate,
and recommended CMS should assess performance at the episode level for
more accuracy. Another commenter
[[Page 49599]]
noted specialists' concerns that the proposed ASM design based on the
MVP framework relies on measures that are not relevant to low back pain
and heart failure.
Response: We appreciate the commenters for sharing their concerns
regarding ASM's four performance categories. We stress that though not
all performance categories measure performance at the episode level,
the cost performance category is evaluated at the episode level, which
represents 50 percent of an ASM participant's final score. We believe a
combination of episode-level cost scoring plus individual-level scoring
of quality (or group-level in the case of small practices), in addition
to improvement activities and Promoting Interoperability scores, is
appropriate for determining overall participant performance. We also
note that many of the selected measures, such as those finalized in the
quality and cost measure sets, were chosen specifically for their
relevance to ASM's targeted chronic conditions. The Promoting
Interoperability and improvement activities ASM performance categories,
though not condition-specific, are aimed at spurring transformational
changes that support better quality care and lower costs.
Comment: A commenter expressed concern that ASM does not connect
quality and cost measures in a meaningful way and recommended that CMS
work with interested parties to identify better strategies for
measuring quality and cost to ensure more accurate value-based
evaluations of care.
Response: We appreciate the commenter for their comment but
disagree because we believe that there is an alignment between the
quality and cost measures applicable for each ASM cohort. Though not
directly scored together, ASM's quality and cost performance categories
are reflective of one another. For example, we believe that the Risk-
Standardized Acute Unplanned Cardiovascular-Related Admission Rates for
Patients with Heart Failure (MIPS Q492) quality measure will account
for inappropriate withholding of care if a participant were to attempt
to improve their cost performance through withholding of care.
Additionally, the Low Back Pain Functional Status Change for Patients
with Low Back Impairments (MIPS Q220) quality measure would result in a
lower score for an ASM participant if they attempted to inappropriately
limit necessary care to improve their cost performance score.
Comment: A commenter recommended either removing the improvement
activities requirement or allowing flexibility in its selection, noting
mandatory requirements for improvement activities would increase the
burden on individual clinicians.
Response: We appreciate the commenter for sharing their concerns
regarding the improvement activities ASM performance category measure.
We believe that the improvement activities ASM performance category
promotes collaboration between specialty and PCPs, opening new avenues
for both to enhance their essential roles in patient care management
and coordination. Ultimately, to lead to improved longitudinal care
management, we believe it best to include the four ASM performance
categories as proposed.
Comment: A commenter acknowledged CMS' approach to reduce the
number of required reporting measures under ASM, noting that this
change could decrease administrative burden and encourage greater
clinician participation in ASM. Another commenter expressed concern
that the manual clinical quality measure (CQM) reporting requirement
could impose additional administrative burden as it would require
working with a new external vendor.
Response: We appreciate the commenters for their support of our
quality reporting measures. Though we acknowledge that reporting of
manual clinical quality measures may create additional workstreams for
ASM providers, we believe that those quality measures are important to
evaluate the care provided by each ASM participant. Whenever possible,
we attempted to lessen reporting burdens placed on ASM participants but
in this instance the measures that require CQM reporting were selected
because of their relevance to the participant's specialty and chronic
condition that they manage. We note that several required quality
measures have eCQMs collection types, which reduces burden, and that we
are including an administrative claims-based measure for each cohort's
quality measure set.
Comment: A few commenters expressed concern that ASM relies heavily
on MIPS infrastructure and transfers several existing challenges
including the lack of adequate outcome measures, lack of insight on
performance that facilitates improvement, and a misalignment between
cost and quality measures. The commenters suggested CMS to examine
external benchmarks for what qualifies as a ``good'' quality measure
score, for all measures including topped out measures, and reward high
performers and improvement. The commenters suggested that CMS could
exclude quality measures with consistently high performance.
Response: We appreciate the commenters for sharing their concerns
that ASM, through its reliance on MIPS, has imported some of the same
challenges facing MIPS. We believe that policies unique to ASM address
some of the commenters' concerns. ASM's quality measure set includes at
least one outcome measure in each cohort as described in sections
III.C.2.d.(2).(b).(i) and III.C.2.d.(2).(c).(i) of this final rule.
Additionally, ASM's quality and cost structure does in fact create
alignment across performance categories. As it relates to topped-out
measure status and measures with high performance, we will continue to
monitor during initial ASM performance years before designating an ASM
measure with topped out status. We are also engaging in multiple
benchmark methodologies to facilitate that decision. We also note that
topped-out status under MIPS may not equate to topped-out status under
ASM because MIPS eligible clinicians can choose to report quality
measures on which they perform well; in ASM, the mandatory nature of
the quality measures may lead to a different distribution of quality
measure scores.
After consideration of public comments on ASM's four performance
categories, we are finalizing the definitions of ``ASM performance
category'' and ``ASM performance category score'' as proposed at Sec.
512.705. We are also finalizing ASM's performance category approach as
proposed at Sec. 512.715(a) and finalizing ASM's use of Medicare
claims, administrative data, and model-specific data reported by an ASM
participant to calculate measure or activity scores as proposed at
Sec. 512.715(b).
(b) Data Submission Requirements
We proposed 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 in
this section, we proposed 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 proposed 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; (2) log in
[[Page 49600]]
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 proposed that ASM participants must submit data at the same
level at which they are identified in the model. Since we proposed
identifying ASM participants at the TIN/NPI level (as outlined in
section III.C.2.c.(3).(a).(i). of this final rule), we likewise
proposed 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 received public comments on our general data submission
requirements and our proposal that ASM participants must submit data at
the individual clinician level (TIN/NPI) for ASM performance
categories. The following is a summary of the comments we received and
our responses.
Comment: A commenter generally supported the proposed ASM data
submission requirements.
Response: We appreciate the commenter for their support of the ASM
data submission requirements.
Comment: Several commenters did not support the proposal requiring
ASM participants to report on a fixed subset of measures and activities
applicable to an ASM cohort for the entire duration of the model. The
commenters recommended that similar to MVPs, ASM participants should be
allowed to select the measures and activities that are most relevant to
their practice and patient population. A few commenters recommended
that CMS should offer flexibility for ASM participants to select
between 3 and 5 quality measures relevant to their patients. Another
commenter recommended allowing 3 out of 4 quality measures in an ASM
cohort. Another commenter expressed concern that requiring clinicians
to report measures outside their scope of practice undermines CMS' goal
of aligning measurement with clinically meaningful outcomes. A
commenter expressed concern that that not every measure applies to
every patient, leading to missed data, exclusion bias, and increased
reporting burden. Another commenter shared their belief that creating
flexibility in measure selection would make reporting more meaningful
and clinically relevant while reducing unnecessary reporting burden.
Additionally, a commenter expressed concern that clinicians and
practices have limited control over which data are collected regardless
of the organization's size.
Response: We appreciate the commenters for their feedback on ASM's
requirement to report on a fixed set of measures and activities
applicable to each ASM cohort. We disagree that ASM participants should
have flexibility to report measures, such as in MVPs, as we believe
that more focused performance assessment on a clinically relevant
measure set for heart failure or low back pain is important for
creating accountability for outcomes and spending related to these
conditions. Additionally, ASM will test whether more like-to-like
comparisons of performance can lead to more meaningful incentives;
allowing for flexibility in reporting of measures and activities would
undermine this test. We do not believe that the required measures or
activities would be out of scope for the types of specialists that we
have identified. We carefully selected measures and activities to be
clinically relevant and achievable by ASM participants, primarily
drawing from existing programs like MIPS to maintain participant
familiarity with ASM's requirements. In addition to familiarity with
many of the ASM performance category requirements, we believe that the
inclusion of eCQMs and administrative claims-based quality measures, as
well as the EBCMs calculated by CMS for the cost ASM performance
category, will reduce burden.
Comment: A few commenters supported setting ASM's unit of
performance assessment at the TIN/NPI level to empower individual
physicians to take the lead as it provides transparency about
individual performance and accountability on quality and cost measures.
Response: We appreciate the commenters for their support of our
unit of analysis and reporting level in ASM.
Comment: A few commenters expressed concern that quality
measurement at the individual clinician level (TIN/NPI) is generally
unreliable.
Response: We appreciate the commenters for their feedback but do
not agree that quality measurement at the clinician level is unreliable
as other quality reporting programs, such as MIPS, allow individual-
level reporting of quality data.
Comment: Many commenters did not support the proposal requiring ASM
data submission at the TIN/NPI level, noting significant administrative
burden for ASM participants and their staff, particularly for those
clinicians that are part of group practices and are already
participating in traditional MIPS group reporting. A commenter
expressed concerns about the administrative burden when a group is
required to submit individual-level ASM data while the rest of the
group reports measures to MIPS, potentially requiring clinicians and
practices to collect ten or more measures for reporting. A few
commenters recommended that CMS allow ASM participants to aggregate
data at the registry-level or report as a group, virtual group, APM
entity, or subgroup, particularly to maintain consistency across
various reporting programs. Several commenters expressed concern that
reporting at the TIN/NPI level conflicts with CMS' stated goal of
promoting team-based care and care coordination which are essential for
improving quality and efficiency. The commenters shared their belief
that ASM group or aggregated data reporting would better represent
team-based, multispecialty care; incentivize collaboration and
accountability across the multidisciplinary clinician types essential
for successful value-based care implementation; address low volume
variations and eligibility thresholds; support health system
improvements
[[Page 49601]]
and care coordination; reduce errors; uphold contractual obligations;
ensure consistency with other programs; and reduce burden. Several
commenters supported the alternative to assess ASM participants at the
practice or TIN level because they believe this supports the current
standard of practice, reporting would support team-based care,
facility-based physicians, and clinicians participating in an ACO or
AAPM. A few commenters specifically recommended that the improvement
activities and Promoting Interoperability performance categories be
attested to at the group level. A commenter also shared their belief
that that there should be policy flexibilities for small practices due
to limited capacity for data aggregation and reporting. Another
commenter indicated that it is not more burdensome for small group
practices to submit at the TIN/NPI measurement level.
Response: We appreciate commenters for sharing their concerns
regarding the proposal to require data submission at the TIN/NPI level
and the associated burden. We recognize that reporting quality measures
at the TIN/NPI level may be particularly burdensome for small
practices. We also refer readers to section III.C.2.d.(e).(4) of this
final rule for ASM's definition of a ``small practice'' (that is, a
single practice with 15 or fewer NPIs) and further discussion on
comments we received related to ASM participants in small practices and
the small practice scoring adjustment. We agree with the commenter's
suggestion that we should adopt some data submission policy
flexibilities for small practices given the challenges they may face in
data reporting. Given that we considered TIN-level reporting for the
improvement activities and Promoting Interoperability ASM performance
categories, and that we received specific feedback from commenters to
provide policy flexibilities for small practices because of the burden
related to data aggregation and reporting, we are modifying our
proposal to allow ASM participants in small practices to report the
quality measures in the ASM performance category at the TIN-level. We
believe this would reduce burden for small practices. We will monitor
the performance of these small practices to determine whether there is
a future state in which we could reconsider mandatory TIN-NPI-level
reporting of quality measures for small practices. We believe that ASM
participants in non-small practices would have the resources and
infrastructure to report the quality measures in the quality ASM
performance category at the TIN/NPI level.
Based on commenter's feedback, we also agree that our proposal to
require submission of the improvement activities and Promoting
Interoperability ASM performance categories data at the TIN/NPI level
could increase administrative burden for ASM participants regardless of
practice size. Reporting the improvement activities and Promoting
Interoperability at the TIN level may better promote team-based care
and coordination as the requirements of these ASM performance
categories typically reflect work done at a practice level.
Accordingly, ASM participants will report on the improvement activities
and Promoting Interoperability ASM performance categories data at the
TIN-level.
We acknowledge that different reporting level requirements between
MIPS and ASM has the potential to increase burden for participants or
practices that are reporting to both MIPS and ASM. However, we believe
it necessary to appropriately measure performance and create payment
adjustments that fairly represent the care provided across ASM's four
performance categories.
We note that we did not consider subgroup reporting for ASM
performance categories in this CY 2026 PFS proposed rule but may
consider this in future notice-and-comment rulemaking.
Comment: A commenter recommended clarification on whether ASM
participants would be required to submit separate individual
submissions or could submit individual-level performance data within a
single group submission file.
Response: We appreciate the commenters for their request for
clarification. We note that each ASM participant would need to submit
data for each ASM performance category at the level the performance
category requires. Based on the data submission provisions we are
finalizing in this final rule, we note that ASM participants will not
have the flexibility to report both as an individual and as a group.
While an ASM participant could submit the required data through
multiple data submissions, each data submission much meet the reporting
level requirements specified in Sec. 512.720.
Comment: A commenter recommended that CMS aggregate a clinician's
performance across multiple years to overcome the statistical issues
associated with reporting at the individual clinician level for ASM
participants who treat a small number of patients that trigger an
episode.
Response: We appreciate the commenter for their recommendation to
aggregate a clinician's performance across multiple years. As described
in section III.C.2.(c).(3) of this final rule, our ASM participant
eligibility criteria require that a clinician be attributed at least 20
EBCMs applicable to their specialty using the applicable year of data
used to evaluate the EBCM criterion. We believe that this criterion
means that identified ASM participants would reliably meet the quality
and cost case minimums for the required quality and cost measures
during an ASM performance year. Further, our quality and cost ASM
performance category scoring policies account for situations in which
an ASM participant does not meet the case minimums for quality or cost
measures, including accounting for situations in which the ASM
participant cannot be scored on either the quality or cost measures. We
refer readers to sections III.C.2.d.(2).(h)., III.C.2.d.(3).(f)., and
III.C.2.e.(2). of this final rule for further discussion on the
quality, cost, and final scoring policies related to case minimums.
Comment: A commenter recommended that both attribution and
evaluation of beneficiaries should be conducted at the TIN/NPI level.
The commenter shared their belief that clinicians and practices should
be held accountable for care delivered within their TIN, noting that
aligning ASM reporting and evaluation at the same level is essential
for accurate and fair performance assessments.
Response: We appreciate the commenters for their recommendation
regarding the attribution and evaluation of beneficiaries at the TIN/
NPI level. We note that we use EBCMs attributed at the TIN/NPI level
for determining whether a clinician will meet the ASM participant
eligibility criterion for minimum EBCM episode volume and for scoring
the ASM participant's performance in the cost ASM performance category.
Each TIN/NPI-attributed EBCM episode is attributed to a single
beneficiary. As discussed earlier in this section of this final rule,
with the exception of ASM participants in small practices due to the
unique challenges they may face in data aggregation and reporting,
aligning reporting and evaluation of quality and cost measures at the
TIN/NPI level can make for fairer performance assessments. However, we
believe allowing TIN-level reporting of improvement activities and
Promoting Interoperability requirements for all ASM participants--
because they primarily reflect practice-level efforts and
infrastructure--as well as TIN-level reporting of quality measures for
ASM
[[Page 49602]]
participants in small practices will reduce the reporting burden on ASM
participants without undermining ASM's performance assessment approach.
Comment: A commenter believed that required reporting for each of a
clinician's TIN/NPI combinations would create redundant work and
documentation, confusion, unneeded complexity, and increased costs. The
commenter recommended adopting the MIPS structure of calculating a
clinician's score for each TIN and then selecting the higher score and
omitting the lower scores for assessment and comparison.
Response: We appreciate the commenter for their feedback. We
believe that the commenter is referring to a situation where we
identify a single clinician (that is, represented by one NPI) as
multiple ASM participants under multiple TINs. As we discussed in
section III.C.2.c.(3) of this final rule, we believe that this would be
a rare but not impossible occurrence. Based on our participant
identification approach, we believe that it is appropriate to hold that
clinician accountable for the care they provide related to the
applicable condition under each of the TINs for which we identify them
as an ASM participant. While we did not consider a provision where we
would use that NPI's highest scores from all their TIN/NPI submission,
we do not believe this aligns with the performance assessment and
incentive structure we are creating under ASM. Should we consider such
an approach in the future, we would do in notice-and-comment
rulemaking.
We also proposed 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 proposed 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 received comments on the proposal to allow third-party
intermediaries to submit data on behalf of an ASM participants. The
following is a summary of those comments and our responses.
Comment: A commenter generally supported the inclusion of third-
party intermediaries in ASM and recommended CMS including Qualified
Clinical Data Registries (QCDRs) and Qualified Registries (QRs) in the
definition of the term ``third-party intermediaries'' as approved data
submission mechanisms for ASM. The commenter shared their belief that
QCDRs and QRs are foundational partners in QPP and that small or
independent practices rely on registries for policy interpretation,
education, data aggregation, and technical submission management and
expressed concern that omitting QCDRs and QRs could create uncertainty
and disrupt established clinical workflows for ASM participants.
Response: We appreciate the comment for their general support of
the inclusion of third-party intermediaries in the ASM data submission
mechanisms.
Comment: A commenter supported the proposal allowing ASM data to be
submitted to CMS on behalf of ASM participants by a designated entity
or individual, including third-party intermediaries as described in
Sec. [thinsp]512.720(a).
Response: We appreciate the commenter for their support of the ASM
policy allowing data to be submitted to CMS on behalf of ASM
participants by third-party intermediaries.
Comment: A commenter supported the proposal to use the definition
of third-party intermediary set forth in MIPS at Sec. [thinsp]414.1305
for ASM, aligning the data submission policies for third party
intermediaries between MIPS and ASM.
Response: We appreciate the commenter for their support of the ASM
third party intermediary definition and the alignment of third-party
intermediaries between MIPS and ASM.
Comment: A commenter recommended that CMS include an option within
the annual self-nomination and qualification process for QCDRs and QRs
to be certified for the ASM. The commenter shared their belief that
this would provide a clear and official pathway for registries to
support their clinicians in new programs.
Response: We appreciate the commenter for their recommendation for
QCDRs and QRs to be certified for ASM. We note third-party
intermediaries permitted to report data under MIPS would be allowed to
do the same for ASM. Although we did not consider a specific provision
for a QCDR or QR to be certified specifically for ASM, should we, we
would do so in future notice-and-comment rulemaking.
After reviewing public comments, we are finalizing our definition
of ``submission type'' as proposed at Sec. 512.705.
We are also finalizing our proposal on the level at which ASM
participants must submit the required data with some adjustments. ASM
participants must:
Submit applicable quality ASM performance category data at
the individual clinician level (that is, TIN/NPI level) unless the ASM
participant is part of a small practice as described at Sec.
512.720(a)(1)(i),
Submit required improvement activities at the TIN level as
described at Sec. 512.720(a)(1)(ii), and
Submit required Promoting Interoperability data at the TIN
level as described at Sec. 512.720(a)(1)(iii).
After consideration of commenters' feedback, we are finalizing at
Sec. 512.720(f) that ASM participants who are part of a small practice
may submit quality ASM performance category data at the TIN level.
We are also finalizing our proposed definition of ``third-party
intermediary'' as proposed at Sec. 512.705 and the proposed provision
that allows third-party intermediaries to report data on behalf of an
ASM participant as proposed at Sec. 512.720(a)(1).
(i) Quality ASM Performance Category Data Submission Requirements
For the quality ASM performance category, we proposed 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 final rule) and meets the proposed data
completeness requirement as discussed in section III.C.2.d.(2).(h).(i)
of this final 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 2, at least 3, 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 final 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
[[Page 49603]]
for the applicable ASM payment year as discussed in section
III.C.2.f.(4) of this final 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.
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.
We received public comments on our proposed data submission
requirements for the quality ASM performance category. The following is
a summary of the comments we received and our responses.
Comment: A commenter did not support the proposed requirements for
ASM low back pain participants to report on all the quality measures in
the ASM low back pain cohort, noting that these requirements exceed
those for MVP participants. The commenter also shared their belief that
the measures have limited applicability to orthopedic surgeons.
Response: We appreciate the commenters for sharing their concern
that ASM would require all low back pain participants to report on all
low back pain quality measures. Although ASM's quality reporting
requirements exceed those for MVPs, allowing participants to choose
quality measures has historically led to overall high-quality scores
within MIPS. Allowing ASM participants to select their quality measures
would make it more difficult to meaningfully differentiate clinician
performance. We disagree that the quality measures have limited
applicability to orthopedic surgeons because we believe that orthopedic
surgeons who are attributed 20 EBCMs provide longitudinal chronic
condition care to beneficiaries with low back pain, which means it
would be appropriate to hold them accountable for the low back pain
quality measure set.
Comment: A commenter recommended that CMS should use eCQM quality
measures in ASM whenever possible.
Response: We appreciate the commenters for stating their
recommendation regarding interest in eCQM quality measures whenever
possible. However, we disagree, because although we acknowledge the
ease of reporting eCQMs, the CQMs selected for the quality measure sets
better reflect ASM's goal 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.
Comment: A few commenters recommended that CMS provide additional
clarification regarding the proposed requirements for the quality ASM
performance category. A commenter expressed concern that the proposed
rule does not clearly specify whether ASM participants must submit data
for all ASM quality measures in their applicable cohort, or only for
one quality measure (excluding administrative claims-based measures).
Another commenter requested clarification on the exact number of
quality measures clinicians are required to report on. Specifically,
the commenter stated whether an ASM participant would need to contract
with a third-party intermediary to report only the single MIPS CQM if
their ASM cohort included three eCQMs and one MIPS CQM.
Response: We appreciate the commenters for their recommendation for
further clarification regarding ASM quality measure reporting. As
discussed in section III.C.2.e.(2).(b) of this final rule, for an ASM
participant to receive a payment adjustment greater than the negative
adjustment equal to the applicable ASM risk level (negative nine
percent in the first two ASM payment years) they must meet the Quality
ASM Performance Category Data Submission Requirement as discussed
earlier in this section of this final rule. For an ASM participant to
meet the quality ASM performance category data submission requirement,
the 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 final rule)
and meets the proposed data completeness requirement as discussed in
section III.C.2.d.(2).(h).(i) of this final rule. Participants are
still required to report all five measures in their quality set;
however, if they do not meet the minimum case threshold as discussed in
section III.C.2.d.(2).(h) they 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 as described in
III.C.2.d.2.(i).(i) of this final rule. If a participant only reports
three eCQMs and one MIPS CQM, they would be scored on those 4 measures
but receive a zero for the measure for which they did not submit data,
which means they would not meet the data completeness requirement for
that measure.
After consideration of public comments, we are finalizing our
provisions for data submission requirements for the quality ASM
performance category as proposed at Sec. 512.720(a)(1)(i).
(ii) Improvement Activities ASM Performance Category Data Submission
Requirements
We proposed in 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 did not propose 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 proposed to factor in the ASM improvement
activities performance category score into the final score as proposed
at Sec. 512.745(a)(1)(iii).
We received public comments on our proposed data submission
requirements for the improvement activities ASM performance category.
The following is a summary of the comments we received and our
responses.
Comment: A few commenters did not support proposed data submission
requirements for the improvement activities ASM performance category,
noting the requirements as impractical and burdensome. Another
commenter shared their concern that mandating two specific improvement
activities for specialists could add significant burden for specialty
practices already complying with other MIPS activities. The commenter
recommended that CMS align the ASM improvement activities category with
MIPS to allow greater flexibility and choice during the initial ASM
performance years.
Response: We appreciate commenters for sharing their concerns
regarding the data submission requirements for the improvement
activities ASM performance category. We recognize that introducing two
ASM-specific mandatory improvement activities may be burdensome for
specialty practices that may participate as a group in MIPS. However,
we believe that these ASM-specific improvement activities are important
to incentivizing practice transformation and improved specialist-PCP
integration to improve chronic condition management. We refer readers
to section III.C.2.d.(4) of this final rule for additional discussion
on the basis for our improvement activities
After consideration of public comments, we are finalizing our
[[Page 49604]]
provisions for data submission requirements for the improvement
activities ASM performance category as proposed at Sec.
512.720(a)(1)(ii).
(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).
We did not receive any public comments on our proposed Promoting
Interoperability data submission requirements and are, therefore,
finalizing the provisions as proposed at Sec. 512.720(a)(1)(iii).
(iv) ASM Performance Categories Without Data Submission Requirements
Like the cost performance category or administrative claims-based
quality measures under MIPS, we proposed 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.
We did not receive any public comments on our proposed provisions
related to ASM performance categories without data submissions
requirements and are, therefore, finalizing the provisions as proposed
at Sec. 512.720(a)(2).
(v) Data Submission Types
We proposed 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.
We received public comments on our proposed data submission types.
The following is a summary of the comments received and our responses.
Comment: A commenter supported the proposal to align ASM data
submission types-- including direct, log in and upload, and the use of
third-party intermediaries, with the existing MIPS framework. The
commenter shared their belief that alignment between ASM and MIPS data
submission types would reduce confusion, limit the administrative
burden on clinicians, and leverage a familiar infrastructure.
Response: We appreciate the commenters for their support of the ASM
proposal to align ASM data submission types with the existing framework
in MIPS leading to lower administrative burden on clinicians.
Like the policy established under MIPS, we proposed at Sec.
512.720(c) that ASM participants would be permitted to submit their ASM
data using multiple submission types for any ASM 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.
We did not receive any comments on our proposed provisions related
permitting ASM participants to submit data using multiple submission
types for any ASM performance category as applicable.
After consideration of public comments, we are finalizing our
proposed provisions for data submission types as proposed at Sec. Sec.
512.720(b)(1) and (2). We are also finalizing our proposed provisions
on multiple submission types as applicable for each ASM performance
category as proposed at Sec. 512.720(c).
(vi) Data Submission Deadline
We proposed 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 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.
We received public comments on our proposed data submission
deadline. The following is a summary of the comments we received and
our responses.
Comment: A commenter did not support the proposed data submission
deadline of March 31 following the close of the applicable ASM
performance year, noting concerns with meeting the deadline due to the
complex reporting requirements across multiple programs, and
recommended extending the ASM data submission deadline to the end of
April.
Response: We appreciate the commenters for sharing their concerns
regarding our data submission deadline. However, ASM's data submission
deadline aligns with the deadline in MIPS specified at Sec.
414.325(e).
Comment: A commenter supported the proposed data submission
deadline of March 31 following the close of the applicable ASM
performance year, noting its alignment with traditional MIPS and MVP
deadlines could decrease burden on ASM participants.
Response: We appreciate the commenter for their support of our data
submission deadlines and agree that alignment with MIPS and MVP
deadlines decreases reporting burdens.
After consideration of public comments, we are finalizing our
proposed data submission deadline as proposed at Sec. 512.720(d).
(vii) 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 proposed at Sec. 512.720(e) to calculate and score
each submission received and assign the highest of the scores. We
proposed 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 proposed to score the most
recent submission. We proposed at Sec. 512.720(e)(2), that for
multiple data submissions received for the Promoting Interoperability
performance category, we would calculate a score for each data
submission received and assign the highest of the scores.
We received public comments on our proposed provisions for the
treatment of multiple data submissions. The following is a summary of
the comments we received and our responses.
Comment: A few commenters supported the proposed approach for
multiple ASM data submissions. The commenters noted the proposed policy
would allow an ASM participant to be scored on the data submission or
measure with the greatest number of achievement points, aligned with
MIPS and could help reduce confusion among clinicians and
administrative staff during reporting.
[[Page 49605]]
Response: We appreciate the commenters for their support of our
approach towards scoring multiple ASM data submissions and believe that
our policy rewards participants for earned ASM performance achievement
points.
After consideration of public comments, we are finalizing our
proposed provisions related to multiple data submission types as
proposed at Sec. 512.720(e).
(2) Quality ASM Performance Category
The 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
final rule.
(a) Background
We proposed at Sec. 512.725(b) and (c) to use a quality measure
set specific to each ASM cohort, one measure set for heart failure (HF)
and one measure set for low back pain (LBP), which would contain
condition-specific mandatory measures. Each ASM participant must report
all finalized measures specified in Table B-D4 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 proposed to avoid making significant changes to these measure
sets over the period of model; however, we may propose to add or remove
measures through notice-and-comment 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 sought comment on this
proposal.
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 finalized measures also promote
prevention, as detailed in Table B-D4, 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 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 49606]]
[GRAPHIC] [TIFF OMITTED] TR05NO25.109
(i) Performance Year for the Quality ASM Performance Category
We proposed 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 solicited comments on our proposed approach setting the ASM
performance year for quality measures.
We did not receive public comments on this provision, and
therefore, we are finalizing the proposed ASM performance year for
quality measures as proposed at Sec. 512.725(a).
(b) Quality Measure Set for the ASM Heart Failure Cohort
We proposed at Sec. 512.725(b)(1) through (5) to include the
following measures in the heart failure quality measure set. Each ASM
heart failure participant must report each finalized measure using one
of the collection types specified in Table B-D4.
(i) Risk-Standardized Acute Unplanned Cardiovascular-Related Admission
Rates for Patients With Heart Failure (HF) (MIPS Q492)
We proposed to include Risk-Standardized Acute Unplanned
Cardiovascular-Related Admission Rates for Patients with Heart Failure
(HF) (MIPS Q492) in the ASM heart failure quality measure set. By
assessing potentially preventable cardiovascular-
[[Page 49607]]
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.\184\
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.\185\ 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.\186\
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.\187\ We proposed to include this measure to continue the momentum
on reducing avoidable hospital admissions and readmissions, as well as
improve overall quality of care for Medicare patients with heart
failure.
---------------------------------------------------------------------------
\184\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions.
Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/.
\185\ Dhaliwal JS, Dang AK. Reducing Hospital Readmissions.
Nih.gov. Published June 7, 2024. https://www.ncbi.nlm.nih.gov/books/NBK606114/.
\186\ 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.
\187\ 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.
---------------------------------------------------------------------------
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 proposed to use this measure at the TIN/NPI level.
We pursued 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 final 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 solicited 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed inclusion of MIPS
Q492: Risk-Standardized Acute Unplanned Cardiovascular-Related
Admission Rates for Patients With Heart Failure measure in the ASM
heart failure quality measure set. The commenters shared their belief
that the inclusion of this measure would promote care coordination and
enhance patient outcomes and quality of care. A commenter supported
expanding the focus beyond a 30-day hospital readmission measure to
emphasize the importance of long-term, chronic care needed for heart
failure patients.
Response: We appreciate commenters' support of the proposed
inclusion of MIPS Q492: Risk-Standardized Acute Unplanned
Cardiovascular-Related Admission Rates for Patients With Heart Failure
measure in the ASM heart failure quality measure set. We agree that
this is an important measure to promote accountability in care
coordination and enhance patient outcomes. We also appreciate the
feedback regarding the importance of expanding focus beyond 30-day
readmission measures to emphasize long-term, chronic care management
for heart failure patients.
Comment: A few commenters did not support the proposed inclusion of
MIPS Q492: Risk-Standardized Acute Unplanned Cardiovascular-Related
Admission Rates for Patients With Heart Failure measure in the ASM
heart failure quality measure set, noting that the majority of
readmissions are not preventable through heart failure management. A
commenter cited research indicating that only 17 to 35 percent of
readmissions are attributed to heart failure re-exacerbation, and
therefore, the commenter expressed concern that holding general
cardiologists engaged in longitudinal care for heart failure patients
accountable for total cardiovascular admission rates may unfairly
penalize these clinicians for outcomes beyond their clinical control. A
commenter requested clarification on how the measure would interact
with the heart failure EBCM, to ensure clinicians are not subject to
overlapping penalties for the same utilization events across quality
and cost domains.
Response: We appreciate the feedback regarding concerns about the
proposed inclusion of MIPS Q492: Risk-Standardized Acute Unplanned
Cardiovascular-Related Admission Rates for Patients With Heart Failure
measure. The measure methodology has several mechanisms to account for
situations when admissions are outside the control of providers, such
as exclusion criteria for very ill or complicated patients,
identification of planned admissions, a 10-day buffer period following
discharge, and a risk adjustment model that includes demographic,
clinical, and social risk factors. We believe these are appropriate
safeguards that address the concerns raised about penalizing providers
for outcomes beyond their clinical control. Additionally, the measure
focuses specifically on admissions that are cardiovascular in nature,
addressing the concern that providers may be penalized for admissions
completely unrelated to heart failure care. A key goal of ASM is to
promote enhanced accountability for longitudinal care by providers for
their patients, and this measure complements the heart failure EBCM to
ensure accountability as they measure different aspects of care. We do
not perceive this as overlapping penalties, as they are different
metrics and the cost of a heart failure episode is not encapsulated in
unplanned admissions alone.
Comment: A few commenters did not support the proposal to apply the
MIPS Q492: Risk-Standardized Acute Unplanned Cardiovascular-Related
[[Page 49608]]
Admission Rates for Patients With Heart Failure measure at the TIN/NPI
level, noting that this measure was not designed to assess individual
clinicians and has only been in used in MIPS for evaluating groups. A
few commenters also noted that the measure's reliability has only been
tested at the group level, not at the individual clinician or TIN/NPI
level, and reliability scores decrease for groups with fewer heart
failure patients. A commenter shared their concern that clinicians may
have limited time to implement the measure, since CMS noted the
measure's revised specifications would be released in the rule. Another
commenter expressed concern that attributing this measure at the TIN/
NPI level, particularly for specialists working in team-based settings,
could misrepresent individual accountability for admissions influenced
by broader social risk factors or primary care coordination. The
commenters recommended that CMS monitor for unintended disparities and
ensure risk adjustment methodologies account for factors outside of
cardiologists' direct control.
Response: We appreciate the feedback regarding the application of
MIPS Q492: Risk-Standardized Acute Unplanned Cardiovascular-Related
Admission Rates for Patients With Heart Failure at the TIN/NPI level.
Internal analyses identified that an overwhelming majority of likely
heart failure ASM participants would individually meet or exceed the
case minimum of 21 for this measure, which is the volume threshold used
in other CMS programs. The analysis used the measure specification to
simulate a performance year for providers that met the ASM participant
inclusion criteria, demonstrating feasibility for implementation at the
individual clinician (TIN/NPI) level.
To address concerns about attribution and accountability, ASM will
slightly modify the measure specifications to attribute solely to ASM
participants who have had 1 or more visits with the beneficiary.
Focusing the measure in this way allows ASM participants to be
accountable for the health of patients they have actively treated,
while addressing concerns about misrepresenting individual
accountability in team-based settings. We will release more technical
details in the future in a form and manner determined by CMS.
We recognize the concerns about social risk factors and
coordination issues beyond cardiologists' direct control, and we will
continue to monitor unintended disparities while ensuring that risk
adjustment methodologies appropriately account for factors outside of
specialists' direct influence. The measure's established risk
adjustment framework, combined with our attribution modifications,
should help address these concerns while maintaining meaningful quality
assessment.
After consideration of public comments, we are finalizing the
inclusion of the MIPS Q492: Risk-Standardized Acute Unplanned
Cardiovascular-Related Admission Rates for Patients with Heart Failure
measure in the heart failure quality measure set as proposed as Sec.
512.725(b)(1).
(ii) Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular
Systolic Dysfunction (LVSD) (MIPS Q008)
We proposed to include Heart Failure (HF): Beta-Blocker Therapy for
Left Ventricular Systolic Dysfunction (LVSD) (MIPS Q008) in the ASM
heart failure quality 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.\188\ 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.\189\
---------------------------------------------------------------------------
\188\ 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.
\189\ 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.
---------------------------------------------------------------------------
Despite its survival benefits, use of beta blockers in eligible
patients remains suboptimal.90 191 Nonadherence to
medications prescribed for heart failure, including beta-blockers, can
be associated with adverse outcomes such as hospital readmission and
mortality.192 193 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 sought 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
quality measure set.
---------------------------------------------------------------------------
\190\ 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.
\191\ 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.
\192\ Ruppar TM, Cooper PS, Mehr DR, Delgado JM, Dunbar-Jacob
JM. Medication Adherence Interventions Improve Heart Failure
Mortality and Readmission Rates: Systematic Review and Meta-Analysis
of Controlled Trials. Journal of the American Heart Association.
2016;5(6). doi:https://doi.org/10.1161/jaha.115.002606.
\193\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposal to include the
MIPS Q008 Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular
Systolic Dysfunction (LVSD) measure in the ASM heart failure measure
set. A commenter noted that this measure would help address the under-
prescription of evidence-based therapies and promote the appropriate
use of combination or quadruple therapy, which includes beta-blocker
therapy, in patients with HFrEF.
Response: We appreciate the commenters' supportive feedback
regarding the inclusion of MIPS Q008: Heart Failure (HF): Beta-Blocker
Therapy for Left Ventricular Systolic Dysfunction (LVSD) in the ASM
heart
[[Page 49609]]
failure measure set. We agree that this measure is essential for
encouraging the adoption of comprehensive, evidence-based treatment
approaches that have been shown to improve outcomes for heart failure
patients. The measure aligns with current clinical guidelines that
emphasize the importance of optimizing medical therapy, including the
use of combination or quadruple therapy regimens that incorporate beta-
blockers as a cornerstone of HFrEF management.
Comment: A few commenters expressed concern regarding the proposal
to include the MIPS Q008 Heart Failure (HF): Beta-Blocker Therapy for
Left Ventricular Systolic Dysfunction (LVSD) measure in the ASM heart
failure quality measure set, noting that the measure is topped out in
MIPS. The commenters recommended that CMS consider alternative quality
measures, that are not topped out, for inclusion in the ASM measure
set. A few commenters specifically noted that the measure only applies
to patients with reduced ejection fraction and excludes those with
preserved ejection fraction. A commenter recommended that CMS consider
respecifying this measure as an outcomes-based measure. Another
commenter recommended that CMS ensure necessary exclusions for
clinically justified cases, noting that some patients with left
ventricular systolic dysfunction may have contraindications to beta-
blocker therapy.
Response: We appreciate the comments regarding the proposed
inclusion of MIPS Q008 Heart Failure (HF): Beta-Blocker Therapy for
Left Ventricular Systolic Dysfunction (LVSD) measure in the ASM heart
failure quality measure set. While we are aware that the measure may be
topped out in the MIPS program, we believe that the required reporting
structure in ASM may yield different results than those seen in MIPS,
where providers have flexibility in measure selection. We carefully
considered several measures and selected those that are most clinically
relevant and methodologically valid, though we acknowledge we are
limited by existing measures and cannot develop outcome measures for
every clinical scenario. We believe this measure set provides an
adequate assessment of patient care quality related to heart failure.
This measure is clinically valid and reliable, incorporating necessary
exclusions for beta-blocker therapy when clinically documented reasons
exist (for example, low blood pressure, fluid overload, asthma, recent
intravenous positive inotropic agent treatment, allergies,
intolerances, other medical reasons, patient refusal, or other patient-
specific factors). While the measure may not apply to a cardiologist's
entire patient panel, it remains a valid assessment tool for the
significant portion of heart failure patients that cardiologists treat
with reduced ejection fraction.
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q008) HF: Beta-Blocker Therapy for LVSD in the
heart failure quality measure set as proposed at Sec. 512.725(b)(2).
(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 proposed 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 quality 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.194 195 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.\196\ Similar to beta blockers, optimal dosing and adherence to
this group of medication in heart failure patients remains
suboptimal.\197\ By including this measure, we can incentivize
cardiologists participating in 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
sought comment on the appropriateness of including this measure in the
heart failure quality measure set.
---------------------------------------------------------------------------
\194\ 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.
\195\ 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.
\196\ 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.
\197\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters expressed concern about including the
MIPS Q005: ACE Inhibitor or ARB or ARNI Therapy for LVSD in the ASM
heart failure measure set, noting that the measure is topped out in
MIPS. The commenters recommended that CMS consider alternative quality
measures for inclusion in ASM that have not reached topped-out status.
A commenter specifically noted that the measure steward would
discontinue supporting the measure starting in CY 2027. Another
commenter expressed concern that patients with left ventricular
systolic dysfunction may have contraindications to ACEi/ARB/ARNI
therapy and recommended that CMS include necessary exclusions for
clinically justified cases.
Response: We appreciate the commenters' feedback regarding the
inclusion of MIPS Q005: ACE Inhibitor or ARB or ARNI Therapy for LVSD
in the ASM heart failure measure set. While we acknowledge that this
measure may be topped out in the MIPS program, we believe that the
required reporting structure in ASM may yield different results than
those seen in MIPS, where providers have flexibility in measure
selection.
We also believe this remains a valuable measure to include despite
the measure steward's announcement that they will no longer maintain it
in the future. The steward did not suggest measure alternatives, and
there are no suitable substitutes that would be as impactful in our
heart failure quality measure set. The steward's primary rationale for
discontinuing maintenance was the topped-out status; however, as
stated, we do not believe this will be the case given the mandatory
nature of measures in our model.
Regarding concerns that patients with left ventricular systolic
dysfunction may
[[Page 49610]]
have contraindications to ACEi/ARB/ARNI therapy, the measure addresses
this through multiple built-in mechanisms. The measure includes
denominator exclusions for clinically justified cases, such as patients
with LVADs, documented medical reasons for not prescribing these
medications, hypotensive patients at risk of cardiogenic shock,
hospitalized patients with marked azotemia, and those with allergies,
intolerances, or other medical contraindications. Additionally,
patients who have declined therapy are excluded. These exclusions
ensure that clinically justified cases are appropriately addressed, as
the commenters recommended.
Comment: A commenter recommended that CMS consider a composite
adherence measure or a PRO-PM linked measure to better capture the
value of guideline-directed medical therapy in practice.
Response: We appreciate this comment regarding the use of composite
adherence measures or patient-reported outcome process measures (PRO-
PM) linked measures to better capture the value of guideline-directed
medical therapy in practice. Our current ACE inhibitor/ARB/ARNI and
beta-blocker measures are the best existing tools we have to promote
guideline-directed medical therapy (GDMT) for heart failure patients.
While we will continue to review whether other measures are developed
in the future, we believe these measures are appropriate for assessing
quality of care and incentivizing optimization of these therapies. We
do include a patient-reported outcome process measure related to
functional status, which serves as a complementary tool to determine
quality of care and provides additional insight into patient outcomes.
Comment: A commenter supported the proposed inclusion of MIPS Q005:
ACE Inhibitor or ARB or ARNI Therapy for LVSD in the ASM heart failure
measure set, noting that the appropriate use of these therapies is
associated with reductions in mortality and hospitalizations related to
heart failure.
Response: We appreciate the commenter for their support of the
proposed inclusion of MIPS Q005: ACE Inhibitor or ARB or ARNI Therapy
for LVSD in the ASM heart failure measure set. We agree that the
appropriate use of these evidence-based therapies is critical for
improving patient outcomes in heart failure management. The clinical
evidence demonstrates that ACE inhibitors, ARBs, and ARNIs are
associated with significant reductions in mortality and
hospitalizations for patients with left ventricular systolic
dysfunction. Including this measure in the ASM heart failure measure
set aligns with our commitment to promoting the use of guideline-
directed medical therapy that has proven benefits for patients with
heart failure.
Comment: A commenter supported the proposed inclusion of MIPS Q005:
ACE Inhibitor or ARB or ARNI Therapy for LVSD in the ASM heart failure
measure set and recommended that CMS consider broadening the measure to
account for a wider range of future innovations or related therapies
that may enter the market. The commenter further recommended that CMS
establish higher standards for adherence to oral antihypertensive
therapies within the model to address issues related to suboptimal
dosing and medication adherence.
Response: We appreciate the support of the proposed inclusion of
MIPS Q005: ACE Inhibitor or ARB or ARNI Therapy for LVSD in the ASM
heart failure measure set. We appreciate the recommendation to consider
broadening the measure to account for future innovations and related
therapies that may enter the market. We will assess the measure set
regularly to account for changes in clinical guidelines and medication
therapies and innovations in care which could impact the model, and the
measures included. Regarding the recommendation for higher standards
for adherence to oral antihypertensive therapies, we believe this
measure and the beta-blocker measure appropriately assess adherence to
antihypertensive therapies and should promote improvements in
medication management. We recognize that suboptimal dosing and
medication adherence are important challenges in heart failure
management, and these measures are designed to encourage providers to
focus on evidence-based prescribing practices. The combination of these
measures within the quality measure set will help drive quality
improvements in heart failure care while maintaining flexibility to
adapt to evolving clinical standards.
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q005) HF: ACE Inhibitor or ARB or ARNI Therapy
for LVSD measure in the heart failure quality measure set as proposed
at Sec. 512.725(b)(3).
(iv) Controlling High Blood Pressure (MIPS Q236)
We proposed including Controlling High Blood Pressure (MIPS Q236)
in the heart failure quality 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.198 199 For example, severe hypertension can
result in pulmonary edema (more common in patients with preserved
LVEF), requiring urgent treatment to reduce blood pressure.\200\
Controlling blood pressure helps reduce the risk of adverse outcomes,
such as hospitalizations and mortality related to heart
failure.201 202 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.\203\ 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.\204\ 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.\205\ We sought comment on our
[[Page 49611]]
inclusion of this measure in the heart failure quality measure set.
---------------------------------------------------------------------------
\198\ 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.
\199\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical
Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x.
\200\ 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.
\201\ 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.
\202\ 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.
\203\ 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.
\204\ Oh GC, Cho HJ. Blood pressure and heart failure. Clinical
Hypertension. 2020;26(1). doi:https://doi.org/10.1186/s40885-019-0132-x.
\205\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters did not support the proposed inclusion of
MIPS Q236: Controlling High Blood Pressure in the ASM heart failure
quality measure set. A commenter expressed concern that using a single,
most recent blood pressure reading to determine a patient's blood
pressure control does not align with clinical guidelines or best
practices in hypertension management, which recommend longitudinal
assessment of blood pressure to appropriately reflect a patient's
status. A commenter noted that the measure should be revised to
incorporate multiple blood pressure readings or longitudinal data
before including in the ASM heart failure quality measure set.
Response: We appreciate the feedback regarding the inclusion of
MIPS Q236: Controlling High Blood Pressure in the ASM heart failure
quality measure set. The commenters' concerns about using a single,
most recent blood pressure reading versus longitudinal assessment could
be provided as feedback to the measure steward for future
consideration. Currently, we believe that MIPS Q236 is the best measure
available to ensure this vital activity occurs in heart failure care.
Using this measure allows us to align with MIPS and other quality
reporting programs, thereby reducing the administrative burden on ASM
participants. While we acknowledge that clinical guidelines recommend
longitudinal assessment of blood pressure, the current measure
specification represents the most feasible approach for standardized
quality measurement across CMS programs. We will continue to monitor
developments in blood pressure quality measures and consider updates as
improved measures become available through established measure
development processes.
Comment: A commenter expressed concern that ASM participants may
lack vendor support for reporting the measure, leading to increased
costs and burden for clinicians. Another commenter recommended that CMS
should provide credit to clinicians for evidence-based interventions,
such as dietary advice or diuretics, even if blood pressure control is
not achieved, since blood pressure control may not be fully within a
clinician's influence.
Response: We acknowledge the potential burden that participants may
face regarding vendor support for reporting measures, but we believe
this is an important measure for our heart failure quality measure set.
This measure has been part of the MIPS program since CY 2018, providing
ample time for vendors and systems to adopt it. This measure's
importance has also been signaled as important and relevant with its
inclusion in the CMS Universal Foundation of Quality Measures.
Participants have until 2027 to ensure that they can report this
measure, which we believe provides enough advance notice to ensure
those pursuing reporting can do so successfully. Also, we believe that
the performance assessment structure of ASM will incentivize evidence-
based interventions such as dietary advice and diuretic management.
While there are no specific measures for these individual activities,
our improvement activities complement whole person health activities
such as diet counseling and screening for health-related social needs
(HRSNs). We believe that participants who choose to provide these
evidence-based interventions to their patients will see improved
performance in ASM, thereby incentivizing these activities.
Comment: A few commenters supported the proposed measure, MIPS
Q236: Controlling High Blood Pressure, because blood pressure
management is a critical part of managing heart failure. A commenter
stated that the measure is part of the Universal Foundation measure
set, and thus including this measure in ASM will promote alignment
across programs. A commenter supported the measure but suggested that
CMS consider recommended pharmacological interventions to help control
high blood pressure, such as loop diuretics. Another commenter
recommended that CMS consider incorporating measures that assess
sustained improvements in blood pressure. Finally, given the recent
release of updated blood pressure guidelines, a commenter noted that
CMS may have to modify this measure in the near future to reduce the
current target blood pressure range which may result in limited
comparability of results over the 5-year proposed timeframe.
Response: We appreciate the comments regarding the proposed
inclusion of MIPS Q236: Controlling High Blood Pressure in the ASM
heart failure quality measure set. We agree that blood pressure
management is a critical component of heart failure care, and we
believe that measuring this will promote clinical improvements by
providers, such as implementing recommended pharmaceutical
interventions like loop diuretics as suggested. We recognize the value
of alignment across CMS programs, and including this Universal
Foundation measure in ASM supports that goal. We are limited as there
are not valid and reliable measures established for all clinical
scenarios, and therefore, we must use the measures that are available
to us. We believe this measure is an appropriate, clinically valid, and
widely used measure for assessing blood pressure control. Regarding the
recommendation for measures that assess sustained improvements in blood
pressure, we will consider this feedback as we continue to evaluate the
measure set. We will continue to review the latest guidelines in
clinical care for heart failure, and the specifications of this measure
could be adjusted in the future by the measure steward depending on
research developments and updated clinical guidelines, including the
recent blood pressure guideline updates mentioned. We acknowledge that
modifications to align with updated guidelines may impact comparability
over time, which is why we do not plan to make changes to the measure
set over time, but ensuring clinical relevance and adherence to current
evidence-based standards remains our priority.
Comment: A few commenters offered other recommendations to CMS on
the proposed measure, MIPS Q236: Controlling High Blood Pressure. A
commenter recommended updating the measure with risk stratification or
digital quality components to address disparities, workflow issues, and
patient non-compliance. The commenter also recommended that CMS
consider accepting home or remote blood pressure readings. Finally, the
commenter requested clarification regarding whether a missed reading
due to a single skipped visit or lack of patient engagement would
disproportionately impact performance scores under ASM. Additionally, a
few commenters noted that pharmacists and registered dietitian
nutritionists can play an important role in controlling blood pressure
under the measure and therefore recommended that CMS include
pharmacists and registered dietitian nutritionists in ASM.
Response: We appreciate the commenters' feedback regarding MIPS
Q236: Controlling High Blood Pressure and the recommendations for
measure enhancements. We aim to align with the specifications
determined by the measure steward to ensure we do not create undue
burden by changing
[[Page 49612]]
specifications across different programs. For recommendations regarding
risk stratification, digital quality components, acceptance of home or
remote blood pressure readings, and other measure specification
changes, we recommend directly contacting the measure steward directly
to suggest these modifications. We will not include pharmacists or
registered dietitian nutritionists as eligible participants in ASM, but
to perform well on this and other measures, ASM participants may
partner with or leverage these valuable healthcare resources as part of
their care delivery approach. This collaborative approach allows ASM
participants to benefit from the expertise of pharmacists and
dietitians in managing hypertension while maintaining the model's focus
on specialty care providers as the primary participants accountable for
quality and cost outcomes.
After consideration of public comments, we are finalizing the
inclusion of MIPS Q236: Controlling High Blood Pressure in the heart
failure quality measure set as proposed at Sec. 512.725(b)(4).
(v) Functional Status Assessments for Heart Failure (MIPS Q377)
We proposed including Functional Status Assessments for Heart
Failure (MIPS Q377) in the heart failure quality 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.\206\ 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 sought comment on our inclusion of this measure in the heart
failure quality measure set.
---------------------------------------------------------------------------
\206\ 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 received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed inclusion of MIPS
Q377: Functional Status Assessments for Heart Failure in the ASM heart
failure measure set, noting that the measure should be included as a
process measure for the CY 2027 ASM performance year, to ensure data
collection is feasible and not overly burdensome to patients or
clinicians prior to transitioning to a PRO-PM.
Response: We acknowledge the commenters' support of this measure.
We agree that it is beneficial to the measure set in its current state
and appreciate the commenters' recognition of its value for heart
failure care. The measure balances the burden of reporting while
incentivizing functional status assessments, which are critical
components of comprehensive heart failure management.
Comment: A few commenters expressed concern about the proposed
inclusion of MIPS Q377: Functional Status Assessments for Heart Failure
measure in the ASM heart failure measure set. A commenter shared their
concerns regarding the measure's feasibility and benchmarking, noting
that limitations in data capture could unfairly penalize clinicians
regardless of care quality. Another commenter expressed concern that
some patients may require more than 180 days for meaningful
improvement, depending on disease severity and comorbidities, noting
that the measure timeframes must account for these actions.
Response: We appreciate the commenter's feedback. We understand the
concerns about data capture feasibility and potential penalties for
clinicians regardless of care quality. Success in ASM may mean ensuring
that patient healthcare data is entered and captured in EHRs
appropriately, and we are providing significant advance notice as the
model does not start until 2027, thereby giving participants ample time
to implement practices and systems to address concerns about data
capture capabilities.
Regarding concerns about meaningful improvement within 180 days, we
want to clarify that the measure in its current form only looks for
documentation that a valid and standardized functional status
assessment tool is being administered within 180 days before or after a
qualifying heart failure encounter. This measure does not look for
clinical improvement during that timeframe, rather, it focuses on
whether appropriate assessment tools are being used to evaluate patient
functional status as part of comprehensive heart failure care. The
measure is designed to promote the systematic use of validated
assessment instruments that can inform treatment decisions and care
planning, rather than requiring specific improvement outcomes within
the specified timeframe.
We note that the Functional Status Assessments for Heart Failure
(MIPS Q377) measure is currently a process measure. We proposed that
the process measure would be included for the 2027 ASM performance
year, while we explore the benefit and applicability of developing a
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 sought
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 quality measure set for future
performance years of ASM.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter did not support development of the proposed
MIPS Q377: Functional Status Assessments for Heart Failure measure into
a PRO-PM and expressed concern that the measure incorporates factors
that are beyond clinician control, such as patient-specific social risk
factors and
[[Page 49613]]
patient literacy levels. Another commenter noted that the inclusion of
PRO-PMs adds new burdens with limited demonstrated value. The commenter
also stated that implementation requires new workflows, vendor
contracts, and high costs. The commenter recommended that if PRO-PMs
are to be included, CMS should allow clinicians flexibility in vendor
selection, ensure that acceptable instruments are freely available, and
provide technical assistance and phased adoption.
Response: We appreciate the feedback regarding the proposed MIPS
Q377: Functional Status Assessments for Heart Failure measure and
concerns about its potential development into a PRO-PM. We are
finalizing the inclusion of the process version of this measure in this
rule, not the PRO-PM version. We are continuing to explore whether a
PRO-PM version is appropriate for future implementation and will take
these concerns into account during this evaluation process.
We are committed to ensuring that measures included in the ASM
measure set prioritize clinical acceptability while minimizing
administrative burden on ASM participants. Under the potential
development of a PRO-PM, we would seek to allow flexibility where
possible in survey instruments used, recognizing the diverse needs and
capabilities of different practice settings. We understand the concerns
about factors beyond clinician control, such as patient-specific social
risk factors and literacy levels and will carefully consider these
limitations in any future PRO-PM development.
Any future implementation of this measure as a PRO-PM would be
clearly indicated through future notice-and-comment rulemaking, which
would provide ample time for adoption by ASM participants. We would
also consider opportunities to support participants and phased
implementation. We recognize the workflow changes, vendor
considerations, and associated costs that PRO-PM implementation may
require, and we are committed to working with interested parties to
address these challenges should we move forward with PRO-PM development
in the future.
Comment: A few commenters supported CMS' development of a validated
PRO-PM for the proposed MIPS Q377: Functional Status Assessments for
Heart Failure measure. A commenter noted that the PRO-PM would
demonstrate a meaningful shift from documentation-based processes to
measures of patient experience and lived health outcomes while another
commenter stated that the PRO-PM would allow CMS to hold ASM
participants accountable not only for completing assessments but also
for improving or maintaining patients' functional status over time.
However, a few commenters noted possible challenges around licensing,
data sources, and inequitable scoring if a PRO-PM is implemented. A
commenter recommended that the future PRO-PM for Functional Status
Assessments for Heart Failure should not require licensing costly
proprietary content. A commenter recommended that CMS phase in this
measure as a reporting-only measure or include it as an ASM improvement
activity.
Response: We appreciate the supportive feedback regarding the
potential development of a PRO-PM for the proposed MIPS Q377:
Functional Status Assessments for Heart Failure measure. We are
finalizing the inclusion of the process version of this measure in this
rule, not a PRO-PM version. We are continuing to explore if a PRO-PM
would be appropriate and will take this support into account during
this evaluation process. We agree that this tool would improve
adherence to completing assessments and improving functional status
over time, representing a meaningful shift from documentation-based
processes to measures of patient experience and lived health outcomes.
We understand the comments around licensing and data sources, and would
consider these issues if the measure is developed into a PRO-PM. We
recognize the importance of avoiding costly proprietary content
requirements and ensuring equitable scoring across diverse patient
populations. If a PRO-PM is developed and included in ASM, we would
indicate it in advance via notice-and-comment rulemaking and would
ensure there is adequate time for the survey(s) to be implemented.
We also received broad feedback on the heart failure quality
measure set. The following is a summary of these comments and our
responses.
Comment: Many commenters generally supported the proposed ASM heart
failure quality measure set. A few commenters supported the use of PRO-
PMs in the ASM heart failure quality measure set. A commenter shared
their belief that the proposed PRO-PMs in ASM elevate patient voice and
incentivize clinicians to be more responsive to the patient's treatment
outcomes. Another commenter noted that the proposed quality measures in
the ASM heart failure measure set would support early intervention of
acute symptoms, self-management, and improve overall quality of care
for patients with heart failure. A commenter recommended that CMS
consider including outpatient management of worsening signs and
symptoms in patients with heart failure and incorporating guidance from
the 2022 AHA/ACC/HFSA Heart Failure Guideline. Another commenter
appreciated CMS for the proposed measure set's conciseness and
alignment with the Core Quality Measures Collaborative's work.
Response: We appreciate the supportive comments regarding the
proposed ASM heart failure quality measure set and the recognition of
its alignment with established quality frameworks. We will continue to
explore opportunities for PRO-PM in the measure set. Our goal is to
support early intervention and management of heart failure symptoms
while ensuring that the measure set is appropriate for all levels of
heart failure care. We appreciate the feedback regarding incorporating
guidance from the 2022 AHA/ACC/HFSA Heart Failure Guideline and will
consider how to better address outpatient management of worsening signs
and symptoms in future iterations. The conciseness of the measure set
and its alignment with the Core Quality Measures Collaborative's work
reflects our commitment to reducing provider burden while maintaining
meaningful quality assessment. We believe this balanced approach will
support improved self-management capabilities and overall quality of
care for patients with heart failure across the care continuum.
Comment: A commenter shared their concern that none of the proposed
measures in the ASM heart failure measure set are PRO-PMs, noting that
two of the heart failure quality measures, Beta Blocker Therapy for
LVSD and ACE/ARB/ARNI for LVSD, only apply to patients with reduced
ejection fraction while the cost measures include patients with
preserved ejection fraction.
Response: We appreciate the commenter for the feedback regarding
PRO-PMs and the scope of quality measures in the ASM heart failure
measure set. We are limited by which measures are currently available
and validated for heart failure care, and we believe the selected
measures are appropriate for assessing quality care delivery in this
population. We are continuing to explore opportunities for developing a
heart failure-specific PRO-PM, but we believe the process-based quality
measures in our current set appropriately assess evidence-based care
delivery. Regarding the concern
[[Page 49614]]
about reduced ejection fraction measures, while the cost measures
include patients with preserved ejection fraction, our goal is to
improve care for all heart failure patients, not just certain subsets,
though we recognize the clinical nuances and heterogeneity in their
care needs. Certain quality measures are only applicable to specific
patient subsets and should be applied as they were developed and
specified, rather than being extended to other populations for which
they were not designed or validated. We acknowledge that we currently
do not have quality measures specifically for heart failure with
preserved ejection fraction (HFpEF), partly because clinical guidelines
for HFpEF continue to evolve and measure development has not kept pace
with these advances. We will be assessing the quality measure set
throughout the course of the model and could propose changes or
additions in future years through notice-and-comment rulemaking as new
evidence-based measures become available and validated for the heart
failure population.
Comment: Several commenters offered recommendations on the proposed
ASM heart failure quality measure set. A commenter recommended that CMS
incorporate incentives for early screening and diagnosis of cardio-
renal-metabolic (CRM) conditions to slow progression of CRM conditions
and improve health outcomes. Another commenter recommended CMS adding
palliative care as a treatment option for heart failure patients,
noting alignment with the American Heart Association's recommendation
to integrate palliative care for patients with advanced cardiovascular
disease. Another commenter recommended incorporating patient experience
measures, such as the CAHPS survey, to assess the domains of patient
communication, care coordination, and shared decision-making. Another
commenter recommended that CMS includes Preventive Care and Screening:
Screening for Depression and Follow-up Plan measure in the heart
failure quality measure set, because many heart failure patients suffer
from depressive symptoms. A few commenters recommended that ASM
recognize and accommodate novel therapeutic innovations and incorporate
newer therapies, such as statins and SGLT2 inhibitors. A commenter
recommended that CMS consider including future measures for novel
therapies, cardiology visits, and medical nutrition therapy.
Response: We appreciate the feedback on additional measures and
elements to improve the quality of care for heart failure patients,
such as those focused on early screening and diagnosis of CRM
conditions, palliative care, CAHPS patient experience measures,
depression screening, novel medical therapies, and composite guideline-
directed medical therapy (GDMT). With the heart failure quality measure
set, we strive to balance clinical applicability and minimal burden on
participants and patients. Due to this balance, the development of new
measures is often unfeasible, considering the significant effort
involved by CMS and participants in standing them up operationally.
We will take these suggestions into consideration. While we do not
plan to adjust the quality measure sets during the model test period,
we would consider modifications for significant changes in clinical
guidelines, availability of new measures, or where the addition or
removal of measures would incentivize quality care. Comment: A
commenter shared their concern about using PRO-PMs as the foundation of
ASM, noting the difficulty to collect data in vascular surgery
populations.
Response: We appreciate the commenters for their feedback. We
believe that PROMs are valuable tools in quality measurement as they
capture the patient's perspective on their health status and treatment
outcomes, which is essential for comprehensive quality assessment.
However, we recognize that PRO-PMs do not exist in every clinical field
yet, and their development and validation require significant time and
resources.
We would like to clarify that ASM focuses specifically on heart
failure and low back pain conditions, not vascular surgery. The measure
sets are tailored to these specific clinical areas where an appropriate
PROM has been identified and validated. We understand that different
surgical specialties, including vascular surgery, may face unique
challenges in implementing PROMs due to factors such as patient acuity,
procedural complexity, and varying recovery timelines that can make
standardized outcome measurement more difficult. However, because ASM
does not focus on vascular surgery specialists, we believe that this
comment is out of ASM's scope.
Comment: A few commenters recommended that CMS use existing MVPs
that may be applicable to heart failure, such as the Advancing Care for
Heart Disease MVP, since using existing MVPs would minimize reporting
burden
Response: We appreciate the commenter's recommendation to use
existing MVPs that may be applicable to heart failure, such as the
Advancing Care for Heart Disease MVP. We agree that overlap in measures
between programs can reduce administrative burden on providers and
improve alignment across CMS quality initiatives. For this reason,
during our measure selection process, we aligned as much as possible
with the Advancing Care for Heart Disease MVP. Four of our five heart
failure measures are the same as those included in the MVP,
demonstrating our commitment to reducing duplicative reporting
requirements while maintaining clinically meaningful quality
assessment. This alignment supports provider efficiency by allowing
participants to leverage existing workflows and data collection
processes they may already have in place for MVP reporting. Also,
acknowledging the burden this may present to small practices, we are
finalizing allowing for flexibility for small practices to report
quality measures in the quality ASM performance category at the TIN-
level, as further described in section III.C.2.d.(1).(b) in this final.
Comment: A commenter recommended that CMS consider including
arrhythmia detection in the ASM heart failure measure set, noting that
the measure would help address a key, often undetected driver of heart
failure morbidity and cost, and align with HHS's Make America Healthy
Again initiative. The commenters recommended adding quality measures in
the ASM heart failure measure set, such as documented rhythm
monitoring, appropriate management initiation, and reduction in
unplanned cardiovascular admissions attributable to atrial
fibrillation.
Response: We appreciate the feedback regarding the recommendation
to include arrhythmia detection measures in the ASM heart failure
quality measure set. We recognize that arrhythmias, particularly atrial
fibrillation, can be an important and often undetected driver of heart
failure morbidity and healthcare costs. However, we do not currently
have a validated MIPS measure that addresses this specific clinical
nuance, particularly in regard to heart failure admissions and the
comprehensive arrhythmia management components.
We considered existing measures such as those focused on atrial
fibrillation and atrial flutter anticoagulation management, recognizing
that some patients with heart failure also have atrial fibrillation.
Ultimately, we did not choose to include these measures because they
only apply to a subset of the heart
[[Page 49615]]
failure population, and we aimed to develop a measure set that would be
broadly applicable to the diverse heart failure patient population
served by ASM participants.
We appreciate the commenter noting the alignment with broader
health initiatives and the clinical importance of rhythm monitoring and
appropriate management. While we do not plan to adjust the quality
measure sets during the model test period, we would consider
modifications for significant changes in clinical guidelines,
availability of new measures, or where the addition or removal of
measures would incentivize quality care. We will consider incorporating
arrhythmia-related measures in future iterations of the ASM heart
failure quality measure set should validated measures become available.
The feedback regarding documented rhythm monitoring, appropriate
management initiation, and reduction in unplanned cardiovascular
admissions attributable to atrial fibrillation will inform our ongoing
evaluation of potential measure enhancements.
Comment: A few commenters expressed concerns about the proposed ASM
heart failure quality measure set, noting that it may disadvantage 50
percent of heart failure patients with HFpEF as well as patients with
advanced heart failure. The commenters shared their belief that the
proposed quality measures are primarily aligned with evidence-based
treatments for HFrEF and recommended that CMS develop dedicated quality
measures for HFpEF populations that reflect the limited evidence base
and different therapeutic approaches for these patients. The commenters
encouraged CMS to adopt additional measures to incentivize quality of
care for all heart failure patients.
Response: We appreciate the feedback regarding concerns about the
proposed ASM heart failure quality measure set and its potential impact
on patients with heart failure with preserved ejection fraction (HFpEF)
and advanced heart failure. Our goal is to improve care for all heart
failure patients, not just certain subsets, though we recognize the
clinical nuances and heterogeneity in their care management approaches.
We acknowledge the difference between patients with HFpEF and those
with HFrEF, and that clinical guidelines for HFpEF are still evolving.
We note that certain quality measures are only applicable to specific
patient subsets based on the clinical evidence and populations for
which they were developed and validated, and we would want to apply
these measures as they were originally specified rather than extending
them inappropriately to other populations. We also note that there are
limited existing quality measures that apply to HFpEF. We will be
assessing the quality measure set throughout the course of the model
and could propose changes in future years as the clinical evidence base
evolves and new validated measures become available. While we strive to
incentivize quality care for all heart failure patients, we must
balance this goal with the practical limitations of available,
validated quality measures. We appreciate the clinical expertise
reflected in these comments and will continue to engage with the heart
failure clinical community to ensure our quality measurement approach
supports optimal care for all patients across the heart failure
spectrum.
Comment: A commenter shared their concern that patients with
advanced heart failure may encounter treatment paradoxes, where
standard care protocols may not be appropriate, potentially
compromising the validity of quality measurement and unfairly
penalizing clinicians caring for the most complex patients. The
commenter, therefore, recommended that patients classified as New York
Heart Association (NYHA) stage D be systematically excluded by CMS from
all proposed quality measures.
Response: We appreciate the commenters for expressing their
concerns about patients with advanced heart failure and the potential
impact on quality measurement validity. We agree that there are
scenarios in which advanced heart failure patients may present clinical
complexities that could be less appropriate for assessing a
participant's performance. For this reason, each quality measure
includes elements such as denominator exclusions and risk adjustment
methodologies specifically designed to address these challenging
clinical situations. We also believe that our overall performance
assessment approach, which includes multiple elements beyond quality
measures and compares similar providers treating comparable patient
populations, will help mitigate potential issues related to caring for
complex patients. While we understand the clinical rationale for the
recommendation, we believe that systematically excluding Stage D
patients would be against ASM's overall goal of improving care for all
heart failure patients and holding providers accountable for the full
spectrum of patients they treat.
Comment: A commenter recommended that CMS clarify whether the
proposed medication-based measures in the ASM heart failure measure set
would apply to all heart failure patients under a clinician's care or
only to those patients attributed to the clinician within ASM. The
commenter expressed concerns that applying these measures to all heart
failure patients could increase reporting burden, while limiting them
to attributed patients may result in issues with sample size and
representativeness.
Response: We appreciate the comment requesting clarification on the
scope of the proposed measures in the ASM heart failure quality measure
set. The medication measures (ACE Inhibitor or ARB or ARNI Therapy for
LVSD and Beta-Blocker Therapy for Left Ventricular Systolic
Dysfunction) are all-payer measures, meaning they are reported
regardless of insurance type for those patients that they apply to. We
believe this approach is important because it allows full
representation of an ASM participant's care across their entire patient
panel, provides more stable denominators for meaningful measurement,
enables streamlined workflows for reporting, and delivers improved
quality insights. While we understand the concerns about potential
reporting burden when applying measures to all heart failure patients
under a clinician's care, we believe that the benefits of comprehensive
measurement outweigh these concerns. The all-payer approach ensures
that quality assessment reflects the totality of care provided by ASM
participants rather than being limited to a subset that may not be
representative of their overall practice patterns. Additionally, this
approach addresses the sample size and representativeness issues that
could arise from limiting measurements to only attributed patients,
which could result in unreliable or skewed performance data.
Comment: A commenter recommended that CMS clarify whether heart
failure patients without a confirming echocardiogram would be excluded
from the proposed ASM heart failure quality measure set, noting that
attributing such patients to specialists without definitive diagnostic
confirmation would be inappropriate.
Response: To clarify for the commenter, each measure includes
specific inclusion criteria that determine which portion of the
participant's patient panel is included in the denominator or numerator
for that particular measure. The measures do not universally require
verification that the patient has heart failure with a confirming
echocardiogram as part of
[[Page 49616]]
their standard specifications. We believe the all-payer and patient
panel approach of the measures is appropriate as it allows the measures
to comprehensively assess provider quality across their entire relevant
patient population. Each measure has been rigorously tested for
reliability and validity in the specific population it targets, and
modifying these specifications to look exclusively for heart failure
patients with a confirming echocardiogram would jeopardize the
measures' established validity and reliability. The inclusion criteria
for each measure are designed to identify the appropriate patient
population based on the clinical evidence and methodology that supports
that specific measure. This approach ensures that quality assessment
reflects real-world clinical practice patterns while maintaining the
scientific integrity of the measurement tools. After reviewing public
comments, we are finalizing the inclusion of Functional Status
Assessments for Heart Failure (MIPS Q377) as proposed at Sec.
512.725(b)(5). We intend to consider re-specification of this measure
into a PRO-PM through future notice-and-comment rulemaking.
(c) Quality Measure Set for the ASM Low Back Pain Cohort
We proposed at Sec. 512.725(c)(1) through (5) to include the
following measures in the low back pain quality measure set. Each ASM
low back pain participant must report each finalized measure using one
of the collection types specified in Table B-D4.
(i) Magnetic Resonance Imaging (MRI) Lumbar Spine for Low Back Pain,
Respecified To Be Relevant to ASM Participants Treating Low Back Pain
We proposed to include a respecified MRI Lumbar Spine for Low Back
Pain measure in the low back pain quality measure set. We believe this
administrative claims-based measure can effectively assess overuse and
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.\207\ 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, despite the lack of
clear indication.\208\ 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.209 210 By including this measure in the low back
pain quality 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.
---------------------------------------------------------------------------
\207\ 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.
\208\ 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.
\209\ 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.
\210\ 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.
---------------------------------------------------------------------------
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).\211\ 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.
---------------------------------------------------------------------------
\211\ Hospital Outpatient Quality Reporting [verbar] Partnership
for Quality Measurement. P4qm.org. Published 2025. Accessed April
23, 2025. https://p4qm.org/taxonomy/term/216.
---------------------------------------------------------------------------
We solicited comments on the re-specification and inclusion of MRI
Lumbar Spine for Low Back Pain measure in the low back pain quality
measure set.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters expressed concerns about the proposed
MRI Lumbar Spine for Low Back Pain measure in the ASM low back pain
measure set. A few commenters did not support the inclusion of the
measure, noting the measure is still in development resulting in
limited insight into the measure specifications. A few commenters
recommended that CMS defer the inclusion until the measure is fully
developed, clinically vetted, and made available for public review. A
few commenters noted that the measure was previously removed from the
Hospital Outpatient Quality Reporting program due to stable performance
and low average volumes, as well lack of alignment with current
clinical guidelines. A commenter recommended CMS to clarify the
timeline for measure development and validation. Another commenter
expressed concern that the measure could inappropriately drive
clinicians to focus narrowly on reducing utilization, rather than
ensuring appropriate and timely imaging when clinically indicated. The
commenter recommended that CMS replace the proposed MRI Lumbar Spine
for Low Back Pain measure with the Falls: Plan of Care measure. A few
commenters recommended CMS to clarify attribution and reporting
requirements for the measure. A commenter recommended that CMS provide
specifications for MRI utilization and identify high-risk medications.
Another commenter expressed concern that the measure would not
accurately reflect the quality of care or be applicable to all ASM low
back pain cohort participants.
Response: We appreciate the commenters for their feedback regarding
the proposed MRI Lumbar Spine for Low Back Pain measure in the ASM low
back pain quality measure set. Based on this feedback, we are not
finalizing the MRI Lumbar Spine for Low Back Pain measure in the ASM
low back pain quality measure set at this time. We are continuing to
explore this measure and/or other measures focused on low back pain
low-value care that are claims-based for inclusion by the January 1,
2027 ASM start date. We will propose the measure we would like to move
forward with through future notice-and-comment rulemaking. We believe
that, given our intention to use an administrative claims-based
measure, which limits participant burden, indicating the measure and
specifications during the CY 2027 PFS notice of public rulemaking would
[[Page 49617]]
provide ample time for participants to prepare for implementation. We
acknowledge the concerns raised about measure development status,
clinical validation, and the need for public review, as well as the
feedback regarding the measure's previous removal from other quality
reporting programs. Our commitment is to ensure that any low-value care
measure we ultimately include will be fully developed, clinically
appropriate, and aligned with current evidence-based guidelines. We
will continue to work with clinical experts and interested parties to
identify the most appropriate and effective measure while ensuring that
clinically indicated care is not compromised.
Comment: A commenter recommended that CMS re-specify the proposed
MRI Lumbar Spine for Low Back Pain measure in the ASM low back pain
quality measure set, noting that the measure should evaluate care based
on specific lumbar spine diseases or conditions, including lumbosacral
and sacroiliac conditions, rather than grouping all chronic low back
pain patients together. The commenter also recommended that CMS provide
a list of ICD-10 codes that would trigger a ``non-specific low back
pain'' classification, as well as the CPT codes included within the
non-specific low back pain group.
Response: We appreciate the commenter's feedback on the proposed
MRI Lumbar Spine for Low Back Pain measure in the ASM low back pain
quality measure set. We are not finalizing the inclusion of the MRI
Lumbar Spine for Low Back Pain measure in the ASM measure set at this
time. We intend to revisit this measure or possible alternatives in the
CY 2027 PFS notice of public rulemaking. At that time, we may consider
the recommendation to re-specify the measure to evaluate care based on
specific lumbar spine diseases or conditions, including specific
diagnostic categorizations and appropriate code specifications that
better reflect the clinical nuances of different lumbar spine
conditions.
After consideration of public comments, we are not finalizing
inclusion of Magnetic Resonance Imaging (MRI) Lumbar Spine for Low Back
Pain, Respecified to Be Relevant to ASM Participants Treating Low Back
Pain in the low back pain quality measure set at this time. We intend
to revisit this measure or alternatives in future notice-and-comment
rulemaking.
(ii) Use of High-Risk Medications in Older Adults (MIPS Q238)
We proposed 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.\212\ 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 adults.213 214 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.215 216 217 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 were not prescribed these medications.\218\ 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.\219\ 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 quality 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.\220\ 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 solicited comments on our inclusion of the Use
of High-Risk Medications in Older Adults (MIPS Q238) measure in the ASM
low back pain quality measure set.
---------------------------------------------------------------------------
\212\ 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.
\213\ 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.
\214\ 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.
\215\ 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.
\216\ 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
\217\ 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.
\218\ 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.
\219\ 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.
\220\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters did not support the proposed inclusion
of MIPS Q238: Use of High-Risk
[[Page 49618]]
Medications in Older Adults in the ASM low back pain quality measure
set. A few commenters expressed concern that the measure may unfairly
penalize clinicians for appropriate prescribing of medications and
recommended that CMS monitor the impact of this measure. The commenters
shared their belief that clinicians should be encouraged to
individualize medication regimens relevant to the patient's unique
needs, rather than being penalized for prescribing a ``high risk''
medication. A commenter recommended that CMS should not hold ASM
participants accountable for use of high-risk medications to manage
care for low back pain, noting that these medications are indicative of
patients with a wide range of diagnoses beyond low back pain, are often
prescribed or initiated by a primary care physician rather than
specialists, limiting the specialist's authority to discontinue or
alter those prescriptions. Another commenter recommended that CMS
should test the reliability and validity of the measure at the
individual level prior to its inclusion in ASM, noting that the measure
was developed at the health-plan level and not the individual clinician
level. Another commenter expressed concern that the measure is topped
out.
Response: We appreciate the feedback regarding the proposed
inclusion of MIPS Q238: Use of High-Risk Medications in Older Adults in
the ASM low back pain quality measure set. We want to note that the use
of two or more high-risk medications is a concern for overall health,
and there are not common circumstances in which patients would have
this medication mix and it would be appropriate. This measure has been
extensively reviewed and approved for use because of its ability to
discern inappropriate prescribing patterns. Furthermore, if there were
a rare instance of a medication combination that would be captured in
the numerator of this measure being relevant to a patient, the rest of
the ASM participant's patient panel would balance out this outlier, as
the measure focuses on the total percentage of patients 65 years of age
and older. The measure largely looks for trends in inappropriate
medication use, and providers that would perform the worst are those
who have a significant number of patients on these high-risk
medications.
Regarding concerns that these medications are applicable to several
conditions beyond low back pain, ASM is focused on promoting
accountability of our participants for their patients' whole-person
health. When seeing a patient, the participant should examine the
patient's suite of medications they are on and scrutinize if any are
high-risk, especially given the connection between some of these high-
risk medications, low back pain, and adverse events like falls.
Additionally, if a medication is ordered by a provider who is not the
ASM participant, they would not be penalized based on the measure
methodology.
Regarding reliability at the TIN/NPI level, we note this measure is
currently used in MIPS at the individual clinician level and our model
aims to align with MIPS measures and measurement approaches whenever
possible. While it can also be used to assess health plan performance,
we note that the health plan level is not the only level of reporting
or analysis for the measure. We also believe ASM's minimum case count
criteria for quality measures as described in section
III.C.2.d.(2).(h).(ii) of this final rule will ensure that only
participants that meet the case minimum will be scored on the measure.
Finally, concerning the topped-out status, we believe the mandatory set
of measures in ASM reduces choice compared to MIPS, where providers
could typically report measures on which they perform best. We believe
mandatory reporting could significantly change the distribution of
measure scores and whether the measure would be considered topped-out
in ASM. We refer readers to section III.C.2.d.(2).(i).(iii) of this
final rule for further discussion on topped-out measure status in ASM.
Comment: A commenter shared their belief that pharmacists are
essential in ensuring patients receive medications that best align with
their treatment plan under the proposed MIPS Q238: Use of High-Risk
Medications in Older Adults measure in the ASM low back pain quality
measure set and recommended that CMS include pharmacists in the ASM, as
many of the proposed measures are applicable to them.
Response: We appreciate this comment regarding the important role
of pharmacists in medication management and patient care. While ASM
does not include pharmacists as ASM participants, we recognize that to
succeed, participants would ideally connect with pharmacists and
collaborate on optimizing patient care. We believe the overall
incentive approach of the model ensures discussion and coordination
with the overall care team, which may include a pharmacist. The quality
measures, including MIPS Q238: Use of High-Risk Medications in Older
Adults, are designed to encourage ASM participants to take a
comprehensive approach to patient care that naturally involves
collaboration with other healthcare professionals who can contribute to
better outcomes. This collaborative approach aligns with our broader
goals of promoting coordinated, patient-centered care that leverages
the expertise of all relevant healthcare professionals.
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q238) Use of High-Risk Medications in Older
Adults in the low back pain quality measure set as proposed at Sec.
512.725(c)(1).
(iii) Preventive Care and Screening: Screening for Depression and
Follow-Up Plan (MIPS Q134)
We proposed to including Preventive Care and Screening: Screening
for Depression and Follow-Up Plan (Q134) in the low back pain quality
measure set because patients with chronic pain conditions, such as low
back pain, are at an increased risk of developing depression.\221\
Comorbid depression can negatively impact quality of life, treatment
adherence, and overall health outcomes.\222\ 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.\223\ Co-occurring
depression has also been found to worsen low back pain outcomes and
increase health care costs.\224\ 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 quality 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
[[Page 49619]]
health, prevent worsening of a patient's health status, and improve
overall outcomes.225 226 We sought 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 quality
measure set.
---------------------------------------------------------------------------
\221\ 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.
\222\ 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.
\223\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
\224\ 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.
\225\ 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.
\226\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed inclusion of MIPS
Q134: Preventive Care and Screening: Screening for Depression and
Follow-Up Plan measure in the ASM low back pain quality measure set,
noting that depression can exacerbate pain and negatively affect
function, treatment adherence, and overall health outcomes. A commenter
shared their belief that this measure would encourage providers to
prioritize mental health screening and follow-up care. Another
commenter recommended CMS to clarify whether the proposed measure
aligns with the Universal Foundation.
Response: We appreciate the support for the proposed inclusion of
MIPS Q134: Preventive Care and Screening: Screening for Depression and
Follow-Up Plan measure in the ASM low back pain quality measure set. We
believe it is vital to whole-person low back pain care, as depression
can exacerbate pain and negatively affect function, treatment
adherence, and overall health outcomes. This measure encourages
providers to prioritize mental health screening and follow-up care,
which is essential for comprehensive pain management. This measure does
align with the CMS Universal Foundation's and our model aligns with the
Center's focus on prevention, wellness, and chronic disease management
across CMS programs.
Comment: A few commenters did not support the proposed inclusion of
MIPS Q134: Preventive Care and Screening: Screening for Depression and
Follow-Up Plan measure in the ASM low back pain quality measure set,
noting that screening for depression is not specific to patients with
low back pain and could also be applied to more diverse patient
populations and expressed concern that some clinicians, specifically
anesthesiologists and orthopedic surgeons, do not routinely screen for
depression. Another commenter shared their belief that using broadly
applicable measures for the ASM low back pain cohort illustrates CMS'
challenges to create a one-size-fits-all measure set, noting that these
measures generally would not lead to meaningful comparisons of
clinicians across different specialties and subspecialties.
Response: We acknowledge the comments regarding the proposed
inclusion of MIPS Q134: Preventive Care and Screening: Screening for
Depression and Follow-Up Plan measure in the ASM low back pain quality
measure set. While the measure is not exclusive to low back pain, we
described in the CY 2026 PFS proposed rule (90 FR 32589 through 32594)
how a significant portion of patients who have low back pain also
experience depression and that there is an established connection
between depression and low back pain. While some specialties may not
routinely conduct these screening, we are purposefully incentivizing
this activity to occur in ASM to improve whole-person care for low back
pain patients. We believe that participants meeting our criteria for
inclusion treat enough patients with low back pain that they should be
routinely exploring this comorbid condition as part of comprehensive
care. The model is limited by the measures available in existence, and
we also took several steps to ensure alignment across CMS programs
(like MIPS) to reduce administrative burden on providers. However, we
believe that each measure is clinically important to the conditions we
are focusing on and, therefore, believe they create a cohesive set that
can appropriately identify differences in physician performance and
promote quality improvement. We believe that encouraging this practice
across different specialties will ultimately lead to improved patient
outcomes for those suffering from low back pain.
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q134) Preventive Care and Screening: Screening
for Depression and Follow-Up Plan in the low back pain quality measure
set as proposed at Sec. 512.725(c)(2).
(iv) Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-Up Plan (MIPS Q128)
We proposed to including the Preventive Care and Screening: Body
Mass Index (BMI) Screening and Follow-Up Plan (MIPS Q128) measure in
the low back pain quality measure set because obesity can predispose
patients to and exacerbate chronic low back pain.227 228
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 quality 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 sought 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
quality measure set.
---------------------------------------------------------------------------
\227\ 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.
\228\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter supported the proposed inclusion of MIPS Q128:
Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-Up Plan in the ASM low back pain quality measure set, noting
that including the measure with weight management strategies could help
reduce low back pain as obesity is a modifiable risk factor which may
exacerbate chronic low back pain.
Response: We appreciate and agree that this measure can be
beneficial for patients with low back pain. The inclusion of MIPS Q128:
Preventive Care and Screening: Body Mass Index (BMI) Screening and
Follow-Up Plan in the ASM low back pain quality measure set recognizes
the important connection between obesity and chronic low back pain. We
agree that obesity is a modifiable risk factor that may exacerbate
chronic low back pain, and incorporating weight management strategies
through BMI screening and
[[Page 49620]]
follow-up planning can help reduce pain and improve patient outcomes.
Comment: A few commenters did not support the proposed inclusion of
MIPS Q128: Preventive Care and Screening: Body Mass Index (BMI)
Screening and Follow-Up Plan in the ASM low back pain quality measure
set. A commenter shared their concerns that using BMI as the sole
indicator for screening and follow-up is not aligned with current
clinical understanding. Another commenter recommended that the measure
be revised to incorporate more meaningful and individualized indicators
of health risk, noting concerns that BMI is an outdated and overly
simplistic tool. Another commenter expressed concern that BMI screening
is not routinely reported by some specialists, specifically
anesthesiologists. A commenter expressed concern that the current
measure specifications apply for larger patient populations, rather
than just patients with low back pain. Another commenter expressed
concern that the measure does not appropriately address the desired
outcome of holding patients accountable for meeting their weight loss
goals and recommended CMS to incentivize weight-loss programs and
reimbursement for counseling or nutrition services for motivating
patients to lose weight.
Response: We appreciate the comments regarding the proposed
inclusion of MIPS Q128: Preventive Care and Screening: Body Mass Index
(BMI) Screening and Follow-Up Plan in the ASM low back pain quality
measure set. As we described in the CY 2026 PFS proposed rule (90 FR
32589 through 32594), while the measure is not specific to low back
pain patients, a significant portion of patients have low back pain and
there is a well-documented connection between elevated BMI and low back
pain, including increased pain severity, functional disability, and
treatment complexity. Clinical evidence demonstrates that excess weight
places additional mechanical stress on the spine and can contribute to
inflammatory processes that exacerbate pain conditions. While some
specialties do not routinely conduct these screenings, we are
purposefully incentivizing this activity in ASM to improve whole-person
care for low back pain patients. We believe participants meeting our
criteria for inclusion treat enough patients with low back pain that
they should be routinely exploring this comorbid condition as part of
comprehensive care management. This approach recognizes that effective
low back pain treatment often requires addressing underlying
contributing factors rather than focusing solely on symptom management.
We also do not see harm in this measure reaching beyond the low back
pain population as BMI screening activity is widely applicable and may
positively impact other conditions commonly managed by these providers,
including cardiovascular disease, diabetes, and other musculoskeletal
conditions. The model is limited by the measures available in
existence, and we also took several steps to ensure alignment across
CMS programs, like MIPS, to reduce administrative burden on providers
while maintaining clinical relevance.
Regarding concerns about BMI as a screening tool, we acknowledge
the ongoing clinical discussions about BMI limitations and the
evolution toward more individualized health risk indicators. However,
BMI remains a widely accepted, standardized, and practical measure
across healthcare settings that provides valuable population-level
health information. The measure focuses on screening and follow-up
planning rather than BMI as the sole determinant of health risk,
allowing providers flexibility in developing individualized treatment
approaches based on comprehensive patient assessment. The model does
allow participants to provide beneficiary incentives that could be used
to improve care outcomes, including those related to BMI management,
weight loss programs, and comprehensive lifestyle interventions. We
refer readers to section III.C.2.k.(1) of this final rule for further
information on beneficiary incentives. These incentives can support
patient accountability and engagement in weight management goals while
providing resources for counseling and nutrition services as
recommended by commenters. Additionally, other CMS programs and
Innovation Center models, aligning with the prevention focus of CMS,
encourage these screening activities and offer possibilities for
improvement in patient outcomes through early identification and
coordinated intervention strategies.
Comment: A commenter requested clarification on how ASM
participants that are part of a group would ``count'' a patient when
reporting this measure. For example, they noted that if each clinician
must report their own measures, the EHR may require each clinician to
document a BMI screening for the same patient, even if it was already
done by another clinician the day before. This could lead to the
patient having to undergo the same screening and counseling twice,
which is redundant. Alternatively, if a practice reports quality
measures as a group, once a BMI screening is documented for a patient,
regardless of which clinician did it, the EHR will recognize the
measure has been met and other clinicians in the group will not be
prompted to repeat the BMI screening for the same patient within the
same reporting period.
Response: We appreciate the commenter's request for clarification
on how ASM participants within group practices would report the MIPS
Q128: Preventive Care and Screening: Body Mass Index (BMI) Screening
and Follow-Up Plan measure. This is an important operational question
that affects both provider workflow and patient experience. The BMI may
be documented in the medical record of the provider or in outside
medical records obtained by the provider. Per the measure
specifications, the measure only requires a BMI documented during the
current encounter or during the measurement period AND who had a
follow-up plan documented if BMI was outside of normal parameters.\229\
Therefore, the screening should not need to be repeated. If the BMI is
documented in the patient's chart, the BMI screening will not need to
be repeated for the provider to get credit for this measure, addressing
concerns of duplication of efforts.
---------------------------------------------------------------------------
\229\ 2025 MIPS Q128: Preventive Care and Screening: Body Mass
Index (BMI) Screening and Follow-Up Plan Measure Specifications.
https://qpp.cms.gov/docs/QPP_quality_measure_specifications/CQM-Measures/2025_Measure_128_MIPSCQM.pdf.
---------------------------------------------------------------------------
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q128) Preventive Care and Screening: Body Mass
Index (BMI) Screening and Follow-Up Plan in the low back pain quality
measure set as proposed at Sec. 512.725(c)(3).
(v) Functional Status Change for Patients With Low Back Impairments
(MIPS Q220)
We proposed to include the Functional Status Change for Patients
with Low Back Impairments (MIPS Q220) measure in the ASM low back pain
quality 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
[[Page 49621]]
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.\230\ 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.231 232 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 sought comment on our proposal to include
the Functional Status Change for Patients with Low Back Impairments
(MIPS Q220) measure in the low back pain quality measure set.
---------------------------------------------------------------------------
\230\ 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.
\231\ North American Spine Society. Clinical Guidelines for
Multidisciplinary Spine Care: Diagnosis and Treatment of Low Back
Pain. North American Spine Society; 2020.
\232\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters did not support the proposed inclusion
of MIPS Q220: Functional Status Change for Patients with Low Back
Impairments in the ASM low back pain quality measure set, noting
concerns that while Focus on Therapeutic Outcomes, Inc (FOTO) permits
free access to components of the measure, the website's functionality
is not interoperable with clinicians' chosen health IT systems and
leading to a disjointed and labor intensive manual process, requiring
the licensed FOTO's tools to report measure data and increasing
reporting burden and costs for both clinicians and vendors. The
commenters expressed concern that it could disadvantage small or rural
practices due to limited or no access to FOTO's systems. The commenters
noted that CMS should consider only including eCQMs in ASM and
recommended that CMS should wait until an eCQM has been developed for
the measure. A few commenters did not support the measure, noting its
reliance on the FOTO Low Back Functional Status PRO-PM. A commenter
expressed concerns with the risk-adjustment algorithm, noting it is
proprietary and undisclosed, restricting clinicians to replicate or
validate results. Another commenter noted that the FOTO Low Back Status
PRO-PM tool is not used by neurosurgeons, who instead commonly use
tools such as the Oswestry Disability Index. A few commenters expressed
concern regarding the measure's reliability and validity as it was last
reviewed for endorsement maintenance in 2019. The commenters also
shared their concern that the measure was originally developed to
evaluate quality of care for physical therapists, chiropractors, and
other nonphysician practitioners, who are excluded from ASM. The
commenters also expressed concern that the measure focuses primarily on
rehabilitation services rather than care provided by other specialties,
such as neurosurgery. They also noted that these specialties may need
to interface with a new system outside of their usual workflows and
EHRs to report data for this measure. A few commenters also noted that
the measure is defined using a different set of diagnosis codes than
those used for the Low Back Pain EBCM. A few commenters noted that the
measure relies on the FOTO Low Back Patient-Reported Outcome tool, and
it is not clear whether this survey aligns with the Oswestry Disability
Index, which is referenced in the measure's justification. A commenter
noted that it requires both the initiation and completion of a
functional status episode within a single calendar year, while care
episodes for low back pain often span multiple calendar years. Another
commenter noted that the measure is not reported in significant numbers
by certain specialists, specifically anesthesiologists. Another
commenter recommended that CMS should not include any patient reported
outcome measure that is beyond a clinician's control. A commenter
shared their belief that low back pain patients may require more than
180 days for meaningful improvement, based on disease severity and
comorbidities, and recommended that the measure timeframes
appropriately account for these factors.
Response: We appreciate the comments regarding burden and concerns
related to the survey tools for functional status assessment in low
back pain patients under MIPS Q220: Functional Status Change for
Patients with Low Back Impairments. We understand the operational
challenges raised by commenters regarding system interoperability and
the potential impact on smaller practices and believe our flexibility
for small practices to report quality measures in the quality ASM
performance category at the TIN-level, as further described in section
III.C.2.d.(1).(b)., help address this concern. We chose not to restrict
the measure to eCQMs specifically to allow greater flexibility to
participants in selecting appropriate assessment tools that best fit
their practice workflows and patient populations. While we acknowledge
the concerns about FOTO's system integration challenges, the measure
allows multiple validated survey instruments to satisfy reporting
requirements, so it is not limited solely to FOTO tools. The Oswestry
Disability Index, which several commenters noted as commonly used by
neurosurgeons, is an appropriate and accepted tool under this measure's
specifications. This flexibility in tool selection addresses many of
the commenters' concerns about being restricted to a single proprietary
system.
We believe this measure and the tools included are clinically
appropriate and methodologically sound, given their established use in
MIPS and their demonstrated validity in assessing patient functional
status and promoting clinical improvement. The measure has undergone
rigorous evaluation processes, and while the last formal endorsement
review was in 2019, we believe the underlying clinical principles and
measurement approaches remain current with accepted standards of care
for functional assessment in low back pain management. Regarding
concerns that the measure was
[[Page 49622]]
originally developed for rehabilitation services, we believe the
measure's focus on functional improvement is relevant across
specialties, as neurosurgeons, anesthesiologists, and other specialists
all contribute to patients' functional recovery, even if through
different intervention modalities.
By requiring this measure in ASM, we ensure that functional status
outcomes are reported adequately and allow for like-to-like comparisons
across ASM participants and specialties. This standardized approach is
essential for meaningful quality assessment and improvement
initiatives. The model's five-year test period provides sufficient time
for patient improvement to be reflected year-to-year or over the
model's five-year duration, which would accommodate the longer recovery
timelines that some commenters noted may be necessary for complex low
back pain cases. Regarding concerns about episodes spanning multiple
calendar years, the measure methodology accounts for these clinical
realities while maintaining the integrity of annual reporting cycles.
For specialists who may not currently report this measure in
significant numbers, ASM provides an opportunity to establish baseline
performance and drive improvement in functional outcome assessment
across all participating specialties. The inclusion of patient-reported
outcome measures reflects our commitment to patient-centered care and
recognizes that functional improvement is a critical indicator of
treatment success that should be within the influence of all ASM
participants, regardless of their specific intervention approach.
Comment: A few commenters offered recommendations on the proposed
inclusion of MIPS Q220: Functional Status Change for Patients with Low
Back Impairments in the ASM low back pain quality measure set. A
commenter recommended that CMS work with the measure steward to improve
ease of access and interoperability for clinicians and HIT vendors to
program the necessary measure components into their systems. The
commenter also recommended re-specifying the measure to remove the FOTO
Lumbar PRO-PM and instead use an alternative modern measurement
science-based PRO-PM that has fewer proprietary restrictions on
interoperability and use within HIT systems, such as the PROMIS
Physical Function or the PROMIS Pain Interference. A commenter
recommended CMS to clarify the measure specifications as the proposed
rule language references the use of Oswestry Disability Index instead
of the Modified Oswestry Disability Index for the MIPS Q220 measure,
noting concerns that these versions are not interchangeable. Another
commenter shared their belief that clinicians not currently using FOTO-
supported platforms may face technical and operational challenges in
adopting the measure which may introduce complexity in terms of
governance, licensing, and implementation and recommended that CMS
clarify whether it intends to reconfigure the measure into a PRO-PM;
how it plans to engage with non-CMS measure stewards ; and the timeline
and process for testing and validation.
Response: We appreciate the recommendations regarding the inclusion
of MIPS Q220: Functional Status Change for Patients with Low Back
Impairments in the ASM low back pain quality measure set. We believe
the January 1st, 2027 start date should provide adequate lead time for
participants to update their systems, enhance their measure reporting
capabilities, and work with their vendors as needed.
While we appreciate the recommendations for changing measures or
re-specifying to use alternative PRO-PMs such as PROMIS Physical
Function or PROMIS Pain Interference, we will adhere to the existing
MIPS specifications to ensure alignment with MIPS, thereby reducing
burden caused by model-specific measures and specifications. The latest
specifications for the MIPS Q220 measure should be referenced as the
source of truth for which survey instruments are appropriate.
Importantly, the MIPS Q220 measure includes the FOTO Low Back
Functional Status PROM/FOTO Public Access Survey, which is available
free of charge for use in individual clinical practice. Additionally,
there is a validated crosswalk available from the Modified Oswestry
Disability Index for participants who prefer to use this alternative
tool, which has been tested for reliability and validity.
We recognize the potential effort that further implementing this
measure may introduce, but it is vital to the integrity of the model as
it represents our best outcome measure available for low back pain.
These measurement activities should be occurring to ensure
improvement in patient outcomes, and therefore we will include the
measure in our set. We believe that the January 1st, 2027 start date
and any support we may provide to enhance adoption during this period
before model start will address the primary concerns raised by
commenters, particularly given the availability of free tools and
validated crosswalks that reduce barriers to implementation.
Comment: A few commenters supported the proposal to include the
measure MIPS Q220: Functional Status Change for Patients with Low Back
Impairments in the ASM measure set, noting that tracking and assessing
a patient's functional status over time is a patient-centered way to
reward meaningful improvement for ASM participants. A commenter
specifically noted several advantages of the measure, including its
non-condition-specific design, allowing clinicians to select validated
measures appropriate to their clinical workflows; established
implementation in EHRs and registries, reducing technical and
operational burden; and alignment with existing quality initiatives,
making it easier for providers to integrate into current reporting
structures.
Response: We appreciate the support and feedback regarding the
inclusion of MIPS Q220: Functional Status Change for Patients with Low
Back Impairments in the ASM measure set. We are pleased that commenters
recognize the patient-centered value of tracking functional status over
time as a meaningful way to reward improvement for ASM participants.
The advantages highlighted by commenters reinforce our belief that
this measure will enhance care delivery within ASM and beyond, focusing
on prevention and functional status improvement that directly benefits
patients with low back pain.
After consideration of public comments, we are finalizing the
inclusion of the MIPS Q220: Functional Status Change for Patients with
Low Back Impairments in the low back pain quality measure set as
proposed at Sec. 512.725(c)(4).
We also received broad feedback regarding the low back pain quality
measure set. The following is a summary of the comments we received and
our responses
Comment: Several commenters expressed concerns about the proposed
inclusion of proprietary measures in ASM that are controlled by private
vendors, rely on non-transparent instruments or risk adjustment
methods. A commenter expressed concern that requiring measures with
proprietary dependencies undermines transparency, equity, and
scalability and conflicts with CMS' own standards to avoid measures
with misleading or inaccurate results. Another commenter recommended
that the proposed ASM measures must be transparent, reproducible, and
broadly accessible
[[Page 49623]]
and that CMS should not use measures that are dependent on closed tools
or private algorithms. The commenters specifically highlighted the
proposed measures MIPS Q220: Functional Status Change for Patients With
Low Back Impairments and MIPS Q503: Patient Activation Measure (PAM) as
proprietary measures and recommended that CMS remove these measures
from the ASM low back pain quality measure set unless all PRO-PM items,
scoring rules, and risk-adjustment models are fully disclosed and
publicly available. A commenter also recommended that if these measures
are finalized, CMS should permit alternatives or substitutions with
open measures of functional status and patient engagement supported in
certified health IT. Another commenter recommended that CMS prioritize
validated, accessible tools that do not require licensing fees, such as
the Modified Oswestry Disability Index or the PROMIS Global10.
Response: We appreciate the feedback on the proprietary nature of
some measures. We would like to note that MIPS Q220: Functional Status
Change for Patients With Low Back Impairments, while it uses a
proprietary tool, has a version of the tool available free of charge
for individual clinical practices. The survey tool used by the measure
also includes a free crosswalk from the Modified Oswestry Disability
Index, addressing concerns related to the ability to use multiple
validated instruments.
Additionally, we are not including PAM measures in the final ASM
measure set, so the proprietary nature of this measure is not an issue
for the model. We believe we have included only measures that make the
most clinical sense and create a holistic view of a participant's care
furnished to patients. We also believe these measures will help promote
improvement in certain areas, such as comorbid conditions related to
low back pain.
Regarding alternatives, we purposefully created a mandatory set of
measures in ASM that all participants will report. This will enable
like-to-like comparison and accountability for the same activities.
This standardized approach ensures consistent quality measurement
across all ASM participants while maintaining the clinical integrity of
the model.
Comment: Several commenters generally expressed their support for
the proposed ASM low back pain quality measure set. The commenters
shared their belief that the proposed measure set aligns with modern,
evidence-based guidelines, focuses on promoting high-value care by
discouraging the use of low-value imaging, fostering patient-
centeredness by incorporating the patient's voice through patient-
reported outcome performance measures (PRO-PMs), promoting functional
status and patient self-efficacy, and drawing attention to impactful
co-factors, such as depression, that should be clinically managed to
help achieve optimal chronic low back pain outcomes. A commenter
specifically supported the proposed PRO-PMs, noting that they elevate
patient voice and incentivize clinicians to be more responsive to the
treatment outcomes.
Response: We appreciate the strong support for the proposed ASM low
back pain quality measure set. We are encouraged that interested
parties recognize the alignment with evidence-based guidelines and the
focus on high-value care delivery.
Comment: Several commenters recommended that CMS include other
quality measures in the ASM low back pain quality measure set. A few
commenters recommended that CMS adopt functional-status PRO-PMs for low
back pain with remote capture, such as the PROMIS Physical Function or
Oswestry Disability Index for low back pain functional outcomes. A
commenter specifically stated that remote PRO-PMs reduce documentation
burden, improve completion rates, and are more equitable for
beneficiaries with mobility or transportation barriers. The commenter
also recommended that CMS recognize FHIR-enabled, application-based
PROMIS capture and acceptance of patient-entered data into certified
EHRs which aligns with ASM's interoperability aims. A commenter
recommended that CMS adopt and re-specify the MSK-3 measure for this
measure set, noting that the MSK-3 measure utilizes PROMIS Pain
Interference, which would offer significant benefits, such as enabling
cross-cutting comparability of results across diverse patient
populations and care settings that are not limited solely to low back
pain. The commenter shared their belief that this measure is an outcome
measure, may result in better performance than a process measure, would
reduce patient response burden while maintaining optimal reliability
and validity through use of existing ``short-form'' versions. Another
commenter recommended that CMS include a measure on physical therapy
referrals to incentivize access to high value services for patients
with low back pain. The commenter noted that the measure would decrease
the use of more costly, low-value, testing and interventions such as
imaging, injections surgery, and opioids, reduce the overall cost of
managing low back pain, and improve patient outcomes. A few commenters
recommended that CMS include measures to assess lifestyle
interventions. A commenter recommended measures on pain management
effectiveness and care coordination. Another commenter recommended that
CMS use the CAHPS for MIPS survey to better measure patient experience
and capture domains, such as patient communication, care coordination,
and shared decision-making.
Response: We appreciate these recommendations for additional
quality measures in the ASM low back pain quality measure set. We have
carefully considered these measures during model development and
decided that the current proposed set represents the best approach to
target the condition specifically, minimize burden on providers,
support alignment with other CMS programs, and achieve our broader
model objectives.
Several of the general domains recommended by commenters are
already covered by our measures in different but effective ways. For
example, our inclusion of MIPS Q220: Functional Status Change for
Patients with Low Back Impairments addresses the functional status
outcomes that commenters sought through PROMIS Physical Function or
Oswestry Disability Index measures, while maintaining alignment with
existing MIPS specifications. This measure captures patient-reported
functional improvements over time, which is fundamental to assessing
the effectiveness of low back pain treatment.
The patient experience domains highlighted by commenters, including
patient communication, care coordination, and shared decision-making
are integral to the patient-reported outcome measures we have included
and will be further supported through the model's emphasis on care
coordination and patient engagement activities. We believe our overall
ASM measurement approach, which combines targeted quality measures with
improvement activities and cost accountability, will effectively meet
the goals of promoting high-value, patient-centered care while reducing
the administrative burden on ASM participants.
While we recognize the potential benefits of remote PRO-PM capture
and FHIR-enabled applications, our current approach balances innovation
with implementation feasibility during the model's initial years. We
will continue
[[Page 49624]]
to evaluate opportunities to enhance our measurement approach as health
IT capabilities evolve and as we gain experience with the model's
implementation.
Comment: Many comments generally expressed concern about the
proposed ASM low back pain quality measure set. A few commenters shared
their concern that many of the proposed measures were designed for
therapists, chiropractors, and other non-physician practitioners and
are not reflective of the specialties included in the ASM low back pain
cohort, such as physiatry, surgery or anesthesiology. A commenter
expressed concern that anesthesiologists have a limited set of relevant
quality measures in MIPS and further noted that the proposed measures
in the ASM low back pain cohort are either not top-performing or not
commonly used by anesthesiologists. A few commenters also shared their
belief that the proposed measures would not appropriately assess
whether Medicare beneficiaries with low back pain achieve better
outcomes, reflect quality of care provided to patients, or protect
patients from underuse caused by efforts to reduce spending. A few
commenters shared their concern that none of the proposed quality
measures are included in the MIPS Neurosurgery Specialty Set or the
MIPS Orthopedic Specialty Set. A few commenters also expressed concern
that the ASM low back pain quality measure set is skewed to focus more
heavily on a reduction of services and does not include enough patient-
reported outcome measures to assess quality of life, functional status,
and patient-clinician relationships. A few commenters shared their
concern that the proposed measures would focus on younger patients and
all-payer patients rather than being limited to Medicare patients. A
commenter noted that the measures would not be relevant to ASM
participants' practices or the care they provide. Another commenter
noted that the proposed measure set relies heavily on process-based
measures and quality measures that would not foster holistic, patient-
centered improvements in care. A commenter also expressed concern that
ASM quality measures may discourage clinicians from treating high need
individuals with complex or severe low back pain and may add complexity
to determine ASM financial incentives relevant to outcomes.
Response: We appreciate the feedback regarding the proposed ASM low
back pain quality measure set. We are limited by which measures are
available and validated for the specialists included in the model, and
we believe the selected measures are appropriate for assessing quality
care delivery for patients with low back pain, for multiple
specialties. All-payer measures provide valuable insights into care
quality across diverse patient populations and payer types, which
enhances the robustness and generalizability of our quality assessment
approach. We aimed for alignment with MIPS and MVPs in many areas to
reduce administrative burden and maintain consistency across CMS
quality programs, while also focusing on the measures most pertinent to
low back pain management and outcomes.
We include a low back pain patient-reported outcome measure (PRO-
PM) which is a strong tool for understanding functional outcomes and
patient-centered results that matter most to beneficiaries. This
measure directly addresses concerns about assessing quality of life,
functional status, and patient experience with their care. The measures
include established risk adjustment practices that should ensure
scoring is equitable across different patient populations and practice
settings, and these adjustments are designed to prevent practices from
turning away patients with complex conditions or higher severity. Our
measure set balances process and outcome measures to provide a
comprehensive assessment of care quality while maintaining feasibility
for specialty providers participating in ASM. We believe this targeted
approach will effectively assess whether Medicare beneficiaries with
low back pain achieve better outcomes while supporting the delivery of
high-value, patient-centered care.
Comment: A commenter recommended that CMS limit the proposed
measures to patients who have been in established care for 90-plus days
and exclude patients who are seeking procedural care only. A commenter
recommended that CMS provide a clear set of specific diagnosis codes
and definitions that will be used to determine the denominators for low
back pain measures, which should include a look back period of no more
than 2 years. A commenter expressed concern that applying the proposed
efficiency adjustment to rehabilitative therapy codes may impact
patients with low pain. A commenter recommended that CMS ensure CPT
codes and coverage for therapies, such as aquatic therapy, massage
therapy, and other non-medication, non-procedural treatments, which are
vital for patients with low back pain.
Response: We appreciate the commenters for the feedback regarding
the ASM low back pain quality measures and related concerns. We are
aligning quality measures with the existing inclusion criteria for each
measure that has been thoroughly reviewed for validity. Furthermore,
adjusting the measure specifications would present a significant burden
to practices that already report some of the same quality measures in
MIPS. We refer readers to the publicly available measure specifications
to determine details on diagnosis codes for denominators, as these
specifications provide comprehensive information about the specific
codes and definitions used for each measure. ASM does not have a
proposed adjustment to rehabilitative therapy codes, as the model
focuses on quality measurement and cost accountability rather than
modifying existing payment structures for specific service categories.
ASM does not change which services are covered under Medicare, so all
therapies typically covered for patients continue to be available to
beneficiaries. The model's focus is on improving the quality and
efficiency of care delivery while maintaining access to the full range
of appropriate treatment options for patients with low back pain.
Comment: A few commenters recommended the use of objective pain
data and databases for measurement in the ASM low back pain cohort. The
commenters shared their belief that CMS would need access to existing
objective pain databases in order to measure an individual's pain
objectively and ensure cost-effective care. A commenter shared their
belief that pain data would provide specialists with proper metrics to
help guide the patients' care journey, reduce avoidable
hospitalizations, and provide the right level of care to a patient. The
commenters further shared their belief that pain data can allow
patients to be screened more effectively for coordinated care and be
used as an outcome measure to assess improvement after a procedure or
surgery, noting that incorporating pain data into healthcare practice
would align with ASM goals and contribute to improved outcomes for
Medicare beneficiaries with low back pain.
Response: We appreciate commenters' feedback regarding the use of
objective pain data and databases for measurement in the ASM low back
pain cohort. We believe that our patient-reported outcome measure (PRO-
PM) focused on functional status will help meet these goals of
providing meaningful metrics to guide patient care and assess treatment
effectiveness. We currently do not have an appropriate way to
incorporate pain databases into
[[Page 49625]]
the model without creating undue burden and operational complications
for participants. However, ASM participants can engage in these
activities if they find them clinically meaningful and beneficial for
their patient care, as part of their broader quality improvement
efforts. We appreciate the recognition that pain measurement aligns
with ASM goals, and we believe our functional status PRO-PM will
capture important patient-centered outcomes that reflect the
effectiveness of low back pain treatment while maintaining feasibility
for widespread implementation.
Comment: A commenter recommended that CMS prioritize interested
parties' feedback in measure selection for ASM measure sets. The
commenter suggested that CMS collect patient feedback prior to
finalizing measure sets as it is essential to creating meaningful
measure sets. A commenter also recommended that CMS explore mechanisms
to account for primary care influence in quality metrics.
Response: We appreciate the commenter for the feedback regarding
interested party input and patient feedback in measure selection for
ASM measure sets. We ensure that patient voice and whole person's
health is accounted for in our measure set design and development
process. We believe that including a PROM in each measure set helps to
ensure the patient's perspective is heard and valued in quality
assessment. We also received input from several entities during the
measure development process, including those that represent beneficiary
feedback and patient advocacy perspectives. This interested parties'
engagement was essential to creating meaningful measure sets that
reflect both clinical excellence and patient-centered care priorities.
Our improvement activities strategy is focused on primary care
engagement and collaboration, and that should be reflected in the model
through this mechanism. These activities are designed to promote
coordination between specialty care providers and primary care teams,
ensuring that patients receive comprehensive, well-coordinated care
that addresses their full range of health needs rather than focusing
solely on the specialty condition being managed under ASM.
After consideration of public comments, we are finalizing the
inclusion of the (MIPS Q220) Functional Status Change for Patients with
Low Back Impairments in the low back pain quality measure set as
proposed at Sec. 512.725(c)(4).
(d) Other Measures Under Consideration
(i) Patient Activation Measure (PAM) (MIPS Q503)
We sought comments on whether the Patient Activation Measure (PAM)
(MIPS Q503) would be appropriate to include in both the heart failure
and low back pain quality 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 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.\233\ Furthermore, higher levels of patient
activation have been associated with better health behaviors, such as
physical activity, and improved mental health outcomes.\234\ 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 quality measure sets.
---------------------------------------------------------------------------
\233\ 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.
\234\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported the proposed inclusion of
MIPS Q503: Patient Activation Measure (PAM) in the ASM quality measure
set. These commenters noted that this measure is a valuable outcome
measure that can help predict and assess health, utilization, and cost.
They believed that this measure would help patients become more
empowered and engaged in their care, improve self-management skills,
and promote shared decision-making between patients and clinicians. A
few commenters stated their belief that the measure has been used in
various and diverse settings, including the Kidney Care Choices Model,
to understand risk, support disease management and care, allocate
resources, and improve equity. A few commenters stated that PAM is the
only validated tool that comprehensively assesses patients' knowledge,
skills, and confidence in managing their health that has been endorsed
by the Consensus-Based Entity. A few commenters also noted that the PAM
imposes minimal operational burden relative to its value in clinical
care and that it would provide CMS with a parsimonious and consistent
measurement approach across model cohorts and other quality programs.
Specifically, a commenter noted that the measure addition would be
offset by the expected relatively low volume of qualifying episodes,
which will result in a smaller eligible survey population and therefore
reduce reporting burden. A few commenters addressed CMS' concerns about
the PAM being a proprietary measure and stated that CMS uses other
proprietary measures in various other reporting programs. A few
commenters also noted that inclusion of the measure would provide CMS
with a more complete view of patient capacity, complementing rather
than duplicating functional status measures. They also stated that the
measure enables clinicians to tailor education and support individual
patient needs. A commenter recommended that CMS should not focus so
heavily on reporting burden and that CMS could reduce the burden of the
PAM by removing other proposed quality measures while another commenter
noted that the PAM is aligned with the CMS Innovation Center 2025
Strategy to Make America Healthy Again.
Response: We appreciate the thoughtful comments that supported the
inclusion of MIPS Q503: Patient Activation Measure (PAM) in the ASM
quality measure set. We recognize the value that commenters see in PAM
as a tool for assessing patient engagement, self-management skills, and
shared decision-making capabilities.
While we acknowledge the benefits highlighted by commenters, we
believe that adding an additional survey instrument that is not
directly tied to low back pain would weaken our focused measure set and
introduce unnecessary reporting burden. Our goal is to maintain a
streamlined, clinically
[[Page 49626]]
relevant measure set that directly addresses the specific conditions
and outcomes most important to the ASM cohorts.
We want to emphasize that many of the patient engagement and
empowerment benefits noted by commenters regarding PAM will be
addressed in part by ASM's improvement activities and care coordination
requirements. These activities focus on reducing care fragmentation for
patients, improving collaboration between providers, and enhancing
communication with patients. Additionally, ASM's improvement activities
performance category includes health-related social needs screening
requirements, which can promote valuable conversations between
providers and patients and address some of the same patient engagement
aspects as PAM while being relevant and actionable for the clinical
conditions being managed.
Comment: Several commenters did not support the proposed inclusion
of the MIPS Q503: Patient Activation Measure (PAM) because they
believed it would increase burden since patients would have to respond
to ten or more questions and be difficult to implement. A commenter
noted that CMS should wait until data collection is more feasible and
more resources are available to practices to implement the measure.
Another commenter believed that smaller practices may lack the survey
administration, longitudinal tracking, and analytic infrastructure
needed to implement the measure. They also noted that scoring and
submission complexities of the measure may further disadvantage
resource-limited providers. Another commenter did not support the
measure, because they believed it was not tested at the individual
clinician level (TIN/NPI) and that the measure requires too many
patients to meet the minimum reliability level. Additionally, a
commenter recommended utilizing the four-question version of the PROMIS
Self-Efficacy measure, which they believe is more accessible and
interoperable than the PAM. A commenter did not support the measure,
because it has not been validated in spine care or for chronic pain
populations and recommended CMS conduct a pilot of PAM in ASM to assess
feasibility and clinical utility before requiring widespread adoption.
Response: We appreciate commenters for their thoughtful feedback
regarding the proposed inclusion of MIPS Q503: Patient Activation
Measure (PAM) in the ASM quality measure set. We agree with the
concerns raised by commenters about implementation burden and added
survey administration challenges for smaller practices, and are
finalizing the exclusion of the PAM measure from ASM. Our decision
aligns with our goal of implementing a focused, clinically relevant
measure set that minimizes administrative burden while maintaining
meaningful quality measurement.
Based on the feedback, we are not including MIPS Q503: Patient
Activation Measure (PAM) in the heart failure or low back pain quality
measure sets.
(ii) Advance Care Plan (MIPS Q047)
We considered including the Advance Care Plan (MIPS Q047) measure
in the heart failure quality 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 1 month, 86.5 percent at 1 year, and
56.7 percent at 5 years, with elderly patients having lower survival
rates on average.\235\ 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.\236\
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.\237\
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 quality
measure set.
---------------------------------------------------------------------------
\235\ 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.
\236\ 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.
\237\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters did not support the proposed inclusion of
the MIPS Q047: Advance Care Plan measure, because they believed the
measure is burdensome to implement and is better suited for primary
care settings.
Response: We appreciate the feedback regarding the proposed
inclusion of MIPS Q047: Advance Care Plan measure in the ASM quality
measure set. We agree with the concerns raised by commenters about the
implementation burden and the measure's suitability for specialty care
settings.
Comment: A commenter supported the proposed inclusion of the MIPS
Q047: Advance Care Plan measure because they believed that the measure
would result in meaningful positive changes for patients which would
justify any increased burden. The commenter also noted that the
cardiologist is often the most appropriate provider to oversee advance
care planning, since they can become the practical primary provider for
patients with heart failure.
Response: We appreciate the support for including MIPS Q047:
Advance Care Plan measure and the recognition of its potential value
for heart failure patients. However, we are not including this measure
in the ASM quality measure set. At this time, we are concerned about
the implementation burden and want to keep the measure set clinically
focused on the specific conditions being managed under ASM.
We believe that the activities included in the improvement
activities and other elements of ASM designed to improve care
coordination and patient engagement will promote important
conversations like advance care planning between providers and
patients. These elements can facilitate meaningful patient-provider
discussions while maintaining our focus on
[[Page 49627]]
condition-specific quality measures that directly relate to the
clinical care being provided under the model.
After consideration of public comments, we are not including the
MIPS Q047: Advance Care Plan measure in the heart failure quality
measure set.
(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 quality
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.\238\ 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 quality 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 quality measure set.
---------------------------------------------------------------------------
\238\ 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.
---------------------------------------------------------------------------
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters did not support the proposed inclusion of
the MIPS Q484: Admission rates for Multiple Chronic Conditions (MCC)
measure and noted that while this may be a meaningful measure it does
not target patients with heart failure. A commenter noted that the
measure is only endorsed at the group level, and reliability testing
showed results of only 0.413 for practices with at least 15 clinicians
and 18 patients with multiple chronic conditions.
Response: We appreciate commenters' feedback regarding the proposed
inclusion of MIPS Q484: Admission rates for Multiple Chronic Conditions
(MCC) measure in the ASM quality measure set. We agree with the
concerns raised by commenters and are not including this measure in the
heart failure quality measure set. Our goal is to maintain a
streamlined, condition-specific measure set that directly relates to
the care and outcomes most relevant to heart failure management under
the ASM.
After consideration of public comments, we are not including the
MIPS Q484: Admission rates for Multiple Chronic Conditions (MCC)
measure in the heart failure quality measure set.
(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 quality 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.\239\ 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.\240\ 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.\241\ By including this measure in the heart failure
quality 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 quality 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.\242\ We seek comment on
whether the Cardiac Rehabilitation Patient Referral from an Outpatient
Setting measure could be meaningful if included in the heart failure
quality measure set.
---------------------------------------------------------------------------
\239\ Cardiac Rehabilitation Program Coverage. www.medicare.gov.
https://www.medicare.gov/coverage/cardiac-rehabilitation.
\240\ 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.
\241\ 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.
\242\ 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.
---------------------------------------------------------------------------
We received public comments on this proposal. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed inclusion of the
MIPS Q243: Cardiac Rehabilitation Patient Referral from an Outpatient
Setting measure, because they believed it would incentivize
cardiologists and other clinicians to refer eligible patients to
cardiac rehabilitation programs that improve long-term health outcomes,
thereby reducing risk of hospitalizations. A commenter recognized the
challenges in access to cardiac rehabilitation programs but noted that
including the measure would help close gaps in access by ensuring
eligible patients are referred promptly wherever programs exist. They
also recommended that CMS could exempt ASM participants from reporting
the measure if they attest that cardiac rehabilitation programs are
unavailable in their referral region. Another commenter supported the
inclusion of the measure and also recommended that CMS consider the
MIPS Q374: Closing the Referral Loop: Receipt of Specialist Report
measure. The commenters also requested that an eCQM equivalent be made
available. Another commenter recommended that CMS include this
[[Page 49628]]
measure as an optional measure or improvement activity given its strong
clinical value and evidence base.
Response: We appreciate the support expressed by commenters for
including MIPS Q243: Cardiac Rehabilitation Patient Referral from an
Outpatient Setting measure and understand the clinical value they see
in promoting cardiac rehabilitation referrals. We recognize that
cardiac rehabilitation can provide significant benefits for eligible
heart failure patients by improving long-term health outcomes and
potentially reducing hospitalizations. However, after careful
consideration of the feedback and operational realities, we have
decided not to include this measure in the ASM heart failure quality
measure set at this time. While cardiac rehabilitation is clinically
appropriate in some cases of heart failure, it is not indicated for all
heart failure patients, and persistent barriers to access across
different geographic regions would disadvantage providers where these
programs are not readily available. This creates challenges in
establishing a universally applicable measure for ASM participants. The
proposed attestation mechanism would introduce significant operational
burden and administrative complexity that conflicts with our goal of
streamlining quality measurement under ASM. We are committed to
establishing a cohesive set of measures that nearly all ASM
participants can meaningfully report on, ensuring fair and consistent
evaluation across the model. While we cannot include this measure as a
formal quality measure or improvement activity within the ASM
framework, the overall value-based structure of ASM will naturally
incentivize the use of cardiac rehabilitation where it is clinically
reasonable and appropriate for patient care.
Comment: A few commenters did not support the proposed inclusion of
the MIPS Q243: Cardiac Rehabilitation Patient Referral from an
Outpatient Setting measure. Commenters agreed with CMS' concerns
pertaining to access challenges and regional variation in the
availability of cardiac rehabilitation services. They highlighted the
importance of increasing access to cardiac rehabilitation for Medicare
patients before including this measure. A few commenters noted that
some payers do not cover cardiac rehabilitation services. A commenter
believed that access to cardiac rehabilitation is limited, because
nurse practitioners are not authorized to refer patients to these
services.
Response: We acknowledge commenters' feedback regarding the
proposed inclusion of MIPS Q243: Cardiac Rehabilitation Patient
Referral from an Outpatient Setting measure. We agree with the concerns
about access challenges and regional variation in the availability of
cardiac rehabilitation services, and we are finalizing the exclusion of
this measure from the measure set.
We recognize the importance of addressing barriers to cardiac
rehabilitation access, including coverage limitations by some payers
and authorization restrictions for nurse practitioners, before
implementing quality measures that depend on these services. The
regional disparities in program availability would create inequitable
reporting conditions for ASM participants, which conflicts with our
goal of establishing fair and consistent quality measurement across the
model.
After consideration of public comments, we will not include the
MIPS Q243: Cardiac Rehabilitation Patient Referral from an Outpatient
Setting measure in the heart failure quality measure set.
(v) Falls: Plan of Care
We considered including the Falls: Plan of Care measure in the low
back pain quality 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.\243\ 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.244 245 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.\246\ 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.247 248 By
including this measure in the low back pain quality 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 propose to include
the measure in the low back pain quality 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 sought comments on whether the Falls: Plan of
Care measure could be meaningful if included in the low back pain
quality measure set.
---------------------------------------------------------------------------
\243\ 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.
\244\ 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.
\245\ 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.
\246\ 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.
\247\ 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.
\248\ 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.
---------------------------------------------------------------------------
We received public comments on this proposal. The following is a
summary of
[[Page 49629]]
the comments we received and our responses.
Comment: A few commenters did not support the proposed inclusion of
the Falls: Plan of Care measure. These commenters believed that
patients may be at risk of falls for reasons unassociated with the care
provided by ASM participants and that the measure appears to be topped
out according to 2022 Quality Payment Program data.
Response: We appreciate the comment regarding the proposed
inclusion of the Falls: Plan of Care measure. We agree that it is not
the most applicable or appropriate measure for the low back pain
quality measure set, particularly given the concerns raised about
patients being at risk of falls for reasons unassociated with the care
provided by ASM participants. We believe that other activities promoted
in the improvement activities performance category would address
concerns in this area and help reduce falls and other adverse events
through comprehensive care coordination and addressing adjacent social
needs.
Comment: A few commenters supported the proposed inclusion of the
Falls: Plan of Care measure. These commenters noted that this measure
would encourage clinicians to systematically assess patient fall risk
and implement corrective actions to mitigate those risks. Regarding
CMS' concerns that falls in the ASM population may occur for reasons
less directly related to their musculoskeletal condition, the
commenters noted that older adults with a history of back pain are at
significantly higher risk of falls. A commenter specifically
recommended replacing the proposed respecified MRI Lumbar Spine for Low
Back Pain measure with the Falls: Plan of Care measure.
Response: We appreciate the support expressed by commenters for the
Falls: Plan of Care measure and recognize the clinical rationale
regarding fall risk assessment for older adults with back pain.
However, we are not including this measure in the ASM measure set to
maintain a targeted and focused measure set specifically designed for
low back pain management. We will not be replacing the proposed MRI
Lumbar Spine for Low Back Pain measure with the Falls measure, as we
are focused on including a utilization-based measure to identify and
discourage low-value care. We believe that the improvement of
activities and care coordination requirements within ASM will provide
opportunities for participants to address broader patient safety
concerns, including fall risk, through their overall patient management
approach.
After consideration of public comments, we will not include the
Falls: Plan of Care measure in the low back pain quality measure set.
(e) Removal and Addition of Quality Measures
While we do not plan to add or remove measures from either cohort's
measure set during the ASM test period, there may be circumstances in
which it is necessary. We proposed 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 solicited comments on the proposed approach for removal or
addition of quality measures.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported removing quality measures
from the ASM quality measure set through notice-and-comment rulemaking
and agreed with the overall desire to keep a consistent and stable set
of measures. A few commenters believed it is important to have
mechanisms in place to add or remove measures to adjust for advances in
evidence and changes in practices that may make measures no longer
meaningful and believed rulemaking was the appropriate mechanism. A
commenter recommended that CMS avoid removing quality measures without
a clear rationale and to maintain metrics that reflect long-term
function, quality of life, and patient experience.
Response: We appreciate the supportive feedback regarding our
proposed approach to quality measure maintenance in the ASM quality
measure set through notice-and-comment rulemaking. We agree that
rulemaking provides the appropriate level of transparency, interested
parties engagement, and deliberative process for making changes to
quality measures that affect ASM participants. We take seriously the
recommendation to avoid removing quality measures without clear
rationale and are committed to maintaining metrics that meaningfully
reflect long-term function, quality of life, and patient experience.
Any future proposals to modify the ASM quality measure sets will
include comprehensive justification based on clinical evidence, measure
performance data, interested parties feedback, and alignment with the
model's objectives. We believe the notice-and-comment rulemaking
process provides the appropriate framework to achieve the right balance
between measure stability and the flexibility needed to ensure our
measures remain clinically relevant.
Comment: A commenter did not support removing quality measures from
the ASM quality measure set through notice-and-comment rulemaking and
believed that maintaining a stable set of measures for 5 years and
limiting submission options would restrict the ability of participants
to adapt to evolving clinical standards and provide comprehensive,
evidence-based care.
Response: We appreciate the feedback regarding our proposed
approach to quality measure maintenance through notice-and-comment
rulemaking. However, we believe that maintaining a stable set of
measures for all ASM performance years within the ASM model test period
is essential to provide participants with predictability and allow them
to make meaningful investments in quality improvement initiatives. The
notice-and-comment rulemaking process ensures appropriate transparency
and interested parties' engagement when changes to the measure set are
warranted based on significant advances in clinical evidence or
practice standards. We do not agree that this approach would restrict
participants' ability to provide comprehensive, evidence-based care, as
the measures are designed to promote high-quality, evidence-based
practices within the specialty care settings. The stability of the
measure set will allow participants to focus their efforts on improving
performance rather than continuously adapting to changing measurement
requirements.
Comment: A commenter supported removing measures from scoring if
the data are compromised by external errors (for example, code
omissions, EHR glitches, guideline changes), because they believed it
would help maintain the accuracy and credibility of final performance
scores.
Response: We appreciate the commenter's support for our policy
regarding the removal of measures from scoring when data are
compromised by external errors, as this approach helps maintain the
accuracy and credibility of final performance scores. The policy
outlined at Sec. 512.725(h)(4)(ii)(A)
[[Page 49630]]
provides that for each measure impacted by significant changes or
errors prior to the data submission deadline, performance is based on
data for 9 consecutive months of the applicable ASM performance year.
Significant changes or errors are defined as changes to or errors in a
measure that are outside the control of the clinician and its agents
and that CMS determines may result in patient harm or misleading
results, including but not limited to changes to codes, inadvertent
omission of codes, or changes to clinical guidelines or measure
specifications. This policy ensures that ASM participants are not
unfairly penalized for circumstances beyond their control while
maintaining robust quality measurement standards.
After consideration of public comments, we are finalizing our
proposed provisions related to the removal, addition, and maintenance
of technical specifications of quality measures as proposed at Sec.
512.725(d).
(f) Maintenance of Technical Specifications for Quality Measures
We proposed at Sec. 512.725(d) to communicate any updates or
changes to the quality measure sets via notice and comment rulemaking.
This would include releasing technical specifications for the required
quality measures in a form and manner determined by CMS for each ASM
performance year. 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 proposed releasing the measure technical specifications
applicable to ASM via notice-and-comment rulemaking before the start of
each ASM performance year.
We solicited comments on our proposal to use the most recent MIPS
version of technical specifications of quality measures for each ASM
performance year. We also sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposal to maintain
technical specifications for MIPS measures in ASM, because this is more
cost-effective and efficient than developing and maintaining separate
measures for ASM and MIPS. Commenters believed that any re-
specification of existing MIPS measures would be appropriate for both
MIPS and ASM. Additionally, a commenter recommended that CMS finalize
and release all MIPS and non-MIPS measure specifications no later than
1 year prior to the start of the applicable ASM performance year.
Response: We appreciate the supportive feedback regarding our
proposal to maintain technical specifications for MIPS measures in ASM,
and we agree that this approach is more cost-effective and efficient
than developing and maintaining separate measures for ASM and MIPS. We
concur with commenters that maintaining consistent specifications
reduces administrative burden for participants who may be reporting
under multiple CMS quality programs and ensures alignment across our
quality measurement initiatives. We also agree that any re-
specification of existing MIPS measures would be appropriate for both
programs, promoting consistency and reducing confusion for
participating clinicians. We will rely on the MIPS program to release
technical specifications in accordance with their typical timeframes.
After consideration of public comments, we are finalizing our
proposal to communicate any updates or changes to the quality measure
sets, including the releasing of technical specifications for the
required quality measures in a form and manner determined by CMS for
each ASM performance year as proposed at Sec. 512.725(d).
(g) Data Submission Criteria for the Quality ASM Performance Category
We proposed at Sec. 512.725(e)(1) that ASM participants submitting
data that are not 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 in the
finalized measures in Table B-D4. We proposed at Sec. 512.725(e)(2)
that for the applicable ASM performance year, each ASM heart failure
participant would report all of the measures in the heart failure
quality measure set as described in section III.C.2.d.(2).(b) of this
final rule and each ASM low back pain participant would report all the
measures in the low back pain quality measure set as described in
section III.C.2.d.(2).(c) of this final rule.
We solicited comments on the proposed form, manner, and timing of
quality measures reporting at Sec. 512.725(e).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: Several commenters supported making quality measures
available via the eCQMs for ASM quality measure set. A commenter
believed that eCQMs help maximize the efficiency of electronic health
systems while providing more accurate and comprehensive data. Another
commenter supported the inclusion of eCQMs because they believed it
aligns with other CMS programs, reduces reporting burden, and is a
reliable and efficient method for data reporting. A few commenters
recommended that all ASM measures have eCQM versions to make reporting
more consistent and to support the transition towards digital quality
measurement. A commenter recommended that CMS eliminate all measures
that are not eCQMs in the ASM while another recommended that all
measures be eCQMs or claims-based measures.
Response: We appreciate the support expressed by commenters for
making quality measures available via eCQMs for the ASM quality measure
set. We agree with commenters that eCQMs support the efficiency of
electronic health systems while providing accurate and comprehensive
data, and we recognize their value in aligning with other CMS programs
to reduce reporting burden. We support the transition towards digital
quality measurement and support making eCQM versions available for ASM
measures where technically feasible and clinically appropriate. While
we understand the recommendation to remove non-eCQM measures, we must
balance this goal with the need to maintain clinically meaningful
measures that may not yet have fully developed eCQM specifications. We
will consider eCQM availability for ASM measures over time, supporting
participants' preference for reliable and efficient electronic
reporting methods.
Comment: A commenter requested clarification on what ``using one''
collection type means. Specifically, they sought clarity on whether an
ASM participant who chooses to report using the eCQM collection type
would still be required to report on the MIPS CQM, as that would
constitute a different collection type.
[[Page 49631]]
Response: We appreciate the commenter's question seeking
clarification on what ``using one'' collection type means for ASM
quality measure reporting. Each measure must be reported using one
collection type per performance period. If a measure has both CQM and
eCQM collection types available, the ASM participant can choose which
collection type they prefer to use for that specific measure.
Participants do not need to report both collection types for the
same measure; they should select the single collection type that works
best for their practice's technical capabilities and reporting
infrastructure. This approach provides flexibility while maintaining
consistency in how each individual measure is reported within ASM.
Comment: Several commenters did not support limiting the collection
type of measures in ASM and recommended that CMS maintain flexibility
for ASM participants in collecting, validating, and reporting their
quality measurement data. They believed that reporting flexibility
ensures that clinicians can select the most practical submission
pathway based on the capabilities available in their EHR environment
while also minimizing administrative burden. Additionally, they
believed that ASM participants will have to use multiple reporting
methodologies to meet measure reporting requirements, since some of the
proposed measures can be reported either through MIPS CQMs or eCQMs.
The commenters believed that some providers have limited technical
infrastructure to successfully report eCQM and recommended that CMS
allow ASM participants to select the collection type that is most
appropriate with their existing reporting platforms when reporting
measures.
Response: We appreciate commenters for their feedback. To clarify,
ASM allows participants to choose a measure's collection type if more
than one collection type is available. For example, if a measure is a
CQM or an eCQM, the participant may choose to report the CQM or the
eCQM, but not both. We promote the adoption and reporting of eCQMs;
however, if a measure specification allows reporting via CQM, we will
allow participants to report using that collection type.
After consideration of public comments, we are finalizing our
proposed data submission requirements for the quality ASM performance
category as proposed at Sec. 512.725(e).
(h) Data Completeness Requirement and Case Minimums for the Quality ASM
Performance Category
(i) Data Completeness Requirement
We proposed 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 proposed 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 proposed 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 final rule, we believe that
it would not be appropriate to score quality measures for which we
cannot determine a benchmark.
We sought comments on our proposed definition of ``measure
achievement points'' proposed at Sec. 512.705. We sought 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 sought 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 sought
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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter supported the proposed data completeness
requirement of 75 percent.
Response: We appreciate the commenter for supporting this
requirement. We believe it is vital to the integrity of our quality
measures that we set an adequate data completeness threshold.
Comment: A commenter expressed concern about enforcing a strict 75
percent data completeness threshold and believed that specialists who
provide episodic care may be unable to fully document all required
fields when reporting measures.
Response: We appreciate the concern regarding the 75 percent data
completeness threshold and understand the documentation challenges
specialists providing episodic care may face. However, we believe
maintaining this threshold is essential to ensure the integrity and
reliability of quality measurement under ASM. The 75
[[Page 49632]]
percent standard aligns with other CMS quality programs and represents
the minimum level needed for statistically reliable and clinically
meaningful quality scores. We encourage participants to work with their
health IT vendors in advance of model start to optimize their
documentation workflows. This period should provide adequate time to
meet this important standard.
Comment: A few commenters did not support assigning zero measure
achievement points for any submitted quality measure that does not meet
the data completeness requirement. A commenter believed that because of
the limited number of measures in the ASM, this may increase the number
of lower scores. Another commenter recommended that CMS avoid point-
based penalties for partial or incomplete reporting during the early
implementation phases of the ASM. A commenter recommended that CMS
create denominator exceptions when information is not accessible to an
ASM participant so that incomplete records are not considered failures.
Another commenter recommended that when certain measures are removed or
suppressed due to data completeness requirements, such as the lack of a
benchmark, CMS should automatically assign full points for the affected
measure to prevent an unfair distribution of scores and mitigate the
impact of smaller measure sets.
Response: We appreciate the feedback regarding our proposal to
assign zero achievement points for quality measures that do not meet
the data completeness requirement.
However, we will maintain the zero achievement points policy for
quality measures that fail to meet data completeness requirement. We
must be able to appropriately compare providers, and therefore, we
believe there should be an incentive to report complete data. A single
quality measure represents only a portion of the overall performance
assessment approach in ASM, so if data completeness is not met for one
measure, there are several other compensating areas including the other
quality measures, as well as the cost, improvement activities, and
Promoting Interoperability performance categories. Quality measures
have built-in denominator exclusions that ASM will adhere to for
reliability purposes, and we will not impose additional exclusions
beyond these established parameters. If we score measures that do not
meet data completeness due to inadequate data capture by the
participant, then participants may choose which portion of data to
report and could be at an advantage in performance comparisons.
Relaxing the data completeness requirement would undermine the
integrity of the performance comparison approach. We believe promoting
data completeness is essential to accurate assessment and the integrity
of the model's goals and payment adjustment methodology. The limited
number of measures in ASM makes each measure's data quality even more
critical for meaningful performance evaluation, and maintaining this
standard ensures that all participants are held to the same rigorous
reporting requirements that support fair and accurate comparisons
across the model.
Comment: A few commenters supported the alternative proposal to set
the data completeness requirement to lower than 75 percent beginning in
the 2027 ASM performance year and then implementing a phase-in approach
over the first few years of the model performance period to gradually
increase the data completeness requirement. They believed it would
provide ASM participants with time to adjust to the new model, minimize
burden, and reduce inequity. A commenter recommended that CMS provide a
clear guide and consider hardship exemptions when setting the data
completeness threshold.
Response: We appreciate the feedback from commenters supporting a
phased-in approach to the data completeness requirement, and we
understand the concerns about providing ASM participants with adequate
time to adjust to the new model while minimizing burden and reducing
potential inequities. However, after careful consideration of all
comments received, we have decided to maintain the 75 percent data
completeness requirement beginning with the 2027 ASM performance year.
We believe this threshold is essential to ensure the integrity and
reliability of quality measurement in ASM and represents the minimum
level of data completeness necessary to generate statistically reliable
quality scores. The 75 percent standard aligns with established
requirements in other CMS quality programs and reflects our commitment
to maintaining robust quality measurement that can accurately assess
performance and support valid comparisons across ASM participants. We
believe that the notice provided by this rule and our planned release
of a preliminary eligibility list in early CY 2026 will provide
adequate time for participants to work with their health IT vendors and
optimize their documentation workflows to meet this standard.
Comment: A commenter recommended that CMS waive or lower the 75
percent data completeness threshold for PRO-PMs for at least the first
performance year. They also suggested that CMS consider omitting or
reducing the weight of PRO-PMs in determining payment adjustments. The
commenter further recommended that CMS incorporate a voluntary ``rapid
learning collaborative program'' in which participants agree to use a
learning platform for collection and analysis of patient-reported data.
Response: We appreciate the commenter's feedback regarding PRO-PM
data completeness requirements and payment adjustment considerations.
However, we will not be changing the 75 percent data completeness
threshold for PRO-PMs, as this standard is essential to ensure the
integrity and reliability of patient-reported outcome measurement under
ASM. We will not be removing or reducing the weight of PRO-PMs in
determining payment adjustments, as these measures are a vital aspect
of our quality measurement strategy and represent critical patient-
centered outcomes fundamental to assessing care quality and
effectiveness. We appreciate the recommendation for a voluntary ``rapid
learning collaborative program'' and intend to pursue efforts to
promote learning and diffusion among ASM participants regarding best
practices for quality measurement and beyond.
We did not receive specific comments on our proposed definition of
``measure achievement points,'' so we are finalizing it as proposed at
Sec. 512.705.
After consideration of public comments, we are finalizing the
proposal to set the data completeness threshold at least 75 percent as
proposed at Sec. 512.725(f)(1). We are finalizing the proposal that
participants receive zero measure achievement points for any submitted
quality measure that does not meet the data completeness requirement as
proposed at Sec. 512.725(f)(2).
Finally, as we did not receive any comments on the proposal, we are
finalizing the proposal that we would exclude quality measures that do
not have a benchmark in the calculation of the quality ASM performance
category score as proposed at Sec. 512.725(f)(3).
(ii) Minimum Case Requirements
We seek to ensure that ASM participants are measured reliably,
therefore, we proposed at Sec. 512.725(g)(1) to use 20 cases as the
minimum case requirement for each quality measure.
[[Page 49633]]
We proposed 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 final 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 solicited comments on our proposed case minimum for quality
measures at Sec. 512.725(g). We received public comments on these
proposals. The following is a summary of the comments we received and
our responses.
Comment: A few commenters did not support setting the case minimum
requirement to 20 cases for each quality measure because they believed
it is statistically insufficient. A commenter believed that this case
minimum systematically excludes rural providers. Another commenter
believed that the 20-case minimum may be insufficient to generate
stable benchmarks for certain measures and recommended CMS to evaluate
safeguards or confidence intervals for measures that may demonstrate
year-to-year variation. A commenter recommended that CMS adopt a higher
minimum because it would also reduce the risk of punishing providers
who treat more vulnerable patients.
Response: We acknowledge the concerns raised about statistical
sufficiency, rural provider inclusion, and benchmark stability. For
each measure, the case minimum was established during the measure
development process and determined to be reliable and valid at this
case minimum threshold, based on established standards and statistical
analysis conducted during measure testing and validation. We believe
most ASM participants should meet this minimum considering that the
threshold for inclusion in the model requires meeting the 20 EBCM cost
measure minimum, meaning they see at least 20 patients with the
relevant condition, and likely many more given the nature of specialty
practice patterns. Therefore, these clinically specific quality
measures should be applicable to ASM participants, and the case minimum
should be achievable for most participants who treat sufficient volumes
of patients with these conditions. Also, we are finalizing allowing for
flexibility for small practices to report quality measures in the
quality ASM performance category at the TIN-level, as further described
in section III.C.2.d.(1).(b) in this final rule. However, we do not
plan to increase the minimum case requirement, as the current threshold
aligns with other thresholds established throughout the model, is
consistent with existing measurement specifications and criteria used
in other CMS quality programs and avoids excluding providers who should
appropriately be assessed under the model. Regarding concerns about
year-to-year variation and benchmark stability, we will monitor measure
performance data and evaluate the need for additional safeguards or
statistical adjustments as we gain experience with the model. Our goal
is to balance statistical reliability with inclusive participation that
captures the spectrum of providers delivering care to Medicare
beneficiaries with these conditions, while ensuring that quality
measurement remains meaningful and actionable for driving improvements
in patient outcomes.
Comment: A commenter supported the proposal to exclude measures
from the quality ASM performance category score if the case minimum is
not met. The commenter also recommended that clinicians should not be
required to participate in the ASM for a reporting year in which they
do not meet the case minimums.
Response: We appreciate the commenter's support on case minimums
and the proposal to exclude measures from the quality ASM performance
category score when the case minimum is not met. We agree that this
approach ensures statistical reliability and meaningful quality
measurement for ASM participants. However, we will not exclude
providers from participating in ASM for a reporting year in which they
do not meet the case minimums for specific quality measures. Instead,
those measures where providers do not meet the minimum case
requirements will not be counted against them in their overall
performance assessment, allowing them to continue participating in the
model while ensuring fair and statistically valid quality measurement.
After consideration of public comments, we are finalizing our
proposed provision for minimum case requirements for quality measures
as proposed at Sec. 512.725(g).
(i) Quality Measure Achievement Points and Quality ASM Performance
Category Scoring
(i) Quality Measure Achievement Points
We proposed 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 final rule. We proposed
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 proposed 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 not 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 proposed 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 proposed not to score measures for which we could not
determine a benchmark for a given ASM performance year as described in
section.III.C.2.d.(2)(i)(ii) of this final 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
[[Page 49634]]
unfair to penalize ASM participants due to a lack of a benchmark.
We sought comments on this proposed quality ASM performance
category scoring approach to assigning measure achievement points as
described at Sec. 512.725(h)(1).
We did not receive specific comments on this provision, and
therefore, we are finalizing our proposed provisions for quality ASM
performance category scoring as proposed at Sec. 512.725(h)(1).
(ii) Benchmarking
For the quality ASM performance category, we proposed at Sec.
512.725(h)(2) that the ASM performance standard is a measure-specific
benchmark. We proposed 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 proposed 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.\249\ 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
proposed to require in ASM,\250\ we believe it would be more
appropriate to calculate a benchmark for each collection type.
---------------------------------------------------------------------------
\249\ https://qpp.cms.gov/resources/performance-data.
\250\ https://qpp.cms.gov/resources/performance-data.
---------------------------------------------------------------------------
We proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 solicited comments on our proposed benchmark determination
process as proposed at Sec. 512.725(h)(2) and all alternatives
considered.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter did not support calculating benchmarks for
each quality measure and collection type because they believed it may
unintentionally penalize clinicians who adopt certain reporting
pathways that perform differently due to measure specifications or data
completeness.
Response: We appreciate the feedback regarding our proposal to
calculate benchmarks for each quality measure and collection type.
However, we are not concerned about the potential for unintentionally
penalizing clinicians who adopt certain reporting pathways, as we
believe our benchmarking methodology appropriately accounts for
differences in measure specifications and data completeness across
collection types.
Our approach to calculating separate benchmarks by collection type
is designed to ensure fair and accurate comparisons among participants
using the same reporting method, thereby maintaining the integrity of
performance assessment while providing flexibility in reporting
options. This methodology aligns with established practices in other
CMS quality programs and supports equitable evaluation of clinical
performance regardless of the chosen collection pathway.
Comment: A commenter recommended that CMS compare the calculated
ASM benchmarks to the corresponding MIPS benchmarks by collection type
and select the benchmark that is most favorable to the ASM participant
because they believed it would ensure fair and equitable scoring.
Response: We appreciate the commenter's recommendation regarding
benchmark comparison between ASM and MIPS programs. However, we will
not be comparing the calculated ASM benchmarks to the corresponding
MIPS benchmarks by collection type and selecting the benchmark that is
most favorable to the ASM participant. ASM has different goals than
MIPS and adopting this approach could undermine how ASM will make more
like-to-like performance comparisons to achieve in improved care
delivery. ASM is specifically designed to test innovative payment and
care delivery approaches for specialty care, with benchmarks that
reflect the unique patient populations, care patterns, and quality
improvement objectives of the participating specialties. The ASM
benchmarks will reflect performance from clinicians in each ASM cohort,
whereas MIPS benchmarks would not reflect the performance of our
participants and would introduce heterogeneity in the form of different
provider types. Using MIPS benchmarks could undermine the model's
ability to drive meaningful change and improvement in specialty care
settings, as it would dilute the incentives for participants to achieve
the higher
[[Page 49635]]
performance standards that ASM is designed to promote. Our ASM-specific
benchmarks are calibrated to support the model's goals of improving
patient outcomes and reducing costs within the specialty care context.
Comment: A commenter recommended that CMS be transparent about the
benchmarks it uses.
Response: We appreciate the commenter's recommendation for
transparency regarding the benchmarks we use in ASM. We believe our
proposed approach provides substantial transparency through the
detailed methodology outlined in our regulations.
Our benchmarking process will determine measure-specific benchmarks
for each quality measure and collection type using data from ASM
participants during the performance year or previous periods, with
separate benchmarks calculated for each collection type due to
performance variations observed in MIPS. The benchmark methodology uses
decile distributions based on actual ASM participant performance, with
measure achievement points assigned based on where a participant's
performance falls within these deciles. We will only calculate
benchmarks for measures that have a minimum of twenty ASM participants
reporting the measure while meeting data completeness and case minimum
requirements. This approach ensures statistical reliability while
providing clear, performance-based standards that all ASM participants
can understand and work toward achieving. We plan to release the
benchmarks in a form and manner determined by CMS for each performance
year.
Comment: A few commenters did not support the proposed quality
benchmarks requirements and believed that if developed without
specialty input, it would risk misaligning incentives by undervaluing
the clinical complexity and safety requirements of image-guided spinal
interventions performed in the office setting. A commenter believed
that benchmarks should account for the precision, specialized
equipment, and significant physician expertise that interventional pain
procedures require. They were concerned that if benchmarks do not
account for these factors, then the benchmarks could distort clinical
decision-making and diminish access to these appropriate services.
Response: We appreciate the feedback regarding quality benchmark
requirements and understand the concerns about specialty input and the
unique aspects of interventional pain procedures. However, we believe
our proposed benchmarking methodology appropriately addresses these
concerns by using data reported specifically by ASM participants rather
than external standards that may not reflect specialty practice
patterns. Our approach to determining benchmarks for each quality
measure using data from ASM participants during the performance year or
previous ASM performance years ensures that benchmarks are based on
actual performance within the specialty care context. The methodology
accounts for the clinical complexity and specialized nature of
interventional procedures by establishing benchmarks using decile
distributions based on actual ASM participant performance. The
participants included in each cohort supports more like-to-like
comparisons, addressing concerns of broad differences in care patterns
between providers treating different conditions.
By calculating benchmarks for each measure's collection types using
ASM participant data, we ensure that the unique characteristics of
specialty care, including the precision, specialized equipment, and
physician expertise required for interventional pain procedures, are
inherently reflected in the performance standards. This participant-
specific benchmarking approach prevents the misalignment of incentives
that commenters were concerned about, as the benchmarks will be
calibrated to the actual performance patterns of ASM participants in a
specialty care setting.
Comment: A few commenters did not support using deciles for
benchmarks because they believed that scoring clinicians according to a
distribution and subjecting those in the bottom deciles to the maximum
risk could harm high-performing providers and those who are improving
year-over-year but in the lower decile. They believed that not
recognizing both attainment and improvement creates a negative
behavioral economic incentive, where clinicians who are improving but
still ranked low may feel discouraged to improve further. A few
commenters requested clarity on the standard for what constitutes a
``good'' quality measure score. These commenters recommended that CMS
establish external benchmarks that define acceptable performance for
quality measures and believed this approach would reduce reliance on
relative scoring and avoid unfair penalties.
Response: We appreciate the feedback regarding our use of deciles
for benchmarking in ASM and understand the concerns about potential
negative impacts on high-performing providers and those showing
improvement. However, we believe that creating a benchmark based on
data reported by a group of similar providers provides meaningful
quality assessment and accountability within the specialty care
context. Our decile-based approach is designed to incentivize value and
reward clinicians who are delivering high-quality care while
encouraging those who are performing below their peers to improve their
practices. This relative scoring methodology ensures that we maintain
appropriate performance standards that evolve with the overall
performance of the ASM participant pool, rather than static benchmarks
that may become outdated or inappropriate over time. Regarding the
request for external benchmarks that define ``acceptable'' performance,
we believe that specialty care quality is best evaluated in the context
of peer performance rather than external standards that may not reflect
the realities of specialty practice patterns or patient populations.
The decile approach ensures that quality expectations remain
appropriately challenging and relevant to the specific clinical
contexts within ASM. We will continue to review our benchmarking
approach as the model evolves to ensure it effectively rewards high-
quality care delivery and promotes continuous improvement while
maintaining fair and meaningful performance standards. Our goal is to
create a system that recognizes excellence, supports improvement, and
ultimately benefits Medicare beneficiaries through enhanced quality of
specialty care.
After consideration of public comments, we are finalizing our
proposed provisions for quality measure benchmarking as proposed at
Sec. 512.725(h)(2).
(iii) Topped-Out Quality Measures
We proposed 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 proposed
monitoring during the initial ASM performance year(s)
[[Page 49636]]
before designating an ASM measure with topped out status. We proposed
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); 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 solicited comment on our proposal at Sec. 512.725(h)(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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters generally supported not removing topped
out measures in ASM. A commenter encouraged CMS to include topped out
measures, because they represent established standards of high-quality
care and that maintaining these measures helps ensure ongoing focus on
critical aspects of care and consistency across the model. Another
commenter recommended that CMS consider mitigation strategies for
topped out measures, such as narrowing measure definitions,
transitioning to outcome-focused specifications, or suppressing topped
out measures from final scoring to avoid clustering.
Response: We appreciate the supportive feedback from commenters
regarding our approach to topped out measures in ASM.
We will continue to identify topped out measures within ASM but
plan to not immediately remove them from the measure set. Instead, we
will carefully evaluate each topped out measure's continued relevance
and consider the mitigation strategies suggested by commenters to
address performance clustering while maintaining the clinical integrity
these measures provide. Any changes to our approach for handling topped
out measures will be addressed through notice-and-comment rulemaking,
ensuring appropriate interested parties' engagement and transparency in
our decision-making.
Comment: A few commenters generally did not support keeping topped
out measures in ASM and recommended CMS replace topped out measures
with metrics that meaningfully differentiate performance and reward
improvement. These commenters also recommended that CMS incorporate
external benchmarks and set a ``floor'' for negative adjustments once
providers achieve collective improvement on a topped out measure.
Response: We appreciate the feedback regarding topped out measures
in ASM and understand the desire for metrics that better differentiate
performance. However, we believe fewer measures would be considered
topped-out in ASM given the mandatory reporting of all quality measures
applicable for each ASM cohort. Maintaining consistency during the
model performance period allows participants to focus their quality
improvement efforts effectively. We also do not intend to review
external benchmarks or set a floor for negative adjustments as it would
not align with ASM's performance assessment approach and goals. We will
continue reviewing topped-out measures as the model progresses and
assess their ability to meaningfully differentiate performance among
ASM participants. While changes are unlikely, any modifications would
be proposed through future notice-and-comment rulemaking to ensure
appropriate interested parties engagement and transparency.
After consideration of public comments, we are finalizing the
proposed topped-out measure policy as proposed atSec. 512.725(h)(3).
(iv) Calculation of the Quality ASM Performance Score
We proposed 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 the total achievement points by the total available measure
achievement 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 proposed 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 proposed 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 proposed at Sec. 512.725(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 proposed 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 proposed 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 proposed 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
[[Page 49637]]
quality measure set. As discussed in sections III.C.2.e.(2)(b) and
III.C.2.f.(4) of this final 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 solicited 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 solicited comments 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 sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter did not support the proposed quality
performance category scoring methodology because they believed the
proposed scoring methodology is different than MIPS and that ASM
effectively creates two separate sets of scores for one specialty
group. The commenter believed that since ASM does not provide specific
benchmarks for when a positive or negative payment adjustment may be
applied, clinicians and their group would have no actionable
information or incentive to improve their performance. The commenter
expressed concern that the specialty group would also have to identify
where to place its limited resources to improve performance, deciding
whether to focus on the 6 measures required to report for MIPS or the
measures that are required to report for the individuals required to
participate in the ASM.
Response: We appreciate the feedback regarding our proposed quality
performance category scoring methodology for ASM. ASM is intentionally
designed as a distinct alternative payment model with its own
performance standards and benchmarks, separate from MIPS, to test
innovative approaches to specialty care delivery and payment focused on
high cost, highly prevalent chronic conditions. While we understand the
concern about managing multiple reporting requirements, ASM's focused
measure set is specifically tailored to the clinical conditions and
care patterns relevant to the participating specialties and targeted
chronic conditions, which differs from the broader scope of MIPS
measures. We also have used MIPS measures in our measure set to reduce
burden and align with other CMS programs. Regarding benchmarks and
payment adjustments, our methodology provides clear performance
standards through decile-based scoring that allows participants to
understand their relative performance and identify areas for
improvement. The model's design ensures that participants have
actionable information through transparent scoring methodologies and
performance feedback, even though the payment adjustment methodology
may differ from other CMS programs.
Comment: A commenter wanted clarification on how quality measures
are counted and scored for clinicians. They requested whether clinical
action, such as a screening performed by one provider within a TIN
(regardless of ASM eligibility), could be ``counted'' by an ASM
participant to meet their own quality measure requirements. The
commenter recommended that clinical actions by any provider within the
same TIN should count toward meeting quality measures, as the patient's
care is managed within the same TIN.
Response: We appreciate the commenter's question seeking
clarification on how quality measures are counted and scored for
clinicians in ASM. To understand each individual measure's specific
requirements, we refer readers to the measure specifications which are
publicly available and provide detailed guidance on measure calculation
and attribution. In instances like the BMI screening and follow-up
measure, the measure looks to see if a BMI screening has occurred
during the performance year and is documented in the patient's chart.
In this instance, it can be conducted by someone else in the practice
and the ASM participant can receive credit, assuming other measure
criteria are met, and the screening is properly documented and
attributed. ASM promotes individual accountability as quality and cost
elements are scored at the TIN/NPI level. We recognize the
collaborative nature of practice-level efforts, and practice-level
efforts may be reflected in quality measure reporting as described by
each measure's specifications. However, acknowledging the burden this
may present to small practices, we are finalizing allowing for
flexibility for small practices to report quality measures in the
quality ASM performance category at the TIN-level, as further described
in section III.C.2.d.(1).(b) in this final rule.
Comment: A few commenters did not support calculating a quality
measure score based on nine consecutive months of data from the
performance year in the event of significant changes or errors. A
commenter shared their belief that shortening reporting periods is not
feasible for eCQMs. Another commenter believed that partial-year
scoring introduces inconsistency and distorts results. The commenters
recommended that CMS suppress or remove the measure from scoring, which
they believe is consistent with MIPS, rather than truncating the
reporting period.
Response: We appreciate the feedback regarding our proposed
approach to calculating quality measure scores when significant changes
or errors occur during the performance year. We align with MIPS on the
principle of protecting participants from circumstances beyond their
control that could unfairly impact their quality scores. We did not
propose a provision that would allow us to remove a measure from
scoring when appropriate circumstances warrant such action. We
understand the concerns raised about the feasibility of shortened
reporting periods for eCQMs and the potential for partial-year scoring
to introduce inconsistency in results. We will consider which of these
two approaches, using 9 consecutive months of data or removing the
measure from scoring entirely, would be most beneficial to participants
in each specific situation and execute the approach that best serves
the integrity of the measurement system and fairness to ASM
participants. We will also review the MIPS approach to not truncate
qualifying eCQMs as discussed in the CY 2024 PFS final rule (88 FR
79369) to determine if such an approach would be appropriate for ASM.
Our decision-making process will consider the nature of the significant
change or error, the impact on data quality and reliability, and the
operational feasibility for participants.
Comment: A commenter did not support suppressing measures when
certified health IT is unavailable or when scoring could be misleading,
because they believed this conflicts with CMS principles and ASM's
regulatory structure. The commenter believed that proprietary PRO-PMs
and undisclosed
[[Page 49638]]
risk adjustment can create risks when health IT is unavailable.
Response: We appreciate the commenters feedback regarding our
proposal. However, we believe this approach is fundamental to fair and
accurate performance assessment. We have clarified that there are
resources available to help participants understand PRO-PMs, including
publicly available measure specifications and we believe these patient-
reported outcome measures are vital tools for our assessment of care
quality and patient-centered outcomes. We are aligning our approach
with MIPS standards and methodology, which provides consistency across
CMS quality programs and reduces administrative burden for participants
who may be reporting under multiple programs. We believe that the
measures in our proposed set represent the best available tools for
assessing quality in our specialty care settings of focus, and
therefore we will maintain the measure set as proposed.
After consideration of public comments, we are finalizing the
proposed calculation of the quality ASM performance score as proposed
at Sec. 512.725(h)(4).
(3) Cost ASM Performance Category
The 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 final 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 proposed 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 in this section, while we proposed to
evaluate ASM participants on their performance on these 2 MIPS cost
measures, and proposed 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 proposed to use different
benchmark ranges.
(b) Performance Year for Cost ASM Performance Category
Beginning with ASM payment year 2029, we proposed 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 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 solicited comments on our proposed approach at Sec. 512.730(a)
for setting the ASM performance year for cost measures.
We did not receive public comments on the proposed performance year
for cost measures, and therefore, we are finalizing this proposal as
proposed at Sec. 512.730(a).
(c) Cost Measure for the ASM Heart Failure Cohort
For the ASM heart failure cohort, we proposed 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.\251\ We proposed 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.\252\ We proposed 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 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.
---------------------------------------------------------------------------
\251\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
\252\ https://www.cms.gov/files/zip/2024-cost-measure-information-forms-zip.zip-0.
---------------------------------------------------------------------------
Additionally, we proposed 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.\253\ 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.\254\ Further,
heart failure was listed as the cause of death on 13.4 percent of all
death certificates in the United States in 2018.\255\ 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.\256\ 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.\257\
---------------------------------------------------------------------------
\253\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.''
(2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776.
\254\ Yancy et al. ``2013 ACCF/AHA Heart Failure Guidelines.''
(2013). https://www.ahajournals.org/doi/pdf/10.1161/CIR.0b013e31829e8776.
\255\ Centers for Disease Control and Prevention (CDC) ``Heart
Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm.
\256\ Centers for Disease Control and Prevention (CDC) ``Heart
Failure.'' September 2020. https://www.cdc.gov/heartdisease/heart_failure.htm.
\257\ 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.
---------------------------------------------------------------------------
We solicited 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.
We received public comments on these proposals. The following is a
[[Page 49639]]
summary of the comments we received and our responses.
Comment: A commenter expressed concern with the proposal to use
only administrative claims measures for the cost ASM performance
category. The commenter recommended that CMS collaborate with patient
groups and specialty societies to explore the use of alternative data
sources, such as clinical registries. The commenter shared their belief
that incorporating additional data sources could help ensure that ASM
cost measures provide a more comprehensive and accurate assessment of
patient care, including outcomes and preferences.
Response: We appreciate the commenter for sharing their concern
regarding the cost ASM performance categories use of only
administrative claims-based EBCMs. While clinical registries and
patient-reported outcomes can be valuable for research and targeted
quality improvement, we do not believe that they are appropriate for
use in ASM because not all specialists have robust and mature
registries whereas all ASM participants would generate claims used in
EBCMs. Accordingly, we believe it crucial for all ASM participants
within an ASM cohort to be scored on the same EBCM.
Comment: A few commenters offered general feedback related to EBCM
measurement. A commenter suggested limiting eligibility to potential
ASM participants that have a comparatively higher cost point until
quality is measured so that there can be a low-cost, high-quality
standard. Another commenter recommended that EBCM measurement volume
should be robust to consider both major and minor complications and
systematically prevent patient harm and unnecessary costs.
Response: We appreciate the commenters for their feedback related
to EBCM measurement. We believe that ASM's approach to quality and cost
measurement provides a more comprehensive approach to incentivizing
quality improvements and reductions in unnecessary or low-value care
spending related to ASM's targeted chronic conditions. We believe that
a more complex participant identification logic comparing historical
cost relative to some quality threshold would limit the potential
impact of ASM by focusing on a narrow subset of specialists. By way of
their construction, EBCM episodes account for attributable cost related
to major or minor complications, which creates an incentive for the
attributed clinician to improve upstream chronic condition management
since they will perform better on the measure if they reduce
unnecessary costs. For reasons discussed throughout this section of
this final rule, we believe that the 20-episode threshold as part of
the ASM participant eligibility criteria and as part of the cost ASM
performance category measurement approach would be robust to evaluate
clinicians on their efforts to reduce unnecessary costs while improving
the quality of care.
Comment: A few commenters stated that retrospective EBCM
attribution methodology prevents ASM participants from knowing their
at-risk population prospectively. A commenter also shared their belief
that episodes based on visits do not attribute all beneficiaries and
leaves a measurement gap.
Response: We note that we only plan to use historical EBCM data to
evaluate clinicians in mandatory geographic areas for the ASM
participant eligibility criteria. ASM participants will be scored on
the applicable EBCM as part of the cost ASM performance category that
aligns with a given ASM performance year (that is, ASM participants for
the 2027 ASM performance year will be scored using 2027 EBCM scores).
While we expect that ASM participants would continue to reach the EBCM
episode minimum of 20 to be scored, ASM participants that cannot be
scored would not receive a final score or payment adjustment as
described in sections III.C.2.e.(2).(b) and III.C.2.f.(4) of this final
rule. We refer readers to our discussion of the EBCM attribution
methodology earlier in this section of this final rule. However,
prospective attribution of beneficiaries is not required for ASM's
performance measurement framework. Should a participant want to
identify beneficiaries that would likely trigger an episode, we believe
they could do so by using the triggering and confirming codes provided
in each EBCM's specifications. Further, we do not agree that use of
EBCMs leaves a measurement gap. The goal of the heart failure and low
back pain EBCMs is to evaluate a clinician's performance by assessing
the cost of services related to a defined episode of care for a
beneficiary with whom the clinician has a longitudinal relationship as
determined by the triggering and confirming claims.
Comment: A few commenters expressed concern about the reliability
of the proposed Heart Failure EBCM, noting that the measure did not
meet the ``high'' reliability threshold at the TIN or TIN-NPI level.
The commenters shared their belief that the EBCM reliability levels at
20 attributed patients are too low for measures used to adjust payments
for clinicians. A commenter expressed concern that relying on a measure
with only moderate reliability could lead to misleading conclusions
about actual differences in performance.
Response: We recognize the commenters' concerns regarding the heart
failure EBCM 20-episode volume threshold. However, we disagree that the
20-episode minimum is an inappropriate volume of cases for determining
ASM cost performance category scores. An EBCM 20-episode threshold is
consistent with the established episode threshold finalized for MIPS at
Sec. [thinsp]414.1350(c)(6) for the EBCM. As we discussed in the CY
2018 PFS final rule (82 FR 53697 through 53699), increasing the case
minimum to improve measure reliability would reduce the number of
clinicians assessed by the measure. A higher case minimum would,
therefore, limit the scoring of EBCMs to larger group practices with
sufficient case volume at the expense of individual providers who are
the focus of ASM. We believe that an EBCM 20-episode threshold remains
aligned with other CMS programs and will reliably, just like in the QPP
program, measure ASM participants on cost performance.
Comment: A commenter did not support the proposed heart failure
EBCM, noting concerns that the measure is narrowly defined and may not
capture potential savings from efficient team-based care. The commenter
also expressed concern that the proposed attribution to individual ASM
participants is not patient-centered and may not recognize the
efficiencies of team-based care.
Response: We appreciate the commenters' feedback but disagree that
the heart failure EBCM is narrowly defined. The heart failure EBCM is
designed to capture a wide spectrum of care events that occur once an
episode is triggered and that are appropriately attributable to a TIN
or TIN/NPI. It includes but is not limited to inpatient admissions,
outpatient follow-up, medication management, diagnostic testing, and
post-acute care. We also disagree that the cost EBCM, though measured
at the individual level, would not recognize the efficiencies of team-
based care. The EBCM reflects costs from any provider rendering an
included service for an attributed beneficiary--centering the
beneficiary at the heart of the measure. Therefore, efficiencies in
team-based practices such as reducing duplicative services could
potentially improve the ASM participant's EBCM score.
Comment: A few commenters expressed concern that the proposed heart
failure EBCM does not reflect the
[[Page 49640]]
quality of care provided by ASM participants. A commenter recommended
CMS to align quality and cost scoring to prevent duplicative
accountability under the heart failure EBCM, noting that the proposed
quality measures include patients younger than 65, while the cost
measure applies only to those older than 65. A commenter expressed
concern that CMS does not account for how changes in spending and
utilization may impact quality. Another commenter recommended that CMS
collaborate closely with prospective ASM participants to identify
measures that accurately reflect savings.
Response: We appreciate the commenters for their feedback. However,
we disagree that the proposed heart failure EBCM is not aligned with
the quality of care provided to participants. We believe that the Risk-
Standardized Acute Unplanned Cardiovascular-Related Admission Rates for
Patients with heart Failure (MIPS Q492) quality measure as discussed in
section III.C.d.2.(b).(i) of this final rule would account for the
inappropriate withholding of care in an effort for a participant to
improve their cost ASM performance category score. Though we understand
that the inclusion and exclusion criteria for the quality and cost
measures may differ, taken individually both collective measure sets
are appropriate for assessing heart failure quality of care and its
associated costs. We are aligning the approach used in MIPS to reduce
burden and ensure alignment across CMS programs. We disagree that the
EBCMs would not reflect opportunities for findings savings and we note
that the EBCMs have already undergone extensive with interested parties
input, including specialty societies and technical expert panels.
Comment: A few commenters expressed concern that ASM participants
may not be able to control all costs included in the proposed heart
failure EBCM such as emergency department visits or post-acute care
decisions made by other clinicians. Another commenter shared their
belief that the heart failure EBCM could potentially penalize
clinicians for poor performance even when they provide care that
adheres to evidence-based clinical guidelines and is in the best
interest of the patient. A commenter shared their concern that the
proposed EBCM has limited the ability to distinguish between spending
within, and outside of the clinician's control. Another commenter
expressed concerns about the inclusion of Part D medications within the
heart failure EBCM, noting that varied access to prescription
medications can cause fluctuations in the cost of care.
Response: We appreciate the commenters' feedback, but we disagree
that the heart failure EBCM penalizes clinicians for high costs beyond
their control, or for providing care adhering to evidence-based
guidelines in the best interest of the patient. The heart failure EBCM
is designed to reflect the clinical appropriateness of care. The EBCM
also accounts for a variety of clinically appropriate care variations,
and necessary treatments. Though we acknowledge that not every care
decision is controlled by the attributed participant by including
services initiated by other clinicians, the measure appropriately
incentivizes specialists to coordinate care and manage transitions to
reduce avoidable, duplicative, fragmented and costly services. The EBCM
measure specifications include all services that are included in the
measure. Those services were selected as part of the scope of
longitudinal heart failure chronic condition management in consultation
with specialty societies and practices. While Part D costs are included
within the episode, we note that Part D costs are winsorized such that
extreme observations at and above the 98th percentile are excluded from
the EBCM's calculations. We believe it is important to include Part D
spending because Part D spend oftentimes represents a significant
portion of episode's total cost. The inclusion of Part D spending
creates participant accountability for that portion of spend.
Furthermore, including Part D spend prevents any inappropriate cost
shifting that may occur if Part D spend is excluded such that
participants were incentivized to move Part B spend to Part D spend to
artificially deflate Part B measured spending.
Comment: A few commenters expressed concerns about the proposed
attribution methodology for the heart failure EBCM. A commenter
recommended that CMS continue to refine the heart failure EBCM
attribution methodology to better account for the nuances between cost
and clinical appropriateness.
Response: We appreciate the commenters' feedback, but we disagree
that the heart failure EBCM relies on a flawed attribution methodology.
The heart failure EBCM is built upon a two-stage process to identify
clinically appropriate patients receiving longitudinal heart failure
care. A heart failure episode is only attributed to an ASM participant
if two Part B Physician/Supplier (Carrier) claims are billed by the
same ASM participant within 180 days of one another. The pair of
services must include a trigger claim and confirming claim from any of
the set of clinically relevant outpatient CPT/HCPCS codes and services
when accompanied by an ICD-10 diagnosis code indicating heart failure.
This sophisticated methodology ensures that only beneficiaries
receiving longitudinal heart failure management from the same ASM
participant will trigger an episode. We did not consider refinements to
the attribution methodology to remain aligned with the existing measure
specifications under MIPS and to ease participant burden.
Comment: Several commenters expressed concern that the heart
failure EBCM does not capture the clinical complexity of the patients
with heart failure, which can impact episode costs. A few commenters
shared their belief that the proposed EBCM does not adjust for many
social and economic factors that affect the number and types of
services patients receive or improvements in care access that could
increase costs but also improve outcomes, which could significantly
disadvantage clinicians serving more complex patients. A few commenters
recommended that CMS continue to refine risk adjustment to better
reflect the nuances between cost and clinical appropriateness,
particularly for high-risk populations such as older adults with
multiple comorbidities. A few commenters requested that CMS publish
more details on how patient complexity and comorbidities will be
incorporated into risk adjustment and clarify how risk adjustment
differs between the MIPS/MVPs EBCM and the ASM version of the EBCM. A
commenter recommended that certain cases be excluded or separately
benchmarked, including advanced therapies, cardiogenic shock/ECMO,
multi-organ failure, high-risk electrophysiology/device dependence,
active transplant evaluation (where diagnostic intensity and
consultative services dominate spending), and end-of-life care with
hospice election during the episode window.
Response: We appreciate the commenters for their concerns that the
low heart failure EBCMs do not reflect patient complexity, however, we
disagree. The heart failure EBCM's sophisticated risk adjustment
methodology accounts for patient complexity, and comorbidities outside
of the participant's control. The EBCM risk adjustment methodology uses
clinical factors such as age, comorbidities, recent hospitalizations
and other relevant conditions to
[[Page 49641]]
standardize costs. The heart failure risk adjustment methodology
employed in ASM is the same methodology used in MIPS/MVPs EBCM.
Additionally, the exclusion criteria are designed to remove unique
groups of patients or episodes from the measure calculation in cases
where it may be impractical or unfair to compare the costs of caring
for these patients to the costs of caring for the cohort at large.
Heart failure EBCM exclusions include amyloidosis, congenital heart
disease, high-output heart failure, hypertrophic cardiomyopathy, prior
and/or recent left ventricular assist device (LVAD), prior and/or
recent heart transplant, peripartum cardiomyopathy, and other
infiltrative disease. While the EBCM does not account for all social
risk factors in its risk adjustment methodology, we stress that
beneficiary social and economic characteristic and challenges faced by
small or solo practices are addressed in the complex patient scoring
adjustment section III.C.d.4.(3) of this final rule and small practice
scoring adjustment in section III.C.d.4.(4) of this final rule. We
believe that both the complex patient scoring adjustment and the small
practice scoring adjustment properly addresses the realities those ASM
participants face because those adjustments are simpler and do not
require any additional participant reporting.
Comment: A commenter recommended that CMS provide actionable data
and definitions and identify ways to improve cost performance on the
heart failure EBCM.
Response: We appreciate the commenters for their recommendation to
provide actionable data and methods to improve performance. We are
exploring ways to provide participants with the right data at the right
intervals to assist their performance in ASM.
After consideration of public comments, we are finalizing as
proposed at Sec. 512.730(b)(1) the use of the heart failure EBCM 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 proposed 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.\258\ 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 proposed 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.
---------------------------------------------------------------------------
\258\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
---------------------------------------------------------------------------
We believe that the 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,\259\ 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.\260\ Other studies have also found large increases in resource
use for low back pain despite only modest increase in its prevalence
and little improvement in patient outcomes,261 262 263 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.
---------------------------------------------------------------------------
\259\ Will, Joshua Scott, David Bury, and John Miller,
``Mechanical Low Back Pain.'' American Academy of Family Physicians
98(7) (2018): 421-428.
\260\ 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.
\261\ 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.
\262\ 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.
\263\ Norman Marcus Pain Institute, ``Pain Facts.'' Last updated
23 January 2012. https://www.normanmarcuspaininstitute.com/tag/neck-and-shoulder-pain/.
---------------------------------------------------------------------------
We sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters expressed concerns about the proposed low
back pain EBCM for ASM participants, noting low reliability thresholds
at the individual clinician level. The commenters noted that the
reliability levels for TIN/NPIs with 20 or more attributed patients are
too low for measures used to adjust payments for clinicians.
Response: We recognize commenters' concerns regarding the low back
pain EBCM 20-episode threshold. However, we disagree that the 20-
episode minimum is an inappropriate volume of cases for determining ASM
cost performance category scores. An EBCM 20-episode threshold is
consistent with the established case volume finalized for MIPS at Sec.
[thinsp]414.1350(c)(6) for EBCMs. As we discussed in the CY 2018 PFS
final rule (82 FR 53697 through 53699), increasing the case minimum to
improve measure reliability would reduce the number of clinicians
assessed by the measure. A higher case minimum would, therefore, limit
the scoring of EBCMs to larger group practices with sufficient case
volume at the expense of individual providers who are the focus of ASM.
We believe that a minimum EBCM 20-episode threshold remains aligned
with other CMS programs and will reliably, just like in the QPP
program, measure ASM participants on cost performance.
Comment: A few commenters expressed concern that the proposed low
back pain EBCM may not align with the quality measures for the ASM low
back pain cohort or that the low back pain EBCM may not accurately
reflect the quality of care provided by ASM participants. A few
commenters shared their concern that assessing cost without considering
outcomes could create unintended incentives, such as encouraging
clinicians to avoid complex patients, limiting necessary care, or
promoting pharmacologic or surgical interventions that may not be
appropriate. A commenter recommended that CMS develop quality and cost
measures in tandem to create a single value measure that integrates
both dimensions. Another commenter suggested CMS to collaborate closely
with prospective ASM participants to identify measures that
meaningfully reflect savings.
Response: We appreciate the commenters for their feedback. However,
we disagree that the proposed low back pain EBCM is not aligned with
the quality of care provided to participants. For example, the low back
pain Functional Status Change for Patients with Low Back Impairments
(MIPS Q220) score would lower if an ASM participant attempted to
inappropriately limit necessary care to
[[Page 49642]]
improve their cost performance score. We further stress that the EBCM's
risk adjustment methodology accounts for patient acuity and complexity.
The EBCM risk adjustment methodology uses clinical factors such as age,
comorbidities, recent hospitalizations and other relevant conditions to
standardize costs. We did not consider merging quality and cost
measurement into a single value because we believe that measuring them
separately ensures direct accountability for performance on quality and
cost. We note that the low back pain EBCM has already undergone
extensive interested parties input, including with specialty societies
and technical expert panels. Further, we believe that the EBCM
performance can help ASM participants identify areas for potential
savings.
Comment: Several commenters expressed concern that ASM participants
may not control all costs included in the proposed low back pain EBCM,
such as patient emergency department visits or post-acute care
decisions made by other clinicians. A commenter recommended that CMS
consider separating spending into categories, distinguishing between
expenditure on avoidable services controlled by ASM participants and
all other costs. A commenter also expressed concern that holding ASM
participants, particularly proceduralists, accountable for care beyond
their control is not clinically appropriate and may result in unjust
penalties. Another commenter recommended CMS clarify which services are
included in the low back pain EBCM.
Response: We appreciate the commenters for expressing their
concern. However, we disagree and believe that including services
performed in the emergency room or post-acute care decisions made by
other clinicians is vital to incentivizing ASM participants to provide
upstream care management to reduce unnecessary services. Though we
acknowledge that not every care decision is controlled by the ASM
participant, including services initiated by other clinicians
appropriately incentivizes specialists to coordinate care and manage
transitions to reduce avoidable, duplicative, fragmented and costly
services. This is especially the case for proceduralists for whom we
would like to extend accountability for their management of
beneficiaries with chronic conditions beyond the procedure they
initiate. We also note that for a beneficiary to be attributable to a
proceduralist the triggering event must include an ICD-10 diagnosis
code indicating low back pain as well as a confirming code within 60
days. Meeting the requirements set forth through this attribution
process suggests that a longitudinal care relationship that between the
proceduralist and beneficiary. We refer commenters to the cost measure
codes lists available on the 2024 MIPS cost performance category
resources for a comprehensive EBCM services list.\264\
---------------------------------------------------------------------------
\264\ https://www.cms.gov/medicare/quality/value-based-programs/cost-measures/about.
---------------------------------------------------------------------------
Comment: A commenter did not support the proposed low back pain
EBCM, noting concerns that the measure is narrowly defined and may not
capture potential savings from efficient team-based care. The commenter
also expressed concern that the proposed attribution to individual ASM
participants is not patient-centered and may not recognize the
efficiencies of team-based care.
Response: We appreciate the commenters' feedback but disagree that
the low back pain EBCM is narrowly defined. The low back pain EBCM is
designed to capture a wide spectrum of care events that occur once an
episode is triggered. And that are appropriately attributable to a TIN
or TIN/NPI The EBCM includes inpatient admissions, outpatient follow-
up, medication management, diagnostic testing, and post-acute care
services. We also disagree that the cost EBCM, though measured at the
individual would not recognize the efficiencies of team-based care. The
EBCM reflects costs from any provider rendering an included service.
Therefore, efficiencies in team-based care such as the reduction of
duplicative services will improve the ASM participant's EBCM score.
Comment: A commenter expressed concern that services provided by
anesthesiologists, including pain medicine physicians who treat
patients with lower back pain, may not be captured by the existing cost
measure methodology for the low back pain EBCM. The commenter expressed
concern that CMS' reliance on the remaining single ASM performance
category for anesthesiologists, quality, could undermine a
comprehensive assessment of how clinicians or their groups deliver care
to Medicare patients.
Response: We appreciate the commenters for sharing their concerns.
However, we disagree with their assessment that an anesthesiologist is
not likely to meet the cost performance category minimum requirements
to receive a cost performance category score. Selection into ASM
requires that a participant must have already met the 20-
episodethreshold from the calendar year determining performance year
eligibility. The likelihood that the participant would also meet the
case 20-episode threshold during the given ASM performance year, would
be high. Therefore, the participant would receive a cost score on any
of the quality measures for which they meet those minimum data and
submission requirements as described in sections III.C.d.(2).(g) and
III.C.2.d.(2).(h) of this final rule.
Comment: A few commenters expressed concerns about the proposed
attribution methodology for low back pain EBCM, noting concerns that
the attribution methodology would identify the correct clinician,
particularly for low back pain, where care is often fragmented and
patients may see multiple clinicians. A commenter expressed concern
that most potential ASM participants would have a low volume of EBCM
cases, which may not accurately represent their overall practice.
Response: We appreciate the commenters for expressing their
concerns regarding the low back pain EBCM attribution methodology.
However, we disagree with the commenters' concerns. The low back pain
EBCM requires that a triggering event must include an ICD-10 diagnosis
code indicating low back pain as well as a confirming code within 60
days from the same Tin/NPI--or in ASM's case the ASM participant. This
ensures that only beneficiaries with a diagnosis of low back pain are
included in the measure. By assigning accountability for costs to a
provider that initiated a low back pain episode, we have created the
incentive structure to reduce fragmented care. Additionally, to receive
a cost score an ASM participant must meet the 20 episode threshold. As
discussed earlier in this section of this final rule, a 20-episode
threshold is consistent with the established case volume to score MIPS
participants at Sec. 414.1350(c)(6) and with ASM's participant
eligibility criteria.
Comment: A few commenters expressed concern that the proposed low
back pain EBCM may not capture the clinical complexity of the patients
with low back pain, which could impact episode costs. A few commenters
noted the difference between general low back pain and more complex
cases, noting that comorbidities can affect treatment choices. A
commenter requested that several cases be excluded or stratified, such
as those involving malignancy, infection, fracture, major structural
abnormalities, urgent neurologic compromise, prior spine surgery,
implanted hardware (including spinal cord stimulators or fusion
constructs),
[[Page 49643]]
failed comprehensive conservative care with documented non-response to
multimodal therapy, and non-spinal mimics. Another commenter noted that
the model does not adjust for many social and economic factors that
affect the types and number of services patients receive, which could
disadvantage ASM participants serving patients from lower income
communities. Another commenter recommended that attribution and
benchmarks account for issues specific to smaller practices.
Response: We appreciate the commenters for their concerns that the
low back pain EBCMs does not reflect patient complexity, however, we
disagree. The low back pain EBCM's sophisticated risk adjustment
methodology accounts for patient complexity, and comorbidities outside
of the participant's control. The EBCM risk adjustment methodology uses
clinical factors such as age, comorbidities, recent hospitalizations
and other relevant conditions to standardize costs. Additionally, the
exclusion criteria are designed to remove unique groups of patients or
episodes from the measure calculation in cases where it may be
impractical or unfair to compare the costs of caring for these patients
to the costs of caring for the cohort at large. Low back pain
exclusions include cauda equina syndrome, spinal infection,
osteoporotic compression fracture, myelopathy, trauma, and spinal
neoplasms. Any additional exclusions would diverge from the EBCMs
structure as used by MIPS, potentially increasing administrative burden
to have model-specific modifications to the measure's specifications.
While the EBCM does not account for all social risk factors in its risk
adjustment methodology, we stress that beneficiary social and economic
characteristic and challenges faced by small or solo practices are
addressed in the complex patient scoring adjustment section
III.C.2.e.e(3) of this final rule and small practice scoring adjustment
in section III.C.2.e.2d.e(4) of this final rule. We believe that both
the complex patient scoring adjustment and the small practice scoring
adjustment better address the realities those participants face because
those policies are simpler and do not require any additional
participant reporting.
Comment: A commenter recommended that CMS provide actionable data
and definitions and identify ways to improve performance on the low
back pain EBCM.
Response: We appreciate the commenters for their recommendation to
provide actionable data and methods to improve performance. We are
exploring ways to provide participants with the right data at the right
intervals to assist their performance.
After consideration of public comments, we are finalizing as
proposed at Sec. 512.730(b)(2) the use of the low back pain EBCM to
score the cost ASM performance category 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 proposed 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 solicited comments on our proposed approach at Sec. 512.730(c)
for adding or removing cost measures if necessary.
We did not receive public comments on this provision, and
therefore, we are finalizing as proposed at Sec. 512.730(c).
(f) Minimum Case Requirements
Like under MIPS, as specified in Sec. 414.1350(c)(6) (88 FR 79346
through 79348), we proposed 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) of this final rule. As discussed in section
III.C.2.c.(3)(b) of this final 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 sought 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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters expressed concern with the proposed 20-
episode threshold for the ASM EBCMs, noting that a small denominator
for patient attribution may not produce a reliable performance score. A
few commenters recommended increasing volume thresholds to better
account for statistical variation. Specifically, a commenter suggested
that clinicians should not be scored on the heart failure EBCM unless
they have at least 50 attributed episodes, or if the number of episodes
meets the reliability threshold of at least 0.8, whichever is greater.
A few commenters shared their concern that even a single outlier case
or event could disproportionately impact performance results and
unfairly penalize clinicians who treat patients that are frail or
vulnerable with complex medical conditions.
Response: We recognize the commenters' concerns regarding the heart
failure and low back pain EBCM 20-episode threshold. However, we
disagree that it is an inappropriate volume of cases for determining
cost ASM performance category scores. An EBCM 20-episode threshold is
consistent with the established minimum case volume finalized for MIPS
at Sec. [thinsp]414.1350(c)(6) for both the heart failure and low back
pain EBCMs. As we discussed in the CY 2018 PFS final rule (82 FR 53697
through 53699), increasing the case minimum upwards of a figure like 50
episodes would reduce the number of clinicians assessed by the measure.
This would, therefore, limit the scoring of EBCMs to larger group
practices with sufficient case volume at the expense of individual
providers who are the focus of ASM. We believe that a minimum EBCM 20-
episode threshold remains aligned with other CMS programs and will
reliably, just like in the QPP program, measure ASM participants on
cost performance. We also note that Part D costs are winsorized such
that extreme observations at and above the 98th percentile are excluded
from the EBCM's calculations.
After consideration of public comments, we are finalizing at Sec.
512.730(d) the proposed case
[[Page 49644]]
minimum of 20 attributed episodes for all cost measures used to score
the cost ASM performance category as proposed.
(g) Cost Measure Achievement Points and Cost ASM Performance Category
Scoring
(i) Cost Measure Achievement Points
We proposed to follow a similar methodology for establishing and
assigning measure achievement points as is used by MIPS. We proposed at
Sec. Sec. 512.730(e)(1)(i) 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.
We sought comment on the proposed methodology for establishing and
assigning measure achievement points for the cost ASM performance
category as proposed at Sec. Sec. 512.730(e)(1)(i).
We did not receive specific comments on the proposed provisions at
Sec. Sec. 512.730(e)(1)(i) and are, therefore, finalizing as proposed.
(ii) Benchmarking
We proposed 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
proposed 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 proposed 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 proposed 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 proposed 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
proposed 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 B-D5 for an example of how the proposed cost scoring
methodology could be implemented for a specific cost measure.
[GRAPHIC] [TIFF OMITTED] TR05NO25.110
We proposed 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
[[Page 49645]]
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 solicited comments on our proposed approach for calculating EBCM
benchmarks and scoring each cost measure, as well as all alternatives
considered.
The following is a summary of the comments we received and our
responses.
Comment: A commenter recommended the use of prospective peer-
grouped benchmarks with case-mix stratification and regional price
standardization and stated their belief that such benchmarks could
potentially limit cost differences in high-acuity versus community
practices.
Response: We appreciate the commenter for sharing their
recommendation that we use prospective peer-grouped benchmarks with
case-mix stratification and regional price standardization to limit
cost differences in high-acuity versus community practices. We note
that EBCMs do use standard, Medicare allowed amounts, in their
calculations. However, we disagree with the recommendation to use
prospective peer-grouped benchmarks because of our overarching goal
when calculating benchmarks to follow a similar methodology as is used
by MIPS so that most ASM participants would be familiar with the
benchmarking approach. Though we did not consider this approach to
benchmarking, if we did, we would do so in future notice-and-comment
rulemaking.
Comment: A few commenters recommended that CMS clarify how
benchmarking will be applied when the same measure is used in MIPS and
in ASM, given the distinct clinician populations. The commenters
suggested that CMS compare the benchmarks between MIPS and ASM to
illustrate any differences. A commenter expressed concern that the
heart failure EBCM was originally developed across multiple specialties
and recommended selecting the benchmark that is most favorable to ASM
participants to ensure fair and equitable scoring.
Response: We appreciate the commenters for sharing their
recommendation to clarify our benchmarking approach when it differs
from other CMS cost benchmarking methodologies like in MIPS. We stress
that the ASM benchmark ranges will only be calculated using ASM
participant EBCM data, which would allow for fair comparisons of
performance of ASM participant performance. Any modifications at the
end of the performance year to the methodology to benefit some
participants would hurt other participants. We further clarify that ASM
benchmarks are calculated separately for each cohort.
Comment: A commenter did not support the proposed methodology to
calculate benchmarks for ASM EBCMs. For the heart failure EBCM a
commenter expressed concern that benchmarking based solely on
cardiologists, particularly at the individual clinician level, could
bias rankings and result in inconsistent or misleading scores. A
commenter recommended that CMS stratify the heart failure EBCM results
by ejection fraction phenotype. The commenter also recommended CMS
develop a more granular, specialty-specific benchmarking approach that
reflects clinical realities and avoids applying measures validated in
one population to another with different practice patterns and patient
profiles.
Response: We appreciate the commenter for their concern, however,
we disagree that the benchmarking approach as proposed would result in
inconsistent scores because by determining benchmarks based off
cardiologists' performance, we are creating benchmark sets calculated
from ASM participants' peers. Further, we did not consider stratifying
the cost cohort by heart failure type because EBCM scores and data are
not stratified by condition so we would be unable to calculate
benchmarks segmented by condition. Additionally, we disagree that the
EBCMs apply measures validated in one population onto another. The
EBCMs were developed for specific specialty types and to adjust for
fairer comparison based on patient profiles include a sophisticated
risk adjustment methodology as discussed earlier in this section.
After consideration of public comments, we are finalizing at Sec.
512.730(e)(2) our benchmarking policies that base cost measure
benchmarks on cost performance during the ASM performance year, and the
formation of 10 benchmark ranges based on median cost and standard
deviations as proposed.
(iii) Calculation of the Cost ASM Performance Category Score
We proposed 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 final
rule, we proposed 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
final 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 1 cost measure.
We proposed 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 proposed 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 proposed 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 proposed 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
[[Page 49646]]
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 solicited comments on our proposed methodology for calculating
the cost ASM performance category score.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters expressed concerns on the proposed cost
scoring for the ASM EBCMs, noting misaligned incentives may discourage
specialist participation. The commenters shared their belief that
inherently higher costs of complex cases driven by patient severity,
rather than inefficiencies or poor quality, combined with the emphasis
on cost without appropriate risk adjustments, and severe financial
consequences could discourage skilled specialists from participating in
ASM and from providing care in resource-intensive but clinically
appropriate settings like hospitals and rural facilities, ultimately
limiting patient access to necessary care. A commenter suggested CMS to
gradually phase in cost accountability, with safeguards to avoid
unintended penalties and support the goal of increasing specialist
participation in value-based care. Another commenter expressed concern
that cost benchmarks for ASM, if set without specialty input, may
undervalue the complexity and safety needs of image-guided spinal
interventions, could impact clinical decisions and reduce access to
essential, minimally invasive treatments, potentially leading to
increased opioid use or unnecessary surgery, contradicting CMS' goals
of improving quality and reducing costs
Response: We appreciate the commenters for expressing their
concerns on ASM scoring of EBCMs, however, we disagree that the cost
category creates improper incentives. We stress that the EBCMs use an
advanced risk adjustment methodology so that cost comparisons are not
raw cost versus cost. But rather, risk standardized cost versus their
peers' costs treating similar patients. We did not consider phasing in
cost accountability because our ASM cost performance category closely
mirrors the cost performance category as defined in MIPS, so
specialists should be familiar with this measure. Additionally, our
benchmarking methodology uses risk adjusted costs so as not to penalize
or reward participants on patient complexity or lack thereof.
Comment: A few commenters generally expressed concerns on the Cost
ASM scoring policies. A commenter expressed concern that including
spending on necessary services in EBCMs could inadvertently reward
clinicians for reducing spending on essential care, potentially leading
to worse patient outcomes that may not be reflected in quality
measures, noting that average spending on patients could increase due
to factors outside a clinician's control, such as rising drug prices or
services ordered by other physicians, which could unfairly penalize
clinicians. Another commenter recommended that cost metrics account for
the influence of primary care or consider exclusion criteria for
patients not primarily managed by specialists, to ensure fair
attribution and avoid penalizing specialists for outcomes beyond their
control.
Response: We appreciate the commenter for their concerns on Cost
ASM scoring policies, however, we disagree that the cost ASM scoring
policies reward clinicians for reducing spend on essential care. Both
the heart failure and low back pain quality measure sets, as discussed
earlier in this section, contain measures whose performance may lower
if participants choose to inappropriately withhold care. We note that
the EBCMs do not compare participants to prior year spending, rather
they are scored based off of performance relative to their cohort. We
did not consider adjusting the EBCM for the influence of primary care
because the EBCM has already undergone extensive review by multiple
specialty societies and clinicians. Lastly, EBCMs are only attributed
to specialists if they render a triggering and confirming service with
a corresponding ICD-10 code. We believe that that threshold is high
enough to assume that ASM participants with EBCMs assigned to them are
active in managing the care of their patients.
Comment: A commenter suggested establishing clear performance
benchmarks for EBCMs to guide positive and negative adjustments,
allowing clinicians to make informed practice and investment decisions
with assurance that their performance will be evaluated fairly. A
commenter further recommended that CMS publish the cost measure
specifications used in the model along with the claims used for
calculating the measures to support transparency and effective
performance monitoring.
Response: We appreciate the commenter for their recommendation.
However, we disagree with their recommendation because positive and
negative payment adjustments are based off of numerous factors beyond
the cost performance category. Therefore, it would be improper to set a
performance threshold in the cost benchmarking category. We also note
that all EBCM measure specifications are publicly available on the CMS
website.
After consideration of public comments, we are finalizing as
proposed 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. We
did not receive public comments on the provisions at Sec.
512.730(e)(3)(ii), Sec. 512.730(e)(3)(ii)(A), Sec.
512.730(e)(3)(ii)(B), and Sec. 512.730(e)(3)(ii)(C) and therefore, we
are finalizing as proposed.
(4) Improvement Activities ASM Performance Category
The 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 final 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
[[Page 49647]]
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 (HRSN) 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.\265\ 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.\266\ 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 activities subcategory of MIPS to
align with activities in which organizations may already be engaged.
---------------------------------------------------------------------------
\265\ 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.
\266\ 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).
---------------------------------------------------------------------------
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 Program and other
Innovation Center models.\267\
---------------------------------------------------------------------------
\267\ 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.
---------------------------------------------------------------------------
We solicited comments on our proposed definition for ``improvement
activities.'' We did not receive specific comments on our proposed
definition of ``improvement activities,'' so we are finalizing it as
proposed at Sec. 512.705.
(b) Performance Year for Improvement Activities
Beginning with ASM payment year 2029, we proposed 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 sought comments on this proposal.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A commenter supported the proposal to align the ASM
performance year for improvement activities with MIPS, noting
continuity in reporting, leveraging existing infrastructure and
reducing burden.
Response: We appreciate this supportive feedback regarding the
performance year alignment. We are finalizing the policy to establish
the ASM performance year for improvement activities as 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. This approach maintains consistency with existing MIPS
reporting frameworks and supports operational efficiency for ASM
participants and their technology vendors.
Comment: A commenter recommended CMS publish ASM improvement
activities requirements with the CY 2026 final rule and include them in
the existing MIPS inventory and data validation and audit spreadsheet,
so clinicians can prepare and adjust workflows ahead of ASM
participation in CY 2027.
Response: We appreciate the commenter's interest in the Improvement
Activities (IA) requirements and specifications for ASM and their
thoughtful suggestions regarding publication timing. The details
provided in the final rule constitute the specifications for the IAs,
and the program is designed with built-in flexibility to support
practices in approaching these activities as they determine most
appropriate for their clinical workflows and patient populations. We
understand the interest in comprehensive guidance on improvement
activity implementation and recognize the importance of supporting ASM
participants in their preparation efforts. ASM will continue to evolve
as we gather experience from current ASM participants. Our approach
allows clinicians the autonomy to tailor an IA to their specific
practice environments while meeting the model's quality improvement
objectives. We intend to provide participants with additional resources
on model requirements and performance category requirements in the year
leading up the model start. We intend to make these resources available
on the ASM website.
Comment: A commenter expressed concern that the proposed IA
requirements could force small practices to close, increase
consolidation within the health care industry, and discourage
specialists from treating Medicare patients.
Response: We appreciate the commenters for their concern about the
improvement activities requirements. While we acknowledge that these
ASM-specific requirements may be new activities that may require
additional effort, we do not believe these IA requirements would force
small practices to close. To support the small practices, we proposed
additional policies and flexibilities in ASM, such as the small
practice scoring adjustment described in section III.C.2.e.(4) of this
final rule and adjusted data submission requirements at Sec.
512.720(a)(1)(ii) to allow for the Improvement Activities to be
reported at the TIN level. Also, we do not believe small practices will
need to consolidate in order to meet the improvement activity
requirements as we allow ample flexibility in the specifications and
provide significant time for implementation as the model does not start
until January 1, 2027. For these same reasons, we do not believe that
the model will discourage providers from treating Medicare patients and
believe that the opportunity for positive payment adjustments from the
model will motivate participants.
After consideration of public comments, we are finalizing the
proposed performance year for
[[Page 49648]]
improvement activities as proposed at Sec. 512.735(a).
(c) Improvement Activities
We proposed at Sec. 512.735 the establishment of the improvement
activities ASM performance category. We proposed at Sec. 512.735(b)
that we would evaluate ASM participants on the proposed improvement
activities at Sec. 512.735(c): (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 (CCAs).
We did not receive any comments on our proposed general approach to
evaluating ASM participants on the required improvement activities.
Comments specific to the proposed improvement activities are summarized
and discussed below. Therefore, we are finalizing the provision related
to evaluating ASM participants on the finalized improvement activities
as proposed at Sec. 512.735(b).
(i) Improvement Activity 1 (IA-1): Connecting to Primary Care and
Ensuring Completion of Health-Related Social Needs Screening
In IA-1, we proposed 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 proposed 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 do not
see a PCP yearly.\268\ 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.\269\ 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 proposed at Sec.
512.735(c)(1)(ii) to require that the ASM participant 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.\270\
---------------------------------------------------------------------------
\268\ 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.
\269\ 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.
\270\ 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.
---------------------------------------------------------------------------
As the final element of IA-1, we proposed at Sec.
512.735(c)(1)(iii) that ASM participants collaborate with PCPs to
ensure that their patients have received health-related social needs
(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.\271\ 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.\272\ 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.
---------------------------------------------------------------------------
\271\ 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.
\272\ 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.
---------------------------------------------------------------------------
(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 PCP 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.
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
[[Page 49649]]
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.
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed IA-1, noting that
enhanced coordination between specialists and PCPs is critical for
effective cardiovascular care and improving care coordination.
Response: We appreciate the support for IA-1 and believe the
implementation of this improvement activity will bring valuable
insights and impact of HRSN screening in specialty care settings. We
agree that coordination between primary and specialty care is essential
for achieving comprehensive patient care and addressing upstream
drivers of health that significantly influence chronic disease
management and outcomes.
Comment: A few commenters supported the proposed IA-1: Connecting
to Primary Care and offered additional recommendations. A commenter
suggested CMS consider a multidisciplinary, system-level approach
rather than holding the ASM participant responsible for the activity at
the individual level. Another commenter shared their belief that some
practices may not have the data infrastructure to handle IA-1, which
would unfairly penalize clinicians. Another commenter shared their
belief that the proposed IA-1 focuses more on the process rather than
the outcomes, which could add administrative burden leading to
clinician burnout. A commenter suggested CMS to simplify the IA-1 by:
developing additional quality measures for specialists to demonstrate
collaboration with primary care, requiring specialists to meet a
threshold percentage for having a PCP listed, confirming whether the
HRSN screening or an annual wellness visit was completed, or assisting
patients in finding a PCP that can perform the screening.
Response: We appreciate commenters for their support and
recommendations regarding the proposed IA-1: Connecting to Primary
Care. We have adjusted the data submission requirements of ASM at Sec.
512.720(a)(1)(ii) to allow for the Improvement Activities to be
reported at the TIN level, in order to promote team-based care and
coordination as the requirements of this ASM performance category
typically reflect work done at the practice level. We believe that
changing this reporting level from the individual clinician to the TIN
level decreases administrative burden while still maintaining
accountability for these important care coordination activities. We
intend to provide participants with additional resources on model
requirements and performance category requirements in the year leading
up the model start. We intend to make these resources available on the
ASM website. While we appreciate the comment to create a quality
measure for this activity to assess coordination and collaboration,
that is not feasible at this time and would present an additional
burden to ASM participants. We also believe that the annual attestation
of this activity is low burden as it does not require ongoing
submission of detailed data.
Comment: A few commenters did not support the IA-1: Connecting to
Primary Care, noting concerns around the need for manual data when
electronic health records (EHR) or Health Information Exchange (HIE)
are not shared between practices, lack of interoperability for social
determinants of health (SDOH) data, absence of closed-loop referral
tracking and misalignment of financing. A commenter specifically called
out anesthesiologists as being the inappropriate care team member to
identify a PCP due to their limited interactions with patients during
episodic care. The commenter recommended that CMS propose an
improvement activity that better reflects the expected roles and
workflows of anesthesiologists.
Response: We appreciate the feedback about IA-1. While there may be
effort associated with implementing IA-1: Connecting to Primary Care,
we believe the activities proposed in IA-1 are vital to patient care
and reducing care fragmentation, and many of these coordination
activities should already be occurring as part of comprehensive patient
management. The preliminary participant list for CY2027 will be posted
in early 2026, nearly a year in advance of the model start. This will
provide ASM participants with nearly a year in advance to prepare their
HIE systems and adjust to some of these activities, such as HRSN
screening checks.
The ASM participant themself does not need to directly connect the
patient to a PCP. It can be a separate activity not tied to the HIE
system and/or an initiative/process within their practice or health
system to ensure this coordination is happening effectively. Also, even
though anesthesiologists may have limited interactions with patients
during episodic care, we believe anesthesiologists should still be
ensuring their patients are receiving longitudinal care coordination
and help connect them to a PCP when needed. Furthermore, we believe our
methodology for participant inclusion in ASM is focused on providers
that have been attributed at least 20 patients with the condition of
interest, which will identify clinicians that are more likely to have
ongoing relationships with patients. This makes it more reasonable to
expect these care coordination activities from these anesthesiologists
who are ASM participants.
Comment: A few commenters expressed general concerns regarding the
proposed IA-1: Connecting to Primary Care. A commenter expressed
concern that the model may be less effective for primary care practices
due to the lack of direct funding for PCPs, who are already
overburdened. A commenter recommended that CMS offer technical
assistance and upfront funding to PCPs. Another commenter suggested
that CMS should provide additional resources for investments to support
coordination.
Response: We appreciate the feedback regarding concerns about the
effectiveness of IA-1: Connecting to Primary Care for primary care
practices and the need for additional support resources. We understand
the challenges facing PCPs and recognize the importance of supporting
their participation in care coordination activities. Codes for e-
consults and interprofessional communication already exist for ASM
participants and PCPs to receive reimbursement for their collaborative
efforts. Furthermore, we
[[Page 49650]]
believe these coordination efforts will reduce care fragmentation and
improve efficiency, which may provide financial benefits to ASM
participants and the primary care practices with whom they partner
through reduced duplicative services, improved patient outcomes, and
more streamlined care delivery. The improved coordination should also
lead to better patient satisfaction and potentially reduced
administrative burden over time as communication pathways become more
established. We recognize that successful implementation of this
improvement activity requires adequate support for both specialists and
PCPs. We intend to provide participants with additional resources and
support on model requirements and performance category requirements in
the year leading up the model start. We intend to make these resources
available on the ASM website.
Comment: Several commenters provided recommendations for IA-1. One
commenter recommended a more holistic approach to screening that
included connecting patients to resources and offering community
solutions.
Response: The primary goal of IA-1 is to ensure comprehensive care
coordination and HRSNs that significantly impact outcomes for
beneficiaries with these chronic conditions. We appreciate the
commenter's support for our HRSN screening efforts and the observation
that screening alone does not connect patients to resources. We believe
that incentivizing screening is the essential first step to connecting
patients to these resources. As ASM operates at the specialist level,
there are minimal direct levers for the model to connect patients to
community resources, but the screening and coordination requirements
create pathways for PCPs and care teams to facilitate these
connections.
Comment: Several comments provided recommendations about IA-1. One
commenter suggested that longitudinal models that engage specialists
over the course of chronic care conditions such as through condition-
based or per-person payments would allow for team based care,
collaborations, and interventions. Another commenter stated their
belief that FFS payment models do not account for the time and effort
needed to implement screening and refer patients.
Response: We appreciate the supportive feedback and thoughtful
recommendations regarding IA-1. Our model is for low back pain and
heart failure, two chronic diseases in which HRSN screening and
collaboration can greatly improve care and reduce fragmentation for the
patient. We agree that longitudinal care models are important, but this
is not the sole goal of ASM. We are targeting specific conditions for
improvement and believe that within the larger context of the
healthcare ecosystem, ACOs and other value-based care systems will be
supported. By promoting this connection between providers, we are
enforcing longitudinal relationships and care continuity for patients
with heart failure and low back pain. Furthermore, we believe that the
payment structure of the model incentivizes these efforts and rewards
them more than the traditional FFS system. ASM promotes coordination,
HRSN screening, and quality improvement efforts by measuring them and
providing potential positive payment adjustments for those participants
achieving these desired goals.
Comment: Several commenters provided feedback on IA-1 related to
interoperability. A commenter also recommended that CMS define the
expectations now and measure them later and align the model to the HL7
Gravity FHIR Implementation Guide for data transfer and timeline should
be coordinated with Assistant Secretary for Technology Policy and the
Office of the National Coordinator for Health IT (ASTP/ONC)
certification and vendor upgrades. Another commenter noted that CMS
should phase in expectations aligned with national standards such as
Gravity, CCA templates, and finance operations.
Response: We appreciate the comments. We recognize the importance
of aligning with national standards such as the Gravity Project to
promote interoperability and reduce implementation burden. We will also
explore opportunities in the future to align with these efforts and
others that will support effective implementation. Also, we are
interested in providing resources and materials to support the
improvement activities performance category and other model
requirements. We intend to make these resources available on the model
website.
Comment: A few commenters stated this proposal will add burden to
specialists. One commenter noted the time this will take during already
packed office visits, workflow changes, interoperability concerns, and
buy-in from clinicians with other employers who are not ASM
participants. The commenter recommended that CMS codify ``screen once,
share widely'' to prevent duplication and that compliance be achievable
through EHR rather than separate portals or manual lookups. Another
commenter suggested simplifying the HRSN policy, because it could lead
to finger pointing between specialists and PCPs. A commenter stated
their belief that infrastructure, workflow standards, and financing
will drive duplicative screening and increased the administrative
burden.
Response: We appreciate the commenters' feedback. We understand the
concerns about infrastructure, workflow standards, and buy-in. We
believe that the advanced notification of mandatory participation as
described in section III.C.2.c.(5) of this final rule would provide ASM
participants with time to prepare for the model requirements, such as
developing workflows and partnerships that support effective HRSN
screening and care coordination. We also intend to release additional
guidance and resources before the model launches in CY 2027. The
model's emphasis on communication and care coordination should
ultimately reduce fragmentation and improve efficiency for both
specialists and PCPs while ensuring that patients receive comprehensive
care that addresses both their clinical conditions and HRSNs. Regarding
concerns about duplication and the need to codify ``screen once, share
widely,'' we believe the current IA-1 policy is effective because it
promotes coordination between specialists and PCPs while addressing
HRSN screening for beneficiaries with heart failure and low back pain.
The existing policy already encourages the ``screen once, share
widely'' principle by allowing specialists to satisfy requirements when
they can access valid existing screening results through established
communication channels and HIEs. Also, while there is a chance that
minor duplication of HRSN screening may occur between specialists and
PCP, we believe this can be mitigated by proper communication process
and that it is a reasonable trade-off to ensure that patients are
receiving appropriate screening and being connected to the resources
they need to maintain their health. The primary goal of IA-1 is to
ensure comprehensive care coordination and address social determinants
of health that significantly impact outcomes for beneficiaries with
these chronic conditions.
Comment: A commenter expressed their belief that misalignment
between programs increases administrative complexity, including
workflow changes and data infrastructure investments, as seen in the
proposed removal of HRSN from the MIPS Quality and Improvement
Activities categories
[[Page 49651]]
and the inclusion of IA-1 in ASM. A commenter stated it was
contradictory to include HRSN screening in ASM but remove SDOH
screenings. A commenter recommended CMS review proposed SDOH changes
across programs for consistency.
Response: We appreciate the commenter's feedback. ASM is a distinct
model separate from other payment programs. While we strive to align
where possible, differing approaches may persist. HRSN screening is
especially important in patients who have heart failure and low back
pain and may be at greater risk, and therefore greater benefit, from
screening and intervention. For this reason, we will include HRSN
screening in ASM and continue aligning with other payment programs
where possible.
Comment: A commenter recommended CMS collect and disseminate HRSN
information since they are better positioned and the HRSN screening
falls outside of heart failure and low back pain specialists' clinical
scope.
Response: We appreciate the feedback regarding the dissemination of
HRSN information. We believe that ensuring HRSN screening has occurred
is important when dealing with patients with the ASM chronic conditions
of focus, and therefore, it is within scope. We plan to provide as much
relevant information and data to participants in advance of and during
the model. This may not explicitly include HRSN screening data, but
other information that we believe will be beneficial to ASM
participants.
Comment: A commenter expressed their belief that some patients may
not have a PCP and that physicians may not share their HRSN
information. A commenter expressed their concern about the role of the
specialist ensuring the PCP completes the screen and the potential of
the patient being unwilling to see a PCP. A commenter expressed their
belief that there should be clear exceptions for specialists if a
patient declines a PCP, lives in a primary care shortage area, or the
primary care physician declines the screening.
Response: We appreciate the comments around the roles of the
specialist and PCP in HRSN screening. We support the connection of
patients to care but recognize that this is not always the primary role
of the specialist, so we have specified that the specialist should
ensure the HRSN screening is completed by the PCP, or by them if
needed, and believe that the proper next steps will occur through this
coordination. We appreciate the comment around clear exceptions in
cases where patients decline PCP connections, live in primary care
shortage areas, or when primary care physicians decline to participate
in screening activities. The improvement activity requires that there
are processes, workflows, or technology in place to connect all
patients to a PCP and HRSN screening. We want to incentivize as much
action toward achieving these ASM goals as possible, acknowledging that
there may be specialists who are well positioned to help identify a PCP
for the patient when a PCP is difficult for the patient to find
themself.
Comment: A few commenters recommended that CMS should advise which
HRSN screening tools are acceptable so vendors can integrate these
tools into clinical workflows.
Response: We appreciate the request to advise on screening tools.
We do not specify a particular HRSN screening tool to allow flexibility
for participants to choose tools that work best with their existing
workflows and EHR systems. We may provide additional guidance in the
future to support decision-making. Also, we note that the IA-1 does not
require that the HRSN screening be conducted by the specialist, unless
it is unable to be completed by the PCP, acknowledging that PCPs may
have more experience with HRSN screenings and connecting patients to
resources, if needed.
Comment: A commenter recommended that specialists receive full
credit for sending EHR documentation and visit summary to a primary
care physician within a defined timeframe.
Response: Participants have flexibility to integrate the IA-1
requirements however they choose whether through manual processes or
automated systems as part of their EHR or other health information
technology platforms. The situation described by the commenter would
meet the expectations for communicating relevant information back to
the ASM beneficiary's PCP, which is one part of IA-1. This
communication between specialists and PCPs should help minimize
duplication of HRSN screening when existing results can be accessed and
shared effectively through established workflows and HIE.
After consideration of public comments, we are finalizing IA-1 and
its specifications as proposed at Sec. 512.735(c)(1).
(iii) Improvement Activity 2 (IA-2): Establishing Communication and
Collaboration Expectations With Primary Care Using Collaborative Care
Arrangements (CCAs)
In IA-2, we proposed 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
proposed defining ``collaborative care arrangement'' to mean an
arrangement that complies with all of the requirements set forth in
Sec. 512.771. We also proposed 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.
We sought comments on our proposed definition for ``ASM
beneficiary''. We did not receive specific comments on our proposed
definition of ``improvement activities,'' so we are finalizing it as
proposed at Sec. 512.705.
To receive achievement points for IA-2, we proposed 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
[[Page 49652]]
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.\273\ 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.
---------------------------------------------------------------------------
\273\ 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.
---------------------------------------------------------------------------
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).\274\ 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.
---------------------------------------------------------------------------
\274\ 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/.
---------------------------------------------------------------------------
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 unnecessary utilization of
health care resources.\275\
---------------------------------------------------------------------------
\275\ 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.
---------------------------------------------------------------------------
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 a 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 (CCAs).
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 PCP 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
[[Page 49653]]
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 solicited comments on the goals and specifications of the
required improvement activities proposed at Sec. 512.735(c)(2).
We received public comments on these proposals. The following is a
summary of the comments we received and our responses.
Comment: A few commenters supported the proposed Improvement
Activity 2 (IA-2) requiring ASM participants to enter a CCA with PCPs
with three of the five following areas including data sharing, co-
management, transitions in care planning, closed loop connections and
care coordination integration and offered further recommendations. A
commenter recommended that CMS take a similar approach to the Making
Care Primary (MCP) program by implementing specific coding and payment
for consultations, noting that incentivizing collaboration is more
likely to have a meaningful impact. Another commenter recommended that
CMS align ASM care coordination requirements with existing Chronic Care
Management (CCM)/Advanced Primary Care Management (APCM) frameworks to
reduce reporting burden.
Response: We appreciate the support of IA-2. We do not believe
model specific payment codes would add value or align with the goals of
ASM. We believe the improvement activities framework adequately
supports the goals that these codes would accomplish. ASM participants
and their partnered PCPs will more often be collaborating and
coordinating care, providing more opportunities for them to
appropriately bill the existing CCM, APCM, IPC, and e-consult codes. We
will continue to think about how we can communicate the use of these
existing codes and their alignment with our improvement activities
goals in future guidance. Finally, we believe these coordination
efforts required by ASM will reduce fragmentation and improve
efficiency, which may provide financial benefits to participants and
partnered primary care practices alike.
Comment: A commenter recommended CMS permit specialists to partner
with third-party care management companies to meet coordination
requirements and ensure access to infrastructure. Another commenter
recommended that CMS publish clear requirements for CCAs, including
requiring specialists and PCPs to have detailed operational plans and
coordination activities. Another commenter recommended requiring
specialists to share a copy of the CCA to provide insights into how
market participants operationalize collaborative elements.
Response: We appreciate the feedback regarding partnerships with
third-party care management companies and the development of CCAs for
ASM. If a high-value third party can support coordination efforts, an
ASM participant may work with them to achieve the improvement activity
requirements.
We would be interested in participant feedback as they implement
these coordination activities. However, we are not requiring the
submission of CCAs as we are concerned with creating an excess
administrative burden for ASM participants. We believe that the annual
attestation approach strikes the appropriate balance between ensuring
accountability for coordination activities and minimizing reporting
burden. This approach allows participants the flexibility to develop
coordination strategies that work best for their specific practice
environments while still maintaining oversight of these important
activities.
Comment: A few commenters supported the proposed IA-2. The
commenters acknowledged the importance of incentives for promoting
coordination between primary care physicians and specialists.
Response: We appreciate commenters' supportive feedback regarding
the proposed IA-2. We agree with commenters about the importance of
incentives for promoting coordination between primary care physicians
and specialists. We believe that establishing clear collaboration
expectations through annual attestations will help strengthen the care
coordination framework that is essential to the success of ASM. We
believe success in ASM and potential positive payment adjustments is
the incentive.
Comment: Several commenters did not support IA-2. A commenter
shared their belief that specialists should not be required to have any
type of coordination arrangements with primary care physicians. Another
commenter expressed concern that the CCAs were overly burdensome,
particularly for clinicians outside of a larger system who lack the
staff to manage such arrangements. Another commenter shared their
concerns that 6 months is insufficient for providers to establish care
coordination processes, and that the policy imposes significant
workflow adjustments and administrative burdens within a short
timeframe. A commenter expressed concern that ASM participants are at a
disadvantage in negotiating CCAs, as PCPs are not required to
participate. A few commenters expressed concern that it would be
burdensome for ASM participants to enter into multiple CCAs given the
range of patient primary care services. Another commenter noted that,
despite having EHRs, reliance on fax persists due to external clinician
systems, and the proposed improvement activity depends on cooperation
from unaffiliated clinicians. Another commenter recommended granting
credit for the improvement activity if clinicians share a common EHR or
HIE.
Response: We appreciate the feedback regarding Improvement Activity
(IA) 2. We are purposefully requiring specialists to engage with PCPs
as a core goal of the model is to reduce fragmentation for patients and
improve care collaboration. We believe an appropriate mechanism to
achieve this is through CCAs.
We recognize the effort this requirement may take but intend to
provide additional resources to support practices and believe that in
the long
[[Page 49654]]
term, the coordination that IA-2 promotes may create efficiency through
streamlined interactions with PCPs in situations of co-management or
referral optimization. Also, for the CY 2027 performance year, we
intend to release the preliminarily eligible list of participants in
early CY 2026. This provides nearly a year of advance for ASM
participants to prepare for IA-2. Further, IA-s only need to be
implemented for a portion of the performance year in order to attest to
the activity, providing additional time for the participant to meet the
requirements.
We believe that primary care practices will be interested in
engaging in CCAs as they also benefit them by building and
strengthening relationships that can improve care coordination. We do
not require the participant to enter into multiple CCAs, only one.
Identifying a PCP with whom the ASM participants has the most shared
patients could maximize the impact of the CCA.
We believe this coordination requirement is necessary to promote
the collaboration we aim to achieve in ASM. Additionally, IA-2 does not
specify that the primary care partner must be external. If an ASM
participant is in a multi-specialty system, the participant may develop
a CCA with a primary care group within that system. In this way, there
is the opportunity to minimize additional complications related to
external CCAs, if the other expectations of the CCA are met.
Regarding concerns about EHR interoperability and reliance on
external systems, we acknowledge these challenges but believe we allow
enough flexibility in IA-2 for ASM participants to explore multiple
avenues to address them. If participants share an EHR, the benefit
would be the minimal effort involved in achieving improvement activity
requirements.
Comment: A few commenters supported the proposed IA-2 but shared
additional recommendations. A commenter shared their belief that
specialists should not be penalized for primary care actions and credit
should only be applied to the actions within the specialist's control.
Another commenter recommended that CMS further clarify the operational
details of the five proposed collaborative elements to avoid a check-
the-box approach.
Response: We appreciate the commenters for the supportive feedback
regarding the proposed IA-2. The improvement activity focuses on the
specialist's role in establishing and maintaining collaborative
relationships and communication pathways with PCPs, rather than holding
them accountable for PCP actions or decisions. Regarding the
recommendation to clarify operational details of the five proposed
collaborative elements, we appreciate this feedback and intend to
provide additional resources to clarify details of CCAs in advance of
the model start. Our goal is to ensure that these improvement
activities promote meaningful collaboration rather than a check-the-box
approach, and we will work to provide guidance that helps participants
understand how to operationalize these coordination requirements in
ways that genuinely improve patient care and reduce fragmentation.
Comment: A commenter recommended that ASM improvement activities be
approved as improvement activities in traditional MIPS for the CY 2026
performance period to allow time for likely ASM participants to
prepare.
Response We appreciate the feedback regarding the alignment of ASM
improvement activities with MIPS. We will take the comment into
consideration for future coordination with MIPS. We note that there is
overlap between the requirements of the MIPS IAs in the Care
Coordination section and the ASM IAs.
After consideration of public comments, we are finalizing our
definition of ``collaborative care arrangement'' without modification
at Sec. 512.705. We are also finalizing IA-2 and its specifications as
proposed at Sec. 512.735(c)(2).
(d) Improvement Activities Data Submission, Achievement Points, ASM
Performance Category Scoring
We proposed that ASM participants must submit data on ASM
improvement activities in the form of attestations meeting the
submission requirements at Sec. 512.720. We proposed 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
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 will receive zero measure
achievement points and an improvement activities ASM performance
category score of zero percent.
We solicited comments on our improvement activities ASM performance
category scoring approach at Sec. 512.735(d)(1) and (2) and
alternative improvement activities weighting and scoring options. We
did not receive public comments on this provision, and therefore, we
are finalizing as proposed at Sec. 512.735(d).
(5) 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, clinicians, and 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 final rule.
[[Page 49655]]
(a) Background
In the CY 2026 PFS proposed rule (90 FR 32593 through 32597), we
included proposals for defining the performance year for Promoting
Interoperability measures, the requirement for CEHRT use and related
attestations, and data submission criteria and scoring for the ASM
Promoting Interoperability performance category. As discussed in
section III.C.2.e. of this final rule, the Promoting Interoperability
ASM performance category score will be used to determine the Promoting
Interoperability ASM 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 proposed the ASM performance year for
Promoting Interoperability ASM performance category. Beginning with ASM
payment year 2029, the performance year for Promoting Interoperability
measures will be a 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.
As discussed in the CY 2026 PFS proposed rule (90 FR 32593), this
reporting period aligns with the MIPS performance period established at
Sec. 414.1320(i)(1) and provides ASM participants adequate opportunity
to monitor and submit performance data. We believe that alignment of
the performance period between MIPS and ASM helps support the
transition of ASM participants from MIPS to ASM and reduce
administrative burden for clinicians who are familiar with reporting in
the existing MIPS performance period.
We solicited comments on our proposal at Sec. 512.740(a) for the
180-day performance period for Promoting Interoperability measures. The
following is a summary of the comments we received on defining the
Promoting Interoperability ASM performance year and our responses.
Comment: A few commenters supported the proposal to use a
continuous 180-day period within the calendar year as the performance
year for the Promoting Interoperability ASM performance category,
noting alignment with MIPS and the Medicare Promoting Interoperability
programs. The commenters shared this approach would reduce
administrative burden for clinicians who are already familiar with
these reporting timelines and processes and would allow leveraging
existing infrastructure.
Response: We appreciate the commenters for their support of using a
continuous 180-day period during the calendar year as the performance
year for the Promoting Interoperability ASM performance category.
Comment: A commenter recommended CMS not to extend the ASM
Promoting Interoperability performance year beyond 180-days in a future
rule, expressing concern that a longer reporting period could create
challenges to electronic health records (EHR) vendors who require
adequate time for software updates, user training, and testing while
supporting multiple facilities.
Response: We want to clarify that we did not propose to extend the
ASM Promoting Interoperability performance period beyond 180-days. We
appreciate the commenter for the suggestion and will consider it in the
future should we decide to make changes to the proposed definition
being finalized at Sec. 512.740(a).
After consideration of public comments, we are finalizing this
proposed definition of the ASM Promoting Interoperability performance
year at Sec. 512.740(a).
(c) Reporting for the Promoting Interoperability Performance Category
We proposed at Sec. 512.740(b) to earn a performance category
score for the Promoting Interoperability ASM performance category for
inclusion in the final score, an ASM participant must be a meaningful
EHR user meeting certain criteria. In the CY 2026 PFS proposed rule (90
FR 32593), we proposed to define ``meaningful EHR user'' at Sec.
512.705 to mean an ASM participant who possesses CEHRT, uses the
functionality of CEHRT, reports on applicable objectives and measures
specified for the Promoting Interoperability ASM performance category
for a performance period in the form and manner specified by CMS, and
engages in activities related to supporting clinicians with the
performance of CEHRT. We proposed to not include additional provisions
related to information blocking as defined at 45 CFR 171.103 in the
definition of a meaningful EHR user. In addition, the Promoting
Interoperability ASM performance category will focus on the safe use
and exchange of patient data. Our requirements to demonstrate
meaningful CEHRT use through reporting Promoting Interoperability
objectives and measures are discussed later in this section of this
final rule at III.C.2.d.(5)(c)(ii).
(i) Required CEHRT Use
We proposed 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 their use of CEHRT to fulfill
the Promoting Interoperability measure requirements (as defined 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.
As discussed in the CY 2026 PFS proposed rule (90 FR 32593 through
32594), 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 objectives and measures; (2)
reporting of clinical quality measures, including eCQMs; (3)
interoperability and data sharing between clinicians 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
proposed to 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 also proposed (90 FR
32593 through 32594) 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 \276\ Measure.
---------------------------------------------------------------------------
\276\